Dual mode phone trends – update

I occasionally check in at the Wi-Fi Alliance website to see how the dual mode phone certifications are doing. The last time was in February. Today I got an interesting surprise. Massive activity this quarter – over 50 phones. I am very curious to see the results for the fourth quarter – could we have crossed the trough of disillusionment in dual-mode phones?

There are still no 802.11n dual-mode phones – not really surprising considering that only one company claims to be shipping 802.11n mobile phone chips: Redpine Signals; they tell me that their chip is shipping in Wi-Fi only phones, not yet dual-mode. TI’s announced 11n chip will probably ship in phones early next year. Wi-Fi Alliance Dual-Mode Phone Certifications 2005-2008

Numbers on Enterprise 802.11n and FMC Growth

A recent survey of over 200 IT professionals worldwide performed by BT’s Consulting Group says:

While many new technologies take years to be adopted, 802.11n appears to be exceeding the typical adoption curve. In fact, nearly one-third (31 percent) of respondents plan to migrate to 802.11n within the next 12 months, and another 20 percent plan to do so sometime beyond this timeframe.

The report says this speedy uptake indicates that the benefits of 11n are urgently needed. Unfortunately the survey didn’t appear to question respondents about their plans for 5 GHz operation.

The report delivered some other surprisingly optimistic numbers concerning FMC: 9% of respondents claim to have already implemented Fixed-Mobile-Convergence, and 32% plan to within the next 12 months. The report doesn’t specify how “Fixed Mobile Convergence” was defined in the survey. Since the survey was about WLANs, presumably it didn’t simply mean PBX extension to mobile, but I doubt that 9% of worldwide enterprises have implemented call continuity between WLAN and cellular.

The report has a lot of other interesting information – well worth a read.

iPhone thirty to fifty times better than other phones?

Owners of iPhones know that web browsing on the iPhone is a completely different animal than on any other cell phone. How different? Well, it would appear to be thirty to fifty times different.

Thirty times is difference in data usage between iPhone users and others on the T-Mobile network in Germany, according to Unstrung.

Fifty times is the difference in the number of Google searches by iPhone users compared to others according to Google.

Dual mode phone trends – Update

In May 2007 I showed a chart of dual-mode phone certifications by time. Certifications have continued to grow since then, as the updated graph below shows. These numbers are pretty raw, for example six certifications in November 2006 were for variations on a Motorola phone first certified in October. If you go back and look at the previous chart you will also notice discrepancies in the number of certifications for any particular month. These are presumably because of revisions at the WFA website.
Dual mode phone trends
From 2006 to 2007 smartphone certifications were essentially flat, going from 33 to 36, while feature phone certifications went from 11 to 21. These add up to 44 dual mode phone certifications in 2006 and 57 in 2007.

Smartphones displacing notebook PCs?

The coming crop of smartphones are data friendly, third-party software friendly phones with Wi-Fi. But there’s more! The processing power of the ARM application processors used in phones lags that of mobile PC CPUs by about 7 years, so this year’s phones will have roughly the computing power of a 2001 laptop.

These changes come together to make phones chip away at the uses of notebook PCs. Many people who used PCs only for email now use Blackberries instead. Many phones are good substitutes for personal organizer software on PCs. The iPhone can credibly substitute for a PC for web browsing.

These trends motivated Instat to say last November:

Smartphone use will grow mostly from use as a laptop replacement

According to Gartner, the year-on-year notebook sales growth numbers for notebook PCs from 2004 to 2007 remained healthy: 36%, 28%, 22%. The crossover in unit volume came in 2006, when smartphones and notebooks both shipped roughly 80 million units worldwide. That 22% unit growth in notebook sales from 2006 to 2007 represented a jump to over 100 million units shipped. Compare this to a 70% jump in smartphone unit shipments in the same period, to over 130 million.

Google phone alliance members

The Open Handset Alliance was announced today by Google and 30 or so other companies. Until now the highest-profile open source handset operating environment was OpenMoko.

The list of participants has no real surprises in it. Nokia isn’t on the list, most likely because this project competes head on with Symbian. This may also help to explain why Sony Ericsson isn’t a supporter yet, either. But the other three of the top five handset manufacturers are members: Motorola, Samsung and LG. All of these ship Symbian-based phones, but they also ship Windows based phones, so they are already pursuing an OS-agnostic strategy. Open standards are less helpful to a market leader than to its competitors.

Of course the other leading smartphone OS vendors are also missing from the list: Microsoft, Apple, Palm and RIM.

Ebay is there because this massively benefits Skype.

Silicon vendors retain more control of their destiny when there is a competitive software community, so it makes sense that TI is aboard even though it is the market leader in cellphone chips. Intel is another chip vendor that is a member. Intel can normally be relied on to support this type of open platform initiative, and although Intel sold its handset-related businesses in 2006, its low power CPU efforts may evolve from ultra-mobile PCs down to smartphones in a few years.

Among MNOs Verizon and AT&T Mobile are notorious for their walled-garden policies, so it makes sense that they aren’t on the list, though Sprint and T-Mobile are, which is an encouraging indication.

At the launch of the iPhone Steve Jobs said that the reason there would be no SDK for the iPhone was that AT&T didn’t want their network brought down by a rogue application. I ridiculed this excuse in an Internet Telephony column. Even so, the carriers do have a valid objection to completely open platforms: their subscribers will call them for support when the phone crashes. For this reason, applications that use sensitive APIs in Symbian must be “Symbian signed.” When he announced the iPhone SDK, Steve Jobs alluded to this as a model that Apple may follow.

So Sprint’s and T-Mobile’s participation in this initiative is very interesting. Sprint’s press release says:

Unlike other wireless carriers, Sprint allows data users to freely browse the Internet outside its portal and has done so since first offering access to the Internet on its phones in 2001.

Open Internet access is actually available from all the major US MNOs other than Verizon; AT&T ships the best handset for this, the iPhone. But the iPhone doesn’t (officially) let users load whatever software they want onto the phone. Symbian and Windows-based phones generally do, and again all the major MNOs ship handsets based on these operating systems. An open source handset goes a big step further, but who benefits depends on what parts of the source code are published, and what APIs are exposed by the proprietary parts of the system. As a rule of thumb, one would think that giving developers this greater degree of control over the system will increase their scope for innovation.

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.

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.

Dual mode phone trends

Here is a chart of the number of dual mode phones certified for Wi-Fi each month starting in 2004, compiled from data found on the Wi-Fi Alliance website. There is a suggestion of a trend over the first few months of 2007, but of course it’s too early to call the entry of FMC into the trough of disillusionment. In the first three months of 2007 there were 14 certifications, versus 8 in the first three months of 2006. That’s a healthy 75% year on year increase. When you look at it on a quarterly scale, the first calendar quarter of 2007 is the second best ever, beaten only by the twenty certifications in the fourth quarter of 2006. But broken down by month it looks like certifications are sliding. There has only been one so far in May.
Wi-Fi certifcations of dual mode phones