Last year, we wrote an article, Cell Death 2010 which suggested that the emergence of Ubiquitous Broadband (UB) via WiFi and WiMax offering free voice calls and high speed, low cost data would precipitate the end of the cell phone. Although some disagreed with our conclusions then, the general argument now is not whether this will happen, but when.
The brunt of this major disruption is going to be focused on the incumbent network carriers and it’s clear that some of them are already responding by installing their own, branded, subscription WiFi services (T-Mobile with Hotspot in US, DoCoMo in Japan etc). Handset manufacturers, too are racing to the scene with WiFi enabled cell phones. As users migrate from cellphone platforms to portable network devices which can instantaneously switch to the least cost/fastest option for voice and data, the crucial question which arises is; Who owns the networks?
In order to answer this question, it’s necessary to understand where the real mobile networks are. They are not in the technology that provides the wireless infrastructure; they are in the social connections and the ways the social networks are formed and serviced.
A year ago we wrote;
So how do the service providers make money when calls will in essence be free? Ask Google: It knows all about it. There are currently around 190 million cellphone users in the United States (out of 1.8 billion worldwide) who will spontaneously switch to what is basically a web interface for all of their communications—that's a lot of extra clicks...
And what will drive this revolution? Free telephone calls are a big deal—big enough, in fact, to make the platform dominant—but eventually it will be services (both paid for and free) that are the driving force. In the end, it's all about content, and the groans of service providers and content creators can already be heard as they wonder how they'll pay for or get paid for all of this content when the consumer expects so much for free.
Since then, Google have introduced Checkout, then they signed an exclusive search deal with MySpace and now they've just thrown a whole bunch of their valuable shares at YouTube which places them squarely in the contents delivery business with one of the world's most popular video/social networking sites. The argument about whether Google have paid too much for YouTube will bat back and forth for a good while yet and inevitable lawsuits from copyright owners will surface like pimples on a teenager – but when the dust settles, the deals are done and the content owners are getting paid for the viewing and purchasing of their property, what will emerge is a gigantic social network, 'owned' by a service provider who gives away most of it's services for free because it monetizes them in a different way.
When a major percentage of the content the network consumes is user generated, with a micro payment method embedded into the user account to enable the content creators to share in the revenue they generate – then we start to see a network evolve that owns itself.
The obvious next step, as cities are blanketed with UB (guess who?) is to service that network while they are on the move. But providing the mobile society with what they need is not just a matter of porting web based applications to a cellphone.
With a PC, search is the gateway to the Internet. That is, after all, how Google started to build their empire. But keyword search is dysfunctional on a mobile device. Cellphones are simply not suited to display screens of links to pages which are frequently not optimised for mobile usage or even relevant to the immediate needs of the user. On a PC it’s not a problem, on a mobile device it’s tedious in the extreme. Search is still required, but the interface is fundamentally different. Why? Because a portable device, no matter how powerful, how high the screen resolution, how large the memory or how fast the data connection, is never going to be used the same way a PC is used. It’s one thumb and a 2” screen Vs ten fingers and a 15” screen – it’s Augmentation Vs Absorption. The gateway to the mobile web is the filter of your social network. Your buddy list is the way you connect to the things you want to know while you’re mobile. It’s about a trusted opinion filtered through your social connections – an algorithm far in advance of any heuristic search engine – one that suggests stuff to you simply because someone you know is interested in it and because it knows about your location.
And when it comes to owning the networks, are the handset manufacturers going to be sidelined again unable to share in the revenue streams their devices facilitate?
Not if they are quick on their feet. See part II.
