RCR Local: Kansas City panel talks how to profit from 4G

OVERLAND PARK, Kansas—“It’s not fair to call that a phone,” commented Craig Miller, VP of marketing and business development at chip maker Sequans, referring to the HTC EVO 4G WiMAX smartphone, set to be commercially introduced this summer by Sprint Nextel Corp. Miller one of several panelists discussing “Profiting from 4G networks and solutions,” during a panel event earlier this week at an RCR Local event held at Sprint Nextel Corp. headquarters in Kansas.
The device, demonstrated earlier in the day, has a large (4.3 inch) screen display, cameras facing forward and backward to enable video chatting and a number of other uses, a kickstand that enables people to stand up the device like a monitor to watch high-definition video and the latency gains that come with running on a 4G network. The buffering on the WiMAX network “shortens the time to joy,” for the end user, noted Paul Reddick, CEO of mobile publisher Handmark.
The challenge with 4G services is to translate the value proposition to the consumer, noted Eileen Brown, VP of the telecom and wireless unit at the NPD Group, which tracks consumer behavior across a wide variety of industries.
That challenge –showing the consumer what is possible with 4G – is the impetus behind Sprint Nextel’s 4G branding campaign that shows people watching video at an airport and gaming in the woods with friends connected via Wi-Fi, commented Todd Rowley, VP of 4G at Sprint Nextel. For comparison, the carrier’s 3G advertisements focus on price, service and money-back guarantees. Possibility, not price, is the focus of the WiMAX campaigns.
The difference between 4G and 3G is analogous to the difference between broadband and dial-up in the PC world, said Sequans’ Miller. Rowley likened it to experiencing high-definition TV for the first time in that once people experienced the difference in quality, they immediately understood it.
Nevertheless, 4G networks will take time to rollout. Verizon Wireless is in the process of building out its LTE network with a few markets set to launch by the end of the year and AT&T Mobility is taking a slower approach. For its part, Sprint, with partner Clearwire Corp., plans to cover 120 million potential users by the end of the year, compared to the 270 million pops covered by Sprint Nextel’s 3G network, Rowley said. “You’re not really going to be hindered by ‘only’ covering 120 million pops,” Reddick pointed out.
The point of 4G networks is not a question of “if,” but “when,” said Deb McPheter, account GM with HP, which is in the process of buying Palm to further shore up its end-to-end wireless play. Companies need to find which applications will be the key drivers for the user experience. A good user experience will speed customer adoption, she said.
The youth market will help drive 4G adoption, NPD Group’s Brown said, citing research from her company that found families with children under the age of 13 have more connected consumer electronics devices in the home.
And while everyone expects 4G services to penetrate and indeed enable the connected home, panelists were realistic about what will be connected wirelessly and what will connect via other methods. “It needs to be portable and mobile,” commented Reddick.
“Some things will want to be connected on the LAN. Some things will want to be connected on the WAN,” echoed Miller, who was then teased for giving human qualities to inanimate objects, perhaps an indication of America’s love of their consumer electronics devices. So realistically, while everything from refrigerators to big-screen TVs to printers could connect via a 4G chip, it may make more sense for some appliances not to have a WiMAX or LTE chip embedded in them.
But a myriad of devices will have chips embedded in them, from traditional handsets to less-traditional consumer electronics devices to enterprise devices and industrial machinery. This wide swath of applications points to the huge opportunities in the marketplace, but also raises the question of which company gets the call when something goes wrong. In general, panelists agreed that customer service calls will become more complicated going forward, as devices, carriers, content providers and others along the value chain converge to bring new business models to market.