Verizon reported continuing growth earlier today, anchored by strong wireless operations. It also reported reaching a milestone for FiOS – the company has reached the 1 million subscriber threshold. This is based upon the 943,000 subscribers Verizon had as of the end of last year for the Fiber to the Home broadband and video service.
The company also lost almost 3 million residential wireline customers, or 10.6 percent of its subscriber base, but added 2 million wireless users during the year. So the company is changing shape, and will continue to do so over time. Just last week, one of the participants in Barron's Round Table noted Verizon CEO Ivan Seidenberg's gutsy call on FiOS, now bearing fruit.
In looking for some parallels between Verizon and AT&T – the nation’s two biggest telephone companies, I ran across an interesting pair of articles from Business Week about the broadband race for video subscribers, and what this may entail (higher broadband speeds along with some different numbers for Verizon's FiOS), and what industry players are well positioned to win.
Meanwhile, back at the ranch, bids continue to pour in for the FCC's spectrum auction, which now total some 4.3 billion dollars for Auction 73 (choose "Auction 73" in the drop down menu for a look at the numbers, which topped 3.2 billion dollars on Friday, and 3.7 billion just an hour ago). This is the so-called "beachfront property" in the nation’s spectrum market, for its suitability for wireless broadband deployment – perhaps the only market doing well these days – and 214 prospective bidders want a piece of it.
On our merry way to full blown connectivity and functionality wherever you want it, several obstacles remain. The day after the day Steve Jobs drew his newest laptop from an office envelope, it would appear that people have bunched into two camps; “we love it” faction or the “not terribly impressed” gang, according to Wired.
There’s that “ecosystem” word again, in another day after the day big picture analysis, according to Business Week. It’s creeping into use: I heard it this way: “broadband ecosystem:” I liked it. I use it. BW also concludes that Apple nailed the numbers on AppleTV, although nobody has mentioned that you can now rent a movie on iTunes and buy a share of Blockbuster for less than the cost of a ticket at the neighborhood MegaMultiPlex, without leaving your (broadband) home.
With the burning issue of Apple Up or Apple Down still undecided, Wired also reports about another hot item: Stanford scientists have proposed a method for making lithium ion batteries that can last up to 40 hours, without catching fire! This means no more coming to fisticuffs over the sole remaining power outlet at BWI’s endless Terminal D. Go ahead, cut that cord.
Resuming the opposing camps theme, on Monday the FCC released two public notices on allegations that Comcast had interfered with peer-to-peer file sharing services, such as BitTorrent, and complainant Vuze, in violation of the FCC’s Connectivity Principles. The PNs (DA 08-91 and DA 08-92) were docketed in the FCC’s ongoing inquiry into Broadband Industry Practices (WC Docket No. 07-52) including discussion of connectivity, more popularly known as “Net Neutrality.”
I recall the guy standing in line behind me saying “Apple never cuts its prices” and I nodded in agreement. This was June 29, 2007, the day the iPhone went on sale.
Some two months later Apple cut its price by 33%, accompanied by a mea culpa and some statement about technology, so I have absolutely no credibility on whether the innovations announced today are priced appropriately or not. But the ultra thin MacBook Air does have a certain appeal, and Steve Jobs continues to earn points for marketing. And Apple cut its prices again - on AppleTV.
The Apple ecosystem continues to grow, with improvements in Apple TV and added functionality for iTunes (movie rentals), a few software upgrades, and what appears to be a stronger gravitational pull for my wallet, so I'm going to make this a short post before I talk myself into "pre-ordering" something that I'd no doubt thoroughly enjoy later.
A year ago the world learned that Apple planned to introduce a combined phone and iPod music player. The device turned out to be a smash hit in more ways than one; it changed the way the wireless carriers viewed handsets, and altered the relationship between vendor and network operators.
In a fascinating article from article from Wired, this journey is laid out, and the reverberations continue: CES introduced a number of touch screen devices, and this week is Macworld 2008. So what’s the buzz this year? Though we won’t have to wait too much longer, here are some additional predictions for big announcements.
From my perspective, other than the fact that I very much like the phone, I find the whole "balance of power" story very interesting, given that it has been a hot topic of discussion over the past year. In particular, it has been suggested that the carriers extert too much control over the devices they allow to run on their networks. The FCC responded with open access (including devices) for upcoming wireless spectrum auctions
Then there are those who would take matter in their own hands: last year Apple suggested that something approaching 20% of iPhones purchased were being hacked to run on networks other than AT&T's. In fact, a number of questions during Verizon Wireless's late November conference call announcing its open network initiative concerned the iPhone, such as whether someone might buy an iPhone, then walk across the street to Verizon Wireless to sign up for a Bring Your Own Device account.
While that won't exactly work (Verizon currently uses a different network (CDMA) than that which the iPhone works on, which is GSM), others have proposed complex work-arounds, such as hooking up a USB wireless modem that runs on Verizon's EV-DO Rev. A wireless technology, jumping this to a Wi-Fi router, which then could link up to an iPhone using Wi-Fi, that involves quite a few hoops.
While it was probably inevitable that consumers would take matters into their own hands - such as purchasing unlocked phones from websites or while travellng overseas - it looks like Apple accelerated the process and popularized it at the same time.
Considerable efforts are being made to achieve connectivity, all the time, on both the network and user side. While not all networks are capable of ticking off the rock ‘em sock ‘em speeds of Verizon’s fiber-to-the-home FiOS service, the goal, from carriers to campus, from casual eateries to high end hotels, from rural hospitals to municipal downtowns, is to provide fast connections to networks for end users.
As varied are the network types, so too are the reasons for those providing service – something approaching true wireless broadband may be just part of a bundled service offering, or just another service offering, on the carrier side (and I’m thinking of Verizon Wireless’ EV-DO Rev. A, or AT&T’s HSPDA here), or perhaps a way of filling in spectrum gaps (as did T-Mobile in forging Wi-Fi partnerships with numerous retail establishments, later offering phones capable of toggling back and forth between broadband and cellular networks).
Or perhaps it may be the other side of seeking eyeballs, for some (monetary) reason, only less directly so: the aforementioned retail establishments (think McDonald’s, or Borders, or even the local pub) conclude for business reasons that it is in their interest to provide Hot Spots to keep their patrons to stay put (and spend more money). Ditto for hotels. Hospitals, on the other hand, offer Wi-Fi services for their “guests” or for guests visiting those guests.
Applications service providers also seek these same eyeballs, but tend to worry about someone in the middle restricting their access to consumer eyeballs, and so this game is in play, for now and into the foreseeable future; or perhaps consumers don’t appreciate the network operator having so much control over what they watch or cannot watch: another long, slow, simmering battle.
Certain elements are practically underwritten in Apple’s estimate that a good percentage of iPhone sales were made for the purposes of being used on another network. How about something in a 3G sort of way? It’s coming. But that’s the point. The networks are a mosaic. Variations in coverage will abound, so that one may be better off finding access to a broadband connection along a commercial strip in a semi-rural area than in a more densely populated urban area, but these things will even out.
So too on the consumer side will some of these gaps be filled in. In Japan, where the PC has never been as dominant as it has been here, citizens access the web on mobile devices. The problem with accessing the web in such fashion is one’s view of the screen is, well, somewhat limited, unless you like to scroll and read and scroll some more. It works in a pinch, but I was very encouraged to learn that a number of big names in tech were working on a middling device, smaller than most laptops, but with a larger viewing area than most mobile phones.
I haven’t tried any of these out yet, but I’ve long threatened to get a Nokia N800, which is now on it’s third generation, with Skype support, and a keyboard, but there are others too. With any luck, next week, I may have another brand also to choose from, and I still have that $100 credit to use.
For the truly obsessed with connectivity, a number of big names in tech are working on the ultra mobile personal computer, or UMPC, as it has sometimes been called, which is something sized between a cell phone and a computer.
Intel, Qualcomm and Sony are looking at it, and the question is whether the device would resonate with enough consumers to, well, resonate in terms of sales. Sony’s Mylo – for “my life online” – is one such device currently on the market, complete with Wikipedia entry and all.
Nokia has marketed a similar device in the past, and I’d written about this concept, at one time, which I believe was then called "tweeners" – as in between the size of a cell phone and a computer…
Anyway, I never posted, and I’m glad we have a new, much more techno-duty name, rather than something that sounds like a brand of candy, and then I recalled that Apple is rumored to be working on a subnotebook, or maybe not, and this in turn led me to Macworld, and more rumors about the iTablet, which do have a certain persistence about them.
Given the clarity of the iPhone's screen, iTunes movie rental deals, and Apple's ability to completely frame a market, it's as good a guess (iGuess) as any that we'll soon have an entirely new category of device to consider and absorb, and perhaps buy, maybe sooner than we think.
Sony made a promising announcement at the start of the Consumer Electronics Show, or CES, in Las Vegas. The company revealed that several branded channels will be carried on YouTube, and also introduced an interesting concept in serialization – the mini-sode.
The announcement aptly demonstrates the blurring lines between device and content, with networks in between.
Sony also reports that it sold 1.2 million PlayStation 3 devices during the 2007 holiday season. A gaming console, the PS3 also can operate as Blu Ray disk player – Blu Ray being one of two competing Hi Definition video formats available on the market: the PS3 has to tough it out not only with Nintendo's super popular Wii gaming device, but also do battle with the HD DVD lineup as well.
These aren't the only announcements from Sony: Financial Times reports that Sony and Skype have agreed to a cross marketing arrangement which essentially turns the PlayStation Portable into a phone using Skype's free calling software. The more the merrier!
Consumer spending electronic gadgetry appeared to have held up going into the holiday season, with AP counting some $4.5 billion in sales from November 18 to December 9, 2007.
This week brings more fun and excitement on the same front, at the giant Consumer Electronics Show in Las Vegas.
Apple continues its encroachment into yet another market – this time it's movie downloads – bringing iTunes into direct competition with Netflix and Blockbuster.
Meanwhile, according to one calculation, consumer use of Apple’s iPhone and OS jumped substantially: there’s a “stalking horse” in here somewhere.
One take away from 2007 certainly has to be that, from a regulatory perspective, open networks (for devices, applications and software) and wireless services went from concept to virtual reality in about 9 or 10 months. This contains two significant facts: 1) a change in the manner in which devices may operate on different networks; and 2) the speed at which this change occurred.
And I might add that it’s just one of many developments in the telecom sector, which lately seems to be characterized by major developments happening simultaneously. The FCC recently banned exclusive video contracts in Multiple Dwelling Unit buildings. Late last week, Verizon announced that it will begin to deploy its FiOS fiber-to-the-premises service offering in urban centers (Verizon previously has focused its FiOS rollout in suburban areas).
This may present a real competitive threat to cable companies. According to an article on fiber-optic battle lines from Friday's Wall Street Journal Online, once customers switch to Verizon’s FiOS, they tend not to return: the “churn” rate for customers dropping FiOS is less than 1.5%, according to Verizon.
