The Southwest of Mobile Networks
All of the press around Intel’s investment in Clearwire and their collaboration on 802.16e should have people thinking. Not about how Intel is greasing the industry to get support, but rather about Intel’s larger vision: defeat Qualcomm at their own game.
Intel’s public announcements tend to focus on fixed wireless and notebook remote access applications. Yet these are very small industries so why bother? With the addition of mobility in 802.16e, presumably you can download your email in your car at 80mph. Maybe that opens the door for next generation Blackberry’s, networked iPods and storage-less digital cameras. Still seems too speculative to bother.
The real story is that Intel is using these nascent markets to get some industry adoption while they complete 802.16e with support for VoIP. According to public documents, Intel expects this in 2007.
The general consensus is that 2007 is too late as WCMDA will have broad adoption globally with excellent device support while 802.16e will just get off the ground. However, I believe the battle is not so much about technology, but rather the business model rationalization that Intel’s insurgents, like Clearwire, will force. Technology is an enabler but the battle will be fought with new business models.
The mobile carrier business model is unsustainable, with high acquisition costs, complex pricing plans, onerous contracts and walled gardens. The incumbent carriers have high operating costs and fight their value chain—handset vendors, content owners, and application developers—to maintain their preeminent position.
The opportunity for Clearwire and others is to create the Southwest of mobile networks. Run the least operating cost network based on a pure IP infrastructure. Outsource legacy PSTN interconnect to others that already have scale. Open the devices at the application and network layers to enable a true consumer electronics business and eliminate the carrier subsidy. Allow anyone to develop and deliver innovative applications and content.
How will they make money? In the near term, they will have high growth with low marketing expenses. In the long term, they will be the arms dealer to the consumer device, content and services giants who will fight the mega-battles to win the consumers wallet.
Intel’s public announcements tend to focus on fixed wireless and notebook remote access applications. Yet these are very small industries so why bother? With the addition of mobility in 802.16e, presumably you can download your email in your car at 80mph. Maybe that opens the door for next generation Blackberry’s, networked iPods and storage-less digital cameras. Still seems too speculative to bother.
The real story is that Intel is using these nascent markets to get some industry adoption while they complete 802.16e with support for VoIP. According to public documents, Intel expects this in 2007.
The general consensus is that 2007 is too late as WCMDA will have broad adoption globally with excellent device support while 802.16e will just get off the ground. However, I believe the battle is not so much about technology, but rather the business model rationalization that Intel’s insurgents, like Clearwire, will force. Technology is an enabler but the battle will be fought with new business models.
The mobile carrier business model is unsustainable, with high acquisition costs, complex pricing plans, onerous contracts and walled gardens. The incumbent carriers have high operating costs and fight their value chain—handset vendors, content owners, and application developers—to maintain their preeminent position.
The opportunity for Clearwire and others is to create the Southwest of mobile networks. Run the least operating cost network based on a pure IP infrastructure. Outsource legacy PSTN interconnect to others that already have scale. Open the devices at the application and network layers to enable a true consumer electronics business and eliminate the carrier subsidy. Allow anyone to develop and deliver innovative applications and content.
How will they make money? In the near term, they will have high growth with low marketing expenses. In the long term, they will be the arms dealer to the consumer device, content and services giants who will fight the mega-battles to win the consumers wallet.
posted by dury at 11:21 PM
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