Results tagged “iPhone” from Emerging Communications Blog

The run time is 22 minutes.

Good morning, Jan.  How are you?

I'm good, thank you for having me.

Hey, welcome, especially since Global IP Solutions is a Gold Sponsor for the forthcoming Emerging Communications 2009 Conference.  Sponsorship is very appreciated, I think by everybody, because I think everybody realizes that without sponsors the tickets would be astronomical.  It would be double because of the venue prices. 

I guess, as a first question, what's best to ask is why GIPS sponsored?

That's a good question.  We look at different opportunities and this is definitely very different from your typical conference in this space.  It's all about the new stuff, what's exciting.  That's where we want to be because that what we're trying to really focus on being, at the forefront of what's happening.  This fits hand-in-glove for us. 

Excellent, so GIPS became famous because it provided the Codec, which powered Skype originally, although that's been taken in-house.  GIPS provided the wideband codec, a very smart codec that deals with packet loss, etc., exceptionally well.  The Codec still powers the likes of Gizmo.  We've not actually heard from GIPS in a while now, so I'd like to get a handle on what Global IP Solutions has been up to.

Sure, first of all, we continued in that direction.  We added many more customers, like Gizmo, but also IBM, Oracle, Google, AOL, Yahoo; the list is long, anyway, similar to Skype-type of solutions.  After that, we focused a lot on a couple of different tracks.  One is mobile.  The other one is video.  We realize that video is a big part of the future, so for the last four years we have done a lot of development in video and added customers on that side.  Then, also a little bit more on the enterprise side, so the Cisco's of IS, etc.

Most recently, as I mentioned, some mobile stuff.  One of the latest additions to our product portfolio was a voice engine, as we call it, for Apple iPhone, which is obviously a very exciting platform.  That's actually, what I'm going to talk about at eComm, later.

Okay, so in relation to the iPhone platform, what exactly are you guys offering application developers?

What we do, we are an enabling technology company.  We don't develop applications that you will see.  As you mentioned, we enabled Skype to get off the ground, and many others, by providing the media processing technology that's necessary.  The idea is that if we do that, the application developers can focus on building cool applications. 

It's very exciting to be part of this by providing very important building blocks for nice and cool applications, in this case, voice and video applications.  We can focus on getting the high quality, regardless of what network conditions you have, what device you're on.  We focus, pretty much, solely on that and therefore that's why you can get the good quality.  We give the application developer a toolbox, if you will, to add voice and video into their applications.

You guys are still engineering in what I'll call the Codec space, in terms of voice and codecs.

We are, but video as well.  We do a little bit about the actual codec.  Its things like echo cancellation, noise suppression, things that make the whole experience better.

Okay, so these are what you would term proprietary codecs, i.e. commercial codec development and then you have some kind of pricing scheme, royalty scheme, or whatever, in order to get that into developers' hands.

Yes, that's correct.  Proprietary is only part of it, I mean, we're very focused on standards.  We make sure that everything we do can interoperate with all standards.  We support, pretty much, every single standard Codec that's out there.  But, for many of our customers, there is no need to go license an expensive standard Codec.  They can use ours that are less expensive because we don't have to go to ten different companies and pay license fees.  The idea is that we provide a library you can integrate into your application and you pay us a license fee for that. 

A library of Codecs?

Codecs and other functionality, voice and video functionality.  It includes, as I mentioned, echo cancellation, file handling, a lot of things, everything you need to do in the media processing part.

Okay, so are you able to give me some kind of idea what value proposition you're giving application developers?  People could use a free codec, for example, the iLBC codec, or Speex.  What is the value proposition that GIPS offers application developers?

That's a good point because it's definitely possible to do things free.  Usually, when there is something for free, you're giving up something.  We know that.  You mentioned iLBC.  That's actually a Codec that we developed and made available, for free, to everybody.  We wanted to make sure there was a good codec available, for free.  But, on top of that, you need more things.  The value proposition is really to provide a quality level that you can't get out of the free stuff.  There are many reasons why we can achieve that.  The main reason is, of course, the amount of work we put in to do that. 

We also make it possible for the developers to really focus on their strengths.  If you get the free stuff, there is always something missing, and you need to add something.  We give a complete media processing solution, including things like handling the operating system, the sound cards on device, which is actually a very difficult task to do that, especially while maintaining good quality and low latency.

The platform you seem to have focused on, at least lately, has been the iPhone platform.  What is it that GIPS is offering on the iPhone platform?

The iPhone, obviously for us, as with everybody else, is an exciting platform.  It's really excited a whole mobile development area because it's a platform where you can do more things than in many others.  It's easier for people because it's similar to the Apple Mac development. 

We focused on it because there is a lot of excitement.  We see what we fit well, because again, where the coolest applications are developed, that's where they need our stuff.  One thing to mention, though, is that even though it's an exciting platform, there are some issues around it, in terms of not everything is available that you would like.  For example, when we want to add video here, because obviously, video conferencing is interesting, you can't get access to the video stream coming in from the camera, into the application.  These are things that it seems Apple is opening up one by one, but there are issues like that.

Okay, so if you guys can, at the moment, enable high quality audio on the iPhone, which is surprising, because it has a limited processor...

Yes, that's one of our focus things, to develop solutions that work, regardless of what type of processor you have, so we have solutions all the way from high-end PC's, and there you can do HD video.  You can't do that on an iPhone, but you have to limit yourself to what you can do.  You can do very high-quality audio.  You can actually do video, as well.

So, the iPhone ARM processor is good enough for processing quality, real-time voice, then?

Absolutely, if you have well optimized for that specific platform, you can't just take a standard PC application and port it.  You have to put a lot of effort into optimizing it for the ARM processor, which is something we've done.  That's one of the reasons why it sounds good and doesn't take all the CPU of the machine.  You still have plenty of CPU available, actually, when you're just running voice.

This is available today, for application developers on the iPhone.  Why are we not seeing Skype-type clients on the iPhone?  I haven't seen any that look any good; have you got customers who are doing this on the iPhone?  I don't know.  I'm a bit confused.

I think it takes time to get everything right.  We have several customers that are in the process of doing that, right now, Nimbus is one example.  There are some others out there.

Who's an example?

Nimbus, and there are some others that are doing applications.  I agree with you; not all of them are really good.  Some of the limitations are because of limitations of the SDK on the iPhone, but I think we have solved more than most people, in terms of getting this to work really well.  We're seeing a number of customers that are just launching or in the process of launching applications on this platform.  I think, come eComm, that we will probably be able to talk about more of those.

Okay, hopefully all the iPhone users will have a quality VoIP client, then, in the coming months?

That's what we hope and believe.  It's definitely possible with what we provide and what's possible what to develop on top of that.

Okay, with the iPhone, let's say you're not home, you're not using a Wi-Fi, and you're using 3G or 3.5G.  What's the quality like?

Actually, Apple doesn't allow you to use the 3G mostly, for this.  It depends, of course, on service providers.  That is an issue.  Otherwise, in general, we have similar solutions for other devices that do support 3G.  Our experience is that 3G - the biggest issue you will have is that you can get latency that is longer than you used to if you use the Wi-Fi.

And this is GSM-based 3G that you're speaking about?

Yes, because obviously, in Europe, 3G is much more built-out than it is here in the States.  We have much more experience of people actually using 3G for VoIP over there.  Here, myself, I use my Wi-Fi at home.  That works very, very well.

Have you tried over EVDO in the States?

We have done, not ourselves, but customers have done trials with that previously.  Again, the same issues with delay, an EVDO can also be bandwidth limited.  In essence, there is no difference for us.  We send packets, we receive packets, and we have to...

So, it's not optimized specifically to EVDO or 3G or HSDPA?

No, what we have is some technology deep inside of our engine that adapts very quickly to the type of network you're on.  From the high-level standpoint, you don't see that, but down in the middle there, we have something that quickly adapts to how much jitter there is in arrival times of packets, how much packet loss there is, and tries to compensate in the best way possible for that.  Therefore, we don't have to have a specific optimization for a certain network.  We have such a quickly adapting technology, that it will do that on the fly, which is very powerful if you are talking about fixed-mobile convergence, for example, when you switch between different networks.  You need to be able to quickly adapt to a new type of network, as well.

Okay, the FMC is an interesting point.  Obviously today, you have the likes of Truphone.  Truphone, today, will turn your iPod into a phone and let you do VoIP calls, or your N95, and it will use Wi-Fi and it will also use 3G.  So, do you feel that you're behind?

No, no, when it's available we offer the same as they do.  There is no difference in that perspective.  For example, on the iTouch, our voice engine runs there, as well.

You're not offering applications.  You're only there to aid application developers, correct?

That's correct.

You said with the iPhone, with many of the carriers you can't, or I don't know what you mean by can't.  Maybe you just mean in terms and conditions that you can't run the VoIP client.  Is that a terms and conditions thing?  I can't see a technical way of restricting it.

Actually, there is a way of restricting it for VoIP.  It's possible and they do that, at times.  Of course, even more prohibitive at times, are just fees in terms of how you pay for your data network.  There are many reasons why it's not always possible, but it depends on the scenario.  Apple has, on the iPhone, specifically made sure that you shouldn't compete with the regular ...

But, when you say Apple makes sure, do you mean contractually or in software?

In software

How do they achieve that?

By not giving you access to that part of the network for those types of applications.  It's a little bit complicated and it's changing by the day.  Next week it could be a different story.  It's been one of the struggles for people developing applications for VoIP on the iPhone, itself.  Of course, I'm not blaming Apple in any way for this.  I believe that's typically a part of the carrier scheme, here.

Okay, so are you saying that there is a lot of resistance to running VoIP applications on mobile phones coming from the mobile operators?

Yeah, there is, but it's also changing.  They are all realizing that they have to kind of jump on the train as well.  I think a couple of days ago; Verizon stated that they would be all VoIP for all their residential services.  We hear that there are a lot of 4G trials going on, where it's all going to be IP communication for the voice, as well.  Right now, there is definitely some resistance, but we also see that it's opening up.

Okay, I don't know if the Verizon one is quite true, but I suspect it's not.  Even if they did, even if you take the 4G scenario, there is a big difference between their VoIP and your VoIP, a third-party VoIP.  One will be acceptable and one won't.  I'm just saying the environment you must see is difficult, shall we say.

Yes, I agree with you, Lee, definitely not, just because a VoIP channel exists doesn't mean that it's easy for a third party.  They still want to have that control.  I think it is still going in that direction, that it is opening up.  There are other ways to make money than blocking out.

Could I get you to comment on video, generally, for mobile phones?  What do you see specifically in the iPhone?

Video is definitely a very interesting, but also schizophrenic, if you will, topic for mobile.  Depending on where in the world you are, there is very different up take on that.  In parts of Asia, there is a lot of video communication, between cell phones, going on, using a direct link.  In Europe and the U.S. there is much less of that.  But, it's definitely a very big interest in finding the right way of including it.  I think that's where we really try to focus, not to provide a pure voice or video solution.  That's not really the exciting part.  The exciting part is when it gets integrated to other applications and solutions, like social networking, gaming, collaboration, etc.  When you find a way to put it all together, that's when it gets exciting.  I think people are thinking in that way.  I think that's what's going to make the video experience really happen, and generate the market we think is there but hasn't really taken off, yet.

When do you think that will take off?  I'm not asking you, hopefully too hard, to look in a crystal ball, but you must have a feeling.  You're probably thinking in six month's time.

I think we are definitely seeing some of that happening, slowly.  Of course, it's hard to predict how much the economic downturn will affect any of these things, but I don't think it affects the development all that much.  It's more a matter of if it can be presented in the right way for the mass market.

On the iPhone, you mentioned that as well, we still are waiting for access to the video feed there as the last piece missing for us to be able to offer a video engine for the iPhone, ourselves, and then when have that you can move forward.  I believe, as you said, in about six months you will see things.  I think it's more than a year before you will see any significant volumes, though.

Okay, I'm being optimistic. 

I think that's your job, probably.

That's my job, to be optimistic.  [Laughs]  I just want to see a 'new world order', we'll call it. 

Don't we all.

Yeah, a new world order would be good for 2009.  [Laughter]

Yeah, let's try that.

[Laughter] Let's try that.  I wonder, if you guys have an API, and so on, I assume, or how do application developers work with your solutions?

We provide them an API with all sorts of functionality that they need to set up the call and influence what codec you're using, what settings you're using, etc.

Okay, so you guys should be running a tutorial at eComm.  We've been setting up tutorials as 7:30 to 8:30 in the evenings, and there are quite a few set up already.  Should we chat about that after this call?

Absolutely, let's do that.

One last question.  You're going to be speaking about enabling voice and video, with respect to the iPhone, the challenges.  Can you just give a brief outline of what you're going to be speaking about?

I'm going to talk mostly about the technical limitations we talked about.  I mentioned a couple, already, accessing the video cameras for the applications.  You can actually do two-way video conferencing.  There are some issues, in terms of the API's for voice play out and recording, that are very different from the regular Mac, which we have figured out how to work with.  There are challenges in terms of file access limited the application sandbox.  Maybe the biggest thing is this issue that you can't run applications in the background on the iPhone.  All of these things I'll talk more about and especially what has happened lately; these are constantly evolving.  Apple are coming up with new resolutions to some of them.  I think that's an important part of what's going on, here.

Okay, I very much appreciate you giving me a view of what GIPS has been up to.  I look forward to hearing about the engineering you've been doing around video, and in particular, the iPhone platform, and the challenges you've been overcoming there, to allow developers to have high-quality audio and video, particularly with the iPhone.  I look forward to that and I appreciate the time.

Thank you very much, Lee.  It was a pleasure talking to you and looking forward to seeing you soon.

Thank you very much, bye.

The run time is 38 minutes.

Good morning, Lee.  I'm very good, thank you.

You are working for VisionMobile.  Could you say what you are doing there?

I'm the Research Director at VisionMobile.  We are an analyst firm doing a variety of things such as research reports, workshops, advisory work, and what we call "Market How Maps".  Basically, we specialize in mobile software, ecosystem strategy, services, open source, and definitely, I look into the forward-looking areas of the industry.

Okay, I took a quick look at the VisionMobile website.  The first blog post that hit me was "Network as a Service" (NaaS).  Could you tell me something about network as a service?

It's a very hot topic, that particular one, because it's all about reselling assets that operators have, which are mostly under exploited.  These are assets; like subscriber information, contacts, social graph, information about usage building, and what have you.  And secondly, services; exposing the likes of SMS and billing and chat and voicemail and MMS and any sort of operator service, to the mass market of developers.  That's the basic concept.

The reason why it's interesting is because it's really under exploited; i.e. there are a lot of developers and third parties who would like to tap into information about the user, such as their social graph, like ability to send messages to the user through a variety of means, voicemail, SMS, etc.  But, so far, that kind of access is limited to the top of the pyramid, meaning there are very few service providers who have aggregator agreements or very big...

Okay, so it's not available to developers on mass.

Exactly

The thing is, this notion of turning the network inside out, pretty much like Amazon has done with their infrastructure, has been on the go - that's a Telco 2.0 meme.  I know Martin and I have been speaking about that for many years, turning the network inside out. 

But the actual reality on the ground, even if you just took one core piece of information that operators have in their network, which is location, you see that they've done nothing, pretty much, with location, let alone other things.  Now, at the last eComm show, you saw Fire Eagle from Yahoo, which at least has some teeth to it.  When it comes to mobile operators, if they can't even expose location, this is just blue-sky thinking, surely.

I would say that they can expose location but for various reasons they've been very slow.  You're absolutely right; there is little out there.  In the U.K., there are location aggregators, but it's extremely difficult if you're a small developer house or a one-man-band developer, to go and approach operators.

You used to do it by aggregators, and location particularly, is on a per request charge.  It's very expensive to scale.  This is changing via what's called NaaS, meaning Network as a Service, where this is sort of moving from the top to the bottom of the pyramid.  It is happening over time, especially during 2007 and 2008, we have seen the Orange partner effort to launch many more API's, including location, Vodafone Betavine release, what is practically six API's, I believe excluding location.  There is BT Web21C, which also has five or six API's.  I think we're seeing the beginning of this NaaS market.

Okay, so the BTCN doesn't give you location.

I don't think so, no.

The Vodafone Betavine doesn't give you location, you said.

I have to double check, but I don't think it does.

Okay, does anybody give you location?

Yes, I can confirm there is now location, as it stands, on Betavine.  Orange does have a location API in what it calls "Instant API's" but it's in an Alpha stage.  It's likely that it's only available in Orange France, as well, as most Orange API's are.  In short, a location reflects, pretty much, the status of all other API's, which is that of a nascent stage, with a lot of teething problems.

Yeah, but this is 2009 and we were talking about telecom API's back in 2005, pretty strongly.  I must admit; I don't have a great deal of enthusiasm that anything quick will happen.  I think what we're doing is hitting on a key issue, which I'm sure you'll accept, and that is the lack of innovation.  I think you're in a position where you could comment on the lack of innovation in the mobile industry.  Firstly, do you agree that there is a lack of innovation, and if you do, why do you think there is a lack of innovation?

There is a lack of innovation, primarily because operators who control most of the money, around seventy percent of the revenue in the industry, and the delivery of services are the worst innovators in the industry.  They're extremely slow.  They usually have an ivory tower attitude.  The operator organizations, typically, descended from a network-centric, a closed network view where everything is tightly specified and controlled.  The lack of innovation is because there wasn't the opportunity for the bottom of the pyramid to engage and deliver services, whatever these are, voice, or data, on mobile phones.

What changes do you see?  I seem to hear a hint in your voice that the bottom of the pyramid, as in the mass developers, every man may have opportunities.  Where do you see this opportunity, again, assuming you do, but your voice seems to indicate that you do?

There is definitely an opportunity, but it's one that's going to be unfolding very slowly.  I totally agree with your criticism of the lack of innovation, particularly the slow evolution of this NaaS market.  API's are becoming available for the bottom of the pyramid, but I don't think we'll have reliable cross-operator location, for example, provided before the end of 2010.  Even that might be ambitious because there is the issue of each operator providing it independently, and secondly, someone like the GSMA having a sort of way to abstract these APIs, so essentially, you can access any subscriber, not just a single operator subscriber.

GSMA does have an initiative in place, but judging by the network speed of how services have evolved, I think NaaS will also be evolving in network speeds, and not web speeds, meaning telephony network speeds rather than Telco 2.0 speeds.

Okay, so you don't sound overly optimistic of the fast pace and innovation in mobile.  Am I correct?

Yes, you are correct.  The only place where there is innovation is where there is an "open platform".  I hesitate to use the word because it's over used.  In platforms where you have a couple of things, one is an open access to API's, whether these are network or device API's.  Secondly, there is an open route to commercialization.  That means ability for any third party, big or small, to take their service to market.  These two examples - considered the applications developers have been able to develop on Symbian systems since 2000, until recently.  Then, consider the commercial route to market that the likes of the Apple's App Store have established.  From 2008, with some exceptions, developers have had open route to market, again, from a commercial perspective rather than just API's.

Okay, so regarding application developers having a route to market, you've got the App Store.  You have Google's Marketplace.  Are you aware of cCommunity, with T-Mobile?

Each operator is trying to do their own mobile applications store.  We've done some research on this topic.  We published an article two months ago, called "The Mobile Application Store Phenomenon," where we looked at two things.  One was a side-by-side comparison of five vendors of mobile applications stores.  We saw the Apple App Store, Qualcomm Brew, Nokia Download, Handango, and GetJar. 

We also looked at what is it that makes a mobile application store successful.  What is the recipe behind a successful mobile application store, like Apple's App Store?  We came up with a five-point list, which you can read on our article, rather than me going into a discussion here.  It's a rather complicated solution to develop, for any one player, whether it is OEM or operator.

Okay, so we've had pessimism of innovation in mobile, and probably pessimism is reality.  Where do you see the opportunity, where is your hope?  You can say "none" if you like.  [Laughs]

I'm an optimist by nature so I tend to gravitate towards optimism.  I would say this optimism is in the resolution and slight convergence of choices for delivering services, and developing handsets, meaning it's easier to develop services - let's say, since 2008 onwards, and certainly moving forward.  The choices for developing smart phones today are clear, S60 or Android.  The choices for deploying services are clear, Java for mass market or if you want to have a quick demo, use Android or the iPhone platform.  The choices for [13:01.0 unclear] won't change.  There was a lot of debate whether [13:05.9 unclear] would be around.  They are around; they will be around for a long time. 

I think we have some clarity and consolidation into the multitude of OS's.  The choices a developer or an OEM had to make or had to decide upon, but nothing is clear.  So I look at this with optimism.

So, in summary, what's your optimism?

In summary, both mobile application developers will have a gradually easier way of deploying applications and services, mass market.

It doesn't get me that excited.

Well...

It sounds rather glacial.

It is exciting, only if you look at it from a high level.  You won't see a difference from one month to the next month.  The immediate differences you have seen is anyone who wants to demo something to a large audience, now goes to iPhone or Android because of the reasons I mentioned earlier.  There is a difference there in going to market. 

I know you're trying to play all even, and so on, in the way you're talking about platforms, but what you've just said there is people want to demo something, they will use the Google Store of they'll use the iTunes Store.  That, in itself, seems to be saying that the other players are screwed, going forward.

Nokia Download, is it any good, yes or no?

If we're looking at mobile application stores, Nokia Download is pretty much a disappointment, both for Nokia and a failure for everyone else.

So Nokia Download is a failure for Nokia.  Why is it a failure, briefly?

Briefly, because they failed to get four out of five ingredients of the mobile application store right.  These ingredients they failed to get are decent revenue share for developers, other than premium SMS, distribution is partial.  Provisioning on handsets is again, partial and it's only on a case-by-case basis, depending on which region the handset is sold into.  On-device discovery doesn't have a global search.  It's split down into shop and shops.  Even Nokia's own applications are hard to find.  There is no transparent way of submitting your own applications.  Pretty much, everything that the iPhone App Store got right, Nokia Download got wrong.

How could Nokia get four out of five wrong?  They had an example to look at.  They had the iPhone Store, iTunes.  How did they manage to get four out of five wrong?

If you look back, Nokia had Prime Minute up until June 2006, where it replaced this online marketplace with Nokia Content Discover (NCD).  Essentially, back then with Prime Minute, you had the very well designed, well-structured marketplace for submitting, pricing, and distributing your applications.  But that was network only.  There was no on-device storefront. 

They replaced that with NCD, which was an on-device storefront.  It was the wrong decision to start with - it all started back then with the very wrong decision to shut down Prime Minute.  Back then, the decision was, I believe, because they were having a hard time selling Prime Minute to operators.  Then, pretty much no one, perhaps with the exception of Qualcomm Brew, had a control of the entire service delivery chain, meaning controlling everything from the marketplace, to the on-device storefront.

Nokia, I think, got quite a few things wrong.  The App Store wasn't around to copy back in 2006 or 2007.  Still, they could have done things much better than they did.  It was just a quick and dirty solution.

We're now in 2009.  You would have thought; they've got something to look at.  They could have achieved something, by now.  It's just a case of them falling further and further behind, surely.

Yes, I think they will have admit to that themselves.  I remember being on an analyst call with Nokia and hearing one of their VP's say, "We definitely have a lot of things to learn from the Apple App Store". 

Okay, so you have a computer manufacturer, Apple.  You've got an Internet search engine, Google.  Both have demonstrated to the mobile industry how to do things, in terms of offering applications all the way through to delivery.  Would you agree that a computer manufacturer and a search engine, people from outside of the space, are actually leading the way, leading the march?

I would agree about Apple; I wouldn't agree about Google.  Google, I see as an advertising company, whose inventory is delivered by search mechanism, a very good search engine.  But, the Android market has still not proven itself.  It's very, very far away from the numbers that the Apple App Store is making, in terms of revenues and downloads.  It still hasn't proven itself, in terms of the success of Android, whether it will present the single platform versus a fragmented platform for developers.  We haven't seen any significant innovation in the industrial design.  So Google still has a lot of things to prove in the mobile industry.  Apple is far more of a role model.  That is because it is a single player who dictated to operators how it was going to run things.  It was able to control everything from top to bottom.

In saying that Nokia Download was a failure, out of whatever five metrics you used - four out of five; it was a failure.  How does the Android market compare?

It still is somewhat early, but from the parts of this mobile application store recipe that are clear, they have some elements they've got right, which is on-device discovery and provisioning.  Because of their lack of handsets, it's unclear how distribution will work, whether or not the application developer will be able to distribute to all Android handsets or if there will be some OEM restrictions.  It's unclear whether operators who launch more devices like the G1 will have any additional certification requirements, which creates the problem that Brew is facing, like having very stringent certification requirements.  As to a centralized billing, I cannot offer you an opinion at this stage, simply because we have not studied the particular solution in depth.

Okay, so we're beginning to see a shift in the mobile industry, in terms of power, the balance of power.  Would you care to describe how the balance of power is shifting in the mobile industry?

Absolutely, you have to look back a few years, as far back as the early 1990's, when there were the first handsets.  Where you would see the IBM model of the early 1980's, meaning the all-in-one company, which integrated everything from hardware to software, to logistics, the whole thing.  It was a vertically integrated model, similar to the one IBM had in the early 1980's. 

Over time, this has moved to a horizontal model again now that is now changing.  Trying to answer your question a bit more directly, the power now is moving back into a vertical arrangement, to the players who can put together all the necessary elements from handset, including hardware and software and the UI, to the services and the developer SDK and platform.  The players who have the resources and the ability to put together both access to these services and the handset, under one roof, we see a consistent consolidation of power along these vendors. 

Let me give you some examples.  These are vendors like Qualcomm, who controls everything from hardware and IPR, to service delivery enablers.  You have Nokia, obviously, now all on Symbian and via the Symbian Foundation has access to the complete stack.  It owns Qt for service delivery.  It owns - has SDK's go to market routes etc. 

How does Qt, Qtopia enable service delivery?

Qt is very interesting.  In fact, I would say if Qt knew that it was the only choice for Nokia during the acquisition, it would have made a much higher sale price, rather than the one hundred or so Euros that it made back then.

Hundred Euros?

Sorry, hundred million Euros.  Qt will be used for Nokia to deliver its own signature applications, its own uniquely branded, unique flavor applications.  Secondly, its Ovi services.  The reason I mentioned Qt and Trolltech's unique position is because it's the only application environment that is rich enough for someone to write core applications on top and it can be ported on both mobile and PC and MID or non-mobile environments.  It's exactly the solution that Nokia was looking for at that stage, as I said, for Ovi and its own applications.  There is no other type of solution that allows Nokia to port its services and applications on such a wide variety of handsets. 

Can you pass comment on Ovi?

At this point, Nokia is the only one with enough cash creating profits to invest massively in services.  Ovi, I think, is just unfolding.  There are a lot of deals happening with operators, with brands, with service providers behind the scenes.  I believe it's the cornerstone of Nokia's transformation into an Internet company, meaning a way from a manufacturer of handsets into an Internet company, which is providing services across any handset, competitor handsets included, PC's, home, the living room, etc.  As I said, we've only seen the tail of the lion.  We haven't seen the lion, the majority of the power of Ovi and the services that Nokia is building behind it. 

Okay, if I look at Ovi website at the moment, it reminds me a little bit of the Apple website they designed.  It looks a bit like MobileMe, some of the graphics being used here.  The last time I tried to use a Nokia service; it was downloadable for Windows only.  My few experiences - when I've tried using Nokia software hasn't actually been favorable at all, to be honest.  Do you see the likes of Ovi running up against Apple, with their App store?

I wouldn't compare Ovi to the App store.  I would compare Nokia Download, as part of Ovi, to the App Store.  I would say firstly, Ovi has S60 clients for each one of its services.  You have to give it some credit for trying to do too many things at the same time, even being such a huge corporation.  If you look at other OEM's, no other OEM's come close to releasing so many services, one after the other.  Overall, Ovi is competing with the likes of Apple, although Ovi is more of an Internet company, the services company, whereas Apple primarily makes money from manufacturing, not from subscriptions.

The interesting thing to try and predict is whether the other OEM's, the other handset OEM's will be so desperate for their own services, for service revenue ad so cash strapped, as they are today, that they will end up licensing Ovi, maybe co-brand or with a white label license.  They will have Ovi as their only, or one of the very few options available to them for generating post-sales revenue.

Have you looked at all at Xpress Music, from Nokia?  Again, I looked at that and I just personally saw failings.

The one surprising thing about Nokia's music services is the lack of or relatively lack of DRM or tied DRM.  With the new handset, you get a one-year subscription to a whole lot of music, which is not monetized, traditionally, on a per track basis but on an unlimited basis.  That makes me wonder how Nokia is going to make that money up in terms of payments to the music labels.  Other than that, I haven't played with the service myself, so I couldn't tell you if it has glitches here and there.  I imagine it has.

Okay, why do you think Nokia went in to fully acquire Symbian?

It's a rather complex argument.  If I try and simplify that, Symbian was costing Nokia over a hundred million dollars per year.  It had forty-eight percent of ownership so relative control but not one hundred percent control over the source code.  The platform was closed to innovation.  It was difficult for third-party developers to build on top of Symbian, at least substantially. 

By acquiring Symbian, for which by the way paid about the equivalent of two and a half years of royalties, by acquiring Symbian, Nokia firstly reduces its operating expenses.  Secondly, the Symbian Foundation, the operations around Symbian are much leaner.  It can control the roadmap of Symbian more effectively because it will have the most engineers working on the source code.  Also, by going open source, and zero royalty - technically that's not one hundred percent true - by going open source, it decentivizes OEM's from using Microsoft.  It sort of pushes Microsoft into becoming even more irrelevant.  More importantly, it took out UIQ and MOAP from being competitors.

Okay, have you looked at LiMo? 

Oh yes, in depth

What do you feel about LiMo?  Can you share some opinions on LiMo?

Yes, LiMo started with an extremely impressive lineup of founders, the Who's Who of open source, in both operators and manufacturers.  Over the last three years, LiMo has primarily focused on getting new members on and getting industry endorsement, with very little on actually producing a single software base for handsets. 

In fact, if you ask the LiMo Foundation whether all the handsets that are LiMo compliant have even the same piece of software, even how small that might be; you will not get a straight answer.  What I mean is that most of the LiMo efforts and most of the LiMo success is in helping software vendors get operator attention, via the foundation, and help market its members, especially the smaller ones, rather than being a standards body that mandates or defines a specific software stack for handsets, which it was supposed to be initially.

Okay, that's news to me.  You also have mentioned before that Android has a darker side.  You speak about fragmentation and control.  Tell me about the darker side of Android.

There are two main problems with Android, as it stands.  One is the fragmentation and there is a lot of debate.

Can you tell me more about the fragmentation?

The APL2 license, the Apache 2 license says that you can fork, you can branch the source code without needing to contribute any of your modifications to that source code, back to the community.  In that sense, it's a non-copyleft license.  Now, that means that essentially, you can have as many Android flavors as you have phones, which of course creates a problem that developers write one Android application and they have to port to every single handset model, which is what you have with Java.  This is the worst-case scenario.  I think things will be less fragmented but still fragmented.  Although Google is rumored to be using some sort of agreement, a non-fragmentation agreement, in practice there will be differences across OEM's.  Fundamentally, OEM's need to change the operating system software in order to create differentiation.  That is both on the UI side and on the middleware side.  Android will end up with a lot of fragmentation.

Do you see any other problems with Android?

Yes, its industrial design suffers at the moment.  People were expecting far more from the G1, a far sexier device. 

It's been selling very well.

Yes, but again, if you see the industrial design behind the mass marketed Nokia handsets, it's just amazing how Nokia has been able to slightly alter the plastics, material, and the format and buttons and everything else, and create very appealing designs. 

Companies like HTC, or generally the Asian or DM type of manufacturer do not have an edge on industrial design.  Now, at the same time, it's worth noting that HTC acquired an industrial design firm based in San Francisco, which was very well respected.  We should be seeing some far cooler handsets from HTC.  But still, given that Android does not provide any form of industrial design as part of the package, it will easily face the problems that Windows Mobile is facing, which is a lot of handsets from lesser-known ODM's, but quite boring handsets, as such.

Okay, so Android may end up being predominately on ugly handsets, shall we say?

That's correct.

How do you feel about Windows Mobile, looking forward?

It's had a lot of potential, but I think, especially since the third quarter, it's facing challenge after challenge.  In the third quarter, it was the first quarter where both iPhone and RIM had more sales than Windows Mobile, despite Windows Mobile being around since 2002. 

The major problems it's facing are; it's still an enterprise phone.  The major OEM's, the tier one OEM's will only use it as a high-end prosumer or enterprise phone.  The smaller ODM's don't have the industrial design expertise to create cool consumer phones.  Windows Mobile next generation, I believe it's 7, is way late.  We were expecting it definitely in 2008.  It won't be ready, according to several sources, before the end of 2009. 

In addition, Microsoft recently acknowledged that they are spreading themselves too thin on too many ODM's and too many manufacturers, whereas their new strategy is more resources on fewer handset models, which are higher sellers.

Almost finally, I would like to ask about Brew.  Are there any feelings there and their position of Brew in the marketplace, looking forward?

Brew, overall, in the last one or two years, and what's continually predicted for 2009, has a market share of around eleven percent of total sales, which is pretty impressive.  One in ten handsets is Brew-based.  However, if you look at the revenues the QIS division is making, last time I checked it was below eight percent of the total revenues.  If you look back at why Brew was created, it was created to drive sales of the Qualcomm chipset's QTC business, and QTL the licensing business, which make up about fifteen to thirty percent of Qualcomm revenues: which make up about fifty and thirty percent of Qualcomm revenues, respectively

Since Brew isn't making that much money, they are looking at alternatives.  There are a lot of handsets shipping with Windows Mobile on top of Qualcomm chipsets.  There is what appears to be significant movement at Qualcomm B and behind this Brew mobile platform, the new mobile platform they announced a few months ago, for which unfortunately, there isn't enough detail out yet on what exactly is being planned.  There are discussions about a deep integration of Flash on Brew, but what is not clear is what is the future for UiOne, how will Flash interact with UiOne commercially, and generally, I would say there is some uncertainty for Brew as an OS.  Certainly, not for Qualcomm as a chipset vendor, or IPR licensor.

Looking ahead, let's pretend we're putting bets on at the bookies.  Which horses are you going to back in the race circuit, and why?

I would definitely back Qualcomm, both because of the expertise - it has really strong people on board, everywhere you look at Qualcomm; the teams there are top notch; and, because of its existing investments and its ability to invest a lot of new chipsets and new platforms.

I would continue banking on Apple.  Steve Jobs, now, is apparently taking a step back, due to health issues, but it's the single company that can command everything from chipsets to services. 

I would also say Intel.  This is mostly a hunch because they are investing massively in their new Atom processor, in which case, they're competing with Qualcomm and ARM.  Obviously, we know that there is one billion plus handsets shipping a year so chipset wise, there is a huge market for anyone. 

Covering chipsets and OS's as horses here.

Yes

Okay

In the case of Intel, I would say mostly chipsets because Moblin is only good for MID's which is a really small market now.

In terms of other players, let me think; I wouldn't bank on LiMo.  It's quite clear that there is an expiry date.

And Android?

That's a difficult one to predict.  There are a lot of things in its favor, an extremely strong architecture and OEM and M&O that has operator endorsement.  At the same time, the developer stories are not clear.  As I said, whether we will have fragmentation or not, as I said, I'm still not convinced whether we will see very sexy devices, really hot sellers coming with an Android OS.

If you look at Linux, Linux didn't specify aluminum and glass computer cases, but Linux is powering the Worldwide Web.

But there you're making - you're drawing a parallel to the PC or Internet industry, which is totally different.  Users will never specify what software they want on their handsets, which is why you need to have some correlation between the OS and the industrial design, meaning a good OS will only sell if it comes into a good industrial design.

So, people are not going to be asking for an OS at the shop; they're going to be saying small and pink.

Definitely, yeah, that's never going to happen.  There is absolutely no reason for it to happen.  It would be distorting the consumer perception to say that, or to embark on such an effort.

Okay, so industrial design - us geeks might talk about OS's but the average consumer is more industrial design

It's all about the package.  It doesn't matter what you have inside; it's about the package.  Of course, I'm not saying it doesn't matter if the OS is buggy or not, of course it matters.  That's part of the package.  If the user experience is smooth, if you get what you expect, don't have any problems calling someone, it's straightforward to text a person, etc., by and large you need a strong industrial design to win, in terms of consumer preferences.

It sounds to me like the iPhone is just going to keep getting stronger. 

I would agree, with a small reservation, regarding whether Apple's ability to create innovative designs will saturate because obviously, everyone is talking about the iPhone Nano now.  That's like a small version of the iPhone.  Nokia has tens of models out every year.  How can you cater to all the different consumer tastes?  You can't do that with two or three models.

Have you looked at the Nokia Touch?

Yes

It feels it lags behind the iPhone, it doesn't have two point touch.  It isn't as simple to use.  It just doesn't feel as intuitive.  Okay, it came after the iPhone, but it certainly didn't catch up with it, let alone, go ahead of it.  I must admit, I do feel disappointed in Nokia's Touch phone.

Yeah, it's really a touch screen UI, strapped on top of a Symbian OS.

Yeah, exactly, that's the feeling that you get.

It's certainly not designed from scratch.

Okay, it's been really fantastic speaking with you.  We're just coming up for the hour here, so I better let you get on with your day.  Thank you very much, Andreas.

Thanks for the opportunity, Lee.

We're honored that you joined us at for the first eComm conference. In doing so you've joined history in the making.

This community finds itself --quite suddenly-- in a new world of more open opportunity. Open handsets, open networks and open telecom platforms lend themselves to innovation in the worlds garages and bedrooms. And the signs are promising. Within the last 12 months many important events have occurred. First Apple released the iPhone, a phone running their computer operating system; a high school kid then spent the summer cracking the platform, hacking iPhones went critical, and finally Apple itself was forced to "blink", resulting with the release of an SDK. The FCC stated that the next big block of spectrum would only be auctioned to an open network and Google announced first that it was willing to spend billions to create universal access through wireless spectrum. Then Google announced Android, a new open phone operating system; T-Mobile and Sprint joined the Open Handset Alliance; and even Verizon and AT&T made PR releases about becoming open networks.

We believe a new era requires a new kind of conference. Previous industry talking to the industry type events have yielded nothing save consensual hallucinations. The gap between what telecom operators are doing (or allowing) and what the innovation community COULD do, and where end users are taking us is widening fast.

Communications innovation is being democratized. The winners will be those who embrace it. So welcome to eComm 2008. Let's all create an Emerging Communications Community capable of rethinking the trillion dollar industry together!

Lee Dryburgh
Founder, eComm Media

• Moderator: Brough Turner (NMS Communications)
• Panelists (in left to right order): Martin Geddes (STL Partners), Stanley Chia (Vodafone), Sumit Agarwal, (Google), Jonathan Christensen (Skype), Christopher Allen (iPhoneWebDev.com), Benoit Schillings, (Trolltech/Nokia)