Out of the Box

Sirius and XM have convinced the Department of Justice that its merger won’t create a monopoly in the radio, or more broadly, music playback, space. While the FCC is expected to follow suit with the DoJ, there is a rush of parties that are looking to add terms and conditions to the merger. Censorship on satellite radio? What would be the point of a premium alternative to terrestrial?

It’s certainly true that there are far more options available for high-quality digital music playback since the time that XM started broadcasting from space. The iPod is frequently brought up as a competitor, but I’ve never really thought of it as a major one. First, the iPod accelerated its move into the vehicle rather late in its rise to popularity and many of the solutions are primitive or awkward.

I’suspect that I, like many MP3 player owners, have music on their players to which they’ve never listened. Mostly, though, particularly for Apple’s ecosystem that has never been as aggressive about music discovery as, say, Rhapsody, iPods are about playing back what you have, not what you don’t. And keeping them fresh requires round-trips between the house and car. So, what satellites really buy the companies better than any competing technology today (save terrestrial radio, which was around at its launch) is direct and unfettered access to the vehicle

Wireless technologies such as 4G and WiMAX have the potential to present a credible no-hassle alternative to satellite radio, but the cost structures don’t support the infrastructure required to deliver it for the foreseeable future. One could argue that they didn’t for XM or Sirius, either. But with a reduced customer acquisition marketing burden, their expenses should become more manageable. In the meantime, the Slacker Portable satellite add-on looks like it will be promising alternative when it arrives.

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I certainly agree with Verizon CEO Lowell McAdam that mainstream consumers will be in no hurry to abandon the subsidy model. But in addition to seeing whether more sophisticated customers will shell out $200 or more to run advanced wireless devices on Verizon’s network, we have to see how Verizon will price open access before understanding the impact it will have on new or integrated devices in the market.

McAdam acknowledges that consumers won’t sign up for multiple $50 per month plans, and at Gearlog, Sascha Segan notes that Verizon might offer incremental device access for $5/month. This is the kind of scheme that Sprint has talked about for Xohm as well although Sprint has acknowledged there should be an unlimited access cap.

There are already a number of devices other than handsets that are obvious candidates to work on a high-speed wireless network — portable navigation devices, handheld gaming consoles, MP3 players/Internet radios, and more. Consumers are already buying these devices. Sure, adding WAN modems would add cost, but it’s really the high price of wireless broadband that is holding them back. Verizon needs to offer a cheap tier of service that entails either limited data or limited speed. Such pricing would go a long way toward enabling the kind of creative innovation that Dash Navigation has enabled with only a GPRS connection at its disposal.

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Om Malik pretty much nails the challenge that such an acquisition would have.  Sprint’s customer base would do wonders for T-Mobile’s ARPU. However, the company would be juggling four wide-area networks (and five altogether if you include Wi-Fi). On one hand, a WiMAX network would be an attractive asset for migrating those T-Mobile Broadband customers forward. On the other hand, T-Mobile could just shut down the expensive Xohm initiative and transition everything to LTE.

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If you were wondering why Steve Jobs sneaked in some enhancements to the iPhone’s location capabilities in advance of the February SDK unveiling, tonight may have provided a clue. In advance of its official release at GSMA Mobile World Congress (and the first shipments of the Dash Express), Garmin unveiled its Nuviphone, which combines communication, navigation and some basic MP3 playback features — Industrial design inspiration courtesy you-know-who. Wilson Rothman has captured my pointing out the name’s similarity to a certain popular interactive voice response system.

Garmin isn’t releasing specifications or a features list given that the device won’t ship until the third quarter. On the data front, though, the Nuviphone will support at least POP and IMAP email and Web browsing. It also takes digital stills an video and — here’s the slick part — geotags them so you can send a photo to another Nuviphone, after which that recipient can be directed to where the photo was taken. The Nuviphone has a 3.5″ screen but a wider aspect ratio than the iPhone.

As for other comparisons, it’s not a smartphone in that it does not have an open OS. Garmin says that developing an SDK is technically possible but not something the company is pursuing. (I think it should.) And I also don’t expect the Internet or media features to set a new bar.

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Today, Google made it official that it will bid in the 700 MHz spectrum auction and there’s a flurry of media and excitement around it — most of it premature. How much will Google bid? Will it partner to do it? Will it win? And what will it do if it does win? At least the other shoe has dropped on Verizon Wireless’s open access announcements earlier this week. CEO Eric Schmidt has defended the hedge by noting that it will mean open access regardless of who wins due to FCC requirements.

Even if Google does win, we shouldn’t necessarily expect for it to be a branded carrier. Remember that one of the conditions it wanted from the FCC was mandatory wholesaling. So.. much as with Android, there may not be a “Google Wireless” but lots of different MVNOs using Google’s spectrum as infrastructure.

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I’ve been thinking lately about the notion of “signature phones.” Lots of wireless operators have exclusives but it seems that some grow to be especially associated with that operator, ideally in an iconic way, even transcending specific models to extend to generations of products. They don’t have to be smartphones although they’ve tended to be. Here’s how I would assign them today:

• AT&T: iPhone (duh). This was probably ingrained from the introductory Macworld keynote.
• Verizon Wireless: Hasn’t historically had one, but the enV is gaining momentum as its Sidekick. Voyager definitely has potential here and VZW is promoting it.
• Sprint: While Treo was probably once a signature phone for Sprint, Touch may be the closest today although it may not be compelling enough.
• T-Mobile: Sidekick, although Shadow may be up and coming as a rival.
• Helio: Ocean

Overall, signature phones have been good for operators, but too much focus on them can distract from other benefits such as network coverage (which helps explain why Verizon Wireless has never let one emerge). There are also risks involved if the phone moves to other carriers (like Treo) or if another signature phone tries to take the industry in another direction (as the iPhone has done to the Sidekick). It’s interesting to note that none of these devices have been made by the top three global handset companies. Also, the concept may expire as U.S. operators move to more open access.

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There is an alternative way to send short bits of text between mobile phones! Oh, technology, thou art a fickle muse. I think I will start one of these companies and create a product called, ”I Seek You.” Yes, something like that, but catchier. Maybe there’s some way to shorten it.

Actually, this article doesn’t even come close to describing the real threat du jour. As Facebook becomes the growing Web within a Web, this community is going to hit the mobile world like a freight train with more people on it than the carriers themselves have. It is developing more leverage than AOL ever had during its heyday. AOL was a jail; Facebook is the Hotel California.

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Gizmodo has a lengthy post about Apple’s new iPhone update and its impact on unlocked phones. Apple gave advance notice that the update might render such phones useless. The whole iPhone unlocking phenomenon has touched on a lot of complex issues regarding intellectual property, consumer rights, the DMCA and so forth, but are there really that many consumers out there who so lust for an iPhone but have such an aversion to AT&T? Why don’t these people just get an iPod touch and another sleek (smart)phone? It seems like this would save them a lot of trouble.

Since my two-part column on Xohm, I’ve been accused of drinking the WiMax Kool-Aid, but I have to think that some kind of open access (or at least more open access) network would be cheered by consumers looking for most of the iPhone’s data features without being tied to AT&T. Apple’s multiyear exclusive may forbid such fraternizing with Sprint, but at least some fans of Apple’s portable wireless devices are clearly willing to go to extraordinary measures to avoid Apple’s current wireless partner.

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This week’s Switched On, the second of a two-parter, focuses on some of the business issues around building WiMAX into devices such as digital cameras and MP3 players. In the course of researching the column, I came across this informative article detailing Clearwire’s role in the Xohm rollout. Of note, the agreement is slated for 20 years, with an option to extend it for another 30. That’s a long-term play in this (or just about any) business.

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I took advantage of a trip down to Atlanta this week to check out the new AT&T Experience store, which promises to bring together all of AT&T’s formidable triple-play assets. In particular, I was interested to check out U-Verse and HomeZone, its home video plays.

I thought I might document the trip with a few pictures, but was accosted by an employee on some kind of cigarette break while I was outside the store, maybe 15 or 20 feet away just taking pictures of the facade. I can — OK, I really can’t — understand companies getting testy about taking pictures inside a store, but outside? Does the store have anti-aircraft artillery on the roof to take down any planes snapping pictures for Google’s or Microsoft’s maps?

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