Google and Verizon eye a pad - or at least a patch

In interviews to the Wall Street Journal and Bloomberg*, two Verizon Wireless execs confirmed the carrier's discussions with Google to launch a tablet running on Android OS.

The absence of such discussions would have been surprising.

Verizon and Google will probably accelerate TTM for one manufacturer, very much the way they did with Motorola for Android handsets, and together they have enough power and motivation to close the gap.

Close the gap ? For Verizon Wireless, tablet TTM is definitely less important than LTE TTM, and recent LTE trials in Boston seem to confirm this sense of emergency. VZW can not only remove its CDMA-GSM handicap vs AT&T, but also enjoy a temporary competitive edge when its Texan rivals struggle with capacity issues (partly courtesy Apple). Likewise, tablets and other devices will be less critical than the ecosystems behind : AT&T may or may not keep its exclusivity with Apple for the iPhone until 2012, it still managed to open up to both the Kindle and the iPad. V wants more control on the value chain than pipe filling, and on a more sustainable basis ? Time to prove it.

Close the gap ? I never considered the key race to be between Apple and Google. Mountain View is more aiming at Redmond's throat than at Cupertino's. Yes, Apple the manufacturer is succeeding where Nokia the manufacturer failed, in trade diversification**, but Apple will never enjoy Nokia's record market shares. Yes, Apple played the role of an accelerator for existing usages and business models (ie didn't invent smartphones nor app stores), but Google can go much further and not just because, as expected, it's pushing Android ahead on handsets : Google can literally become a category killer for the wealthiest players around in the telecom and software industries. Operators know it, Microsoft knows it. A success of Google's instant cloud scratchers on bigger screens represent a much bigger disruption than the iPad itself (not really a game changer in the global ecosystem).


mot-bile 2010

* "Verizon, Google Developing iPad Rival" (WSJ) / "Google, Verizon in Talks About a Rival to Apple's iPad" (Bloomberg)
** OK, Nokia has gone a long way from timber

Pervasive Korea in US, China, Vietnam...

SK Telecom seems to speed up its internationalization process, more than doubling its subscriber base in Vietnam within one year to reach the 1M mark and targeting 4M by the end of 2008, which would at last sound like a significant position overseas.
But investors tend to be more impressed by less spectacular moves on more demanding markets and Helio doesn't seem to claim many customers in the US. Yet, SKT's UI, T-PAK, is coming up on some Motorola handsets soon. And NATE just locked interesting deals on mobile search engines with Google, and on telematics and in-car entertainment with GM Daewoo cars (TTM 2008) : telematics through NATE Drive, movies through Cizle, music through MelOn... Korea's leading cellco is eventually leveraging on its Jeju Telematics trials*.
Middleware, content and enablers are a surer bet than airwaves, even if Korea Inc keeps pushing its own technos : strong presence during the 2006 China Int’l DAB/DMB Forum & Expo in Beijing, recent deal clinched on WiBro in the US**...
Airwaves do cross the seas, but the other way : W-CDMA / HSDPA were already gaining momentum thanks to SKT and KTF, and now LG Telecom announces GSM-enabled phones by the end of the year. Of course, LGT will invest KRW 400 bn in EV-DO rA over 3 years (including 170 BS in Seoul), but only 15 will be spent by the end of 2006 instead of the 40 planned earlier.


* see "Jeju Telematics celebrates the wedding of GPS and DMB" (20060510)
** Neupara from Columbia, MD (neupara.com), chose POSDATA for its 2.3GHz WiBro trial in the US. Posco's subsidiary joins Samsung in the US market and Neupara keeps pushing Korean technologies after T-DMB in India. Its CEO, Mr John J. Shin, happens to be a Korean-American.

GSM rules in the Americas

It was only a matter of time with the TDMA migration but GSM eventually reached the 50% mark in the Americas before the end of Q2 2006 (51%, up from 38% one year earlier).
The situation remains better in Latin America and the Caribbean (63%) than in North America, where CDMA gained 2.8M subs compared to 3.8M for GSM and 505k for iDEN last quarter : considering TDMA lost 1.6M, this means the CDMA family still outscored the GSM-TDMA squad 51% to 45% in net adds. Spectrum hassles keep preventing W-CDMA from entering the Kingdom of Qualcomm, where Sprint just launched the Novatel Wireless S720 Sprint Mobile Broadband Card ; not much of a name but an EV-DO Revision A device nonetheless.
The CDG is rejoicing but during the last five years, the CDMA roadmap has shrunk to a Data Only thing. I guess Doc Jacobs is working on a disruptive Voice over DO evolution... Reversal of fortune ?


And oh - Happy birthday to GSM (15 years), cdmaOne (10 years) and CDMA2000 (5 years).

TDtv and IP fews

When I write "IPmobile have remained relatively silent" (after getting a 3G license in Japan)*, I'm only talking about the 3Greenfield operator.
Because mother company IPWireless has been fairly active lately.
In 2006 alone : Sprint Nextel injected another $10M in the venture, the CEO resigned, new & old faces joined the board, and IPW announced TDtv trials for H1 2006, not to mention partnerships with MobiTV and Vidiator.
Based on MBMS (Multimedia Broadcast and Multicast Standard) and, unsurprisingly enough, UMTS-TD-CDMA, this mobile TV solution will naturally be exhibited in Barcelona this week and - a little bit later - used by IPmobile in Japan. IPW's 3G-3GTV combo matches Qualcomm's cdma2000-MediaFLO package : with a slightly smaller customer base to start with, but also with the 3GSM label.
As the GSM family gathers near La Sagrada Familia, faces look much less grim than a couple of years ago. This mob used to milk the neighborhood without pain but suddenly got challenged by competitors and incorruptible regulators. The association reorganized itself in order to cope with both and now looks stronger than ever, able to lead in a world of competition and diversity, eager to market to third parties a consumer base bigger than China.


* see "J:COM's quadruple play : within the fence" (20060210)

BeautifulPhones, cheesecakes, greenfees

A few weeks after BT's BT Fusion, neuf cegetel are trying their WiFi - GSM handsets, dubbed BeautifulPhone. That's about 10 years after cegetel* tried dual mode homezone DECT - GSM handsets, but the continuity of the multimedia / office spheres could succeed where voice only failed to sell.
Swisscom should sell too, or at least be fully open to strategic partnerships : Switzerland are abandoning their 66.1% share of the cheesecake. TDC / easymobile could grab more than a few crumbs of this jewel airline, but why would Vodafone turn their own cheese into a gruyere ?
Elsewhere in Europe, H3G Italia will broadcast DVB-H next year (H2) after taking over Channel 7 and their digital TV frequencies. The only truly pure greenfield 3G player eventually understood profits would come from 3G voice and mobile TV wasn't a 3G application.

* then the no-yet-born long distance subsidiary of the no-yet-born Vivendi, but already with SFR

CDG : you can't beat demographics

The CDMA Development Group announced on november that the 200M 1x subscriber mark had been reached last september. And that EV-DO claimed 2.2M subs within 3 months to reach 18 M overall (20 M by year end). A far cry from W-CDMA's 35M, but "the broadband solution equivalent to 1xEV-DO will not be commercial until 2006". So HSDPA is the real competitor to EV-DO now... Which release are we talkin about, doc J ? Calling HSDPA the competitor instead of joining the band - as a few CDMA players will do - doesn't look like a smart move to me. If you agree with CDG's definition of 3G, CDMA is already 73% "3G" while GSM only stands at 2% : there are over 1.5 bn GSM fellas out there, and CDMA figures at the end of the year will be 20 M for EV-DO out of 220 M for cdma2000 out of 300 M for CDMA. You can't beat demographics.
The truth is cdma2000 is losing its momentum and 2005 was the year, as scheduled from the beginning*. Qualcomm definitely aren't playing fair these days ; they should focus on innovation trials instead of legal ones. The problem is, just like Microsoft, their vision of innovation focuses on the annihilation of competition. This can't last in an open environment.

* actually, back in 2001, I would say 2006 but W-CDMA can thank 3 for boosting its share of "voice"

NYC sub subs

So they're fighting for the coverage of US subways now (277 outta 468 stations). The Metropolitan Transportation Authority proposes a 10 year exclusivity and all MNOs are bidding, but the winner will be compelled to offer roaming to his competitors, CDMA or GSM (anyway they can't go together in the tunnel of love since the tunnel parts are not included in the contract). The NYT sizes the prize between $50 and 100M.
That's a far cry from MTA's no-bid contract awarded to Lockheed Martin Corporation for its electronic surveillance system : $212M. And that system won't be shut down in case of terror crisis. Not that it could change anything : the time for the authorities to realise something's happening it will be too late anyway. But not for this major favorite of the Bush Administration.

Livedoor to incumbents : you've got mail

What's up in Japan ?
Nothing spectacular as far as incumbents are concerned. As their 3G lead is shrinking, KDDI seek new growth engines through CDMA-GSM roaming ; NTT DoCoMo try to think positive despite gloomy news (i-mode struggling even in Australia) ; and after posting a first non disastrous month in a long time (+5,000 subs in June), Vodafone KK seem eager to play a role in the VNO frenzy to come in Japan.
More exciting : three new 3G licences are to be awarded by the end of this year ; two in the 1.7 GHz band (FDD) and one in the 2.0 GHz band (TDD). The first two should land in the hands of Softbank and e-Access, while IP Mobile Inc are betting on VoIP & TD-CDMA. They have the techno thanks to their partner IPWireless but their hunt for new investors seems sterile and they lack the marketing know-how. Another TDD competitor, Willcom Inc, proves to have both the technological know-how (Kyocera is a shareholder with 30%) and the deep pockets (the highly controversial Carlyle Group is on board too with 60%). KDDI Corporation hold the last 10% : can the regulator allow this cdma2000 player in the W-CDMA arena ?
There's clearly a window of opportunity for a new player with money, ambitions, and the potential to fill the pipes. With or against the other competitors.
Unsurprisingly enough, Livedoor Co. Ltd recently expressed their plans to apply for a 2.0 GHz licence. They seem to have all it takes, even if their President & CEO, Takafumi Horie, scares the hell out of the Japan Inc establishment since he tried to take over Nippon Broadcasting System (Livedoor are suing Fuji TV for a potential illegal poison pill).
So the company previously listed as Livin' On The EDGE and then EDGE eventualy decided to bid for 3G. If not as famous as Softbank, Livedoor managed to build a fairly impressive interactive / marketing empire in Japan and across the globe. Should they make it in Japan, they could very well make it elsewhere, starting with China or the Americas. Among their jewels :

• Livedoor.com : the third portal in Japan and #40 in the World. One should notice a strategic partnership with SKYPE...
• Livedoor Mobile : founded in 2004 in order to boost the creation of mobile sites, this wireless side of the portal should become the base of the future mobile operator.
• MyRice.com : formerly Lycos China and now a leading convergent portal - in the World's top 100 thanks to 5M daily visitors and 35M daily hits. Livedoor can also leverage on their Dalian unit, China Livedoor Software Development. They even have a subsidiary in Thailand (EDGE Siam).
• interactive marketing is clearly a major asset, going glocal through subsidiaries and partnerships with ethnic marketing specialists. mailcreations.com (a subsidiary of Livedoor Inc, their US branch) claim over 200M opt-in e-mails worldwide : 85M in the US (2,5M hispanics), 22M in LatAm, 16M in Europe and 33M in Asia thanks to such initiatives as melma!, a portal devoted to e-mail news : melma! Spain was created after the original Japanese melma!. by Livedoor Interactive / Cyberclick Agent, the Spanish unit located in Barcelona (also a specialist in WAP & i-mode sites). Livedoor also owns EX Marketing and ValueClick Japan.

Among Livedoor's other assets : SeekOver (a US search engine), Cázalo.com (a Spanish search engine based on the ODP), Innovation Lab (the Group's R&D arm), EDGE Telecom, Joboon (formerly Livedoor Career), Turbolinux (Penguin Inside ?), Livedoor Factoring...

Also to be noticed :

• Livedoor Finance : this is Japan, and any player can turn out to be a potential banker.
• Contents : if they failed in taking over NBS, Livedoor are clearly focusing on contents everywhere. In Europe, their Berlin unit (Livedoor Europe) licenses local software mobile contents. In the US, they clinched a licensing deal with WAU Móvil, a mobile content provider working with 20 operators across Latin America ; Livedoor's True Tones will cover 8 countries for a start. Livedoor also holds AlienQuest.com (a game portal), and an intriguing Broadband Pictures Inc... Consistant, but Livedoor arrived late after the Japanese mobile content wars and remains a dwarf in contents. Their strength seems to lie more in their swiftness or their ability to deliver. Well, that's something.

Up to now, Softbank has been quite a disapointment in the wireless arena, but they're much stronger now. Can Livedoor take the helm ? Can both succeed at the same time ? Can a non-Japanese player make a surprise 3G late check-in ? How will 2G incumbents deal with Mobile Number Portability next year and new competitors soon after ? To be continued.

Humble pies and compulsive eaters

End of June, WCDMA and CDMA2000 1x claimed respectively 28,3 and 186M subs (still no split for 1x EV from the CDMA Development Group), which means since our last count, one semester ago the global 3G market* grew by one third and 3GSM's share didn't take off dramatically (from 10 to 13%).
CDMA is still leveraging on its key asset (compared to GSM-WCDMA, migration remains a piece of cake for operators), but the phenomenon is reaching its limits : "3G" now represents 3/4 of the global 256M CDMA subscriber base (only 2% for the 1,430M GSM family, not to mention the other technos joining WCDMA). Besides, WCDMA is just gaining momentum and will eventually make it in Korea with the help of HSDPA, for which KTF and SKT just agreed on a march 2006 launch**. Even in Japan, FOMA is catching up with 38,7% of the 3G market... less than 2G laggard KDDI but 12 times better than Vodafone KK...
Well. I'm getting nowhere. This WCDMA vs CDMA2000 thing is getting boring. What matters now is what's growing out of this pie.
You'd better focus on players used to claiming leadership beyond the mobile market. While maintaining a market share acceptable by the regulator, SK Telecom claims 10M subs for NateOn or 14M for Cyworld. Their S-DMB service has seduced 75,000 subs within 2 months and still expects 600,000 by the E.O.Y. If you remember, that's far ahead of MBCO's DMB service : MobaHO! reach only 10,000 after 3 months, a poor score for a consortium of 90 companies (including SKT). Beyond the glamorous "Take Out TV", TU Media basically remains a mobile phone and the usage of the service logically contributes to the operator's wireless data ARPU, but this shouldn't be always the case. Let's see how stats will be kept when other accesses appear, when actual new biz starts.


* Well that's the 3G market defined as the sum of the two most relevant IMT-2000 technologies implemented by cellular operators : TD-SCDMA's been delayed again, and neither EDGE nor DECT can be considered 3G. TDD has been implemented but not in the right spectrum yet.
** SKT's HSDPA rates are as follow : 16k wons per month (about $16) for the charge and 2 to 3 megs for the bits. Manufacturers will make sure handsets are on time for the World to see. For the moment, Koreans see WCDMA attracted 3,000 customers in 20 month including such "customers" as the operators' staff and partners...