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Sharing Wi-Fi 1 – My Wi-Fi

I have written before about Intel’s Cliffside project. This went public at CES in January under the name My Wi-Fi. The idea is to make your one laptop Wi-Fi adapter into two virtual adapters. One of these adapters is a regular laptop Wi-Fi adapter like before. The second turns your laptop into a kind of mini access point. Consumer electronics like Apple TVs and Wi-Fi printers can then stream media directly to and from the laptop, rather than relaying it through a real access point:

Realize first that, from an overall network topology standpoint, a single video stream coursing from source to destination is actually two streams; one going from the source to the router and through its integrated switch, and another heading out from the router to the destination. [Brian Dipert]

My Wi-Fi also allows Wi-Fi to substitute for Bluetooth for laptop wireless peripherals, like mice and keyboards, and this CNET article points out that it can also be used to share paid Wi-Fi connections in hotels and hot-spots.

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Fixed Mobile Substitution and Voice over Wi-Fi

Getting rid of your land-line phone and relying on your cell phone instead is called Fixed Mobile Substitution (FMS).

A report from the National Center for Health Statistics of the Centers for Disease Control (CDC) shows a linear increase in the number of households that have a cell phone but no land-line, starting at 4.4% in 2004 and reaching 16.1% in the first half of 2008.
US Fixed Mobile Substitution 2005-2008 - source: CDC

These numbers match those in a recent Nielsen report on FMS.

FMS will most likely accelerate in 2009 because of the recession. It will be interesting to see by how much. We will reach a tipping point soon. 13% of households have a landline that they don’t use.

There are about 112 million occupied housing units in the US, and about 71 million broadband subscribers.

So what does this mean for Wi-Fi VoIP? One of the primary reasons for FMS is to save money; it is more prevalent in lower income households. There are two kinds of phone that do VoWi-Fi, smartphones and UMA phones. Smartphones are expensive, and probably less common among the cord-cutting demographic – except that that demographic is also younger and better educated as well as having a modest income – many are students.

Wi-Fi VoIP in smart phones is still negligible, but the seeds are planted: vigorous growth of smart phones, Wi-Fi attach rate to smart phones trending to 100%, a slow but steady opening up of smart phones to third party applications, broadband in most homes, Wi-Fi growing in all markets.

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Wi-Fi and the Mobile Internet

Admob periodically publishes numbers on the mobile Internet and its usage. The numbers are badly skewed because of Admob’s customer mix. For example Indonesia lists as the second largest mobile Internet market in the world. But if you make your own mental adjustments for this, the numbers are informative.

Admob’s latest report highlights Wi-Fi use in the USA.

Of the ad requests fielded by Admob, in August 2008 9% came from Wi-Fi capable devices: dual-mode phones, iPod Touches and Sony PSPs. In November this number doubled to 19%. Since the numbers for August aren’t broken down, it is uncertain which devices drove this growth, but my guess is that it is due to the booming sales of the iPhone.

Of the requests from Wi-Fi capable devices, the proportion that came over Wi-Fi varied radically. For the iPod Touch and the Sony PSP, 100% of the requests were over Wi-Fi. No surprise there. But on the phone side, a very interesting discrepancy between the iPhone (42% of requests by Wi-Fi) and the HTC phones (16% of requests by Wi-Fi). Since each of the phones uses the same browser for cellular data and Wi-Fi connections, it can’t be an ease of use of the Internet issue. Two other possibilities come to mind: the Wi-Fi may be easier to set up on the iPhone than it is on the HTC phones, or the cellular data speed may be worse on the AT&T network, driving the users to Wi-Fi, while users on T-Mobile (where all the HTC phones listed in the report are) get acceptable performance from their cellular data connection.

The Blackberry data casts a similar light on the question. The two Blackberries in the report were the 8820 and the 8320. The 8820 had the same profile as the iPhone – 40% of the requests came by Wi-Fi. The 8320 had even less Wi-Fi use than the HTC phones – only 8% of the requests came by Wi-Fi. These two phones are both on the same carriers (AT&T and T-Mobile), they have the same Wi-Fi chip (from TI), and their specs are similar.

The clue is in their release dates. The 8320 has been out on T-Mobile for a year, but was not yet released on AT&T in November when AdMob collected their numbers. The 8820 was released by AT&T a year ago, but by T-Mobile only 6 months ago. There are obviously a lot of other variables at work – like 3G versus 2G, for example, and pricing structure, but this looks like evidence that the T-Mobile data network has a more acceptable performance than AT&T’s.

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A not so perfect Storm

The Verizon Storm may be heading for failure in more than one way. A raft of reviewers, led by David Pogue of the New York Times are trashing its usability. This means that even with the marketing might of Verizon behind it it may not fulfill its goal of being a bulwark against the iPhone in the enterprise.

But the Storm was an experiment in another way by Verizon. The other three major American mobile network operators have capitulated to Wi-Fi in smartphones. Against the new conventional wisdom, Verizon decided to launch a new flagship smartphone without Wi-Fi. The Storm looks like a trial balloon to see whether Wi-Fi is optional in modern smartphones. If the Storm is a success, it will demonstrate that it is possible to have credible business smartphones without Wi-Fi. But if it turns out to be a flop because of other factors, it will not be a proof point for Wi-Fi either way.

But Wi-Fi is a closed issue by now for all the network operators, perhaps even including Verizon. Phones have lead times of the order of a year or so, and controversies active back then may now be resolved. Verizon covered its bets by launching three other smartphones around the same time as the Storm, all with Wi-Fi (HTC Touch Pro, Samsung Omnia, Samsung Saga).

Before its launch, AT&T hoped that the iPhone would stimulate use of the cellular data network. It succeeded in this, so far beyond AT&T’s hopes that it revealed a potential problem with the concept of 3G (and 4G) data. The network slows to a crawl if enough subscribers use data intensively in small areas like airports and conferences. Mobile network operators used to fear that if phones had Wi-Fi subscribers would use it instead of the cellular data network, causing a revenue leak. AT&T solved that problem with the iPhone by making a subscription to the data service obligatory. T-Mobile followed suit with the Google phone. So no revenue leak. With the data subscription in hand, Wi-Fi is a good thing for the network operators because it offloads the 3G network. In residences and businesses all the data that goes through Wi-Fi is a reduction in the potential load on the network. In other words, a savings in infrastructure investment, which translates to profit. This may be some of the thinking behind AT&T’s recent acquisition of Wayport. The bandwidth acquired with Wayport offloads the AT&T network relatively cheaply. AT&T’s enthusiasm for Wi-Fi is such that it is selling some new Wi-Fi phones without requiring a data subscription.

The enterprise market is one that mobile network operators have long neglected. It is small relative to the consumer market, and harder to fit into a one-size-fits-all model. Even so, in these times of scraping for revenue in every corner, and with the steady rise of the Blackberry, the network operators are taking a serious look at the enterprise market.

The device manufacturers are way ahead of the network operators on this issue: the iPhone now comes with a lot of enterprise readiness Kool-Aid; Windows Mobile makes manageability representations, as does Nokia with its Eseries handsets. RIM, the current king of the enterprise smartphone vendors also pitches its IT-friendliness.

Wi-Fi in smartphones has benefits and drawbacks for enterprises. One benefit is that you have another smart device on the corporate LAN to enhance productivity. A drawback is that you have another smart device on the corporate LAN ripe for viruses and other security breaches. But that issue is mitigated to some extent if smartphones don’t have Wi-Fi. So it’s arguable that the Storm may be more enterprise-friendly as a result of its lack of Wi-Fi. Again, if the Storm becomes a hit in enterprises that argument will turn out to hold water. If the Storm is a flop for other reasons, we still won’t know, and it will have failed as a trial balloon for Wi-Fi-less enterprise smartphones.

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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

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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.

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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.

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CSR 2Q08 results: in line. Company focusing on “Connectivity Centre”

CSR released its 2Q08 results today. Quarterly revenues are 13% down year on year ($188.4m vs. $215.9m), but in line with expectations and up 17% on Q1. The CEO blamed the decline on “macro economic pressures.”

The press release says that CSR has completed “repositioning the business around the Connectivity Centre.”

What CSR calls the “Connectivity Centre” was the topic of a report I wrote with the Linley Group last year and which we are in the process of updating for 2008. The idea of the connectivity chip is that cell phones have a multiplicity of radios in them these days: several cellular standards and frequencies, Bluetooth, FM radio, GPS, Wi-Fi and some other minor ones. The way it has shaken out so far is that cell phone OEMs have implemented each of the non-cellular radios separately on their phone motherboards, or with two or more of them mounted together on a multi-chip module, or “connectivity chip.” Recently many vendors have started doing single-die implementations of connectivity chips, like Bluetooth plus FM, or Bluetooth plus Wi-Fi.

CSR with its BlueCore 7 is the first to combine Bluetooth (plus Bluetooth LE, formerly Wibree), FM (transmit and receive) and GPS on a single chip. This looks like a winning combination, because these three technologies are the ones with the highest attach rates to cell phones, and CSR has managed to implement the GPS with a sufficiently modest silicon footprint that CSR doesn’t charge for it if the OEM doesn’t want to use it.

Also mentioned in CSR’s results release is the news that the low-power Wi-Fi chip that CSR announced in 2004, the UniFi 2, is finally shipping in phones: “our embedded Wi-Fi product will be shipping in six smart phones by the end of the current quarter.” Actually, one of their analyst presentations appears to indicate that it is already shipping in the Mio A702.

CSR says it is “the only ‘pure play’ connectivity company.” This is passably true, but each of the major cellular baseband companies except Freescale now has, or is in the process of putting together a suite of connectivity products. CSR also says it “is moving fast to create and lead this market.” It will have to move fast. Qualcomm has already swept multiple connectivity technologies into its latest cellular baseband offering. This is the likely end-game for all the cellular baseband vendors. The questions are: is this what the handset OEMs want, and if so, how long will it take?

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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.

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More on Ozmo

A while back I wrote about Ozmo, a company that plans to replace Bluetooth with Wi-Fi in certain applications.

Ozmo’s pitch is that their special version of Wi-Fi is faster, less prone to interference, cheaper and more power efficient than Bluetooth. Though slow for Wi-Fi, Ozmo’s data rate of 9 Mbps is way better than the 3 Mbps of Bluetooth 2.1 plus EDR. Concerning interference, Bluetooth transmissions are in the same 2.4 GHz frequency range as Wi-Fi, so careful engineering is always needed for coexistence; but coexistence is not an issue for Ozmo, because it is a flavor of Wi-Fi. The lower-cost part of the story is that while an Ozmo chip for a peripheral is roughly the same price as a Bluetooth chip, it saves the need for a Bluetooth chip in the host device. So if Ozmo’s claims of double the battery life of Bluetooth turn out to be valid when tested, the pitch holds water.

Bluetooth is unshakably incumbent in the billion-unit-per-year mobile phone market; most phones are now shipping with Bluetooth. But in laptops the Bluetooth attach rate is still well under 50%, while the Wi-Fi attach rate is close to 100%. So it makes sense that Ozmo is focusing initially on the computer market. Ozmo enables a laptop to use wireless peripherals like mice, keyboards, game controllers and headsets with a software modification to the Wi-Fi rather than having to include a USB wireless receiver in the package.

Ozmo is also focusing on the Consumer Electronics market, where Wi-Fi is gaining traction, and where the ability to support wireless remotes and similar peripherals can be added ‘free of charge’ to a device that already has Wi-Fi.

Since this is a compelling proposition, OEMs in these markets are likely to fall into line relatively easily, and indeed Ozmo has already secured the support of the biggest fish in the PC pond, Intel.

It may be a harder sell to the peripheral manufacturers. For them it’s not just a software upgrade. It is a new product line, one that depends on a single source for a key component and that sells into a currently non-existent base of host devices.

On the other hand, the peripheral device manufacturers may not be oposed to a new product line – they already have a plethora of products, using a variety of connectivity technologies including proprietary ones. Adding another one may not be too arduous, especially if it removes the need for a USB part. Ozmo could overcome the non-existent base issue by supplying, or convincing Intel and the other PC Wi-Fi chip vendors to supply, upgraded drivers for legacy Wi-Fi devices.