May 1, 2002 12:00 PM

Questioning Authorities

Faced with troubling questions about the nature of life, death and war, people traveled from all over the ancient world to Greece to seek guidance from the oracle at Delphi. Clear, definitive answers were rare and interpretations were often subject to controversy. But the oracle was always willing to extend another prophecy — assuming more gold was offered, of course. Fast forward a couple millennia, and good advice is still no easier — or cheaper — to come by. Analyst studies, bar charts, consumer demographics and broker ratings litter the wireless landscape, but when it's common knowledge that they're commissioned by wireless companies, can they be trusted? We posed a series of hot-button questions to notables across the industry in the belief that the collision of so many different viewpoints and agendas would make for a truly balanced look at all sides of the arguments. Who's full of wisdom, and who's just full of it? That's for you to decide.

William Quigley, managing director, venture capital firm Clearstone Venture Partners

The cat's meow right now is quality of service. In the wired world, we have ATM, which allows us to create permanent virtual circuits and provide different levels of services. There is no equivalent in the wireless world.

At the enterprise level in the wired environment, there are large differences in services depending on what you want to pay. In wireless, we want to get to the point where a carrier can say, “We will give you greater access to the network than those that are paying much less.”

The challenge is that today, we don't even have sufficient service that people are willing to pay a low price for. Right now, you can't get networks to provide general, low-quality service to every one of your subscribers. We're trying to figure out how the AT&Ts of the world will be able to charge more.

There are a number of in-between steps. First you need smart antennas, meaning three transmitters instead of two. And antennas that can swivel depending on the time of day. On the customer premises side, you're probably going to need maybe two antennas on each chip to ensure that as the waves propagate through the air, you get two bites at the apple. It's not how well you transmit the data, it's how well you capture it.

3G is clearly where you're going to get the most robust data rates and where you can start differentiating. What we are trying to figure out is what are the transitional networks that let us feel good about subscriber management.

In the meantime, we're paying a lot of attention to Korea, where you've got 3G rollout. We're going to see how user behavior changes with all that bandwidth availability. We're watching Korea extremely closely and trying to extrapolate that to the U.S. market.
— As told to Vince Vittore

What do people want out of next-gen wireless apps?

Gordon Gould, chairman and founder, mobile entertainment provider Upoc

Wireless success hinges on understanding who consumers want to interact with and how they want to share information. Broadcast-type models that just push stuff out to the end user without providing them any context or continuity with the rest of their lives are not going to be as well-received as those that allow them to get information or content and communicate it with their peer groups.

At the end of the day, phones are still communications devices and not content platforms the way that television is. If you don't take into account that phones are primarily designed to connect people and allow them to communicate, you're trying to fit a square peg into a round hole.

The Watchman was never successful, and portable DVD players haven't been particularly successful either. There's certainly a niche audience for them, but it's not clear why anybody needs video delivered to their phone. But multimedia messaging that incorporates video or animation will be very popular. Advanced messaging is going to be a win unless the carriers completely screw it up by making it exorbitantly expensive. The carriers are really starting to get there — and I'm optimistic — but they're an unpredictable lot.
— As told to Chris Sewell

John Griebling, chief technology officer, broadband services provider Aerie Networks

The mass market just wants something that's high-speed, easy to use, easy to install and inexpensive. Anything wireless attempting to serve the residential market that doesn't fit that equation isn't going to make it. Also, wireless data services that are metered will have a very narrow appeal and won't support killer apps because mass-market appeal requires unlimited usage.

There's definitely strong emphasis on digital photography and having wireless-enabled cameras that can take a picture and transmit it to someone else. It's just like if you had an MP3 player that was wireless-enabled, then you could download songs directly to your MP3 player and share songs with your friends directly from your player to theirs.

Pretty soon, we'll be carrying around mobile wireless enabled cameras and PDAs, but that demand is going to take time to materialize.
— As told to Chris Sewell

Mark Kelley, chief technology officer, service provider Leap Wireless

If you force people to undergo a shift in their behavior, the obstacles you have to overcome are huge. Applications that require people to solve technological puzzles or do something in a way that's totally new for them are not likely to be early successes. WAP-based services are a perfect example. They've had some traction and I use them frequently, but I'm sort of in the geek market, which is a fairly small one.

Extending things that people are already doing to a mobile mode like games, images and music — those are the sorts of things that clearly have an attraction in the market. To that end, instant messaging, e-mail and short messaging clearly will have legs going forward because it's just an extension of your computer desktop.

It's going to be the people who are graduating from college now or slightly younger who are really going to be driving the mobile industry. Internet and mobile usage is just as much a part of a young adult's life as the phone and fax is for people in business who are a bit older. In the youth market, a paradigm shift is easier to swallow than it is for people in their 30s and 40s.
— As told to Chris Sewell

Paul Master, chief technology officer, mobile communications developer QuickSilver Technology

Regardless of what the device does, you always want to be connected — period. That's something everyone expects of their devices. Once you're hooked up, losing that connectivity is like cutting the umbilical cord.

But you never know what consumers will buy and what will turn out to be a killer application. Who ever thought caller ID would turn out to be the moneymaker that it is? The only people that are able to tell us is the consumer, and traditionally the only way to find out is to toss up 100 ideas and see which ones they bite at. There are no dumb ideas — you just have to figure out how to get them in front of a consumer and let consumers pick the good ideas from the bad.
— As told to Chris Sewell

What will really happen when the spectrum cap is lifted?

Mark Wilson, vice president of strategy, Ericsson

A lot of people talk about how lifting the spectrum caps will naturally lead to consolidation, but there's another dynamic at play. As customer acquisition costs rise, it might be less expensive to acquire customers via merger than in the open market. Our models show we'll go from what used to be 25% subscriber growth to 15%. That's a natural contributor to consolidation.

In another scenario, releasing the spectrum cap — coupled with some aggressive pricing — drastically increases wireless market penetration. If, through consolidation or other scenarios, carriers acquire more spectrum, economies of scale could allow them to bring on the next wave of subscribers. That's essentially the way it worked in Western Europe — wireless became a mass-market commodity.

If American carriers continue aggressively bundling long distance and other things, people will spend more voice time on their mobile phones and use their fixed lines more for broadband connection to the Internet. The average minutes of use on mobile networks in the U.S. has skyrocketed in the last couple of years. Those minutes are coming from somewhere.

Operators might experiment with different types of segmentation and targeting, and some of them could choose a mobile virtual network operator model. I could envision carriers having their own brand and their own services but having an MVNO play if they want to target a specific segment. That could lead to a lot of different types of services becoming available. Even without MVNOs, lifting the spectrum cap could lead to an aggressive rollout of new services. Carriers will start out with some fairly basic data offerings,things that offer people stock quotes and e-mail and sports scores. It will build from there.

There will be two catalysts in that next phase: mobile positioning and multimedia messaging. When you combine the mobile Internet with services based on subscribers' location, and you combine location with messaging and customization, those are going to be the two big drivers leading to a more substantial mobile experience. Then the revenue model shifts from being 100% voice to more of a split between voice and data services. That could very well lead to a moderation of the pricing decline.

There are skeptics out there who doubt these mobile data services will actually take off. I'm one of the optimists.
— As told to Ed Gubbins

John Marinho, vice president of offer management, Lucent Mobility Solutions

Lifting spectrum caps will allow wireless operators to roll out high-speed data services more aggressively. One of the first market segments to be tapped will be mobile professionals who need mobile access to information that's sitting behind corporate firewalls. They have significant pent-up demand and a very high willingness to pay.

But selling data services will require carriers to take a different approach in how they go after market segments. When you're selling data solutions to enterprises, you have to talk to the CIO as well as the side that's going to derive the greatest benefit from the services — the sales force and the people who manage the mobile work force.

You've got to understand the nature of the organization you're selling to, how they're positioned with their customers. It's a much more involved approach than just selling phones in phone stores.

Speed will be a key differentiator. Today, CDMA 1X will support data rates up to 144 kb/s. In the second half of 2002, commercial trials will take the data rates even higher. Peak rates will be 2.3 Mb/s. That will completely change the paradigm of how people use laptops and PDAs. The lifting of spectrum caps will only accelerate that process.
— As told to Ed Gubbins

Is there a killer app for the wireless enterprise?

Steve Krom, vice president of business development and marketing, Cingular Wireless

The application that's driving wireless within the enterprise is access to corporate e-mail. That is the app du jour. It is really the foot in the door in terms of doing anything with the wireless enterprise, and it will drive the enterprise market for the next couple of years.

There are really three categories of wireless enterprise applications. The first is mobile office apps, and that's where you have e-mail and calendar and intranet applications. Then you have the whole category of commercial applications, like customer relationship management applications — things from companies such as PeopleSoft. Then there are the vertical or corporation-specific applications that we would design customized just for a particular type of customer.

The commercial applications category is the next phase, and it has the potential to be bigger than the area of vertical industry applications because they are proven, third-party applications.

There isn't really a challenge from corporations against creating a wireless enterprise or a mobile office. Wireless has been legitimized in the corporation as something that allows you to be more productive. However, with the economic situation they way it is, any corporation using wireless in the enterprise wants to see a quick return on investment, and we have to show them how wireless will translate to a real operational cost savings.

With devices, customers will want to access the mobile office in a variety of ways, by mobile phone, PDA, BlackBerry, etc. In the future, companies will want to make sure that they can use all of their enterprise applications across a multitude of wireless devices in the same fashion.
— As told to Dan O'Shea

William “Butch” Winters, CEO, mobile enterprise infrastructure software developer Neomar

I don't assume there's one killer app. Some of the simple segmenting we've done is very similar to the approach used in the early days of the Internet. The value prop is either in generating revenue or mitigating expense, and you look at end users as employees, partners or customers.

In the revenue-generating employee segment, we see applications that are driving toward increasing employee productivity. If I can make field-based revenue-generating employees more productive, I can get more of that revenue-generating activity out of them. On the customer side, we see companies saying, “If we can have customers do business with us in different venues, they're going to do more business with me more often.”

We're big believers that the killer apps in the mobile enterprise space are the same killer apps in the landline enterprise space. All of your applications players that exist today are the ones that are going to be mobilized.

We're relatively young in this market. If you map out business impact and time, where we are right now is this mobilization ennoblement stage in which existing business processes are getting a mobilization facelift. Over time you'll probably see new types of business models emerge into potentially new industry models. That gets into a much longer view of what wireless will look like in 2005 to 2006.

The press — and we in the industry — must do a better job talking about real things that can be done with the technology today.

There may be a little bit of a waiting game for next-gen devices and next-gen networks, so the industry is not doing itself any favors in that they're pre-announcing capabilities that don't exist today. For those of us trying to build a business and make a living in the wireless space, providing reasons for corporations to delay purchases is not a good thing.
— As told to Toby Weber

Dale Gonzalez, vice president of wireless engineering, wireless platform provider Air2Web

One way to describe the next killer app is wireless forms-based processing. This is pointing to the disconnect between what people need from their computers and how computers satisfy their needs. Computers are all about individual discrete applications that perform various functions. Users are all about things that they have to accomplish, which will almost always span multiple applications.

Obviously, wireless devices can't possibly have full-blown apps, nor will users be able to cut-and-paste and flip between one app and another. So if you construct an infrastructure or application that imposes a task-based framework on top of back-end apps that the customer is used to using, then you'll have something that will mobilize users better.

Whenever you're automating an enterprise, mobile users inside a process flow are the nightmare. Ninety-five percent of the time your sales force isn't at their computers, which is the point of automation. So what you have is a semi-automated process, then people are writing things on notecards, then automating them again.

But wireless devices provide an opportunity to create seamless task flows through an organization in ways we could never do before. All of sudden you have this seamless web of tasks that hop from person to person and that span multiple back-end systems and applications.

Wireless chat also has promise. I did think of this, but rejected it. I thought,these phones already have a built-in chat channel: It's called “calling.”

I completely overlooked visceral differences in having a threaded, textual conversation with someone. I overlooked that most people can multitask chat with other things and the tolerance for gaps in the conversation. I overlooked the anonymity in chat and the ability to involve multiple parties.

It would not surprise me if an enterprise outgrowth of chat, some form of groupware, fell out of the wireless space and let people communicate while incorporating the non-human in the call. If you presume something like a slightly larger device with an integral camera, you could have a communications tool that makes an appropriate use of a broadband network in an extremely powerful way.
— As told to Toby Weber

Who should set standards for 3G?

Walt Tamminen, manager of CDMA standards, Nokia

The best way to produce standards for 3G is to have an equal partnership between the vendors and the operators. Both sides have certain capabilities that you need to have to produce a good solution.

For instance, operators know what their customers are going to need and the services that are going to be most popular. Vendors, on the other hand, have a much better handle on what is realistic from a technical perspective. That's important because nice-to-have services are often different than what is technically feasible. It's why vendors write most technical standards.

The biggest challenge in creating a standard is the competitive nature of the companies involved in the process. They all have existing technologies or networks they think are the best, and their own ideas on how the standard should look. Vendors also want to make sure their intellectual property becomes part of the standard.

Different companies also have varying degrees of influence. To a point, the process looks a lot like what goes on in Washington: Relationships are important. Operators will support their vendors, and vendors will cater to their operators. It's not always fair. Sometimes you come out ahead. Sometimes you don't.

You have to find a way to balance all of that. It's not easy. In fact, we're never able to keep to a schedule because of all the discussion, which can get pretty contentious at times. That's not necessarily a bad thing. Generally speaking, open discussion improves the overall result.

But there is a downside to an open environment. Often, compromise is the only way to get anything done, and compromise doesn't always result in the best possible standard.

There is no ideal way of going about this. It's not black and white. That's why standards development is an ongoing process. In a perfect world, you would come up with a single standard that would stand for all time. But that would limit our ability to bring in new technologies, services, markets and ideas. So there's no end point. And there probably shouldn't be.
— As told to Glenn Bischoff

Bill Clift, chief technology officer, Cingular Wireless

Standards development is like flying an airplane: You need a pilot and a co-pilot. And operators should be the pilots, with vendors taking the role of co-pilot.

The reason is simple: 3G needs to be readily commercialized, and vendors tend to lean toward technologies that are most easily implemented. Vendors will argue that they know what's technologically feasible, that they're more cutting-edge. But operators have to drive this because they're the ones who have to sell the services. It worked just the opposite when GPRS was deployed in Europe, and what got rolled out was not nearly as marketable as it could have been.

Vendors are too separated from the customer to know what they need. They do market research just like the operators, but the difference is that they don't talk to the customers every day as the operators do. Vendors also have a tendency to protect the intellectual property they own. They want to see that property become part of the standard, so they can license it and collect royalty fees.

That's not to say vendors should be subservient. You have to get their input because of their technical expertise. You have to find a way to work with them.

It's also a political process. At times it resembles the behind-the-scenes activity at the United Nations. Actually, it looks more like the figure-skating fiasco at the Olympics: If you support my approach in this particular standards process, I'll support yours later on.

There's another way in which it resembles the political process. Because of the very technical and specialized knowledge that's required, those that serve on standards bodies do so for several years at a time, sometimes for as long as a decade. They understand the core of the technology to a depth that most people can't grasp.

Because the process moves slowly, they go to one meeting after another. These meetings tend to move around a lot in an attempt to accommodate everyone, so they often spend a lot of time in these meetings talking about the next exotic location they're going to and not as much time talking about the relative merits of the technologies being presented. They sometimes forget that we're all for-profit companies.
— As told to Glenn Bischoff

Gerry Flynn, director of advanced technology strategy, Verizon Wireless

Standards development is an interesting phenomenon on a variety of levels. It has to be a collaborative effort, but that's not always easy to execute because operators and vendors look at things very differently.

Vendors are interested in market share and selling new models that are going to generate more revenue. Operators, on the other hand, tend to focus on protecting and recovering their investments, so they prefer their networks to evolve.
— As told to Glenn Bischoff

Dean Prochaska, director of industry standards, Sprint PCS

Standards development has to be a cooperative effort, even a joint effort between vendors and operators. Both sides have to really communicate.

There's no question that operators are closer to the marketplace and can provide better guidance as to what customers want in terms of services. But it's technology that will provide the capability to make those services reality, so it is imperative that operators are able to work closely with their vendors.

It's not always easy. In fact, it can get pretty contentious. There are a lot of reasons a vendor will push a particular technology. For instance, vendors are very competitive when it comes to making sure their intellectual property is included in a standard, because it can lead to revenue generation later on.

Of course, protecting revenue streams is important for any company, including vendors. Shortly after launching Sprint PCS, we led the effort to create an interoperability standard. At the time, operators that bought radio equipment would also have to buy that vendor's switch. We knew it would give us greater leverage in contract negotiations if we could break those components apart. The vendors didn't react well to our proposal at first, but they eventually went along with it. The result was the adoption of the Interoperability Specification standard.

Manufacturers have a tendency to listen to their customers. And the operators are their customers.
— As told to Glenn Bischoff