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AT&T saddles iPhone customers with useless data plan

David Pogue of the New York Times, reviewing the iPod said:

When you’re in a Wi-Fi hot spot, going online is fast and satisfying.

But otherwise, you have to use AT&T’s ancient EDGE cellular network, which is excruciatingly slow. The New York Times’s home page takes 55 seconds to appear; Amazon.com, 100 seconds; Yahoo. two minutes. You almost ache for a dial-up modem.

After reading that, I decided that since I would never use the EDGE service (too frustrating). I would forego the data plan on my prospective iPhone, and just use Wi-Fi at home and at work. But then I discovered that AT&T won’t let me do that. The data plan is an obligatory expense if you buy an iPhone.

Adding insult to injury, Randall Stephenson, the new CEO of AT&T, said in an interview in the Wall Street Journal:

With this particular device, to not have an inclusive data package with a voice package would be almost irrelevant, right? This is a data and a voice product. It’s nonsensical to sell a rate plan separate.

It’s as though he is unaware that the type of person that buys an iPhone almost invariably already has Wi-Fi. He must know that nobody is going to wait two minutes for a page to load; if David Pogue’s experience is the usual one, nobody is going to use the EDGE network. Customers will use the Wi-Fi connections they are already paying their ISP (maybe AT&T) for.

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T-Mobile launches FMC nationally in USA

***Update: I went to the T-Mobile store this morning and signed up. The service here in Dallas is $10 per month, not $20 as reported by Reuters. The store manager also told me that people with poor cellular reception at home can use the UMA service at no additional monthly charge, but that this usage is treated the same way as cellular usage – in other words, it counts against your cellular minutes.***

***Update 2: Here are some details on the T-Mobile launch campaign. ***

Reuters reported this morning that T-Mobile is rolling out FMC service nationally.

Subscribers would pay an extra fee of up to $19.99 per line or $29.99 for five lines on top of regular monthly cellular bills for unlimited calls in a subscriber’s home or the nearly 8,500 places T-Mobile runs Wi-Fi, like Starbucks coffee shops.

This pricing model seems ambitious, compared to what it is competing with. T-Mobile’s MyFaves 300 plan gives you unlimited minutes nights and weekends and unlimited minutes to a list of five people that you choose. So the 300 minutes are consumed during the day, calling to people whom you call infrequently. For $20 more you can bump this to 1,000 minutes. Alternatively, you can spend that $20 on the FMC service. It seems like the FMC service would only be a better deal for people who are home all day (or at Starbucks), who want to talk a lot to people beyond their five most frequently called. MyFaves 1000 would be a better deal for people who want to talk to a large variety of people during the day when they are not at home, for example in the car or out of range of a Starbucks – like at work, for example.

So who are these people that this “HotSpot@Home” service is aimed at? Surely there can’t be many. Why doesn’t T-Mobile use this technology to gain more customers, by giving it away free to subscribers? This would appeal to all the people who have poor reception at home, who would feel bilked by having to pay extra just for acceptable quality of service there (Hey! They do! See the update above). Another way to increase customer appeal would be to go with a wideband codec for Wi-Fi calls, guaranteeing CD-quality sound to Wi-Fi on-network calls. Or why not do both? This would provide a viral motivation to complement MyFaves, it would be unique among US carriers, it would improve retention, and it would bring new subscribers to start exploiting all that spectrum that T-Mobile picked up in the AWS auction in September 2006.

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IT spending on wireless services to outstrip wireline by 2010

Instat published a report today, predicting that corporate spending on wireless voice and data services will outstrip spending on wireline services by 2010. The report is pitched at service providers, pointing out that corporate users are more profitable. Of course some service providers, like Sotto, already pin their strategy on this. The report also encourages corporations to unify their wireless spending, rather than have employees get their service piecemeal and expense it. I wrote about this in an earlier posting.

As cell phones get smarter and as they get more tightly bound into corporate networks, security becomes a major concern. This is the subject of two stories in today’s Wall Street Journal. The first tells how the iPhone is precipitating a standoff between IT managers who don’t want it on their networks, and users who want to use it as a corporate email client. The second explains how iPods, iPhones and any device with storage and a USB connector constitute network security threats.

My May column in Internet Telephony Magazine is about the Jericho Forum, which proposes a radical solution to the security concerns of the wireless enterprise.

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WSJ tells it like it is

There’s a great lead article in the Wall Street Journal this morning, explaining how cell phone manufacturers and cellular service providers have opposing interests concerning phone features and how they are delivered.

The article pitches the fight as one over which of these two will end up controlling the data services on the phone. The interests of consumers would be best served by neither of these outcomes. The essence of the Internet is its openness. Nobody controls the services. Ideally, the mobile model of Internet access will follow the wireline model, where neither the device manufacturer nor the Internet access provider exerts any control over the content of the network data packets.

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Apple to let outsiders create programs for iPhone???

Reuters carried a story yesterday from the Apple World-Wide Developer Conference in San Francisco. The headline is “Apple to let outsiders create programs for iPhone,” and the story says “Apple Inc. will allow independent developers to write applications for its upcoming iPhone by tapping into the device’s built-in Web browser.” The story was presumably based on Apple’s press release on the topic.

This sounds exciting, so why did Apple stock lose $4.30 on the day? Well, the market focused on the glass-half-empty. Apple didn’t open the iPhone up to third party developers in the way that most developers want. The comment that squelched the crowd was “there’s no SDK!” The official version, what Jobs, Forstall and the press release said beyond that, is too scant and ambiguous to draw a clear idea of how well developers will be able to exploit the iPhone as a platform. Here’s a link to the video of the Jobs keynote. The iPhone developer part starts at time index 1:14. Ryan Block of Engadget was there live-blogging the Jobs keynote. His transcription and commentary:

Jobs: “We have been trying to come up with a solution to expand the capabilities of the iPhone so developers can write great apps for it, but keep the iPhone secure. And we’ve come up with a very. Sweet. Solution. Let me tell you about it. An innovative new way to create applications for mobile devices… it’s all based on the fact that we have the full Safari engine in the iPhone. And so you can write amazing Web 2.0 and AJAX apps that look and behave exactly like apps on the iPhone, and these apps can integrate perfectly with iPhone services. They can make a call, check email, look up a location on Gmaps… don’t worry about distribution, just put ’em on an internet server. They’re easy to update, just update it on your server. They’re secure, and they run securely sandboxed on the iPhone. And guess what, there’s no SDK you need! You’ve got everything you need if you can write modern web apps…”
Block: “Weeeeeaaaak.”
Scott Forstall, VP of iPhone software: “Your applications can take advantage of the built-in native services.”
Block: “He’s in the iPhone — no new apps up on screen, the same 11 as before — sorry iPhone fans!”
Forstall: “We built a custom corporate address book app to use our internal LDAP… it actually took less than one person-month to do this. It’s under 600 lines of code to do the whole thing.”
Block: “Shows up the vCards as they look in the built-in contact app. Not too shabby!”

The Web 2.0/AJAX model is great for AT&T, because this model requires continuous interaction with the server, so you will be burning up your data minutes. Except, I hope, when you are at home or at work and can use the Wi-Fi connection.

This is, as Block says, weak compared to loading real OSX applications on the phone. How weak depends on what Steve Jobs means by “the full Safari engine.” Apple’s Safari FAQ page says “All versions of Safari support Netscape-style plug-ins.” This undoubtedly applies to the iPhone version of Safari, since Steve Jobs has been toying with the idea of including Flash. The published Safari plugin SDK isn’t any use to iPhone developers, since the CPU is an ARM. So if Apple doesn’t publish an iPhone SDK, even the Safari plugin support is moot to third parties, except those working closely with Apple, like Google. One obvious Google plugin that would reduce the sting of no SDK would be Google Gears, which lets you run server-based applications off-line. The usual example is Google’s complete suite of Office applications.

From the overall context it appears that there is a JavaScript API to control some elements of the iPhone subsystem. That could be cool, depending how capable the API is. As for documentation of the API, a check of the Apple Developer website doesn’t reveal anything of that nature yet. There was a session at WWDC called “Developing Web Sites for iPhone,” which may have had some related information.

Blog reaction has been hysterical (but when has it ever not been?) Jesus Diaz of Gizmodo says No iPhone SDK Means No Killer iPhone Apps. One interesting tidbit in his piece concerns the degree of integration with the the iPhone’s services. Here’s what he says about clicking on a phone number in the browser to place a call:

This is nothing new, however. We knew this from the very beginning because iPhone’s Safari was already doing it. It’s called auto-detection of phone numbers and addresses: you click on a phone or address in your web page and it gets passed by Safari to the operating system, which calls the number or shows the address in the Google Maps app.

I certainly hope this isn’t the extent of it. If so, this guy is right. Nothing special here at all.

We live in hope, though. Steve Jobs was accurate in saying that Web 2.0/AJAX programming is the hot new thing, and that highly capable applications (especially enterprise applications) are being built like this. Users don’t care how software is written, they just want it to perform a useful function in a responsive and considerate way. If the API is rich enough, popular opinion will follow the trail that Ryan Block blazed, from “Weeeeeaaaak” to “Not too shabby!”

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Brough Turner on Network Neutrality

The estimable Brough Turner has written at length on the topic of Net Neutrality.

The first thing to read on this topic is his blog entry “Why there’s no Internet QoS and likely never will be”. In this article he makes the point that the only place where QoS measures make a difference is in the access link, and that the best way to ensure access link QoS is by putting a traffic shaping device behind your broadband modem. So no need for anything from your ISP beyond what you already expect, namely bandwidth and uptime.

In this article, Brough advocates a long view, focusing on increasing last-mile bandwidth, pointing out the danger of unintended consequences of regulation. He makes the point that fiber is not a natural monopoly, in the sense that there is adequate revenue per square mile in moderately densely populated cities to sustain multiple runs of fiber to each home. He identifies rights of way restrictions as the real barrier to last mile competition. In a similar spirit, he advocates opening up spectrum for license-exempt operation for last mile access. This article has similar arguments.

In this later article, Brough backs off a little to what seems to me to be a better position, namely regulating dark fiber, and fostering competition above it.

By 2007, Brough had nailed his colors to the mast. In this review of Susan Crawford’s paper, “The Internet and the Project of Communications Law,” he says:

I’d really like to see a national strategy to get as much of the population on dark fiber as possible.

And just a couple of months ago, he proposed a way to do it:

…unfettered municipal experimentation by any of the 22,000 municipalities in the US and/or interested community groups.

So there you have it. A relatively simple, seemingly doable solution to Net Neutrality, implementable by the grass roots, thought through by a smart guy who knows the subject inside and out.

I’m aboard!

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Bluetooth and the Trough of Disillusionment

An earlier post in this blog discussing dual mode phones mentions the trough of disillusionment as a part of the technical product hype cycle. This article from 2002 gives an amusing view of Bluetooth from the bottom of that trough; industry experts warn that it could be 2012 before Bluetooth is pervasive. It turns out that in 2007 Bluetooth will be in almost half the handsets sold. In retrospect it seems so inevitable.

The article covered its bets in the final paragraph, quoting Instat predicting 690 million Bluetooth chipsets to be shipped in 2006. Actually, by the end of 2006 the run rate was 12 million units a week. Considering it was a four year out prediction Instat’s accuracy was remarkably good.

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Dual mode phones taking off?

Instat came out yesterday with a report entitled “Portable Connectivity Driving Wi-Fi Chipset Market.”
The report says:

Although dual-mode cellular/Wi-Fi handsets represented only 3% of total shipments in 2006, this category will be the breakout market segment in 2007, and will reach 20% of the total Wi-Fi chipset market in 2009.

A look at the database of smartphones and PDAs at pdadb.net reveals that of 343 phones listed, 192 have Wi-Fi; of the 96 phones released since December 2006, 76 have Wi-Fi. This confirms Instat’s opinion at the top end of the phone market.

Although the smartphone market is small relative to the overall cell phone market (4% in US, 9% in Europe according to Telephia), it is still big. With well over a billion cell phones being sold in 2007, the number of smartphones will be of the order of 100 million. In another report, Instat predicts about 400 million Wi-Fi chipsets to be sold in 2009. So the 20% number seems quite doable with smart phones alone.

If FMC takes off, Wi-Fi will also become common in non-smartphones, and the volume of Wi-Fi chip sales will be even higher. But mobile network operators remain tentative about FMC; rapid widespread rollout is not happening yet. Consumers rightly see little value in FMC the way that it is currently being sold to them. FMC is more likely to be led by enterprises deploying smart phones using third party applications to extend their PBX. The mobile and fixed operators have the power to thwart this use of their networks, and some will. But the benefits of this model to enterprises are clear and compelling, so it will eventually prevail.