Accelerating the Mobility Revolution

It’s been a long time since I last posted. I’m also very behind in responding to comments, I apologize for that and hope to get caught up in the next few days. Between a lengthy overseas vacation and a full

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plate of work, it’s been hard to carve out time for this blog.

But, there are a few news items that are worth commenting on.

The first few items point to Sprint’s commitment to continuing to accelerate the Mobility Revolution. This shows up in a number of ways – Sprint has been scoring well in RootMetric’s network comparison tests demonstrating our commitment to the network investments that are necessary to support the Mobility Revolution.

According to Chitika, we’ve also been increasing our share of the Android market (see graph below). Note that Android sales from our prepaid brands (Virgin and Boost both have Android handsets that are selling well) are not included in Sprint’s numbers and probably are a meaningful part of the growth in “other”. This demonstrates our commitment to the open development environment which is key to customers integrating mobility into all aspects of their lives.

This commitment to the network and platforms necessary for the Mobility Revolution is reflected in how our customers use their devices. According to a Consumer Reports study, Sprint’s smartphone customers use about twice as much data as our competitors’ customers – proving the point that Sprint’s customers are way out ahead in the Mobility Revolution – making mobility integral to everything they do.

The final news item I can’t pass without commenting on is Google’s proposed acquisition of Motorola. This deal is a clear demonstration of the Mobility Revolution in action. Google, perhaps the most powerful company on the planet, has put their money where their mouth is. For a couple of years Google has been saying that mobility is their top priority and now they are proving it. As with any big deal, this one’s not a simple black and white, good or bad news story. I think I can best address it in terms of what’s good, what’s bad, and what’s ugly about the potential tie up.

The Good:

  • Google gains Motorola’s patents, which help in the patent wars in which Big Bell Dogmatists have been trying to slow down the Mobility Revolution by impeding Android-based innovation.
  • Google gains a better appreciation of the complexities OEMs face in building Android handsets, likely leading to improvements in the operating system.
  • Google likely gains traction with Google TV through Motorola’s Set Top Box business, potentially bringing additional value to the Android ecosystem and encouraging some pretty interesting cross-platform innovation (imagine a Netflix or Hulu app with your smartphone as remote control and the STB as video player).
  • Motorola’s strength in low-cost feature phones may provide Google with insights into how to expand the Android ecosystem into emerging markets.

The Bad:

  • Motorola is obviously a strong competitor to Google’s other Android OEM partners. Samsung, LG, HTC, and others are likely to pause and consider their level of commitment to Android going forward.
  • Google gains leverage in the Android and overall mobile ecosystem, making all other players work harder to earn their fair share of industry profits.
  • The deal will require regulatory approval, which will take months, potentially slowing down innovation at Motorola, Google, and other ecosystem players.

The Ugly:

  • Google has to convince everyone that they won’t unfairly favor Motorola over other handset OEMs.
  • RIM, Microsoft, and Nokia are all in unstable positions in the mobile industry. Microsoft potentially has the opportunity to win the hearts of Motorola’s competitors, but if they fail to do so, they may find themselves with an unsustainable market position. Microsoft may also succumb to the urge to keep pace with Google by acquiring Nokia or RIM. And RIM’s only hope (other than being bought) is if enough of the ecosystem shifts from Android to Windows to keep RIM within sight of the pack.

What do you think – did I miss anything?

23 Responses to “Accelerating the Mobility Revolution”

  1. Happy to see Sprint is still pushing hard to keep the revolution going. :)

    Sad to get the strong feeling at my local Sprint store of “Go Android or go home.”

    Happy to see Google purchase Motorola Mobility and its phone and set top production, but especially happy to see them get the Moto patent pool. (That will hopefully help keep the patent sharks at bay by cross licensing…)

    Depressed to see the death of probably the best smartphone operating system to date: WebOS.

    Now I need to weed through the other operating systems available to Sprint customers (Android, RIM, MS) in an attempt to find “the least bad” for my next device.

    Hmmm… MS is out, RIM doesn’t have what I need (I like some of the hardware, though), so I guess it’s Android, warts, bugs and all.

    Maybe Sprint really should look into allowing the iPhone on their plans. It’s a little bit more polished than the rest of the pack, at least.

    Too bad HP was unable to come up with smartphone hardware to match the quality of their OS, and especially too bad that they decided to just take it out back and shoot it. Now my investment in all this hardware and software only usable on my old and very tired Pre is just sunk cost. Thanks, Sprint and HP!

    Off to the Sprint site to look for something to use until something decent comes along again.

    Take care, Russ!
    Tom

  2. Russ says:

    Yea – Leo must’ve read my blog post and decided to cut his losses on WebOS… :) I too loved my Pre and the slickness of WebOS, but it was going no where in a tough competitive environment. As soon as I had the chance to set aside my Pre for a few days and explore the Android Market, I realized that the future was Android, warts and all.

  3. Patrick says:

    Russ,

    I agree with most of what you have said. However, I am probably more positive about Windows Phone’s future. The OS is REALLY good (have you tried it?). So good, that as soon as Sprint releases an EVO 7 4G, I’ll be dumping Android for good, and I LOVE my EVO…but the WP7 platform is so much better, for me, than Android.

    I think the idea of Android as an “open” platform (and I use that word very loosely, because it isn’t truly open but is “free as in beer”), is good for the mobile industry but I don’t know how long Google can continue to sustain it. I personally see Google dropping Android (after losing several billion from litigation and the like) in about 3-5 years, in favor of Chrome, which *could* run on mobile handsets as well, and has been developed entire by Google, with no ties to middleware like Java (thus preventing IP lawsuits from the likes of Oracle).

    Now, having said that…the landscape of wireless is changing, we see it every day. Unfortunately, our rubber stamp government will allow AT&T to buy T-Mobile…even though EVERYONE (including AT&Ts own customers) don’t want this merger to happen because it is bad for the industry, consumers and innovation. Despite this, I am happy to see Sprint still making changes to a more robust network (moving to LTE from WiMAX) and preparing for long-term growth.

    Having said that, I’d like to ask that Sprint please show WP7 a little more love with some better (i.e. Larger) handsets than the Arrive :)

  4. Nathan says:

    Please do whatever is possible to secure a CDMA version of the Nexus Prime upon its release in October. I cannot begin to express how important a stock Android phone is to certain subscribers. The Nexus S 4G was a great effort, but unfortunately it came to market far too late for its specs to be relevant. Again, PLEASE, I beg you, secure the Nexus Prime for the Now Network.

  5. Becky Johnston says:

    Another potential “good” with respect to the tie-up of Google and Motorola Mobility: Given Google’s tenuous relationship with the Chinese government, they may benefit from Motorola’s strong presence in China, a key growth market for mobility.

  6. I’m sure you’ve seen Tomi’s blog post on HP’s recent decisions.

    http://communities-dominate.blogs.com/brands/2011/08/did-i-miss-a-memo-what-changed-why-would-hp-quit-the-smartphone-biz-after-buying-palm-last-year.html

    Even with some of the less overwrought reviews of HPs decision to get out of smartphone hardware (and most other consumer hardware) and become primarily a software and cloud company that have come out, suggesting HP desires to license webOS, they have essentially killed it and its existing ecosystem.

    By the time another manufacturer can license, design, test, pass FCC inspection, get carriers interested, begin manufacturing, and finally start selling a webOS device, the customers and developers will be gone, moved on to something else in the three year gap between major smartphone releases on that OS.

    Sadly, that includes every one of Sprint’s hard core webOS fans.

    (So far the least objectionable device I can find for my needs is the Motorola XPRT at Sprint, and it’s no where near as smooth and elegant in it’s operation as the Pre.)

  7. PaulHTX says:

    Hi Russ,

    Maybe Leo did read your post and decide to axe webOS hardware development. I think this decision must have been in the works when they moved Jon Rubenstein a couple months ago, and was finalized with the (once again) terrible launch of the TouchPad.

    Like yourself, I moved to Android a few months ago, and like you it all came down to what was available in the app catalog. Reports from within HPs Personal Systems Group (formerly Palm) is that there was terrible mismanagement within the company before the HP buyout, and HP was either unable to make changes to that culture, and/or unaware of how bad things were.

    I hate to see webOS take a hit like this. Just like so many others, I think it is the best OS out there, but businesses that are run poorly need to die. I would love to see webOS licensed, but given that there is a current mass exodus of current developers, and no developer in their right mind will start developing for webOS now, I don’t see the lack of essential (to me) apps getting any better.

    I think it is slightly more likely that HP could sell webOS as a whole to another manufacturer, and hopefully see some webos elements make it into another operating system. I would love to see webOS synergy on my android phone, and the cards user interface as well. But HP would lose a lot of money on that deal.

    Probably the most likely thing is that while webOS dies a slowly fading death under HPs continued development into who-knows-what, other OSs will emulate more and more of what webOS was. In the end, maybe that means good things for all of us.

  8. Tom says:

    Hmm, guess it is hopeless to think someone will bring back Palm OS now that Web OS is terminal. No, I am not looking for someone to bring back 8-track tapes. Yes, I am still using a Palm Centro and waiting for the next right phone (maybe the rumored sprint iPhone, time will tell).

    I feel picking a phone should not be just about the latest OS and apps. It includes ease of use and good phone reception. To that end the Centro is great. I am wondering about Sprints future use of it’s spectrum and when phones will use the lower frequencies for better building penetration. (hope it’s not too far in the future as I’m 60+ and can’t wait forever)

  9. Mike says:

    Now that the Sprint Epic Touch 4G has been announced, are you able in any way to comment on what factors are at play that resulted in its delay of over half a year relative to the rest of the world?

    Surely Sprint is aware of what a coup it would have been to be able to launch this device long before its rivals?

  10. Russ says:

    Mike,

    I don’t understand your question or your point.

    Sprint is the first carrier to offer a Samsung Galaxy S II device in the US – the Epic Touch 4G – and the only 4G version of the Galaxy S II line in the world. The Galaxy S II was announced in February (over 6 months ago), but didn’t start shipping anywhere in the world until May (4 months ago). If I understand it correctly, Verizon has indicated they won’t carry any Galaxy S II devices, and AT&T will carry the HSPA+ 3G version of the phone.

    I don’t have insight into why Samsung launched the device in Europe and Asia ahead of the US. I don’t know if that delay was caused by Samsung or the carriers. Given that AT&T will launch their version a few days after Sprint makes me think it had something to do with the US market (FCC, Legal, or Samsung’s priorities) rather than the individual carriers.

    Thanks,

    Russ

  11. Patrick says:

    Russ,

    I’m curious as to your thoughts on the recent changes with Sprint. With these changes, Sprint is becoming more like VZW and ATT in the way that they handle customer benefits (cutting the premier program, cancelling early upgrades, etc.).

    Sprint says they are doing this to “remain competitive” with the other two major carriers, but that doesn’t seem to make sense. Removing customer loyalty benefits, to me, would only decrease one’s chances of remaining competitive.

  12. LB says:

    I wanna the reason why sprint wants customers to upgrade the price of their plan to get a decent android phone? I’m not eve talking about the premium Data plan.

  13. Russ says:

    Patrick,

    Thanks for your note.

    As I’ve noted elsewhere, maintaining unlimited is really important to Sprint. As I noted above, our customers use more data than our competitors’ customers. That increased use translates directly into increased costs for us. Our competitors have explained that well when they abandoned unlimited. We don’t want to abandon unlimited, so instead we’re looking for other places that we can reduce costs. Some of our recent changes bring us in line with our competitors’ policies in areas that help us reduce our costs without having to abandon unlimited. It’s painful for us to make decisions like these because we know that they’ve been attractive for customers precisely because they’ve been better policies than our competitors, but we have to make choices. (All of us at Sprint understand the pain very well because these policy changes impact our employee and family accounts as well.) But, sometimes you have to sacrifice the nice-to-have to defend the essential.

    I hope that helps.

    Russ

  14. Russ says:

    LB,

    By it’s nature, Android uses lots of data. When you have an Android phone, you install apps (that’s why you want Android, right). Most apps connect to the Internet and draw down data. You use the web. You use e-mail. You use Facebook or whatever your favorite social network is. You text. You take pictures and share them with your friends. Android makes all of this really easy, so when you get Android, you actually use it the way it was meant to be used. And all that data use translates into increased costs for Sprint. We’re not a charitable organization. We can’t afford to lose money forever. Unlike the government, we can’t get an unlimited supply of debt to keep funding a deficit. Therefore, we have to charge a price that covers our costs. Because Android phones cost us more each month, we can either raise everyone’s pricing, or we can limit Android phones (and other smartphones) to those plans where the pricing might allow us to at least cover our costs. It’s simple business economics.

    I hope that helps.

    Russ

  15. Patrick says:

    Russ,

    Thanks for the response. In keeping with my original statement, I’m excited to hear Sprints upcoming announcement on network plans. I’m most excited about the possibility of Sprint finally rolling out EVDO rev.B, which is faster than WiMAX and has better reach, and is easier on the battery.

    Is there any news if devices like the HTC EVO 4G would be able to support it? Does Sprint have a comprehensive list of EVDO-rev B compatible devices?

    Thanks!

  16. Tony says:

    Hi Russ,

    Will the recently announced iPhone 4S be available for sero p members? Been a long time Sprint member and hoping to stay one!

  17. Russ says:

    I can’t provide any info beyond what’s in Apple’s press release. Sorry.

  18. LB says:

    Yes it helps Russ and I can respect that answer. I know you answer many questions on this site even though you are a busy. I appreciate that. I just have one last question. I wanna upgrade to the Apple 4GS phone once released. I have a Sero 500 $30 Plan. What plan can I upgrade to and how? When I go online it does not allow me to upgrade my plan. I heard talks of Sero Premium? I’m clueless and so is customer service. I love sprint and been a loyal customer, but customer service is not the best.

  19. Jay says:

    russ, i hear sprint is moving to LTE and Sprints agreements with CLEAR end at the end of 2012.

    My concern is that if I upgrade to a new 4g device today that it will not support the LTE 4g because your current devices are all WiMAX 4g. Thus putting myself and other customers in a bad position, where we have 4g devices that cannot use WiMax 4g , furthermore we dont have an upgrade credit available as a full 24 months have not passed, and even if we sell our devices no one would want to repurchase them as they are literally obsolete for the LTE network.

    Simply put, does sprint have a plan for many customers who wish to upgrade but are on the fence?

  20. Russ says:

    Jay,

    Sprint still owns more than 50% of Clearwire and will continue to buy wholesale 4G services from Clearwire beyond the end of 2012. The reference to the end of 2012 is that our large purchase commitments to Clearwire end then.

    I hope that helps.

    Russ

  21. Pete says:

    Russ,
    I sent a email to you the other day with regard to my situation and the policies Sprint has with respect to legacy plans and smartphones.

    I’d like to point out to you that while it’s true that many smartphone users typically do use far more data than their counterparts with feature phones, I don’t think the average smartphone user consumes nearly as much data as you might think.

    My wife and I have had Smartphones for years with Sprint and I just checked my latest bill and even though I routinely connect to the internet to retrieve my email and RSS feeds, weather and stock prices I rarely use more than 200MB of data a month.

    The problem is that if you average out data usage between my family and a teen who is downloading HD movies on his/her evo you are going to get a distorted view of the data usage of your customers. In essence, those of us who don’t use much data are subsidizing the data usage for the rest of the customers.

    I’m sure that you can run the numbers yourself, but I suspect that 15%-20% of your customers account for 75% of the data usage. It would be interesting to see if your data validates my supposition!

    Pete

  22. Russ says:

    Pete,

    By definition the “average” smartphone user actually does consume as much data as we think, however, your point is accurate that any averaging means that there are some that use significantly less than the average and some that use significantly more. We have chosen to emphasize the simplicity of a single unlimited plan over the custom-sizing of a complex array of different priced options based on how much any user thinks they might typically use (with the risk of surprise overage bills). We recognize that some consumers will walk away from Sprint because they think they’re better served by the multiple bucket approach, but for now we think simplicity serves most really well.

    Thanks,

    Russ

  23. Pete says:

    Russ,
    Point taken. By definition the “average” is as you state. Sorry for incorrectly using the terminology. As an Engineer, I should have known better and I should have known that you would call me out on it!

    I guess my point is simply that if one eliminates the extreme data users from the mixture, then the data usage picture looks significantly different. I don’t dislike the unlimited data plans, I simply dislike having to subsidize other people’s data usage. Those folks who are rountinely consuming huge amounts of data cause Sprint to have to prematurely upgrade networks which costs everyone money and causes plan prices to rise.

    At one point, Sprint dropped the customers who were causing too much of a strain on the customer support system so we know that Sprint is conscious of the costs and there is precedent for getting rid of customers that cost the company too much.

    PS: I really enjoy your blog. While I may not agree with all of your opinions, I enjoy reading your insights. Please, keep writing!

    -Pete

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