Mobile Game Conference Roundup

Over the last couple of years, Seattle has become a Mecca for digital and interactive media. Seattle hosted the Mobile Gaming Conference on the 13^th and 14^th. Next year’s World Cyber Games 2007 will elevate its status further to a new level. Several key players were at hand to talk about the status of mobile gaming industry and where it is headed. WSA’s Gaming SIG also organized an event “Value Models of Mobile Games” to coincide with MGC (on the 13^th). I had the privilege of moderating an experienced panel that included Derrick Morton, GM Mobile Games, Real Networks; Jeff Davis, CEO, GoGoMo; Tom Meigs, Executive Producer, Yahoo Mobile Games; and Scott Wallin, CEO, Metaplay. This note summarizes the thoughts, observations, and discussions from the two events.

First, let’s do the numbers. According to the two leading industry players (rivals) – Telephia and M:Metrics, who measure the US mobile market, mobile gaming segment, is growing. By how much is anybody’s guess?

• Game downloads represent approximately 6% (approx $50M/month revenue) of the mobile data revenues (compared to say Japan which is over 15-20%) and have approximately 5% subscriber-penetration in the US
• While the number of first time buys is increasing (1.6M in May), repeat purchases are not scaling up
• US has about 2% smart phone penetration but over 22% of such subscribers downloaded mobile games. Over 18% of the 3G users downloaded games – which is obvious – better user experience leads to more interactivity
• The mobile game industry is growing. The number of downloads increased from 6M to 11M in a period of 7 months (Nov 05 to May 06) and the revenue jumped from approx $40M/month to $100M/month.
• Not surprisingly, 13-24 age demographics is making majority of the purchases
• 40% of mobile games played come embedded with the phone
• Online promotion leads to 5-10X increase in mobile game sales
• There is significant dispute over the leading games list published every month list (we will get to the “statistical discrepancy” or as someone would say “fuzzy math” a bit later)

Trends –

Current landscape – Carrier has the power, Deck placement rules, meager carrier staff to review games. Independent developers at a big disadvantage. Mobilized Classic games still the front runner. Big head is developing (top 5 mobile game providers have over 60-65% of the market share, EA Mobile with over 30-35%), no efficient way to leverage the long tail. Multi-player and cross-platform games only exist on powerpoint decks, limited interoperability across carriers and platforms. Single digit subscriber penetration, no gaming specific wireless devices. Business models straightforward – subscription or download purchase. IP primarily relates to content and licensing. Catalog on the server. Microsoft a fringe player. For D2C players, only marketing drives sales. Poor discovery and distribution. Insignificant use of other phone features (camera, haptics, broadcast, music, SIP, IMS) into the game environment. Development cycles shorter than legal and payment cycles for the smaller developers.

Future landscape – Community driven market place. Tight integration of other mobile technologies (music, video, IM, advertising, location, etc.) with games. More consolidation (intra- and inter-segment). D2C rules. Mobile search drives growth for independent and small publishers, new business models are introduced. Carrier product managers leave their power jobs for industry positions. Multi-player and cross-platform games the norm. 50% or higher subscriber penetration, substantial improvement in handset features that enhance the gaming experience. More innovative business models, more bundling with other apps and services. IP relates to technology and innovation in addition to content. Catalog on the device. Microsoft a dominant player. Significant use of all available features on the handset and the network. Legal and payment aspects of content are all automated.

Community – If one had to pick a theme for the conference, it definitely was “community, community, community.” Small and big players alike expounded on the importance of community and communication though there seems to be some confusion as to what “community” actually means. Trip Hawkins talked at length about community and social computing driving mobile game sales while Microsoft is pushing its “Live AnyWhere” platform. More on LAW shortly.

Value-chain collaboration – Asian economies are better at value chain collaboration than their western counterparts. Daishiro Okada gave an example of the partnership of DoCoMo, Panasonic, NEC, and Square Enix to enhance the mobile gaming experience. Similarly, DoCoMo had worked with SEGA to develop some neat experiences and offerings in the early 2000s. SK Telecom and KTF also work closely with both device manufacturers and content providers to have a more consistent content and enhanced user experience strategy. US carriers have started to change their attitudes towards wireless data in general but they still work in silos internally and there is less collaboration between different entities within the company such as procurement, marketing, mobile gaming, messaging, etc. Unless one takes a holistic view, final products will miss the mark.

RIM – a gaming platform? RIM had a booth trying to woo the developers to consider Blackberry as a gaming platform. They might do well in corporate thriller or corporate scandal game category.

Microsoft’s entry into mobile gaming space – Microsoft is one company that can take a holistic view of things and change the industry. What’s impressive about the vision is its inclusion of different platforms and development environments. It is not usual for Microsoft to promote or target J2ME and BREW platforms but they are going after them to build a rich ecosystem of devices that can be supported and can talk to their XBOX platform and perhaps even tie-in other gaming communities as well. Can you imagine the wealth of user, device, and network data that will be captured as a result? Hello advertising. Yahoo and Google should be afraid. This will also lead to some disruptive business models and interesting carrier conversations. Imagine migrating the model to other areas such as enterprise applications. How well Microsoft is able to execute its strategy worldwide will define the next shift in mobile gaming.

McDonalds vs. Starbucks – Publishers are aiming to become the Starbucks of the mobile games market where people come in, pay a premium to a commodity offering, spend time in the environment, commune, spend more money, and come back again for more. This versus the current fast-food environment with low spending desire.

Licensed vs. original content – Big brands still drives the sales. Every now and then there will be a game based on original content and vision that will be do well but for the most part without some branded (meaning licensed content) equity, the chance of making a “hit” drops faster than the temperature on mountain top after the sunset. That means only innovation can get you attention.

Fuzzy Math – Telephia, M:Metrics and others regularly publish the top selling mobile games, their market share, the revenues generated etc. These lists have significant impact on how the games and the players are perceived within the industry and hence can harm or benefit a company (especially smaller ones) depending on which side of the equation they end up. Many of the publishers – big and small, and carriers seemed frustrated at the wide discrepancies in the results from both Telephia and M:Metrics. For e.g. Telephia results indicate a gender-gap while M:Metrics’ don’t. Publishers indicated that the order of their top hits published by research vendors is inconsistent with their internal numbers. Carriers also noted that they have never heard of some of the games that appear on the top 10 list which points to some sampling issues. Since these numbers have a direct impact on strategies, planning, marketing, execution, and revenues of many companies, much more transparency in sampling and statistical methodologies and validation of results is warranted.

Missing the big picture – Except for some of the seasoned industry veterans like Daishiro Okada (Square Enix), Trip Hawkins (Digital Chocolate), Chris Early (Microsoft), Mark Pierce (SHFF), and some others, most (esp. the smaller players) seemed to be operating in a world of their own, unaware or uninterested in what’s currently going on outside the mobile gaming space and how it might impact their respective businesses. As pointed out above, mobile gaming is shifting gears and people who aren’t watching for trends and developments outside their sub-segment will be creamed within the next 12 months. Developers will benefit from looking at the developments in the areas of mobile music, mobile search, voice recognition, mobile video & broadcasting, mobile advertising, near field communications, etc. As Mark Pierce noted, his experience in working on projects with Jumptap (mobile search), v-enable (voice search), Autodesk (location), Mobot (visual search), Vibetones (vibration), GestureTech (motion, tilt) helped him gain a broader perspective of the industry that he can apply to his passion of building mobile games. Conference attendees would have also benefited from the perspective of infrastructure vendors like Ericsson and Motorola – what’s coming and when? For e.g. SIP and IMS will have a direct impact on the mobile gaming market but they were barely uttered by any of the speakers. 3G will hit the inflection point next year but not much was discussed except EA Mobile demonstrating 3G only games.

Such focused conferences (vs. say CTIA) do elevate the issues and there are more direct conversations and less ducking the critical questions.

Overall a great show pointing to interesting times ahead.

Your comments are always welcome.

Chetan Sharma

(http://www.chetansharma.com/mgc2006.htm)

INTEROP Russia: BRIC Wireless Markets

6 cities, 5 time zones, 4 countries, 10 days. Last week was quite hectic but it was great. From the exquisite towering cathedrals in St. Petersburg and Kremlin to serene Stockholm, from a midnight stroll in daylight by river Neva in St. Petersburg to 4am walk in Gamla Stan (Stockholm), from reading the subway maps in Russian to catching a soccer match in Amsterdam, the trip was quite memorable. In Moscow, I was speaking at the INTEROP conference on the topic of “BRIC wireless markets – lessons, opportunities and challenges.”

This note highlights some of the points discussed during the talk.

BRIC which stands for Brazil, Russia, India, and China collectively represent the biggest and fastest growing wireless subscriber block. While the sheer volumes represent enormous opportunities for the near and distant future, there are significant challenges and risks associated with these markets as well. Unprepared and naïve companies have been chewed and spat out in no time.

First, let’s do the numbers:

•         Over 682M subs by 2005

•         BRIC markets will account for over 50% net adds 2005-9

–        Net adds – 159M in 2005

•         Subscribers – Brazil (87M), Russia (125M), India (75M), and China (393M)

•         Penetration – Brazil (46%), Russia (86%), India (6.3%), and China (30%)

•         ARPU is low – Brazil ($13), Russia ($7), India ($10), China ($10)

•         Data ARPU is low - $0.8-$1.5

Of course, since Dec 2005, the growth has continued unabated. China surpassed the 400M mark while India crossed the 100M mark and both countries show signs of continued growth. India is on the verge of another surge due to rural network expansion in 2006. However, both countries have some tough 3G spectrum decisions to take care of (have been delayed several times), particularly in China where the government is favoring the controversial TD-SCDMA and carriers opting for standards such as WCDMA. With Olympics looming in Beijing, this makes for an interesting dynamics.

BRIC markets share some characteristics but are also unique in how they have progressed and in how they should be approached. The primary growth drivers with some degree of variability have been:

•         Prepaid dominates

•         Pent-up Rural demand

•         Market reforms driving the industry

•         Competitive pressures on big carriers

•         Low-priced handsets

•         Some of the lowest infrastructure costs

•         Lowest tariffs

•         Carriers profitable despite low ARPUs

As highlighted in our report “Indian Wireless Market” back in May, India and China are adding on an average over 5M subs per month. That is in contrast to 5M net sub adds per quarter in the US and less than a million net adds per quarter in Japan and Korea. With the penetration rate at 12% and 30% respectively for India and China, these nations will continue to add approx 60M subs per year for the next 3-5 years.

Despite the growing subscriber numbers, pressure on ARPU remains strong and the ARPU has been on the decline in all BRIC countries. Data ARPU for BRIC countries is also small compared to some of the other established markets and is bound to stay that way for the foreseeable future. We will cover worldwide ARPU trends in a forthcoming paper. Stay tuned.

Summary of Lessons and observations

•         Government participation essential – Unified telecom Policy

•         Highly price sensitive markets

•         Data applications used as a churn-prevention tool

•         Role of competitive forces an foreign investment is quite important – lowers costs to consumers which stimulates growth

•         Low or zero import subsidies on parts or finished goods

•         Operators control the value chain

•         Operators can lower cost of infrastructure by accepting lower busy-call completion rates

•         Revenue-sharing arrangement with vendors vs. pure licensing deals

•         Low price demands innovation, participation in local economy

•         Network-sharing for rural expansion

•         Role for lower frequency bands (450MHz)  is important

•         Localize data applications

•         E.g. India – Cricket, Bollywood, Education, etc.

•         Significant IP issues especially in China

•         Rural markets key to future growth

•         Consumer driven markets, Poor Enterprise markets

•         Minimal market for foreign application developers

•         Should partner, acquire, or build-up local expertise

•         WiMax is attractive but cost considerations are more important

•         BRIC markets important for infrastructure players, not that much for application developers

•         3G is in planning stages, spectrum issues need to be resolved quickly

•         Considerations for other growing markets like Indonesia and US

Overall, BRIC markets represent significant opportunities but they are not for the faint-hearted. Amidst all the talk of BRIC wireless markets, it is easy to forget that US still remains and will remain the highest revenue generating market in the world for some time with close to $44B in carrier revenues in 2005, almost twice to the second player — Japan and twice of the revenues generated by the carriers in BRIC countries, combined. However, US market presents its own set of challenges and idiosyncrasies. Wireless is doing wonders in BRIC markets and there are tremendous opportunities.

There were also a couple of interesting INTEROP keynotes from Steve Wozniak and Kevin Mitnick.

Overall, it was an action packed conference, covering variety of themes including Wireless, VoIP, and Security. The trip left me longing to return to the region at the next available opportunity.

Your comments are always welcome.

Chetan Sharma

CTIA and Mobile Entertainment Summit Roundup

My week started with a presentation on “US Wireless Market: Trends, Technologies, and Opportunities” to the CTIA-bound Japanese delegation that included very knowledgeable executives from NTT DoCoMo, KDDI, Kyocera, Mitsubishi, Base, MCPC, Vodafone, and Willcom. During networking, had some interesting conversations with our Japanese friends regarding content business, UMA, WiMax, 4G, and new business models.

Spent next three days attending Mobile Entertainment Summit (April 4th; Chetan Sharma Consulting was research partner for the event) and CTIA (April 5-7th), talking to companies, looking at demos, visiting with colleagues and friends, and just absorbing the atmosphere and distilling things down to “what does this mean?” Below is the summary of key observations, thoughts, and digressions.

General atmosphere – As expected, the show grew bigger in terms of attendees (over 40K) and exhibitors marked by return of double story booths, glitz, and million dollar marketing budgets. Samsung and LG clearly were dueling it out for the most recognized brand out there trying to out-do each other in invoking a subliminal conversation with the customers. There was tremendous excitement at the opportunities, fear of missing it out, and yearning for figuring things out to ride the wave.

Booth of the show award is a tie between LG and Motorola with Samsung close behind. Honorable mentions: Philips, Lucent, and Siemens.

Typically, the main CTIA show focuses a lot on infrastructure, middleware, network, and handsets. This time, it was also about applications. There are readjustments going on in the value chain and with the looming consolidation wave, the rubric cubes will be rearranged in several sub segments. Wireless email had already starting shifting that way even though we are below 10% penetration.

Convergence was a big theme of the show. Consulting firms Deloitte and PwC released their reports on the subject and every major infrastructure player was talking about the impact of Fixed-Mobile Convergence (FMC). Convergence across PSTN, Cellular, WiFi, Bluetooth, Cordless Telephony Profile (CTP), Unlicensed Mobile Access (UMA), Session Initiation Protocol (SIP), IP Multimedia Subsystem (IMS), and Digital Living Network Alliance (DLNA) were all discussed in some detail. From a consumer point of view, it comes down to how fast the network is upgraded to provide the functionality and the number of devices in the market to take advantage of the feature-set at reasonable prices. Until then, it is just talk.

Positioning – Several companies are coming around to what DoCoMo taught us about i-mode. It was all about – improving the life experiences of customers. Nokia’s tag line changed from “voice goes mobile” to “life goes mobile” and “work goes mobile”. MTV expresses itself as a “content experience” company. Microsoft is all about “Discover, Innovate, Deliver” while Motorola wants to produce “must do” experiences.

Mobile TV is another area that is priming up for some consolidation as various components are commoditized (esp. for Unicast). It is not that, we are done with the innovation in this segment, in fact, we are only getting started, however, the drive will come from how the video content is packaged with other pieces of content and applications and made more interactive with humans and machines. The number of companies in the space almost doubled since last show (Ortiva, VectorMax, Snell & Wilcox, NMS, Nexage, Vimio). Everyone agrees that MobiTV has a huge advantage. It is a good case study of “first mover advantage”. It will be interesting to see if they can build on their success and compete effectively against broadcast solutions. Broadcast is the future of MobileTV. Mediaflo rocks. Key questions are: can the carriers get the business model right at launch that promotes usage and will the political and regulatory climate foster Mediaflo growth in light of DVB-H (Modeo in US) and DMB. Japan, Korea, and US are fertile ground for this battle. Qualcomm is working on Mediaflo as well as DVB-H chipsets. Slingbox was also showing their place-shift mobile video solution. It will be interesting to see how carriers block-and-tackle this one.

AORTA and 3G revisited – Since the article “3G – Hitting the Mass Market”, the tipping point assessment has been validated by several other analysts. In US and Europe, 3G deployments will start hitting critical mass in the first half of 2007 and we are getting closer to the vision of Always-On Real-Time Access (AORTA).

Mobile Search – During last couple of CTIA shows, mobile search has been an upcoming thing. During the last six months, 3 of the top 5 carriers have launched mobile search solutions with some incredible returns and actual impact on the bottom-line. Some branded solutions have also been launched and various business models are being tested. One can feel the tension between carrier-branded search and solutions from the likes of Google, and Yahoo. Who can build a better mouse-trap? Will carriers cede control and help non-carrier solutions with carrier-resident data? Feature-set is straightforward. Question is what customer data can one use to enhance the user-experience. If carriers are smart about it, they will work with white-label vendors such as Infospace (also Medio, Jumptap, etc.) to develop some really neat analytics that feeds back into user experience. Voice search solutions are also becoming more prominent. In the last 6 months, Voicebox, Voicesignal, Promptu, and V-enable have announced voice search solutions.

User Interface is getting better – Players in the value chain are paying more and more attention to the user-experience. As predicted, MVNOs are having an impact on how device manufacturers and carriers think about customization. Amp’D, ESPN, Disney, and Helio all have custom clients. Rather than relegating the user experience on device browser and archaic transcoding solutions, these MVNOs want to provide a controlled and immersive user experience. With 2^nd tier device guys eager to do what-ever-it-takes to make the user experience attractive, mainstream device manufacturers and carriers will need to get their acts together in a hurry. Verizon’s announcement (about using Flash) is recognition of this trend. Also, there were some apps with really cool UIs from startups such as DSI.

Community and User-generated content – There was tremendous activity in the mobile community and user-generated content space, from blogs and SMS to video and music content around community networks. Indeed, it is all about communities and user-generated content plays an incredibly important role in it. Though we have seen significant amount of growth in ringtones, graphics market, this will explode when UGC (including music, video) is put into the mix. This has been validated by multiple data points, the newest one being from 3 in Europe through seemetv service. How quickly will carriers embrace this so that the poor schmuck with 10 goofy videos with no technical capability gets to put their content for sharing, for barter, or for sale. Companies such as Intercasting, Juicewireless, AirG, SMS.ac, Bango, Blogstar, Helio (Myspace) are coming at the opportunity from different angles.

MVNO launches Since last CTIA, ESPN Mobile and Amp’D have launched. This CTIA marked the launch of Disney Mobile and the concept resonated with most attendees esp. folks who have kids. They also got their handset strategy right by pricing it for mass consumption. Service will become available in June. Helio is supposed to launch around the same time. In the meantime, Vegas started taking bets on which MVNO will be the first to fold. As I have discussed in prior articles, MVNOs have clearly raised the bar on user experience and will continue to push the envelope. The willingness of Asian manufacturers to customize at a frantically rapid pace is going to put pressure on the big boys and is already having an impact on their strategy and roadmaps.

Enterprise – Though there were a couple of Enterprise pavilions, the substance was pretty light. Revenue potential of enterprise solutions is equally big if not bigger than the consumer segment, yet it fails to get attention beyond mobile email which itself is becoming a commodity play. It should be noted that there were a couple of vendors that are trying out new approaches to the consumer email such as using MMS for email (Memova).

Mobile Diagnostics and Performance measurement – With the advent of 3G and numerous data apps, the impact on network storage and performance is enormous but is often not talked about. The amount of bytes generated in 3G networks is many times more than 2G and 2.5G networks. As such, the networks need to be planned and monitored appropriately. Testing and simulation of applications, services, and handsets also become more important. Companies such as Vallent, EMC, Keynote, Schema, and Argogroup are looking at the problem from different angles.

4G – Though no body in the industry agrees what it is, some semblance of “Beyond 3G” solutions started showing up at the show from IMT-Advanced solutions from DoCoMo (1Gbps) to WiMax pavilion. Samsung had the WiBro gear at the show – handsets and infrastructure – very cool to see things end-to-end. WiBro trials are ongoing in Korea and we are likely to learn a lot from the results that will help decision makers in the WiMax segment. However, we are still a long ways away (200 before we see any meaningful mass market penetration for mobile WiMax (There are a number of trials going on around the world from DoCoMo, Willcom, Softbank, KDDI, Sprint, SKT, and KT). It should be noted that US spectrum auction is slated to start June 29^th, 2006. It will be interesting to see who ends up with what esp. Clearwire and if any of the non-traditional players such as Google, Disney, DirecTV, and Microsoft make a run for it.

Near Field Communications (NFC) – DoCoMo has had success with FeliCa (Sony’s technology) launch in Japan. Things are increasingly looking bright for NFC-based solutions (mobile wallet, venue check-in, authentication, etc). Mastercard is running some trials on East coast. Cingular has been running some trials in Atlanta area using Nokia phones with Philips NFC technology. In addition to contactless payment capability, NFC-equipped phone can also read data from compatible tags, opening new content discovery avenues. The biggest challenge is of course getting the required infrastructure in place and endorsement or participation by at least one or two major retailers such as Starbucks or McDonalds. Many companies from Philips to smaller players such as MobilyT had neat NFC prototypes. Paypal also launched its mobile payment solution. Many companies are looking to bypass carrier billing so they have more control – it will be an interesting battle to watch.

M2M – With most major western markets reaching saturation, focus has been shifting to M2M applications and device-to-device networking. In addition to the big players such as Siemens, Motorola, and Phillips, newer players such as Esmertec were discussing the potential and applications.

Chinese presence – In the CTIA roundup one year back, I noted “Chinese are coming”. If there was any doubt, it was pretty clear from this show that Chinese wireless players are going to be significant force to reckon with. They are already making an impact in markets outside China, such as in India, Eastern Europe, and Latin America. Booths and showcases from ZTE, UTStarcom, and Huawei rivaled their western counterparts. Noticeably, several software and SI Indian firms also had presence at the show.

Handset business will continue to be brutal. Samsung, LG, Motorola, and Nokia all had a good line up of new handsets. Chinese manufacturers such as Techfaith wireless and Amoi also had some sleek handsets on display (Amoi even had knock-offs of Razr and iPod phone)

Mobile Advertising – Not much substantive progress since last time, except for more talk, and more companies popping up. The concepts and business models are starting to get more serious discussions from carriers, content providers, aggregators, and advertisers. Some interesting ad performance tools are also coming up (Integrated Media Measurement Inc.). It comes down to who has the relationship with the customer, what’s the depth of consumer profile information, and the trust-level established with the customers. ActionEngine’s MSNBC launch, new startups Rhythm NewMedia and VibesMedia, and Free DA (supported by Ads) were among the highlights in this area.

Location Based Services – I remember working on LBS solutions back in 97-98 timeframe and the technology was going to change the world (in the US). Largely due to FCC’s inability to enforce its own rulings, we didn’t see much progress for a number of years. Though Nextel has been providing LBS in the enterprise sector, it was only recently with Sprint opening up its APIs for selected developers that we are seeing some LBS based apps for the consumer sector e.g. FindIt. Disney Mobile is also making location a key feature of its offering for kid-tracker types of apps.

Microsoft dominance starts – It has taken a number of years, but shift is noticeable now. With smart phones penetration increasing, Microsoft is starting to dominate the high-end market. A good percentage of new smart phones are running MS software though Linux is also making some inroads in this market (DoCoMo, China). If the battery power issues can be resolved and the OS moves into the sub-$200 market, it will accelerate MS’s dominance of handsets. There was also talk about Opensource OS for mobile devices.

Open gardens – Pretty soon, being “open” will be considered a competitive advantage. At the two extremes are T-Mobile International (which gave up and opened up its greenhouse to the likes of Google) and Verizon (which might be one of the last ones to open up its nursery). Then we have carriers such as Cingular who are slowly but surely opening up access and getting closer to the i-mode model (e.g. recent Myspace announcement)

Misc. – Impatica was showing their solution of running PowerPoint from blackberry. Pretty slick and easy. Another interesting app I learned about was that of using SIM as a token generator for authentication. This can be really handy for corporate security.

Later this week, I am leaving for Korea to meet with some really smart guys in the wireless industry and experience the wireless broadband capital of the world first hand.

Your comments are always welcome.

Copyright, 2006 Chetan Sharma Consulting. All Rights Reserved

CTIA week

This week will be pretty exciting and busy. Monday starts off with a presentation and reception to the CTIA-bound Japanese delegation with folks from NTT DoCoMo, KDDI, Vodafone, Kyocera, Willcom, Mitsubishi, and Base. Tuesday off to Vegas for iHollywood and CTIA. Spending the day at iHollywood event and ending the day with CTIA press reception. Wed and Thu at CTIA with meetings, presentations, and of course the most interesting part - walk through the show floor. Looking forward to meeting old friends and colleagues and new faces.

iHollywood Mobile Entertainment Summit Discount

As a research partner of iHollywood MES event, we get discount coupons for friends and colleagues. If you are interested in attending and haven’t registered yet, please let us know and we will send you the coupon

Japanese Delegation to CTIA

I will be addressing the CTIA-bound Japanese delegation on 3rd April. Companies include NTT DoCoMo, KDDI, Mitsubishi, Base and others. If you would like to meet with them, please let me know.

Seattle Mobile Talk

Had a good discussion on 3G at Seattle Mobile last night. Hans (EMC) and I talked about the trends and the 3G impact on carrier network. One of the most revealing stats was the jump in carrier information data (within the network) - 10-15 times due to introduction of 3G. If storage is not well designed, it could lead to several problems. We are thinking about exploring this topic further. I continue to believe that starting next year, we will see pretty healthy 3G growth in the US market. China and India will start catching up over the next 2-3 years, while Japanese and Korean markets will start saturating.

Teaming up with iHollywood Forum

We have teamed up with iHollywood Forum as their Research partner on upcoming conferences to provide research and coverage on mobility issues.

The two upcoming conferences are:

Mobile Entertainment Summit April 4th, 2006 and

MoTV: Mobile Video and TV Forum at NAB - April 25th, 2006

Hope to see you there.

Deluxe Ticket holders will get a copy our recent research and industry brief.

Seattle Mobile Talk on March 13th

March Meeting - Monday March 13

3G Diffusion, Impact, and Opportunities
 
This month Chetan Sharma and Hans Hanspal will be giving a presentation on 3G entitled “3G Diffusion, Impact, and Opportunities”. Chetan has recently had an article entitled “3G: Hitting the Mass Market” published as the cover article for Wireless World that is an overview of the current state of 3G. Chetan and Hans will be speaking about the current state of 3G and what we can expect in the short and long term.

“We will focus our attention on 3G’s diffusion to mass-market in key geographies, look into key drivers for 3G growth, and discuss the short-term (12-18 months) and long-term (1-5 years) trends. We will also discuss some of the challenges associated with the increasing volumes of data.”

So if your business is mobile content, networks, services, or applications; your business is going to be affected by 3G networks. You don’t want to miss this one.

 When: Monday March13, 6:30 - 7:30 Networking, 7:30 - 9:30 Presentations

Where: Downtown Seattle, The Harbor Steps in the Terrace Room

 

Presenters:
 

Chetan Sharma, Principal - Chetan Sharma Consulting Chetan is a recognized industry expert in strategy and implementation of wireless data and pervasive computing solutions. His expertise is in developing innovation-driven technology, product and IP strategy. He has worked with major wireless carriers around the globe and advised some of the major content brands and wireless technology companies. Chetan is author of several books, articles, papers, and reports on wireless industry and sits on the advisory board of several startups and VC firms. He has also been involved as a wireless technology expert witness in intellectual property litigation cases. He is chair/member of several telecom industry consortiums and committees. Some of his clients include NTT DoCoMo, Disney, Qualcomm, Reliance, SAP, Merrill Lynch, American Express, Infospace, BEA, and HP.

Harinderpa Hanspal EMC Corporation Harinderpal (Hans) Hanspal is currently a member of EMC Corporation’s Global Telecommunications, Media & Entertainment Initiatives group, where he has responsibility for defining EMC’s strategy and solutions for global mobile markets. Prior to EMC, Hans has held various positions at Metapath Software, Sequent Computer Systems, and Amdahl Corp. His roles have spanned business strategy, sales, marketing, engineering, services, business & alliance development, and solution development. He has been in the IT industry for over sixteen years, with the past nine years focused exclusively on global telecommunications providers. Hans has extensive international experience and has worked with some of the largest mobile service providers around the world, including NTT DoCoMo and Cingular Wireless

FCW Wireless Security/RFID Conference Roundup

Once or twice a year, I get a chance to look at wireless issues in the federal sector, hear and talk to CIOs and executives of various government agencies such as DHS, DOD, GSA etc. It provides a unique view into a different world that is both impressive and befuddling at the same time. Though there are similarities to the Enterprise Mobility segment, it is a difference universe where things are driven by mandates and missions, directives and discourses. While there is a sense of urgency, there is also stifling bureaucracy and ineptitude.

I made my annual pilgrimage to Federal Computer Weekly’s (FCW) Wireless Security and RFID Conference in Washington DC earlier this week (courtesy of Compubahn). Also, spent some time at an event on Capitol Hill hearing some of the CIOs and their underlings on their future IT plans. At the conference, I got an opportunity to moderate a very knowledgeable panel on wireless security matters. We will get to the panel discussion a bit later.

I think it is quite relevant to discuss federal wireless related issues within the enterprise context as there are several lessons to be drawn it can help various organizations who are going through some of the similar challenges or are simply unaware of the problems they have. The most fundamental problem that most agencies (and by the same token most companies) have is lack of a coherent and detailed wireless security policies that considers “all” wireless devices whether they are operating within a WLAN that is controlled by the entity or for the device that is using a foreign network to access internal resources or for the device that is not connected yet but has significant and sensitive information stored on the device. How do you manage these devices? What if the device gets lost or hacked? Is the data encrypted? Does the data that gets copied on the SD card encrypted? How is the policy enforced? Can you use the same policy enforcer that you use for LAN on wide range of devices - PDAs, Symbian phones, BREW devices, etc. What’s the policy on Bluetooth? Do you permit Bluetooth devices in your enterprise? (in some agencies, Bluetooth enabled devices are not procured at all) Are you aware that there is no encryption? What ports get disabled and when? There are plenty of questions but no clear answer. For government, a good starting point is DOD wireless security policy (8100.2). Any enterprise who hasn’t really laid out their wireless policy could benefit from the same as well.

However, the policy needs to be laid out with plans that take into account scenarios 2-5 years from now. The reality today will get outdated really fast and for sure before your current implementation gets done. Once you have the policy, then what? Well, Audit and Enforce it.

One of the keynotes was given by Ron McKenzie who is the point person for American Red Cross IT and wireless implementation (disaster and rescue response units deal with wireless technology and related applications all the time) and reports to SVP and CIO Steve Cooper. He discussed the challenges that Katrina posed to the operations, logistics and IT. The main technology used are Satellite, 2way radios, and Cellular. The main applications are registration, family linking, bringing shelters online, and connecting with financial institutions to issue cards. One of the biggest challenge is scaling up and down of operations. As we are painfully aware - Katrina was a shameful disaster of significant magnitude. One of the basic problem was that communication (ok, so it is not that basic) was woefully lacking. Wireless industry clearly responded well but we could do more. The initiative really needs to come from Red Cross. Ron was looking for feedback from the industry as how they can improve their solutions and processes to better address emergency needs and minimize discomfort and chaos. I bet there are a number of people reading this who have great ideas or experiences that can help in pushing the dialog further. Red Cross is planning to finalize its “lessons learned” booklet by July 06 and thus prepare a process plan that can be replicated in the event of similar or worse disasters in the future. You can help. If you have ideas on emergency preparedness and execution, please send them along and I will compile and pass them on to Ron who has promised to give good consideration to all proposals. A few months back, Tsunami in SE Asia created damage and destruction of epic proportions. I always wonder as to how can the technology be applied to reduce the impact of natural disasters or make rescue and recovery operations more tenable. But, it is clearly not the technology that is a challenge but the people who use (or don’t use) it to streamline the processes. With Satellite, WWAN, WLAN, WPAN technologies, there isn’t a place on earth that can’t have connectivity for communication or data exchange.

One of the more telling problems (and I see this echoed in the commercial world as well) is the lack of user input into solutions or product roadmaps. There are plenty of vendors who are touting cutting-edge solutions to various agencies but they are selling to buyers and not users who typically are busy doing the real work.

My wireless security panel “Technology Fundamentals for End-to-End Security” constituted of Sumit Deshpande, VP, Wireless, CA (Computer Associates), Dean Knuth, National Manager, Northrop Grumman, and Jeff Watts, Sr. Engineer, Smartronix. These guys have dealt with very strict security requirements for most of major agencies esp. DOD. I asked the panel “Is security a technology issue?” Answer was an emphatic NO. Security is a process in which technology plays an important role. Education, training, awareness, audit, and enforcement are as or more critical than the technology implementation of whatever solution you might have. Bruce Schneier explains this in his books and articles better than anyone else.

There has been a lot of talk about 802.11i (WPA2) standard which is supposed to be a lot more secure than current WPA/Tkip implementations. Device management and device security is an important issue that is mostly overlooked. The other aspect that is hardly considered is that there is more to security than just LAN/WLAN - WWAN and WPAN powered devices all need to be managed if security is a concern. Though it hasn’t been a big issue yet, wireless security issues will become important for Sarbanes Oxley compliance as well. How does company keep track of corporate SMS/IM/data on wireless devices? Can it be audited? What are the risks? What are controls in place? Another point to remember - though FIPS 140-2 is becoming the norm for encryption, the certification process is arduous, so plan accordingly.

Amid the discussion about security, one can also go overboard in cases where information being transmitted or stored isn’t sensitive and security provisions only help in alienating the user and they get fed up of the steps required, reduced speeds and investment goes by the way side. Security to some extent is also a balancing act of user convenience and corporate priorities.

There seems to be a trend that CIOs of various agencies are coming from the industry these days. I think a great trend but there are many agencies that lack leadership and initiative and still rely on the big consulting companies to run their shop.

RFID - A good overview report can be downloaded free of cost here

Though there are a lot of privacy and security concerns (just like for Bluetooth), consider the following:

	2005	2010	2015
RFID Tag Pricing	$0.23	$0.06	$0.01
Number of RFID Tags in Use	6.3 million	80 billion	10 trillion
Growth of overall RFID market	$3 billion	$10 billion	$25 billion

Source: IDTechEx (2005)

RFID (and similar WPAN technologies) are going to be pervasive. Applications range from logistics to defense. Though I have been skeptical, human implants are also showing up. Recently a senior executive at one of the biggest software company I was working with told me that I am underestimating the growth in RFID implants in mobile workers in the next 5-10 years. Maybe there is a point, time will tell.

Also, ran into Iridium booth. I thought the company evaporated after their spectacular flameout but they are still hanging their hat and focusing on government, public safety, and on workers that require remote coverage.

My colleague and friend Sunil Jain raised a few interesting questions recently. Right now there are vendors like Symantec who license and manage security and policy on desktops and laptops and then you have vendors such as Pointsec, Mobile Armor, Credent and host of others who focus solely on the wireless device space. With the two worlds converging rapidly, how soon before an enterprise asks Symantec to add a few hundred licenses to their agreement to cover mobile devices as well. Do the (now) niche players get gobbled up by the big boys? or would the reverse be true? Likewise, how do you extend your HP Openview, CA Unicenter, BMC Patrol, or IBM Tivoli to do wireless device management as well. Also, whose responsibility is security anyway? OS Vendor, Handset guys, Network or carrier, enterprise (consumer?). And along the same lines, should security be handled at the network or at the device level? Gartner advocates network level protection. They contemplate that mobile world shouldn’t follow the PC deployments of anti-virus and other risk mitigation tools but rather network should have these services and only go to devices as a last resort. I think both are required, because there are is so much that can happen in a disconnected (from the enterprise but still connected) mode.

For most new technologies or products, security is generally an after-thought. We as an industry need to get better at designing systems, protocols, and technologies with security built-in rather than going through the alphabet soups of new versions to patch-up the mess.

Another area that is gaining traction is the concept of Managed Security. Security is getting complicated and so companies rather than deploying staff are interested in outsourcing device management and security of their mobile assets. Would you do it?

Finally, there are several other interesting federal initiatives like Location Specific Digital Signature (LSDS) and WiMax development work with Intel, Integration of RFID with WLAN, Biometrics, Locating users using WLAN/WPAN. These will trickle into the commercial sectors in the next 2-3 years.

 Your comments are always welcome.