Google "Will Discuss" Owning a Mobile Network

From time to time, speculation arises about whether any of the four leading "Internet" firms in the U.S. market (Apple, Google, Facebook, Amazon) would seriously examine ownership of a branded mobile network. Half of those firms already are in the smart phone business, three are in the tablet business and Facebook, off and on, is rumored to be considering producing its own smart phone.

So is Google, for example, looking at owning a wireless network? "I'm sure we will discuss this," says Google Chairman Eric Schmidt. That doesn't necessarily mean Google will act.

But Google appears to believe that abundant spectrum could become a reality. If that happens, the barriers to a branded Google mobile service would seem less formidable.

"The current spectrum shortage [currently facing the mobile industry] is real, but it's an artifact of a licensing and regulatory error," said Schmidt. "New technology allows there to be lots of spectrum, far more than you could use."

NFC Pessimism Grows, and Might be a Good Thing

Juniper Research has revised its forecasts for the global near field communications market, significantly scaling back its growth estimates for the North American and Western European markets. In some ways, that might be considered a "good" thing, to the extent that it follows a common pattern of technology adoption.

What is "good" about deflated hopes is that such periods seem "always" to happen, and are just a milestone on the way to eventual adoption on a fairly wide scale. So the argument is that dashed initial hopes mean the market is moving in the way one should expect: high hopes, disillusionment, and finally adoption.
The most significant change to the Juniper Research forecast is the amount of transaction activity NFC devices will drive, as the new forecast reduced the number of NFC devices in use only slightly.

By 2017, global NFC retail transaction values are now expected to reach $110 billion in 2017, significantly below the $180 billion previously forecast. 

Such revisions are not unusual in the predictions business, especially not for a brand new market that depends on many changes in the ecosystem.

Apple’s decision to omit an NFC chipset from the iPhone 5 has reduced retailer and brand confidence in the technology, leading to reduced point of sale) rollouts, for example.
This in turn will lead to lower NFC visibility amongst consumers and fewer opportunities to make payments, threatening a cycle of “NFC indifference” in the short term, Juniper Research believes.

“While many vendors have introduced NFC-enabled smartphones, Apple’s decision is a significant blow for the technology, particularly given its previous successes in educating the wider public about new mobile services” says Dr. Windsor Holden, author of the study.

The report found that Apple’s move would impact most dramatically on markets in North America and Western Europe, where transaction values would exhibit a “two year lag” on previous forecasts as retailers delay POS investments.

Conversely, retail transactions in NFC’s heartland in Japan and Korea are likely to experience little or no impact from the Apple decision.

None of that is terribly surprising. Though the 2011 KPMG Mobile Payments Outlook, based on a survey of nearly 1,000 executives primarily in the financial services, technology, telecommunications, and retail industries globally found that 83 percent of the respondents believe that mobile payments will be mainstream by 2015, even the moset astute industry observers tend to overestimate early adoption of a major new technology, while underestimating long term impact. 



Analysts at Gartner, for example, use a model of how expectations for significant new technologies running in a predictable cycle. What the cycle suggests is that expectations nearly always (always, according to the model) run ahead of marketplace acceptance.

What the Gartner hype cycle suggests is that expectations for mobile payments using near field communications are at a point where we can expect five to 10 years to elapse until NFC actually begins to make serious inroads as an adopted mainstream technology. The emphasis probably is important to note: “begins.”

In fact, Gartner's Hype Cycle now expects it will take five to 10 years before NFC is in widespread and mainstream use. Gartner's latest expectation likewise is that cloud computing and machine-to-machine applications will not be mainstream for another five to 10 years as well.

But new technologies historically take some time to reach 10 percent, then 50 percent, then virtually ubiquitous adoption. To be sure, there has been a tendency for new technologies based on digital and electronic technology to be adopted faster. But a decade period to reach perhaps 10 to 20 percent adoption is hardly unusual.

That is not much of an issue for point solutions like computers that can be used without lots of additional change in infrastructure. That is not true for highly-complex ecosystems such as payments, though.

ATM card adoption provides one example, where "decades" is a reasonable way of describing adoption of some new technologies, even those that arguably are quite useful.

Debit cards provide another example. It can take two decades for adoption to reach half of U.S. households, for example.

If Gartner analysts are right about the near field communications "hype cycle," we should continue to see "disillusionment" expressed about near term prospects for NFC. The reason is that Gartner now sees NFC at the "top" of its hype cycle, the point at which overly-optimistic projections face the reality of an extended period of development, before something "useful" actually emerges.

Internet TV, NFC payment and private cloud computing all are at what Garner calls the "Peak of Inflated Expectations," which is always followed by a period where the hype is viewed as outrunning the actual market. That suggests NFC soon will enter a phase where expectations are more measured.

You Can’t Easily Sell “Unified Communications” to Small Business

Service providers arguably aren’t terribly good at selling “unified communications” to small business owners, but probably not because, as UC retailers, they are especially ineffective communicators.

No, the problem is that UC is tough to explain, tough to comprehend, tough to envision, quite often.

It’s a little bit like the old adage: people don’t buy drills, they buy holes.” Some of you are veterans of the IP telephony business, and can remember what it was lke trying to sell a “hosted PBX” service to small business prospects. Most will probably say, if they are honest, that most potential buyers didn’t immediately “get it.”

There is a reason most tier-one service providers split sales into “enterprise” and “mass markets” efforts. Small businesses are more like consumers than enterprises in terms of how they buy technology products. Try explaining “hosted PBX” to a consumer who is not in the technology business. Small businesses might not be too different.

That might still be true about some of the newer features and value propositions. Datavo, a competitive local exchange carrier operating in Southern California, is the first announced user of the Metaswitch Networks “Accession Communicator” platform, which turns a hosted PBX solution into a mobile solution.

The way Datavo sells the new capabilities illustrates quite a lot about how small business customers understand value, and how little they understand industry jargon.

Really, they don’t get “unified communications.” They don’t really get “hosted.”

“The concept really is not easy to convey in a brochure,” says Rhaphael Tarpley, Datavo’s chief operating officer, in large part because customers really do not understand “unified communications,” even if “that is what they actually want and need,” says Tarpley.

“They don’t get ‘hosted solution,’ but they do understand ‘cloud’ or ‘Internet,’ and that’s the way Accession features can be sold, Tarpley says.

Perhaps oddly, the metaphors tend to be “consumer” like references. People relate to their devices and their apps. And, perhaps oddly, the idea that invoking business office features from their office phones is something made possible by a downloaded Google Play or Apple iTunes app just makes sense to people.

Prospects understand the notion that the features are enabled by a free app downloaded from iTunes or Google Play, Tarpley says. That seems familiar and tangible.

They don’t necessarily “get” the notion of invoking features from a web portal. They seem better able to understand a Google Play or iTunes app download.

The point is that it is hard to sell “unified communications.” hosted IP telephony or mobile UC to prospects who struggle to understand it. It just isn’t intuitive. But they seem to grab the "Internet" and mobile app metaphors much more easily. So don't sell "UC."

Tell prospects they can download a free app from iTunes or Google Play that allows their mobile phones to use the features of their business phone service, plus video calling, plus starting a call on the mobile and finishing on the business phone, or vice versa. Later you can tell then how you do it.

There's a Long Tail (Pareto Distribution) for App Store Developers

A small number of developers, almost entirely game companies, continue to generate the majority of revenue at the leading app stores - Apple’s App Store (iPhone only) and Google Play, according to an analysis by Canalys.

Canalys estimates that just 25 developers accounted for 50 percent of app revenue in the United States in the Google Play and Apple iTunes stores during the first 20 days of November 2012. Between them, they made $60 million from paid-for downloads and in-app purchases over this period.

That is a classic Pareto distribution, sometimes called a "Long Tail" or the "80/20" rule. The idea is that, in any market, or any natural world distribution, a small number of instances account for a highly disproportionate share of the total cases. 

In business, that might be also called the law or rule of three. It's the same idea: a small number of actors, instances, companies or objects have a disproportionate share of total instances. 

Also, Of the top 25 grossing developers, all bar one (popular music service Pandora with its Pandora Radio app) are game developers. 

Mobile Operators Say Small Cells "Essential"

About 98 percent of mobile operator respondents surveyed by Informa Telecoms and Media  believe small cells are essential for the future of their networks. There are now 46 small-cell deployments by operators, including nine of the top 10 operators by revenue globally, according to Informa Telecoms and Media.

Somet 55 percent of the mobile operator respondents are most interested in public access deployments over the next 12 months, while 35 percent say enterprise applications are of high interest.

Some 49 percent of operators said their greatest concern surrounding outdoor metro deployments are the planning issues (finding suitable sites, power), followed by backhaul challenges, noted by 35 percent of respondents as a challenge.

The survey also found that Wi-Fi was deemed to be complementary to small cells with deployments of both expected to take place in parallel.

In practice, it sometimes will be hard to clearly delineate a small cell access from Wi-Fi hotspot access. Vodafone Greece provides its customers with a free data service when connected to certain public access small cells in retail locations. In that scenario, the network might be “mobile,” but the charging is that of “free public hotspot.”

“Our research shows that operators now regard small cells as essential to the future of their networks,” says Dimitris Mavrakis, principal analyst at Informa Telecoms & Media.

Millennials are Gadget Nuts

The November 2012  Scarborough Research study that surveyed 210,000 US consumers ages 18 to 29, illustrates what gadget nuts they are.  High-definition televisions had the highest rate of ownership among this group at 73 percent, followed by smartphones at 61 percent. 

And while only 17 percent of Millennials owned a tablet, it topped the list of gadgets that they planned to buy in the next year, at 11 percent.

These digital natives have taken to the hyper-connected world of social media with enthusiasm, says eMarketer. 

Beyond simply logging on to view their feed, six in 10 respondents had visited a friend’s page or profile during the previous 30 days, while 52% had commented on a friend’s post and 49% had updated a status. Those participation levels easily outpaced email and messaging activities, performed by 48% of respondents.

A March to April 2012 survey from the Pew Research Center’s Internet & American Life Project found that those ages 18 to 29 were more likely than any other age group to engage in real-time mobile activities ranging from coordinating social gatherings to reviewing a business or restaurant.

How Syria Turned Off the Internet, Why UN Must Not Gain Control

On 9 November 2012, between 1026 and 1028 (UTC), all traffic from Syria to the rest of the Internet stopped., according to CloudFlare.

The Syrian Minister of Information is  reported as saying that the government did not disable the Internet, but instead the outage was caused by a cable being cut. He's lying. 

The exclusive provider of Internet access in Syria is the state-run Syrian Telecommunications Establishment. Their network AS number is AS29386. The following network providers typically provide connectivity from Syria to the rest of the Internet: PCCW and Turk Telekom as the primary providers with Telecom Italia and TATA for additional capacity. 

When the outage happened, the BGP routes to Syrian IP space were all simultaneously withdrawn from all of Syria's upstream providers. The effect of this is that networks were unable to route traffic to Syrian IP space, effectively cutting the country off the Internet.

Syria has four physical cables that connect it to the rest of the Internet. Three are undersea cables that land in the city of Tartous, Syria. The fourth is an over-land cable through Turkey. In order for a whole-country outage, all four of these cables would have had to been cut simultaneously. "That is unlikely to have happened," CloudFlare says.

CloudFlare diplomatically says they "don't believe our role is to take sides in political conflicts." 

"However, we do believe it is our mission to build a better Internet where everyone can have a voice and access information," CloudFlare also says.

Indeed. And that's why allowing governments to control the flow of information on the Internet is such a bad idea.