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The WAVE Report on Digital Media
3D --- Media Creation --- Shared Space ---Published by 4th Wave, Inc.--- Issue #0510------------------3/11/05 |
The WAVE Report is Searchable on
http://www.3dlinks.com
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0510.2 Email Contents
Bigfoot Interactive Consumer Survey: Less Spam, More Relevance in the Inbox Today Than One Year Ago
0510.3 VoIP Growth
0510.4 Power Generation
0510.5 In-Home Technology
Top Minds in Home Technology Develop TecHome Builder Conference Program
0510.6 Product Recall
CPSC, JVC Announce Recall to Repair Rear-Projection Televisions
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0510.1 Story of the Issue
***3GSM 2005
By John Latta
Cannes, France
February 14 – 15, 2005
It only takes a trek to Europe to realize that the US lives in its own cloistered cellular world. As the US cellular industry still struggles with coverage and quality, Europe has passed these issues many years ago. As Europe demonstrates improved services, data rates and global reach, Verizon gets hit with a class action suit, or an attempt at one in California, because it disables Bluetooth on phones for external connectivity. It is not hard to realize why WiMAX is a feeble attempt to assert wireless leadership but the reality is that the European’s are miles or should we say kilometers ahead.
Bordering on one of the “worst conference” experiences has to be 3GSM in Cannes, France. The best analogy is holding CES in Rehoboth, Maryland. All that changes next year as this event moves to Barcelona, Spain. But in spite of the fact that some of the tent booths are on sand as this event “spills” to the beach, this is the place to be. The conference schedule is packed and all the major players are here. This is a global market and both the booths and attendees reflect that also.
The industry is beaming after the telecommunications slow down as now it is looking up. Last year GSM subscribers topped 1B and this year was the largest subscriber growth ever at 300m. There is now 27% world penetration. Last year 16 new countries were added to the GSM fold. 3G is also a success story with 19m WCDMA subscribers. But just as important HSDPA is beginning and this will take the industry to new capabilities in terms of bandwidth and latency.
Ericsson – Blazing New Trails in Connectivity
Hakan Eriksson, SVP and GM for R&D and CTO, Ericsson spoke to the future of the wireless industry. In something of a surprise he described the need for the cellular industry to move to a triple play. That is, voice, data and television. The video triple play for the office implies video conferencing. Hakan was not as bullish for this on the cellular network as he was with the unicasting of video to mobile terminals. All of this is enabled by improving technology. He described the 3G era in two phases – before HSDPA and with HSDPA. The technology overview showed HSDPA in the 14Mb/s range but its major advantage is lower latency which they quote as 75ms. Considerable stress was placed on the design of networks which specifically reduce latency – in many respects, this is more important than bandwidth in delivering the triple play services. Ericsson has been doing demos of HSDPA since October 2004 and has had the uplink demo (HSUPA) recently. The specification for HSDPA (High Speed Downlink Packet Access), known as Release 5 has been out since 2002. The uplink specification, HSUPA (High Speed Uplink Packet Access), called Release 6, came out at the end of 2004. The next major advance will come with “Super 3G” which has yet to be named. This has as the objective 100Mb/s down, 50Mb/s up and 10ms latency. The schedule for this has a Study Item period from the end of 2004 to mid 2006 and then a transition to with Work Item period from mid-2006 to mid 2007 when the detailed specifications will be released.
802.16 was acknowledged in the presentation as a niche product which only goes to 15Mb/s to households. 802.16e was dismissed as limited in its mobility and lack of handoff capability.
Note that later, Neil Ransom CTO of Alcatel, stated that within Alcatel the number one supplier of ADSL, they have looked carefully at the business model of WiMAX. It is their assessment that the costs, including CPE, will prohibit it from serving any but rural areas that are not otherwise served by ADSL or cable. Bottom line WiMAX will just be too expensive to compete with already established broadband access technologies.
Trolltech – Linux on a Roll
Trolltech Software provides a software development environment for Linux based phones. At 3GSM they announced 50 vendors making cell phones with Linux. The WAVE probed about the market dynamics for Linux.
There is a significant cost advantage for using Linux – about $5/phone. The other major advantage is the OEM/ODMs can custom tailor the phone look and feel. This is hard to do with other operating systems due to the high cost of the source code license.
Much of the movement in Linux use is in China but this comes from the PRC mandates to use Linux. However, once the phones are in place with Linux this provides a significant market advantage to the OEM/ODM. Thus, companies such as Ningbo Bird see the opportunity in providing low cost phones to the market outside of China. There is a close parallel with the success that Huawei Technologies has had in the telecommunications equipment market. Once these companies establish their technical competence, and also as a low cost provider, they become a strong international competitor. Another company developing Linux phones for China is Motorola.
The value of the hardware reference design is that it addresses the “dirty work” of getting all the components of the phone to work with Linux. Companies in this area include: Intel, Motorola, TI and Samsung. When asked who was the leader the response was definitive – Samsung. Once the hardware reference design is completed then innovation is possible by customizing the phone with Linux. In the case of the Samsung K2 phone this took much longer than expected – 15 months.
Two other companies expected to lead in Linux based phones are Panasonic and LG.
The real competition for Linux is Microsoft and Nokia each with their own OS’s for the phone.
More on Linux
newlc is a cell phone developer in France. The WAVE Report spoke to its CEO about Linux, which is one of several operating systems that they support.
Motorola is one of the largest supporters of Linux. They will have 10 phones out which use it.
Philips is another supporter of Linux.
MontaVisa has the Mobil Linux effort which is supporting a number of developments in this area.
It is expected that NTT DoCoMo will be releasing Linux phones which are made by NEC and Panasonic.
70% of the work of creating a phone for Linux is addressed when the reference design is complete. Thus, reference designs are very important.
Is the Notebook the Next Cell Phone Terminal?
Novatel Wireless is headquartered in San Diego. They claim to be the leading supplier of PC Card modems for notebooks. The U630 supports UMTS (Europe and RTW) and the V620 supports EVDO (US). As we discussed their PC Card modem we asked – what about embedding this technology into the notebooks?
In 6 months the supply of low cost notebooks as a part of the service offering of carriers will emerge. Right now two carriers, assumed in Europe, are pushing this. Novatel Wireless has created a module which integrates into the MB on the notebook. It is felt that this market will emerge in a significant way in 2006.
When asked how the carriers would offer this the response was as a long term contract – 1 year minimum, with a full featured OS, assumed Windows, and not a stripped down notebook. The reason this has now become viable is that data costs on the carriers are continuing to fall along with the notebook prices. Thus, providing notebooks with the service contract is one way to open up the market to additional market segments, assumed SME and consumers, and to lower churn.
The modules for data connectivity are complex and it has taken many years to develop. One of the reasons is that in Europe, due to the many countries, has made roaming a critical requirement. Only now has Novatel accomplished this. In contrast the US market for cellular and especially cellular data is very fragmented.
Another example of Novatel’s Wireless technology was shown in the booth with its Ovation. This is a UMTS broadband terminal for the home. It then disseminates the data in the home via 802.11b/g. It is claimed that this has gotten a very good response from the carriers. This “3G Multimedia Application Console” goes right to the heart of the ADSL business. It also is a spear into WiMAX.
Sierra Wireless – AirCard 850 – HSDPA for Notebooks
Earlier, Novatel Wireless was described with their U630 supports UMTS (Europe and RTW) and the V620 supports EVDO (US) products. Then we saw the next generation of these PC Card based products in the Sierra Wireless booth. One came away with the realization that HSDPA is getting real. Trials in 2005 and the likelihood of deployments in 2006. This is a mobile product that makes possible T-1 to a notebook. While our discussions with Novatel Wireless opened up the planning of the carriers to offer notebooks with this technology embedded we did not get this from Sierra Wireless. They consider it is too early to consider embedding HSDPA into notebooks. Sierra Wireless does have modules to be embedded but that have not done this yet in HSDPA.
Pushing the Cell Phone as a Platform
IXI Mobil is taking an interesting direction to the role of the cell phone. This is based on using the phone as a gateway. The network supporting the gateway is Bluetooth which forms a PAN or BAN. Their first product is the successful AT&T/Cingular Ogo. This is a small inexpensive messaging device which is connected to the WWAN via the cell phone. But the connection between the Ogo and the cell phone is Bluetooth. IXI Mobil’s product is their OS called IXI-Connect. Companion devices, as examples only, include: messaging, watches, cameras, MP3 players and health monitoring devices. Shown in the booth was WiPOQ from Sanyo. This is a stylish messaging device.
They even have a publication called PMG World – for Personal Mobil Gateway. It is like a slick magazine.
Motorola
Motorola had more Bluetooth headsets in the booth of any cell phone company. Motorola was making a fashion statement with its Bluetooth products. These got a lot of attention.
Burton Jacket is clothing which serves as the control center for an iPod and Bluetooth enabled phone. Speakers a built into the collar.
Burton Beanie is a head cap which supports a Bluetooth headset.
Oakley Razrwire sunglasses with Bluetooth headset as a part of the frame of the sunglasses.
Bluetooth card kit HF820 BT which is the only one at the show with a DSP. This can be carried from car to car.
Scooter helmut which has Bluetooth as part of the helmut including a microphone boom that extends to the mouth. This does not have a DSP and Motorola claims the audio quality is good to 55mph.
Cellular Market Dynamics – As seen at 3GSM
At the WAVE Report we have spoken many times about the need to understand market dynamics first and then apply that understanding to assessing and scoping markets. Earlier we outlined what key individuals in the industry are saying. Now, with a bit more information, we are able to expand on the developing landscape of cellular and the state of the industry.
In advanced countries penetration is cited above 100% with many individuals carrying more than one phone. In less developed countries growth is still possible but this is about the supply of infrastructure equipment and early phones in poor countries. In this case, these are very low cost phones. China fits this case because of the huge potential market but the average revenue per phone (ARPU) is low. Thus, the growth engine in the existing markets is either adding more phones or increasing the (ARPU).
3G, based on W-CDMA in the GSM world, is finally coming to market. But increasing the ARPU based on voice is unrealistic. Siemens presented data that showed the ARPU has stabilize at less than 30 euros per month and unlikely to change (Western Europe). But data is likely to grow to an additional 15 euros on top of voice. The challenge is to find the sources of that growth. Yesterday this gave rise to the triple play scenario where all forms of content could be used as “data” to drive usage. One example was cited with the “3” service in Austria that is netting 60 euros/month.
In this struggle to increase income, the cellular industry is turning to a new customer – the enterprise. It is for this reason that Research in Motion (RIM) is in their sights. At the Nokia booth we saw tools for the Nokia OS to extend Web Services to the Series 60 Developer Platform. It would be possible for a large enterprise to write a custom application, at no cost for the tool kit, to extend enterprise applications to cell phones which use this OS – of which many of the new ones will.
Another approach is to support convergence. That is a nice word in this context to say that the operators are going after the wireline business. With rates up to 1.4Mb/s and doing wireless redistribution in the home the wireless carriers can decimate the home wired phone market. In the US we would call this WLL and label it fanciful but the Europe the prospect is real.
Thus, the operators are faced with the challenge of growing the top line and in market areas where they have not been before. In Japan, NTT DoCoMo has been a leader in its experimentation in the market. Marco de Benedetti, CEO of TIM (mobile of telecom Italia) said it well with the sound bite:
In our first 10 years we cut the wire to the phone
In our second 10 years we cut the wire to the PC
The catch word is VAS – value added services. Put in another way - more services we can charge for and the customer will pay for. Yet, as NTT DoCoMo stated, they are going down the difficult path of fixed price all you can use path. For many customers, especially business customers, this is what is desired.
Just as 3G with UTMS is entering the market, HSPDA is emerging. Ericsson will trial this in the Isle of Mann in Q2 2005 and many see 2005 the year of first deployments. Nortel plans on a major roll out in Europe with mmO2 in 2005 and beyond.
All of this has to be seen in the context of the GSM world. We saw samples of this in our reporting from IST Mobil & Wireless Communications Summit. This is a small club with difficult entry conditions. They pride themselves with the fact that there are only a few providers of equipment. In general, US based companies have not been leaders in GSM. Important players include Motorola and TI who have a history of integrating with other geographies. But the cost of entry is high – for example, Freescale cited that the cost to develop a baseband processor is $100m and this does not include all of the product support costs.
All of this upside is counterbalanced by the often stated situation – we cannot get enough 3G terminals, i.e., cell phones. At the same time the operators are demanding unique signatures and service support in the phones. In fact, Elektrobit told us if a customer wanted a 3G phone, even based on their reference designs, it would not be possible by the holiday buying season this year.
The massive size of this market is also driving commodization in the cell phones. Our show floor scan indicates much of this is from China. While the commodization of the PC was driven out of Taiwan we have seen only one Taiwanese company in this space. Here at 3GSM the names which come up are: Ningbo Bird, AMOI Electronics and dbtel (Taiwan). This is also very consistent with the push to use Linux and the need to supply a worldwide market with very low cost basic phones.
An important factor supporting this trend are the phone reference designs. There is a close parallel with the role that the original IBM PC played and currently what Intel does to define many of the PC components and how they work together. In the cell phone market Freescale, Samsung, Broadcom and others are the source of designs.
At 3GSM many of the booths are focused on how an exhibiting company pushes the envelope in enabling these VAS. Be it multimedia, content, gaming, security, push to talk, imaging, enterprise applications or direct broadcast television the role that the future phone is radically changing. Back office functions of web site access restrictions and integrated billing are here. If one word can capture the essence of the booth space at 3GSM it is the “future” of the industry. This is all consistent with the market dynamics discussed here.
WAVE Comments
Europe is different when it comes to the cell phone market. It is a technology leader. It has set the world standard. This is a factor in its world competitiveness. In spite of Bell Labs and Motorola having developed the original cellular technology it is sad that US companies are largely bit players today. Yes, there are pockets of expertise but these are specific technologies and not at the system level. When it comes to infrastructure for cellular Europe is ahead and the Chinese are coming on strong. Thus, there was much to learn from 3GSM.
With HSDPA and HSUPA the cell phone is finally a credible high speed access device. Then comes the hard part – what to do with the bandwidth? We were pleasantly surprised with the concepts of the Personal Mobil Gateway. This is not dissimilar to the mobile network concepts in the automobile – the moving network with many nodes in the car. The same can apply to the individual with PAN and BAN.
Closely related to the issue above is what to do with data – seen by many as the driver behind bandwidth consumption and thus income. Yet, we came away with the impression that this misses the point.
But over all we were disappointed that more innovation was not evident in the application of data or more importantly where the value proposition is based on user segmentation and use.
Mobile bits are expensive. We heard comments that some users are paying $2 to move a cell phone camera picture. Thus, critically missing is any discussion on end user cost. Somehow lost in all this excitement about the technology is that markets are defined by the movement of money and that price elasticity has a significant role.
The basic issue is that the cellular access platform is closed. As the bandwidth increases, the prospect of many other uses increases some of which are in direct competition with the carrier. Further, if the terminal device goes beyond the cell phone, such as the notebook, the options significantly increase. What this points to is that the carriers may not be able to define valuable services as effectively as 3rd parties can.
The closed platform debate centers around the issue: will the operators enable this if they do not get a cut of the revenue stream? Thus, the future of how bandwidth is used, from a user perspective, could well hinge on the openness or closed nature of the platform.
***Bigfoot Interactive Consumer Survey: Less Spam, More Relevance in the Inbox Today Than One Year Ago
NEW YORK
March 8, 2005--
Bigfoot Interactive announced the results of a new nationwide survey of consumer perceptions of spam and Internet security at its 2nd Annual PROfile Email Summit in New York City. The results are positive news for the war on spam, with a majority of consumers saying they receive less spam and more relevant communications in their inboxes today than they did one year ago. The results of the survey are in line with a recent, landmark announcement from America Online (December 27, 2004) that it had experienced a substantial, year-over-year decline in spam sent to and received by its members.
Highlights from the survey include:
-- Majority of consumers say spam volume has decreased - 57% of consumers strongly/somewhat agreed that the amount of spam they have received over the past year has decreased, while 39% strongly/somewhat disagreed and 4% had no response/don't know.
-- Majority of consumers say they receive more relevant communications today than they did one year ago - 57% indicated that the emails they received from companies they do business with are more targeted than the same communications they got from those same companies a year ago. 35% strongly/somewhat disagreed and 8% had no response/don't know.
-- Phishing attacks difficult to recognize - 34% of consumers strongly/somewhat agreed they have received a fraudulent or phishing email that was disguised as a legitimate email asking them to verify personal information. In addition, just 32% of consumers strongly agreed they were confident they could identify or detect a fraudulent, "phishing" email that was designed to look like those of legitimate businesses, financial institutions and government agencies.
-- Anti-spam software use high - 65% of consumers strongly/somewhat agreed they currently use anti-spam filtering or challenge response software.
-- False positives persist - 25% of consumers indicated they have recently lost or did not receive an email that they were supposed to receive from a trusted source and 32% say that email they have requested from a trusted source was delivered to a junk mail folder. In addition, 52% of consumers strong/somewhat agreed they routinely check their spam/junk folder for legitimate messages.
-- Security concerns pervasive - 82% of consumers say they are concerned about spyware as it relates to their online privacy, and 55% believe they have been infected with a spyware program.
-- Consumers express interest in verification functionality from their ISP/Email provider - 89% indicate they would like their ISP/Email provider to include an icon to indicate email has been authenticated and is from a trusted source, and 86% of consumers strongly/somewhat agreed they would like their ISP/Email provider to include an unsubscribe option that would safely remove them from email lists.
The survey is based on interviews conducted from February 18 - 20, 2005. A total of 1,004 interviews were completed, 522 with female adults and 482 with male adults, all 18 years of age and older. Findings were based on 537 adults with Internet access at home with one or more email accounts.
The Bigfoot Interactive OmniTel telephone survey, conducted across users with Internet access and one or more email accounts by RoperASW, explores consumer perceptions, behaviors and interests in regard to receiving, unsubscribing and using email communications in the face of "spam" - unsolicited bulk email.
http://www.bigfootinteractive.com
***Cox Brings Telephone to Five New Markets in '05
ATLANTA
March 8, 2005
Cox Communications Inc. has announced that it will bring Cox Digital Telephone service to five new markets in 2005, bringing the total markets served to 22 or 70 percent of Cox's total footprint by year-end. Based on the great success Cox has already experienced with Voice over Internet Protocol (VoIP) technology in five of its existing telephone markets, the company will continue to use VoIP technology for all 2005 deployments.
As the largest cable telephone service provider in the nation, Cox's telephone business has long distinguished the company from its peers. To date, Cox's impressive growth is evidenced by:
-- Cox has more telephone customers than any other cable company, with more than 1.3 million phone customers nationwide. In 2004, Cox added approximately 317,000 telephone customers, more than any other U.S. cable operator.
-- In some communities, such as Omaha, Neb. and Orange County, Calif., 40 percent of consumers subscribe to Cox Digital Telephone, and 82 percent of our phone customers elect Cox for their long distance service as well. Companywide, Cox has penetrated an average of 21 percent of its telephone-ready footprint.
-- In 2003 and 2004, Cox Communications earned the highest customer satisfaction scores for telephone service in the Western region in J.D. Power and Associates studies - beating entrenched Regional Bell Operating Companies and other cable operators.
-- Our "bundled" customers, those with voice, video and Internet, are extremely satisfied; churn - or disconnect rates - are 41 percent lower than single-product customers.
-- Seven years of telephone experience has enabled Cox to improve its profitability significantly, with EBITDA margins now above 40 percent.
Cox's telephone markets include: Orange County and San Diego, Calif.; Phoenix and Tucson, Ariz.; Omaha, Neb.; Meriden, Conn.; Rhode Island statewide; New Orleans, Baton Rouge and Lafayette, La.; Oklahoma City and Tulsa, Okla.; Wichita, Kansas; West Texas (including five geographically dispersed locations: Lubbock, Amarillo, Midland, Abilene and San Angelo); and Hampton Roads, Roanoke and Northern Virginia.
***SolarCraft Completes New Solar Electric System; Avalon Natural Products Saves Thousands Annually
NOVATO, Calif.
March 8, 2005
SolarCraft Services has announced that they have commissioned a 106-kilowatt photovoltaic (PV) system for Avalon Natural Products of Petaluma, the largest manufacturer of natural and organic personal products in the U.S.
The recently completed SolarCraft PV system provides 100% of Avalon's electricity needs on an annual basis for the company's 55,000 square foot office and distribution center. Avalon received a rebate for approximately 50% of the cost from the California Energy Commission and expects to save $35,000 per year in electrical expenses.
SolarCraft Services, headquartered in Novato, engineered and installed the roof-mounted system. The system's PV panels convert sunlight directly into electricity and will generate approximately 175,000 kilowatt hours of energy annually.
SolarCraft installed a non-penetrating roof mounting system, which maintains the integrity of Avalon's large flat roof. The roof mounting system, manufactured by RWE Schott Solar, is wind tunnel tested up to 130 miles per hour. SolarCraft then installed Schott's high-performing ASE 300 solar panels, which are guaranteed for 20 years.
***Top Minds in Home Technology Develop TecHome Builder Conference Program
FRAMINGHAM, Mass.
March 8, 2005
EH Events & Education has announced the conference program for the inaugural TecHome Builder Conference & Expo. The event, which takes place May 18 - 20 in Phoenix, Arizona, features the most comprehensive and in-depth technology education program for homebuilders ever assembled. The program, developed in part by a group of advisors who have a strong footing in the homebuilding industry, is comprised of four boot camps and thirty-three conference sessions exclusively focused on home tech products and IT solutions for the homebuilding community.
EH tapped the expertise of these industry individuals to develop a comprehensive program to educate builders on the benefits of implementing technology into their businesses and the homes they build. This council represents a wide variety of perspectives from CIO of top 10 builder to principal of a custom home design/build firm to manufacturers, integrators, software developers and consultants who've been in the thick of the homebuilding and technology fields for years. Their guidance has aided in the creation of this valuable learning program.
***CPSC, JVC Announce Recall to Repair Rear-Projection Televisions
WASHINGTON
March 9
The U.S. Consumer Product Safety Commission, in cooperation with the JVC Americas Corp. has announced a voluntary recall of 26,500 rear-projection televisions an internal electrical connection can cause electrical arcing, charring or smoking inside the television, which pose a fire risk to consumers.
JVC has received two reports of incidents, including one case of melted television parts and one case of a minor television fire. No injuries have been reported.
The recalled 52-inch and 61-inch JVC rear projection televisions were manufactured in Mexico between May 2004 and November 2004 and sold at consumer electronic stores nationwide from July 2004 through January 2005 for between $3,000 and $5,500. The televisions have the following model and serial numbers:
HD-52Z575: 10980014 through 16980772
HD-52Z575: 16986471 through 16989999
HD-52Z585: 10980031 through 16981502
HD-61Z575: 10980031 through 16982712
HD-61Z585: 10980031 through 16980942
Consumers should stop using the recalled products immediately unless otherwise instructed by JVC. The company will schedule a free in-home service for those consumers with recalled televisions. JVC is contacting registered consumers directly via regular mail and e-mail to arrange a free at-home service.
Call JVC at (800) 252-5722 between 9 a.m. and 10 p.m. ET any day or log on to the company's Web site at
http://www.jvc.com/support/notification
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