You can take it with you

FEBRUARY 21, 2010
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment

Fans of “Star Trek” and the tricorder medical scanner used by “Bones” McCoy might have missed the news on BBC this week announcing the Vscan from GE Healthcare. A handheld device the size of a mobile phone, it was described as “a rapid diagnostic aid for cardiac patients” that revealed a long-standing heart condition in a volunteer by simply being held over a patient.

“Star Trek” has played a pioneering role in the world of portable phones ever since Martin Cooper made the world’s first mobile call in 1973. He has said often that television show’s device was the inspiration behind his invention.

Handheld devices have dominated the news this week as the Mobile World Congress (MWC) held its annual gathering in Barcelona. Although the makers of the world-leading iPhone did not turn up in Spain, those who did had a lot to talk about, not least the continuing advance of applications.

For those who wish to plan their evening’s entertainment, Lovefilm has introduced a free-to-download iPhone app that catalogues 65,000 DVD titles and allows registered users access to their rental lists. Grand Union Communications launched the HD TV Guide for iPhone offering instant access to Freeview and BBC HD. In the United States, Blockbuster On Demand announced the video rental service’s first foray into smart-phone applications in a deal with T-mobile to supply content for a new “HD smart-phone” with a screen almost 25% bigger than the iPhone.

The BBC introduced two new apps for news and sports content and immediately met opposition from the Newspaper Publishing Association, which said they would “damage the nascent market” and called for the BBC Trust to intervene. The apps are intended not just to receive audio and video but also to contribute directly to the newsroom: Stand by for on-the-spot reports from the Clapham omnibus.

Meanwhile in Barcelona, Hugh Bradlow, Chief Technology Officer of Australian operator Telstra, told MWC delegates, “Developers are still struggling with the handset environment, testing their software on up to 1,000 different handsets to ensure compatibility. I believe there will still be at least six to 10 mobile operating system offerings on the market in the coming years.”

Authoring for packaged media is straightforward – it’s either Blu-ray or DVD – but in the world of mobiles the multitude of incompatible formats presents an expensive challenge for developers. As 3 billion iPhone downloads testify, it is easy when there is only one player, but the single standard has vanished in the scramble to come up with competitive products.

The challenge of multiple incompatible platforms has been faced already by iPlayer, which supports more than 23 different formats. Perhaps the BBC can use licence payers’ money to develop versions for every possible device but it’s not something that content owners can contemplate, particularly independents that might otherwise enter the mobile market.

Not every smart-phone is an Apple. Nokia, LG, Samsung, Sony Ericsson and many others are finally catching up, so will retailers have to develop an app for every handset? Last week, Tesco introduced its innovative Clubcard app, Ocado. It is already on iPhone and Sainsbury’s reportedly has an app in the pipeline. Wal-Mart has offered iPhone apps since December 2008 although Asda, the UK part of the family, has yet to join in. Will the complexities of catering for six or more formats delay further developments?

Faced with this problem, 15 of the largest mobile operators announced in Barcelona that they have come together to form the “Wholesale Applications Community” (WAC), intending to create a single point-of-entry for developers. Instead of content owners trying to hit a moving target, these phone companies plan a unified format, as happened (eventually) with Blu-ray.

Even though Apple and Microsoft are unlikely to participate, at least in the early stages, several handset manufacturers have already signed up, no doubt with an eye to the potential revenues at stake. The WAC group serves an astonishing 3 billion mobile phone users around the world and so could have a significant influence on the future smart-phone market.

In a parallel universe, Apple has doubled the limit for app downloads when iPhone users are on mobile broadband. Developers have struggled to stay under the 10Mb limit in the past, but iPhone apps will be able to reach 20Mb, putting an increasing strain on an already overloaded network.

The tech talk in Barcelona was about “long term evolution” (LTE), the potential successor to today’s 3G mobile networks. Scandinavia already benefits from the higher bandwidth and performance of LTE but some doubt the investment will pay off.

Motorola Senior VP and General Manager of Networks Business Bruce Brda told Reuters, “LTE will buy a carrier two to three years of relief, but then it runs out. Carriers have been very consistent – they do not increase capital expenditure.”

US operator AT&T Chief Technology Officer John Donovan said, “We’re seeing advanced smart-phones like the iPhone driving up to ten times the amount of usage of other devices on average”.

It’s a problem that bedevils mobile phone companies around the world: the more successful they are in selling product and services, the more they have to invest in network infrastructure. Better bandwidth cannot be turned on overnight even if the investment could be justified, as fixed line operators have discovered.

In some countries, mobile data access is already eating into landline revenues. A report released this week by the consulting firm Capgemini, “Mobile broadband in Europe”, said that 35% of subscribers in Austria use mobile devices as their main or only internet connection. In other words, one subscriber in three there is no longer tied to a landline.

While Austria heads the table, Ireland is in third place. Almost a quarter of broadband users there rely on mobile data as the substitute for fixed line broadband, not an addition. In Britain, just 11% of all broadband connections are mobile, putting a severe strain on existing 3G networks.

The problem for mobile operators is identified in the Capgemini report. The capital expenditure required to improve the network infrastructure must triple, even to allow for monthly data usage to increase by 0.6GB per subscriber. At current pricing, business models become unsustainable for usage over 1 GB per month – that’s three episodes of "EastEnders" on iPlayer.

So if “unlimited broadband” offers are unlikely to continue, what other strategies are available? Estimates from the US show that 2% of mobile broadband users there account for over 50% of data consumption. Differential pricing, moving large downloaders to off-peak periods might accommodate this relatively small number of unprofitable customers, but it doesn’t address the fundamental problem. There’s just not enough bandwidth to go round.

The hottest news from Barcelona is that more next-generation handheld devices like the iPad will become available soon. Products called provisionally “super-smarts” will appear, for which voice communication will be peripheral.

Sony CEO Howard Stringer was at MWC to tell delegates that Sony Ericsson smart-phones will in future incorporate the PlayStation Network, noting that PSN has “over 40 million registered accounts”. The new Windows Phone operating system from Microsoft will integrate Xbox Live and the Zune music player from lift-off. And Nokia and Intel announced MeeGo, a system for “pocket computers, smart-phones, connected TVs and in-car infotainment”

Two centuries before the fictional “Star Trek” adventures, Gene Roddenberry’s 1970s dreams are becoming reality. All that’s needed is the bandwidth. As Captain Kirk says, “Beam me up, Scotty”.