Bill Gates suggests that there is a degree of convergence between the functionality of Longhorn, Microsoft’s 2006 Window’s operating system, and Tiger, Apple’s new operating system released this week. In particular, Gates emphasizes similarity in usability, search facilities, and ease of switching between applications such as chatting, gaming, and Internet.
While it is debatable whether Windows will ever be as easy to use as Apple’s operating systems, there is nothing to prevent Microsoft incrementally improving the usability of Windows until it approaches that of Apple. But that would not be a good idea for either company.
The reason is that the only way to outsell a competitor with a product similar to your own is to promote better, distribute better, or price lower. Unfortunately, all these options have the effect of reducing profits for both parties. The winner is therefore typically the company with the greatest capital reserves. That would be Microsoft.
A better way for Apple to compete is to aim for product divergence or differentiation from Windows. That would allow it to compete on four instead of only three dimensions: features, price, distribution and promotion. In order to maximize its own profits, Microsoft should of course do the same and differentiate itself as much as it can from Apple.
The question is therefore how these companies might differentiate from each other. One important difference, for example, is that Apple provides both the hardware and operating system for its systems unlike Microsoft which provides only the software. Apple could therefore introduce innovations that rely on the tight integration between its hardware and software. For example, its PCs could become music centers - extensions of iTunes if you will. Microsoft would not easily be able to imitate this.
Similarly, Microsoft is differentiating itself by integrating its Xbox games unit more tightly with Windows – something Apple would find difficult to copy.
All in all, there are many ways for these companies to differentiate. I do not understand why Gates speaks so highly of convergence.
Source: http://maxblumberg.typepad.com/dailymusings/apple_strategy/index.html
Sunday, November 25, 2007
iTunes: Rental Challenges from Yahoo and Real?
When Napster to Go was launched, we predicted that “younger” music listeners (say those under the age of 25) would prefer these rental download models to outright purchase models like iTunes.
Yahoo and Real clearly agree and have launched Yahoo Music Unlimited and Rhapsody, both music-for-rent models.
This begs a number of questions. First, will Google launch a music service? I doubt it because unlike Yahoo or MSN, everything that Google does is based around a search niche. For example, Google does not offer video downloads, but it does offer video search. It will probably introduce a music search facility in the foreseeable future which crosses all music platforms.
A second point is that I believe that these rental models will cause significant changes to the music industry. iTunes, Rhapsody, YMU, Napster and co are online distributors for record labels such as Universal, Sony BMG, EMI, and Warner Music. With the exception of Sony, few of these labels distribute any products other than their own for fear of promoting competitor’s brands. This is short-sighted; there is no need for any label to lose out on the sale of its competitors' music.
What these labels should consider is adopting a customer-centric approach by selling music buyers whatever they want to hear whether it is from their own label or not. In other words, they should get into the distribution game and treat it as a separate business from music/content production. This will better serve both their profits and their markets.
If a record label chooses this route – as Sony has – it has begun a process of vertical integration, from the production of the content through to its retail distribution.
I predict that we will see more vertical integration and a resulting contraction of music industry big names. A forthcoming article will explore possible roles for independent labels
Source: http://maxblumberg.typepad.com/dailymusings/2005/05/itunes_rental_c.html
Yahoo and Real clearly agree and have launched Yahoo Music Unlimited and Rhapsody, both music-for-rent models.
This begs a number of questions. First, will Google launch a music service? I doubt it because unlike Yahoo or MSN, everything that Google does is based around a search niche. For example, Google does not offer video downloads, but it does offer video search. It will probably introduce a music search facility in the foreseeable future which crosses all music platforms.
A second point is that I believe that these rental models will cause significant changes to the music industry. iTunes, Rhapsody, YMU, Napster and co are online distributors for record labels such as Universal, Sony BMG, EMI, and Warner Music. With the exception of Sony, few of these labels distribute any products other than their own for fear of promoting competitor’s brands. This is short-sighted; there is no need for any label to lose out on the sale of its competitors' music.
What these labels should consider is adopting a customer-centric approach by selling music buyers whatever they want to hear whether it is from their own label or not. In other words, they should get into the distribution game and treat it as a separate business from music/content production. This will better serve both their profits and their markets.
If a record label chooses this route – as Sony has – it has begun a process of vertical integration, from the production of the content through to its retail distribution.
I predict that we will see more vertical integration and a resulting contraction of music industry big names. A forthcoming article will explore possible roles for independent labels
Source: http://maxblumberg.typepad.com/dailymusings/2005/05/itunes_rental_c.html
T-Mobile responds to Vodafone iPhone injunction: $1,500 unlocked iPhones
T- Mobile just issued a press release in response to Vodafone's efforts to unravel the iPhone exclusive offering in Germany. In the statement, T-Mobile claims that they will appeal the ruling (they have two weeks to do so) and will continue selling the iPhone unabated. T-Mobile defends the locking strategy as good for consumers who receive preferential data rates and access to T-Mobile hotspots as a result. In addition, T-Mobile says that it will likely claim damages against Vodafone for the mess they're causing. Perhaps T-Mob hasn't noticed all the free press they (and Apple) are receiving?
Update: Reuters confirms that T-Mobile will sell the iPhone in Germany unlocked -- that will be the first unlocked iPhone officially available. The catch: it's €999! That's $1,478 at the current exchange rate for a phone which cost €399 (with contract) just a few minutes ago. Hackers and unlockers, your services are still required.
Source: http://www.engadget.com/2007/11/21/t-mobile-responds-to-vodafone-iphone-injunction/
Update: Reuters confirms that T-Mobile will sell the iPhone in Germany unlocked -- that will be the first unlocked iPhone officially available. The catch: it's €999! That's $1,478 at the current exchange rate for a phone which cost €399 (with contract) just a few minutes ago. Hackers and unlockers, your services are still required.
Source: http://www.engadget.com/2007/11/21/t-mobile-responds-to-vodafone-iphone-injunction/
Vodafone strategy change may be near
Executive changes at Vodafone Group PLC, including the announcement on Sunday of the resignation of Christopher Gent, life president of Vodafone, indicate a battle over the future direction of the company, analysts say.
"It's about an impending strategy shift, which the old guard may find difficult to accept," said James Enck, European telecommunications analyst at Daiwa Securities SMBC Europe Ltd.
On Monday, Vodafone Chairman Ian MacLaurin issued a statement saying that he and the board are fully supportive of Arun Sarin, Vodafone's chief executive officer. He said his comment was in response to recent press reports that have described a supposed rift between Sarin and some board members, led by MacLaurin and representing Vodafone's historic mission as originally outlined by Gent.
Gent is widely credited with turning Vodafone into an international operator with a mobile-only strategy. But recently, an increasing number of operators around the globe are looking to deliver multiple services and also to combine those services for customers. "No one can afford to be a one-dimensional, one-technology company anymore," Enck said.
An examination of Vodafone's holdings hint at a potential impending change in strategy that could include a fixed-line business, he said. For instance, historically when Vodafone has made an acquisition that includes a fixed-line operation, it sells the fixed-line business, he said. However, with its acquisition of Mannesmann in 2000, Vodafone acquired Arcor AG & Co. KG, a wireline operator, and has yet to sell off that business.
In Germany, Vodafone competes with T-Mobile Deutschland GmbH, whose parent company has a fixed-line business. O2 (Germany) GMBH & Co. OHG, another mobile operator in Germany, was recently acquired by Telefonica SA, which has a DSL (Digital Subscriber Line) offering in Germany. Over the weekend, Enck heard rumors of a potential tie-up between E-Plus, another German mobile operator, and QSC AG, a DSL provider in Germany. Vodafone can better compete with those operators in Germany if it retains Arcor, Enck said.
Vodafone lacks a wireline operation in its other large European markets, including the U.K., Italy and Spain. But the company could be in the process of freeing up cash to make purchases of wireline businesses in those regions, Enck said. Earlier this month Vodafone announced that it is in discussions to sell its unit in Japan. Rumors have also surfaced recently about Vodafone possibly selling its stake in Verizon Wireless Inc.
Vodafone has not yet responded to a request for comment on the executive changes and a potential shift in strategy.
In addition to Gent's resignation, Vodafone announced last Wednesday that long-time Vodafone executive and Chief Marketing Officer Peter Bamford would resign on April 1.
Source :http://www.infoworld.com/article/06/03/13/76375_HNvodafonechange_1.html
Vodafone's expansion strategy makes it a good bet
It was only a few years ago that Vodafone was a mobile evangelist, intent on selling off its German fixed-line business as it did not fit the bill. By the end of 2005, it was talking about the potential of broadband and convergence, but adopted a softly-softly approach to broadband, based around signing joint venture deals with the likes of BT to keep hold of customers who wanted to source high-speed internet and mobile from the same provider.
Fast-forward to today and Vodafone is a fully fledged consolidator in the broadband sector after splashing out £537m on Tele2's Spanish and Italian fixed-line businesses. Vodafone has picked up nearly 650,000 broadband customers in two high-growth markets, yet it has also gained 2.4 million fixed-line voice customers.
It is a sign of the times that the only concern analysts have is the price, not exposure to fixed-line voice. Although it has only gained a market share of 4 per cent in the two broadband markets, Vodafone has paid a 30 per cent premium to the value of the assets under Tele2's ownership. But the company was accused of overpaying for assets in Turkey and India over the past two years, and it has quickly turned that sentiment on its head.
Under Arun Sarin's leadership Vodafone has become synonymous with investment in high-growth emerging markets. Yet its strategy in mature markets to cut costs and drive growth from new services such broadband is just as important. The Tele2 deal reflects that focus and strengthens the company's hand in two key European markets without materially affecting its financial performance. Despite various threats to the company's progress over the coming years, notably price deflation and regulation, the shares look a good bet to keep progressing toward the 200p level.
Source: http://news.independent.co.uk/business/comment/article3041116.ece
Fast-forward to today and Vodafone is a fully fledged consolidator in the broadband sector after splashing out £537m on Tele2's Spanish and Italian fixed-line businesses. Vodafone has picked up nearly 650,000 broadband customers in two high-growth markets, yet it has also gained 2.4 million fixed-line voice customers.
It is a sign of the times that the only concern analysts have is the price, not exposure to fixed-line voice. Although it has only gained a market share of 4 per cent in the two broadband markets, Vodafone has paid a 30 per cent premium to the value of the assets under Tele2's ownership. But the company was accused of overpaying for assets in Turkey and India over the past two years, and it has quickly turned that sentiment on its head.
Under Arun Sarin's leadership Vodafone has become synonymous with investment in high-growth emerging markets. Yet its strategy in mature markets to cut costs and drive growth from new services such broadband is just as important. The Tele2 deal reflects that focus and strengthens the company's hand in two key European markets without materially affecting its financial performance. Despite various threats to the company's progress over the coming years, notably price deflation and regulation, the shares look a good bet to keep progressing toward the 200p level.
Source: http://news.independent.co.uk/business/comment/article3041116.ece
Vodafone outlines emerging-markets strategy
Vodafone Group Plc has taken time to outline its strategy in the Eastern Europe, Middle East, Africa, Asia Pacific, and Affiliates region to analysts and investors.
Vodafone is the world's largest mobile operator in terms of sales. Over the past decade it has adopted a global approach, and acquired stakes and operations in many countries. However, since the departure of Sir Christopher Gent in 2003, the group has moved from an "empire-building" approach and instead opted to offload assets in mature markets such as Japan, Sweden, and Belgium where it could not establish a dominant position.
The biggest challenge now facing Vodafone under chief executive Arun Sarin is ensuring growth. Vodafone's core markets in western Europe are heavily saturated and offer very limited growth potential, so over the past 12 months, Sarin has turned to developing markets such as India, South Africa, and Turkey to drive growth.
Vodafone's $4.55bn purchase in Turkey last December of Telsim Mobil Telekomunikasyon AS was controversial. Many thought it had overpaid when it won an auction for Telsim Mobil Telekomunikasyon AS that was broadcast live on Turkish television. Telsim had been in receivership since February 2004 when state authorities seized 219 companies that belonged to its owner, the Uzan family, whose business empire collapsed in 2003 after a fraud scandal.
However, Vodafone has now told investors that it hopes to turn around its Turkish mobile business quicker than previously forecast, and it reiterated an interest in increasing its presence in China and India.
Telsim is solidly in second position in Turkey, with a 24% market share behind market leader Turkcell's 60%. Sarin said on Wednesday that Vodafone is happy with its market position there but expects margins to fall in the second half of the year because of higher costs and seasonally lower call volumes. Sarin also revealed that the capital expenditure on Telsim is expected to be around 433m pounds ($853m), compared with the 611m pounds ($1.2bn) it had previously forecast
Vodafone reiterated its expectations of compound average annual revenue growth of 20% for Vodafone Turkey for the next five years, but is now targeting EBITDA margin percentage in the medium term to be in the high-twenties compared with mid-twenties previously.
Vodafone shares fell 1.27% to 136.5 pence ($2.68) on the London Stock Exchange during afternoon trading.
Meanwhile, in separate news, Motorola Inc announced that it has won a major contract to upgrade, extend and manage Vodafone's nationwide GSM network in Turkey. It is an eight-year contract that means that Motorola will modernize and upgrade Vodafone's radio access network to increase coverage and capacity. In addition, Motorola will assume responsibility for operational management of the network. It will also ensure the 3G readiness of key sites. No financial terms of the deal were disclosed.
The deal shows that Motorola harbors no ill feeling towards Telsim. Prior to its acquisition by Vodafone, Telsim had been found guilty of cheating Motorola out of $2bn in loans. Telsim had borrowed nearly $2bn from Motorola in order to finance the building of a Motorola-constructed mobile phone system in Turkey. Telsim also owed Nokia approximately $900m. Following Vodafone's purchase, both since settled their lawsuits against the Turkish operator.
Source: http://www.cbronline.com/article_news.asp?guid=7793D322-1BE1-45E7-BC74-4E03A700B579
Vodafone is the world's largest mobile operator in terms of sales. Over the past decade it has adopted a global approach, and acquired stakes and operations in many countries. However, since the departure of Sir Christopher Gent in 2003, the group has moved from an "empire-building" approach and instead opted to offload assets in mature markets such as Japan, Sweden, and Belgium where it could not establish a dominant position.
The biggest challenge now facing Vodafone under chief executive Arun Sarin is ensuring growth. Vodafone's core markets in western Europe are heavily saturated and offer very limited growth potential, so over the past 12 months, Sarin has turned to developing markets such as India, South Africa, and Turkey to drive growth.
Vodafone's $4.55bn purchase in Turkey last December of Telsim Mobil Telekomunikasyon AS was controversial. Many thought it had overpaid when it won an auction for Telsim Mobil Telekomunikasyon AS that was broadcast live on Turkish television. Telsim had been in receivership since February 2004 when state authorities seized 219 companies that belonged to its owner, the Uzan family, whose business empire collapsed in 2003 after a fraud scandal.
However, Vodafone has now told investors that it hopes to turn around its Turkish mobile business quicker than previously forecast, and it reiterated an interest in increasing its presence in China and India.
Telsim is solidly in second position in Turkey, with a 24% market share behind market leader Turkcell's 60%. Sarin said on Wednesday that Vodafone is happy with its market position there but expects margins to fall in the second half of the year because of higher costs and seasonally lower call volumes. Sarin also revealed that the capital expenditure on Telsim is expected to be around 433m pounds ($853m), compared with the 611m pounds ($1.2bn) it had previously forecast
Vodafone reiterated its expectations of compound average annual revenue growth of 20% for Vodafone Turkey for the next five years, but is now targeting EBITDA margin percentage in the medium term to be in the high-twenties compared with mid-twenties previously.
Vodafone shares fell 1.27% to 136.5 pence ($2.68) on the London Stock Exchange during afternoon trading.
Meanwhile, in separate news, Motorola Inc announced that it has won a major contract to upgrade, extend and manage Vodafone's nationwide GSM network in Turkey. It is an eight-year contract that means that Motorola will modernize and upgrade Vodafone's radio access network to increase coverage and capacity. In addition, Motorola will assume responsibility for operational management of the network. It will also ensure the 3G readiness of key sites. No financial terms of the deal were disclosed.
The deal shows that Motorola harbors no ill feeling towards Telsim. Prior to its acquisition by Vodafone, Telsim had been found guilty of cheating Motorola out of $2bn in loans. Telsim had borrowed nearly $2bn from Motorola in order to finance the building of a Motorola-constructed mobile phone system in Turkey. Telsim also owed Nokia approximately $900m. Following Vodafone's purchase, both since settled their lawsuits against the Turkish operator.
Source: http://www.cbronline.com/article_news.asp?guid=7793D322-1BE1-45E7-BC74-4E03A700B579
Nortel Tries Again To Turn Corner from Accounting Saga ( Flash Back for Year 2004)
Nortel said it was in the process of trying to recoup about $10 million worth of performance bonuses from those fired. Although Nortel has not detailed the exact nature of the accounting issues, speculation is that 2002 results were artificially lowered and 2003 results falsely pumped up to help executives achieve bonuses for returning the company to profitability.
Battered Nortel said it would lay off 3,500 workers and fire seven executives as part of its latest attempt to move beyond an epic accounting scandal and regain its market prominence.
The layoffs , part of a US$400 million restructuring aimed at cutting costs to be more competitive, represent about 10 percent of the worldwide workforce of the Canadian company. The cuts will leave Nortel with about 30,000 workers, far below its peak size of nearly 100,000 workers in 2000.
In addition to the cuts, which Nortel said would come across its businesses and be focused in North America, the company also announced it had fired for cause seven more executives. Those firings come on top of the earlier sackings in April of the CEO, CFO and controller in charge of the company during the disputed earnings period in 2001.
Under Scrutiny
Nortel said it was in the process of trying to recoup about $10 million worth of performance bonuses from those fired. Although Nortel has not detailed the exact nature of the accounting issues, speculation is that 2002 results were artificially lowered and 2003 results falsely pumped up to help executives achieve bonuses for returning the company to profitability.
CEO Bill Owens emphasized that Nortel was still not in a position to provide solid financial data or comparisons, because all of its recent results remain under scrutiny. Regulators in both the U.S. and Canada are investigating and private shareholder lawsuits have been filed as well.
"We're well on our way to putting our financial issues behind us," Owens said in a conference call.
Shares of Nortel were up about 3 percent in Friday trading to $3.85.
Long Process
Turning Nortel around is proving no small or short-term feat.
In June, the company announced it would sell most of its manufacturing operations to Flextronics, which will make Nortel's hardware on an outsourcing basis. That deal is expected to help bring more than $700 million into Nortel's coffers in coming years and will result in Nortel shedding more than 2,000 workers.
Gartner (NYSE: IT) analyst Mark Fabbi said Nortel has been careful to act quickly to take the necessary steps to address the earlier problems, but probably still has a rattled employee base and some spooked customers.
"The shakeups have been a distraction, but the message that the tough decisions will be made is one that everyone needs to hear," Fabbi told the E- Commerce Times.
Although Nortel has appeared to maintain some of its key market share in the wireless infrastructure space in particular, he added, customers are more likely to postpone purchases until Nortel can prove it's turned the corner, which might in turn hamper efforts to right the shop.
Cutting Carefully
Nortel said the cuts would come mainly from management, and while they'll leave the company with less than a third of its onetime employee base, analysts said the company could still be a market force in its slimmed-down form.
"Cuts of that magnitude can leave a company reeling, because the employees left behind feel a bit shell shocked," Challenger, Gray & Christmas CEO John A. Challenger told the E-Commerce Times. "The impetus is on the leadership to convey that the company is going to emerge from this stronger than before. They have to watch employee reaction very closely."
One reason for the cuts is Nortel's desire to be profitable consistently going forward, something that investors in the space are demanding, especially since competitors, many of whom were equally battered by the tech downturn, have managed to do so.
Lucent (NYSE: LU) Technologies recently posted its fourth straight quarter of profit, and Cisco Systems (Nasdaq: CSCO) and Juniper Networks (Nasdaq: JNPR) have managed to turn the corner on better sales of enterprise and telecom equipment.
Source: http://www.ecommercetimes.com/story/35986.html
Battered Nortel said it would lay off 3,500 workers and fire seven executives as part of its latest attempt to move beyond an epic accounting scandal and regain its market prominence.
The layoffs , part of a US$400 million restructuring aimed at cutting costs to be more competitive, represent about 10 percent of the worldwide workforce of the Canadian company. The cuts will leave Nortel with about 30,000 workers, far below its peak size of nearly 100,000 workers in 2000.
In addition to the cuts, which Nortel said would come across its businesses and be focused in North America, the company also announced it had fired for cause seven more executives. Those firings come on top of the earlier sackings in April of the CEO, CFO and controller in charge of the company during the disputed earnings period in 2001.
Under Scrutiny
Nortel said it was in the process of trying to recoup about $10 million worth of performance bonuses from those fired. Although Nortel has not detailed the exact nature of the accounting issues, speculation is that 2002 results were artificially lowered and 2003 results falsely pumped up to help executives achieve bonuses for returning the company to profitability.
CEO Bill Owens emphasized that Nortel was still not in a position to provide solid financial data or comparisons, because all of its recent results remain under scrutiny. Regulators in both the U.S. and Canada are investigating and private shareholder lawsuits have been filed as well.
"We're well on our way to putting our financial issues behind us," Owens said in a conference call.
Shares of Nortel were up about 3 percent in Friday trading to $3.85.
Long Process
Turning Nortel around is proving no small or short-term feat.
In June, the company announced it would sell most of its manufacturing operations to Flextronics, which will make Nortel's hardware on an outsourcing basis. That deal is expected to help bring more than $700 million into Nortel's coffers in coming years and will result in Nortel shedding more than 2,000 workers.
Gartner (NYSE: IT) analyst Mark Fabbi said Nortel has been careful to act quickly to take the necessary steps to address the earlier problems, but probably still has a rattled employee base and some spooked customers.
"The shakeups have been a distraction, but the message that the tough decisions will be made is one that everyone needs to hear," Fabbi told the E- Commerce Times.
Although Nortel has appeared to maintain some of its key market share in the wireless infrastructure space in particular, he added, customers are more likely to postpone purchases until Nortel can prove it's turned the corner, which might in turn hamper efforts to right the shop.
Cutting Carefully
Nortel said the cuts would come mainly from management, and while they'll leave the company with less than a third of its onetime employee base, analysts said the company could still be a market force in its slimmed-down form.
"Cuts of that magnitude can leave a company reeling, because the employees left behind feel a bit shell shocked," Challenger, Gray & Christmas CEO John A. Challenger told the E-Commerce Times. "The impetus is on the leadership to convey that the company is going to emerge from this stronger than before. They have to watch employee reaction very closely."
One reason for the cuts is Nortel's desire to be profitable consistently going forward, something that investors in the space are demanding, especially since competitors, many of whom were equally battered by the tech downturn, have managed to do so.
Lucent (NYSE: LU) Technologies recently posted its fourth straight quarter of profit, and Cisco Systems (Nasdaq: CSCO) and Juniper Networks (Nasdaq: JNPR) have managed to turn the corner on better sales of enterprise and telecom equipment.
Source: http://www.ecommercetimes.com/story/35986.html
Telco Giant Corporate Strategy
NSN launches Green base stations. The energy consumption of a base station site can be reduced by up to 70% with its solution.
Ericsson deploys “Green” solar-driven and energy-efficient main-remote GSM base station for Telkomsel (Indonesia).
Motorola is also “Green” with a wind and solar power system trial in Namibia.
ZTE has doubled its mobile phone shipment to India in the first three quarters to over 10m.
Mformation Technologies has been selected by Bharti Airtel for the delivery of a core platform for data services and management solutions.
ZTE, Haier, Datang Mobile , Hisense, Huawei, Ningho Bird, and other nine vendors have been granted TD-SCDMA cell phone production licenses in China.
NSN gives up a $875m order from BSNL for GSM equipment, claiming the financial terms are not good: around $90 per line for BSNL vs initial proposition of $170 by NSN.
Source: http://telcoflashnews.over-blog.com/
Ericsson deploys “Green” solar-driven and energy-efficient main-remote GSM base station for Telkomsel (Indonesia).
Motorola is also “Green” with a wind and solar power system trial in Namibia.
ZTE has doubled its mobile phone shipment to India in the first three quarters to over 10m.
Mformation Technologies has been selected by Bharti Airtel for the delivery of a core platform for data services and management solutions.
ZTE, Haier, Datang Mobile , Hisense, Huawei, Ningho Bird, and other nine vendors have been granted TD-SCDMA cell phone production licenses in China.
NSN gives up a $875m order from BSNL for GSM equipment, claiming the financial terms are not good: around $90 per line for BSNL vs initial proposition of $170 by NSN.
Source: http://telcoflashnews.over-blog.com/
Sunday, November 18, 2007
Telcos Prep for IPTV Play
When it comes to video services, the children of Ma Bell have taken their hard knocks.
A flood of ventures by telephone companies designed to compete against entrenched cable TV operators received much fanfare in the early 1990s, only to fizzle out as failures before the new millennium passed.
But don't count them out just yet. As cable operators increasingly target their data and voice customers, the telephone companies are crawling back from defeat, reinvigorated by a perfect storm of network convergence, broadband technology and the good ol' IP infrastructure.
Coming soon to a screen near you: IPTV.
"It's one of the hot topics in telecommunications," said Steve West, director of product marketing for fixed solutions at Alcatel, a network infrastructure provider. "We've been actively pushing the space since 1999 or 2000. It is absolutely ready for market."
While traditional cable systems devote a slice of bandwidth for each channel and then cablecast them all out at once, IPTV uses a "switched video" architecture in which only the channel being watched at that moment is sent over the network, freeing up capacity for other features and more interactivity.
"The real advantage is that it's very bandwidth-efficient," said Gary Arlen, president of Arlen Communications in Bethesda, Maryland. "It's catering to the on-demand future, which is what TV will be."
Arlen said other interactive applications, such as multiplayer gaming through a set-top box, work "best in an IP network."
In the United States, big telephone companies like SBC Communications, BellSouth and Verizon Communications plan to start launching IPTV systems as early as this year. But their strategies vary.
For example, Verizon plans to adopt a hybrid model combining traditional cable and IPTV technologies while SBC and BellSouth want to launch full-fledged IPTV networks.
"The IPTV platform allows for very compelling future features that will help us deliver a better TV experience," said SBC spokesman Marty Richter. "It can change the way customers watch TV."
IPTV enables features such as multiple pictures-in-picture, remote programming of digital video recorders, and access to caller ID, digital photos or personalized stock, weather and sports information right on the TV screen. IP technology also can allow various devices in the home to work together more seamlessly.
"We think the true winner here will be the company or companies that integrate services and pull it all together for customers," Richter said. "We plan to use internet protocol to connect these devices in a way that gives customers seamless access across devices virtually anywhere they go."
One global driver of IPTV is Microsoft, which has been pushing its Microsoft TV IPTV Edition software in hopes of dominating the nascent IPTV market. Microsoft has been trying to break into the TV business for years with limited success.
So far, Microsoft has stuck IPTV deals with carriers around the world, including Bell Canada, British Telecom, Reliance Infocomm, Swisscom, Telecom Italia, Deutsche Telecom's T-Online France, as well as SBC, BellSouth and Verizon in the United States. (It's providing a customized version of its Microsoft TV platform with both digital-cable and IPTV features for Verizon.)
According to Microsoft, its telecom IPTV customers (including some yet to be announced) now represent 26 percent of the world's residential fixed-access phone lines (75 percent in the United States) and cover 28 percent of the world's DSL customers.
Carriers seem to be banking on Microsoft's stability as a vendor. "When you're head of procurement at SBC, you want to make sure that your vendor is there in two years," said Hervé Utheza, principal analyst. "They know that Microsoft will be there throughout the deployment."
The carriers also know they need to get IPTV right or risk creating a bad first impression with the public -- so they have moved cautiously.
For example, Australian carrier Telstra dropped out of Microsoft's early adopter program to work out technology problems, and Swisscom has also run into technology-related delays. SBC's rollout has also gone more slowly than originally hoped.
But Microsoft said that, considering the infancy of IPTV, the pace remains frantic. "We've gone in 24 months from ground zero to commercial launches," said Ed Graczyk, director of marketing for Microsoft TV. "It's not like one day you flip a switch, and 5 million people have it."
Experts said delays and problems are inevitable with brand-new technology. "A lot of these things have never been tested in the field," said Utheza. "They're having to deal with a complex set of systems."
"The technology, like anything else with IP, is not that simple when you're the first one doing it," said Arlen Communications' Arlen.
Graczyk said hardware issues -- not Microsoft's IPTV software -- were behind recent delays, despite "misinformation" in the media blaming Microsoft. In the case of Swisscom, he said the carrier wants to wait until IPTV set-top devices with DVR capability are available. "In software terms, we're considered code-complete," he said.
Meanwhile, the incumbent cable industry has watched the telephone companies' IPTV moves closely. But cable operators have spent roughly $100 billion since the mid-'90s upgrading their networks, according to the National Cable & Telecommunications Association, and they face a conundrum of sorts.
"Cable has not been shy about talking about delivering everything in IP," said Graczyk. "The challenge cable has is that they have this huge investment in other technologies. The telcos have a green field."
During a panel on IPTV at a recent cable-marketing conference in Philadelphia, Dallas Clement, senior vice president of Cox Communications, said cable operators are struggling to determine where IP fits into their strategies, with proper prioritization being one of the company's biggest challenges.
Because of their existing investments, Arlen said it could be a decade or more before the cable industry widely adopts IP-based video delivery. But as telephone companies look to launch IPTV in various markets by next year, cable operators may eventually have no choice but to upgrade their networks all over again.
"The entire world is going IP," said Alcatel's West. "If the cable operators don't start investing in IP, they're going to have some significant cost issues over the long haul."
Wednesday, November 7, 2007
Infrastructure awards wrap-up: Ericsson, Alvarion, Nokia Siemens and more
The following list details this week's infrastructure awards for the cellular, WiFi, and WiMAX industries. The contracts are broken down by transmission technology, country and vendor. The value of the contract is included when available.
Cellular
Sweden: L.M. Ericsson said it upgraded 3 Scandinavia’s HSPA network to support downlink speeds of up to 7.2 Mbps and uplink speeds of 1.4 Mbps.
Uruguay: Movistar chose L.M. Ericsson to be its sole supplier and network integrator for a W-CDMA/HSPA core and radio network.
WiMAX
Cayman Islands: Digicel Group has chosen Alvarion Ltd. to provide its 802.16e 4Motion Mobile WiMAX solution as part of the carrier’s first WiMAX launch.
India: Sequans Communications said Telsima is using its chips in its StarMAX product line that supports both 802.16-2004 fixed and 802.16e-2005 mobile WiMAX networks. The solution is being deployed now in India.
Miscellaneous
Israel: Nokia Siemens Networks said it has been chosen by Cellcom Israel to develop its Next Generation Network.
Spain: GigaBeam Corp. said it received its first purchase order for a WiFiber link from F2-Tel Ingenieria de Telecomunicacion. The links are being used by a Spanish university, said the company.
Cellular
Sweden: L.M. Ericsson said it upgraded 3 Scandinavia’s HSPA network to support downlink speeds of up to 7.2 Mbps and uplink speeds of 1.4 Mbps.
Uruguay: Movistar chose L.M. Ericsson to be its sole supplier and network integrator for a W-CDMA/HSPA core and radio network.
WiMAX
Cayman Islands: Digicel Group has chosen Alvarion Ltd. to provide its 802.16e 4Motion Mobile WiMAX solution as part of the carrier’s first WiMAX launch.
India: Sequans Communications said Telsima is using its chips in its StarMAX product line that supports both 802.16-2004 fixed and 802.16e-2005 mobile WiMAX networks. The solution is being deployed now in India.
Miscellaneous
Israel: Nokia Siemens Networks said it has been chosen by Cellcom Israel to develop its Next Generation Network.
Spain: GigaBeam Corp. said it received its first purchase order for a WiFiber link from F2-Tel Ingenieria de Telecomunicacion. The links are being used by a Spanish university, said the company.
Telco Refreshment...
KDDI and Intel to bid for WiMax licence in Japan
KDDI and Intel are leading a joint venture to bid for a WiMax licence in Japan. The joint venture, that is called Wireless Broadband Planning, will bid for the 2.5 gigahertz frequency band and, if successful, will launch a mobile wireless broadband business. The new company said it intended to become a global leader in WiMax and would offer services globally through roaming agreements. NTT DoCoMo has partnered ACCA Networks to seek a WiMax licence. The Japanese government is expected to hand out two licences by the end of the year. (Financial Times)
Wireless Spectrum Is on Hold
US carriers, which spent billions of dollars in last year's government auction of airwaves, have been unable to use a major portion of this spectrum because of the surveillance activities of several federal agencies. For T-Mobile, the issue is impeding its US expansion. The company was the largest bidder, having spent nearly USD4.2 billion to acquire the spectrum. The government agencies were given USD1.1 billion raised in the auction to relocate to other radio spectrum, but most of them have yet to move. T-Mobile has also offered to pay up to USD50 million to buy new equipment or modify existing equipment for the agencies to use temporarily. However, a Commerce Department spokesperson said the government likely wouldn't view this proposal favorably. (The Wall Street Journal)
NOKIA AGREES TO BUY CELLPHONE-AD FIRM
Nokia has agreed to acquire a Boston company that displays ads on cell phones. The 120-person Enpocket works directly with cell phone operators such as Sprint Nextel, Vodafone and Bharti Airtel. It has powered mobile ads for brands such as Hyundai and Pepsi. (The Wall Street Journal)
BRUSSELS IN FRESH THREAT TO MOBILE GROUPS
Viviane Reding, the EU media commissioner, is threatening to draw up new rules that could harmonise how much mobile operators can charge for connecting calls to their networks. She is concerned the charges vary widely across the 27 EU member states, and wants national regulators to adopt a common approach. The rates are known as wholesale charges because they are paid by operators rather than consumers. In the UK, the charges represent about 15 percent of mobile operators' revenues. (Financial Times)
T-MOBILE IN IPHONE DEAL
Deutsche Telekom´s T-Mobile subsidiary has secured the rights to sell Apple´s iPhone exclusively in Austria, the Netherlands, Hungary and Croatia, in addition to Germany. (Financial Times)
KDDI and Intel are leading a joint venture to bid for a WiMax licence in Japan. The joint venture, that is called Wireless Broadband Planning, will bid for the 2.5 gigahertz frequency band and, if successful, will launch a mobile wireless broadband business. The new company said it intended to become a global leader in WiMax and would offer services globally through roaming agreements. NTT DoCoMo has partnered ACCA Networks to seek a WiMax licence. The Japanese government is expected to hand out two licences by the end of the year. (Financial Times)
Wireless Spectrum Is on Hold
US carriers, which spent billions of dollars in last year's government auction of airwaves, have been unable to use a major portion of this spectrum because of the surveillance activities of several federal agencies. For T-Mobile, the issue is impeding its US expansion. The company was the largest bidder, having spent nearly USD4.2 billion to acquire the spectrum. The government agencies were given USD1.1 billion raised in the auction to relocate to other radio spectrum, but most of them have yet to move. T-Mobile has also offered to pay up to USD50 million to buy new equipment or modify existing equipment for the agencies to use temporarily. However, a Commerce Department spokesperson said the government likely wouldn't view this proposal favorably. (The Wall Street Journal)
NOKIA AGREES TO BUY CELLPHONE-AD FIRM
Nokia has agreed to acquire a Boston company that displays ads on cell phones. The 120-person Enpocket works directly with cell phone operators such as Sprint Nextel, Vodafone and Bharti Airtel. It has powered mobile ads for brands such as Hyundai and Pepsi. (The Wall Street Journal)
BRUSSELS IN FRESH THREAT TO MOBILE GROUPS
Viviane Reding, the EU media commissioner, is threatening to draw up new rules that could harmonise how much mobile operators can charge for connecting calls to their networks. She is concerned the charges vary widely across the 27 EU member states, and wants national regulators to adopt a common approach. The rates are known as wholesale charges because they are paid by operators rather than consumers. In the UK, the charges represent about 15 percent of mobile operators' revenues. (Financial Times)
T-MOBILE IN IPHONE DEAL
Deutsche Telekom´s T-Mobile subsidiary has secured the rights to sell Apple´s iPhone exclusively in Austria, the Netherlands, Hungary and Croatia, in addition to Germany. (Financial Times)
NetScout to acquire Network General for $205 million
NetScout Systems plans to spend about $205 million in cash, stock and debt to acquire competing and complementary network service assurance vendor Network General.
The newly merged company will approximately double NetScout’s current revenue rate in 2009 and further NetScout’s “vision of providing superior network-based performance management based on a KPI (key performance indicator) Flow/Packet paradigm,” the two companies said in a news release.
The acquisition is also expected to accelerate NetScout’s push into the wireless service provider segment by expanding its real-time monitoring and reporting performance monitoring and troubleshooting offering.
The deal is expected to be completed by early November and is one more sign that the entire telecommunications space is again converging. In this case, the double-sized company hopes to compete more effectively against bigger vendors in the wireless space, pitting real-time monitoring and reporting against established deep packet inspection techniques.
Source: http://www.telecommagazine.com/newsglobe/article.asp?HH_ID=AR_3488
The newly merged company will approximately double NetScout’s current revenue rate in 2009 and further NetScout’s “vision of providing superior network-based performance management based on a KPI (key performance indicator) Flow/Packet paradigm,” the two companies said in a news release.
The acquisition is also expected to accelerate NetScout’s push into the wireless service provider segment by expanding its real-time monitoring and reporting performance monitoring and troubleshooting offering.
The deal is expected to be completed by early November and is one more sign that the entire telecommunications space is again converging. In this case, the double-sized company hopes to compete more effectively against bigger vendors in the wireless space, pitting real-time monitoring and reporting against established deep packet inspection techniques.
Source: http://www.telecommagazine.com/newsglobe/article.asp?HH_ID=AR_3488
Telco Morning News...
BRUSSELS SPLIT OVER TELECOMS
The EU commissioner Viviane Reding has proposed that telecom operators with a dominant market position could be forced to separate its networks and services divisions. Now, other EU commissioners warn the proposed review could create more bureaucracy and harm investment, especially in ultra-fast broadband networks. Some national regulators in the union already have the power to impose functional separation, but Reding wants to ensure all telecoms authorities can apply the measure in a consistent way. (Financial Times)
BLYK TAPS EUROPEAN MOBILES
Blyk, the first UK mobile operator to offer customers free phone calls in return for accepting advertising on their handsets, plans to expand into continental Europe. Large groups such as Google and Vodafone are also weighing plans to turn such advertising into a significant revenue source. Blyk was co-founded by Pekka Ala-Pietila, former president of Nokia, and is targeting 16- to 24-year-olds, who have become difficult to reach with advertising because their reading and viewing habits are so fragmented. (Financial Times)
MYSPACE LAUNCHES FREE MOBILE SERVICE
The Web site MySpace is launching a free, advertising-supported cellphone version Monday as part of a wider bid by parent News Corp. to attract advertising for mobile Web sites. News Corp.'s Internet properties, also plans to roll out versions of FoxSports.com, the gaming site IGN, AskMen and its local TV affiliates in the coming months that will work on cell phones that can access the Internet. The new MySpace version will work on all U.S. carriers and will allow users to send and receive messages and friend requests, comment on pictures, post bulletins, update blogs, and find and search for friends. "Accessing the Internet from your mobile phone will soon be as common as text messaging and voice calling," said John Smelzer, senior vice president of mobile at Fox Interactive. (Wall Street Journal)
The EU commissioner Viviane Reding has proposed that telecom operators with a dominant market position could be forced to separate its networks and services divisions. Now, other EU commissioners warn the proposed review could create more bureaucracy and harm investment, especially in ultra-fast broadband networks. Some national regulators in the union already have the power to impose functional separation, but Reding wants to ensure all telecoms authorities can apply the measure in a consistent way. (Financial Times)
BLYK TAPS EUROPEAN MOBILES
Blyk, the first UK mobile operator to offer customers free phone calls in return for accepting advertising on their handsets, plans to expand into continental Europe. Large groups such as Google and Vodafone are also weighing plans to turn such advertising into a significant revenue source. Blyk was co-founded by Pekka Ala-Pietila, former president of Nokia, and is targeting 16- to 24-year-olds, who have become difficult to reach with advertising because their reading and viewing habits are so fragmented. (Financial Times)
MYSPACE LAUNCHES FREE MOBILE SERVICE
The Web site MySpace is launching a free, advertising-supported cellphone version Monday as part of a wider bid by parent News Corp. to attract advertising for mobile Web sites. News Corp.'s Internet properties, also plans to roll out versions of FoxSports.com, the gaming site IGN, AskMen and its local TV affiliates in the coming months that will work on cell phones that can access the Internet. The new MySpace version will work on all U.S. carriers and will allow users to send and receive messages and friend requests, comment on pictures, post bulletins, update blogs, and find and search for friends. "Accessing the Internet from your mobile phone will soon be as common as text messaging and voice calling," said John Smelzer, senior vice president of mobile at Fox Interactive. (Wall Street Journal)
Mobile is the new internet battleground
First there was the broadband bonanza. Now, the technology world is betting that, after several false starts, using the internet via a mobile phone will become their next cash-cow.
The partnership between O2 and Yahoo!, announced with great fanfare this week, is the latest move in a rush to explore this potentially lucrative market. Growth in voice calls is slowing so mobile phone companies are keen to find revenue from a burgeoning new area: putting adverts on your mobile phone screen.
Of course, web search giants Google and Yahoo! already dominate the online PC market. 'Paid-for-search' - where advertisers pay to be included in search engine listings - accounted for 57% (£762m) of online ad revenues in the UK for the first half of 2007. So mobile companies want a slice of the action.
In practical terms, 02's deal means its customers will now have a Yahoo! search box as part of their phone's main display. Others have formed similar alliances, such as Vodafone with Google.
But the mobile advertising market is still in its infancy. 'In comparison to online via a PC, it's a fraction of the volumes,' says Mark Slade, managing director of mobile specialist 4th Screen Advertising. 'Most mobile search advertising is for providers of ringtones, games and adult video clips. Traditional online spenders such as financial services companies aren't spending on mobile yet. Because consumers aren't asking for insurance via their phone, such companies haven't been investing in mobile internet sites.'
This scenario sounds familiar to those who watched the rise of internet advertising on PCs. Once the pioneers got the technology right, Tesco and Marks & Spencer followed. The same should happen with mobiles.
But do the public really want to be bombarded with adverts on their phones? Probably not. We all know spam and pop-up ads are the most irritating things about going online on the PC at home or at work.
No surprise, then, that advertisers have been wary. The key lies in developing technology that will target ads carefully at the right people - the Holy Grail of online marketeers.
Many in the industry believe the quality of images that can be viewed on the handset is key. Remember all those billions mobile companies spent on buying '3G' or third generation licences in 2000? They spent £22.5bn in the UK alone. The problem was, hardly anybody bought the phones. Even today, little more than 12% of mobiles in western Europe are 3G. This is way short of the kind of critical mass of broadband.
But 3G is coming, albeit slowly. And with the extra wizardry it can bring, so mobile ads are becoming more sophisticated. Phone screens are also improving and tariffs are getting cheaper. Thanks largely to the buzz surrounding the recent launch of Apple's iPhone, interest is finally starting to rise. As the graph above shows, estimates suggest more than 80% of mobiles in western Europe and America will be 3G by 2011.
Companies involved in mobile advertising are bullish. But some industry watchers are still cautious. Are there enough people out there who really want their phone to be more than just a, well ... phone? And will advertisers find a way of creating online ads that don't just turn people off?
The truth is, nobody knows. But one thing is certain: the phone companies that spent billions on 3G licences will have to wait a long while until they get their money back.
Source: http://www.thisismoney.co.uk/bbphone/article.html?in_article_id=425036&in_page_id=182
The partnership between O2 and Yahoo!, announced with great fanfare this week, is the latest move in a rush to explore this potentially lucrative market. Growth in voice calls is slowing so mobile phone companies are keen to find revenue from a burgeoning new area: putting adverts on your mobile phone screen.
Of course, web search giants Google and Yahoo! already dominate the online PC market. 'Paid-for-search' - where advertisers pay to be included in search engine listings - accounted for 57% (£762m) of online ad revenues in the UK for the first half of 2007. So mobile companies want a slice of the action.
In practical terms, 02's deal means its customers will now have a Yahoo! search box as part of their phone's main display. Others have formed similar alliances, such as Vodafone with Google.
But the mobile advertising market is still in its infancy. 'In comparison to online via a PC, it's a fraction of the volumes,' says Mark Slade, managing director of mobile specialist 4th Screen Advertising. 'Most mobile search advertising is for providers of ringtones, games and adult video clips. Traditional online spenders such as financial services companies aren't spending on mobile yet. Because consumers aren't asking for insurance via their phone, such companies haven't been investing in mobile internet sites.'
This scenario sounds familiar to those who watched the rise of internet advertising on PCs. Once the pioneers got the technology right, Tesco and Marks & Spencer followed. The same should happen with mobiles.
But do the public really want to be bombarded with adverts on their phones? Probably not. We all know spam and pop-up ads are the most irritating things about going online on the PC at home or at work.
No surprise, then, that advertisers have been wary. The key lies in developing technology that will target ads carefully at the right people - the Holy Grail of online marketeers.
Many in the industry believe the quality of images that can be viewed on the handset is key. Remember all those billions mobile companies spent on buying '3G' or third generation licences in 2000? They spent £22.5bn in the UK alone. The problem was, hardly anybody bought the phones. Even today, little more than 12% of mobiles in western Europe are 3G. This is way short of the kind of critical mass of broadband.
But 3G is coming, albeit slowly. And with the extra wizardry it can bring, so mobile ads are becoming more sophisticated. Phone screens are also improving and tariffs are getting cheaper. Thanks largely to the buzz surrounding the recent launch of Apple's iPhone, interest is finally starting to rise. As the graph above shows, estimates suggest more than 80% of mobiles in western Europe and America will be 3G by 2011.
Companies involved in mobile advertising are bullish. But some industry watchers are still cautious. Are there enough people out there who really want their phone to be more than just a, well ... phone? And will advertisers find a way of creating online ads that don't just turn people off?
The truth is, nobody knows. But one thing is certain: the phone companies that spent billions on 3G licences will have to wait a long while until they get their money back.
Source: http://www.thisismoney.co.uk/bbphone/article.html?in_article_id=425036&in_page_id=182
Tuesday, November 6, 2007
Joost: An Internet TV
Joost was founded in 2006 by Scandinavian entrepreneurs Niklas Zennström and Janus Friis. They have a track record in bringing new technologies to market: first with their Kazaa file-sharing software, and then with their VoIP product, Skype. In June 2007 Joost named former Cisco senior executive Mike Volpi, also a Skype board member, as its new chief executive, replacing CEO Fredrik de Wahl who remains as chief strategy officer.
Joost is aimed at providing the high quality broadcast TV experience of traditional TV services with the choice, navigation and interactivity of the Internet. Having started life as The Venice Project, the service announced commercial launch on 1 May 2007 when existing Joost beta testers were given an unlimited number of invitations to take part in the beta test that they could send to friends and family. Advertising campaigns from some of Joost’s advertising launch partners also began to play on the platform.
Joost currently has 150 channels with programming across a range of genres including cartoons and animation, entertainment and film, sports, comedy, lifestyle & documentaries, and sci-fi. The content focus is mainstream as opposed to niche or ‘long tail’. The availability of channels and programming varies by geographic region based on copyright ownership, with most programming already available to viewers in the US. Joost says it is adding international, regional and local content partners.
The service will make use of Web 2.0 features to enable interactivity and a community-driven environment. Viewers can already build a preferred list of channels. Advanced television viewing features such as links to more information or related websites based on the content will be offered. A number of applications will also be provided including instant messaging, message boards and news tickers.
The service is based on peer-to-peer technology used by file-sharing services (such as Kazaa), which makes it possible to distribute video to millions of people over the Internet more cost-effectively than traditional streaming or downloading. It runs on a secure Internet platform that enables interactive, advertising-supported, video streaming while providing copyright protection for content owners and creators. Users download a piece of software to their PC. Once installed, anyone with broadband connection can view the service on their PC.
Joost is aimed at providing the high quality broadcast TV experience of traditional TV services with the choice, navigation and interactivity of the Internet. Having started life as The Venice Project, the service announced commercial launch on 1 May 2007 when existing Joost beta testers were given an unlimited number of invitations to take part in the beta test that they could send to friends and family. Advertising campaigns from some of Joost’s advertising launch partners also began to play on the platform.
Joost currently has 150 channels with programming across a range of genres including cartoons and animation, entertainment and film, sports, comedy, lifestyle & documentaries, and sci-fi. The content focus is mainstream as opposed to niche or ‘long tail’. The availability of channels and programming varies by geographic region based on copyright ownership, with most programming already available to viewers in the US. Joost says it is adding international, regional and local content partners.
The service will make use of Web 2.0 features to enable interactivity and a community-driven environment. Viewers can already build a preferred list of channels. Advanced television viewing features such as links to more information or related websites based on the content will be offered. A number of applications will also be provided including instant messaging, message boards and news tickers.
The service is based on peer-to-peer technology used by file-sharing services (such as Kazaa), which makes it possible to distribute video to millions of people over the Internet more cost-effectively than traditional streaming or downloading. It runs on a secure Internet platform that enables interactive, advertising-supported, video streaming while providing copyright protection for content owners and creators. Users download a piece of software to their PC. Once installed, anyone with broadband connection can view the service on their PC.
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