January 2010 Archives

The Cortex A4 Core that is. I was interested to see the first production use of technology from Apple's acquisition of PA Semiconductor. While most analysts believe Apple should have used off-the-shelf ARM CPU silicon from Qualcomm or Freescale, I believe the benefits of controlling your own hardware outweigh the potential cost saving curve over the long run. Here's why. First, chip design today is very modular and you can choose ready-to-integrate LSI gate arrays in a mix and match fashion. Second, given the size criteria, Apple chose an optimal layout by only putting the necessary logic it needs on-board the A4 rather than taking an entire system-on-a-chip (SOC) from a commodity supplier. Third, they have more control over system enhancements and fixes by being able to flash hardware without waiting on chip manufacturer release cycles. And lastly, they get to keep the intellectual property created by engineering the highest performance per cubic-millimeter and lowest power per dollar and not allowing that learning to accrue to the commercial silicon provider - where it could find itself in non-Apple devices. Just getting the In-Plane-Switching (IPS) display to work right without the power budget hit was amazing. IPS requires two transistors per pixel instead of one, which usually requires more backlight (and hence more power).  Somehow Apple got around that. Who's to say they couldn't get Intel to manufacturer the chip for them?

With a four-way price war going on between AT&T, Verizon, Sprint and T-Mobile, we have seemed to lost track of VoIP over 3G. Software from companies such as Fring or Truphone allow you to make VoIP calls on your iPhone, but only over WiFi. There are hacks (crash-x) that allow you to trick the iPhone into thinking you're connected to WiFi and make VoIP calls over 3G (or downspeed to EDGE/GPRS). I'm still wondering ... why bother? If the idea was to save minutes or money, the carriers have already responded by driving cheap voice with price reductions. Besides, VoIP over 3G needs massive data compression and low latency to battle quality of service issues that make the user experience poor.  Skype claims they only need a small amount of bandwidth - between 6 kbps and 40 kbps, but I don't think they can overcome latency issues. Many users were disappointed Skype 1.3 did not include push notifications or support VoIP over 3G. They still have usability issues using Skype when "real" phone calls come in (it logs you off). Eventually data plans will race for the bottom too so Skype could become irrelevant on 3G/4G handsets.

I believe there will be a continued demand for unlimited service rate plans in the $40-$60 per month range such as those being offered by providers like MetroPCS, Tracfone and Boost Mobile. The low-end market of pre-paid plans as grown to over 22% of the total market vs. 16% three years ago, according to Sanford Bernstein.  Martin Peers from the WSJ picked up on my idea that we could see the Google Nexus show up heavily discounted to compete in this prepaid space.  Meanwhile the major carriers struggle to grow ARPU in spite of increased costs due to bandwidth "hogs." Even Verizon's CTO, Dick Lynch says metered billing would benefit most consumers because they would not be subsidizing others. With plans to move to LTE by AT&T and Verizon, I see that exacerbating the problem. You provide faster water through the spigot; the users want to drink more water. Carriers and handset makers have created an addiction for what will become an expensive habit. The question is will users trade down-market for cheaper service instead of staying top-shelf at pure 4G.

Many people are drawing similarities between Intel's recent announcement of its' AppUp Store and the venerable Apple App Store. Companies including netbook manufacturers, automobile makers, RIM, Palm and Microsoft have followed along Apple's concept. One difference will be the Google Chrome OS application store as they will be web apps, not local apps (well maybe some Google Gears apps). Intel's AppUp is a favor to netbook manufacturers because it provides a nifty application OEMs can customize as their own private label app store. Lest we forget, iTunes was a wildly successful client application before the App Store ever existed. That's why I don't think these second derivative app stores will be that useful. Users don't want to search every app store for what they need. It would make sense to go somewhere on the web where applications are rated by other users across platforms and useful feedback is provided. For open systems like Android, it is even more important that the community act as the support mechanism. The trend is moving toward TVs and other consumer devices and the manufacturers will not be able to keep up. 

As an avid follower of developments in semiconductors, I've been especially impressed lately with Qualcomm. Not only does the new Snapdragon processor power the Google Nexus One, but the company recently began promoting their own brand like an Intel or even like a consumer display company such as LG. They showed off their interferometric modulation (IMOD) technology for color e-readers at CES this year. IMOD uses MEMS technology in a biomimetics application. This means it simulates behavior found in nature - like the way butterfly wings shimmer with reflective light. While the Mirasol was not a product per se, it was a proof of concept, a reference design to show manufacturers what is possible. Qualcomm's new dual-core 8X72 chip Smartphone processor will be capable of rendering 1080p HD, so be on the lookout for more HD video and 3D packed into the next generation handsets too! 

The launch today of the Google Nexus was less about technology and more about changing how customers obtain mobility service. Carriers needed a handset alternative to the iPhone and Android's timing last year was perfect. Windows Mobile or RIM Blackberry was not going to unseat the iPhone, even with their recent App Store forays. By offering an unlocked phone, Google avoids some of the negative backlash of network quality because they allow users to select their own carrier; poor service won't be their fault, or HTC's. The big winner here I believe is Verizon as they will have both the new 4G iPhone and several Android handsets including the Nexus One by this summer. The business managers at the carriers can justify their next round of network upgrades to 4G and take advantage of the new spectrum they've acquired. One thing to remember, unlike cable TV and satellite, there is no alternative to carriers with regards to cellular service. No carrier, no service; no VOIP, no Mobile Internet, no SMS and no PCS. Much has been reported of the billions of App Store application downloads but I believe users only use a very small subset of what they download. I would think 100 applications would be plenty and you can always change them out. Google is courting more developers with their friendly, open source licensing schemes. I went ahead and ordered mine, even got customized etching. 

Palm's press conference at CES will be Thursday January 7^th where they'll likely announce the Palm Pre 3 with Verizon. It's taken almost a year since I first recommended Palm needed another carrier. Palm's stock performance this year was certainly improved by the original Pre introduction but it failed to translate into meaningful revenue and profit growth. I believe Palm's Webkit and friendly developer tools still make it a viable device but Verizon will have to position it against the highly marketed Droid and quite possibly by summer, the Apple CDMA iPhone 4G. The New Year is shaping up well for Verizon as they seem to be placing their bets across the smartphone "blue line." When you have real spectrum, you have nothing to worry about. I would be concerned with how the unlocked Google phone would perform on T-Mobile. Even a subsidized T-Mobile handset would be dependent on wide spectrum availability (>100MHz) in thin metro spots. With the new Verizon deal, Palm needs to show it can grow revenue and profit margin. Verizon could have the Pre 3 at the low end, the Droid in the mid-range and the iPhone 4G at the high end. The CDMA communication logic for the 4G might not be ready in time for the Apple Tablet (should it have built-in WWAN support in the first place), but I'd like to see Verizon pick up the Apple Tablet early on. No doubt, January will be a busy mobility month!