- IN THIS ISSUE:
- * Shosteck Group - An Ideal Sparring Partner
- * CDMA2000 1X - An Ugly Duckling or A Trojan Horse?
Thank you all for your encouraging comments on my latest newsletter issue featuring my ‘mobile Internet solution wish list’. With your feedback I could better digest the Shosteck Group 3G seminar as well as my visit to EWU in San Diego. More on that below.
In the issue #4, I intended to initiate a discussion on the importance of ethnicity in our marketing strategy. Influenced by an industry authority, Marian Salzman, I made the mistake of quoting her without fully explaining the context of her advice. Her main purpose was to pinpoint the ethnic nature of thought leadership in pop culture, sports and other consumer markets and how sensitivity to that could enhance the acceptance of Ericsson’s products on the marketplace. The wording I used when quoting Ms Salzman offended some Ericsson employees. Therefore I want to issue a formal apology. I maintain that my intentions were good and that ethnic aspects of marketing are very important to our operator customers in selling products and services but recognizing the sensitive nature of it, I will refrain from addressing it in the future, including further elaborating the recommendations of Ms Salzman. Again, my sincere apologies to those affected.
Best regards
Tapio Anttila
SHOSTECK GROUP - AN IDEAL SPARRING PARTNER
I attended the “Strategic Cellular and Wireless Internet Seminar” of the Shosteck Group, following immediately after CTIA in Las Vegas. 140 people attended, three others from Ericsson in Stockholm. Shosteck tends to get less and less operators into their seminars but still as an example I can refer to the Nextel executive Rob Chimsky who sat next to me at their previous seminar last summer, and who certainly played a significant role in their subsequent technology choice.
Shosteck Group takes the role of the ‘provocateur’: they take a clear position on the success of technologies, applications and vendors. Their argumentation varies from thoughtful down to light and outright uninformed. But they are an influencer and therefore our marketing and investor relations should perhaps cater for their needs better. They complained that they don’t have a good enough dialogue with Ericsson. Another (great) use for their services would be to invite them in to be the sparring partners to the Ericsson sales and marketing folks. We could ask them to throw the mud at us and then work in teams to develop counter-argumentation. May I suggest that my colleague John Gauntt (see below) would be a great resource to run such a workshop(s).
Shosteck Group has also published a report on the subject and Ericsson has bought it (download from http://khan.ericsson.se/sources/herschel_shosteck/index.asp). I will take the liberty of copying here the analysis my colleague John Gauntt wrote after reading the report (with my minor editing). It pretty much summarizes my views and the highlights of the seminar as well.
Analysis by John Gauntt (EUS/NAM3G):
“Will the future center on “pure” wireless networks, as believed by E/// and Vodafone or will it be determined by integrated landline-wireless networks as believed by Nortel? Shosteck believes that the integrated perspective will win out.
3G profits will not come from the “killer application” but from the “killer business case”. This killer business case centers on enabling instead of providing applications. It is based on IP and centers on wireless operators becoming efficient commodity pipes for Internet access. So 3G is not about access to high bandwidth but open and low cost access to Internet content.
DoCoMo is leading the effort and E/// is well positioned through its work with DoCoMo to understand just how the parts fit together in a real system. Also by working with E///, DoCoMo knows that its network will work in Europe and elsewhere.
Japanese terminal manufacturers will have initial advantage in 3G because of DoCoMo but they don’t have the GSM background to ensure quality dual and tri-mode phones which will be a crucial problem because pure play 3G networks will take a lot longer to field than most are saying.
Shosteck illustrates the alternatives facing operators who must explore alternatives to the conventional model of buying separate licences and building separate networks: (1) forgo constructing networks entirely and instead enhance their 2G properties; (2) bid on 3G licences with other established operators; (3) become MVNOs; (4) share common 3G infrastructure with other operators.
Shosteck believes 2.5G technologies won’t get off the ground because they fill only a short-term market need and offer little foundation for further development. Because of the current market conditions, operators will have little choice but to discard 2.5G and accelerate adoption of 3G.
In summary, Shosteck does not *get* content or applications or the other parts of the value chain that have to come together for 3G to work. In essence, Shosteck’s analysis assumes a 3G world that is defined and dominated entirely by the communications part of the value chain (wireless operators). Quite rightly, he shows that the business case won’t fly. But he has not spent any time trying to put together an integrated view of things. It is like basing the entire business case of the airline industry solely on the economics of aircraft, which is certainly crucial but is not the only input to the process. Perhaps that was intentional to position the report towards just the operators and manufacturers. If so, then fair enough. But I think that his interpretation of the killer business case as being just a pipe for open and low cost access to Internet content is overly simplistic.
Shosteck is to be commended for putting down on paper a lot of doubts about 3G that we in the industry cannot articulate in public. That said, he gives very little insight into the “killer business case” that he states will hold the key to unlocking 3G value. So for a well written laundry list of everything that is *wrong* with an operator-centric vision of 3G, this is a good report and needed to be written. But it will become dated very quickly and I don’t think that Shosteck will be very good at enunciating what goes *right* in 3G because it will involve other industry sectors where he appears to have little competence.”
CDMA2000 1X - AN UGLY DUCKLING OR A TROJAN HORSE?
I visited San Diego and our CDMA business unit EWU. My purpose was to better understand how it fits in our overall application strategy and particularly how it could be used to strengthen our position on the US market.
The implicit Ericsson reasoning goes as follows: we enter in the CDMA market and thereby defer our competition pushing it harder. Actively offering products to CDMA customers will give us a share of the market. Automatically? Hmmm… We all know that it is difficult to go to Verizon or Sprint to pitch a base station. So perhaps the Internet Services Platform (formerly Service Network) together with well-targeted application packages could offer a break-in opportunity? Sure, that’s what our friends at EWU are trying to do. But there are two problems as I can see it after talking to most parties concerned…
1) 1X and WCDMA folks are engaging too much in the ‘my daddy can beat your daddy’ argumentation about the technologies. Give it a break, guys! CDMA2000 1X will get half of the US market, let’s make the best out of the fact that we are a strong player in that part of the market as well.
2) EIP is not prioritizing enough the adaptation of Internet Services Platform to CDMA2000 customers. There are resources working in making the bridge happen, but not enough in my opinion. As an example, I talked to some ten pretty high level people at EWU and none of them had heard of the Ericsson Mobility World launch - and they have an application center of their own at EWU.
Here’s what I would do: Ericsson needs above all have a strong position in building the global 3G ecosystem. We need to offer our operator customers BUSINESS SUPPORT SERVICES for operators’ 3G service launches. This means we need to
1) be PERCEIVED as a strong AMERICAN player on the US market
2) which will enable us to partner successfully with the American software industry
Therefore, we should profile ourselves as the neutral proponents of 3G. “We are technology-agnostic, we want to make 3G happen, no matter what it takes.” We should give CDMA2000 1X application development a special niche which they could drive globally, such as for example being responsible for the mobile enterprise solutions. Mobile Internet in the US is driven by corporations and corporate applications, world’s largest enterprise software companies are almost exclusively American. Kick-starting with a couple of sexy joint ventures and claiming a leadership would change how we are being PERCEIVED. And that changes how we are able to attract additional partners to build a world-class ecosystem.
Give it another twist: Suppose we don’t focus on CDMA2000 application development. What will happen? CDMA operators in the US will find partners by themselves. They will teach the likes of Sun, Oracle and Openwave to understand the requirements of wireless better. Since CDMA2000 1X will hit the market earlier than WCDMA (in the US at least), enterprise software companies and application developers are eager to partner with Nortel, Morotola, Lucent (no, forget it), Openwave and Sprint PCS for early learning experience. If you don’t believe me, please book a ticket to the Openwave Developer Conference in July to see what kind of CDMA2000 1X support program they will have built….
INTERNAL DISCOVERIES
Please consider joining the internal Ericsson Digital Rights Management (DRM) Workshop, April 9 in Kista. http://research.eed.ericsson.se/DRM/
QUICK TAKES
Access Co Ltd has released a version of its Compact NetFront platform with support for WML, c-HTML and xHTM all in the same browser (saves memory footprint). Initial versions of Compact NetFront Plus will be available in the second quarter of 2001, with the production version shipping in the fourth quarter. http://www.access.co.jp/english/index.html
The Openwave service network launch: http://www.openwave.com/news/Archive2001/03202001_opwv_services_os.html
- (go to http://webacademy.ericsson.se for links to stories)IOW EVENTS CALENDAR
- The 3G Portal - http://www.the3gportal.com/
SNS Newsletter by Mark Anderson - http://moneycentral.msn.com/articles/invest/trends/6112.asp - FierceWireless Weekly Newsletter - http://www.fiercewireless.com/
- Mobile Media Japan - http://www.mobilemediajapan.com/ (*NEW)
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NAM 3G Homepage - http://www.exu.ericsson.se/EUS/R/NAM3G/home/html/index.shtml
DIA Homepage (in memoriam) - http://dia.ericsson.se/
EIP Homepage - http://internetapplications.ericsson.se/ - MAI - http://www.mobileapplicationsinitiative.com
- Internal MVNO homepage - http://mvno.ericsson.se
- MI Competitor Intelligence in Outlook Public Folders: \Company Information\EIP\CB/M - Marketing (*NEW)
http://webacademy.ericsson.se/resources/majorevents.htm
IOW LIBRARY - RECOMMENDED READING
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This is a newsletter describing the non-confidential part of my work during the past week and how I see market evolution affecting Ericsson (as interpreted my me in my role working for the Next Generation Mobility unit of EUS, based in New York City). The report will be published twice a month. For subscriptions go to http://webacademy.ericsson.se/elists.
Disclaimer: Opinions presented herein are those of the undersigned and do not represent the position or message of Ericsson. This newsletter is produced on writer’s own initiative, outside work hours and independent of any organizational supervision.
