Monday, December 10, 2007

Panic

US networks open in light of Google's scene entry?I read the latest "AT&T flings cellphone network wide open" PR with a good laugh. This is clearly following "Verizon opens network to more cellphones" earlier PR. Somehow, people are responding to this with some skepticism, as do I.

The good laugh, BTW, comes from an old memory of me walking into an AT&T store 6 years ago (yup, they were called AT&T then) and realizing that already then they were selling Motorola unlocked handsets.
Another reason to a good smile is that, as far as my technical hat goes, no GSM operator has ever attempted to correlate users' IMSI with their sold IMEI at the (in other words, make sure the subscriber is using the handset sold to them) and it would mean more work. The blocking happens at the handset level, which means the vendor has to put it in. why would they if they can push back and sell more?. Anyway, This correlates well with:
"You can use any handset on our network you want," says Ralph de la Vega, CEO of AT&T's wireless business. "We don't prohibit it, or even police it."

As far as Verizon goes, they will still be CDMA (alongside Sprint vs. T-Mobile and AT&T), hence iPhone (for example) will simply not work on their network, will it? in fact, only CDMA phones, traditionally manufactured to Verizon's requirements will pretty much work. Verizon is building a $20 million testing lab but has not provided details about how this process will work. Guess how the testing criteria will look like? Guess how much certification will cost and who will bear those costs?
"In the short term, it's a giant publicity stunt," says wireless analyst Bill Hughes at researcher In-Stat. I agree.

Just to make things more interesting, throw in Amazon's new Kindle device. an EV-DO device that acts like a cool reader. EV-DO means you're married to Sprint or Verizon pretty much (in this case, Sprint), you can't download more content if you're outside the US BTW. Why is Kindle relevant to this discussion? because Sprint branding is nowhere to be seen. there's no sign up and no monthly fee with Sprint. An improvement on their MVNO strategy or a shift in branding awareness?

I read Bijan's interesting post "When did we agree to being locked in?", who also commented on the AT&T announcement by saying:

"Networks need to be open.

Devices need to work everywhere.

Content needs to be distributed anywhere.

Which walled garden is coming down next?"

I agree, utopia or maybe UK reality (on that in a separate post). But that brings me to my main point here. This is all reactionary to Google's Android announcements (dare I say hype? again?). Everyone's crawling under the table in light of the announcements and not being in the "open". So the last Mobile Monday Boston, taken place during the Mobile Internet conference, featured Google's Android as they are obviously local. Here's how it went:

Sounds awfully similar to Savaje ("Savaje falls on hard times"), doesn't it? :-) or :-( ?. A visio diagram filled with boxes you'd expect from any device vendor, mix of open and restricted APIs, J2ME toolkit (ironically, partially based on existing tools), am I missing something?! Oh yeah, backing of Google's deep pockets.

Here's what I think Google can be a game changer at: Their success at building a phone or OS is to be seen, but what Google are great at, is impressions, CPMs, advertising, search, optimization and content. What a single Nokia flag store in NYC didn't do to the operators realization that content, mobile purchasing and advertising is the key to move forward, Google can do.

We'll see where this ball rolls next. interesting times indeed. Operators are certainly reacting, whether through real changes or PR.

4 comments:

Ramon said...

hey Amir,
Great line of thoughts. Although carrier dont restrict or necessarily want to restrict which phone you use on their network (Sprint being one of the largest exceptions), they do closely track which phone you use. I was recently in a T-Mobile store here in Boston, to get a new SIM (I tend to lose them at work), and they told me- "on, you are using an iPhone!" When I asked how'd they know, the sales rep swung around the monitor where it showed a list of IMEI numbers and corresponding devices I had been using with this SIM.

As for walled gardens, a few thoughts to add:
- the mobile industry is quickly moving to flat fee, unlimited data plans. In order to sell these, you must have a rich offering of applications on the network. The CDMA carriers are trying, but they will have a hard time selling premium features if they "double dip": charge both for data and for the service. External apps will save the day. (Point in hand, I got to your blog through Facebook, browsing and writing this from my iPhone.)
- as long as carriers subsidize phones instead of upsell them, there is no incentive for them to restrict you to their own models. You actually save them subscriber acquisition costs if you get your phone somewhere else, and several of them still want to lock you into a contract at that point.

Cheers,
--Ramón

Amir Rozenberg said...

Ramon,
Thanks for your comment, spot on. One thought that I forgot to mention is the effect these operator comments will have on their support operations: "opening" the network will enable them to wash their hands from the heavy support burden?

Ramon said...

I think that the CDMA carriers are quickly moving to a hybrid model for offering services. They realize that carrier-offered services are a way to make add-on revenue. Take for example VZNavigator or some of the services Sprint is working on. Or take Nuance's Voice Control service: this is offered by the carrier to the end-user, but also by Nuance directly into the mobile s/w market (through Handango and such).

Carrier services offer a billing and operational advantage (read: user convenience) that will be hard to match by external 3rd-parties. Also, if a carrier offers a service, it signals to the user that it is "trusted", "reliable", etc.

On the support burden-- actually, I don't think that the support burden will decrease-- quite the opposite. People will now call the carrier for support on 3rd party services that are not run by the carrier, and (VZW) for support on phones that were previously not supported/offered by the carrier. There is a substantial burden redirecting your customers to the 3rd party that *can* help them, and this often negatively affects the customer service satisfaction levels.

We should have a cup of coffee sometime to discuss these things-- we both appear to have quite a good understanding where the mobile market is going.

--Ramón

streetstylz said...

Speaking of CDMA ... QUALCOMM has entered the mobile code-reading space by joining the Mobile Codes Consortium (MC2).

http://www.mobilecodes.org

http://streetstylz.blogspot.com/

Best regards