Even though Near Field Communications (NFC) has been around
for 15 years, it could become mainstream in the U.S. smartphone market this
year. NFC operates at 13.56Mhz and at speeds from 106 kbits/s to 848 kbits/s all
within a 4 cm range. We are finally catching up with Japan (e.g., Osaifu-Keitai
system) and other areas of the world where NFC is used for mobile commerce and
payments. With better software integration, you now have the intersection of
context, proximity and event handlers that blend the physical and virtual
worlds. It would make sense if Google announced a mobile payment platform since
NFC is natively supported in Android 2.3. You have to consider other players with a little more "trust" than Google such as Apple iTunes or even Paypal. Merchant
players like First Data or GPN are reluctant to adopt an offering that is not
industry standard. MasterCard and Visa have made progress raising consumer
awareness for NFC but financial institutions are not good catalysts for
ecosystems. Even though NFC silicon can be standardized, individual competitors
that bring their own implementation of payment systems can stall adoption and
create payment silos. The battle will be which model will prevail -
operator-centric, bank-centric, collaboration-centric or peer-to-peer-centric. Perhaps
it doesn't matter since once a user has selected a smartphone platform, they
automatically get the mobile payment system. Otherwise we would need a system
like "payment roaming" similar to what evolved during the early expansion of
cellular networks and billing systems.
Apple's recent change to its developer rules requiring their
approval to collect and send device data to third parties for aggregation,
analytics or processing, has created a firestorm in the mobile blogosphere. If
Facebook had a mobile operating system, they would not qualify as "independent"
according to the new rules and hence could be blocked. Recent legislation, such
as the draft privacy bill from Rep. Rick Boucher, seeks to define and require
opt-in approval for "sensitive information." That could be your exact
geographic location or something similar. Of course users comfortable with
geo-location applications shouldn't have a problem providing their approval,
not many people read those fine print in pop-ups anyway - but they should. We are seeing inconsistent privacy
notices and policies in use across desktop and mobile applications. Apple justifies
their approach under the "privacy" banner, but could attract the scrutiny of
the FTC. The recent leak of AT&T ICC-ID data to obtain user email addresses
brings Apple's privacy concerns up front and personal. While not necessarily
Apple's fault, they still require an email address for iTunes. Mobile
advertising has evolved from the desktop space with some innovation, although
there have not been many break-through ideas. Apple's iAd experience is very
clever in that users clicking ads are presented an HTML5 container without leaving
the app. Delivery and bundling of iAds via iTunes supports their cash engine. By
forcing developers to use HTML5, this further drives the standard away from Adobe.
Perhaps Apple could use iTunes as a repository for user opt-in status thereby
eliminating interruptions in the application itself.
Developers explain that using Xcode tools from Apple for
Objective-C results in more efficient code and power management for the
iPhone & iPad devices. This also ensures some consistency in the way the finished
application looks and behaves. Even though Obj-C is not managed code like
Microsoft .Net (e.g., with garbage collectors), developers have no problems
releasing memory to fulfill the performance requirements imposed by Apple. If
your program takes more than 20 seconds to respond to the user or tries to access
more memory then is available, the OS shuts it down. I don't see Apple attempting to create a
monopoly or impose unfair trade practices. They do not have the desktop market
share that Microsoft had during the Internet Explorer DOJ actions. It's not
Apple's concern what developers have to do to their app for another platform.
Adobe can set up an Apple mobile devices group to develop Xcode libraries for
their mobile application developers. This is no different than what Microsoft
does with their Apple division where they have MS Office 2008 running very well
on Snow Leopard. No need for the government to get involved.
The first draft of the HTML5 spec appeared in early 2008. Its
design purpose is to eliminate the need for plug-ins such as Adobe Flash,
Microsoft Silverlight or Sun JavaFX, especially when playing videos. Adobe
Tools such as Creative Suite have enabled thousands of developers to make Flash
the standard for 75% of video on the web today. But let's look at whose driving
the standard. Ian Hickson is from Google and David Hyatt is from Apple, so it
should come as no surprise why Adobe is odd man out. Refined standards take a
long time to materialize; the Candidate Recommendation stage for HTML5 starts
in 2012 and could end as late as 2022, but we're talking software, not hardware.
Meanwhile, we are starting to see more useful implementations of the standard
as it sits today. The recent iTunes Preview iPhone App is a good example of
HTML5. The new Google Voice iPhone browser also uses HTML5 and leverages local
caching of data. It supports voice tags that allow you to play audio voicemails
in the browser. Is HTML5 advancing fast enough to overtake Flash on the web? If
the CODEC debate of H.264 vs. Ogg Theora doesn't get resolved soon (H.264 has
IP licensing and potential patent infringement issues), we will see a
splintering of web browser support for HTML5 in the short term. For now, I'd
keep some Flash developers around.
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.
Last week HTC launched their latest Android device, dubbed
the Hero. In addition to supporting multi-touch Flash Player 10 content, the
Hero has a new UI layer called "HTC Sense." Among other things, it allows the use
of widgets to bring information up the UI stack, like Twitter or other
applications. It has similar behavior to the Palm Pre in this respect, allowing
more end user customization. From a business perspective, it is strategically
valuable to separate the user experience from the underlying operating system.
That way, HTC can choose to change out Android for Windows Mobile and HTC Sense
will still look the same. However this begins the fragmentation of open source
code that could disrupt a fledgling ecosystem. For one thing, users would need
to wait for HTC and the carrier to
release updates. Google Android has made strides last year at the expense of
the more prolific mobile OS, J2ME. Both Windows Mobile and J2ME variants suffer
from a high degree of code fragmentation. J2ME is slowly dying and MIDP3 is way
too late to make an impact. Apple got it right because they control the device
and the OS, not to mention making app discovery and payment seamless and
carrier independent. Developers will still need to maintain multiple versions
of popular applications for Smartphones. We need a stable Android in order to
achieve break-through market traction and avoid the developer frustration experienced
with J2ME.
Warren East, CEO of ARM Holdings says there will be over 10
ARM-based Netbooks on the market by year end. That puts a lot of pressure on
Microsoft to port Windows to the ARM processor, or does it? Here's the dilemma.
If Microsoft ports to the ARM, Intel could optimize x86 CPUs like Atom for
Linux (and Android). Even though Microsoft has embedded versions of Windows for
kiosks & cash registers, it's not clear to me the ARM processor could handle
a scaled down version of Windows. Not to mention how it would perform against a
lightweight Linux ARM implementation. Intel wins either way. Apple's not
playing this game; they've segmented the processor platform of the Intel
MacBooks from the iPhone. They will most likely develop their own MPU/GPU combo
chip as I've discussed here before. Microsoft should stay the course and stick
with Intel.Â
A WSJ article highlights recent discussions between Verizon
and Microsoft to develop a new touch-screen multi-media device "in an ambitious
effort to challenge Apple's iPhone." With Apple recently reaching over 1
billion application downloads, the bar is quite high for RIM, Google, Palm and
Microsoft. Both Microsoft and Google prefer to stay out of the hardware design
altogether. That makes sense because they are software companies. However,
Apple has better control over the harmony between device and software. They
recently hired AMD/ATI's CTO, Bob Drebin. A new CPU/graphics processor could be
in the works under Drebin's direction utilizing talent Apple acquired from PA
Semiconductor. Apple OpenCL is a specification that enables a single chip to do
both graphics and computing. In chip-speak, it allows GPUs and multi-core CPUs
to handle tasks like physical awareness & video rendering on a single die.
Verizon seems set on retaining control by launching their own download store
for a variety of applications and devices. I don't see them being too eager to
introduce the device reported to be bigger than an iPOD and smaller than a
laptop because it will have native WiFi & VoIP capability. Verizon is
keeping their options open but they seem to be increasing subscribers fine without
the iPhone ... for now.
With all the focus recently on social media and cloud
computing, some might have missed recent developments in the next generation wireless
network, LTE. Verizon announced at CTIA their new development center and one
thing I find interesting is the fact that the operating system choices will
have to collapse for 4G. Developers are still forced to choose between Windows
Mobile, Android, iPhone, Qualcomm Brew and Symbian. Maybe what's needed is a
mobile hyper-visor of sorts that will run managed code on any device, more on
that later. The other thing that will trip us up will be the change in the economics
of mobility revenue and profit opportunity. I believe LTE will require
operators to abandon flat-rate, monthly unlimited data plans altogether - including
wired. Time Warner and other MSOs got some backlash this year with their
experimentation of metered broadband. Real-world bandwidth is nowhere near
theoretical peaks (I expect users will get 10-20Mbps download links for LTE vs.
the 100 Mbps advertised). Busy websites and network congestion happen. Spectrum
is a shared and non-deterministic media. Combine this with operator backhaul
capacity, device receiver power and cell configuration diversity and you have
an industry marching to data caps, bandwidth restrictions and questionable service
guarantees. Think about this easy example: when you are able to download data
faster, you download more thereby triggering increased usage and reaching your
data cap more quickly. Stacey Higginbotham had an excellent example of the
difference in downloading HD video in a metered world where you thought you
were saving money by not driving to Blockbuster!Â
Peter Parkes, chief blogger for Skype reported there were
over a million downloads of Skype for the iPhone in just two days. As reported
here before, eBay failed to monetize their investment in Skype and realized a
huge write-down. The surge in user interest is more a function of pre-release
promotion, teasers & blog coverage, than anything else. The application does
not work on 3G, only WiFi, therefore it automatically obsoletes those Skype
WiFi phones. I like the application on a laptop and it's quite useful for international
Skype-to-Skype calling. There are other alternatives; Truphone has an unlimited
call package and other bloggers have tips to JailBreak your iPhone and install voipover3g
to spoof the device in to thinking it's on WiFi. If you have a good connection,
the voice quality is better than Fring or Truphone, but how many people will
really use this application? If you already have Skype on your laptop at home
and have a Skype contact list, all you'd be able to do is make calls from your
handset unwired. We saw this pre-launch hype with the Palm Pre too and today
they had some early looks at applications during CTIA 2009.
The Kindle is not a game changer like the Apple iPod was
with music. This product has less of a growth curve than iPhones, NetBooks or
other consumer devices. People are questioning the grayscale, the price and the
experience but some like the aluminum case, the Stephen King eBook, "Ur" and the
ability to get any printed book in 60 seconds. For $359, you can shop for a
Netbook and get more functionality. The total cost of ownership of Kindle is
higher because with newspaper subscriptions, books and other additions, you
could run up to $100/month easily. Amazon doesn't break out the sales of their
eBook business but they claim it is 10% of overall titles sold. The Kindle is
Amazon's call option on the future of reading. I'm afraid that call option will
expire worthless, there's a reason books haven't changed for 500 years, they
still work!
Despite the lowest holiday sales in 40 years, Apple powered
ahead in the fourth quarter with both a rise in profit and revenues and sending
its quarterly sales past $10 billion for the first time. Tim Cook even took a
shot at would-be copycats saying if anyone "rips off" Apple's IP, they will "go
after anybody that does." Former Apple
executive, Jon Rubinstein was in opposition with Steve Jobs to the keyboard design
of the iPhone. He left the company last year and with $325 million funding from
Elevation Partners, he became Executive Chairman of Palm. My short evaluation
of the Palm Pre was positive on the technology but negative on the business
prospects. Maybe Jon should use some of that funding to pay royalties to Apple.
By building upon their heritage in personal information management
devices, Palm has extended good functionality to popular websites that appeal
to business users with the new Palm Pre. I believe this is the last Hoo-Haa for
Palm as they have struggled for several years (stock was $1.50 in December). They
redesigned the operating system, WebOS, from the ground up and many industry
observers like the new user interface. It makes use of MEMS to support tilt
like the iPhone. It received a lot of attention at the Consumer Electronics
Show this week. The browser is based on WebKit and developers who know XHTML,
Javascript, XML and Cascading Style Sheets should be able to develop for the
device without learning any new languages. Palm has many loyal users. Their
carrier partner, Sprint has experienced a severe drop in subscriber growth recently.
So you have two weak players making another go at it. If Verizon gets a hold of
it, that would help it flank AT&T's iPhone. We're not out jumping in the
stock yet, it went from $3 to $6 in a couple of days, mostly a short-covering
rally.
Google will have a lot to learn about bringing hardware and especially wireless handsets to market. Without their own proprietary technology, this would be the MP3 vs. the iPod. What's the value? For people that want an iPod but don't want to pay the premium, they choose a MP3 player. There is a definite market opportunity for an alternative to the iPhone, but don't forget about Motorola and Nokia. This is a race that will tiresome to keep up with advancements. Google will have to get the carriers to bend. Apple was able to pull that off, they were the first company that "dictated" to the carrier what the user experience and functionality would be. Not the other way around. Google may have some similar pull with the carriers, it's possible. They certainly have the deep pockets to push it through. Making it open and unlocked for a global market would be a better approach. Also, making it feasible for an enterprise mobile user would be one better. Most CIOs and IT directors I talk to are not enthused about supporting the iPhone on their networks. Selling it as a Google utility online direct from Google would also keep their costs down - that business model doesn't fit well with carriers today.
Paul Lopez is a 20+ year technology veteran whose career has spanned multiple disciplines such as product management, software development, engineering, marketing, business development and operations... read more