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In reality, the idea of a device that includes an ecosystem dates back to the late 1990s when the first BlackBerry was introduced.
 
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Ecosystems

Friday, April 11, 2008
 

I wrote about the latest CTIA Wireless show for my Fierce Wireless column and presented my thoughts in a Firece Wireless Webinar held on April 10 (replays available on its website).

 

Each year in the press room, you can find members of the working press (and others who pretend to be) discussing the show and sharing comments about the latest and greatest gadget, technology or service. This year, the press room was very quiet. There was little talk about great and wondrous things at the show and I am sure many were disappointed that they did not have the opportunity to write about something unique or really different.

 

However, the real story is not about the lack of buzz, but rather the fact that things that are happening today will have an impact on the industry for a long time to come. We have left the world of devices and networks running such-and-such technology, and we are entering a world made up of various ecosystems. There is the audio ecosystem, the mobile TV ecosystem, location-based services ecosystem and many more.

 

What is an ecosystem you ask? Well, perhaps the best couple of examples are the new Nokia phone (computer) that is sold not only as a device but with access to music, games and other types of entertainment. Nokia provides a portal you can access when you purchase the device that provides end-to-end access to a variety of entertainment customers might want. And then there is the location-based services ecosystem. The LBS world is no longer about GPS and location and special devices, it is now about LBS capabilities (GPS and other types of location-determining technologies) being embedded into devices that are shipping such as turn-by-turn navigation, traffic reporting and points of interest location software.

 

In its own right, the Apple iPhone is its own ecosystem. Yes, there were a number of IPKs (iPhone Killers) being shown at CTIA, including the Sprint/Samsung Instinct, but to my knowledge, none of them include a back-end ecosystem for obtaining content or the ability to use a site such as iTunes to find what you want on your phone. (While Apple isn't doing a great job of this, it is better than most.) To me, the standalone phone is something a voice-centric person will purchase, while those of us who want and need other things will look for ecosystems that fit us.

 

In reality, the idea of a device that includes an ecosystem dates back to the late 1990s when the first BlackBerry was introduced. It included an end-to-end ecosystem for Microsoft Mail, calendar, tasks and an address book. It first provided over-the-air email and side-loading of the other elements of Microsoft Outlook, then full over-the-air synchronization. No one called what RIM did an ecosystem but, by today's standards, it was. The device was sold to customers (or corporations), the software was installed and the revenue generated was divided between the network operator and the service provider-in this case RIM. In some respects, Apple's iPhone is simply following the model established by RIM, but in other respects it is different because it was originally aimed at consumers and was not a corporate product and service.

 

It is interesting to me that RIM is now heading for consumers in addition to its corporate play and Apple is heading toward corporations and the game world. Neither of these companies can be all things to all people, but it appears as though Apple is going to try. RIM, a more seasoned wireless player, understands better how to choose its markets. It will be interesting to watch, especially with Nokia entering the device business with a full ecosystem play.

 

What percentage of the device market will be dominated by devices backed up by ecosystems? Will Samsung, Sony-Ericsson, LG, Kyocera and others continue to sell only handsets or will they be tempted to enter the ecosystem business as well?

 

How will network operators that used to fill in these ecosystems react? After all, the model was to purchase a phone from them and then use their portals to find the software, games and entertainment services you wanted and to purchase them through the operator. If handset vendors are entering into the ecosystem or applications distribution business, where does that leave network operators? Will they fight back by not selling certain brands of devices? Is this what open access is really all about? Is it not only any device to any content, but specific devices to specific content, bypassing network operators?

 

I don't think any of us know the answer, but I believe device vendors that are beginning to enter the ecosystem business need to make sure they take care of network operators. Even with open access, they will not succeed without them. Having the FCC dictate open access rules would be a disservice to the industry-the free market should determine the rules of the open access engagement. The way I see it, to win at the ecosystem game requires sharing success with the companies that spend $billions building and maintaining the networks.

 

The future of wireless is about splitting the customers' dollars in many different ways and sharing in the revenue that is generated. If any one player in the ecosystem gets too greedy, the entire system will fall apart. So to me, the CTIA Spring show was about the realization that things are changing and that Google and others are having an impact on our industry, and that if we work together we can provide what customers want at a price they are willing to pay and everyone can make money, which sounds to me like market forces at work.

 

Andrew M. Seybold

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