Another round-up of interesting posts about the mobile industry at this week’s Carnival of the Mobilists,
hosted by TomSoft.
Archive for January, 2007
Carnival 58
Monday, January 15th, 2007Five Thousand Dollars per Megabyte
Sunday, January 14th, 2007
How Apple intends to keep you from installing software on the iPhone?
(Photo by protohiro)
Watch Steve’s demo of text messaging on the iPhone from his keynote address. The Mercury News has posted their bootleg version. It was shot with a camcorder over the heads of the Apple fanboys like a pirate DVD, but at least they indexed it, so you can jump straight to the bit about texting.
Forgive the crowd their cries of pleasure and awe. It’s a packed house, it’s the most anticipated product launch ever, he’s had forty minutes to soften them up by now, and this Reality Distortion Field goes to eleven.
But come on, that’s just iChat, Apple’s instant messaging client, running over SMS. What’s the point of that?
The point is price discrimination.
Steve typed "Sounds great. See you there." 28 characters, 28 bytes. Call it 30. What does it cost to transmit 30 bytes?
- iChat on my Macbook: zero.
- iChat running on an iPhone using WiFi: zero.
- iChat running on an iPhone using Cingular’s GPRS/EDGE data network: 6 hundredths of a penny.
- Steve’s ‘cool new text messaging app’ on an iPhone: 15c.
A nickel and a dime.
15c for 30 bytes = $0.15 X 1,000,000 / 30 = $5,000 per megabyte.
"Yes, but it isn’t really $5,000," you say. It is if you are Cingular, and you handle a few billion messages like this each quarter. (1)
Short of launching your own private satellite network, on a per byte basis SMS is the world’s most expensive way to communicate, and the most profitable product ever introduced by wireless operators.
On Tuesday, I found this part of the demo irritating, but assumed that I would be able to install iChat myself. Or better still Adium, which supports AIM, MSN, ICQ, and Jabber. (2)
But I will not be able to do that because … it will not be possible to install applications on the iPhone without the approval of Cingular and Apple.
It could get worse. Cingular has ‘not yet determined’ service pricing.
Right now, Cingular charges $19.99 per month for unlimited data; unless you have a Treo or Blackberry or Blackjack, in which case the price is $39.99 per month. Why?
Just because.
Smart customers sign up for the cheaper plan, buy an unlocked smartphone, and install their own email app, saving $200-$300 over the life of the contract (depending on the cost of the smartphone).
What if Cingular introduces an ‘iPhone date plan’ and charges $59.99 per month? I will not be able to do anything about it, because … it will not be possible to install
applications on the iPhone without the approval of Cingular and Apple.
I will not be able to make free phone calls over WiFi on my home or
office network because …
I will not be able to install Skype because …
I will be able to ‘touch my music’ - thanks Steve - but I will not be
able to use my own music to create free ringtones because …
It’s not just about Jobs being a control freak (although that may explain why we have to use Safari, a browser that some major web sites do not support, and why we won’t even be able to buy Java games). It’s not about the ludicrous claim that a third-party app could take down the network. It’s not about preventing other manufacturers from copying the iPhone. It’s about the money.
Fair enough. None of this changes the fact that the iPhone is a remarkable new product. Cingular and Apple exist to make money, and if they can persuade consumers to pay this kind of premium, congratulations.
But as a consumer, I have a choice. And for now the ability to install any application that I want leaves phones powered by Windows Mobile, Symbian, Linux, RIM, and Palm OS with some major advantages over the iPhone.
***
1. Even if Steve bought the biggest bundle of text messages that Cingular offered and used exactly that number every month, this message would still have cost him $250 per megabyte. But he’d have to send 100 messages a day to keep his average that low. On the other hand if he signed up for one of Cingular’s pseudo-unlimited data plans, iChat via GPRS/EDGE would cost him essentially zero.
2. Yes, I know that most people don’t have IM on their phones, so I still have to use SMS to send them a message. And where carriers do offer IM, it generally runs over SMS. But this is circular reasoning. Other carriers refuse to offer IM-over-data out of the box for the same reason Cingular and Apple do: so that you and I have to pay a premium for SMS.
New York or the Valley: Decision Time
Thursday, January 11th, 2007
Uploaded by DogFromSPACE
Three months ago I wrote a post called "New York or the Valley?" about whether I should move to the west coast to start my next business.
I put it this way: given that my wife and I could live anywhere in the US right now (we have recently returned from a long trip and all our things are in storage), and that I am planning to start a new technology company, are there any advantages to starting it in New York?
Phrased a little differently each time, I put that question to dozens of friends and colleagues in the last few months. But apart from the obvious cases - businesses related to financial services, real estate, or marketing - no one could make a strong case for NY.
Yes, I heard many pleas in mitigation, many
examples of how you can succeed here, presuming that you have
already decided that this is where you want to live. But we haven’t. Though we love this city, we’re also attracted to the Bay Area - the climate, the scenery, being a little closer to my wife’s family in Oregon, TechShop. Call it a wash. My wife and I decided to make our decision on purely professional grounds; to go wherever we thought we could maximize our chances of success.
So Summer and I are moving to San Francisco at the beginning of February. To old friends, bye for now - my new business will bring me back to NY quite often. To new, we can’t wait to meet you.
And if you think I’ve missed some very important advantage of New York … sigh. Too late.
The iPhone Cometh
Wednesday, January 10th, 2007
Uploaded by dotdean
And so the iPhone cometh. For a thorough overview, see David Pogue, Michael Mace, and Russell and Carlo.
Forget about the ’specs’; several phones already on the market beat the iPhone on paper. This is all about the user interface. Every advanced phone in the world today is an ugly compromise, the unholy union of an elderly cellphone and a PDA. But the multi-touch interface on the iPhone looks as if it may be better than an iPod, better than any PDA, better than any tablet PC, and maybe an acceptable substitute for a plain old voice cellphone … if it performs anything like as well it did in Steve Jobs’ keynote address.
You cannot go by the press reports, or even the animated demos on the Apple web site. Until you can play with the thing yourself you will have to sit through the whole damn 90-minute presentation if you want to understand what I am getting at. Sorry.
The concepts are not new. You’ve seen this stuff in movies like A.I. or in the work of Jeff Han, and Go Computer had gesture-based interfaces (with a stylus) on commercial devices in the early 90s. But Go is gone, and OpenMoko is still vaporware. Apple will be the first to put this technology into the hands of millions of people, and for that they deserve all the praise that they are getting.
Forget about the price. $499 with a contract is steep, but this is Version 1.0. Version 1.0 of the iPod was $399 in 2001 and did nothing but play music. This year Apple will sell its 100 millionth iPod, and the most popular model is half that price. For the same reason, forget about the lack of 3G, the 2MP camera, and most of the other shortcomings on the feature list. Remember the leap from Version 1.0 of the iPod to the Nano.
Don’t blame Apple for going with Cingular instead of Verizon. Blame Verizon. Given Verizon’s refusal to support Bluetooth (beyond headsets) or WiFi or simple desktop synchronization and their insistence on Verizon-branded proprietary software (like their $4-per-song alternative to iTunes) there is no way that Verizon could carry the iPhone. Why do you think Verizon doesn’t offer any high-end phones from Nokia or Sony Ericsson? The iPhone and products like it will ultimately force Verizon open, as I have been saying for months now.
Why has Apple been able to leap so far ahead of Nokia with their first phone? Because Apple is the only company with the chutzpah to tell a major US carrier what a phone ought to look like. Nokia, Motorola, Sony Ericsson, RIM, and Microsoft have all bowed before them. So I think Tom Evslin is wrong; this is a revolution. And if Apple can really sell 10 million phones it will have even more control when it comes to Version 2.0.
As well as lamenting the Cingular deal, Fred Wilson thinks that the iPhone will have no impact on sales of the Blackberry and that the market was wrong to sell off RIMM. I disagree. True, the iPhone is highly unlikely to appeal to RIM’s core enterprise customers - it’s expensive, entertainment-focused, and won’t play nice with Exchange Server or support Office attachments at first. But RIM’s high valuation is a bet on their being able to break out of the enterprise market and sell to consumers. RIM’s legacy business is secure, but Apple just took their future away.
Even if Apple makes it very difficult to unlock the iPhone, they will have to sell unlocked versions in Europe and Asia if they want to make their sales targets. I predict that more unlocked iPhones will be imported back into the US than any handset ever sold - not just for T-Mobile customers, but for Cingular customers who don’t want to wait until their contract is up for renewal.
Similarly, it’s a mistake to think that the iPhone is not important because only high-end customers will be able to afford it. For one thing, this phone will set the design direction for the whole market and it and phones like it will cost $200 or less in a few years’ time. But more importantly, the high end is the most important segment of the mobile phone market, because it is the most profitable segment. Motorola and Nokia are selling more phones than ever but getting punished by investors because their phones are too cheap and their margins are collapsing.
Having said all that, Apple still has serious questions to answer:
- Battery life: forget about talk time, forget about music playback, what is the standby time and why are you being coy about it?
- Why would you even think about blocking third-party applications? If so, what is the point of having OSX?
- Why do you need a cable to sync it when it has WiFi? Is it because you want to drive any possible games or downloads through iTunes and DRM?
Finally, I believe that Apple has made at least one deal with the devil, and it’s in their implementation of SMS. But I will save that for another post.
***
Happy New Year … Summer and I took a break to visit friends and family in Dublin and Brussels. Now back to work.
