GSMA Mobile Broadband announcement - a billion dollar ho-hum

Lots of fanfare this morning about the announcement of GSMA's big "Mobile Broadband" branding exercise, whereby notebook vendors will put a sticker on embedded-3G notebooks, reminiscent of Centrino or WiFi.

Some good stuff in the announcement, notably a $1bn marketing budget which is obviously likely to help drive the uptake of both embedded and external solutions. But also lots of self-serving propaganda as well (as exemplified by the quote from Gemalto, maker of SIM cards).

But the focus on WiFi hotspots in the PR points out just how narrow a niche the initiative is addressing. Personally, I use HSPA a lot as an alternative to hotspots - but that's because I'm the type of user who really needs access in a lot of different places, and I cringe at the stupid prices charged by the likes of Swisscom in hotels and airports. My next laptop might well have an embedded module - as long as the price is right, and it's not locked to a specific MNO's data plan.

But I'm in a minority - as, I expect, are most readers of this blog. The vast majority of notebook buyers - consumer or corporate - won't be buying an embedded-3G notebook any time soon. Many don't need mobility anyway, and others will be happy with dongles and tethered 3G phones.

I'm buried in other stuff today, but I'll get back later in the week to why the curve of 3G "attachment" in notebooks will be much shallower than that experienced by WiFi a few years ago.

And as for the semi-serious mention of refrigerators with embedded modules in the PR.... I remember the "screen fridge" in all those house-of-the-future demos back in the late 1990s. It says a lot about the balance of reality vs. wishful thinking in the whole announcement.

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Multiple devices per account on WiMAX + also wholesale options

I saw an interesting announcement this morning from Bridgewater Systems, about a solution to enable WiMAX operators to control the number of active connections per user/device. While it's being pitched as a sort of fraud-management tool, it highlights something pretty important:

WiMAX services will enable multiple devices per subscription

This isn't news as such - many market participants like Sprint have been saying this was likely for some time. But it's something that the existing cellular providers and architecture are pretty bad at. Yes, you can get family plans and corporate group accounts. Yes, discounts are available where you get both phone and 3G dongle from the same provider, linked at "customer account" level. 

But with very few exceptions, operators don't offer the option for a single subscription (ie "phone number") to support multiple devices. A few operators provide 2+ SIMs, but there's typically a clunky procedure for the user to denote which device is "active" at a given time.

Increasingly, I find myself using two or three screens simultaneously - making a phone call while using my laptop, using handheld device for email while doing something else on my PC, and so on. There's no reason why I should need multiple mobile accounts, any more than I do running two PCs over a single ADSL subscription. Why shouldn't I have two, three or more devices sharing my mobile broadband, as long as my aggregate traffic is less than the monthly cap?

WiMAX has an inherent advantage here in not needing SIM cards, in my view.

Interestingly, Bridgewater also has a wholesale solution for WiMAX providers - another angle in which I'm expecting some differentiation from cellular networks. My view is that there will be a broader selection of partner/wholesale business models in WiMAX, compared with the fairly monochrome choice of MVNOs on cellular. I'm expecting to see regional wholesale networks (eg for local councils), or ones based on specific QoS metrics (eg low-latency gaming MVNO vs secure enterprise MVNO vs. streaming-optimised MVNO). 

To some extent, WiMAX operators will be driven to these niches because they've pretty much relinquished the PC-connectivity market to HSPA/EVDO dongles in the near term. But it also reflects the likely open-minded nature of new WiMAX entrants to try innovative Telco 2.0 business models.

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3G Netbook + broadband bundles.... niche?

It's not great surprise to see a number of MNO announcements about low-cost, small "netbook" PCs with embedded 3G - Vodafone+Dell, and T-Mobile+ Asus/Acer [link in German] in particular. Interestingly, Telecom Italia Mobile has gone the MID route instead.

Regular readers will know that I'm skeptical that what I'm calling "Mobile Broadband Computing" products, sold by carriers with embedded 3G, will amount to much. I think there's a lot of wishful thinking going on, which isn't going to fit with the ways in which customers buy and use computing devices.

One thing I haven't been able to track down yet is whether the mobile broadband contracts for these devices will be have standard flatrate dataplan T's and C's, which prohibit, block (or even charge extra) for applications like VoIP and IM. If they do, the proposition will likely fail even sooner than I anticipated. It would be a very serious mistake indeed.

I can just imagine the marketing pitch - "Get our free laptop with embedded HSPA, and ditch your ADSL service! It's like fixed broadband but better in every way! Only, er, you can't use Skype. Or MSN. Or that IM feature built into FaceBook, although as it's a web service we can't see you using it, anyway".

One thing that MNOs will likely find it tricky to grasp is that in the computing domain, you can always give extra applications to customers - perhaps an SMS client, even IMS RCS - but you can't stop them from using their choice of other software. (Unless you're an enterprise IT administrator... and they are doubly certain in not wanting to have PC applications determined by their carrier).

In any case, I'm just not convinced that end users will want to buy their PCs from a mobile operator - and I suspect that those who are most tempted by "Free Notebook!" offers are probably the most likely to prefer prepaid mobile services rather than another 24-month contract. Or those whose credit cards or banks aren't too keen about providing payment plans for PCs.

I'm definitely of the opinion that some embedded-3G offers are really just about massaging up carriers' apparent data ARPU when in fact all they're doing is simply retail finance masquerading as subsidy. I wonder when we'll see cars with embedded HSPA modules for telematics being sold by MNOs too "Our ARPU is now €450 a month".....

One more passing thought on this - given the numerous horror stories about time/hassle in replacing broken or faulty handsets, do you really fancy leaving your embedded-3G PC, with all your data, at the local phone shop if you have a problem with it 6 months down the road? Or perhaps buying separate PC + dongle is the way to go after all?

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Could Google save us from the tyranny of the SIM card?

From the department of "not likely to happen any time soon, but interesting nonetheless" comes this report of a Google patent that suggests that future phones could institute an auction amongst available wireless providers, each time a connection is needed.

If there's one thing worse than being a dumb pipe, it's being one that has to compete continually on price with an array of other dumb pipes.....

(This reminds me a bit of the original view of web services, where applications would in theory pick providers of XML components from a directory in the cloud, in real time. Although given that mobile commonly has 5-10 second call setup times, there's probably a bit more scope for this to work for phone calls, than if it was embedded in a enterprise app needing millisecond response).

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Convergence gateways - some quick thoughts

I had a meeting this morning at NetEvents with a company I hadn't really spoken to for a very long time - GenBand. They acquired NextPoint last week - itself a combination of the former ReefPoint and Nextone, and one that I frequently encounterer when talking about femto and dual-mode WiFi architectures.

Basically, the company plays in the "convergence gateway" market - which as a telecoms industry sector is an ugly mix of security gateways, media gateways, SBCs, GGSNs, DPI boxes, femto & WiFi gateways and assorted other application-oriented boxes.

Essentially, the sector involves something sitting between the access part of the network (fixed/mobile) and the core applications (legacy CS switches, IMS, NGN, Internet, VoIP etc). This "something" or "somethings" perform a selection of security, control, aggregration, transformational and monitoring functions.

Many companies operate in this general space - Sonus Networks, Acme Packet, Mavenir, Cisco, Stoke and so on. Many of the larger telecom companies like Ericsson and Motorola buy modules on an OEM basis and are this also involved as aggregators.

There is the usual debate about best-of-breed vs. integrated boxes, but I tend to agree with the view that certain things will make sense to blend into unified platforms. The GenBand / NextPoint merger looks quite a smart move against this.

I'm also wondering whether this layer of the network might be the right point to open up network APIs & expose capabilities for various Telco 2.0 business models.

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Vodafone Portugal, prepay data SIMs & WiFi...

I'm in southern Portugal for the NetEvents conference. I had a few minutes to kill waiting for my transfer from Faro airport when I arrived, so I decided to see if I could get a prepay data SIM to run in an unlocked phone.

The good news: Just €5 bought me a SIM with a €7.50 credit. No registration, nothing. And for €7.44 the nice lady in the shop set me up with a month's worth of HSDPA (I think with 100MB cap)

The great news: That sure beats £3 or £2 per MB or whatever the ridiculous data roaming charge is on my 3 or T-Mobile or O2 SIMs I have with me.

The bad news: This gives me a separate access point (a Voda Live! one) which doesn't allow me either to send outbound POP3 email, or use SSL to connect to sites like Yahoo, Gmail or British Airways

The slightly better news: There's another APN called Internet Vodafone which allows me full web access. Plus Nokia Maps seems to work, but Google Maps doesn't.

The ridiculous news: I check into my hotel & decide to see what's up with WiFi to connect my laptop. The hotspot is run by, guess who... Vodafone Portugal. Prices for Voda customers are €5 for one hour, €20 for a day, and €30 for three days.

In other words, a day's WiFi costs 4x a month's HSDPA. From the same operator.

So despite my usual dislike of downloading apps to smartphones, I decide to join the tethering fraternity, and install JoikuSpot on my E71, which turns it into a little 3G-backhauled hotspot.

Joy.

I have both phone & WiFi access online for a low price, having navigated through several orders' of magnitude of attempted rip-off. I haven't signed any piece of paper with terms & conditions, I paid cash, I'm totally anonymous (until writing this....), I can send email via my PC/Web interface.

Not only that, but tethering my PC to HSDPA shows how fast it really is - and how much of its speed & latency is wasted by the browser's sluggishness on the Nokia.

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Plenty going on with femtocells

After a few quiet weeks, it's all happening in femto-ville this week:

Top of the list is the NEC/Ubiquisys rollout for Softbank. The Japanese operator has long been rumoured as the most likely near-term commercial deployment candidate, and is interestingly basing its architecture around IMS rather than the new 3GPP femto standard. Like DoCoMo, (which is planning its own "HomeArea" femto service with Mitsubishi) it is slightly hamstrung by near-term regulatory limits on installing cell-sites, which mandate an engineer be in attendance. However, I suspect that Softbank may be a bit more aggressive than its larger & more conservative peer in getting that law changed, or (perhaps) scrutinising it for loopholes.

One thing I'm less convinced by is Motorola's femto/picture-frame combination. Which looks remarkably like the original Motorola femto/picture frame prototype from 3GSM a couple of years ago that never went anywhere. (Unfortunately I can't find the name or a picture of the thing....). Over at ThinkFemtocell, there's a list of other possible widgets that could incorporate femtos , but my view is that all of these things should actually be static 3G endpoints which connect to a central femto elsewhere in the home. In other words, "phones" specifically designed to work with a femto, a bit like the various WiFi home gadgets like Internet radios and the cute Nabaztag wifi rabbit. I discuss the concept of femto-specific devices in this report.

One of my analyst peers has got quite a lot of press this week with the notion that LTE could be underpinned by a femto layer. I agree entirely - back in May I suggested that "femtos will only become truly massmarket when we get to LTE deployment" and my current forecasts only really forecast a major uptick in shipment numbers above 10m per year, from 2013 onwards. There's a good article from PicoChip on LTE femtos here as well. 

My only slight concern on this is that the vast majority of offloadable mobile data traffic comes from devices that have WiFi in them as well - especially PCs, iPhones and high-end Symbian & Windows smartphones. Collectively, I reckon it's 99%+ on many networks at present - a figure that might fall (and obviously there's voice traffic to offload as well) , but the "inverted pyramid" effect will stay in place for many years.

Lastly, I should mention I'm moderating a panel on Femtos vs WiFi at the NetEvents Press & Analyst summit in Portugal on Thursday - speakers include representatives from Motorola, Airvana, Ubiquisys, Trapeze and GenBand (which just acquired NextPoint)

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Huawei WiMAX dongle certified

One of the biggest boosts for HSDPA adoption came when Huawei introduced its E220 USB dongle modem in mid-2006. It enabled operators to have a lower cost device than previous PC cards, in a form that retailers and users intuitively understood. Variants have now shipped 10m+ units, and have massively expanded the market for mobile broadband into the consumer segment.

So the certification last week of a 15Mbit/s Mobile WiMAX variant of the iconic Huawei device is an important milestone. It's intended for the 2.5-2.6GHz band, so must be a contender for a US launch as well as future European & Asian rollouts.

It's not the first USB WiMAX modem - Airspan and Posdata have them as well, and there's even a Xohm-branded one from Chinese rival ZTE. Samsung's got one coming as well.

But given their track record of ramping up volumes, plus their enviable record at signing up distribution channels, the advent of the Huawei device signals to me that WiMAX is due to have one of its periodic upswings in confidence over the next few months.

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500MB mobile data a month without rich media

I just looked at the logs for my main mobile data/Internet smartphone. In the last 30 days I've used half a GB - 480MB download, 40MB upload. Probably 70% of that has been over 3G, with the rest on my home WiFi.

And that's without doing anything too fancy - no YouTube, no streaming audio, no VoIPo3G, no P2P. Just normal web browsing (a mix of mobile and "real web" sites), email, RSS, plus a fair amount of Google Maps.

Yes, I'm quite a heavy user - I'll update my RSS feeds while I walk to the tube station & read them on the train, and I'll click through to content-rich web pages that are 500k-1MB each to fully load. And I've downloaded a few PDFs of reports and other documents as well. But I probably have the device in my hand as much as a typical BlackBerry or iPhone owner that I see around London.

And this is with fairly lacklustre 3G/HSDPA performance. I don't think it gets above 1Mbit/s at all, and I'd say its considerably slower most of the time. And on a device which has a UI I'd give 6 or 7 marks out of 10.

My cellphone data usage has gone up roughly 50-fold with the advent of flatrate data, HSDPA and decent browsers.

With an iPhone 3G, or an S-E Xperia or a similar device, with a real 3Mbit/s+ peak speed, I could certainly imagine doing 2GB a month, maybe more if I decided to watch video podcasts on the tube rather than text RSS, or streamed Internet radio. And if I used the phone as a tether for my laptop rather than having a separate dongle, you could probably add another 1-2GB.

OK, I'm probably a top-1% user at the moment. But I'm definitely wondering whether we're going to start seeing some real congestion issues on urban 3G networks sooner than we expect if sales/use of upper-tier devices really kicks in.

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Is Nokia missing another screen resolution transition?

In 2004-5, Nokia lost significant handset market share. This was attributable in part to its late adoption of clamshell-format handsets.

But at the time, a secondary factor I identified was a slow adoption of the (at the time) leading-edge QVGA 320x240 pixel screens. Nokias high-end phones (9xxx Communicators excepted) were hamstrung by the early versions of Symbian OS, which mandated a 208x176 pixel screen.

This meant a visible difference in screen quality between high-end Nokias and competing devices from SonyEricsson, Samsung, HTC and others. Screen quality is one of the most noticeable indicators of "quality" to consumers after the external aesthetics of the phone.

Nokia tried to move its range to a "double resolution" but non-standard 352x416 pixel display on products like the E60, but has subsequently reverted to QVGA for most of its devices. Even its new N96 flagship is still sporting a 320x240 screen.

Meanwhile, there is a slow but inexorable move towards much larger formats - capable of rendering PC-grade web pages. Some phones in Japan have had VGA (640x480) screens for two years already. A number of high-end Windows Mobile phones from HTC and others have also sported VGA displays for a while.

And more recently, we've had the iPhone (480x320) - and as well as the multitouch capabilities, this generates a significant "wow" factor from users. And the other day I had a quick play with the new SonyEricsson Xperia X1, which has a screen which is physically smaller than the iPhone's, but crams in 800x480 pixels, showing incredibly fine detail. HTC has just announced the "HD" version of its Touch handset with a similar screen. And unsurprisingly, various phones in Japan have been there for a while already.

Now to be fair, the Nokia N800/810 tablet and E90 communicator both already have similar resolutions.... but in terms of consumer-type phones intended for web & media usage.... we're still waiting.

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How many devices will Apple want to sell you?

The other day I did a post on MIDs, which as with a number of my posts gets syndicated on SeekingAlpha. Leaving aside the usual rants by Apple-ists thinking I'm somehow anti-iPhone (I'm not - I even bought one for my father), the comments have raised an interesting point in my mind.

Some people think that the iPhone is an example of a MID - and that it will absorb the future capabilities of a whole range of other devices.

But other people think that the iPod Touch is an example of a MID - and that it (or perhaps a slightly larger version) will absorb the capabilities.......

So here's a question - will Apple try and structure its product line so people end up buying two devices from the company, or just one? (plus ideally a PC as well). I don't mean the serious fans who'll buy everything - I mean normal customers.

Will the iPhone be the uber-smartphone, sensible to hold to your ear to make calls, but with a good web experience as well.... while the Touch becomes a larger, different beast - perhaps a PSP-replacement, or Netbook-alternative, with ergonomics optimised for these purposes? (and with a bigger battery and screen).

I'm pretty sure that Nokia has long welcomed the trend of people to buy and carry multiple phones - why sell people one product when you could sell them two or three? It will be interesting to see how Apple organises its portfolio around this opportunity.

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Mobile broadband and notebooks - a challenge to operators' auditors?

Imagine two mobile broadband offers:

£15 a month for 3GB data + free dongle
£35 a month for 3GB data + free laptop with embedded 3G module

The question is: when allocating revenues for these in the operator's financial reports, how much should get allocated to non-SMS data revenues?

And should it be different?

Does some amount of revenue get allocated to non-service equipment sales? (assuming that a margin is made on the wholesale price of the PC after the subsidy has been repaid)

Hypothetically, if I was an operator worried about the current precarious financial markets, I'd want to keep up important headline metrics like ARPU. And if was an auditor or stock analyst I'd want to look very closely at customer acquisition costs for *data* services vs. CACs for traditional phones.

My gut feel is that it's appropriate to allocate the cost of the module or dongle (both well-known, as that's what the IPR royalties relate to) as part of the "service" revenue stream. But it's not good accounting practice to add in the price of the rest of the PC. By analogy, for a fixed/cable operator offering triple-play together with a finance package on a plasma TV, you'd perhaps include the set-top box as part of the service revenue, but not the screen.

It's possible that this is a non-issue and that all operators will follow more conservative accounting approaches with mobile broadband. But I'd be surprised if at least some didn't try to fudge the figures a little.

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I'm speaking at the Inst. of Industry Analyst Relations about blogs & social media

I'm speaking at the Institute of Industry Analyst Relations meeting in London tonight.

[Note - for readers outside the analyst "village", AR is a parallel discipline to Investor Relations and Press Relations within many technology companies, intended to deal with people like me. While there's many different sub-types of industry analyst, we all tend to be outspoken, hopefully influential - and occasionally prima-donnas with an over-inflated sense of self importance as well. So basically, many product vendors & service providers use AR professionals to act as a valuable interface point to the rest of the company.... and also as far as possible keep tabs on what we're saying, to whom we're saying it, and what company representatives are saying to us. The IIAR is essentially a trade association of AR practitioners].

Along with a couple of analyst peers, I'll be discussing the role of "social media" in the context of my work.

For me, that's mostly this blog, online b2b social-network 1.0 things like Forum Oxford and my relatively negative views of Twitter, Facebook etc as business tools. I'd also characterise my fairly prolific conference appearances as real-life social medium too.

In particular I will be talking about the implications for AR folk and how it impacts the way they should measure and engage with analysts. It's an area that polarises opinion quite a bit. Some AR professionals think it's relevant and improves relationships, others are more old-school and perceive tools like blogs and social networks as reducing control and visibility. It's a fine balance and one to which there is no single 'right answer'.

I know that as a regular and sometimes contentious analyst-blogger I risk being seen as a 'loose cannon' sometimes. Some seem to pigeonhole me as a blogger who analyses, rather than an analyst who blogs (hint: count the adverts on my site). I get few comments on the blog direct from AR people (unless maybe they're anonymised), although it stimulates a lot of offline email and phone calls. Sometimes I also get contacts from dedicated Blogger Relations teams too, which can be confusing but also gives me a second channel into key companies.

Ideally, I'd write a bit less on the blog and a bit more in paid research and consulting documents. This in turn would be picked up by AR and a virtuous, but mostly invisible, circle of 'influence' would ensue. But ultimately as an independent analyst, I don't have the corporate sales or promotional might of rival analysts from Gartner or Forrester. So to be as 'influential' as my peers, (and from an AR perspective to be seen as such), I need to use less conventional channels to increase my footprint throughout all parts of the mobile ecosystem and its customer base.

I know it's an uneasy balance at times. I'll often comment rapidly on announcements and tie them into ongoing research themes. My broad remit (and the nature of the medium) means that I can't realistically bounce every idea off executives to triple-check - I occasionally make mistakes. But my view is that this is very similar to the role I used to play as an equity analyst - I'd see the newswires announcements at 7am, and have to have some form of initial comment out on the email to investors at 8.15am, backed up, refined (and occasionally demolished) by later, in-depth reports. That said, I'm sensitive to the realities of AR and try not to tread on toes unnecessarily. And unlike some journalist-type bloggers, I know what's totally "non-disclosable" even if I haven't signed an NDA.

I also need to balance the analytic aspects of this blog, and my AR relationships, with the commercial realities of my business. This blog is one of my prime ways to reach existing and new clients - it generates research sales and consulting leads. (hint: Want strategic advice, workshops and forecasts on wireless operator business models, femtocells, mobile broadband or handsets? Congratulations, you're in the right place. Click HERE). I suspect this differs quite a bit from my larger-firm rivals, and also explains why I feel the need to update so regularly.

Overall, it should be interesting to hear from both my colleagues, and understand the AR professionals' view of what I do. Who knows, maybe they'll even convince me to start Twittering....

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Financial market turmoil - impact on telecoms

James Enck has an absolutely heroic post on this topic.

As a former investment analyst myself, I've been watching this week's chaos on Wall St and in the Square Mile with a sort of detached horror.

And I've been watching tech & wireless stocks escape with (comparatively) little damage. Who would have thought, 7 years ago, that it would be banks' and insurers' turns in the firing line?

His comments about the gap between network operators' funding vs. necessary near-term capex are particularly interesting to me. Some additional thoughts:

- Now probably isn't a good time to be buying spectrum, especially if it's with the aim to build out entirely new networks. Maybe O2 & T-Mobile have, ironically, done both BT & the UK Treasury a favour, delaying the UK 2.6GHz auction through their legal action? Otherwise that would have been ongoing right now.
- I reckon that some particularly dongle-rich 3G networks are going to start feeling capacity squeezes over the next 12 months - a combination of the need to fire up extra 5MHz channels on existing sites, add new sites, and/or upgrade backhaul capacities. I hope all that's in the current spending plans....
- From a risk management point of view, all the signs are pointing more towards HSPA+ / HSPA Evolved as a cheap & safe interim step before LTE. If I was the CFO, I'd be asking exactly what LTE would add to the bottom line, and what the risks are that positive ROI might be delayed for a couple of years, because of "unexpected issues" like poor availability of devices and applications. I don't think the situation is going to do WiMAX or FTTH many favours in the near term either.
- I've talked about this before, but do mobile operators really want to start subsidising laptops at the current time? Given that a lot of the "Free Laptop!!! £30 a month subscription" deals look suspiciously like consumer credit arrangements, I hope you've checked your underwriters' fine print. And vice versa.
- I'm mindful of a new item I saw recently, saying that chocolate sales go up during recessions, as it becomes an affordable treat, chosen in place of more expensive luxuries like restaurants. There's a lesson there for certain "feel good" mobile services, surely.

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Is the MID a market?

MIDs (Mobile Internet Devices) are being pushed by some notebook OEMs and silicon suppliers as the next big convergent handheld category. I've seen some presentations pitching the notion that they'll subsume smartphones, encroach on netbooks and UMPCs, and obsolete standalone GPS devices and media players.

There's no standard definition of a MID but the archetypes tend to be the Nokia N810, a long thin prototype device Intel's been showing, and according to some viewpoints, the iPhone. Most people think MIDs will have a 4-7 inch screen, a grade-A web experience, some form(s) of wireless connectivity, and plenty of memory and battery life. It'll probably have a lightweight OS of some sort (Linux, Android, Apple, some cut-down version of Windows etc), and is likely to have various consumer multimedia capabilities.

Many are quite likely to come bundled with some form of mobile broadband - either a familiar 'vanilla' operator Internet access, or perhaps a more under-the-hood wholesaled connection like an Amazon Kindle on steroids. Although the concept started as being quite WiMax-centric it has now evolved to 3G as well.

So far, so good. Basically a 2008-era PDA paradigm with connectivity built in and all the toys like GPS, right?

Maybe, but I'm less than convinced by the general-purpose MID concept. Anyone with a 6 inch device will have a normal phone as well (quite possibly a small smartphone itself), and their own or a shared family PC too.

Yes I'm sure there will be a few road warriors who want a day-trippable device rather than a laptop. Yes some teenagers with backpacks could have one instead of a PSP. If it's cool enough, the gadget fiends will be queueing outside the shops. But 100's of millions of units? Hmmm.

However.I can certainly buy into the idea that things like PSPs, TomToms, N810s, even iPod Touches could use some form of mobile connectivity. Not all of them, not all the time, maybe just for specific apps rather than general Internet services. Each category will adopt mobile at a different pace, and it will probably vary by country too.

Consistently, divergence has been more important than convergence for the last 10 years. For every two things that have combined, three new ones have emerged in their place - a consequence of Moore's Law and economies of scale.

So I see a small core market of converged general-purpose MIDs, really like mini web-optimised computers, bought as a 3rd or 4th device by urban techno-leaders. But that niche will be surrounded by a cloud of app-specific products, some wireless-enabled pseudo-MIDs, some WiFi only or remaining unconnected. Most of these will support decent browsers and extra secondary software clients too, but won't be optimised for them. Developers will face even more fragmentation than is the case for smartphones, but as the value for most of these products will be hardcoded 'out of the box' it won't matter too much.

For what it's worth, I'm still viewing the iPhone as a smartphone rather than a MID, as it can work as a primary phone and you don't look stupid holding it to your ear. (Its size is on the lower limit of MIDs, though, so I won't argue if you define it differently as part of the category - it's only semantics). Some of the larger WinMob devices, however, clearly fall into MID-land, which means WinMob7 will need to seriously step up the pace if Microsoft wants a role outside enterprise-type mobile products.

Overall - I'm cautiously optimistic about MIDs, but I see it as a fragmented movement towards enabling "mobile broadband computing" in a variety of different devices, rather than the genesis of a new generic computing segment.

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Only about 2% of this blog's visitors using mobile devices

I've had Google Analytics installed on my blog for just over a month now, and it's showing up some interesting trends. Some are to be expected - peak usage is on Mon/Tues, most accesses come from US & UK, with a lot from India as well.

Now, obviously this is only the direct web hits I'm measuring - the bulk of readers use some form of RSS or other feed reader. It also misses out sites like Wireless Watch, and SeekingAlpha, that syndicate my posts, as well as assorted other 'unauthorised' aggregation and screen-scraper sites.

But unless someone tells me otherwise, I would have thought that people who access the blog directly on the Web are pretty representative of people who see a link on Google & think it looks interesting. Or who generally just prefer using the browser to read blogs.

So, given that I'm in the mobile industry and so are most of the people reading this, I find it pretty surprising that only about 2% of visits are from browsers on mobile phones. 0.6% from iPhones, 0.3% from Symbian, a handful of Windows users, what looks like about 0.3% of Opera Mini, and a proportion of the 0.4% of non-Firefox Linux users. iPod Touch users were another 0.2%.

And some of the mobile users were in fact me, checking the site looks OK.

Now, I'd hope and imagine that >2% of RSS users are mobile, but overall this really points to the fact that fairly normal, non-demanding web usage is still predominantly PC-based, especially in the B2B domain. It's certainly not a sufficient level for me to seriously devote time to optimising a mobile-specific version of the blog, or even worry whether the occasional graphics I add to the text will render OK on small screens.

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A Theory of Convergence?

I've been watching and analysing various types of telecoms and computing "convergence" for many years.

One thing jumps out at me: not all expected types of convergence actually happen - and even more happen *much* more slower than anticipated. But some occur almost overnight.

I'm starting to think about patterns here - what converges successfully? And what remains "unconvergeable"? And how predictable are these?

(Mobile Phone + Digital Camera) is one of the fastest, most successful examples of convergence.
But (Mobile Phone + TV) is one of the slowest - and is arguably an outright failure.

In the enterprise market, IP-PBXs have slowly reached the mainstream, blending voice and data networks. But it's taken 12 years or so, and the convergence process still isn't complete.

Ideally, I'd like to develop a "Theory of Convergence". At the moment, I regularly try to predict what will/won't blend, but it's on a case-by-case basis. So for example, recently I've been assessing whether the PC and phone might converge - and based on numerous specific reasons like battery size, ergonomics and distribution/business model, it seems highly unlikely.

Some of the elements of such a theory would be:

• technical convergence of *most* components of the convergent products, not just the central computing or communications element
• ability to converge distribution channels (this delayed enterprise VoIP for 5+ years)
• ability to converge useability and user-experience
• ability to converge business models / purchase process
  

So for example, converging handsets with small digital cameras has relied not just on the phone's processor, but also convergence of memory on flash RAM, small/lighter lenses for basic digicams, the reduction of the importance of printed photos meaning that camera business model is now "convergeable", and a mostly low-touch distribution model for cameras (ie they can be sold on a standalone basis by unskilled staff in retail or online stores). And basic digicams have small, sub-1000MAH batteries.

Conversely, these factors don't apply to high-end cameras which are essentially "unconvergeable"

As well as batteries, to my mind, PC and phone also have other "unconvergeable" aspects around distribution and business model. In particular, PCs aren't sold with associated "services" and, particularly, are not locked or customised for a given "service provider". Distribution is also a challenge, as are various aspects of user-experience and ergonomics.

PC/dongle (ie PC/module) is a slightly different convergence situation (dongles don't have batteries), but also falls down in the business model / distribution stakes. For example, dongles have legacy SIM cards, and attempts to integrate them with notebooks' connection managers are clunky.

It doesn't mean these types of convergence won't happen at all - but just that the Venn diagram won't overlap that much.

I've still got quite a lot of thinking to do about creating a generic Theory of Convergence - but this theme of "convergeability" is one I'll be coming back to over the next few months.

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Tethering...another approach to mobile broadband computing (MBC)

As if there weren't enough options for Mobile Broadband Computing (MBC) - dongles, data cards, embedded 3G, netbooks, MIDs.... - another concept is now starting to make itself felt.

It's "Tethering"

Which is what used to be called, more clunkily, "using your phone as a modem".

This isn't especially new - it's been possible since the days of GPRS at least. On the other hand, it's often been an enthusiasts-only sport, involving various configuration hassles (Bluetooth, non-standard cables and so forth), which while theoretically simple, have been enough to dissuade most potential users.

In the past, this practice has been viewed differently by different mobile operators. Some have actually encouraged it, because their “phone” data plans have been more expensive than their “PC modem” data plans. Others have limited the practice via terms and conditions, especially on uncapped “flatrate” data plans for devices like the Apple iPhone.

More recently, a variety of phones like the H3G Skypephone S2, and the Palm Treo Pro, have been designed specifically with tethering as a key usage case – they even enable the driver software to be loaded onto the PC automatically (rather than needing CD or separate download/install) and ease configuration through wizards and so forth. Some operators see them as a good way of enabling two devices via a single subscription – and help them upsell the user to higher bandwidth-cap tiers or faster speeds.

However, Disruptive Analysis believes that this approach (and other approaches to using ‘clusters’ of linked devices, for example in a “personal area network”) will remain in the minority. In particular, the use of a phone as a tether, attached to a PC on one side and a 3G connection on the other, is likely to exhibit a high degree of battery drain – although it possible that they could also draw energy from the notebook battery if a physical cable is used rather than WiFi or Bluetooth. However, where a cable is used, it makes it awkward to have a simultaneous phone call – and some implementations of 3G chipsets may not even permit two connections to run concurrently.

The price of modems/chipsets should come down to a point at which it’s just simpler to have multiple ones for multiple devices. Where it may become more important is in emerging markets, where a single 3G access could feed multiple users via WiFi.

Nevertheless, this approach gets around the issue of “lock-in” for embedded mobile broadband in notebooks – users tend to upgrade phones, and/or churn providers, once every 18 months or so, which makes it easier for the computing element to benefit from upgraded modems without disassembling the PC to the change the module. On the other hand, implementations of new wireless standards in phones often lag those in modems, especially in mainstream devices.

In a way, tethering could be a partial answer to the issue of session-based MBC without the need for a separate SIM card in a notebook or dongle.

Overall, the tethering approach using a handset is likely to appeal to some Mobile Broadband Computing (MBC) user segments and operators, but it seems unlikely to displace either external modems / dongles, or modules embedded in notebooks or MIDs. Disruptive Analysis is skeptical that tethering will be used by more than perhaps 10% of regular MBC users – although if useability becomes better, it may be used on an ad-hoc basis by a larger number of people with an occasional need for connecting a PC or other device.

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How many people use PC in conjunction with their phones?

A few seemingly-unrelated things have occurred over the last few days, but have a common theme:

- I've uploaded some new pictures from my personal voice handset, to email to friends & put on the web
- I've been trying out Vodafone's FaceBook SMS plug-in
- I've had an update from NewBay about its operator-centric phone backup and social network platform
- I've topped up my 3 UK prepay SIM and paid for 2 months' flatrate mobile Internet access

What links them? They all involve using a PC together with a phone. Either locally connected via USB / Bluetooth, or by using a browser to access some sort of operator portal linked to your account.

It's made me wonder what proportion of users ever actually do something similar?

I remember several years ago talking to the guys at Palm, and they reckoned that most of their users synced via the handset cradle, but that that was unusual amongst even smartphone users at the time.

Today, I'd guess the situation is even more polarised with iPhone users linking to iTunes , but a long long tail of low-end handset users never even contemplating using both devices together. I suspect far more people "connect" by swapping out memory cards for sideloading, rather than installing PC-connection software or using operator portals.

Personally, I've stopped putting client software for phones on my PCs, as I switch phones fairly regularly and don't want loads of flaky OEM apps cluttering up my computer and maybe conflicting. I haven't even hooked up the new Palm Treo Pro which I'm playing with at the moment.

But on the other hand, I am using more web-type interfaces to get a window into my "mobile world". But I perceive that being inside the industry, I'm probably unusual in this - I'm not aware that friends or family do the same.

If anyone's got any hard stats on this phenomenon, I'd be fascinated, as done well, I think it adds a lot to both mobile & PC/Internet experience.

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