Streaming Causing ISPs to Upgrade

Consumer use of streaming video over the web has more than doubled in the past year, and Internet service providers and networking companies--at least their personnel--believe lots more is coming, according to the results of a recent ChangeWave Alliance poll.

Nearly two-in-three industry respondents (26 percent) think the delivery of streaming video has significantly increased the demand for networking technology and products, while 38 percent say it's caused a moderate demand increase, says Paul Carton, ChangeWave analyst.

Count Cisco and other infrastructure suppliers, as well as bandwidth barons, as winners.

at&t VoIP for Austin

U-verse IP-based voice service is being introduced in the Austin area. So those of you who wonder when incumbent service providers will get on the VoIP bandwagon have an answer. VoIP makes most sense for an incumbent provider when the basic service package includes other IP-based video services.

Even when IP isn't extended completely to all the end points, the adoption pattern will mirror the ways IP and optical fiber was introduced into the rest of the network. IP made first sense in the network core. So did fiber. Over time, fiber extended into the metro trunking plant. That same sort of thing will happen as soft switches replace older TDM switches.

VoIP features will be made available at the central office, with media gateways between the end user analog equipment and the CO. Over a period of time, the gateways will migrate deeper into the access network.

But there will not be a complete flash cut to VoIP as the voice platform until some critical mass is reached. At some point, half the customers will be buying IP-based video or data services. Sometime around then, it starts to be feasible to decommission the older networks.

But not much before then will it make lots of sense.

DirecTV, FiOS Taking Share

DirecTV and Verizon's FiOS (where it is available) are getting 58 percent of the customers as consumers in a February 2008 survey describe the choices they will make in buying new video service providers.

Keep in mind, these are customers who already have decided to make a change. And as the incumbent, a cable operator is going to be hit disproportionately by customers who want to make a change.

The survey also suggests about four percent of respondents are leaving another service provider for Comcast, for example.

Considering that DirecTV is operating as a "single play" for the most part, it is doing quite well, though some percentage of its new additions come from telephone company customers buying DirecTV as the "video" component of a virtual triple play or dual play.

Apple and RIM Lead Smart phone Sales

According to a March 2008 ChangeWave survey of 3,597 consumers, the smart phone industry is "a two-horse race between Research In Motion's BlackBerry and Apple's iPhone," say Paul Carton and Jim Woods, ChangeWave analysts.

As the incumbent, RIM continues to enjoy a commanding market share lead, with 42 percent. Apple has nine percent, but is growing faster than RIM.

If customer satisfaction is an indicator of future growth, Apple will contiunue gaining share. About 79 percent of iPhone owners report they're "very satisfied" with their phone. About 54 percent of BlackBerry users say the same.

Among respondents planning to buy a new smart phone in the next 90 days, 35 percent say they'll purchase an Apple iPhone, a huge jump since January 2008.

About 29 percent say they will buy a BlackBerry.

at&t Warms to Android

Initially cautious about the Google-initiated Open Handset Alliance, at&t Wireless might be having a change of heart.

"I like it a lot more than I did before," says Ralph de la Vega, AT&T Mobility CEO. "It's something we would want in our portfolio."

"I think it's going to be a good option for us and a good option for our customers," de la Vega says. The wireless giant might be intrigued about being able to put its own applications on OHA devices.

And that offers at&t room for innovation and differentiation, just as open platforms allow innovation by other application providers.

Intel: Internet in Your Pocket

There's a symmetry between Intel introducing new "Atom" processors and Sprint's interest in WiMAX. As the Internet becomes more pervasive, the desire to be constantly connected using wireless and wired broadband--but especially wireless-- will drive the creation of computing-intensive consumer products that benefit from really-fast wireless connectivity.

And that's the whole idea behind the Intel Centrino Atom processor, formerly known as "Silverthorne": low power consumption, advanced graphics handling, quality audio and fast page downloads.

The whole idea is that new consumer devices benefiting from fast mobile broadband will emerge.

In a real way, that's what is emerging from studies of how Apple iPhone users behave. Sure, people talk, text and check their email. But the really stunning behavioral difference is the use of Web applications.

"Internet in your pocket" is a fairly accurate way to describe the coming change. Unless that is going to be a big trend, everybody is wasting time and money thinking about and preparing to build WiMAX, LTE (Long Term Evolution) and other fourth-generation networks.

Biggest Non-Story at CTIA

Sprint Nextel announcing a reinvigorated WiMax venture with Clearwire, Comcast, Time Warner Google and Intel. There was supposedly an April 1 self-imposed deadline for reaching agreement, and it does appear the deadline passed with no agreement.

That, in and of itself, doesn't necessarily mean a deal won't ultimately be reached, or that a deal is unreachable. Cable operators have been in deals with Sprint before, with arguably meager gains on the operational front. But they know Sprint.

What the cablers might not be so sure about is their wireless strategy. Some might argue that with open networks coming, owning the network might not be crucial. Others, possibly with less justification, might argue that cablers don't actually "get" the importance of wireless.

More plausibly, there remain several issues. Investors probably are not wild about the capital investments. Cable executives traditionally have not been comfortable running services on somebody else's network. Wireless is not necessarily a core competency or a service that can be incrementally grafted onto the hybrid fiber coax network.

Perhaps some worry about betting on WiMAX when the telcos will back LTE. More significantly, perhaps, is uncertainty about the size and customer appetite for all sorts of services that go beyond voice. There is, in fact, almost no reason to build wireless broadband networks capable of 50 Mbps to 100 Mbps if in fact various sorts of new broadband services are not the revenue drivers.

And lots of experienced people probably would have to admit it is not yet possible to outline all the popular new services and business models that will drive fourth generation networks. In the midst of that much uncertainty, executives might not feel a need to rush a decision.