Mobile and Wireless Predictions for the New Year

1) There is a notable shift towards non-operator unlocked 'vanilla' handsets. Globally, about 50% of phones are sold through operator channels - although it is much higher in operator-controlled markets like the US and Japan, as well as those with an addiction to subsidy, like the UK. Various trends are emerging that will start to reduce this in 2008, although change will be slow in markets where operators retain stiff control over retail outlets.

• Firstly, the US is starting to wake up to the idea of unlocked phones, courtesy of non-AT&T (T) iPhone angst and the new 'bring your own phone' openness pitch by Verizon (VZ).


• Secondly, Moore's law & scale economies are bringing down the price of really quite good non-subsidised phones to below important thresholds like €100 or £100.


• Thirdly, operators' attempts to lock people into 18 or 24 month contracts will mean they get hungry for cool new devices long before they're due for upgrades.


• And fourthly, some segments like VoIP users or enterprises, will recognize that 'there's no such thing as a free lunch' and realize they're better off with vanilla devices rather than subsidized ones locked-down and larded with operator menus.

Expect alternative options for handset financing, a healthy second-hand market for phones, and a slew of new retail, B2B and online options for acquiring devices.

2) The European Commission cracks down on data roaming prices. You've been repeatedly warned that this is on the watch list. Yet many operators still charge around €10 per megabyte for roaming for mainstream customers. There are a few exceptions - Vodafone (VOD)'s €12 per day cap, and Three's free data while on-net. But as we move to flatter networks, flatter tariffs and split-tunnels breaking out Internet traffic in the radio access network, the current prices start to look more like those of a cartel. Pricing needs to have at least 1 zero, and arguably 2 or 3, chopped off. Expect Ms Reding to take action.

3) Mobile broadand continues its rapid growth - but 3G-embedded laptops lose out even further to USB-based 3G modems. External USB modems are now a mass market proposition. They're available in pink, even. They work with anyone's existing laptop, they self load software, they don't require that operators put the PCs themselves through testing labs, they're easily understandable and upgradeable. Sure, an operator would love to tie a PC user to a single access service for the life of the device. But it's not going to happen - unless they fancy subsidizing computers down to free. In enterprise, they overcome sales channel issues that mobile operators aren't great at explaining computer features, and IT hardware salespeople aren't experts on HSPA. But unless you're absolutely cast-iron sure that your behavior (or competitors' prices or coverage) won't shift over the 3 years or so you've got the notebook, you'd be crazy to go with an integrated solution. A possible solution is a good 'universal connection manager' as part of Windows, rather than risking layers of operator-customized software on your PC. Expect the USB approach to accelerate even further away from 3G built-in PCs in 2008.

4) At least one mobile operator will face an investigation over reported numbers. I've posted several times before about operators fudging their reported KPIs, using opaque or arbitrary definitions. One of my more vitriolic blog comment critics has even claimed, as an insider, that carriers regularly overstate subscriber numbers to appeal to investors' superficial analysis - and seemed quite sanguine about this. I've had private discussions with other analysts where we've looked in disbelief at some published data. Sure, internal management have access to more 'real' figures - but that doesn't excuse them from providing it externally as well, as most are public companies. I suspect that a serious financial miss, or a whistleblower, could provoke some more serious scrutiny into irregularities, if obfuscation turns out to actually mean misleading.

5) Android... hmmm, it's just another platform. I really can't see what the fuss is about Android yet, especially outside of open smartphone-starved North America. That said, I'm not going to write it off - clearly the Big G holds a few cards up its sleeve. But one thing I'm pretty certain of - it ain't changing the world in 2008. We'll be back here in 12 months saying that Google (GOOG)'s Android might be a big deal in 2009.

6) Technologies for exploiting end-user context and state become the hot topic of the year. At the moment, mobile 'presence' (IMS or proprietary) is pretty lame. The user is registered to the network.... hasn't been 'active' on a call for 79 minutes, has a self-set status they've forgotten to update.... and that's it. How much richer would it be if the network could extract more useful 'state' information about the device and/or user? Even moreso if it is enriched with embedded sensors... "phone on charge", "user is on a Bluetooth headset", "battery low", "at location xyz", "moving in a way that looks like it's on train", "in a darkened room" and so on....

7) Operators realize that knee-jerk attempts to block VoIP are counterproductive. 2007 has seen many operators move towards flat rate data for both PCs and smartphones. But quite a few have used restrictive T's and C's, or in some cases port-blocking or other network means, to try and stop people using VoIP over wireless networks. A few have tried to charge VoIP-able 3G flatrate as a premium service, although a few more enlightened operators have shrugged and adopted an 'anything goes' approach to their data pipes. Expect many more to follow suit in 2008. The possible cannibalization threat is overstated - and is more than balanced by the benefits of mobile broadband service contracts. In any case, things like mashups, VPNs and non-telephony VoIP will make it much trickier to isolate VoIP as a distinct "service" in the future. Net result - pragmatism, and some of the more visionary operators exploiting VoIP rather than fearing it - either launching their own fully mobile VoIPo3G services, or partnering with players like Skype, Truphone or fring.

8) Femtocells have a year of ups and downs. Some niche success, but practicalities will mean it's H2'09 or 2010 before mass market deployment. Sure, we'll see some headline "deployments" in 2008, much like we've already seen Sprint (S)'s much-ballyhooed Airave launch. But these will mostly be v0.9 soft launches, not full, production-ready offerings that are able to be sold in their millions to Mr Joe Average Punter. Operators will realize that the proposition, while sounding good in paper, has a million niggly little issues around user experience, management, billing, regulation, emergency calling, numbering and so on. The business model will also need to evolve beyond purely coverage-based or macro-offload. As per normal, more attention has been lavished on the network aspects than actually thinking through user experience and requirements. There needs to be more standardization, a recognition that there could be lots of multi-femto households, guarantees that femtos work nicely when co located with WiFi and so on. And, whisper it.... but I think that there might need to be some optimizations or modifications to handsets, to make them work nicely in a femto context.

9) OK, this might be wishful thinking, but I'm hoping to see more pragmatism & innovation around the concept of mobile multiplicity.

Lots of people already have multiple phones, SIMs, numbers, identities and so on. While some purists may bemoan the inelegance of this "oh, if they just had the right offer, they'd only want one", they are flat-out wrong. People are happy with complexity. The software in your brain is much more flexible about choosing appropriate modes of communication than the software in the network. People like multiplicity. They want multiple service providers. They often don't care about multiple bills or logins. They are not loyal. So live with it - and exploit it where possible.

Offer people ways to federate messages or numbering across multiple carriers. Give them ways to manage the richness. Offer them second SIMs or phones for the same number, or multiple numbers on a single device. Don't try and shoehorn them into your marketing department's polarized view of what a user experience should be. Sure, give them incentives to be stay with and extend their business with a single provider (ie bribe them), but also recognize that coercion or bloody-mindedness isn't conducive to loyalty.

10) No, No, No, No, No

• Mobile search. Still pointless. Haven't you realized by now that people just want normal, full-fat Google on their phones?
• Mobile advertising will definitely grow - but it's not going to get beyond a few % of ARPU in the foreseeable future except for a handful of segments
• Mobile centrex. I stand by what I've been saying for years. Hosted/centrex enterprise telephony has an opportunity for gaining 10-20% of total business lines. Mobile hosted services only have an opportunity for 10-20% of the 10-20%.
• UMA dual-mode services. OK, maybe we'll get to 2-3 million users. Wow, that'll really set the handset industry on fire....

• Unfortunately, we'll still have mobile industry dinosaurs referring to handsets as 'terminals', as if they were mainframe-style dumb endpoints. Mind you, it's a good filter to see who really doesn't 'get' what happens to mobility when it intersects with Moore's Law. Unfortunately, I predict we'll still have the word 'device' at the end of the year. (And 'seamless', too, ugh)-
• Unlicenced-spectrum wide area wireless. Some people have been talking up 2.4GHz WiMAX to me recently. And of course there's the ever-delayed xMax as well. Maybe it'll work in a couple of rural areas where there's not much interference, but unfortunately I can't see city-wide unlicensed data working.
• GSMA's IPX. Sorry, but this just won't work in the real world apart from maybe some internal peering arrangements between operators. End-to-end multi-operator IMS-based QoS? Oh, please.

Comments

[TheBombDifuser]

Ever delayed xMax, Dean how easy it must be for you to sit back in your one bedroom pay as you sleep and comment on things you would never dare try yourself.....One thing that cannot ever be delayed is the minions view on how others try to change the world. Happy New Year, Dean.

[TheBombDifuser]

A couple of Rural Areas, Dean..? You mean where 70 percent of the population in the world live? Ok, we´ll take it.

[TheBomb]

xG has delayed the "launch" five times, has never proven it works, has no commercial contracts with anyone, has lied numerous times etc etc. This thing is never going to work.

[Mobile]

I'd predict that the majority of people with low-end cell phones with browsers will discover sites that better serve their needs: Like most people, I use a regular cell phone with cheap unlimited data plan. The best mobile-friendly portal for us is a1r.mobi (for guys) and a1r.mobi/me (for women). Both offer e-mail from HotMail, gMail, AOL, Yahoo! SMS and a texting dictionary. Plus: news, entertainment, live chat, forums, e-mail, and 411. From either site, you can easily get to everything you want - fast and everything is mobile-friendly. Most people with low-end web-enabled cell phones don’t even use the feature because they don’t know how or think it may be too expensive (check your carrier plans). The main reason I didn’t use my mobile phone at first was it was too much of a pain to find truly mobile-friendly sites. Most sites took too long to load, looked terrible when they did load, and often just froze. a1r.mobi is much better. Try it out on your own cell phone and see for yourself. Like me, you may decide you don’t need to trade up to a smartphone to enjoy web browsing. Of course, if you can afford a smartphone, all the better!

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[TheBombDifuser]

05:07 PM
Tue Jan 1stxG has delayed the "launch" five times, has never proven it works, has no commercial contracts with anyone, has lied numerous times etc etc. This thing is never going to work.

Waaaah, Wimax has delayed for years, so has UWB and EVERY other technology out there. The Bomb is a stinker, who knows nothing about a LOT.

[TheBomb]

Let's take a closer look at what xG earlier has said/promised that never materialized:

Contract with Skytel = lie
$57 Mio pre order = lie
High demand = lie
Ground breaking technology = lie
Credit Suisse to support it= lie
Morgan Stanley to support it= lie
Launch of a Swedish Network = lie
Launch*5 = 5 lies

xG with it's new, amazing, state of the art technology....and all they got are useless and worthless NDAs with 2 (TWO, WOW WHAT A HIGH DEMAND) companies that have no experience in the area.

xG is pathetic, they're liars, they're laughable and they're losers.

[TheBombDifuser]

Ever roll out a technology?
Gama
Telefonica
National Grid
What is your story with Credit Suisse? Have you spoken to Brian Griffiths or someone at the bank?
Why are you crying for pubic info?
Are you nuts, Bomb?
Your obsession with spinning yarns like an old crochety woman who hasn´t gotten any in a while is pathetic. Oh, you ARE in clothing....you don´t spin yarns very well.

[TheBombDifuser]

10) No, No, No, No, No

Methinks the lady doth protest too much!

[TheBomb]

Just pointing out obvious lies xG has come up with and there is still no one outside the company that has seen and/or validated the technology - according to the info they've sent out, they've lied about how it works. Sad that such companies are around gets attention, even more sad market cap for something that is surrounded by lies is $700 Mio. Good thing is it's down from $2,1 Bio .

[TheBomb]

Also, xG is company run by former management from iDigi that was a fraud - it's backed by Swiss/Swedish "bank" ACH, well known for their pump and dump projects, insider trading etc - the only analysis made on xG is by Hichens Harrison. The analyst is a former employee with porn company Private. Private is a very large investor in xG.

Does anyone need anymore red flags to understand this "company" stinks?

[TheBombDifuser]

Also, xG is company run by former management from iDigi that was a fraud - it's backed by Swiss/Swedish "bank" ACH, well known for their pump and dump projects, insider trading etc - the only analysis made on xG is by Hichens Harrison. The analyst is a former employee with porn company Private. Private is a very large investor in xG.

Bomb, the only reason you see red flags is because you are full of bull****. You spend countless hours thinking about xG and you have stinking thinking. That´s what happens when your life is based on fake clothing. The reality becomes fake and the falsehoods are your reality. The more you repeat the same nonsense, you believe it that much more.

[TheBomb]

What is bull**** in this comment?

"Also, xG is company run by former management from iDigi that was a fraud - it's backed by Swiss/Swedish "bank" ACH, well known for their pump and dump projects, insider trading etc - the only analysis made on xG is by Hichens Harrison. The analyst is a former employee with porn company Private. Private is a very large investor in xG. "

[TheBomb]

I also would like to add that xG is supported by boiler room people, TheBombDifuser is one of them. A person whose IP has been blocked on the iii.co.uk bulletin board because of insult and abuse.

Regarding delays and xG - every time they announce anything they say it will happen in 2-3 months. So far nothing has happened and two years are gone. xG is trying to buy time but more and more people are beginning to understand that so the share price is down 2/3 from the top - thank god

[TheBombDifuser]

I would like to point out that the Bomb is an Asian manufacturer of fake designer clothing. Anyone who counts from the top is a born retard.

[TheBomb]

BombDifuser - you obviously have no idea - you may e-mail me on: [e-mail] - I would love to read your abuse and insults.

You didn't answer what was bull**** in this post, the reason is it's all true and even you are smart enough not to deny that:

"Also, xG is company run by former management from iDigi that was a fraud - it's backed by Swiss/Swedish "bank" ACH, well known for their pump and dump projects, insider trading etc - the only analysis made on xG is by Hichens Harrison. The analyst is a former employee with porn company Private. Private is a very large investor in xG. "

[TheBombDifuser]

Bomb, Kablam!! My IP isn´t blocked, you imbecilic peewee. I can´t wait to see your fiction novel.

[TheBomb]

As always with xG and its "supporters" - THEY NEVER ANSWER ANY QUESTIONS.

As you don't I guess you agree that this is true. You haven't said anything else.

"Also, xG is company run by former management from iDigi that was a fraud - it's backed by Swiss/Swedish "bank" ACH, well known for their pump and dump projects, insider trading etc - the only analysis made on xG is by Hichens Harrison. The analyst is a former employee with porn company Private. Private is a very large investor in xG. "

[CuriousGeorge]

I did a quick search on this XG technology and it appears they are associated with penny stock promoters, a pump and dump firm and boiler room operations in three different countries. This should concern anyone who has to hope the black box technology works.

[TheBombDifuser]

Curious, are you sure your name isn´t Dumb?
What penny stock promoters, what pump and dump firm, and what boiler room operations in 3 different countries?

Are you talking about Piper Jaffray, ING and Hichens?
You seem stupid. Keep doing that "search"...t... the way all successful people make their decisions....suuuuuurr...

Most people are stupid. This type of forum is proof.

[TheBombDifuser]

By the way "curious" most people are broke too, you seem like a minion.

[TheBombDifuser]

Oh, wait, I did I "quick search" on Curious George....he´s a cartoon Monkey.....one must be careful after reading something written by a cartoon monkey.

LOL, what a jackoff.

[TheBomb]

ACH is a pump and dump firm also associated with insider trading. Hichens is very much a red flag with it's association between xG and porn. Marc Dannenberg is a well known boiler room profile that has promoted xG. There are about a 1000 more red flags related to this company. If you want to make money from this - go short. Remember market cap is approx $750 Mio and it has NOTHING

[TheBombDifuser]

That´s a lie, That´s a lie, and That´s a lie.
Sure Huang Dong, the Chinese Ripoff manufacturer who can be emailed at [e-mail], if you repeat your lies often enough, you will believe them, just like you believe Versace is really spelled Versachi.

[TheBomb]

What exactly is a lie?

[TheBombDifuser]

Let´s make it simple, Back, anything that comes out of your mouth is a lie. You are a sham, a knock off designer clothes artist, and anything you do or say is not real.

[TheBomb]

You can't point at any lies, that's your problem - xG is laughable and so are you!

[TheBombDifuser]

Ok, Back, so are you, nanananana.

[TheBomb]

Check this link out. Posts by yourself about xG - who's the liar? www.iii.co.uk/investme...

[TheBombDifuser]

THis year, next year, what´s the difference.

[TheBomb]

NO YEAR, it will never happen - THAT'S a difference!

[TheBombDifuser]

sure, ya nutcase!