re: Nokia's Niklas Savander on OMA & Nokia's Data Strategy
>> Nokia's Data Strategy
Nokia's Strategy VP Niklas Savander shows the mobile giant’s plans for Java, multimedia, and standards.
James E. Fawcette
Fawcette Technical Publications
July 25, 2002
fawcette.com
As the entire mobile phone industry struggles to redefine its business around data and data services, Nokia has surprised many industry observers by licensing proprietary software to direct competitors and pushing for standards initiatives that promise to commoditize some of the company's competitive advantages.
The impact of Nokia's initiatives could define how software will be developed for mobile devices, not simply because Nokia is the clear leader in handset sales with 35% of the worldwide market, nearly double that of number two Motorola, but because Nokia is attempting to establish a platform for all mobile device development, in collaboration with most of its direct competitors, as well as partners.
While the industry's results so far have been extremely disappointing, from the dismal failure of WAP, to the slowly delivered and under-achieving data rates of the first 2.5G/3G networks, the push is just beginning.
Phone use is soaring, but average revenue per user (ARPU) is declining. Voice has become a commodity. The hope for offsetting this, and achieving growth in both revenue and profits, is to shift an increasing percentage of mobile device use to data and data services. Niklas Savander discussed his company's vision of how this data-based future will evolve, and its impact on application development in a free-flowing discussion.
"The idea that we can have two sets of business rules is totally flawed," Savander said, referring to the collision between the computer and telecommunications industries over building mobile infrastructure and business models.
"New paradigms are seldom based on rules that worked in old paradigms," he said. "The IT industry is built in layers. Telecom companies are very vertically integrated businesses. Having seen both [Savander worked at Hewlett Packard for 10 years before joining Nokia], I can't claim one or the other will rule."
"But it is a total cop-out (to say that handheld devices) will simply be like a PC."
Savander is skeptical that the approach to writing software followed by the PC industry will suit mobile devices. "How the layers of software architecture are done and what rules of engagement will be followed will be interesting not only for us but for software makers such as Microsoft and Sun," he said. "The PC model evolved before volume production was underway. The handset is the highest volume consumer electronics device of all time."
Nokia estimates that one billion mobile handsets have been sold, compared to 800 million televisions, and 400 million PCs. The company believes that between 400 and 420 million cell phones will be sold in 2002 alone.
Savander argues that this scale makes software development for mobile devices fundamentally different. "The costs of an error are staggering" when shipping in these volumes, he said. PC vendors issue software before it is fully debugged and then send out patches to run on top of the original software. "(Efficient programming) became irrelevant when the 640K memory limitation was removed. Adding layer after layer of software is hugely inefficient." Not only are the costs of bugs higher, but mobile devices also lack the memory and storage to accommodate software written in this fashion.
Sorting Out Standards
But the mobile phone industry has its own bad habits. "Our software is far too integrated with hardware design, including Java," Savander said. Nokia is among many handset vendors settling on a limited group of display sizes to simplify application development (see Table 1 link below) but even more must be done to limit the number of interfaces to which software developers must write.
Table 1: Standard Screen UIs to Simplify Development
fawcette.com
Savander saw the Open Mobile Architecture initiative, which was announced at Comdex in November 2001, as critical to preventing industry fragmentation. "We (brought) unification to the enabler/middleware layer through an open systems software platform, thus reducing the complexity of the business system." OMA participants agreed to support key enabling technologies, including XHTML, Cascading Style Sheets (CSS), Multimedia Messaging Service (MMS), and Java 2 Micro Edition (J2ME).
Open Mobile Architecture included a large number of IT and telecom vendors, from handset vendors, to middleware providers, development tools companies, and service providers. Microsoft, Sprint, and Qualcomm, however, did not sign up.
This changed in June, with the announcement of the Open Mobile Alliance (OMA), which Nokia also vigorously supported. The new OMA replaces the old OMA and also integrates several of the groups that had been proliferating over wireless standards. This time, Microsoft and Qualcomm are in, along with an impressive list of more than 200 members
openmobilealliance.org
At its outset, the group showed promise for making considerable progress where the previously fragmented standards efforts had made little (see previous link "Alliance of Alliances"):
Message 17920315
"Software that does not work across platforms will incur higher costs. The n-by-n-by-n interoperability testing alone," will make such applications impractical, Savander said.
Another approach to creating commonality is to sell proprietary software to competitors. The elements that, "we are selling (not standardizing), are the application engine and UI library." (See "Competition Within Standards" at the end of this article). Overall, however, more parts of Nokia's products than ever before are being standardized or being made available throughout the industry.
How well this move to standardization will be adopted in reality remains to be seen. APIs are proliferating. Not only are phone-specific API extensions being implemented, but there are also plans for carrier-specific API extensions.
Paul Reddick, vice president of business development at Sprint's PCS division, pointed out the other side of co-opetition at Sun's JavaOne conference, criticizing Sun's then-new security model for the Java Kilobit Virtual Machine [KVM] for handsets and asserting that Sprint didn't want developers writing for "the lowest common denominator." He insisted not only that Sprint had a better security model, but also that Sprint would differentiate its products in part through a superior API.
"Sprint is the most extreme example (of the vertical integrator)," according to Savander. "Sprint has a strong technical background, and thus seeks to differentiate its offerings through its deep technology . . . Sprint would say, 'I need a vertical silo.' [Sun's CEO Scott] McNealy says, 'use a common API and differentiate on top of it.' If everyone seeks to impose their own APIs, that will be bad for the developer."
Still, Savander agrees with FTPOnline that, "We have not done a good job standardizing Java; it is still tied to the hardware."
Mobile applications must recognize what capability the handset has, such as screen size. "In the future, we may have pen phones that respond only to voice," Savander said. Then the application on the server must recognize that device interface is solely voice driven and respond appropriately. "There are a huge number of parameters that must be recognized before the handheld terminal can download and run an application," according to Savander.
More Apps, More Data, More ARPU
Selling data applications is the holy grail for resuscitating cellular industry profit margins. They, in turn, are driven by the mobile industry's key figure of merit: ARPU. Seppo Aaltonen, Nokia's Head of Technology and Architecture Marketing, points optimistically to NTT DoCoMo's use of Java in its world's-first 3G handsets. "Java applications [use was double] i-mode application use [400 packets compared to 200 packets] after only seven months of use," Aaltonen said. As disappointing as WAP has been, Short Message System (SMS) e-mail is booming. There are one billion SMS messages sent daily, providing user fees of 100 million euros a day. "By 2006 we expect 35 percent of carrier revenue to come from data, providing 45 euros a month," Aaltonen said.
Nokia is one of several phone companies that are trying to fill the vacuum created by the lack of substantial applications by leveraging SMS's momentum into the richer Multimedia Messaging System (MMS) format. This means getting the users to create their own data. MMS is a format for sending video, images, and sound using the WAP session protocol, but not WAP browsers. Large messages are sent in several packages and reassembled. Smart recognition of the receiving device can degrade the image or send a simple URL so the content can be viewed later.
Phones such as Nokia's 7650 or the Sony Ericsson P800 include a camera for creating MMS images, but MMS images can also be viewed on phones that lack the ability to create them natively. MMS files can be stored and forwarded. MMS can be used to send user-created pictures with audio attachments, or to receive pay-per-play video, such as a clip of the winning goal in a World Cup final.
One critical juncture is the price that carriers set for these services. Nokia believes MMS messages should only cost two to three times what SMS messages cost, perhaps 40 to 50 eurocents apiece, and that the sender should pay, not the recipient.
While MMS has significant momentum on GSM (Global System for Mobile Communications), work trails on Code Division Multiple Access (CDMA) networks; "We are investigating deployment of MMS on CDMA," according to Mikko Pyykkö, 3G Market Development Manager.
"MMS, starting in the second quarter of this year to the first half of next year, plus Java emerging this year, will propel the next phase of growth," Aaltonen said. Still, the mobile platform remains more fragmented than the desktop. "The rich APIs of a full operating system are needed for the highest-end games," admits Jari Suutarinen, Developer Program Manager for Java.
While Nokia seems more committed to and more optimistic about the potential for high-end phones relying on the Symbian Ltd.'s Symbian OS than Motorola, which expects only 10% of its phones to use Symbian OS, Savander refused to project what percent of Nokia's phones will ship with Symbian OS, or even to characterize that shipment by series.
Several technical issues also remain to be resolved. Communicating both the user's profile and the user device's profile to a server, to enable delivery of data and applications, requires standards. The J2ME specification is expected to embrace the relevant standards, but they are not yet included.
Security also will be a critical issue. It's one thing to get hit with a virus on a PC, another when you get billed per message for each SMS sent automatically from your handset by a malicious worm. For security reasons, the current Java spec doesn't allow Java applications to access the user's phonebook. That needs to change, however, for Java to be capable enough for mobile applications. But then the spec will have to enable user verification of messages to avoid unauthorized use. Spam, moreover, will be an even more sensitive issue if service providers charge high per-unit costs to receive rich MMS e-mail.
To deal with higher-end security issues in enterprise-level applications, companies may want to deploy their own Wireless Access Protocol (WAP) gateways. New HTTP security standards are anticipated by next year.
Location-based applications are another potential growth area, and one where the United States may lead Europe because of American e911 regulations, requiring new phones to enable geographic location services. While discussion has focused on consumer applications, such as neighborhood-targeted advertising, or instant-messaging buddy lists that key to proximity, significant business uses are also expected. Nokia's Bernd Gross demonstrated an application from TrackWell Software, Reykjavik, Iceland that provides a dynamically updated map with the locations of a company's vehicles. Most services are expected to use triangulation based on phase and time lags to GSM cell sites, although CDMA networks may require more expensive—and much more accurate—Global Positioning System (GPS) chipsets in the new phones. <<
>> Competition Within Standards
[Sidebar for above article]
fawcette.com
Nokia’s Six-Plus-Four model for making and marketing its handsets departs from the past, where, for example, its proprietary hardware was considered a key competitive advantage. Now, standardization is seen as key to increasing penetration and monthly use, through the development of more applications.
Six aspects of the total product to standardize or sell:
1. Hardware (standardize)
2. Radio/modem software module (standardize)
3. Operating system (standardize)
4. Application engine (sell)
5. UI library (sell)
6. Look and feel of final UI and applications (standardize)
Four aspects of the total product on which to compete:
1. Design
2. Brand
3. Sales channel
4. Logistics and product integration <<
- Eric - |
