If you have T-Mobile in the UK you may be disappointed to know that the company has suddenly decided that you should be perfectly happy to use little more than just 500 MB per month -- a paltry amount. It's not quite a cap at 500 MB -- you'll still be able to do some basic surfing, but apparently, once you've used up your 500 MB, you'll no longer be able to do anything beyond browsing static websites or checking email. No streaming, downloading, gaming, etc. Many users previously had caps that were around 3GB, so this is a pretty big drop. Apparently, T-Mobile has decided it gets to tell you what you can and cannot use the account for:
"Browsing means looking at websites and checking email, but not watching videos, downloading files or playing games. We've got a fair use policy but ours means that you'll always be able to browse the internet, it's only when you go over the fair use amount that you won't be able to download, stream and watch video clips."
Basically, this is T-Mobile UK announcing to the world that it doesn't have the bandwidth to actually give people what they want, and it hasn't invested in the necessary upgrades to offer a reasonable service. Or, a simpler way of explaining it, is that this is T-Mobile UK telling users in the UK who actually want to use mobile broadband to find another provider.
Nearly five years ago, we predicted that Qualcomm was wasting a ton of money with its MediaFlo effort. The company had bought up a bunch of spectrum to create a special broadcast TV offering for mobile phones. It didn't take a genius to predict why that wouldn't make much sense. First of all, using spectrum for straight broadcast video ignores that content is increasingly multi-directional, interactive and on-demand. In an age where more and more people were using their DVRs to time shift, their iPods to place shift and mobile phones to communicate on the go, the idea of watching broadcast television on your mobile phone just seemed to be a solution stuck in a prediction from decades ago, rather than one that actually looked at what the technology allowed.
I have to admit that after writing a few negative pieces on MediaFlo, I did get a nasty email from someone at Qualcomm, who insisted that I didn't know what I was talking about, and the demand for such a broadcast TV system, just for mobile devices, was "off the charts." Apparently, it was off the charts in the wrong direction. After spending so much money, Qualcomm recently announced that it's shutting down the effort (which is now called Flo TV). Next time, Qualcomm, if you're looking to throw away hundreds of millions of dollars, you can just give it to me, and I'll save you the trouble...
Usage-based pricing may be more fair. The top 6 percent of smart phone users are consuming half of all data. The vast majority of customers, 99 percent according to the 60,000 phone bills that Nielsen collects and analyzes every month as part of their Customer Value Metrics product, are better off with a pricing scheme like AT&T's new data pricing model than under flat-rate pricing where they are paying for much more than they ever use.
While many people are applauding AT&T's new data pricing plans as money savers for light users today -- they're not looking at tomorrow's big picture. One, Nielsen ignores the fact that carriers are now making data plans mandatory for smartphone users who previously only used Wi-Fi. That's not "more fair," nor does it save money. Nielsen takes the stance that light users somehow need to be "educated" into consuming more data -- yet many of those users simply prefer to use their device's Wi-Fi functionality alone. That's no longer possible.
Two, the average user already consumes 298MB of data -- while AT&T's base cap is 200 MB. That cap's set just low enough to push today's average user to the higher, $25 a month tier (plus overages, ETFs, an endless assortment of fees). That average is going to quickly skyrocket and the heavy user of today will become the average user of tomorrow -- yet instead of having the option of a simple, unlimited data tier at a fair price -- they'll face heavy and often confusing overages just as smartphones begin seeing interesting video service integration (Netflix, Hulu). That's not about saving money, it's about making money.
Again, incumbent wireless companies are not in the business of making less money, and this new media meme that a shift to low caps and high overages is about saving consumers money, or fairness, or helping minorities -- is simply absurd. If telecom analysts want to analyze -- they should be noting that carriers and investors see the death of SMS and voice minutes heading their direction -- and are changing pricing models to compensate and cash in on an explosion in wireless video (or streaming wireless audio) use. But the suggestion that this shift is driven by altruism is bizarre and disingenuous.
There's also the fact that, with the new plans, if you want to use tethering, it'll run you an extra $20/month -- not to mention that tethering will increase data usage. It also ignores the mental transaction costs when you know you have a cap and potential overages that discourages usage, just as more apps are coming online to encourage usage. The really damning part, of course, is just the basic trend that data usage is increasing and that's not going to slow down any time soon. AT&T smartly set its caps so that it could get analysts to make these kinds of claims, ignoring that a couple years from the average data will be much higher and more and more people will be pushed to higher, significantly more expensive options.
What's kind of amazing here is how no one seems to look back at the consumer internet access costs for comparison. In the early days, when many people had AOL, there were caps and metered billing. And some people used it, certainly, but it was nothing compared to what happened when AOL finally dropped its caps and suddenly people could really embrace and use the internet without worrying about hitting their usage cap. Unlimited internet access is what helped drive internet usage, making it such a powerful and useful platform. Mobile operators seem to want to go in the other direction and are working hard to try to limit how useful many people find their phones, due to limiting data plans. That doesn't seem all that compelling or "fair."
from the everything's-amazing-and-nobody's-happy dept
By now, hopefully, you've seen that clip of comedian Louis CK on Conan O'Brien's show (the old, old one) which went kinda viral, where Louis talks about how "everything is amazing and no one is happy":
When I was a kid in the 1960s and we came back from a visit to my grandmother's, my mother used to call my grandmother, let the phone ring twice, and then hang up. It was important for my grandmother to know that we'd arrived home safely, but long-distance telephone calls were too expensive to indulge in unnecessarily. When I entered Vanderbilt University in 1971, my parents had to decide whether to pay for a telephone in my dorm room. They decided to do so, but most of the thoroughly upper-middle-class students on my floor did not have phones. Phones cost real money back then. Then came the breakup of the AT&T monopoly in 1984. Phone technology and competitive service provision exploded. In 1982, Motorola produced the first portable mobile phone. It weighed about 2 pounds and cost $3995. Within a very few years they were much smaller, much cheaper, and selling like hotcakes.
Today there are some 4.6 billion mobile phones in the world, and counting, or about 67 per every 100 people in the world. The newer ones allow you to carry in your hand more computing power than the computers that put Apollo 11 on the moon. You can cruise the internet, find your location with GPS, read books, send texts, pay bills, process credit cards, watch video, record video, stream video to the web, take and send photos -- oh, and make phone calls from just about anywhere. Unimaginable just a few years ago.
But the point of the post is to question why some are now putting together an event about "Why Your Cell Phone is So Terrible," pointing out that it's a bit silly to complain when you compare it to what we had.
It's a really good point -- but I have to admit I can see both sides to this argument. It's the very fact that, even when we do amazing things, we can still see the faults with it and that drives us to keep improving and to keep innovating. It's the very "culture of improvement" that drives growth and innovation. So, while I can agree that it's sometimes a shame how much we feel a sense of entitlement towards making things better when those amazing things didn't even exist just a few years ago, it's hard not to sympathize with the feeling of wanting things to be even better.
And, by the way, I'm not alone in seeing both sides of all this. That Louis CK video at the top? The one where he mocks the guy sitting next to him on an airplane for getting upset that the WiFi in the sky suddenly stopped working? Yeah, he later admitted that it wasn't someone sitting next to him, but himself getting pissed off at the WiFi not working, even though he didn't even know in-flight WiFi existed until he got on the airplane. So yes, everything is amazing, and no one's happy... but maybe that's a good thing.
Wireless Ink was a company that I remember getting some buzz back in the 2005/2006 timeframe... and then they dropped completely off my radar. Honestly, I had thought they had gone out of business. So I was a bit surprised to see them suddenly pop back up with a patent (of course) and a lawsuit against both Google and Facebook, claiming infringement because both companies allow users to access social networking tools via a mobile phone. Seriously. Does anyone honestly (honestly, really) think that without this patent, no one would have ever figured out how to let people access a social network via a mobile phone? The patent itself (7,599,983) was filed in 2004, but was granted at the end of last year. Wireless Ink (also known as Wink) is claiming that since the patent was filed in 2004, both companies must have known about it, which seems like an odd argument considering how many patents were filed since 2004. Once again, it's hard to see this lawsuit as anything other than an attempt to shakedown more successful companies.
From back when it was first suggested six or so years ago, we were quite skeptical of the need for a "mobile only" top level domain called .mobi. It wasn't difficult to predict that devices would get better and wireless data services would get better, such that there would be no need for a special separate mobile web -- as everything could easily be delivered via the "regular" web. If anything, like many new TLDs, the whole thing just seemed like a cash grab, because companies would feel obligated to pay up to reserve their .mobi domain names before someone else did. And while .mobi tried to position its offering as something much more than a splinter scaled-down internet, most people pretty quickly realized that it served no reasonable purpose. To be honest, I hadn't even heard much at all about .mobi in a couple years, and as more and more people moved onto phones that could handle full webpages -- or, companies set up their own regular websites to automatically scale down for mobile browsers -- the whole concept seemed to have faded away. MobHappy reports that .mobi has been sold off to the company that also owns the rights to the .info domain -- so both can now live together in uselessness. But, best of all, as Carlo explains:
And in case you were wondering, my favorite .mobi site, flowers.mobi -- you remember, the one that was purchased for $200,000 in 2006 and was supposed to be developed into a legit site with "relevant content" -- is still just a parked domain with ads. And it's still not compliant with .mobi's rules for its sites. Big surprise there.
One of the things I didn't get a chance to discuss in my recap of Midem was that there was definitely an undercurrent of people thinking that "apps" are the "answer." There were a bunch of app companies there, and they were swamped with interest, and lots of people seem to be looking at Apple's "success" with the iPhone app market as a chance to regain control, and with it, something to charge for directly. While I don't think many people were expecting apps to be "the answer," there was certainly an impression that apps are going to be a big part of the future. As I've made clear in the past, I'm pretty skeptical that this sort of app madness is really sustainable (or all that lucrative). There are a few reasons for this:
Very, very, very few apps make very much money. We've been suggesting this for a while, and the numbers seem to support it: there really isn't that much money being made directly on selling apps, even on the iPhone. Sure, lots of apps may be selling in aggregate, but very few individual apps make very much money.
Apps are still loss leader/low-margin leaders for hardware makers, and they know it. Sure, Apple wants app developers to be happy, but first and foremost it wants to sell more hardware, which is where it makes its money. And it knows as well as anyone that the more powerful the device is, the more reasons there are to buy the hardware. That means the hardware makers actually have incentive to push the price of apps down (or encourage free apps). This pressure will only get stronger over time.
Apps can be copied too. This is the one that seems the most obvious to me, but seems to get very little attention from those who believe totally in the app revolution. Apps are still digital files and they can (and are) copied regularly. Thinking that putting everything into an app is an easy response by itself to unauthorized copying is a bit short-sighted.
Future standards will break down some walls. While it won't happen that fast, and probably won't happen in all areas where apps exist, things like HTML 5 will certainly break down the walled gardens found on various app stores. Yes, native apps give a better user experience for now, but web standards will get better and better and allow more to be done via the web, totally bypassing any app gatekeeper (and paywall), just like Google did with Google Voice on the iPhone. We've seen this before. The desktop used to be ruled by client-side apps, and then lots of those apps went (or are in the process of going) web-based.
App overload. While there is a group of folks who constantly get new apps, an awful lot of people get a few apps, get themselves comfortable and then never go back to buy another app. There are really only so many apps most people need, and once they have them, there's little reason to keep getting more.
This isn't to say that anyone should be ignoring the app space, or that there's no money to made in apps. It's just that the folks acting like it's going to be "the way" that things are done in the future are going way overboard. It definitely still makes sense to have some sort of app strategy and to play in the space somehow, just not to bet everything on it. And some apps can certainly make money, but a key might be to focus not on selling the app itself, but on using the apps to provide a scarcity. For example, I've heard good things about the new This American Life iPhone app, though it's mainly because of the convenience it provides over alternatives for now. Alternatively, you could see apps that drive people to other scarcities doing quite well. But focusing on just selling apps because that's the next big thing? Might not be the best strategy for most...
I was just recently suggesting that the massive focus on "apps" and "app stores" may be a red herring, as eventually many of those apps can be built via the web (especially as HTML 5 moves forward), without having to go through any kind of app store approval process. So it's worth noting that, in fact, Google has done exactly that with its Google Voice app for the iPhone (doing so because of problems getting a client-side app approved by Apple). While the app is still rough around the edges, it should be a reminder that there are ways around the app store, and web-based apps have plenty of potential.
There are a bunch of different mobile music services out there (and more popping up every day). Some involve getting downloads to your phone, and others involve streaming (and, of course, there are things like ringtones and ringbacktones for specific functions). But Music Ally points us to a new service launched with Orange UK (and Universal Music) that will let users dial a voice call to hear some music. Basically, you call into an IVR system, and get a variety of options on what playlist you want to listen to. There's some functionality where you can set up your own playlist on a computer, and then access it via the IVR. Of course, the service is quite limited, especially in that it only has Universal Music music right now. The article describes the service as "free" but also targeting "pay as you go" customers, which makes me wonder if people are paying for those voice "minutes" that they'd use (which could add up). Perhaps I'm missing something? I also would think the very limited selection is an issue. Still, it's fascinating to see someone try such an experiment to get around some of the other barriers -- especially for folks with lower-end phones that don't have all the bells and whistles and app stores of higher end phones.
It's really sad to see some of the struggles that legacy businesses go through in trying to adapt to a more modern world, but not all of it is the fault of those businesses themselves. Look, for example, at what's happening with Verizon. Subsidiary Verizon Wireless -- which is 55% owned by Verizon -- began a marketing campaign pushing people to ditch their landline phone and go completely wireless. That's not a bad marketing campaign (and, in fact, might be a very good marketing campaign these days). So what happens? The union that represents Verizon's landline telco workers flips out and accuses the company of trying to undermine the union by helping Verizon get out of the landline business, so it can get rid of those workers. Seriously. First of all, there's little evidence to suggest that's true. Like most traditional telcos, Verizon still sees its basic landline business as a useful cash cow that I'm sure it intends to milk for as long as possible. Chances are, since VZW is a separate company, the marketing plan had nothing to do with the parent's marketing efforts. But, either way, at some point the company should be pushing customers to ditch landlines and other older technologies and embrace better solutions. Not because it puts old union guys out of work, but because it's where the market is headed.