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

Broadcom connectivity chip reaches the market

Back in July Broadcom announced that it had started production shipments of its BCM4325 chip.

Yesterday iFixit.com found one in the new Apple iPod Touch. This is the first published instance of a device containing this chip but many more will follow. Broadcom has scored a coup with this device; it contains Wi-Fi, Bluetooth and FM, all on a single die fabricated on a 65nm process.

This is the most highly integrated connectivity chip (the term refers to all the non-cellular radios in a phone) yet to reach the market. Previous combo connectivity chips have combined Bluetooth with FM, and in one instance (from Marvell) Bluetooth with Wi-Fi. But the BCM4325 is the first to market with three radios. TI has announced, but not yet shipped, a similar chip with even more impressive specifications: the TI Wi-Fi will include 802.11n and the TI FM will include transmit as well as receive.

Connectivity technology in cell phones is evolving very rapidly, as the phone manufacturers accelerate their competition on the feature treadmill. Next will be GPS, driven this time by the network operators, who see location-based services as a potential goldmine. Two chip manufacturers have announced, but not yet shipped, combo Bluetooth, FM and GPS chips.

Connectivity chips were the subject of a report I wrote last year with the Linley Group; we will deliver an update with expanded coverage later this year.

Personal Navigation Devices: the end is nigh

Garmin announced today a cut in its revenue and earnings forecast for 2008.

It blamed a challenging macroeconomic climate and intense competition. One bright spot was that “The automotive/mobile segment gross margin continued to be sound at 39% as PND pricing declines moderated.” But this will prove to be a transient plateau in a precipitous decline in the PND market.

Although we continue to earn industry-leading market share, the sector is not growing as rapidly as earlier anticipated and consumers appear to be more cost-conscious than ever.

Garmin may have many strong business opportunities (for example lifestyle-oriented market segments like fitness), but the generic PND is not one of them. The reason is that PND functionality is being built into smartphones. The incremental cost to the phone manufacturer is just a few dollars. The new iPhone is a case in point. It has great mapping software from Google and the screen is large and high-resolution; this PND functionality is effectively thrown in for free.

But it gets worse for PNDs. GPS in phones is intrinsically superior to GPS in PNDs, because the data connection through the cellular service dramatically speeds up time to first fix and can also improve location accuracy.

Garmin appears to have recognized that smartphones will eat its PND lunch, and has embarked on a smartphone development, the Nuvifone. But this is a very, very challenging gamble. The handset business is brutal, not just competition-wise but because of the complexities of regulation, certification and network validation. Garmin must have expected this, but it was still surprised:

The nüvifone will not be available in fourth quarter as previously announced. While we had hoped to have carrier launches in the fourth quarter, we have found that meeting some of the carrier specific requirements will take longer than anticipated.

The Nuvifone may turn out to be a winner for Garmin, but it’s a long shot. It is possible to differentiate on commodity features in handsets, but not in the mass market. An analogy with cameras would be misleading. For GPS there is no essential technical requirement equivalent to a good camera lens in terms of differentiating value in a handset.

Femtocell versus Wi-Fi

Rethink Research has published an interesting article relating the new Wi-Fi voice certification to the outlook for femtocells.

The idea of the article is that voice over Wi-Fi for cell phones is competing with femtocells, and that femtocells may win out. The article distinguishes between business voice and consumer voice, saying that service providers see femtocells as “an important stalking horse for greater control of corporate customers. ” This gives a hint of why femtocells may be unattractive to businesses: many of them would rather not yield this control.

Consumer voice service is controlled by service providers. They have three options in this space: do nothing, deploy femtocells or deploy Wi-Fi. Do nothing is the obvious best choice, since neither of the other options carries a revenue upside. But poor coverage in a home discourages usage and risks cancellations of subscriptions. So in areas of poor coverage something like femtocells or UMA (voice over Wi-Fi) is attractive to service providers. For both technologies the service provider subsidizes the wireless router, but femtocells will remain more expensive than Wi-Fi routers because of their lower sales volumes, so Wi-Fi is more attractive on this count. But UMA requires phones with Wi-Fi, while femtocells will work with any phone in the service provider’s line-up, including legacy ones. So the customers’ experience of femtocells is better – they can choose or keep the phone they want and still get improved coverage at home. This benefit of femtocells clearly outweighs the marginal price advantage of Wi-Fi routers. Femtocells may help subscriber retention in another way: a Wi-Fi router is not tied to any particular cellular service provider, while a femtocell only works with the carrier that supplied it.

The situation in businesses is different. They generally prefer to control their own voice systems, which is why they have PBXs. But a substantial number of business calls are now made on cell phones, even on company premises. These calls don’t go through the PBX, so they are not least-cost-routed and they are not logged or managed by the IT department. Femtocells don’t fix these problems, but Voice over Wi-Fi does. Not service provider Voice over Wi-Fi, like UMA, but SIP-based Voice over Wi-Fi from companies like DiVitas and Agito. What about phone choice though? Won’t corporate customers be stuck with a limited choice of handsets? The answer is yes, only a limited number of phones have Wi-Fi: less than 10% of those sold in 2008. But in the category of enterprise smart phones, like the Nokia Eseries and Blackberries, the attach rate of Wi-Fi will soon be close to 100%.

So femtocells are a good way for service providers to remedy churn caused by poor residential coverage for consumers, but Wi-Fi may be the better option for businesses that want to regain control over their voice traffic.

Wi-Fi certification for voice devices

In news that is huge for VoWi-Fi, the Wi-Fi Alliance announced on June 30th a new certification program, “Voice-Personal.” Eight devices have already been certified under this program, including enterprise access points from Cisco and Meru, a residential access point from Broadcom, and client adapters from Intel and Redpine Signals.

Why is this huge news? Well, as the press release points out, by 2011 annual shipments of cell phones with Wi-Fi will be running at roughly 300 million units. The Wi-Fi in these phones will be used for Internet browsing, for syncing photos and music with PCs, and for cheap or free voice calls.

The certification requirements for Voice-Personal are not aggressive: only four simultaneous voice calls in the presence of data traffic, with a latency of less than 50 milliseconds and a maximum jitter of less than 50 milliseconds. These numbers will produce an acceptable call under most conditions, but a network round-trip delay of 300 ms is generally considered to approach the limit of acceptability, and with a Wi-Fi hop at each end running at the limit of these specifications there would be no room in the latency budget for any additional delays in the voice path. The packet loss requirement, 1% with no burst losses, is a very good number considering that modern voice codecs from companies like GIPS can yield excellent sound quality in the presence of much higher packet loss. This number is hard to achieve in the real world, as phones encounter microwave ovens, move through spots of poor coverage and transition between access points.

Since this certification is termed “Voice-Personal,” four active calls per access point is acceptable; a residence is unlikely to need more than that. Three of the four access points submitted for this certification are enterprise access points. They should be able to handle many more calls, and probably can. The Wi-Fi Alliance is planning a “Voice-Enterprise” certification for 2009.

There are several things that are good about this certification. First, the WFA has seen fit to highlight voice as a primary use for Wi-Fi, and has set a performance baseline. Second, this certification requires some other certifications as well, like WMM power save and WMM QoS. So far in 2008, of 99 residential access points certified only 6 support WMM power save, and of 52 enterprise access points only 13 support WMM power save. One of the biggest criticisms of Wi-Fi in handsets is that it draws too much power. WMM power save yields radical improvements in battery life – better than doubling talk time and increasing standby time by over 30%, according to numbers in the WFA promotional materials.

Potential security vulnerability in some Wi-Fi handsets

George Ou of ZDNet reports that the 802.1X authentication techniques used on some Wi-Fi handsets may be vulnerable. The problem is that these handsets may not validate the certificate from the authentication server. This design choice speeds up roaming, but means that the handset could disclose user login credentials to a sophisticated, determined attacker. Ou suggests using WPA-PSK with a long password instead of 802.1X with these handsets.

Vocera’s documentation, which Ou references, has more depth on the performance trade-offs of various Wi-Fi security options.

Low power 802.11n sampling from Redpine

Redpine Signals has announced that it is sampling a low power 802.11n chip suitable for cell phones. A reference design was certified in January, making it the first handset-grade 802.11n chip to market.

One of the major benefits of 802.11n is MIMO, so you might think that since a handset is unlikely to have multiple antennas, 802.11n isn’t going to help much. Actually, it will make an enormous difference in reliability and range, and consequently throughput. I wrote before about the array of improvements incorporated in 11n. The one of greatest interest in this context is Space-Time Block Coding (STBC).

The WFA website shows 90 Access Points (APs) certified for 802.11n, but STBC is optional in 11n, not mandatory, and not all the AP chipsets support it. The main makers of AP chipsets are Atheros, Broadcom and Marvell. None of these have mentioned STBC until recently. But now Broadcom says it is in the BCM4322, which is set to ship in the first quarter of 2008, and Marvell says it is in the TopDog 11n-450, which is scheduled to ship in 2Q 2008.

This Techworld article has a good discussion of the current state of enterprise 11n access points, noting that multi-radio APs are currently too power-hungry to be powered over Ethernet (PoE).

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.

Open wireless handsets and networks for America?

I have previously written about OpenMoko. It seems now that it was the drop before the deluge. Google’s Android appears to have gained good traction with Sprint and T-Mobile joining the Open Handset Alliance, with Dell rumored (update) to be planning an Android-based phone, and with Verizon expressing lukewarm support. Nokia has for some time sponsored open source handset software through Maemo.org, but this week it upped the ante with its acquisition of TrollTech. Trolltech is responsible for Qtopia, a semi-open source platform used in Linux-based phones. That makes four credible Linux-based mobile phone software platforms. Update: Make that five – the LiMo Foundation is a consortium of carriers (including NTT DoCoMo and Vodafone), phone makers (including Samsung, Motorola and LG) and others “dedicated to creating the first truly open, hardware-independent, Linux-based operating system for mobile devices.”

But a phone doesn’t have to be open-source to be an open application platform, and this category is just as vigorous, but better established. Nokia’s Symbian phones have always been open to an extent – there are over 2 million developers registered in Nokia’s developer organization, Forum Nokia. Then we have Microsoft. Microsoft claims that sales of Windows Mobile phones are set to double year-on-year, to 20 million units. Windows Mobile provides a sufficiently open application environment that applications like Skype run on it. The iPhone is not yet officially an open application environment, but there is still a healthy slate of applications from third parties for those with the stomach to take the unofficial route. This is scheduled to change in February when the open-ness goes official with the release of Apple’s SDK for the iPhone. So that’s three major open application environments for smart phones.

2008 is also the year that Wi-Fi phones will come into their own. The dam broke with the iPhone. Wi-Fi on the iPhone raises the bar for all the other smart phones, making Wi-Fi a baseline checklist item for the next generation of smart phones. Previously mobile network operators were fearful that Wi-Fi in a phone would divert traffic from their data networks. This fear led, for example, to AT&T’s removal of Wi-Fi from their version of the Nokia E61. But there is now new evidence. At last week’s IT Expo East I heard an unsubstantiated report that 60% of wireless data usage in December was by 2% of the phones: iPhones. If this is even partly true, it would demonstrate that a web-friendly phone will drive traffic on the cellular data network even when it has Wi-Fi.