Loosely-Coupled Nexus One Mobile Ecosystem Creates Problems

Some problems are predictable; some aren't. It was predictable that as owners of unlocked Nexus One devices began to experience problems, they'd have to run the gauntlet of fingerpointing one often sees when ecosystems are loosely coupled.

Reporting connectivity issues, some users have been told by T-Mobile USA that it is "an HTC problem," while some users communicating with HTC have been told "it's a T-Mobile problem."

Other problems are echoes of what has been seen in the recent and immediate past, namely complaints about the quality of the 3G networks. Some users complain that 3G coverage is weak or non-existent. Some report that their devices are switching from 3G to 2G networks. Again, it might be a handset issue, but switching from a 3G to a 2G network is what happens when a 3G network gets congested.

In other cases, the error modes suggest there is a software or hardware problem. At least some users say an active HTC device, when sitting right next to a Nexus One, gets great signal while the Nexus One gets a weak signal. It's hard to blame that particular circumstance on network issues.

All that is known right now is that there is some problem using the Nexus One on the T-Mobile network.

The loosely-coupled ecosystem (open devices sold independently of service) is bound to create customer service issues, irrespective of the merits of either a network or handset.

Google Nexus One: the Difference Between "Device" and "Service"

There's a downside to "open" approaches to retail distribution and support of mobile devices. Highly-technical users might not mind, in fact, might enjoy, having to play with their devices and software.

Most end users just want things to work. For all its potential problems, tighly-integrated retail approaches, where software, hardware and retail support are integrated, has advantages. That approach tends to reduce the potential for user unhappiness, particularly when after-sale issues start to arise.

That is one downside for the Google Nexus One approach, which has Google selling unlocked devices, without direct retail relationships with service providers. When problems start to manifest themselves, users are likely to become frustrated with Google's ability to provide email and forum support.

As the old saying goes, one of the things about being a service provider is that one "occasionally has to provide some service." Granted, Google actually is acting as a device retailer for Nexus One. But users are not likely to care. They got their phones from Google and they will expect Google to solve after-sale problems.

If T-Mobile did not sell users their phones, they logically are going to refer users back to Google for device-related questions. It is bound to cause headaches, and also is likely to cause some buyers to gravitate towards a Droid, as Verizon will take ownership for all problems that could arise.

"Open" leads to more innovation, no doubt. But the mobile business is only partly about innovation. It is a service business. And that is likely to prove important, going forward.

Is Google Crazy, or Simply Unusual?

Cable and satellite providers of video entertainment have different financial interests from content providers, even though both are essential parts of the multi-channel video entertainment ecosystem.

Likewise, handets manufacturers, mobile application providers and access providers have distinct financial interests, though all are part of the single mobile ecosystem.

That being the case, conflicts between ecosystem partners are an ever-present reality. The issue is how much cooperation and conflict is possible, and whether enough benefit occurs, despite some conflict.

Google's release of the Nexus One, and its apparent plans to release a Nexus Two and other devices are prime examples. Some observers, including Google's competitors, will note that it is risky for a partner to compete with its other partners in a single ecosystem.

Microsoft of course questions the wisdom of Google's mobile strategy, insisting Google will have trouble attracting and keeping handset partners for its Android operating system now that the company is selling its very own branded devices.

That certainly is the conventional wisdom. But even a valid conventional wisdom can have exceptions. What "most" partners cannot envision, attempt or succeed at is not to say that "all" partners are so limited. Nor are relationships immutable; they can change over time.

Google might be one of the salient exceptions, as is Apple. Several years ago, most telecom executives were more afraid of Google than of cable operators. These days, executives are looking for ways to leverage and work with Google.

Apple has significantly reinvented business frameworks in the music and phone businesses, for example.

The other issue is that Google's relationship with some ecosystem partners can be qutie distinct. At least initially, HTC and Motorola have add a different relationship than other manufacturers, and T-Mobile as a service provider likewise was early to support Android.

Google's other partnerships are a bit more complicated and one has to think Verizon and Motorola are less than thrilled, even though both are key Android partners.

Still, the point is that ecosystem relationships periodically get tested. Content providers and cable and satellite operators are used to the possibility of significant conflict over carriage agreements. Also, at the margin, some distributors also are content owners, while some content owners have been distributors.

Some distributors are part of the equipment supplier segment, as well as distributors. Some equipment suppliers are becoming application providers.

Yes, Google risks some ire by distributing its own branded handset. But ecosystem "messiness" is growing throughout the communications and entertainment ecosystems. And some players can attempt strategies that would be considered suicidal if attempted by less powerful contestants.

There are rules, and exceptions to those rules. Apple and Google might prove to be right or wrong. What is indisputable is that they are different; they can attempt things most other players cannot think about.

FCC has No Current Authority to Impose Network Neutrality Rules?

The U.S. Federal Appeals Court reviewing whether the Federal Communications Commission currently has authority to create or enforce "network neutrality" rules has not yet ruled.

But initial questioning suggests the court questions whether the Federal Communications Commission has current jurisdiction to write, much less enforce, net-neutrality rules for the Internet. So some legal observers now suggest the appeals court will in fact rule that the FCC had not authority to sanction Comcast for the way it managed peer-to-peer services.

A 2008 FCC order forced Comcast to stop throttling BitTorrent applications as a means of managing network congestion.

U.S. Court of Appeals for the District of Columbia Circuit Jude Raymong Randolph pointed out to an FCC attorney that “you have yet to identify a specific statute.”

Since the Congress has passed no laws relating to network neutrality, the FCC had, and has, no authority to take action on the matter, the judge seems to suggest.

A ruling of that sort would at least temporarily delay any new efforts by the FCC to codify new network neutrality rules, and shift the battle over such rules to the Congress.

FCC Chairman Julius Genachowski has argued the agency has authority to set net neutrality rules because of the "Internet Freedoms Principles" set in 2005, which say that users have the right to use lawful applications, which P2P is, though the use of P2P sometimes includes transfers of copyrighted content without permission.

But Comcast argues it has the right to manage its network, which it interprets as permitting rate limiting of P2P services, when necessary to preserve user experience and relieve congestion.

To be sure, the specific issue at hand seems primarily about whether the FCC’s decision was improper for statutory reasons, as Congress has not given the FCC legislative permission to create such rules, observers say.

On a wider legislative front, some observers think the White House is dialing back its efforts to get "strong" network neutrality rules adopted. The evidence is indirect, but some point to the late-October resignation of of Susan Crawford, University of Michigan law professor, previously a key adviser to the president on technology and communications, and a proponent of "strong" network neutrality rules.

According to the American Spectator, Crawford's version of Net neutrality was too radical for White House economic adviser Lawrence Summers, contributing to her early departure. If that observation is correct, it would be a sign that any new rules would not strictly ban "every" form of packet prioritization.

Many observers note that quality of service measures typically are needed when users want to interact with important video or voice services, especially as video already has become the primary driver of bandwidth consumption on a global level.

Those observers also would note that strict versions of net neutrality, that would absolutely ban any packet prioritization, would prevent Internet access providers from applying prioritization on behalf of their users, even when those users might specifcially ask for, and desire, such prioritization.

"Packet discrimination" sounds bad, and is, when it is used as a business weapon, allowing unfair competition. But packet discrimination is a good thing when it helps maintain quality of experience for the emerging applications users say are important, especially video and voice.

Also, at the recent Consumer Electronics Show, White House deputy CTO Andrew McLaughlin said the FCC had yet to determine whether Net neutrality is needed to preserve the "open Internet."

If that seems unremarkable, consider that in 2009 McLaughlin had said network management practices of cable companies that limited the speeds of large file downloads were essentially the same thing as Chinese-style Internet censorship.

Management of bandwidth-heavy applications by some users at times of network congestion is not application "blocking" or censorship. It is an effort to maintain quality of service for most users. Some methods will be more palatable than others.

The analogy is access to the old voice network. Telcos do not "censor" speech when, at times of peak load, a user might encounter a "fast busy" signal indicating that no circuits are available. The point is that every network gets congested at least some of the time.

And it always has been recognized that some method of regulating access at such times is a legitimate network management matter. In fact, a fast busy tone does mean a user has temporarily been "blocked" from the network. Sometimes a mobile voice call experiences the same sort of temporary blocking.

That sort of access blocking is not any suppression of freedom of communication or expression. It is not an infringement of Internet freedom. It is a simple way of managing a congested resource at times of peak load.

The immediate matter at hand, though, is the simple matter of legislatively-granted authority. The appeals court seems to be signaling its belief that Congress has granted the FCC no authority to impose rules about network congerstion management or methods of doing so.

Android: "Excessive Choice" Danger?

Android developments continue fast and furious. AT&T says it will launch five separate Android devices by June. Only days after announcing its Nexus One, Google says it will introduce a "Nexus Two" better optimized for business users.

The Verizon Droid, launched in November, seems to have abruptly changed Android's position in the mobile browsing market in under two months, and dramatically increased the general level of interest in Android devices overall.

In just two months, Android has emerged as the second most popular platform used to access InformationWeek’s mobile web site, pushing aside BlackBerry and taking a meaningful bite out of Apple’s iPhone share of traffic, says Tom Smith, TechWeb VP.

In November 2009, Android accounted for eight percent of mobile page views at TechWeb, compared to 59 percent for Apple and 17 percent for Blackberry, says Smith.

In December, though, Android did far better. Apple had 51 percent share; Android 24 percent; Blackberry eight percent, he says.

Google, which just released the the Nexus One phone, now says the Nexus Two will have a physical keyboard and will be more suitable for enterprise users (obligatory boilerplate: "Nexus One" is aimed at the Apple iPhone; Nexus Two will challenge the BlackBerry").

Android enthusiasts will be pleased by the explosion of activity, right? Well, yes and no. The whirlwind of activity could have an opposite effect: either freezing potential buyers into inaction as they wait for the next device, the next offer, the next set of business arrangements and carriers.

Social psychologists Sheena Iyengar, PhD, a management professor at Columbia University Business School, and Mark Lepper, PhD, a psychology professor at Stanford University, have demonstrated the downside of "excessive" choice.

In a 2000 paper the researchers showed that when shoppers are given the option of choosing among smaller and larger assortments of jam, they show more interest in the larger assortment.

But when it comes time to pick just one, they're 10 times more likely to make a purchase if they choose among six rather than among 24 flavors of jam.

In a separate study, Iyengar and Wei Jiang, PhD, a finance professor at Columbia Business School, analyzed retirement-fund choices, ranging from packages of two to 59 choices, among some 800,000 employees at 647 companies.

Instead of leading to more thoughtful choosing, however, more options led people to act like the jam buyers: When given two choices, 75 percent participated, but when given 59 choices, only 60 percent did. In addition, the greater the number of options, the more cautious people were with their investment strategies, the team found.

Relatedly, too much choice also can lead people to make simple, snap judgments just to avoid the hassle of wading through confusing options, which ironically can sabotage a company's marketing plan, finds social psychologist Alexander Chernev, PhD, of Northwestern University's Kellogg School of Management.

Chernev found that when people were offered variants of the same brand of toothpaste, cavity-prevention, tartar-control and teeth-whitening types, for instance, they tended to switch to another brand that offered a single option.

So what's the problem? "The customer has no idea how to decide and may therefore switch to another brand that doesn't require making tradeoffs," Chernev says.

In that case, they often choose what Herbert Simon, PhD, first referred to as a "satisficing" option: people make the first reasonable choice that fits their preferences, but not the "absolute best" solution.

In other words, instead of exhaustively scanning all options until finding the perfect, or "maximizing" choice, people simply make the "it's okay" choice, not working through all the possible angles.

The implication for Android buyers?  Study the options, then settle on something you feel good, if not perfectly, about. Trying to buy the "absolute best" device will create anxiety and buyer's remorse at some point as the next device option is made available, the price of older options plummets or terms of service and carrier choices evolve.

Android Bumps BlackBerry Traffic in December, TechWeb Says

In just two months, Android has emerged as the second most popular platform used to access InformationWeek’s mobile web site, pushing aside BlackBerry and taking a meaningful bite out of Apple’s iPhone share of traffic, says Tom Smith, TechWeb VP.

In November 2009, Android accounted for eight percent of mobile page views at TechWeb, compared to 59 percent for Apple and 17 percent for Blackberry, says Smith.

In December, though, Android did far better. Apple had 51 percent share; Android 24 percent; Blackberry eight percent, he says.

"To varying degrees, the trends are holding up across other sites in our network as well, but those sites don’t have the same level of visitor activity as mobile.informationweek.com so the numbers above are the strongest indicator we have of Droid’s impact," says Smith.

Smith thinks it was the Verizon launch of the Droid that caused the surge in mobile activity. "We saw a spike in usage of our mobile sites in December, when Droid activity truly took off," he says.

Android appears to be making what had been a two-horse race in smartphones into a three-horse contest, with the previous number two, Research in Motion, being pushed back to third place.

Though impressionistic, the data is in line with what other recent studies suggest, namely that the Android operating system hit some sort of inflection point in December 2009.

Mobile Browsing Still Just 1.3% of All Browsing, But Growing Fast

Mobile browsing now accounts for 1.3 percent of all Internet browsing, according to Net Applications. That measurement was taken in December 2009, which saw double-digit increases for virtually all mobile operating systems, with an unusually high increase for Android.

The Net Applications statistics confirm that most users continue to do most of their Web browsing on PCs, but also that mobile's share has steadily increased during 2009.

Both Windows and Mac devices lost a small amount of share in December, as Android began to make its presence felt, but all major mobile operating systems posted large percentage gains. Android grew  54.8 percent, while BlackBerry grew 22.2 percent. The Apple iPhone posted a 19-percent gain while Java ME grew 15.4 percent.

While the iPhone continues to account for the largest share of mobile Web browsing, Google's Android mobile operating system was by far the largest percentage gainer in December 2009,  accounting for 0.05 percent of all Web browsing, up from 0.01 percent in February.

It does appear an inflection point has been reached, however: the adoption curve appears to be steepening.