I had an interesting call with Rizwan Tiwana, the CTO of Wateen, a large competitive operator which recently rolled out a 802.16E WiMAX network spanning 22 major cities across the nation of Pakistan.   I was looking forward the call because Wateen sits at the bleeding edge of two next generation service and access network technologies, WiMAX and IMS.  Wateen also represents one of a small handful of operators with the combination of both technologies in commerical operation. 

As of today, there are approximately 25K Wateen subscribers who are using their WiMAX connections for both Internet connectivity and voice services.  That voice services are served up over an IMS control plane is a watershed moment for an industry that has seen some negative press on the viabilty of delivering voice over IP services over WiMAX.  So far, so good for Wateen and its WiMAX partner Motorola.  They are excited about ramping up the subscriber base even quicker when the next generation of CPE devices become available in the next half year.

I inquired as to what has made them successful and Mr. Tiwana boiled it down to this; setting realistic expectations and thorough network design and testing.  As he succinctly puts it…”WiMAX is not GSM or CDMA, you can’t just throw up towers and expect blanket coverage.”   Instead, they have taken pains to educate their users on what to expect in terms of coverage and ensure their sales channels also set realistic expectations in the market.  Its good to see a success story like this for WiMAX and IMS and I hope Sprint/Clearwire are paying attention. 

I’ve just begun researching a report with a working title of “Best of the Mobile Web.” As a result, I was pleasantly surprised to see that not only does OpenTable now seat three million diners a month, but it also has launched a mobile version of its web site. For those unfamiliar with the company, the premise is simple: it allows you to electronically find and book restaurant reservations. It is a great solution for those times when you want to plan a great meal in a new area, or simply want to explore new restaurants.

I think the mobile web version of this service is a perfect example of what the mobile web is good for. It has a simple, clear function, namely making restaurant reservations. It works on many mobile platforms; the fact it works on my BlackBerry’s limited browser is testament to its versatility. And it eschews Flash, graphics, and scripting in favor of a standard HTML pages that load quickly, even over slow wireless networks.

It’s too early to claim that OpenTable will be one of the best mobile web sites for my report. Every site has to be evaluated according to 25 Anywhere web criteria, so great content alone isn’t enough to land a spot on the list. Nonetheless, I have to say that OpenTable.com certainly has Anywhere appeal. After all, what’s the point of ubiquitious connectivity if you can’t find a place to eat dinner?

The Wall Street Journal yesterday raised a few Anywhere eyebrows with this paragraph at the end of an article titled Firms Hitch Wagons to iPhone. The paragraph that caused this fuss was as follows:

And those that have been sanctioned by Apple are finding out too late that they have guessed wrong about the depth to which Apple is willing to help them. Makers of location-based software expected to benefit from the new iPhone’s global-positioning system. Yet they are finding out that Apple won’t support “applications designed or marketed for real-time route guidance.” The clause in the iPhone developer tool-kit agreement essentially voids months of work by TomTom NV and other navigation providers.

Could this be? Could Apple be an Anywhere spoilsport and refuse to allow location-based applications?

Now, being a registered developer, I have the software development kits (SDK) for both the Apple iPhone and Google Android [shameless research plug: Yankee Group clients should look for a Decision Note comparison of the two SDKs and how developers should choose between them to be published soon]. Unfortunately, the Apple SDK license terms are confidental so I can’t quote chapter and verse here (software license restrictions and end user license agreements are a rant for another post). However, I can provide my personal interpretation of Apple’s legaleze, which luckily isn’t too tricky. Full disclosure: I am not a lawyer, and this opinion should not be construed as legal advice. Always consult your own attorney on legal matters.

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The devices we use to access the Anywhere Network are truly legion — and getting more so. Gartner Group got a lot of headlines this week noting that one billion PCs are now in use worldwide. As one of the articles notes, that means that there’s a PC nowadays for one out of every 6.7 people on Earth. That’s an amazing accomplishment.

What’s I’ve been struck by lately, though, is how last century this business of counting PCs is. Yes, they are incredibly important devices. But PCs took an amazingly long time to reach this billion units from their humble beginnings with the Apple I introduced in 1976. Meanwhile, another personal device technology — call them PDs — invented around the same time has grown to more than 3.44 billion units, according to Yankee Group’s latest Global Mobile Forecast. That’s 1 PD for every 2 people on Earth. Of course, we know PDs better as mobile phones.

Today’s mobile phones make calls, keep our contact lists, take pictures, exchange email, do instant messaging, and can even help you navigate — and yet unlike PCs, these devices fit in our pockets. Unlike PCs , we rely on our PDs to always work, to be secure, and to become electronic extensions of ourselves. For example, in Japan, many teenage girls decorate their cell phones and their nails to match — you don’t see that happening with PCs. And, according to a recent study, people are more likely to leave their homes without their keys and cash than they are without their mobile phones; PCs, not so much.

And Yankee Group’s research shows that this trend of PDs outgunning PCs for the hearts and minds of consumers isn’t likely to stop soon. As we’ve noted in our Yankee Group Teens and Technology surveys, texting has wedded an entire generation of teen-age users to their mobile phones with a loyalty that their PC-centric and voice-addicted elders just don’t understand. And an upcoming Anywhere Enterprise report will discuss the future of Anywhere mobile applications. Hint: it’s easier to wean executives from their laptops than their BlackBerry PDs nowadays.

So bravo to the billion PCs in the world. Just don’t expect the 3.5 billion PDs on the Anywhere Network to wait for them to catch up.

I don’t know when this started happening, but the digital media industry has been going down a path in which every company is making a pitch that’s takes the following course: crabs in a barrel, transitioning to the dog ate my homework.

To be a little more blunt, companies are now lining up with a digital media value proposition that consists of a “crabs in a barrel” explanation for market development. When pressed, the explanation is akin to “the dog ate my homework.”

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Some funnels are good, and others are bad. For example, funnel cakes fall into the “good” category, but funnel clouds are considered by many to fill the obverse role.

In the world of marketing, there is the often-mentioned “marketing funnel” which shows the range of marketing activities from awareness all the way down to (purchase) intent. The proverbial “line” of above- and below-the-line fame lies somewhere about two thirds of the way down the funnel, and it speaks volumes to the types of marketing objectives that exist in the world of advertising.

Put simply, brand advertising dollars are invested at the top of the funnel where they drive brand and product awareness. Further down the funnel, performance marketing budgets reach closer to purchase intent. As this happens, it becomes easier to measure campaign effectiveness in terms of click-through rates and intent to purchase.

A few days ago, I was talking about targeting with someone who quickly repeated the current industry assertion that online marketers will want to deliver an automobile advertisement to someone who’s in the market for a new car. This is true, but the true question isn’t whether targeting can deliver such an advertisement — it’s how much will marketers be willing to spend to reach buyers in this stage of the process. Dollars per funnel inch…or something like that.

Because not every advertising dollar will get spent at the bottom of the funnel. And even as hundreds of companies hope to make it big by bringing scads of targeted digital inventory onto the market, we have to ask this fundamental question — what is the proper ratio of dollars spent at the bottom of the funnel in comparison to dollars spent at the top? 1:2? 1:3? 1:5?

It’s an open question, but I have to wonder whether anyone is thinking about the size of the market for below-the-line, performance-based, digital advertising targeted at consumers at the “intent” stage of the marketing funnel.

Sorry to be such a reductionist, but this is the epistemology that keeps coming to mind. Digital advertising can be disruptive, but it won’t likely change the core fact that no marketer will want to wait until someone is looking for a new car to introduce them to their brand. Imagine trying to sell a Lexus over a Toyota when that time comes. If you can’t explain the brand at the top of the funnel, then how will you succeed by focusing all your resources at the bottom?

You won’t. And that’s why — as a marketer — I’d prefer to make a calculated investment across the funnel, not just concentrated at one spot on the bottom.

I wanted to let enough time to pass since Yahoo!’s search announcement with Google so that the (other) windbags had the chance to state the obvious. And then I figured that I’d weigh in with a point-of-view to look at the deal from a completely different angle.

I should start by saying that I’m not an expert in search algorithms, and that topic has the same effect on me as a warm glass of milk, a 37-slide PowerPoint presentation and the entire activity we know as golf. Okay, so that last one wasn’t warranted, but you get my point.

Anyway, I’ve been pitched just about every angle on Yahoo!’s inclusion of Google search ads amongst their paid search advertising options. And I have one word for you: AdSense.

Let me explain. Let’s suppose that you run a digital media company. Many people do this every day, so this should be relatively easy to imagine. And you have an online property that you wish to monetize through advertising. Again, relatively straight-forward and believable.

So you do the thing that each of your peers has chosen to do, and that is to select a couple of advertising networks to place advertising at different locations on your web page. Again, this is a common practice in digital media.

And one of those ad networks is Yahoo! and the other comes from Google. Again, no surprises here.

So what’s the rub? Isn’t it just fine to use multiple ad networks? Isn’t it acceptable to use multiple sales channels?

So what if it’s search? Couldn’t we make the same argument for a social network, webmail property, or anything else for that matter?

After all, how exclusive are these bits? And what are the barriers to entry?

My colleagues Dan Taylor, Jen Simpson and I just took a briefing with Kent Ertugrul, the CEO of Phorm. As many of our blog readers may know from reading The Economist (my favorite magazine), Phorm provides an interesting twist on online advertising. Phorm does two things that promise to overturn the advertising apple cart:

• Omniscience. Phorm’s traffic analysis servers, sitting on ISP premises, filter (nearly) all end-user web traffic and observe the keywords they are interested in. By “keywords” I mean the most frequently occurring words contained in pages served up by webservers users visit. For example, if you visit the front page of Talking Points Memo, Phorm will associate page keywords “Obama”, “McCain”, “527″ (and the other most frequently used words with that page) with a random unique identifier that represents you. It knows these things because it has read and indexed the page when you read it.
• Disintermediates search engines. As you would expect, because Phorm reads the content of nearly every web page (on port 80 aka normal unencrypted HTTP) the user visits, it has unparalleled visibility to the user’s activity. The system is also “opt-out,” meaning that if the ISP installs it, the user has to take an active step to not be included in the system. These two properties — drastically expanded visibility, and the fact that the user cannot escape unless they opt out — enables ISPs to go “over the top” of the heads of Google and other search engines. It has the effect of disintermediating them entirely by allowing Phorm to claim, “yeah, these other guys know what user 123 has been searching for, but we know about all of their interests, across all of the websites they visit.”

Richard Clayton of Cambridge University has published a highly technical analysis of Phorm’s system on the his website. It makes for excellent reading, and I recommend it highly. The comments are particularly entertaining; one reader notes wryly that “It seems the only way to full opt out of this is to change ISP.” Wikipedia also has an informative article that is, on the whole, fairly hostile to Phorm. To date, the biggest objection to Phorm has come from researchers and observers who feel that the fact that it reads and indexes (nearly) all pages you visit is an unwarranted invasion of privacy.

In the briefing, I learned quite a bit about Phorm’s goals from a corporate perspective. My queasiness about inspection of customer web sessions aside, it seems that continued badgering from the press and from UK observers has forced Phorm to add more privacy-preserving features. Certainly, the point of going “over the top” of Google and the other search engines means that Phorm tracking cookies are accessible by any website who wants to use it. It’s clearly very appealing to ISPs, who desperately want a slice of the Internet advertising pie.

The question is, how bad do they want it? It’s clear that researchers like Clayton are not happy with the way Phorm’s system works. The way the system is set up (forcible inspection of HTTP traffic, cookie forging) seems a lot like a wiretap to me (albeit one to which, according to Phorm, the user consents). Today, the system is trialing in the UK with three carriers, including BT and Virgin Media. What happens when Phorm expands to the US is the real question. I suspect the Electronic Frontier Foundation and the ACLU will be all over this like a fat kid on a Twinkie.

For all of its novelty and potential for disruption, adopting the Phorm platform value proposition is a risky one for ISPs. The issue is not about whether Phorm gathers the right kinds of consent from end-users, anonymizes data it collects, or offers appropriate data protection tools for end-users. Phorm may (or may not) be doing all of the right things; that isn’t the point. The issue is, regardless of what Phorm does, whether opponents can muster enough opposition to poison the reputations of ISP customers who adopt it. Examples from other emotionally-charged consumer fights around genetically modified organisms (GMOs) and environmental issues suggests that aggrieved consumers, when riled up, have rather sharp elbows. “Spying on their customers!” would be one charge. “Big brother” would be another.

Phorm’s response, in our briefing, was essentially, “once consumers understand our system and its benefits, they will like it.” Let’s assume for the sake of argument they are right. It would still be an uphill battle, though, because business models predicated in part on user education usually fail. My vendor customers in the consumer security business know this all too well!

All of this leads me to conclude that ISPs who adopt Phorm would be putting a cyanide capsule in their mouths. The worst-case scenario is suicide-by-public-relations. Enough jostling from consumers and — crack — there’d be the sudden, familiar whiff of almonds in the air.

What if our ability to imagine a world for consumers made richer and more productive with connected devices was limited by the imaginations of the engineers chartered with building them? What if how we’re conceiving of these things is one of the very things holding them back from arrival on the market?

Michael Rayfield, GM of nVidia’s mobile business unit, showed me a prototype Anywhere Device last week that his firm built to showcase its Tegra computer-on-a-chip family–a potential core component in an entertainment-focused device. What I learned reminded me that the way you ask a question at the outset of any undertaking has a huge influence on the nature of the answer.

“One of the problems with the mobile internet devices out now such as the Eee PC is battery life. That’s because engineers seem to approach the design challenge by taking a conventional x86 PC design and saying, ‘How will we cut back the thing’s power requirements?’ nVidia decided we could help the industry by creating a sample pocket-sized mobile device that could be really useful for 24 hours without a recharge. We think that’s key to a successful consumer experience. To do that, our design process started with a zero power budget.”

I did the expected double-take with that remark. To design a power-miserly device, they decided to allocate no power? “Not far from it,” Michael said. “What we said was, nothing gets power in the design until it’s been proven that it’s needed.”

I thought suddenly of NASA’s Apollo 13 mission, the so called “successful failure,” when following the initial crisis, grounded crew member Ken Mattingly (left in the NASA photo above, next to mission capcom Joe Kerwin) was tasked with figuring out how the crew would re-start the command module without exceeding the limits of the reduced power available. In the film version of events, after many attempts based on removing steps from the power-up sequence, he finally realized he needed to start over — to design a brand-new power-up sequence that didn’t cause the system to overload the available power.  Only then did they manage to address the severity of the limitations. 

It’s a compelling dramatic moment in the film. More importantly, it’s a reminder that a zero-based approach to anything ensures you take nothing for granted. In the case of nVidia’s zero-based power budget, the thought exercise worked in spades. The device that Rayfield’s team built serves up gorgeous high-resolution graphics, multi-tasks like crazy, and runs forever.

Just as the technology industry suffers from blind incrementalism–as in, what other new slick thing can we add to this product–it also suffers from, shall we say, decrementalism. Why do we like the iPhone so much? One reason may be this: its designers didn’t aim to out-do the smart mobile phone category, but rather to come up with the best hand-held device they could make, starting from a clean sheet of paper.

I’m sure some 2009-2010 connected devices will benefit from nVidia’s power re-think. The real question is, what false assumptions have we been making about what needs to be in a connected device? What zero-based rethink can we do on function?

Checking in from the sunny and 107 degree Las Vegas, Nevada where the NXTComm tradeshow was held this week. All of the usual suspects carted their fancy booths, big staffs [armed with the latest and greatest corporate messages], various SWAG items, press kits and demo equipment into the heart of Sin City.

Word from vendors is that overall show attendance was a “mixed bag” and while the show seemed busy, several exhibiting vendors lamented that the quality of attendee or for short–QoA–left something to be desired. I suspect that this means that average foot traffic is approximately 15-20% “true” prospects for the solution that vendor happens to be trying to sell. The rest of the human traffic includes competing vendors [dressed incognito sans the normal logo’d golf shirts], business development folks, partners, staff, press/analysts and various other riff-raff. I saw an adorable older couple, must’ve been in their mid-80s, laboring around from booth to booth collecting vendor SWAG items including those squishy stress balls, flashing lapel pins, pens, and boxes of mints…..I guess it’s more interesting than walking around a mall.

My personal opinion is that smaller vendors with scarce marketing resources can find much better bang for the buck out there to drive lead generation. Educational webinars come to mind here, Yankee Group often has several hundred attendees show up and even more register with their contact details and interest areas. At NXTComm, the no-frills exhibitors are promptly rewarded with awful floor location and non-descript signage which in turn guarantees that they are left wanting for any traffic at all. Even this guy. Not sure how to fix this, but another strategy I’ve seen work well is making the lower-cost investment in an adjacent hotel suite or meeting room which allows the advantage of the common assembly of partners, customers, press and analysts without incurring the big expenses of an actual exhibit.

I’m betting that this show survives, if only because its among the last games in town which a singular focus on the telecom industry. A piece of advice for show organizers that one of my colleagues pointed out—get rid of the 3rd show day, its overkill and three days is too long to be away from the office/real job. Keep an eye out for my show re-cap which will be published for Yankee Group clients within a couple days.