Google, Zander, etc. November 30, 2007Posted by chetan in : US Wireless Market , add a comment
According to WSJ, Google is to announce their Spectrum Auction Plan
and it is Bye-Bye Zander at MotorolaUS Wireless Market , add a comment
With Verizon’s decision to pursue LTE, UMB is effectively dead. There might be some hope for 4G harmonization after all.
Crumbling Closed Gardens? November 27, 2007Posted by chetan in : US Wireless Market , 2 comments
This morning Verizon Wireless announced:
Verizon Wireless said it will allow consumers to use any cellphone on its cellular network and allow open access to the Web and third-party applications, reversing its longstanding policy.
“This is a transformation point in the 20-year history of mass market wireless devices — one which we believe will set the table for the next level of innovation and growth,” Lowell McAdam, Verizon Wireless president and chief executive officer, said in a press release.
I had said that Google’s move into the mobile space will accelerate the move towards open gardens. Of course, devil is in the details.
Lot to be thankful for .. November 21, 2007Posted by chetan in : US Wireless Market , add a comment
I am thankful for the vibrant industry we all work in and my family, friends, and colleagues and you - my readers. Thanks for visiting and Have a Safe and Happy Thanksgiving Holiday.US Wireless Market , add a comment
I was flipping channels earlier this evening and was treated to a smartphone commentary on PBS which had interviews from Ballmer, Eric Schmidt, and Andy Rubin amongst others. This is probably the most Google executives have talked to media about Android and their strategy on mobile. Some good insights.
My favorite passages
ANDREW SEYBOLD: As much as I respect Google, the wireless industry can’t be an extension of the Internet because wireless bandwidth is finite. It’s a fixed resource, and it is shared bandwidth. The more people who use it in a given area, the less data speed they have.
ERIC SCHMIDT: I completely disagree with the characterization that somehow the wireless network is going to be any different than the wired network, because there’s enormous spectrum becoming available through licensing programs, better radio design, faster computers, and so forth.
SPENCER MICHELS: What about the advertising? How important is search to how much money you make from advertising on phones?
STEVE BALLMER: Well I think one of the more important applications that’ll be funded through advertising is search, so search and advertising is very important. If I want to find a pair of shoes in stock, if I want to find a place to go eat that serves Italian food, if I want to find the closest cheesecake place to the movie, those are all kinds of search and advertising opportunities. And we’re making a big investment in our general capabilities around search and advertising and for phones specifically.
SPENCER MICHELS: Is there a difference there then with Apple’s philosophy on that which seems to be changing?
STEVE BALLMER: No, I would say Apple tends to think about things much more sort of cordoned off and cocooned, that’s what they did with the PC, that’s what they’re doing with their phones. Doesn’t mean that they won’t be successful, but it probably means they won’t be a very high percentage of the phone market.
SPENCER MICHELS: What do you hear that Google is doing in this field?
STEVE BALLMER: Everything and so I don’t — I know nothing.
SPENCER MICHELS: Come on.
STEVE BALLMER: No, there are a lot of rumors and we all just have to wait and see what really happens.
SPENCER MICHELS: Does that concern you, Google getting into this?
STEVE BALLMER: There’s already a lot of competition in this field. Our job’s got to be to drive important innovation and to work very well with partners. And if we do that you know the sky’s the limit for opportunity for us.
SPENCER MICHELS: Does Google think it might get into the hardware business and actually make a phone?
ERIC SCHMIDT: Well right now we’re just announcing the software that we think would make a great Google phone. We’ve not announced, and have no current plans, to announce a Google phone piece of hardware. But there are plenty of partners who are busy building interesting kinds of hardware that would use this new operating system that we’ve announced.
SPENCER MICHELS: Implied in what you’re saying is the phone companies, AT&T and Sprint, Nextel and so forth are kind of controlling something that you want to have more open.
ERIC SCHMIDT: We have been concerned for some time with the concentration in the wireless space around a small number of carriers who don’t give people enough choices. What we want to make sure is that you can go to a store, take any phone and connect it to any wireless network.
SPENCER MICHELS: Eric, what makes this different than the kind of phone that for example Microsoft is working on?
ERIC SCHMIDT: Those phones can do some of it, but they don’t do all of it, and more importantly they’re not standard. They’re all specialized. So our offering, Android, if everyone uses it, people will be able to build the same application and have it run on personal computer, on Macintosh, and on a phone. The fact that they get to go to hundreds of millions of people means that software developers will love to deliver this platform.
ERIC SCHMIDT: We’re giving Android away because we benefit when the Web is better. We benefit when more people are using the internet, especially on mobile devices. And we benefit because when more people use Google, more people use Google search and every once in a while those people will use our ads. So eventually we think an Android mobile user is pretty likely to use Google advertising and our studies indicate that mobile ads are going to be worth a lot more than the traditional ads that we sell.US Wireless Market , add a comment
Inside CRM rates biggest VC busts of all times and the MVNO Amp’D Mobile took the top honors.
Kindle - DOA November 20, 2007Posted by chetan in : US Wireless Market , add a comment
You have to give points to Amazon for trying something new and different but they seem to fall in the Consumer Electronics 101 trap. History is littered with examples of devices that have priced themselves out of the market. Amazon could have REALLY made a BIG splash with this device. Aesthetics aside, they should have kept the price below $100 and made more money on downloads. They should have just focused on books and try to keep the costs down for Kindle 1.0 and look for enhancements for 2.0. They were smart not to put extraneous wireless data charges into the mix. But charging for Blogs - what is that all about?
PiTech Magazine Interviews November 19, 2007Posted by chetan in : US Wireless Market , add a comment
Earlier this year, i had a chance to interview two pioneers in the mobile and computing industry. These interviews will appear in the upcoming issue of the PiTech Magazine which is a magazine focused on IITs (Indian Institute of Technology), IITians, and Technology in general). Great features and articles from prominent personalities. I will post these interviews.
Padmasree Warrior, EVP & CTO, Motorola: The Future is Mobile &
Ravi Venkatesan, Chairman, Microsoft India: Microsoft: Innovating from, for, and with IndiaUS Wireless Market , add a comment
Abhishek Tiwari hosts the 100th Carnival with plenty of insightful discussion around Android. Thanks Abhishek for including our post and making it the post of the week.
Finally a post from Chetan Sharma, providing detailed analysis of the US wireless data market for Q3 2007. Chetan does an excellent job with these reports and they contain a treasure of valuable data. Hence this is my post of the week
Mobile Advertising Book: First Reviews are in November 18, 2007Posted by chetan in : Mobile Advertising , add a comment
We are delighted by the reviews that are coming in for the book. The first two are from the two distinguished entrepreneurs who have had a significant impact on the US mobile industry.
“Very rarely do books like this offer equal value to both advertising buyers and sellers but Mobile Advertising is a wonderful primer on the mobile landscape and advertising opportunity from both perspectives. Its completeness and clarity makes it an essential resource for any company or person looking to help pioneer or participate in this emerging category.”
Chamath Palihapitiya, Vice President Product Marketing & Operations, Facebook
“This book is a critical contribution to defining the biggest opportunity in the wireless industry today - Mobile Advertising. And more importantly, it provides a blueprint to exploit that opportunity! Brilliant insights, clearly written — a must-read.”
Paul Palmieri, President & CEO, Millennial Media3G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, Indian Wireless Market, Intellectual Property, Japan Wireless Market, Location Based Services, MVNO, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Search, Smart Phones, Strategy, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments
US Wireless Data Market Update - Q3 2007
US wireless data market continued its growth reaching $6.4B in service revenues for the third quarter. With the holiday quarter to go, the aggregate data revenues for the year are already past the 2006 data revenue mark. Whether it was the first full quarter of iPhone sales, or the debate on the upcoming 700MHz spectrum auction, or the rumors swirling around the gPhone, or the continued M&A activity - the US wireless data market remained vibrant in Q3. Given that majority of the data revenues now comes from non-messaging applications and services and the subscriber penetration for such services is just getting into the inflection zone, US remains one of the most attractive wireless data markets.
- US Wireless data service revenues grew 9.4% Q/Q to $6.4B in Q307. For the first nine months of 2007, the US wireless data service revenues stood at $17.7B jumping 59% from the same time period in 2006.
- Overall ARPU decreased slightly by $0.12 Q/Q to $53.50. The overall voice ARPU declined by $0.35 to $43.93 while data ARPU continued its steady incline, increasing by $0.53 to $9.57.
- Verizon continues to lead in both data ARPU as well as Data as a % of ARPU with $10.6 and 20.30% numbers respectively, in the process becoming the first US carrier to get past the $10 in data ARPU and 20% in data contribution. Sprint also touched $10 in data ARPU but is now last amongst the top four carriers in data % which stood at 16.95%. AT&T’s numbers were $9.35 and 18.4% respectively while T-Mobile’s performance also improved with $8.32 in data ARPU contributing 17.88%
- The strongest growth continues to come from Verizon, accounting for almost 31% of industry’s data revenue in Q307. Its data service revenues jumped by 11% Q/Q to $2B (again becoming the first US carrier to get past the $2B milestone). Verizon was followed by AT&T at $1.8B, Sprint at $1.2B, and T-Mobile at $676M.
- The % contribution of data to service revenues jumped to almost 18% in Q307 and is likely to touch 20% next quarter.
- Last week, US crossed the 250 Million subscription mark. The net-adds stabilized for the quarter even though Sprint lost 337K net subs. While AT&T is the only carrier to cross the 2M mark for net-adds/quarter this year, Verizon is ahead of AT&T in overall net-adds for the year by approximately 820K subs. iPhone couldn’t have come at a better time for AT&T which helped in stemming the tide of losing the market share to Verizon.
- The current net-adds rate for the year is 1.65M subs/month down from 1.92M subs/month in 2006 and 2M subs/month in 2005. Though the growth rate has expectedly slowed down, there is still plenty of room for growth over the next five years.
- The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the year, Verizon with $5.4B, AT&T with $4.95B, and Sprint with $3.7B in service data revenues stood at #4, 5, and 6 respectively with Verizon closing in on KDDI for the number 3 spot. Verizon became one of only four operators in the world who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI). The carrier indicated that enterprise services such as data card and mobile email are generating in excess of $500M/quarter now.
- Non-messaging data revenues continue to be in the 50-60% (of the data revenues) range for the US carriers.
- There was tremendous activity in the area of Mobile Advertising. Google is also laying out its tactical roadmap in hopes to dominate the space and its every move in the mobile space makes its fellow brethren in Redmond scratch their heads. Meanwhile, Yahoo is busy stitching together carrier deals around the world. We just finished a comprehensive book on the subject. More details coming soon.
- Venture money continued to flow into the mobile sector taking the YTD investments to over $4B. Source: Rutberg. Mobile TV/Video, Mobile Personalization, Mobile Search and Advertising, Semiconductor, Carrier infrastructure, Device design and development are hot areas.
- iPhone became the quickest smartphone to eclipse the 1M mark in a quarter (by doing it in its first full quarter). By contrast, RIM took 22 quarters or 5.5 years to crack the 1M/quarter sale mark. Palm is still searching for the elusive milestone and might not find it in this lifetime. iPhone also made its entry into Europe and remains in intense negotiations with operators worldwide.
- Nokia eclipsed 100M unit sale in Q307 for the second straight quarter. Its 9 month tally stood at 303.6M followed by Motorola at 117.8M and Samsung at 114.8M. Nokia’s share of the market went up to 39.1% followed by Samsung at 14.6%, Motorola at 12.8% Sony Ericsson at 8.9% and LG at 7.5%. Apple shipped 1.12M iPhones during the quarter generating the revenue of $118M.
- Despite the sale of over 239M handsets by the top 5 manufacturers during Q307, the industry remained mesmerized by the advent of iPhone. Uncharacteristically, Apple lowered the price of the phone ahead of the holiday season.
- After the launch of iPhone, the talk of gPhone filled the rumoid. While the possibility of a gPhone launch remains open for 1H08, Google launched Android to keep things interesting in the industry.
- T-Mobile USA launched the first device with HotSpot @Home service in Q3.
- There was a renewed interest in LBS and it generated some huge M&A transactions in the sub-sector led by Nokia’s acquisition of Navteq.
- In terms of messaging, T-Mobile keeps their users more engaged than other carriers. Each T-Mobile subs exchanged on an average 758 messages last quarter compared to 584 messages by a Verizon sub and followed by 370 messages by an AT&T subscriber. By comparison, subscribers in Philippines engage in almost 2000 messages every quarter or pretty much a message every hour.
- In our 2005 paper on 3G diffusion, we estimated that 2007 will be the inflection year for 3G in the US market. In Q307, the 3G penetration was just shy of 20% with Verizon leading the pack with 50% 3G subscriber penetration. AT&T reported that 3G subs have over $20 in data ARPU accounting for 30% contribution to the overall ARPU from such subs. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
- Being “Open” is the new Black. Apple announced SDK for iPhone, Sprint touted XOHM, 700 MHz spectrum auction became a subject of great debate and posturing, and Google launched Android (in nov). The convergence of mediums is creating friction, introspection, fear, and opportunities (FIFO). We clearly live in interesting times.
Global update (more details in our worldwide wireless data market update coming out in Q108)
- The RIC in BRIC: We had a chance to visit and spend some time in Russia, India, and China during the past few months. These markets remain vibrant especially China and India adding an aggregate of 15.3M subs a month last quarter. India outpaced China with 24.2M net-adds vs. 21.68M in Q307. Mobile coverage in China is ridiculously good. We found strong RSSI in deep gorges on Yangtze as well as high up on the mountains. Regulators in both countries also gave some indications of granting spectrum for 3G.
- NTT DoCoMo continues to dominate the wireless data revenues rankings crossing the $3B/quarter mark and taking its tally for the year to over $8.6B. They also crossed the 75% mark for 3G penetration. China Unicom edged past SK Telecom to occupy the number 9 spot. Rest of the rankings remained the same.
- Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are topping 30%.
Your feedback is always welcome.
Google planning for FCC auction? November 16, 2007Posted by chetan in : US Wireless Market , add a comment
WSJ is reporting that Google is seriously considering bidding for the 700 MHz spectrum with the deadline to declare intent approaching (Dec 3). I remain skeptical if Google’s strategy to bid and acquire the spectrum is the right strategy for the company. They might end up funding Clearwire which makes sense but i just don’t see Google being an operator. Who is going to take the customer care calls? Eric? If the end goal is to get advertising revenues on mobile, i am not sure if this is the right tactic for them.
This effort pulls them away from their core expertise and will keep the management on their toes + it is a very regional strategy vs. a global strategy. There are a number of other hurdles and am not sure if Google has thought them through.
WSJ also reports “Google, meanwhile, already is running a test version of an advanced wireless network at its Mountain View, Calif., headquarters, gaining operating experience that could come in handy if it wins the spectrum and decides to run a full-scale national mobile carrier, according to people familiar with the matter.”
I don’t know who these “people familiar with the matter” are but they clearly have no idea about what they are talking about. WiFi network equivalent to a cellular network. Puleezee.
US crosses 250M subscriptions November 13, 2007Posted by chetan in : US Wireless Market , add a comment US Wireless Market , 1 comment so far
Phil Leigh of Inside Digital Media interviewed me last week on Google’s Android and other industry topics. The podcast is available here. The conclusions he drew from the chat:
Our guest today is Chetan Sharma who is the Founder of Sharma Consulting. His firm specializes in strategy and intellectual property consulting in the wireless industry. Last week we heard from Alan Reiter who is the founder of the Wireless Internet and Mobile Computing consulting firm, and this interview provides a second opinion. Here are a number of Chetan’s conclusions:
1. Google will decline to bid on the block of 700MHz spectrum that the FCC will auction next year.
2. The bidders will likely be the conventional wireless carriers and perhaps some cable TV companies.
3. It will take several years before the Google cell phone operating system, Android, can be widely deployed, if ever.
4. Even should Android be widely deployed, each carrier will be able to unilaterally determine just how open their systems shall be.
5. Despite number 4 above, Google, Microsoft, and Yahoo, shall become much more influential in the mobile space. The carriers will no longer have the near dominance that they historically have enjoyed.
6. Look for future innovations on the “third screen” to increasingly come from China and India, as opposed to Japan and Korea.
CTIA’s podcast (US Wireless Market) is also easily accessible here (mp3 file)
Mobile Advertising Book Update November 12, 2007Posted by chetan in : Mobile Advertising, Mobile Applications, Mobile Content , add a comment
We are getting into the final phase of the book project. We expect to review the edits from the publisher later this month and finalize the book by end of Dec. Below is the expected Table of Contents:
1. History of Advertising
2. A Perspective from the World of Web Advertising
3. A Five Points Framework
4. Introduction to Mobile Advertising
5. Challenges And Accelerators for Mobile Advertising
6. Mobile Advertising Models
7. Case Studies from Around the World
8. Technology: The Lifeblood of Digital Advertising
9. Mobile Advertising - What Comes Next?
11. Conclusions and Recommendations
I will release more information and content over the course of next two monthsUS Wireless Market , add a comment
Brian DeLacey did an article for O’Reilly’s OnLamp.com “Google Calling: Inside Android, the gPhone SDK”
He interviewed me last week on the subject and he notes ..
The Key to Success? Developers
Chetan Sharma has advised a number of companies in the mobile ecosystem, including members of the Open Handset Alliance. The title to his forthcoming book, Mobile Advertising: Supercharge Your Brand in the Exploding Wireless Market, highlights the underlying economics driving this innovation. Sharma shared his observations:
I think overall, this is a very positive announcement. It means that Google is very serious about mobile. We have heard some rumblings in the past but no substantive initiatives. Now, it seems, Google is willing to take the fight to the carriers and to Microsoft (Nokia, RIM, and others).
Ultimately, the key success factor for Android is this: developers need distribution. Period. Developers can build the most innovative application on the weakest OS given a chance. Enhancements to OS and flexibility in application development are always good, but what really matters is distribution. How easy and expensive is it to get my application to a point where users can play and pay for it? Does Android solve that problem? Will developers have to go through some complicated process to get an application visible to the phone’s owner and network subscriber?
Sharma also raised a practical concern echoed by a number of developers: “Will multiple implementations or adaptations of Android by different handset makers and service providers require that developers create multiple versions of the same application?” If that is the case, Sharma believes Android will just be a YAP (yet another platform) that developers have to painfully consider. Instead, Sharma sees real promise for Google and the Open Handset Alliance to advance the debate around “open access” and crack open the “walled gardens” that have kept phone users immobilized as captive customers in the past.
The fear of fragmentation is something that Google is thinking of too. Mike explained that there was nothing in the license (or underlying technology) to prevent vendors from making these kind of fragmenting changes. However, Mike is confident that consumer opinion will have a significant impact and encourage vendors not to create incompatibles.
One major benefit I see in using the Apache license is that handset manufacturers can take the Android platform and develop their own hardware level drivers before burning it onto devices. Apache licensing allows handset manufacturers to customize in a way that meets business needs without being forced to release incremental intellectual property created for proprietary hardware or drivers. It may not be ideal, but it is practical: this will accelerate openness and adoption among handset vendors who have very little to lose by offering at least compatibility with Android, but would never consider releasing their low-level device interfaces as open source software.
Sprint and Clearwire scrap their agreement November 9, 2007Posted by chetan in : US Wireless Market , add a comment
Quite a blow to Clearwire and possibly to the WiMax movement.US Wireless Market , 2 comments
As you might know, India is adding approx 7M subs a month, clearly one of the hottest market. Stanford is hosting an event to discuss the ins and out of the VAS market in India. It is a free event. Mark your calendars: 5th Dec 6-9PM.
RSVP Mohit Gundecha : email@example.com
“Why Mobile? Why India? Why Now?”
An evening to discuss how Silicon Valley entrepreneurs can participate in the explosively growing Indian Mobile market…
Alongwith release of research report,
“Future of Mobile Value Added Services (VAS) in India“
by Mohit S. Gundecha - Research Associate, Stanford Technology Ventures Program, Stanford University and
Prof. Tom Kosnik - Consulting Professor, Stanford Technology Ventures Program, Stanford University
in association with
Event Date: Wednesday, December 5th, 2007 at 6:00 PM to 9:00 PM
Location: Hewlett 201, Hewlett Teaching Cente, 370 Serra Mall, Stanford University, Stanford, CA – 94305 (Map)
Free parking on Campus after 4:00 PM; Stanford Campus Parking Map
Jeffrey Belk – Senior Vice President, Strategy & Market Development, QUALCOMM
Ashok Narasimhan – CEO, July Systems
Ojas Rege – Vice President, Global Mobile Products, Yahoo! Inc.
Chetan Sharma – President, Chetan Sharma Consulting
Niren Shah – Managing Director – India, Norwest Venture Partners
Eric Allen – Vice President, Direct-to-Consumer, FunMobility Inc.
6:00 PM – 6:50 PM – Networking & Reception
6:50 PM – 7:00 PM – Introduction by Prof. Tom Kosnik
7:00 PM – 7:30 PM – “Future of Mobile VAS in India”, Research Report release by Mohit Gundecha and Kunal Bajaj (Director India, BDA)
7:30 PM – 7:50 PM – QUALCOMM: Enabling Mobile Phone growth in emerging markets - Jeffrey Belk
7:50 PM – 8:50 PM – “Why Mobile? Why India? Why Now?” – Panel Discussion
Is the Indian Mobile VAS Market overhyped? Why are Silicon Valley VCs pouring money into Indian Mobile VAS Companies? What are the growth drivers & inhibitors? Is the market overcrowded? Who are the dominant players in the Indian Market? Who are the promising players? When will 3G networks be installed? How will 3G change the market landscape? Will India leapfrog to Mobile platform for Internet use? Will advertising be an effective revenue model? Will innovation happen only around SMS? How can Silicon Valley participate and benefit from the explosive growth?
The event attempts to understand the explosive growth in the Indian Mobile Market and how Silicon Valley companies can participate and leverage it.
The event is the culmination of a cutting edge research project on “Future of Mobile Value Added services in India” done by Stanford University graduate student Mohit Gundecha and Prof. Tom Kosnik in association with BDA, a leading telecom consulting and research firm in India. The study is targeted at entrepreneurs/ VC’s /angel investors/ students and will encompass different components of the Indian Mobile VAS Value chain. The study evaluates the competitive landscape and offer detailed profiles of established as well as emerging players across the value chain.
This event will bring together a variety of leaders in the industry from both India and North America, along with budding entrepreneurs, aspiring students and prominent authors and bloggers.
Join us for the event to get a FREE copy of the Research Report – Future of Mobile VAS in India!!
More information here
The Christian Science Monitor Article - Google’s Android November 7, 2007Posted by chetan in : US Wireless Market , 3 comments
Chris Gaylord of CSM interviewed me for this article that will be in tomorrow’s newspaper.
from the November 08, 2007 edition - http://www.csmonitor.com/2007/1108/p03s01-usgn.html
Hurdles ahead for Google’s cellphone plan
Bringing Internet openness to the closed wireless world is bold but difficult, analysts say.
By Chris Gaylord | Staff writer of The Christian Science Monitor
After months of speculation, Google this week unveiled its long-awaited “GPhone.” But it wasn’t a phone, it was something potentially far more powerful: a sweeping alliance of cellphone makers, carriers, and programmers that have committed to developing a new generation of mobile devices and perhaps a new philosophy for the wireless world.
The announcement was about Android, a new, Google-led operating system for cellphones. It will be free and open-source, meaning that anyone will be able to use the underlying software to create programs that can run on millions of mobile devices around the globe. If the idea takes off – and that is still a big if – Android could represent an unprecedented fusing of the creativity that has made the Internet useful and fun with the ubiquity of mobile phones.
“This Google proposal can do to cellphones what the Internet did for the personal computer,” says David Weinberger, a fellow at Harvard University’s Berkman Center for Internet & Society. “The Internet created a new public space, and the opening up of cellphones will do the same thing, but extend that space beyond the time that we spend tapping at a keyboard.”
This new era of mobile creativity flows from the idea that Android will let anyone anywhere write programs and share them with the world. So cellphone innovation could come from a developer in her office or a teen in his bedroom. And the next Internet blockbuster business could be sparked by a mobile-phone application.
That’s if things go according to plan. Many have tried and failed to crack today’s closed mobile marketplace, where carriers create and guard software that often runs only on their cellphones. Many analysts doubt that even Google, as big as it is, can succeed.
Even Apple’s iPhone, which allows users to freely surf the Web, won’t download any new applications. What comes with the phone is all you get. Apple says it will open up its iPhone to third-party applications in February, but has not specified how restrictive the development process will be.
Other companies, such as Nokia, have fostered large programming communities, especially outside of the US. “But then you have to worry about whether the program you wrote for one phone will work on another phone, even within the same carrier network,” says Chetan Sharma, head of his own wireless consultancy in Issaquah, Wash. “Often, developers will have to rewrite the code 50, 200, 300 times for the hundreds of different handsets on the market.”
Android hopes to quash these worries. In theory, each phone that runs off Google’s software will speak the same language. Just as consumers don’t have to worry if their Windows-compatible software will run on both Dell and HP computers, Google plans for Android software to run on any phone that adopts the system.
Google will release the actual code next week, but doesn’t expect any handsets to utilize it until the second half of 2008. Until more details come out, many developers are cautious.
“The whole idea of branching out to the mobile platform and reaching a mobile audience is new and exciting,” says Michael Lazerow, CEO of Buddy Media, a New York developer of applications for Internet platforms, such as the MySpace and Facebook social networks. “We’re interested in building applications over every social network that could make us money. If mobile phones offer that, then we’ll be there, but it’s too early to tell.”
So far, Facebook is the only social-network platform that Mr. Lazerow says has opened up its operating software to allow anyone to make money off Facebook programs that they develop. Today, there are 7,700 Facebook applications.
These thousands of mini-programs range from the handy and useful to the silly and pointless. But sometimes, even innovations designed to be frivolous turn into important new tools. Twitter – the social website that asks users to constantly post what they’re doing right now in 140 characters or less – became a key source for decimating emergency information during the southern California wildfires last month.
Before the unveiling of Android, translating Facebook’s model to the mobile market place seemed impossible. The big networks would balk; smaller carriers never had enough users to attract many outside professional developers.
“The telcos have fought any opening up of their walled garden because it goes against their survival instinct,” says Craig Settles, an industry consultant in Oakland, Calif. “But Google has the muscle to make this work.”
The coalition that Google has brought to the table, called the Open Handset Alliance, is an impressive global lineup, most analysts agree.
“This whole move by Google will have a significant impact on mobile users but not for some time,” says Charles Golvin, a principal analyst for Forrester Research based in Cambridge, Mass. One big change will be in the way people perceive their cellphones, he says. Just as the iPhone showed a wider audience that full Web capability was possible in a phone, the coming Android devices could spark greater adoption of Internet-ready handsets.
NY Times Article: Google Enters the Wireless World November 6, 2007Posted by chetan in : US Wireless Market , add a comment
John Markoff of NY Times interviewed me for this article that appears in today’s paper.
Google Enters the Wireless World
The personal computer is climbing off its desktop perch and hopping into the pockets of millions of people. The resulting merger of computing and communications is likely to revolutionize the telecommunications industry as thoroughly as the PC changed the computing world in the early 1980s.
Google, which wants to be as central to the coming wireless Web as it is to today’s PC-dominated Internet, announced on Monday that it was leading a broad industry effort to develop new software technologies aimed at turning cellphones into powerful mobile computers.
If successful, the effort will usher in new mobile devices that as the iPhone has done, will make it easier to use the Internet on the go. The phones, which would run on software that Google would give away to phone makers, could be cheaper and easier to customize.
And by giving outside software developers full access to a Google-powered phone’s functions, the alliance members hope for a proliferation of new PC-style programs and services, like social networking and video sharing.
“We’re human beings and we communicate, and that’s what the Internet social network phenomenon is all about,” said Robert Pepper, a former policy chief at the Federal Communications Commission. “The Internet is going mobile, and it’s not just top down, its one-to-one and many-to-many all at the same time, and that’s what the Google guys get.”
With the move, Google is trying to alter the dynamics of yet another industry. It is already using its deep pockets and innovative technology to shake up television, book publishing, computer software and advertising.
But while Google’s much-anticipated plan has encouraged talk of a Google Phone, the company said that for now it had no plans to build phones. Instead, it has signed up powerful partners to develop and market the phones, including handset makers like Motorola and Samsung, carriers like T-Mobile, Sprint and China Mobile and semiconductor companies like Qualcomm and Intel.
The group, the Open Handset Alliance, expects to start selling the Google-powered phones in the second half of next year.
Analysts were quick to point out that impressive telecommunications and computing alliances had been proposed many times in recent decades and had often had little impact. And the alliance’s software, which is not yet complete, would face competition from established rivals, like Microsoft, Nokia, Palm and Research in Motion.
“I’m not convinced,” said Chetan Sharma, a technology consultant who tracks the wireless data industry. “It’s a pretty impressive list of people in the group, but it takes a long time to get things into the ecosystem.”
However, the strength of Google’s brand with consumers, as well as the open-source strategy that will make the phone software freely available and customizable, make it difficult to discount Google’s potential impact.
For Google, the initiative is an ambitious push to take its overwhelming dominance of advertising on PC screens onto wireless devices. The company has been frustrated at the limited availability of its services on mobile phones, whose features and software are largely controlled by carriers and handset makers.
By courting programmers, Google hopes to give the phones abilities that users demand and carriers find difficult to resist.
The idea is that just as spreadsheets, word processors, video games and other software tools turned the personal computer into an everyday appliance, the emergence of new mobile applications can spur wider adoption of so-called smartphones. More use of the Web, whether on PCs or on phones, benefits Google because its advertising systems have such broad reach.
Software developers “will build applications that do amazing things on the Internet and on mobile phones as well,” Eric E. Schmidt, Google’s chief executive, said at a news conference.
Google’s stock hit a record of $730.23 on Monday before closing at $725.65, up 2 percent.
The 34-member Open Handset Alliance also includes mobile phone operators like NTT DoCoMo and KDDI of Japan and Telecom Italia of Italy, the phone makers HTC and LG and chip makers like Broadcom and Texas Instruments. EBay, which owns the Internet calling service Skype, and Nuance Communications, which makes voice recognition software, are also members.
The list of powerful partners illustrates the substantial inroads that Google has made in the highly competitive industry, as well the challenges it still faces. For example, the two largest cellular carriers in the United States, AT&T and Verizon Wireless, which together account for 52 percent of the market, are not part of the alliance.
While a Verizon spokesman said the company had not ruled out the possibility of joining, an AT&T spokesman, Mark Siegel, said AT&T had no plans to participate.
“Google’s announcement is about what is going to happen in the future, and our focus is about delivering the goods today,” Mr. Siegel said.
Apple executives declined to comment on the Google announcement. However, an Apple spokesman noted that its chairman, Steven P. Jobs, said recently that the company planned to allow programmers to write applications for the iPhone, beginning in February.
Alliance members said they had high hopes for the project.
“Just like the iPhone energized the industry, this is a different way to energize the industry,” said Sanjay K. Jha, chief operating officer of Qualcomm, which makes chips used in wireless phones. Mr. Jha said the Google technology would bring better Internet capabilities to moderately priced phones. He also said innovation could accelerate, as developers would be able to enhance the software, which is based on the Linux operating system, as they saw fit.
The phone plan mirrors Google’s efforts to give away software and services for PCs and profit through customized advertising. As such, it is a potential competitive threat to Microsoft and other mobile software designers.
Mr. Schmidt of Google has said in the past that advertising on mobile phones is likely to eventually bring the cost of making calls to zero. But alliance members said Monday that they did not expect the industry’s business model to change quickly.
John O’Rourke, general manager of Microsoft’s Windows Mobile business, said he was skeptical about the ease with which Google would be able to become a major force in the smartphone market. He pointed out that it had taken Microsoft more than half a decade to get to its current level, doing business with 160 mobile operators in 55 countries.
“They may be delivering one component that is free,” Mr. O’Rourke said. “You have to ask the question, What additional costs come with commercializing that? I can tell you that there are a bunch of phones based on Linux today, and I don’t think anyone would tell you it’s free.”
Handset makers are expected to sell about 12 million Windows Mobile phones this year, accounting for about 10 percent of the global smartphone market, according to the research firm IDC.
Apple, which began selling its iPhone last summer, will account for 1.8 percent of the market. Symbian, which is backed by the phone maker Nokia, dominates the market with a 65 percent share, IDC says.
Google said software makes up about 10 percent of the cost of current phones, although that percentage is rising as phone hardware becomes cheaper.
A brief demonstration of the Google software suggests that phones made using the technology will have features and design similar to the iPhone. Andy Rubin, Google’s director of mobile platforms who led the effort to develop the software, recently demonstrated a hand-held touch-screen device that gave an immersed view of Google Earth, the company’s three-dimensional mapping program.
Mr. Rubin said the software was based on Linux and on Sun Microsystems’ Java language. It was designed so programmers could easily build applications that connect to Web services.
As an example, Mr. Rubin said the Street View feature of Google Maps could easily be coupled with another service showing the current location of friends.
Mr. Rubin also said that a program like Gmail could attach a photo to an e-mail message, regardless of whether the photo was stored in the phone’s memory or on a Web site.
Next Monday, the alliance plans to make tools available to outside programmers in the form of a software developers’ kit. The phone software is named Android, after a company that Mr. Rubin founded and that Google acquired in 2005.
Part of Google’s strategy appears to be that the Android software will lead to new kinds of devices that have cellphone and wireless Internet functions, but have shapes and sizes different from today’s cellphones and PCs.
Intel, an alliance member, has been promoting a new category of device it refers to as Mid that is halfway between a cellphone and a laptop in size. Mr. Schmidt hinted broadly at this when he answered a question on Monday about whether he had a conflict of interest as a board member of Apple, a recent entrant to the cellphone business.
“It’s important to realize there will be many mobile experiences,” he said.