The Next Net

Disruptors Video: The Future of the Wireless Web (Vanu)

This week's New Disruptors video is up on CNNMoney.  In this episode, I speak with Vanu Bose, the founder of Vanu, about how wireless networks could be more like the Internet if they were open to all devices (as the FCC is requiring in the rules for the upcoming auction of broadband spectrum).  Vanu's technology, software radio, can help connect multiple wireless standard to the same network, whether it's GSM, CDMA, or iDen.  Thus, the open-device rules could really play into its hands.  Vanu is also an investor in Frontline Wireless, which was hoping to use Vanu's software radio technology to build a network that could seamlessly switch to support public-safety radios in cases of emergency.  Frontline's plan looks like it may be in jeopardy now, but Vanu still hopes to cash in on the need for device-agnostic wireless networks.

AT&T Launches Mobile Video Sharing Service For its (Non-iPhone) 3G Network

From the folks who brought you the Picturephone, AT&T now lets some customers (those with 3G phones in one of 160 select markets) stream live video over their mobile phones.  Want to show your friend in LA how funny your dog looks in sunglasses?  Turn on the video cam.

Startups like Kyte.tv already allow you to shoot and broadcast videos from your phone, but AT&T now let's you do it live, while you are still talking on the phone.   I admit that is pretty cool.  But is it worth an extra $5 to $10 a month?  We'll soon find out. 

AT&T needs to give people a reason to upgrade to their 3G network, and they hope this is it.  Today, a cell phone without a digital camera seems crippled.  Video is the next logical step, especially as wireless networks become faster.  The problem is that it doesn't work with the iPhone because that is not a 3G phone (and the iPhone only takes pictures, not videos).  So all those folks who just shelled out $500, if you want this feature you will have to buy another  AT&T phone (or wait for the 3G iPhone to come out and pay another $500 for that).  I'm scheduled to discuss this on CNBC tonight around 7:30 PM ET.

Google Starts the Wireless Bidding at $4.6 Billion

From inside a rainbow..., originally uploaded by jerikojosh.

The auctions for the largest chunk of wireless spectrum to become available in several years have not even started yet and Google (GOOG) is already starting the bidding at $4.6 billion.  That commitment, though, is only good if the FCC agrees to play by all of Google's rules: open apps, open devices, open services, and open networks. 

What is really going on here is that the FCC is still determining what the rules of the auction are going to be, and Google is trying to influence that process.  In the opposite corner are the big telcos like Verizon and AT&T who are deploying their substantial lobbying muscle to make sure the auction rules go their way.

Google is serious about the wireless Web, to the tune of at least $4.6 billion, and it wants to make sure it does not get locked out of it.  As Vanu CEO Vanu Bose put it to me in a recent conversation:

There are two aspects to openness: unblocked and unlocked. Unlocked means you can buy any phone and connect it to any network. But unblocked is open unfettered access to content, not a walled garden. The FCC should mandate that you cannot block access to Google.  Where it really hurts is applications.

What Google is trying to do is to impose Net neutrality on the wireless world.  Agrees Bose:

That is exactly what it is.  This is wireless Net neutrality.

But we know who is winning the Net neutrality wars (the telcos).  So why should wireless be any different?  But Google is at least willing to put its money where it's mouth is in this case.  (It also knows how auctions work better than most companies, so that $4.6 billion could just be an opening bid that it is calculating will be trumped by someone else—and thus it will never actually have to pay it out or build out a wireless network.

Spectrum Auction to Be Run By Google Rules

  From inside a rainbow... 
  Originally uploaded by jerikojosh

It appears that the FCC is going to adopt open-access rules backed by Google and other tech companies in its upcoming spectrum auctions.  This is not good news for incumbent wireless carriers.  What Google (GOOG) wants is for the resulting 4G networks built on top of the auctioned spectrum to be more like the Internet, so that you can plug in any device or run any application on it no matter who happens to be billing you for your wireless broadband access.  Google's principles going into this are: 

   

* Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;
* Open devices: consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
* Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
* Open networks: third parties (like internet service providers) should be able to interconnect at a technically feasible point in a 700 MHz licensee's wireless network.

It might not get everything it asked for, but even one or two concessions would make it much more likely that Google will decide itself to bid for some of the spectrum.  If such rules were in effect today, you would be able to buy an iPhone and not be locked into AT&T's network. 

It's nice to see Internet rules finally winning the day in Washington. 

In Time For Christmas, iPhone Nano?

  iPhone Lite ! 
  Originally uploaded by Ben Jacob

JP Morgan is predicting a Nano version of the iPhone by the holidays.  The cost: under $300.  And you know what?  I bet it will have the same amount of memory as the bigger iPhone (4 or 8 GB).

Talk about product life cycles speeding up.  It used to take at least a year between different iPod designs.  If this rumor proves true, the next iPhone Will be out in less than six months. Yet another reason to wait before taking the iPhone plunge.

Update: Now JPMorgan is retracting its prediction.

Apple Takes Its Bite of iPhone Mobile Service Fees

  iPod 
  Originally uploaded by stublog

In the competition to carry the iPhone in Europe, it looks like Vodafone (VOD) is balking at Apple's demands;  The Guardian reports:

Apple is understood to be demanding that its European mobile phone partners hand over a significant proportion of revenues generated by the iPhone and restrict the content that users can access.

The portion of network revenues demanded by Apple is believed to have been behind Vodafone's decision not to sign up as the exclusive partner for the iPhone in the UK. ... The iPhone is expected to launch in November in the UK through O2, in France with Orange and in Germany with T-Mobile.

So not only does Apple (AAPL) keep all the revenues from the $500 iPhones, but it gets a cut of the monthly service fees as well.  I guess even (most) hard-nosed telecom execs have a hard time saying "No" to Steve Jobs.  But if this report is true, good for Vodafone CEO Arun Sarin for sticking to his guns.

Update: Another tidbit about the economics of the relationship between Apple and the mobile carriers.  Citigroup analyst Richard Gardner models iPhone revenues for Apple to include the entire $500 average selling price plus a $100 bounty from AT&T.  (This is from a June 28 note of his).  Gardner does not model in any cut of the monthly subscription revenues, however.  (The $100 bounty would be more like a typical subsidy).  So if Apple is also getting part of AT&T's monthly fees, not to mention that of the European carriers, that would significantly increase its profits from the iPhone.

Web 2.0 Startups Add Features to the iPhone

The iPhone is barely a few days old and already some savvy startups are figuring out how to make their applications work on it—without cutting a separate deal with either Apple or AT&T.  All of the application widgets currently on the iPhone are strictly controlled by Apple (although Steve Jobs recently announced he is going to open up that process).    Startups like Transmedia and Jajah, however, have found another way to get their Web-based applications on the coveted iPhone.

What's the back door they are taking advantage of?  The Safari browser that comes with every iPhone. 

Transmedia's Glide Mobile service—which lets you upload to the Web music, photos, videos, Word docs and Excel spreadsheets and then access them from many smart phones—now works on the iPhone as well.  That means using Glide, you can edit documents and spreadsheets you had previously uploaded to it. 

One of the drawbacks of the iPhone right now is that it only allows you to read such documents, not edit them, because Microsoft has not yet developed a version of Office for the iPhone. With Glide, you can also stream music or videos from your personal Glide jukebox on the Web without taking up memory on the device.

Transmedia CEO Donald Leka says that he and his engineers bought a few iPhones when they went on sale over the weekend, trained his service to recognize requests coming from iPhones, and tested it to make sure Glide works on them.   (Since the iPhone does not support Flash, he uses an HTML implementation instead).  Says Leka of Apple's restrictive policies concerning third-party applications: 

They erect every barrier possible. Silicon Valley is a highly political place.  We are trying to increase consumer choice on the iPhone.

Jajah is also making its app iPhone-friendly, offering cheap international VoiP calls to iPhone users through a simple Website.   So now you can make VoIP calls on your iPhone.  Apple's cellular partner AT&T cannot be too happy about that.

This is not the sort of mobile application you'd imagine that Apple or AT&T would sanction.  For instance, I'll be surprised if we see a version of Skype that works on the iPhone anytime soon.  Because Skype requires a separate downloaded application in order to work.  But in this case Jajah just uses the Web (you type in both numbers and it makes the connection over the Internet, using the cellular network only for the last, local hop).

The iPhone is only a few days out of the gate, but examples like these show how the walled gardens that mobile carriers have erected around the Web can easily crumble.  All it takes is a decent Web browser.

(Read previous posts about Jajah here, here, and here, and about Glide here and here.)

Update:  In response to some of the comments below, I've changed the headline of this post from "Web 2.0 Startups Bypass Restrictions On the iPhone" to "Web 2.0 Startups Add Features to the iPhone."  I agree that the first one was a bit misleading since anyone can develop a mobile app that works on Safari.   

The iPhone does not have a separate software development kit.  The way Apple is opening up the iPhone to outside developers is by using Safari as its development platform.  Jajah and Transmedia are merely among the first to do so. 

Still, the larger point remains valid: startups can now add features to the iPhone that Apple or AT&T may not like.  And don't believe that Apple has given up all control here.  As far as I know, it isn't opening up the application widgets on the iPhone to just anyone, and those are more tightly integrated with the operating sstem and the hardware than any app on Safari. 

Why I am Going To Wait to Buy an iPhone

While many people are saying "TGiPhone" today, I'm not so sure that I really must have the must-have device of the moment.  Maybe it's just iPhone fatigue, with the non-stop media barrage masterfully orchestrated by Steve Jobs. (Disclosure: I too will be priming that pump as a guest on ABCNews Now today to comment on the madness as the phones finally go on sale).

Maybe it's the gnawing feeling I get that no matter how cool the iPhone may seem right now, it will soon seem as quaint and clunky as the very first iPod.  You remember, the one with only 5 gigabytes of memory, a black-and-white screen, and those protruding buttons around the scroll-wheel. 

Maybe it's the fact that the iPhone right now is a tease, hinting at what a broadband mobile computing device should be, but hampered by AT&T's worse-than-dial-up data network.  (Okay, it's a bit better than dial-up, but not much, since AT&T "boosted" its network speeds over the past few weeks).   Steve Jobs says he opted not to go with AT&T's faster, next-generation, 3G network because such phones would be too battery-hungry right now.  Fair enough.  That's just another reason to wait.

And don't tell me that the WiFi crutch is a good substitute for now.  WiFi is not everywhere, and even where there are networks, they are not always open or free.  And connecting to them can be a real bitch.  In the real world, WiFi phones still have a long way to go (see my recent experience with T-Mobile's Why Phone).  These networks are not controlled by Apple (AAPL) or by AT&T (T), so there is only so much they can do to try to make those connections work.

What good is a broadband phone if you can't get a broadband connection?  All the Web-surfing and video-streaming capabilities of the iPhone will be intermittent pleasures at best.

There are a litany of other deficiencies as well, including the inability to buy iTunes songs over the air, a camera that cannot record video, Word or Excel files that can be read but not edited, the inability to download contacts from your current phone, poor search functions, no support for instant messaging clients, and no GPS, to name a few.  I'm confident that many of these features will be added, improved, or corrected over time.  I can wait.

Then there's the price: $500 to $600, plus $60 to $100 a month for the wireless service.  If you go all out and get the best phone with the best plan, that will knock you back $1,800 in the first year alone.  You know what?  I'd rather get a pimped-out MacBook and still save $300.

Update: Glad I waited.  My boss just returned his.

Call It the Why Phone.

This is not a post about Apple's iPhone (except that it is).  It's more specifically about T-Mobile's new WiFi phones, which some marketing genius there decided to launch two days before the iPhone hits the shelves.  Chalk it up to an attempt to steal some thunder from Apple by being first to launch a phone in the U.S. with WiFi capabilities. 

T-Mobile is offering two different WiFi phones, a Samsung t409 and a Nokia 6086, along with a free WiFi router, which they are calling HotSpot @Home.  (Another brilliant marketing move—the @Home moniker calls up memories of one of the biggest Internet failures of the 1990s).  These phones are completely unremarkable, other than the fact that they purport to be able to switch seamlessly from the cell phone network to a WiFi network in mid-call, letting you take advantage of whichever network is strongest. 

It sounds great, but here's the problem with WiFi phones.  Connecting to a WiFi network is not always so easy to do, especially with a phone.  Especially with T-Mobile's phones.  At least that was my experience.  (Others, like Om, had no such problems.  But then, he's a telecom geek).  T-Mobile sent me one of their WiFi phones and an @Home router to check out a couple weeks ago.  I took them home.  The phone was unable to connect to my existing, open WiFi network at home.  But I had been warned that might happen, which is why T-Mobile provides its own router loaded with software to help make the connection happen. 

Rumor: GrandCentral Gets Googled

  Why (I Write) 
  Originally uploaded by lorenzodom

Michael Arrington at TechCrunch is reporting that the latest Web 2.0 startup to be gobbled by Google (GOOG) is GrandCentral.  The service consolidates all of your phone numbers (work, home, cell, Gizmo) into one single number that you give out to everyone, and then it forwards the calls to whichever phone you happen to be at.   You manage your numbers via GrandCentral's Website, where you can forward all calls to a specific number, forward them to voicemail, listen in while someone is leaving a voicemail, or record calls.  You can also specify how you want each call to be treated based on who is calling.

If Google is indeed buying GrandCentral, it would be to add to its existing communications services like Gtalk or Gmail.  To them, voice is just another application on the Web.

Update (7/2/02): Google confirms the acquisition.  Didn't disclose a price.  TechCrunch says its in the $50 million range.