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The single biggest change in the phone world in 2008 will be the increasing amount of market share taken up in China, India and the Far East - but I suspect that our interest in this PhoneTalk blog may be focussed closer to home, i.e. the Western world.

Although the USA will continue on its current phone path, there are signs that its talking to the rest of the world and that global phone initiatives will apply equally to both the USA and (for example) Europe. With the LTE (4G) announcement, Nokia and Verizon have shown the way forward and this technology, plus both this operator and manufacturer, will all stand a good chance of being in the forefront of the phone world come 2010.

Away from telephony and data technologies, surely the biggest battle ground in the phone world is going to be that of the user interface. Which sounds a bit geeky, but with more and more functions (e.g. Internet radio, GPS, NFC) being shoehorned into handsets every single year, usability is going to be as large a factor as fashion in 2008.

Apple, of course, place highly in both usability and fashion stakes, with their utterly groundbreaking iPhone. The combination of capacitive full face touch screen and 'designed from the ground up' finger-operated interface is beguiling, whether you're an utter phone novice or a hardened power user appreciating a product that's so elegantly designed. The first generation iPhone has been quite restricted in terms of overall functionality but 2008 will see a second generation iPhone with 3G data, video recording, (almost certainly) GPS and this will be a force to be reckoned with in all markets.

The major manufacturers know this and have been ramping up their own touch-based interfaces, although in the short term none are going to have the iPhone's elegance - or the iPhone's 'street cred', which is possibly more important. Apple haven't got the resources to provide models for all pockets of course, and the likes of Nokia, Samsung and others will still find plenty of room for product sales, while still beavering away at their own next generation designs behind closed doors. Come 2010 or 2011 and I suspect that almost every mid-range or top-end phone will look a lot like an Apple iPhone and use some of the same principles.

I don't see major changes coming in the way phones are bought, with the current 'prepay' and 'contract' systems surviving in most markets, although the current trend for 18 month contracts in order to bring the initial handset prices right down (usually to zero) is unwelcome and will result in more and more frustrated customers in a year or so's time. Savvy 'power users' should always buy unlocked, SIM-free devices where possible, but this purchase method will remain in the minority.

The largest change for the cellphone industry is Verizon opening up the network to all devices and apps.  This has the potential to recruit tons of new developments, such as phones that provide tons of great wifi functionality. It may also usurp some of Google's power over their own phone, as consumers will likely use the gPhone with the Verizon network vs. trying to use Google's (yet to be implemented) private network. 

The second-generation iPhone will raise the bar again for everyone, and phones like the Verizon Voyager (LG Venus), gPhone, openMoko, and a whole lot of unlocked iPhones will appear on the newly open Verizon network.  Pairing a smartphone like these with Verizon's premium data plan represents the most common future configuration of smartphones -- unlimited data/voice with seamless nationwide coverage.

Consumers will continue to vote with their dollars as contracts expire, moving to networks with more choices and features.  Plans will continue trending towards unlimited everything (data/voice) for a flat rate, while phones continue their trend towards full music, video, and wifi computer-like applications.

Who can get to WiMax?  Answer...the firm that partners with Google on content and localities on owning local infrastructure.  Cell phones are brands for organizing software...almost like Microsoft...get out of the infrastructure business...go into the low asset cost high quality service business of organizing local broadband combined with services.

What are those services?

Local news

Directions     

Local links to groups of interest (Harleys...college football, etc.)

Traffic reports -- coordinated with DOTs

Ryan Lanham 

2008 is bound to see many changes in mobile Internet technology. Google's Android platform is likely to bring about many of them. As consumers become increasingly aware of the vast potential their mobile devices hold -- web surfing, banking, multimedia messaging, GPS navigation -- they will come to expect more of their phones. When consumers come to expect something, there's a line of businesses around the block waiting to deliver it and cash in on the new demand. These folks have been lined up waiting to deliver cutting-edge mobile content and services for years in anticipation of consumer demand that it is yet to come.

So while most phones are capable of advanced functions like web browsing, why have consumers been so slow on the uptake? In fact, 90% of cell phones in the US come with a web browser installed, yet only 13% of users are surfing the mobile web (Gartner). Why? Two reasons: Firstly, because wireless service providers charge a hefty fee to use data services on their network. Launching the browser and getting online with your cell phone requires and additional data plan that tacks an additional $15+ dollars onto consumers' monthly cell phone bills. For most cell phone users, this is too much to pay for a service they didn't know they needed. When web access becomes a standard feature on modestly-priced wireless plans, mere curiosity will spark widespread usage of mobile browsers. Suffice it to say that charging $15/month for something that most consumers do not understand -- and may even find intimidating -- is not a good promotion.

The second reason that mobile browsing has failed to reach the mainstream is the poor usability of most mobile browsing solutions. Someone is unlikely to spend an hour and an additional $15/month figuring out how to send an email with their phone if they can do it on a computer in two minutes for free. There have been many attempts to shrink the desktop web experience down to the small screens of mobile devices, but most of them have resulted in a poor user experience. Practical and usable mobile applications need to be designed from scratch for mobile devices. There is no shortage of development talent to make usable mobile applications, but there is presently too little consumer demand to spend much time developing them. My conclusion is that before the greatest mobile applications can be developed, there needs to be a demand to fuel the fire. This demand however, depends on consumers' ability to use mobile web applications without incurring an additional monthly cost. So it is up to the wireless carriers to loosen their choke-hold on data services and start providing mobile web access as a standard part of mainstream (i.e. modestly priced) wireless plans. I would even bet that the additional revenue carriers could gain by selling third-party applications would surpass revenues from subscriptions to their overpriced data plans.

Therefore, a solution to the cost-of-use problem will inevitably bring about countless new solutions to the usability problem. Wireless carriers, the progress of the industry is in your hands!

In the meantime, there are some brave pioneers developing highly usable mobile applications today, despite the lack of consumer demand. Once such company, Survol Mobile Technologies, has developed a mobile content platform that allows access to complex web content such as RSS feeds via a simple and fast interface. With the usability problem solved the only remaining obstacle to mobile-web-content-for-all is the cost of the data plan -- the application is free. So if you already have a data plan on your cell phone, try it out and get a taste of what is to come in mobile web technology.

number portability

handset choice - branding

data costing tending to free - price plans

phone usage - music IM social networking VoIP 

 In general I see four core themes for the cell phone industry in 2008.

1.  Number portability
2. Reduction in branded phones
3. The price of data will tend to free
4. Phone usage patterns

To expand on each theme:

Number portability - the cell/mobile phone has become an extension of the person.  It is so much an ingrained part of our identity that when you loose your phone the end result is tragic.  Many users feel trapped with golden handcuffs to the network because of their number and this does little for customer service from the provider.  There is growing momentum in Asia for number portability, it is popular in Taiwan and Australia where the process is controlled through a government body to oversea the process.  To improve the customer experience operators in Europe and US will expand number portability options.  This will have knock on effects to branded handsets and price plan options.

Reduction of branded handsets - operators can offer handsets are low prices because of minimum commitments and exclusivity options agreed with manufacturers.  In Thailand where phones are not SIM locked subscribers change their handset frequently (some every year) to get the latest phone.  These handsets are [near] full price but the choice that the subscriber then gets means that price is not an aspect of operator choice.  The limited distribution of the iPhone and handsets options seen in Europe and the US does become a choice in which operator to subscribe to.  I see the end of branded phones and an en masse adoption of the Verizon in an effort to attract subscribers.  Combine this with number portability, and the churn could be significant if I get to choose my handset and retain my number.

The price of data will tend to zero - this could also move the other way.  Data access costs vary across the world.  In Thailand where data is not widely used in favour of voice and SMS data rates are reasonable cheap.  They are limited as the infrastructure would not cope for large scale usage.  As IM, Social Networking and VoIP usage start to increase data will be the competing position between operators and we will see the volume free minutes typical of voice plans today modeled in MB of usage.  Data is usually a relatively small percentage of revenue for a typical operator.  Ratio will increase and price point will then be driven by wireless hotspot pricing as service become more IP centric.  The challenge will be balanced by the availability of dual mode handsets, but as handsets options are broadened to be [generally] that of the subscriber dual mode handsets will become more popular.

Usage patterns will change - as subscribers start to adopt more of the IP centric service such as IM, VoIP and mobile browsing the usage will shift from pure voice and SMS to mobile internet.  This will be driven from the Gen Y'ers that are happy with social networking and platforms like Facebook on their mobile and the use of mobile IM to stay connected with friends and business.  The increase in non-voice applications will place the choice in the hands of the subscribers looking for very cost effective data plans, see the price of data will tend to zero. 

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Will consumers demand more control over their cell phone options?
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    Absolutely.

 Will it really make any difference at all - if not, why?

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    The various "big players", I think, are about to learn just how consumer-driven this marketplace really is.
    Technology for cell phones/mobile devices is expanding at alarming rates, and it's easy to use, simple
    to learn and fuels it's own demand. The cooler it gets, the more people who will want it.

What these announcements will mean for consumers when they're shopping for phone/plan in the future?
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  ;   Healthy competition, terrific pricing wars on features.

What more could we ask for?

Bill Burke
http://wirelessspeech.blogspot.com

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• 2008 should see some big news from the FCC. In February they'll complete their game-changing auction of the 700 MHz spectrum. It could lead to an exciting new high-grade wireless internet — nationwide — or at the very least additional cellphone capacity. (Expect commercials touting better coverage or capabilities from whichever carrier wins!) In addition, some auction-winners will be required to open their networks to other phone companies.
  
  
• Will we see less carrier exclusivity? This summer Congress already held hearings on the iPhone and its "exclusive carrier" status. This will only get more scrutiny as the next election cycle approaches — especially if the prevailing candidates buttress the already existing anti-exclusivity forces. The U.S. will elect a new President in 2008, and they might ultimately appoint new FCC commissions with a stronger consumer bias.
  
  
• Consumers should demand more control over their cellphones. The Android platform is just one more factor focussing new attention on how "closed" cellphones are. Android won't actually be released until the summer of 2008, but Nokia is already bragging about the openness of their N Series phones. ("Open to creativity, open to discovery... We believe the best devices have no limits.") This will raise awareness about cellphones that have "from the top, down" control — and when more "open" choices appear in the marketplace, consumers will finally be able to start voting for them with their pocketbooks.
  
  
• I've always wanted to see cellphones tapping popular gaming communities like Second Life and World of Warcraft. "Niche" capabilities like these should finally start becoming more feasible if and when open platforms start to catch on.
  
  
• One thing is certain for the year to come: cooler cellphones. The iPhone raised the bar for style, starting a design trend that's already provoked imitators (like Verizon's LG Voyager phones and the rumored phone/media device coming from Dell.) Music and internet capabilities now become must-have items for any future smartphone.
  
  
• Ultimately the iPhone signals the biggest trend of all: fierce competition. With more attractive cellphone options, Apple and other handset manufacturers should find themselves forced into extreme measures to compete — everything from co-branding deals, more customization, and yes, even lower prices.