Is an iPhone- and Android-Only World the Best We Can Do?

Reading about the latest Snapdragon-enabled smartphone, I recalled the big splash that Qualcomm made when it announced the platform in 2006. The vision of a world filled with mobile broadband–enabled consumer electronics, ranging from gaming handhelds to portable media players to digital cameras to smartphones, was an enticing one.

Three years later, are we there yet?

The answer is no. Instead, what we have is a world filled with smartphones, netbooks and more smartphones. Throw one or two million e-readers in the mix, and you really have about three devices categories.

All in all, progress has been disappointing for mobile broadband in the consumer electronics market. Sure, smartphones and netbooks are shipping big-time numbers, but outside of these devices — which aren’t even traditional consumer electronics products — when you compare the vision of three years ago to today, the lack of diversity for mobile CE products becomes painfully evident.

Why the lack of variety?

It comes down to four reasons:

  • Cost: The cost of embedding mobile broadband into devices is significantly higher than that of Wi-Fi or other connectivity. In the price-competitive world of consumer electronics, Wi-Fi  wins out over embedded 3G.
  • Long product cycles in traditional CE devices: When Sony launches its fourth iteration of the PSP five years into the platform (and at a higher price), instead of launching the PSP2 with 3G,  you see how slow the  incumbents move.
  • Carriers don’t understand how to operate in a one consumer/multi-device world. Carriers prefer consumers have one device that does everything on their 3G network (i.e. a smartphone) rather than multiple devices for different applications, and if consumers must have more than one device, well then, the new mantra is Mi-Fi.
  • Lack of imagination: There is very little imagination in the consumer electronics space today, and even less in the phone business. Sure, some like Archos dare to be different and Apple is likely percolating a potential disruptive device, but even there – with web tablets – everyone seems to be copying each other.

Some would also argue that the real problem is the smartphone, which is fast becoming the super-CE device. That may be so to a certain extent as more features are subsumed into the phone, but as digital cameras have shown, traditional device categories threatened by phones don’t have to disappear overnight.

Instead of launching another me-too phone, CE makers would be wise — as Kevin Tofel has suggested in the past — to integrate mobile broadband into devices. New models such as Amazon’s whispernet offer a beautifully simple way of making of making mobile broadband fees invisible to the end user. Let’s not leave this opportunity to the e-readers. Otherwise we’ll end up with a world in which we all own the same iPhone or Android device and lots of big-name CE makers will be out of business.

Question of the week

Will the universe of mobile broadband consumer electronics be more than just iPhones and Android devices?
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Michael Wolf

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7 Comments Subscribers to comment
  1. in my view the issue of connected consumer devices has a few dimensions:

    velocity: the smartphone has become a platform of choice for game developers, video apps, and webservices because they offer a standard operating system similar to personal computers. standardization is key to inviting application developers to innovate, and increases their velocity to deliver products quickly, and also creates choice for consumers – which are all good things.

    not sure i am seeing other CE device platforms that allow such a paradigm ? …the Chumby is one attempt at it, but has found little adoption thus far.

    packaging of connectivity: the whispernet example is a good one; the average consumer does not care whether the connection is wifi, wimax, evdo, or whatever – all they care about is the ability to get new content, and get new applications over the internet. the paradigm of non-contract based connected devices will definitely pick up steam (lead by e-readers), and the mobile operators seem to have settled on a “usage-pays” paradigm for it. the Ford SYNC services is another example of CE application packaged nicely into the experience – without need for the consumer to worry where the connectivity comes from.

    device fragmentation: if I can get more and more from a single device, why should i carry additional gear? the smartphone again is proving to be an excellent platform since it affords the framework to package sensors, decent screen sizes, cameras, and the works. no wonder apple packaged iphone software into the iphone.

    it is going to be a platform war, similar to the PC era – and we already have two sets of camps.

    clearly google with android, and microsoft with windows mobile are taking the approach of inviting a number of hardware/CE vendors to the mix and enabling them to innovate on their platform – irrespective of form factor.

    apple and blackberry on the other hand believe their core business is in doing the OS+devices.

  2. A significant factor in 3G access is the balkanization of cellular modulation and frequencies between carriers. With the Mi-Fi approach, you choose 3G based on location and don’t change your devices. Because my Kindle is Sprint, I have many no service locations in my area — it’s always an unpleasant surprise to sit down for lunch and discover I can’t get a Kindle newspaper. If the Kindle had WiFi, Verizon data is bulletproof almost anywhere locally.

  3. Overall the magic that drives sales of high end consumer electronic goods in telco channel – no matter whether comes to iPhone or netbooks – is subsidy. Therfore the preference of all-in-one devices from carrier side is influenced by ability of particular device to generate sufficient revenue for constuction of stunning “for free” offers.

    1. @David – good point. Though I would argue subsidies exist in traditional consumer electronics – the gaming market is a great example – Sony sold the PS3 at a $200 or so loss for the first few years based on anticpation of backend game royalties through the life of the console. The Nintendo DS could be given away by Nintendo and they’d probably make a profit due to all the games they sell. It can be done without a telco subsidy.

      1. I agree with you, but so far did not see too much success stories in bringing similar e2e vertical offers from carriers side. All efforts in business or consumer space are widely overshadowed by iPhone and Blackberry. Could be enter to the dump pipe.

  4. James Kendrick Tuesday, October 13, 2009

    ^^^It always comes back to the cost of 3G plans. Carriers don’t give away mobile broadband service, and that is a prohibitive barrier to put embedded 3G in anything.^^^ It’s going to be interesting to see these e-book readers with embedded 3G come to market in huge numbers as expected. Carriers are going to up the ante on the cost for providing this service and e-book retailers, Amazon and Barnes & Noble in particular, are going to pass that cost on to the consumer.

    1. @James – I think carriers do need to break out of the one-for-one device to consumer mindset. I believe this is one of their biggest struggles, and today the only real solution I’ve seen is Mi-Fi. Now Mi-Fi isn’t a bad idea – its essentially transferring the home router concept to mobile broadband – but I think a range of approaches is best.

      With Whispernet, it isn’t charity. There is a pay-per-usage cost built into the business terms and Sprint gets compensated by Amazon. I would recommend more of these types of relationships where the mobile broadband is invisible and on-demand. This is already done with Wi-Fi with Ninendo devices at McDonalds, for example – no price to the consumer, but McDonalds and their service provder have a business relationship with Nintendo.

      I anticipate the first big Whispernet type of adoption outside of e-Books will possibly be with the next-gen handheld gaming platforms. I would be surprised if especially Sony didn’t build 3G into the PSP2.

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