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Do you want wireless with that?

Apple’s recent recession-bucking third-quarter results have been widely reported, with continued growth of sales of the iPhone (a staggering 626% on the previous year) and its associated apps as a major driver. Just as interesting to my mind, however, is the associated fall of 7%) in sales of the iPod. The iPod was responsible for Apple’s recent resurgence, yet now it is just one more app – albeit a tightly-integrated one – amidst the many on the iPhone.

So it seems that users value the wireless connectivity on the iPhone particularly highly. What’s more, they value the wide-area (cellular) connectivity compared with the small-area (Wi-Fi) connectivity of the iPod touch, which is otherwise virtually identical in terms of functionality. And the price premium that this wide-area connectivity demands is enormous, when you factor in both the initial purchase price of the devices and the ongoing service costs.

It’ll be interesting to see if this value translates into other devices. One potential example is the Amazon kindle e-book reader, whose wide-area(3G) connectivity contrasts sharply with the need to sideload books onto the main competitor’s devices (Sony). One factor which helps is that Amazon appear to have delivered global connectivity for the Kindle via a single deal with AT&T. As well as simplifying the deal-making for Amazon, this also delivers the potential for users outside the US to gain unparalleled coverage, accessing any network which is available to them even in their home country (see Disruptive Analysis’ speculation on this deal).

These may be early examples of a new wave of embedding wide-area wireless in a wider range of devices. For example, the Wireless World Research Forum has set out a bold vision for 7 trillion wireless devices serving 7 billion users by 2017 (http://www.wireless-world-research.org/). Clearly that implies that most of the growth is going to come from machine-to-machine communications, or if you prefer, the Internet-of-things, enabled by low cost next-generation wireless modems, particularly using next-generation LTE/WiMAX/IMT-Advanced technologies.

Do you want wireless with that?

UK WiMAX: Spectrally Challenged?

from Warnham

Wi-Max is a mixed blessing. It’s a fantastic technology, with great potential, but plenty of questions hang over the size of its potential success.

I’ve previously written about the generality of the technology: Wi-Max is not magic – it’s subject to exactly the same trade-offs between range, capacity and quality which any system deals with, so that mobile Wi-Max is likely to achieve much the same range and practical throughput as 3.5G, despite higher advertised peak rates.

Nevertheless, Wi-Max (and similar technologies, particularly Wi-Bro) is showing great uptake outside of the UK, such as the recent announcement by Sprint Nextel in the US that they are intending to spend $3 billion to support 100 million WiMax users by the end of 2008.

In the UK, however, there is a limit on deployments due to the lack of available spectrum. The 5.8GHz band (just above 802.11a Wi-Fi) is available, but those frequencies don’t propagate very far and don’t penetrate into buildings very well. Additionally, the ‘light licensing’ regime in that band means that there is no certainty of protection against interference from other users.

Following some auctions and subsequent aggregation Pipex and UKBroadband have some decent spectrum at around 3.5GHz. UK broadband is operating using other technologies, but Pipex is certainly pressing ahead with WiMax plans via trials and have marked up the estimated value of their licence from zero in 2003 to £5m in 2004. There is reason to suspect this is a substantial underestimate now…

The really ‘tasty’ spectrum for Wi-Max would be the set of bands around 2.6 GHz. It propagates well, there’s a decent amount of bandwidth available and equipment should be readily available as these bands (or nearby) are widely available in other major markets. Ofcom has announced its intention to licence these as part of its burgeoning spectrum awards programme, but plenty of roadblocks remain, including the fact that these bands are equally attractive for extra 3G capacity, and are currently designated for 3G alone at European level.

It could easily take until the end of 2007 before the relevant auctions take place, and there are many unanswered questions about the way the spectrum will be packaged and managed. All this adds up to considerable uncertainty for Wi-Max in the UK.

I’ve been asked several times how much this spectrum might be auctioned for. My crystal ball is far too cloudy to put any precision to that, but for an interesting data point we can look to the current auctions by the FCC in the US for spectrum for Advanced Wireless Services – basically 3G and related services. At the time of writing the price was standing at over $12 thousand million (being careful not to confuse transatlantic billions).

Crudely, if we weight that figure by the ratio between the UK population and the US population we might expect the UK auction to yield at least £1,300 million. In practice I think there are at least two factors which might increase the UK pricing. UK population density is nearly ten times that in the US, increasing the return for operators relative to the network investment. Additionallym the US already has spectrum suitable for WiMax, so we may see operators supporting competing technologies in a bidding war.

It’s not quite at the same levels as the heady days of the 3G auctions in 199 (which produced around £23billion), but if Ofcom can move quickly to clear the remianing obstacles,it promises to be an interesting auction. On the other hand, if they don’t, WiMax could miss its mass-market opportunity in the UK altogether.

T-Mobile Announces HSDPA Service

From home

The following data rates, offered via HSDPA mobile and over the wide area (i.e. not Wi-Fi) would have sounded like science-fiction just a few years ago:

  • Initially (Q3/4 this year) with a download speed of 1.8Mbps everywhere in the cell, compared to just 384kbps (up and downlink) for standard 3G.
  • Next year 3.6Mbps download nearest the base station, degrading as the subscriber moves out to the edge of the cell,
  • By the end of next year, 7.2Mbps download out to the cell edge, together with 1Mbps uplink using HSUPA.

I’d caution that an over-the-air rate offered everywhere does not translate to the same user rate everywhere, just as 11 or 54Mbps advertised on your Wi-Fi client does not translate to anything like that if the channel is busy or if you are suffering interference. Nevertheless, these are impressive numbers. How long until that kind of rate is widely available via Mobile WiMax?

See here for the full article (you’ll need to register with ComputerWire).