Reality Check: CTIA – Any new news?

Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
The spring CTIA has a very tough role – trying to be new and different on the heels of the Consumer Electronics Show (January) and the Mobile World Congress (February). Nonetheless, I spent two exhausting days at CTIA and learned a lot. Given its relatively smaller size, there’s time for longer and more substantive conversations. The parties (except the RCR Wireless Late Night) tend to be smaller and more intimate, and the monorail and taxi lines are much shorter. Here are three themes that I took away from this year’s CTIA:
1. You can’t be smart enough when it comes to phones. John Garcia, my former colleague at Sprint, used to have a saying: “You can never be thin enough, your phone can never be smart enough, and you can never have enough bandwidth.” I heard “Snapdragon” (Qualcomm’s 1 GHz processor) thrown around almost as much as “4G” and I think it marks the first time I’ve heard senior executives at any wireless company reference the processing speed in a handset. The HTC HD2 (with a 1 GHz processor) went on sale at www.walmart.com and www.amazonwireless.com for $99 if you are willing to switch, have good credit, and sign a 2-year agreement. The Samsung Galaxy, introduced at CTIA, also has a 1 GHz processor (and a very nice user interface). And Sprint announced the forthcoming launch of the HTC Evo 4G, complete with a kickstand and a front-facing camera, also with a 1 GHz processor. Not present: Apple, who is planning some changes of their own come June. There was also some buzz on the floor about faster processors coming to Motorola devices this year (more on the MOTOROI can be found here). Bottom line: We need smarter phones if post-paid revenues per user are going to rise. We also need more ROM/RAM for applications (such as auxiliary directories that Mobile Symmetry will be introducing shortly) that run in the background. I also think that there are some plays between the gigabytes of microSD storage that are under- and inefficiently utilized on most smartphones today. Start to have the 16 GB card talk to the cloud (they now have the processors to do it) and interesting things can happen.
2. The wireless industry still hasn’t figured out how to tackle the wide world of machine to machine (M2M). I thought the M2M section of CTIA was abysmal, sparsely attended, and poorly showcased. M2M is the extension of the wired Internet backbones of AT&T, Verizon, and Sprint. They should be giving away telemetry devices for free (or nearly so) in exchange for renewed MPLS and hosting business. The value chain for M2M is severely broken (as broken as the value chain was 15 years ago when commercial Internet services were starting to ramp), and without some significant changes in perspective, we’ll be talking about M2M’s “hope” in 2011. Bottom line: To transform the M2M industry, carriers need to look from the IP network to the device. As they do, they will see M2M as the next “S Curve” of IP networking (akin to how MCI, Level3, Genuity, Sprint, and others looked at the dial modem networks as an extension of their tier-one backbone networks in the 1990s). More here for a future column.
3. Applications that leverage network connectivity and focus on latency pose the greatest threat to the current wireless models and, correspondingly, the greatest opportunities to change the structure of the wireless industry. It was no coincidence that the new Apple iPhone app called “Line2” got a lot of buzz at CTIA (more details at www.line2.com and www.toktumi.com). This app kills two birds with one stone: a) the historically hard (but not impossible) issue of having multiple numbers per handset, and b) placing or receiving calls through Wi-Fi with quality when voice signals are poor. Voice isn’t an easy issue to engineer over any 3G data network, and the product is positioned as a cheap way to place calls through Wi-Fi ($15/ month). But data networks get more robust over time, and one has to believe that, for “free”, folks will do a lot of things, whether in constrained or robust economic times. It’s one of the top selling apps on Apple’s iTunes store, although as of Sunday evening, they were unable to activate services due to a denial of service attack. What an interesting way to add basic phone capabilities to your (kid’s) iTouch!
In line with some of the themes expressed in previous Reality Check columns, the interaction of applications with each other (referred to as “pairs, trios, and quartets”) is a very hot emerging area. A lot more coordination is going to be required to pull this off, but “application interaction” is a topic that’s not going to go away.
Verizon’s support for a carrier-billed applications store is another development worth watching. From the initial view, it’s very promising. And the Skype app works great on by Verizon Blackberry Tour, especially for on-Skype call sessions.
Bottom line: Applications that sit near the network, leverage stored data in a secure manner, and focus on minimizing latency will win – early, and often. Unfortunately, as goes the developer community, so go the devices that are associated with that operating system. I struggle to see how more than four operating systems survive in the U.S. (five with Symbian or its successor OS).
As I mentioned earlier, there wasn’t a lot of buzz about Apple. AT&T made some announcements about bundling (free Microcells if you buy more products from AT&T), but that appears to be a very AT&T-centric idea. Thankfully, netbooks had no headlines, but the elephant in the room was the iPad, both from a developer and a device perspective.
A lot to learn at CTIA. Substantive talk, a pinch of hype, and definitely a path forward. More room than CES, and more substance per day than MWC. What did I miss? Let’s continue the dialogue at www.thesundaybrief.com or on Twitter (@mobilesymmetry).
Jim Patterson is CEO & co-founder of Mobile Symmetry, a start-up created for carriers to solve the problems of an increasingly mobile-only society. He was most recently President – Wholesale Services for Sprint and has a career that spans over eighteen years in telecom and technology. He welcomes your comments at jim@mobilesymmetry.com.