Smart Grid Apps for LTE

Alcatel-Lucent and Tantalus have developed a "smart grid" system using Long Term Evolution networks. The system is important because "machine to machine" communications are expected to provide a key revenue segment for wireless providers, allowing mobile service providers to move beyond revenue models based on "devices used by people," to all sorts of other applications where sensors talk to machines.

Alcatel-Lucent and Tantalus have developed meter collectors and video cameras that will be connected over an LTE network.

Smart grid and other sensor-based applications will be important on the front end of the mobile business as drivers of new revenue, but also important on the back end, in terms of contributing to need for backhaul, middle mile and other capabilities.

LTE Coming Soon to the Smart Grid

Would You Bet Against Apple?

You might be the sort of person who bets against Apple. If so, you'll probably bet against Apple succeeding in any significant way with its rumored mobile payments. The argument against success as a retail store payment vehicle (Apple might builds on iTunes for some other payment-related function) probably starts with the "what's the additional value" argument, but that applies to all proposed systems.

The assumption is that Apple's mobile payment system would have to be as convenient as a credit card swipe. That same objection applies to all other systems as well. Some might argue a mobile payment alternative does not save time; Apple won't either; therefore there is no value and no reason to adopt. Apple will have also have to piggyback off of, or have retail partners deploy, the near field communication terminals required on the retailer end of the transaction That's another barrier.

One possible advantage Apple gains with this new payment scheme is Apple mobile payments bypass the credit card processing fees Apple currently pays for each iTunes transaction. Some might question value for retailer partners and end users. If Apple decides to share those savings with retailers, and rewards users with some loyalty program at the same time, there's the answer to "how do retailers and users benefit."

There are big barriers to mobile payments adoption, ranging from handset capabilities and user habits to entrenched and efficient existing payment systems. But big changes in user behavior have occurred before, when the value was understood. That doesn't mean mobile payments will succeed wildly in the next 12 months or even 24 months. But it could, and Apple starts with a different perspective: it doesn't want to disrupt the traditional payments business. It only wants to enhance the value and stickiness of iTunes.

Apple doesn't have to look first and foremost at its potential direct revenue or profit margin. It doesn't worry so much about those things when it sells music or video or movies. It just wants to make iTunes and its "i" devices so useful and popular that people keep buying them. That makes for a dangerous competitor. Essentially, Apple wants to "give away" what other people need to "get paid for." That is the underlying power of disruption in the Internet space, always.

It's too early to know who wins, or whether Apple will be among them, or why it might win. But Apple, and others, will be dangerous to the extent they clearly understand they have existing revenue models that are enhanced if they extend themselves into mobile payments in some way. The best-placed players might just be those with an existing and powerful revenue model that gets more powerful with mobile payments, without the need to make additional revenue from the payments process itself.

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Will Apple Disrupt Payments?

One can make an argument that any Apple mobile payment system, even if it remains largely aimed at iTunes users and products, will disrupt the existing payments business. Apple does have a base of 160 million iTunes users, said Avivah Litan an analyst at Gartner.

That base gives Apple the ability to operate largely as a "closed payment system" with minimal need to interface with credit card companies and banks, she said. "They can largely shut out credit card companies if they choose to,"and operate in much the same way that PayPal has done in the virtual world, she said.

Some will argue that this approach actually is rather credit card issuer "friendly." Users of iTunes will probably need to continue using their credit cards and bank accounts to replenish the funds in their iTunes accounts, which would make any Apple mobile payments system a distributor for card companies in much the same way that PayPal is. The main issue is the loss of analytics for the card issuers.

Apple could disrupt mobile payment industry, analysts say

Hulu to Become an Over-the-Top Cable Operator?

Hulu management has discussed recasting Hulu as an online cable operator that would use the Web to send live TV channels and video-on-demand content to subscribers, the Wall Street Journal reports.

The new service, which is still under discussion, would mimic the bundles of channels now sold by cable and satellite operators. In other words, Hulu might wind up being an online way of getting linear TV content. Some people might see that as some sort of failure. Others might see it as something else. Much will depend on how the partners structure the end user deal.

If Hulu is tied to existing linear subscriptions, one set of revenue models and value will be offered. It will be useful to watch one's paid-for linear content on devices other than the at-home TV, but beyond that Hulu will simply represent another "TV Everywhere" sort of initiative.

If Hulu acts like an over-the-top cable subscription, there are other possibilities, depending on whether users have more, or less, control over which "channels" they want access to. Hulu might then offer a bit more discrete control over packages, compared to standard multichannel video packaging into a few broad tiers.

It might be asking too much for the new approach to deviate too much from the typical cable approach. But an over-the-top approach, largely disconnected from a "geographic" requirement (where you have to buy a fixed network service to get the mobile content), would still be interesting.

Hulu Reworks Its Script as Digital Change Hits TV - WSJ.com (subscription required)

Cord-Cutting is Too Difficult For Average Families

Here’s evidence that regular people have zero time for things like Google TV, Boxee, and Roku, if only because they’re too complicated.

Hill Holiday, an ad agency,” asked five Boston-area families to participate in a cord-cutting experiment. For one week each family was asked to forgo traditional cable TV in favor of one of the following devices: Apple TV, Google TV, Boxee Box, Xbox 360, and Roku.

As it turns out, TV watching still is a "lean back" activity, and the new Internet delivery systems changed that into an undesirable "lean forward" experience, to some extent. That isn't to say that some company, sometime, will "Apple-ize" the experience and make it elegant. But we aren't there yet.

Video: Experiment Shows Cord-Cutting Simply Too Difficult For Average Families To Grasp