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Why a Verizon iPhone will probably not bring the network down

There is a lot of talk about Verizon getting the iPhone at the end of 2010 or early 2011.  It is a periodic rumor that has been repeated a number of times during the last couple of years but this time round it seems to have a bit more credibility.

One thing that some commentators keep wondering about is whether the Verizon network would be able to withstand a million iPhone users. This is due to the fact that the biggest complaint about the iPhone has centered around the poor performance of the iPhone on ATT’s network. Indeed this has also been reported in O2’s network in the UK. This has been attributed to the massive amount of data usage that iPhones trigger.

But I believe this is unlikely to be seen in any Verizon iPhone (if it becomes available) because of a fundamental difference in the technology used by the Verizon network (CDMA) compared with ATT (UMTS).

The following is a very simplified explanation of this. To transmit and receive calls from cellular towers all wireless phones use wireless spectrum. In the case of CDMA – the spectrum is cut into 1.25MHz slices, while UMTS uses 5MHz slices. The key difference is that in UMTS, both voice and data signals are sent over the same slice.  In contrast CDMA uses different slices for data and voice.  In addition, similar to the wireless spectrum, the wireless network equipment used is also divided between voice and data in CDMA networks, while in UMTS networks there is a lot of equipment used in common.

So what does this mean ? The main consequence is that in UMTS networks, if a lot of users use data they can potentially overwhelm the usable spectrum and equipment. Effectively “locking out” voice callers or causing them problems in general. On the other hand, in CDMA networks even if there is a huge surge in the data network usage, this will only effect the data users. So while data users may see degraded performance and lower throughput etc. the voice users will not be effected. The end result is that on Verizon’s network the user’s voice calls will in most cases not get effected by users overloading the data side of the wireless network. The data users may see somewhat slower performance but that will not be as noticeable.

(NOTE : The above is an extremely simplified explanation. I can go into them if you contact me.)

There of course many other issues that may also be behind the poor performance of the networks such as O2 in UK and ATT in the US. These include

  • lack of backhaul bandwidth
  • lack of spectrum
  • iPhone phone software issues

As far as I know all operators are addressing the first two as quickly as possible.  So I can’t say if Verizon would be in a better position than ATT with respect to these issues.

Regarding the last possible cause – if there is a fundamental issue with the software on the iPhone phone software than you may see the same issues even on a Verizon network as you see on the ATT network. Indeed, there are many reports that other phones on the ATT networks do not see the dropped calls and poor call quality that is seen by iPhone users.  So there may be something in this.

advanced wireless infrastructure != widespread mobile data usage

Recently I was back in my native city, Seoul Korea, for a vacation. As some of you may know, Korea is a country wired for broadband and mobile telephony. It consistently ranks in the top 3 world-wide for broadband speeds. Especially from a wireless perspective, it is pretty amazing. You can make calls and text message almost anywhere – and I mean anywhere!  It doesn’t matter if you are 5 stories below in an underground parking lot, riding an elevator up a 50 story building, or even taking a hike up a mountain near Seoul.  All the major variants of technology including CDMA / EV-DO Rev A, UMTS, and WiMax (or more exactly WiBro the Korean version) are available. This is all due to the hyper-competitive nature of the mobile industry where the SK Telecom, KT, and LG Telecom have been fighting it out in a saturated market the last 10+ years.

But over the years I’ve noticed that while everyone is addicted to cell phones and the cell phone coverage is the best in the world – the growth of a true mobile data users seemed to be lacking. Or maybe more exactly it was focused on voice and text messaging. So while the wireless data infrastructure was first class, the use of mobile data among the citizens seemed to be behind other countries including the USA.

This is most easily viewed when I looked at what people were doing in the subway. They did primarily three things.

  • Sent and received a constant stream of SMS messages (this was the most popular and done by young and old, even most senior citizens were texting more than talking on their phones)
  • Played games on their phones (mostly the games that come built in the phone)
  • Watched DMB TV on their phones or specialized devices (Note, in Korea, many phones have digital TV receivers in their phones.)

There were very few who were checking email or working on laptops/netbooks even though in Korea you usually have great data coverage even in a moving subway. Blackberries were introduces a year ago but I saw very few  users anywhere. There were some who were breaking this mold and those were mostly the folks using the recently introduced Apple iPhone or Android smartphones. The iPhone has been a phenomenal success in Korea selling over 700K since its introduction last year. The new Samsung Galaxy S Android phone also sold 300K in less than a month.

Initially this was strange to me. I would have thought in a mobile crazy county like Korea – mobile data usage would have exploded years ago. Mobile phones are fully integrated people’s lives here that is difficult to explain to people from the USA. People used them for voice communications but in many cases it is used more for texting and other forms of information communication such as looking up subway maps. Mobile phones are widely for payment and even for user identification on many websites.  Spam advertisement over text messages was a problem in Korea years ago.

But maybe that was precisely the problem. Between pervasive and innovative use of text messaging, simple data applications that used minimal data with simple user interfaces, my compatriots were living a very mobile centric life. For them to move on towards using mobile data more fully  something much more advanced had to be shown to them. The result was that they were half way up to mobile data nirvana and stopped – waiting for the next big thing. Admittedly much higher up than other countries but they were stopped.

Another aspect that fed into this delay was probably the fact that due to various reasons such as the fact that most people live near their offices (over 50% live in Seoul), are encouraged to work late into the night at the office rather than take work home, and also live in relatively small apartments with little space for home offices – telecommuting or the need to remotely connect to the office was not supported or encouraged by many companies. For example, connecting to company email from home was not supported by many big companies due to various concerns such as security. So a mobile worklife had not really developed.

I think this combination of a good enough mobile life combined with a lack of support for remote work capabilities led to lack of a push for heavy mobile data usage in Korea by consumers. (A third reason may also be cost as mobile data is still relatively expensive in Korea compared with other advanced nations.)

In my mind, this also explained why WiMax was not a run away success in Korea. There just was no use for it for most people. On the work side there was minimal support for remote telecommuting, while on the consumer side the biggest potential user of WiMax’s high bandwidth – video – was covered through DMB TV. Now with the introduction of smartphones and as this forces a more mobile data lifestyle a market may be forming. (For example, KT recently announced they were expanding the WiMax coverage.)

So I guess you can say that  even though the wireless infrastructure was ready, we had to wait for the smartphone revolution for the infrastructure to be fully used in Korea. I explored this smartphone driven change in lifestyle here.

Maybe this was obvious. A long meandering post on something that on hindsight seems obvious. But it has brought some clarity to my mind.

The three type of mobile users you meet in Seoul

Recently I was in Korea for a vacation. While there I had an interesting experience in the course of  a single day. I met three friends and they showed me how different companies in Korea are approaching mobile data.

The first one I met was a friend who worked at a major semiconductor company in the memory design division. A very smart guy with a PhD from a major program in the USA he was and is a very hard worker staying late (which in Korea means upto 11pm) many nights in the labs.  I asked him why he didn’t go home earlier and work from home. He said that he couldn’t as he didn’t have access to either his email or data. Nor was he allowed to have a laptop to carry between his company and his home.

So here we are in a country with the best broadband infrastructure in the world and he couldn’t use it to work from home. (This was also  true when I worked in Korea 10yrs ago but I had thought things would change – obviously they had not.)

This was the non-mobile user.

I met another friend who worked at one of the major wireline / wireless telecommunications operators in Korea. As I visited  his offices I noticed that the company was putting in a major effort to get everyone in the organization to embrace cloud computing a more “mobile” lifestyle. People were told to move all of their data to the cloud servers and use the iPhone, laptops, and other devices to connect to email from everywhere.  My friend told me they were making a major push to get people to a more mobile work / lifestyle.

My guess is that this would then be the basis for them to push it to their customers. An “eat your own dogfood first” approach which I think is great.

This was the hope-to-be-mobile user.

Finally at the end of the day I met a lawyer friend who works for one of the major law firms in Korea. Even as were drinking late into the night (and in Korea you frequently end up drinking a lot), he would be taking out his iPhone and answering email. After awhile, I asked him why he was answering client email at 10pm in the night. He said that he had to. Ever since the iPhone had come out and his clients realized he was reachable, they demanded immediate response. Not only his clients but his bosses as well. He could not only respond to email but also it seemed look at contracts etc.  He said that he wasn’t sure getting the iPhone was such a good idea for him – as now he felt he was on a 24×7 leash.

This was the 24×7-mobile user.

So there you have it. The three types of mobile users I met in Seoul this year. The irony was that while the first two are working for companies that are on the forefront of enabling mobile broadband, it was the third who was really living the a mobile work lifestyle and showing where it leads for good and bad.

Maybe that is how it should be, after all in Korea there is a saying that “a Buddhist monk can not cut his own hair”. In the same manner, maybe the mobile telephony folks could not figure out how to really use the technology they are developing ?

In summary, the smartphone revolution is bringing about a new revolution in the Korean workplace itself. One that I figured would have happened sooner but is only now manifesting itself. Whether it is good or not can be argued of course – I’m sure some will argue that leaving work at work was a good thing.

But anyway, as things change so fast in Korea, next year it’ll be different again.

Listening on the move …

Like a lot of folks, I like to listen to things when I’m driving. I listen to music (a variety ranging from Bach to U2) of course, but I also like to listen to mp3 audiobooks, and news commentary.

Since I got the iPhone, I’ve noticed a change in my listening. I have turned off my radio and CD player. I still listen to a lot of what i did before, in fact I would say more of it, but now I use the apps on the iPhone such as Pandora, NPR, and of course iPod.  Some of this is in the form of podcasts, but mostly I find I’m just doing straight streaming.

The immediate benefit for me was that I had much more flexibility and choice. I could listen to what I wanted, when I wanted. I could listen to NPR “On Point” or whatever else I had put on the top of my NPR playlist. At other times, I’d switch to my own private Norah Jones  or Mo’ Better Blues channel on Pandora. Half the time I would also be listening to various mp3 audiobooks. (Recently just finished “The Post-American World” by Fareed Zakaria – Highly recommended)

The ability to just stream whatever music or news was what pulled me into this. But what I hadn’t realized was that I was also getting much better audio quality. I noticed this recently when I turned on my radio to WBUR 90.9 NBR for the first time in a while. For some reason – it has become very scratchy along various stretches of my commute. I switched to the iPhone and immediately it was much better. No scratches and much clearer.

That being said there are still some problems. The biggest of course is ATT’s flaky coverage. While in most cases it is alright, on my commute there are a couple of spots where it is touch and go. You can definitely hear a momentary break as the data connection is lost.  Since I live in Boston, it is probably better than in San Francisco or New York.

One added benefit, somewhat unrelated to the above, is that on the iPhone I discovered that I can play audio books back at 2x speeds without losing any words. Which really makes listening to books much faster.

Anyway, the end result is that I very rarely listen to “live” radio now.  I do listen to the radio programs but it is as streaming radio and very much “on-demand”.

Now, this does take up some bandwidth. including all my normal web surfing and email, I seem to be running near the ATT limit of 3 -5GB per month.

What is the setup for this ? Right now, I’m just use a simple $30 charger + FM transmitter system for my iPhone – that is how many of the early adopters are using it now I believe. Though if you have the Ford fusion, the Ford Sync platform will allow you to listen to Pandora on the iPhone even more easily.

While I acknowledge, as my wife likes to point out, I am a bit of a geek, I find it hard to believe that once smartphones become pervasive this form of “listening” will not become more pervasive.

I wonder these days, how soon will this become the “preferred” mode of access for people ? Would my parents like this sort of thing ? Probably not at first.  For them the ease of use the current car audio systems will be win out. But for many others, I have to believe it is only a matter of time.  Note, the nytimes recently had an article on this.

This trend does raise some interesting questions. For example, obviously the Ford Sync platform is a great platform for enabling this. But how about other cars ? Will they all have their own platforms ? in such a world, how do we all get our own music ? Do you need an app for every car and phone combination ? Also what happens to satellite services such as Sirius XM ?

What Apple is buying and why …

Updated : Apple has just announced that they will shut down LaLa. So maybe we’ll see the beginnings of the cloud story sooner ?

These days Apple is constantly in the news for many things from emails sent by their CEO to loss of prototype phones. But among all of the news a couple of recent companies that it has bought with its cash seem to be pointing to some interesting directions.

First, late last year, just as Google offered to buy AdMob,  Apple announced its purchase of Quatro Wireless. Recently it has announced it mobile advertisement platform,  iAd,  based on on that purchase. The demos shown at the iPhone OS 4.0 announcement and the comments from people who have seen the recent demos from Apple all show that it is a very impressive mobile ad platform significantly ahead of what is available today. The ability to use information such as the user app purchases (e.g. send wsj.com advetisements to people who buy finance apps) and location (e.g send ads for Gap when the user is in a mall) to send the just the right ads must have advertisers salivating at the prospects.

Second, various blogs have reported on Apple’s purchase of Siri. Siri aims to be a “personal assistent”.   It can be viewed as a mobile search tool but it is much more than that. It is more a combination of mobile search, voice commands, mashups, and artificial intelligence. Now you may ask if it is mobile search can it be any better than Google ? Well, yes, because it isn’t really just search. It aims to figure out what you are interested in by using artificial intelligence. eg. you ask for restaurants in a town, and it will look for restaurants, also come up with reservation numbers, and transport options (potentially).  Another key aspect, is that unlike Google, it doesn’t try to be the all encompassing database by finding out everything and putting into massive servers, instead it searches in real time across the web. So in some ways it is a step beyond what is available in Google today. (Of course, Google is also going in that direction as it builds in its own voice interfaces and more intelligent search functions.)

Third, recently there have been reports that Apple has bought Intrinsity. This company is supposed to be behind the magic that enabled the iPad’s A4 chipset. This technology should allow Apple’s future iPhones and other mobile devices to run faster and with longer batter life than the competition. This will be the basis for the magic described above.

All of these show that Apple is focusing with laser like focus on enhancing its core product – the iPhone ecosystem.

  1. iAd and Quatro : They are trying to find the best way to monetize their applications. Enabling and selling  mobile apps was the first revenue stream, now they are following on with advertisements.
  2. Siri : They see that search on mobile phones is different from desktop searches and are trying to work towards optimizing it. While at the same time, trying to ensure that they are doing something very different against the presumed market leader Google.
  3. Intrinsity :And against all comers they are trying to get a leap by making sure they have the best hardware basis.

These point to Apple’s overall strategy for maintaining its lead in the smartphone space against all comers including the Google + Android juggernaut. An impressive arsenal by any measure.

But if there is one chink in the armor, it seems that there is as yet no clear cloud strategy. I frequently wish there was some easy way to synchronize all of my contacts. An easy way to sync and use other cloud services such as Google Docs and merge with my other Apple apps. Yes, they do have MobileMe and  iTunes has potential.  Another company that they bought last year, LaLa, could be the basis for a streaming music offering. But as yet, it is unclear how these will be melded into a cohesive cloud strategy – compare this with their mobile ad strategy that seems to have become very clear and focused.

So how will Apple approach the cloud ? Will Apple enable file syncing in their own way ? Will Apple buy a file syncing company like DropBox ? Will they start music streaming with LaLa ? What about a Pandora like radio service ?

Or will they say “… the cloud is not my area of competence, let others fight it out. I’ll concentrate on making insanely great products..”

In the world of pervasive 3G+Wi-Fi, what will it take to goto 4G ?

Today everyone agrees that mobile data growth is explosive. Network operators are scrambling to handle this by building out or upgrading their 3G networks and also increasing support for Wi-Fi hotspots. Long term many of these operators are also looking at 4G (LTE or WiMax) as the ultimate solution for this capacity crunch. But in the meantime, rapid expansion of 3G networks and Wi-Fi hotspots seems to be the order of the day.

What implications does this have for 4G and its adoption by users?

As an avid user of my Wi-Fi capabilities on my smartphone  I am thrilled everytime I see more Wi-Fi hotspots popping up in places I frequent. Many coffee shops, bookstores, airports, and public places are introducing more and more free Wi-Fi hotspots. Coupled with widespread 3G coverage for the times when I’m not near a Wi-Fi hotspot, I get my internet connectivity fix pretty much anywhere I go these days. While 3G speeds are slower than what I get from Wi-Fi hotspots, it is less problematic than I would have expected. I guess this is because of my usage pattern. I require the high speeds of Wi-Fi when I’m looking at things such as youtube or downloading a big presentation to my laptop. Basically things that I usually do when I’m sedentary – for example when I’m in a coffee shop or a library. For things that I’m interested in while moving, such as quick email checks or listening to Pandora Internet radio, 3G networks speeds have been more than adequate. In fact, I’ve found that even letting my kids view youtube in a moving car works fine as well. I don’t think I’m an unusual case in how I use my smartphone.

When 4G is introduced it is supposed to enable operators to offer a better service than 3G. For example, Verizon Wireless says they have seen upto 12Mbps download for LTE vs 1Mbps for 3G. But an interesting point to remember is that average 4G speeds in best case real world scenarios (~ 12Mbps as described by Verizon Wireless) will usually be equal or slower than Wi-Fi. Note, that the 12Mbps from LTE will have to be shared between many customers connected to the same base station, so each individually will see a much lower rate. Wi-Fi because of its simple nature, will always be shared only by those in the immediately vicinity, inherently allowing individual rates to be still fairly high.

So as a customer I face an interesting issue. With a 3G + Wi-Fi smartphone, I’m getting pretty good service. Adding 4G to the mix, does not look as if it will significantly make my life better. Operators believe that this may be a temporary state of affairs. As more smartphones proliferate they believe the 3G networks will become congested and I may end up not so happy with my 3G speeds. Hence their logic for deploying 4G networks as soon as possible. But they are deploying 3G even more rapidly in many cases and at the same time they say they will not have issues. And even if the 3G networks become a little congested, if the places where I require high speed access are places where I can easily get Wi-Fi access, does it matter ?

So what would convince me to move to an 4G offering ? What is the game changing must have aspect that will make it me lust for 4G ? I will lust for the speeds but Wi-Fi may satisfy my lust  in many cases.

So I come back to the question – what will drive me to 4G ? And how can operators make money from 4G ?

Wi-Fi on Smartphones, iPad and your Dataplans – Part 2

In the first post, I talked about how enabling the use of Wi-Fi on smartphones by cellular operators can be viewed as an application of the classical “breakage” model that is well-known in the travel and gift card industries.

But as I noted before, there is no guarantee that this will always be the case for operators in the long run. Especially when tied together with the ongoing discussions of tiered or usage based price plans and the ongoing transition to 4G / LTE networks.

The basis for this are a couple of trends.

  1. As Wi-Fi smartphones proliferate, we can expect Wi-Fi hotspots will proliferate to support them.  For example, Starbucks, Panera, Barnes & Noble, and many airports have free or cheap Wi-Fi access.
  2. For at least the foreseeable future, Wi-Fi connections will in most cases be faster for individual users than any 4G connection.
  3. 3G coverage in areas where Wi-Fi is not available will get better and better.

    The consequence of this is that many smartphone users may end up using high-speed Wi-Fi 80% of the time (when they are home, at work, at airports,  in coffee shops) and rely on 3G cellular networks only for the 20% of the time they are on the move and out of range of Wi-Fi hotspots. It in these cases where the breakage model applies.

    But what happens when operators introduce 4G networks ? How do they wean these spoilt users off onto 4G ? The 4G access speeds will be faster than 3G, but this only comes into play for a small amount of time, the time they are out of Wi-Fi hotspot range. If they do not really consume that much bandwidth intensive resources while on the move (the 20% time above), will they be motivated to pay for the 4G connection ? The fact that 4G will not usually give a user faster speeds than Wi-Fi is also an important factor as the comparison is now not 4G vs 3G but 4G vs Wi-Fi.

    Also what happens when operators start usage based data plans ? In such cases, many of the above types of users may end up only paying minimal amounts for their cellular data plans as they are using Wi-Fi for most of their wireless data needs. If this happens, the operator is really being paid only for the actual usage of their cellular data networks. To recoup their investment in the 4G network infrastructure, they would be forced to increase the rates for such usage based plans to extremely high rates.

    How can the operators deal with this ? There seem to be a couple of ways.

    1. They can try to force a “breakage” model plan by saying any buyers of a “super” smartphone has to buy an “all-inclusive” dataplan that includes 4G. (This is similar to today but extending it to 4G.)
    2. They can also modify the above slightly so that there is a minimum dataplan for all smartphone users, but then make the high data users pay more.
    3. Remove Wi-Fi from 4G capable phones saying that with 4G networks you do not need Wi-Fi.

      My guess is that it will be a mix of the above and other imaginative solutions.

      Of course, the above may be a false alarm. It may not be a serious problem as the above types of users (80% Wi-Fi, 20% cellular) stays as a minority of users.

      But there is some evidence that once people start using Wi-Fi on smartphones, it becomes widely popular. In which case,  is it too late ? Will more and more people become comfortable using Wi-Fi that even when 4G becomes available, they will not rush to it ? How will operators react ? How will consumers react ?

      It is a question I keep wondering about as I use my Wi-Fi enabled smartphone to browse the web …

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