Paul,
To answer one of your questions, adoption of the 1X chip sets is divided between handsets and the carriers' network infrastructure. (As if you didn't already know that! :) Beyond that, I don't pretend to understand the specifics of the types of apps that are accessed the most using 1x chipssets, the types that are growing the most, etc., etc. Maybe Eric or others can help out with that.
My guess is that end user cell phone market growth is like a fasion industry with network effects.
The problem: as fashions fade fast, which they tend to do, we realize that the network effects weren't really all that strong.
The potentially strong network effect, however, is the network effect of BREW. If that operating system is adopted as the de facto standard, there is a huge networking effect that will grow the value chain exponentially. If I understand the information correctly, BREW is the only end-to-end operating system (from developer tools to billing the consumer for downloaded apps)being sold today. And the ARPU (average retail price per user) of 1X BREW users is more than six times greater than the other ARPUs. With that opportunity for the carrier and apps developer to make money and the lead to market that BREW currently enjoys, the network effect even at this very early stage will continue to work against the competition each and every month that other end-to-end solutions don't become available.
Regardless, if a particular game becomes popular, it won't matter which operating system is used to access it. The users will flock to a particular game. That does speak to the nature of fashion that you mentioned. And since I know you've read Tipping Point, I also know that you realize how relatively little is needed, given the right set of circumstances, to drive a particular game's popularity to ubiquitous use. In that case, consumer usage is powerful enough that it can throw a huge roadblock at the network effect of the operating system. We who own Qualcomm stock can only hope that such a popular game is BREW-enabled.
At least, I think I've got all that right. :)
--Mike Buckley |
