McGuire’s Law

According to Philip Redman, research vice president at Gartner, service revenues from wireless services will exceed those from fixed lines by the end of this year. Gartner estimates that 3 billion of the world’s 6.5 billion people will be mobilites by 2010. What makes this truly amazing is that less than 10% of the world’s population has ever made a telephone call, and now, within just a few years, nearly half will be mobile users.

The ITU Internet Report titled digital.life observes that “the number of mobile phones users worldwide passed the 2 billion mark in late 2005. While it took around 21 years to reach the first billion users, the second billion signed up in just the three years. By contrast, it took some 125 years to reach the first billion fixed lines users.”

3G usage is also surging. By the end of 2005, there were about 60 million 3G users worldwide. That number passed 100 million in June of this year and Strategy Analytics estimates it will reach 167 million by the end of this year. They further predict that more than half of mobilites will be on 3G by 2010.

All of these facts and projections are clear indications of the trajectory of the mobility revolution.

Many of us still think of mobility as merely telecom taken with us as we go. That might be a telephone that stays with us, or it might be a broadband connection that is available all the time, wherever we are. In effect, we are thinking of mobility as an incremental extension of the telecom industry.

These facts blow that notion out of the water.

More people are using mobile phones than phones. Soon, more devices will be on broadband wireless than fixed broadband connections, and those devices will be available and used more frequently to do more things than traditional PCs. This alone will transform the way that people interact with the world, and naturally, the best information sources will change the way they work to match their audience.

The most powerful differentiator for mobility over fixed communications is the availability of context. The collection of contextual information available in the mobile era will continue to expand making the relevance of my communications experience to where I am, who I’m with, what I’m doing, where I’m going, what time it is, how traffic is, what the weather is, what my heart rate is, who I just met with, who I’m about to meet with, etc. dramatically richer and more valuable.

As mobile telecom continues to grow and dwarf fixed telecom, expect everything to change.

This is not just “big news” but also “real news.” 2006: the year fixed telephony tipped towards irrelevancy?

In November, 3, the global mobile operator, announced what was perceived to be a radical new approach to mobile services. They called it the “X-series,” which of course got everyone wondering what an X-series really is.

As I noted at the time, “Well, it’s a new pricing plan for broadband mobile. It’s new ‘cutting edge’ handsets. And, perhaps most importantly, it’s a bundle of disruptive applications.”

This was all new for 3 and got lots and lots of attention.

When the pricing was finally announced, there basically were two tiers of service. For an incremental 5GBP on top of the subscriber’s cellphone plan, the customer would get unlimited (sort of) broadband wireless Internet access, including easy access to “disruptive” applications such as Skype, Google search, and Yahoo messaging. For another 5GB, she’d also get access to “disruptive” applications (Slingbox or Orb) to watch her television across the network.

Wow! Cool stuff. Big news! Even now, a month later, there are still 394 news items listed at Google News for the x-series.

But, what here is new?

Cool new handsets come out all the time. Will 3 be able to always pick the newest and coolest? (They’ve already struggled to get more than one handset out the door…)

Carriers already offer unlimited broadband wireless Internet access in the 5-10GBP range.

And carriers are always juggling the applications that are easy for their subscribers to get to, including “disruptors” like Yahoo, Microsoft Live, YouTube, and Loopt.

So, is 3’s X-Series real news? Undoubtedly so for 3’s existing customers who apparently haven’t had the benefit of all these capabilities up until now.

But none of this is as revolutionary as some of the capabilities that are starting to appear that really leverages the context of the mobile user in ways that have been impossible in the pre-mobile Internet era. What 3’s X-series represents is “just” the Internet taken mobile. What context-relevance represents is the full mobility revolution.

This is the last of the “big news” but “no news” stories of the year. The next five will be “big news” and “real news” stories. Stay tuned!

Get this. A company is formed whose investors include Ericsson, Google, GSM Association, Hutchison, Microsoft, Nokia, Orascom Telecom, Samsung Electronics, Syniverse, T-Mobile, Telefónica Móviles, TIM and Vodafone. This company’s goal is to provide “the critical link between the mobile operator, Internet services and the users to make their mobile devices the Internet and communication tool of choice.” Seems like this company, with it’s investors, would understand the space and be able to make a real impact towards that goal.

The way they set about to achieve that goal was to create a new top level Internet domain (TLD). The general idea being that everyone would want to create a parallel website uniquely designed to work well on mobile devices. In July 2005, the company gained approval from the Internet registrars to create and manage the .mobi TLD. In May 2006, the company started taking initial applications for .mobi domains. The scope of these registrations was broadened in June and then again in September. “More than 13,000″ domains were registered in the first few months.

All this sure sounds like “big news” for 2006, and with the combined PR heft of the above mentioned companies, .mobi did gain lots of coverage in the first half of the year.

However, given that even obscure TLDs like .info have thousands of new domains registered each day …

And, given that existing web standards, like the CSS Mobile Profile (from the W3C, whose members include Ericsson, Google, Hutchison, Microsoft, Nokia, Telefónica, and Vodafone) have already solved this problem in a way that doesn’t require creating a parallel web site…

And, given that any domain with .mobi in it will be harder to tap into a mobile device than the same domain but with .com or .net or just about any other top level domain…

…maybe the official launch of the .mobi domain isn’t real news after all.

Unfortunately, this is yet another “big news” but “no news” story for 2006. But don’t worry, we’re nearing the end of the first half of the list and will soon be moving onto big news stories that really were and will continue to be big news.

Stay tuned!

In March of this year, Microsoft formally announced a new class of computing device, the Ultra Mobile Personal Computer (UMPC). The formal announcement followed weeks of intense buzz marketing using the product’s “secret” code name of Origami.

Partly due to the buzz; partly due to the players involved (Intel was also a major participant in the launch); partly due to the value attributed to mobility, this became a huge news story for a few weeks.

And then folks figured out that the UMPC wasn’t nearly as revolutionary as everyone had hoped.

In fact, early skepticism seemed to be quickly validated. Folks hoped for a price point near $500. The early products were around twice that. Folks hoped to quickly get their hands on the devices. Initial shipments were delayed by months and then had logistics and quality challenges. Folks expected reasonable battery life, but instead could only squeeze an hour or two of use out of them.

Bottom line, by late in the year, folks (even Intel) seemed to agree that the UMPC products originally introduced to the market weren’t quite up to what folks really wanted. In short, let’s just say that sales haven’t been nearly up to expectations.

So, the UMPC was a “big news” story for 2006 that ended up being a “no news” story for the year.

But, what will it take for the UMPC to become a big news story in 2007?

Well, if we think about it, the UMPC obviously falls between a laptop (or tablet) computer and a Windows Mobile device. For the UMPC to be a hit, it will need to combine the computing power of the laptop with the mobility power of the Pocket PC.

What does that look like?

A laptop (or tablet) has more computing power than a mobile device because:

• It runs “real” Windows and supports the seemingly infinite array of Windows-based apps.
• It is very usable, with reasonable input, meaningful screen real estate for output, and a big enough screen to comfortably read.
• Our price/performance expectations have been effectively managed by manufacturers.

A Windows Mobile device has more mobility power than a laptop because:

• It’s small enough to conveniently take with you everywhere (high availability).
• It’s likely that you’ll want to use it anywhere, anytime, so you DO take it with you. (Unlike, for example, your digital camera.)
• Mobile devices are always connected, so their value is multiplied by what’s available across the network.
• They are becoming increasingly aware of their context (location, proximity, presence, network strength, relevant data such as traffic and weather, etc.) enabling their value to increase exponentially as the context drives increased relevance to where I am, what I’m doing, who I’m with, what situation I’m in, etc.
• Battery life lasts for hours of use and days of non-use standby.
• Pricing is generally less than $500, making a mobile device an affordable investment.

Will anyone be able to bring a UMPC product to market in the $500 range, with long battery life, the power of “real” Windows (XP or Vista), usability, portability, ubiquitous network connectivity, and contextual relevance?

I sure hope so!

As the year draws to a close, rumors once again abound of Apple bringing an iPhone to market. The latest guesstimates are that the phone will be launched in the first half of 2007.

For a device that’s been rumored for years, and that, at best, is still months away, the iPhone sure makes for “big news.” Typing “iPhone” into Google News results in 894 matches, and that’s just in the last month! Of course, Apple is super secretive about product launches, so there’s no indication out of Cupertino of any real plans.

The iPhone clearly qualifies as a “big news” story for 2006, and since it’s still just rumor, it also qualifies as “no news” for 2006. The question is, will this be “real news” in 2007?

Even if Apple introduces the iPhone (and that’s a big “if”), this isn’t an easy question to answer. Apple worked with Motorola to introduce the ROKR phone way back in 2005 (and even then it was 13 months between announcement and availability). I’m sure that both Motorola and Cingular (the first carrier to offer the phone) had high hopes for the device. I’m not sure Apple really even cared.

In the end, the product was a flop. Why? I think there are three main reasons.

• First, the phone synchronized with iTunes, but only over a tethered connection. In other words, the product didn’t gain any value as would be predicted by the Law of Mobility.
• Second, the phone had limited storage (only holding about 100 songs) and, compared to the iPod, limited battery life. So, the product was actually less valuable than any of the “real” iPod products.
• Finally, the phone was a Motorola product, not an Apple product.

What do I mean by that third bullet? Well, basically the ROKR was designed by a phone company and was about as usable as any feature-rich handset (in other words, not very).

This key point will determine how valuable any iPhone may be. If Apple can successfully bring the value of their usability leadership into the handset space, they will create new, untapped value in a new industry. Good for Apple and good for cellphone customers. But, if Apple can do that AND fully leverage the Law of Mobility to amplify the value of the iPod, then we’ll be looking at a revolutionary product that is helping push forward the mobility revolution.

That’s a lot of “if”s - starting with the biggest one of all - “if” Apple brings an iPhone to market.

And all those “if”s may be closely related. Apple has an incredibly valuable franchise in the iPod. The company has little motivation to either devalue the product line (through carrier subsidization models) or burden the iPod with the heavy technology and performance costs associated with building in a wireless phone. Even more critically, the huge impact of the iPod has come from it’s usability. Apple is highly unlikely to compromise that usability to accomodate the overwhelming plethora of features required by the industry for mobile devices. Finally, and perhaps most tellingly, Apple still defines itself around the personal computer. The iPod is a strategically appropriate product for Apple because it fits into Apple’s vision of the personal computer as the central hub for how people live and play. Essential to that fit is the tight integration between iTunes and the iPod, which of course, further contributes to the iPod’s usability.

Apple is not driven by the Mobility Revolution. The success of the iPod and iTunes is only marginally associated to the Internet Revolution (the iTunes store isn’t a bad revenue source…). The iPod is really all about the PC Revolution that Apple launched more than a quarter of a century ago and which still defines the company.

Is Apple willing to commoditize their economic engine? I don’t think so. Will the company compromise usability to integrate cellphone features into the iPod? I can’t imagine them doing so. Even if they overcome those two barriers and bring an iPhone to market, will they really rally around the real value of mobility by breaking the tether between mobile device and PC? Call me a party pooper if you like, but that hasn’t happened in 27 years, I can’t see 2007 being any different.

Check back a year from now as I run-down the top 10 stories of 2007 and find out whether I was right or wrong!

There was a lot of discussion this year about the 802.20 standards, making it a big story for 2006.  Unfortunately, there still aren’t any standards.  As I discussed in June, the main reason is politics.

This is a classic case of “Big Bell Dogma,” where one party, which is threatened by advances in mobility, actively works to slow the adoption of the technologies that are threatening. 

It would appear that, for years, the 802.20 standards were slowed by Qualcomm, who likely felt threatened by the leading candidate technologies from a startup called Flarion.  Well, eventually Qualcomm acquired Flarion and aggressively started pushing the standards forward based on Flarion/Qualcomm intellectual property.

However, it would appear that Intel feels threatened by 802.20 standardization progress.  Intel, a key proponent of WiMax technologies based on the 802.16 family of standards, complained (perhaps accurately) that Qualcomm had gained too much influence over the 802.20 standards body.  Perhaps Intel’s desire was to slow the standardization to enable Intel’s technologies to gain market traction.

The net result, the IEEE decided that it was time to completely restructure the 802.20 standards group and effectively start over.  In short, another year lost in terms of progress on this potentially powerful mobility standard.

Starting this week, we’ll begin a countdown of the ten biggest news stories of 2006 that relate to the mobility revolution.

Stories 6 - 10 in the list will be five stories that got lots of attention (i.e. they were “big news”) but that really don’t represent significant progress in the revolution.  The top five stories represent significant milestones, pushing the revolution forward.

Look for three stories a week for the next three weeks, with the #1 biggest mobility story of the year featured New Years Eve weekend.

Stay tuned!

Apparently, a holiday week (in the U.S. anyway) translates into a slow news week in the mobile world. Looking ahead at the posts I’d normally do during the coming week, the content is a bit thin, making it feel to me like a waste of your reading time to post a list with only one or two items.

But fear not, each month end I post a growing collection of items that don’t (yet) justify weekly attention. I’ve got four of them queued up for November month-end, so posting one a day will get us through to Friday when hopefully at least one of my normal weekly posts will be robust enough to share.

Please don’t get carried away with your celebrating…

Over the past week or so, the most talked about announcement in the global mobile world has been 3’s announcement of the X-Series.

What is the X-Series? Well, it’s a new pricing plan for broadband mobile. It’s new “cutting edge” handsets. And, perhaps most importantly, it’s a bundle of disruptive applications.

Mostly, folks are talking about the pricing plan. 3 isn’t yet saying what the price will be, although speculation is that it will be “just over 10GBP.” By my calculations, that would be around $19 or so. But that’s not the big news. The big news is flat rate data pricing - no usage charges. Others are making a big deal out of the “Open Gardens” approach that 3 is taking - not limiting what subscribers can access. This is in conflict with the approach that 3 has taken in the past - an approach often referred to as a “Walled Garden.” In a walled garden, the mobile operator limits what web content the customer can access through the service in hopes that they can charge a premium for something that others might give away, and by so doing, maintain an overall profitable service.

The problem with this whole discussion is that it’s nothing new. Some carriers already offer flat rate pricing with no usage charges and already less than $20. Some carriers already provide their customers with open access to anything on the web.

Cutting edge handsets are nothing new either. Wait a month and 3’s new handsets will be as dated as everything currently on the market.

No, the real story is the bundling of disruptive applications.

As Oliver Starr notes at MobileCrunch, “…I have NEVER seen an application that was not on a single carrier deck get the kind of massive broad based adoption that would make it a success…” The disruptive apps that 3 has bundled are nothing new - they’ve been freely available to mobile customers for some time.

The problem is that it’s intimidating to find, install, configure, and troubleshoot applications. For almost everyone, it’s just not worth the trouble. Skype, Sling, Orb, eBay, Google, Yahoo, MSN - they’re all really cool capabilities, but that doesn’t mean I want to invest hours trying to find them and get them to work on my device over my service provider. Mobile apps are simply not yet as user friendly and plug and play as the standardized Windows world.

So, maybe 3 really will have a big impact on the mobile industry. But not in the form of a new pricing model (that model already exists). And not in the form of opening the walled garden (access to the web has already opened that wall). In fact, it is specifically the bringing of applications that previously were outside the wall into the garden so folks can actually enjoy them that is breaking new ground.

But, I wouldn’t call this revolutionary. Many of the commentators have referenced 3’s move as “finally taking the Internet mobile.” And that’s really all that it is. These moves are merely an incremental improvement on the fixed web. The applications are nothing different from what already exists on the fixed web.

The real mobile revolution is happening with applications that do things that are impossible with the fixed web. Specifically, applications that leverage contextual information (where am I, who am I with, what’s on my calendar, etc.) create revolutionary value.

Don’t get me wrong - I’m thrilled with the excitement that 3 has generated and the increasing adoption of these applications in a mobile world.

But let’s not take our eye off of driving a true mobility revolution.

Today I participated in the Links Executive Summit in Santa Barbara.  The overall theme of the conference was content, and participants ranged from old world telecom players (e.g. AT&T), to those that sell to telcos (e.g. Cisco, HP, IBM), to those in the media value chain (e.g. Nellymoser, Real), and all the way to the President of the Houston Texans and the Chief Content Officer of Netflix.

Those last two provided some interesting perspectives that help illustrate the opportunities and challenges in the mobility revolution. 

As I’ve discussed before, context is a key component to the Mobility Revolution and this became a key theme throughout the day.  Location is one of the first ways that context is being built into mobile applications (e.g. Sprint’s announcement today with Microsoft of location-based search).  Location is particularly relevant to Jamey Rootes, President of the Houston Texans.  In Houston, the Texans have a growing and loyal fan base.  Under the structure of the NFL’s national/local structure, there are ways in which the Texans can build upon that valued base with unique content within their immediate vicinity, but not beyond.  Therefore, Jamey is very interested in progress being made to make mobile content contextually relevant to the Texans fans in Houston.

Another theme that continually came up throughout the day was about the challenges of finding the right content within the constraints of mobile devices.  Ted Sarandos, Chief Content Officer for Netflix provided a clear picture of the challenge.  Netflix offers nearly 70,000 titles.  Yesterday, 35,000 of those titles were ordered by customers, so there’s real activity across the entire portfolio.  How can Netflix customers wade through so many titles?  They find what they’ll enjoy, Ted claims, because of the Netflix personalization system based on the ratings that Netflix customers provide.  In effect, the titles that appeal to each customer rise to the top with amazing consistency.  For mobile content to overcome the navigation challenges, similar ways to intelligently simplify the process will need to emerge, undoubtedly helped along by the awareness of context.

Overall, some great discussions and congratulations to the Heavy Reading crowd for putting on a well-run event!