Wondrous Wireless:
Services, Devices and Systems

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By BRational
February 1, 2002

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I have read with interest Seansan's inspiring discussion of wireless services, and Oliver's (Bizkiffer) linked articles on what one can do with mobile phones and 3G-- strongly recommended reading for those interested in wireless devices and services, and ultimately in Nokia the company (rather than just the particle with mass, acceleration, velocity, position� even then you need to understand the external forces acting on the particle, as well as the characteristics of the medium to be able to determine the trajectory).

I wanted to add a few thoughts to that thread, and a few links that may be of particular relevance and some interest to several on this board.

1. Yes, services do lie at the core of the demand for 3G, or anyG; however, devices are also important, and the system technology does have a role to play. I agree that the end user is essentially neutral to the air interface and the transmission technology; any means that is secure, reliable and reasonably priced will be acceptable. Whether it is CDMA2000 or WCDMA will make little difference to the end user, so long as the connection is not dropped, that handoffs are smooth and reliable, and the bill does not contain nasty surprises. In five years, it will not make much difference as the capabilities offered by different carriers will likely converge (much as the digital voice offerings today in the US are largely comparable between the CDMA and TDMA carriers). In the interim, there will be, and there are already significant differences in time to market and capabilities, but I will not get into those here as this is not the main focus of my post. There will however be possibly significant differences in cost structure and economics between carriers, which favor those who had already chosen CDMA in the first place, but this will only matter in "choice" markets, with competing multi-standard carriers, especially in the US, Japan, Latin America and now China.

2. The demand for 3G wireless products and services will be largely supply-driven. While this may seem anathema to conventional utilitarianism�it has been the reality from time immemorial when it comes to new technologies. If someone had asked most of us on this board in 1980 (I meant those who were at least 15 then�) whether we had a need for a computer in our home, we would have ridiculed them. If someone had asked us in 1990 if we needed a browser to surf the web, we would have said "huh???". Build them and they shall come�no question about that in technology. Did we need flat-panel TV screens or digital cable 8 years ago? Asking people now if they want or how they might use a device, technology or service that is not yet available is a poor predictor of actual demand�both positively and negatively. There are many examples of bad ideas who have been built based on flawed premises about what people want and need.

3. For some perspective on what the wireless Internet promises, some recent historical perspective is helpful. There is a slide on page 3 of a presentation by Qualcomm CEO Irwin Jacobs [pdf file] that shows evolution of bandwidth for fixed (wireline) and wireless Internet (this is not Qualcomm-related). It shows clearly how wireless is closely tracking the wireline capabilities, though at a faster rate of progress. Interestingly, the common 56kbps we expect with conventional dial-up phone modem is shown as becoming commonplace in 1995, leading to the explosion of personal use of the Internet, through ISP's like AOL. Before that, who would have thought they had much use for the technology? Look at where we are now, and the role the Internet plays in our lives. So we don't need to necessarily know exactly why we'd want wireless access, and we probably can't think of a single thing we do today that we absolutely must have in wireless form. However, supply will induce the demand, and before we know it, we'd be needing some form of on-line all-the-time access to the web. Who would have imagined even five years ago, let alone 10 years ago, that we'd be spending all this time on the TMF discussion boards? The concept barely existed at the time (other than for academic computing communities). Yet, we now gladly invest in computers and must have the latest Windows XP operating system�and if we don't our children certainly (think they and we) do.

4. Oliver's linked article about what phones can now do hit a particularly responsive chord with me, as I have just acquired a new phone with a large 260-color screen display and 3G chip (it's the Sanyo 5150, with a 1X chip, through Sprint). And yes, it does a lot of things I would have never imagined a phone would do just three years ago. I certainly didn't think I needed voice-activated dialing, nor did I think I'd be checking Nokia's stock price daily several times on my handset (then again I've had this capability for over 18 months now, but it's just so much easier and nicer on the new handset). Different ring alerts for different numbers-- who needed that two years ago? Seven numbers stored per phone book entry�home, office, mobile, pda, fax, other�-- who dreams these up? Yet, once you get used to it, there is no going back.

5. More than one phone per person? Nothing far-fetched about that. I'll offer myself as an example-- I already have three phones; all activated, with the GSM Nokia phone that I use overseas activated in five different countries with different pre-pay SIM card numbers (beats roaming charges in Europe and around the world). Two phones activated for daily use here in the US�one for my connected PDA, the other for the regular phone. No, it's not to match different outfits, but to meet different functions. The PDA-phone (Samsung's cool combo model) is a natural evolution of the old Palm PDA, now replaced by the new device. Now when I travel for business, I don't have to carry two bulky organizers (phone, and PDA); one device does it all. Yet, I don't need to carry around a PDA everywhere, and a smaller regular phone is preferable. However, it's clear that the two are converging in functionality and in size; they're just not where I want them to be for me to give up one for the other, and the productivity and convenience benefits until they do outweigh the cost of having both.

6. Nokia just started showcasing on its web site's home page its Bluetooth-enabled model 6310 to connect wirelessly to one's laptop; clicking on the item takes you here. No need to wait until 2005 for that Valentine Gift, Seansan unless you intend to give a gift of Vertu� Of course, availability is limited to Europe, Middle East, Africa, or GSM 900/1800, and not the US. Regrettably, Nokia only brings its model features to the US market's different GSM frequency band, and other dominant air interfaces (TDMA, CDMA) with about a 12 to 18 months time lag. The reality is that there is considerably more technological innovation in the US among the CDMA carriers and their suppliers, a market in which Nokia could seek out greater presence and market share.

7. Also worth a look is some material on the Nokia web site targeted at those interested in the upcoming 3GSM conference. Included are "key themes" for 3G services. I found the one about mobile entertainment to be the most interesting, though the business themes one is also worth a look, if somewhat conventional.

8. I came across an interesting article in the latest issue of Business Week titled South Korea: A Nation of Digital Guinea Pigs-- and subtitled It's a hotbed of such experiments as a cash-free city.  (Subscription may be required).

It's about a large-scale experiment in a city called Seongnam. I've excerpted a few paragraphs:

Over the next three years, municipal officials plan to transform the town of 930,000 into the world's first digital city. That means using multiple broadband connections to do away with some really worn-out analog concepts--like cash and credit cards. �So in March Seongnam will start equipping citizens with digital cell phones that, in effect, pay for purchases at every store in the city.

Some interesting statistics about the extent market penetration in Korea:

More than half of Korea's 15 million households have broadband service, while more than 60% of Koreans carry cell phones. Korea's telcos are already trying out third-generation mobile handsets, designed to handle high-speed wireless transmission of video, data, and voice. In the securities markets, about 70% of all share trades are done online.

Using cell phones to make payments is not new; however the approach here is different, in that they rely on infrared beams. How does it work?

Some Scandinavian communities use cell phones as payment tools, but the Seongnam experiment�is one of the first to rely on infrared technology. Consumers will pay for purchases by entering a personal identification number on their phone, then shooting an infrared ray from their handsets to a tiny infrared board located by a store's cashier. The ray will transmit credit-card information to the store, and the user will be billed. Similar transactions can happen at bus stops, vending machines--wherever that infrared patch can be posted to relay the digital billing data.

For those who are device-obsessed (like Oliver),

Samsung is launching a line of multifunction gadgets to navigate the high-speed wireless Web. � This month, for example, the company began selling the Nexio, one of the most powerful Net-enabled handhelds going. It combines Microsoft's Office and wireless Web-browsing functions with an MP3 player, telephony, voice-recording, and digital-camera capabilities. By summer, Samsung will introduce Nexio in the U.S. with an $800 price tag.

You can see a picture of this gizmo at Samsung's web site.

9. One last link�to the website of a magazine called Wireless Business and Technologies. It's full of 3G "stuff"�articles about technologies, software (Java Mobile vs. BREW), consumer services, business models, etc� One article on a non-traditional sector: use of wireless technologies in restaurants�just click on the article called "Serving Up Wireless". You'll probably end up reading several of the articles there.

Finally, where does Nokia stand in all this? Wireless communications, access to Internet, and data-based services will permeate our lives in ways we can only start speculating about. Growth industry? No doubt. It's the when and how that are still unfolding, shaped by the likes of Nokia�though for the industry to really prosper it will take an army of creative developers to take chances developing applications and services in the wireless arena in the same way that the wireline Internet has evolved and continues to evolve. Interesting innovations, and several times as many bad ideas, may come from likely scores of software developers in Silicon Valley, Austin, Helsinki, Guangzhou and Madras. The platforms and delivery devices will also evolve, and take various shapes and forms, some evident, but others still to come. More creative chaos lies ahead, and exploiting chaos to extract order is the challenge that the likes of Nokia, DoCoMo, Qualcomm, Sony, Samsung (and increasingly Microsoft and Sun) will have to grapple with and master. 


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