2010: The Year of Change

Intel should be worried. Many of the same vendors offering Atom processor netbooks are also building Snapdragon processor smartbooks.

Well, we all seem to have survived 2009. One New Year greeting I received stated, “May the best of 2009 be the worst of 2010,” and I would like to extend that sentiment to you as well. I think 2010 could be very interesting for wireless—it might even be a year when wireless becomes simply something that is embedded in almost anything to make it better, more functional, and easier to use.

Notable firsts in 2010 will include Verizon being the first nationwide network to roll out LTE in the 700-MHz band, which it plans to do in a number of cities. At the Consumer Electronics Show (CES), the company held a press conference and demoed many products and services over an LTE network installed inside the Venetian Hotel.

Verizon is not merely rolling out LTE at 700 MHz, it is rolling out a completely new set of business models from the way it handles devices on the network to sales and marketing efforts, and especially how it is working with its device testing labs and developer programs. Pricing for services has not yet been established, but as reported elsewhere, there are sure to be changes in the way we pay for this data, how much of it we have access to, and when. These new pricing models are expected to roll backward to the other 3G networks as well. There is no choice since the networks, even LTE, will have to be managed, and the best way to manage them is by offering a variety of bandwidth and usage models with different pricing. I think we will see everything from occasional use fees (say, 24 hours) to pricing based on access speeds (as with DSL and cable) to pricing based on types and number of devices.

Anyone who doubts that Verizon is serious about LTE and that new business models will emerge in 2010 was not at the press briefing at CES nor were they walking the demo area and seeing what is already up and running from multi-player games to security video and everything in between. Many of the applications and devices being shown were fixed rather than mobile with video surveillance cameras being one example, and fixed wireless modems for home and office use being another. Today’s mobile wireless network designs are based on the assumption that most if not all devices are mobile and will move from cell to cell over time. The resultant network is maximized for the amount of traffic that can be handled by any one cell sector, leaving a reserve for traffic being handed off from different cell sectors.

Yes, there are some fixed devices on the market today, but there will be a lot more with LTE. This brings up an interesting question: If there will be more fixed devices on these networks, and network operators won’t know how many per cell sector, how will that affect the system design and build-out? Different people have given me very different answers. It is conceivable that a single cell sector’s full LTE capacity could be usurped by a single customer with multiple real-time color video streams from multiple cameras, or that a number of people in a given neighborhood are using fixed LTE devices. I am sure this will all be sorted out, but it will be challenging for the system engineers to account for these new variables in their calculations.

CES

The Consumer Electronics Show is one of my favorites because I do love gadgets, new concepts, and new devices, and CES is becoming more wireless by the year. Only a few short years ago, you really had to search to find wireless on the exhibit floor—now it is everywhere, even in the TV booths. Everyone was flocking to see the new 3D TV systems that were the talk of the show, but it seemed that every TV booth was also showing mobile or handheld TV. Mobile TV has not been a big success so far, but there appear to be a number of companies betting it will be over time. Perhaps I am missing something here, but I don’t really believe we will want to watch TV while mobile the same way we do when sitting at home.

CES was also a sort of coming out party for Qualcomm. Days before Google announced its Nexus One smartphone (see this week’s blog post), Lenovo was displaying a hot new smartbook that uses the Snapdragon 1-GHz processor, HP was showing its own smartbook, and many more are in the wings. I think smartbooks using the Qualcomm processor will give netbooks using the Intel Atom processor some tough competition. The Lenovo smartbook is sleek and light, and provides 10 hours of battery life (a real 10 hours) performing typical computing tasks and 5 hours watching videos (two full movies). It is quick and easily drives an external monitor to 780p resolution. Intel should be worried. Many of the same vendors offering Atom processor netbooks are also building Snapdragon processor smartbooks. If Intel thought these companies would not build both, it has just been proven wrong. Further, the smartbooks, as well as some of the netbooks, are using Qualcomm’s Gobi wireless chipset that supports all current flavors of 2G and 3G wireless services on a worldwide basis. Paul Jacobs, Chairman and CEO of Qualcomm, gave one of the keynote addresses—not bad for a company with no consumer presence—and gave away Flo-TV devices to some in the audience. Intel has a way to go to catch up…if it can.

As I had predicted, we now have both sides represented. There are computers with wireless built in and wireless devices with computers built in. And there are smartphones using Qualcomm chipsets. The high-mobility market is no longer exclusively Intel territory.

Another thing I enjoy about big shows are the rumors that float around or are started during the show, usually in the press room by those who are perhaps simply thinking out loud. One rumor I picked up on a number of times was that Sprint would sell its stake in Clearwire and move on to LTE. Sounds like it could happen except, and this is a big exception, it doesn’t have any 700-MHz spectrum. Sprint didn’t even show up at the auction and it would be hard pressed to roll out LTE on top of its CDMA EV-DO offering even with all of its 1900-MHz spectrum. So here’s a scenario I came up with for this to happen. First, Sprint would have to divest itself of Nextel, if it can find a buyer willing to take on the network and the remaining obligations that go along with the rebanding effort including the several billion dollars more it will cost to complete. Next, the FCC would have to allocate more spectrum and put it out to auction so Sprint could step up and buy a decent nationwide footprint. Then it could sell its 51% interest in Clearwire, if a buyer could be found (Google?). I don’t think this is very likely. Rather, I think Clearwire will last another 2 years, by which time TD-LTE will be available. Sprint will pick up the pieces and turn the 2.5-GHz spectrum into a TD-LTE system to compete with Verizon and AT&T, both of which will have a significant LTE footprint by then. Another rumor going around was that Sprint would be purchased by Comcast. While these rumors are fun to discuss, reality will probably be far different.

Several years ago, I wrote about wireless penetration exceeding 300%. I based this prediction on the convergence of wireless and consumer devices such as the Kindle and other products. At the show, numbers more in the 500% range were being bandied about. Some of this speculation is based on the new e-readers being announced, navigation devices with built-in wireless, netbooks, and smartbooks. CES was full of devices that include wireless connectivity with everything from Zigbee home control to Wi-Fi and wide-area systems. The wireless industry is doing well and CES is becoming more wireless-friendly and wireless-educated with each passing year. It won’t be long before we will find one or more varieties of wireless in all 2,500 booths.

Palm announced several things at its press conference at CES, but the two most important to me are the two new phones being introduced on the Verizon network: the Palm Pre Plus and Palm Pixi Plus. The ‘Plus’ indicates a number of things including 16 GB of memory, doubling the existing memory in the Pre, and the fact that these phones are also Wi-Fi routers that can be set up to provide access to the Internet using the Verizon EV-DO 3G network and the onboard Wi-Fi that can be used to provide access to up to 5 Wi-Fi-capable devices per phone. I was thinking that if you wanted an iPhone on Verizon, all you would have to do is keep a Palm Pre in your pocket set up as a router and use your iPod touch as an iPhone on the Verizon network, sans voice. Perhaps that was what the earlier rumor about the iPhone coming to Verizon was all about!

The wireless Internet was everywhere—in the Qualcomm, Motorola, LG, Samsung, and other booths, on the Google phone, and elsewhere. It was interesting to see how many people still believe that the wireless Internet will remain like the wired Internet even though they are hearing from the wireless operators how they will have to change their data pricing models to help manage the data flow across their networks. You have heard this before, but it would seem to me that smart devices on smart networks running smart software would help with network management and at the same time provide customers with a much better wireless experience. I guess it will take some speed bumps to get that across to those who believe the two Internets will remain the same. Perhaps it will even happen in time for the FCC to realize that wired and wireless networks are not the same and need to be treated differently.

I will leave detailed product reviews to the hundreds or thousands of reporters who walked the show floor, attended the evening events, and mingled with each other. They will probably do a better job than I would and most of them are probably more positive about products such as PC tablets or two-way video-equipped TVs and how we will all sit in front of our TVs and hold video conferences with family and friends on a regular basis. There certainly was enough technology being shown to provide connectivity to and from almost anything, but I keep asking myself exactly what problem a specific product or technology solves, what it adds to our lives, or why I would want something like that. Maybe I am getting old. What is more likely though is that most of what I saw at the show has already been tried one or more times before. Some ideas might actually catch on this time around because our communications capabilities, both wired and wireless, are so much better than the last time around. But then again, maybe not.

Andrew M. Seybold