a week in wireless


Get lost

The fact that London taxi drivers need to pass a rigorous test to prove that they know how to get from A-B within a six-mile radius of the centre of town before they’re allowed to take to the streets is a bizarre source of pride for some of the UK capital’s residents. Often cited as clear evidence that the city they live in is so much more civilised than those found elsewhere – or, more specifically, those found overseas.

Adding to the mystique, in no small measure, of what would ordinarily be considered essential but rudimentary navigational skills for a professional driver, is the fact that this almost god-like ability to drive around knowing where stuff is, has been dubbed ‘the Knowledge’.

Oooh, the Knowledge. Forget the meaning of life mate, these geezers know how to ferry tourists and drunks about. And, even though they won’t go south of the river after midnight and quite often share political views slightly to the right of Enoch Powell, they’re the salt of the earth alright gawd bless ‘em! Besides, one of their number won BBC TV show Mastermind once years ago, so they must be pretty darn special.

That said, while cycling through this fair city over the years, the Informer has been cut up and nearly run down on more occasions than he cares to remember by London’s finest. If they’re so effin’ knowledgeable, you’d think they’d learn how to use their mirrors and indicators properly.

Still, perhaps the Informer is doing this fine band of brothers a disservice. According to a recent piece of research, funded by Nokia, “getting lost in London is inevitable”. The Finn quizzed well over 12,000 people in 13 countries and London topped the charts in terms of its ability to bamboozle people’s senses of direction, with ten per cent of respondents admitting that they find it impossible to navigate around the city. The fact that London pushed Paris into second place will be music to the ears of Hackney Carriage drivers everywhere.

In addition to London’s labyrinthine layout, the cabbies have got Londoners themselves to thank for encouraging such widespread ineptitude. According to the research, one in three of the Smoke’s residents admitted to purposefully deceiving people when being asked for directions. Upon being told this disappointing statistic, one friend of the Informer gleefully reported that whenever someone asks him where something is, he tells them to head for the BT tower.

Fear not though if you’re one of those people who routinely find themselves lost in unfamiliar surroundings, miles from home, because as well as offering a host of navigation solutions, Nokia this week unveiled its Home Control Centre.

Using the Home Control Centre, Nokia envisages that consumers will be able to monitor and control their electricity usage by switching devices on and off remotely, they could control temperature, heating, and ventilation systems, and even have remote security systems which could send live video feeds via the mobile network. Eeeek! The humans are dead.

The Informer remembers hearing pop star Craig David tell the assembled delegates at the World Congress in 2006 about how he could send an SMS home saying “chill mode”. His fully connected residence, he said, automatically “dims its lights, adjusts the LEDs and puts on some chilled music,” before sending a text back with the message “the house is chilled”. Now, thanks to Nokia’s new platform, mere mortals will be able to live the dream life of Craig David. Of course, David’s not been seen since 2006. Maybe he got lost in London. It’s a chilling thought.

The Informer wishes he could disappear too, his inbox has been taking a battering due to the pre-Christmas glut of handset stories coming his way. Falling like snowflakes in a blizzard they are. This is traditionally the time of year when device manufacturers start rubbing their collective hands together like a gang of overexcited carol singers in anticipation of the general public’s festive consumer spending frenzy.

The excitement is tangible, but it’s also laced with doubt. The Christmas Grinch is in town big style and he’s bashing everyone hard in the wallet with his Acme Credit Cruncher. Nokia and Samsung are a shoe-in for first and second place this year, but things get a little more interesting further down the league table.

A three-way battle has kicked off between Motorola, LG and Sony Ericsson. Swedish-Japanese joint venture Sony Ericsson gained the edge in the third quarter, with 24.8 million devices shipped, giving it a market share of 8.1 per cent.

But the company’s success was more down to obstacles hampering Moto and LG than Sony Ericsson’s own abilities, with yet more Walkman devices adding to an already crowded portfolio, and reported shortages of parts for the Xperia X1.

Despite its very well documented list of challenges, Motorola wasn’t far behind, grabbing eight per cent of the market in the third quarter with 24.6 million shipments. But industry analyst Gartner notes the company is still struggling with a lack of compelling products and competitors’ aggressive pricing, which Moto cannot afford to meet.

Also with its eye on third place is LG, with a portfolio well positioned to take advantage of the seasonality in the fourth quarter and pricing more suited to the current economic climate. The Korean vendor took 7.8 per cent market share in the third quarter, with 24 million units shifted.

Meanwhile, the bean counters at Taiwan’s HTC are anticipating a fairly merry Christmas. The firm has almost doubled its projected shipments for the first commercial device to be based on Google‘s Android operating system.

By the end of 2008, the gadget maker now expects to have shifted a cool one million units of the G1, available on T-Mobile networks in the US and Europe. This is up from earlier projections of 600,000. Not bad for a device that was greeted with relative indifference by analysts and the blogosphere alike. It’s a nice phone, they said, but unlike our beloved iPhone, it’s functional rather than awe-inspiring.

Apple‘s iconic device might well be sexy, but as is so often the case, it’s not as fast as you might have been led to believe. The UK’s advertising watchdog, the Advertising Standards Authority (ASA), has slapped the Californian braggart on the wrists for talking up its “really fast” internet connectivity.

A TV ad for the device was peppered with the term “really fast,” whenever it made reference to the internet connectivity. But a total of 17 viewers complained that Apple oversold the speed of the connection. The ASA doesn’t reveal who those 17 were, maybe the Informer is just being cynical, but what are the chances a number of that number represent directly or indirectly the interests of Apple’s rivals?

The US firm claimed that the ad was intended as a comparison between the older 2G technology of the first generation iPhone, and the newer 3G model, and reckoned that most viewers would understand this.

While the ASA noted this intention, it upheld the complaints on the basis that viewers might actually expect the device to operate as quickly as demonstrated in the ad, which may well not be the case in a real world environment. The ad has since been pulled, but it’s not the first time Apple has had its wrists slapped by the ASA.

In the summer the company caught flak from the advertising watchdog, over its claim that “all” of the internet is accessible from the iPhone. In its TV ads, Apple claims, “all the parts of the internet are on the iPhone,” but consumers complained the claim is misleading because the device does not support Flash or Java, which is required to access many websites.

The iPhone might not be as quick as the pulled TV advert claimed, but no one could deny the positive impact that its intuitive UI and its all-you-can-eat data plans have had on content consumption. The debate over the most effective method of driving the uptake of mobile data services dates back to a time long before the iPhone was even a twinkle in Steve Jobs’ eyes.

The debate tends to revolve around the operator community’s understandable fear of a dumb pipe future. They need to protect their assets and investments, but in order to encourage the type of rapid uptake experienced in the fixed online world, they need to loosen their control and let customers gobble up as much data as they like for a set fee. The two things aren’t necessarily mutually exclusive reckons Juniper Research.

At present, MNOs take a significant percentage of the revenues generated by content providers in order for them to use the networks in question. But Juniper notes that this has resulted in high prices for end users and has deterred consumers from accessing mobile content on a wider scale.

As a result, the analyst argues that the status quo is a disincentive for MNOs and content providers alike, with some content providers attempting to bypass the MNOs or exit the sector altogether.

Juniper analyst Andrew Kitson, claims that in order for the situation to change, it will be down to the MNOs to make the first move. Kitson suggests MNOs emphasise ‘shared value creation’ in order to avoid becoming dumb pipes in the future. Then by transforming their businesses into smart pipe service providers, the operators can significantly increase their income from mobile content, from a share of $23bn in 2008 to around $52bn by 2013.

As more of us access mobile content, though, more of us will fall foul of acts of cellular treachery conducted by nefarious individuals or organisations hell-bent on separating you from your hard earned cash. Or so says messaging firm Airwide, which funded a piece of research conducted by comScore M:Metrics that suggests the number of unwanted spam text messages people are receiving is increasing year-on-year by 21.3 per cent across the EU.

The study also revealed worrying findings into the use of gambling and adult services by under 18 year olds. In total, Spain recorded the biggest problem with four per cent of 13 to 17 year olds accessing adult or gambling services between June 2007 and June 2008. The UK recorded the lowest problem with only 1.3 per cent of minors accessing inappropriate mobile internet sites. However, the study also notes that the figures may mask a more serious situation with many teenagers embarrassed or frightened to admit the truth.

While we’re on the subject of mobile security. Over in the US a handful of Verizon Wireless employees have been suspended for snooping on US president elect Barack Obama’s mobile phone records.

Verizon’s president and CEO Lowell McAdam issued a public apology to Obama, after it emerged that “a number of” Verizon staff had accessed the president elect’s account.

The fact that Obama uses its network is undoubtedly great PR for Verizon, the fact that he was snooped upon, is not so good. But the perps have been uncovered and the free world is safe. So, on balance, that’s got to be good PR.

The Informer has got some more good news for his friends in the US returning to work after yesterday’s Thanksgiving festivities. The North American wireless industry is standing firm against the downturn and is set to grow in 2009, according to analyst projections this week.

Although North America was the first region to be affected by the economic crisis and has been the hardest hit, wireless operators’ results in the third quarter show how mobile services have become indispensable and two year contracts are protecting the sector in the region.

Industry analyst Ovum notes that relative to other mature economies, both the US and Canada have low mobile penetration rates, at 85 per cent and 60 per cent respectively at the end of 2007, meaning that demand has not yet been met and growth in the mobile connections space is still possible.

US mobile operators added 3.9 million connections in the third quarter and year on year connections growth was 10 per cent. Only Sprint Nextel saw a decline in connections – of 1.3 million – that helped the other operators continue to grow strongly.

Canada’s wireless operators also saw connections growth, with Rogers‘ subscriber base growing eight per cent year on year, Bell Canada growing seven per cent and Telus growing 10 per cent.

In general, however, the future isn’t so bright. On Thursday of this week the Informer took a trip to London’s own big screen IMAX cinema, for a special showing of a dark and brooding horror, featuring a star studded cast from Informa Telecoms & Media’s own analyst contingent.

In hindsight it strikes the Informer that the Mobile Industry Outlook event, might have been alternately called “Crunchonomics”, or “Attack of the Insatiable Dongles”.

Nothing puts the impact of the credit crunch on the mobile industry in perspective like seeing it leap out of a screen in 50 foot high, vertigo-inducing PowerPoint slides – causing the Informer to spill his bucket of popcorn on at least one occasion. The plotline was a now familiar doom and gloom focus on economic turmoil, an interventionist regulatory environment and the brutal competition faced by the industry. A bit like Logan’s Run.

Operators have long relied on the laziness of consumers to keep their subscriber numbers up. ‘Loyal customers’ is a funny term for customers who simply can’t be bothered to take their business elsewhere for the sake of a few quid. But in these straightened times, the wheels of inertia are to be greased by increased price sensitivity resulting in an increase in churn, the crystal ball gazers say.

“It’s time for operators to get their house in order,” said Informa principal analyst Thomas Wehmeier, “Now is not the time for a second rate service experience.”

And with operators now judged on their ability to generate free cash flow, there are signs that carriers might cut capex if their margins are threatened by revenue weakness or an inflationary cost base, which of course is bad news for the network vendors. On the other hand, the carriers are being forced to optimise their data networks to keep up with the burgeoning demand for mobile internet services following the unforeseen success of the dongle.

After years of 3G hype, it has been mobile broadband that has become a runaway success. At the end of June there were 14 million HSPA subscribers in Europe, accounting for about 2.5 per cent of the total customer base, and growing by three million every quarter. There is also a noticeable trend of consumers using mobile broadband services to replace their fixed line internet, often with disappointing results.

Regardless of the quality of service, this means that the networks are taking a real hammering, and according to the analysts, should really prompt the carriers to start investing in backhaul and in capacity rather than coverage. Especially with these trends set to continue, as operators use mobile broadband as a value add rather than a revenue driver – one of the Informer’s chums recently scored a deal from Vodafone, which got him a free dongle, six months half price service (£7 per month) and £75 credit. So over the course of a year, the Big V has made a grand total of £51, and given away a dongle which it sells separately for £49.

The Informer is no economist, but £2 revenue over the course of a year? That smacks of the hysterical desperation seen on the high street at the moment where you can’t move for hoardings promising “25% off!”, “50% off!” and “Please spend your money with us!” as retailers desperately try to revive the economy.

Spend your way out of a recession, that’s what they say. But one company keeping a tight hold of the purse strings is Web 2.0 giant Facebook, which has been reportedly eyeing up Twitter as a potential acquisition.

Facebook, much the darling of the mobile space at present, is believed to have considered snapping up the micro blogging tool, but walked away over a high price tag.

How high? Anything up to $500m if some reports are to be believed – which injects a certain irony into the situation as potential suitors for Facebook, like Yahoo, have in the past been driven off by a high price tag themselves.

Around this time last year, Facebook was said to be valued at around $15bn, after Microsoft paid out $240m for a 1.6 per cent stake in the site. A valuation which many just don’t believe, and may suggest a significantly lower sum than was reportedly offered to Twitter. Heck, if even the social networks don’t believe their own hype anymore, times must be hard.

Take care

The Informer


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