Mobile Video: is it tip of the iceburg?

Mobile Video: is it tip of the iceburg?

Looks like finally we are there! After 2000-2008 period; lets call it preparation phase, we are finally there. People start to use it more and more. Now, it is the time for the second phase of revolution. From content transmit optimization, to content generation and interaction optimization. It is time to revolutionize the way we think about our TV experience. 

Myth of Wi-Fi access for your iPhone

Since I downloaded speedtest.net app for my iPhone, I turned into a “speed test” junky! This afternoon, while I was in a Starbucks, I did two measurements; one through my Wi-Fi connection (which was already switched to thanks to ATT) and one through my cellular connection. While with my cellular connection I got constantly +4 Mbps in downlink and +2.5 Mbps in uplink direction, my Wi-Fi measurements constantly show 1.3 Mbps in both directions. I guess they use a T1 to connect their store to the Internet. While for customers with limited data plans switching to Wi-Fi will reduce their bill, the myth that “switching to Wi-Fi will provide higher bitrates” is not valid anymore. Years ago, with GPRS/EDGE and bad data coverage areas, this argument was right, but not anymore. The idea that let the iPhone decides to switch between Wi-Fi and cellular just because it can save some money or release the valuable cellular resources for operator is true, but it does not mean the subscribers will have a better experience. Switching to public Wi-Fi hot spots will limit your performance; there should be an end-to-end QoS measurement mechanism to make this decision. Either it is a part of SON or Release 12 of 3GPP, I don’t know. But it is a must and should be out soon.

 

Win the Competition Like Apple Does

The fanfare for new iPhone launch is behind us. The only surprise was the new uniform for Apple CEO is changed from a black sweater to a black shirt; still it is a black top though!

For me, the most interesting part of Cook’s presentation was the announcement that iPhone has 5% of mobile market share worldwide. What I like about it is the sense of rebellion Apple brings to legacy market assumptions as usual. When Apple launched iPhone in 2007, there were lots of top investors who called this move stupid. They called Steve Jobs a “bigoted selfish individual” (if he was a female probably they would called her Ayn Rand resurrections) who is going against all business common sense and tries to enter a very mature market, with well established players and low margins. Steve Jobs proved that even if you are “the last” to enter a market, you can win if you produce “the best” with “highest margins” and still beats everyone. Even a lazy giant like Nokia!

My Mobile Data Usage!

iPad and iPhone do 60% of US mobile browsing and 8.2% of US web browsing is from mobile devices. These are pretty high percentages compare to five years ago. Then I looked at my mobile phone bills and statistics and I found out why. I was a Blackberry user since 2000; virtually hooks to it. This January I decided to switch to iPhone and rest is history! This is from my ATT monthly bill. I am glad I have an unlimited data plan; I am not sure about ATT though 🙂

Clearwire Wasted Money Early On

I was reading Sprint’s CFO comments regarding Clearwire wasted money early on and remembered one of my old posts; Too Much Money and Ego; If you want to kill a Start-up! Successful companies stick to their fundamentals from the beginning. Although a company can and should evolve from an early stage start up mode into a more solid and robust operations, brings different caliber of managers in different stages and gradually morph into a “corporate” mind set; successful companies stick with their roots even in the later stages. This includes operating under tight-cash flow and careful spending and expansion to maintain their margins. With huge amount of money at the beginning and big corporate mentality from day one, there will be no “fundamental” to build the company culture around it.  Also, building a “green field” nation-wide wireless operator does not make sense; anymore. You build the network without customers; increase your OpEx dramatically without increasing your revenue at the same time. That is why Clearwire’s net loss more than doubled in the Q1 to $267 million, compared to a net loss of $94.1 million during the same period last year.

What Has Happened to Our Startup Culture?

What has happened to our “startup culture”? We are hearing about how greed and focus on short term profit brought world’s financial system into the verge of a complete collapse but heard nothing about other financial institutions misbehavior. Although large banks and their bosses blamed for the problem and punished; better to say singled out, we see same symptoms in all other sectors of investment and business related echo system like VCs. As I mentioned before, VC world is also about to change. From early 2000 until mid 2008, VC industry transformed from a real vibrant business into a fat and blind profit driven industry. VCs were just throwing money into “potential” companies/ideas and wait outside the ring to see what is going to happen. It was not 80s or 90s and they were not Kleiner or Moritz who build the company with entrepreneurs. VCs were the real force behind exploding job creation during 80s and 90s, by supporting real entrepreneurs and creating real companies. Time is passed for partners who use pre-IPO family and friends options and huge bonuses to milk their own baby. It is time for LPs to take a close look at the VCs and really vet them. Clearly something went wrong in the last ten year in the VC industry, let’s fix it for the next ten years.

Verizon Wireless iPhone; Challenges its Data Network and Android

This month Fortune cover shows an iPhone and referring to launch of Verizon iPhone as “get ready for the dream phone”. People familiar with the case speculate Verizon will launch iPhone in early 2011. Lots of US mobile phone users were praying for this news for years. As the largest US mobile operator; by number of subscriber, Verizon was always preferred choice for consumers as the ‘more reliable” service provider. Its CDMA based 2G network, better coverage and call quality in general in the first part of this decade made it preferred choice for voice users.

For the past couple of years, smartphones start to challenge data network capacity. While early 2000 was the hype of wireless data networks deployment, there was no real data traffic until couple of years ago. Operator’s huge investment on mobile data upgrade was sitting idle for years before iPhone shows the art of smartphone development to other vendors and flooding the market with its clones. ATT launch of iPhone in 2007 was smooth until the huge amount of data traffic starts to cripple its network in dense markets, including New York and San Francisco. ATT executives claims the dream of a better iPhone experience on Verizon network will shattered as soon as operator stats to sell and distribute iPhone across its networks. Although Driod and other Andriod based phones were very popular, their popularity and traffic load would not be even close to after iPhone launch. This points to another question; if Verizon starts to sell iPhone, does Andriod based phones continue to growth (at least in the US)? Lots of Verizon geeky data users were forced to buy Android phones because they didn’t have other choices. By introducing iPhone, Verizon introduces a real competitor for its Andriod phones.

Selling the Spectrum Would be a last-ditch Effort for Clearwire to raise money

Clearwire CEO Bill Morrow said at an investor conference in September that Clearwire hoped to secure more money via an investment by a company like T-Mobile or an auction of its unneeded spectrum. Looks like after all; selling the spectrum would be a last-ditch effort to raise money. Clearwire has long argued its vast spectrum holdings help set it apart from rivals like Verizon and AT&T, which are building LTE networks. Clearwire has around 120 MHz of spectrum in the 2.5-2.6 GHz band in most of its markets. Bloomberg reported Clearwire is looking to sell of 40 MHz of spectrum in its markets.

It is a strange world; your parent company gives you the valuable spectrum, you raise more money based on having this spectrum, you ran out of cash and can not raise more money, so you sell the spectrum that brought the money at the first place! What a strange business plan.

No Happy Ending in Sight for VCs

Looks like there is no happy ending in sight for VC market! For the third quarter of 2010 forty five funds raised less than $3 billions. “With funds sizes getting smaller and fewer firms raising money, we are experiencing a period of time in which venture capital investment is consistently outpacing fundraising, creating an industry that will be considerably smaller in the next decade” said Mark Heesen, president of the NVCA. As I mentioned before; it is not necessary all bad news. Last quarter Institutional Venture Partners XIII, L.P. raised $750 million followed Boston, Massachusetts-based Third Rock Ventures II, L.P., which raised $426 million. These two funds account for 35% of the total! There will be less money out there, but at the same time there will be more focused and experienced VCs with larger funds. This will helps entrepreneurs to work with more mature and experienced VCs with enough money to support them all the way to the exit. There is no time and room for VCs which didn’t perform and just burn money without adding any value in the past decade.

Nokia CEO Will Step Down; What a Waste of Four Years

It happened much sooner than I thought. “Nokia Corp. said it was replacing embattled Chief Executive Olli-Pekka Kallasvuo with Microsoft Corp.’s Stephen Elop, as the world’s largest handset maker seeks to reverse steep declines in earnings and market share that have decimated its share price”. After four years of constant struggle and lack of a clear strategy toward future products and particularly high-end mobile phones (smartphones) Mr Kallasvuo kicked out of the door. It was a well know fact that Nokia is heading south, but the speed of it was really surprising for everyone. Many analysts feel that Nokia was caught flat-footed by the iPhone’s success and blame its weakness in smartphones for shaving about 70% off of Nokia’s market value; or more than $90 billion, over the past three years. Basically, Nokia morphed into a “giant dwarf”; a huge player but not a huge force to shape the industry; a follower and not a leader. And it was not all about market share; the overall management of the company was a shenanigan! Former employees describe the structure of the company as a confusing matrix organization, akin to the “Soviet Union.” While Nokia was ahead on hot trends in the tech industry such as internet services and 3-D, lengthy approval processes and a lack of leadership inside of Nokia bogged down these innovations. One former employee added that Nokia, given its size, was never eager to invest in innovations that didn’t have a high volume potential across many of Nokia’s markets. Even the timing of the announcement is awkward and shows a little bit of rush and chaos within the organization. Next week, the company holds its annual “Nokia World” conference in London, where Mr. Kallasvuo was expected to articulate a new strategy to regain its footing in the industry and to present a new smartphone, the N8. The switch at the top of the company will likely draw attention away from those issues. But how this change is going to affect Nokia as a company? First of all Mr Elop is not Finish; he is not even European. “Nokia is definitely a Finnish company. It was born from Finnish culture,” says Juhani Risku, 53, a former Nokia executive, who also wrote a book about the company. He is Canadian at least and not American, so he can be a little bit less brutal. But in any case, this is going to be a dramatic cultural shift for Nokia. Northern American management style is definitely more aggressive and non-European. Secondly, the momentum is already shifted toward Apple, Google and HTC as the leaders of smartphone market. And finally he comes from Microsoft; well they have their own struggles in mobile market for the past couple of years. It will be tough to change it in short term. How Mr Elop is going to tackle these issues and change the direction of the company are questions that will be answered in the next couple of months, if not years.