Now the above headline could easily be a headline from one of Britain’s daily tabloids but it’s also the message I received listening to a mobile phone message recently. While it’s not hard to work out what the person said – it’s just illustrates what bad mobile phone voice quality we tolerate from Operators. So reading the latest headline from ABI Research that ‘ARPUs Continue to fall globally as mobile voice usage nears saturation.’ It seems evident that HD voice is a pretty good solution for these guys. Ex Squeeze me! Hello Haych Dee Voice.

According to ABI, Mobile end-user ARPUs dropped between 6 to 9 percent globally. While in India, the world’s second-largest market in terms of subscribers, saw ARPUs dropping more than 10 percent year-on-year in the same period, as new operators and the introduction of per-second billing put heavy downward pressure on voice revenues. In Europe the ARPU contraction was in the range of -5 to -8%, with Austria seeing a contraction of more than 9%.

I recently received an email from Dan Berninger who organizes the HD Communications summit – which GIPS has sponsored since its inception last year. Good news – having traveled to New York and Paris the event will now be held here in the Silicon Valley on May 12.

Jan Linden and I had the privilege of hosting a group of students looking to learn about entrepreneurship at the GIPS office last Friday. One of the key lessons I hoped they would take away was that you should always be trying to design products which meet a real customer need. It sounds simple, but it is so easy for a company, especially one lead by super smart engineers, to launch products which sound great in theory, but which have little practical value.

I was reminded of my lesson the following night when I witnessed the most ridiculous infomercial since the Snuggie was unleashed upon an unsuspecting public. The ShoeDini- it’s a shoehorn…on a stick!

Not only did this commercial completely mesmerize all the patrons of bar I was in at the time, but it made me reconsider my statement from the day before. Sometimes products fit into a second category in which limitations are overcome when good (or just outrageous) marketing creates a need where none exists. I had no idea I was endangering my back every time I put on or removed my shoes! For my whole life I have been bending over like a sucker. But no longer!

Sunday night, the lesson was taken one step further. Since I refuse to support any endeavor which recognizes the acting accomplishments of Sandra Bullock, I did not have the privilege of seeing the new iPad commercial during the Academy Awards ceremony.

As I see it, the iPad fits into a third or fourth possible category. Category 3, as I have discussed before, is when a product doesn’t pretend to solve a problem, nor create one that never existed. Sometimes it can get by just because it is “cool”. When I ask people what I would do with the iPad, and they tell me I would be doing things I already do, just on a neater device, I start to believe the iPad fits in this “ain’t it cool” category. However, it is possible the iPad will attain a status rarely achieved by a consumer product. Once in a while, a product totally transcends market boundaries and definitions by making us reconsider our very habits and assumptions. Like prisoners emerging from the Platonic cave, we are confronted with a new reality in which the old way of doing things is completely obsolete, and we are presented with seemingly endless possibilities. I am willing to admit there is a small chance the iPad will fit into this fourth category. There is a chance that I am incredibly shortsighted, and Apple is not just trying to ram an oversized iPod Touch down consumers’ throats. For now, though, I am willing to stick to my belief that we are expected to buy it just because it is cool.

I think the larger lesson here is that reaching for the fourth category takes guts, and is what every business or entrepreneur should strive for. However, it is probably a wise bet to focus on the first option. Category 2 might work, but you run the risk of being a late night infomercial joke. And only once you have built up enough cache with the right kind of audience (café sitting, fixed-gear bike owners, I am looking at you) can you even hope to be included in Category 3.

In recent months LG Electronics, Panasonic and Samsung have announced television sets that allow people to view online content such as videos and photos through an easy-to-use web interface that’s built into the TV. What this also can enable is two way video communications – though the cameras need to be separately purchased from the television.

Earlier this week GIPS held a webinar on the topic ‘Is the Television the next Two-Way Communication Tool?’ If you didn’t have a chance to listen to the webinar, you can always listen to the recorded version. We took polls from the live audience, as what better way to affirm our own research conclusions on the TV as a future two-way communication tool.

We directed 4 polls to the audience and 400 people provided the following results:

As TV audiences have fragmented and evolved their tastes, the television has become less central to the home/family experience.  The evolution of the TV as an interactive device has the ability to take back ground lost as a focal point in the home – recapturing the living room perhaps. 98 percent of poll respondents view the TV as becoming an interactive consumer electronic device and perhaps competing with the PC.

The live webinar audience was a solid mix of broadcast industry professionals, so it was interesting to see their response to this question: Who will benefit most from two-way communication via the TV? There are opportunities for all slices within the broadcast industry but ultimately who will benefit is the user. While we didn’t include the end user in this poll, our assumption was that the TV watcher will ultimately benefit in the long run.

While this next poll would be better directed towards consumers – it was interesting nonetheless to gauge the industry professionals’ opinion.

Finally, we asked the broadcast audience when they see the rollout of interactive programming and TVs. Well it’s already happening and as we discussed in the webinar. Oprah, CNN and Sports reporting are just a few of the places this is already happening.  The times are a changing for the broadcast industry and as Charles Darwin said: “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Sweden has exceptional public service television called SVT. During the winter Olympics, SVT broadcasted the most popular events, sometimes two or three at a time on different channels. As if that’s not enough, they also have a free web service called SVT Play, where they streamed almost all Olympic competition in good quality. Finally, for those really devoted to sports, SVT even has an iPhone app for watching the broadcasts on the go.

At first glance, the quality of the online stream appears to be really good. They’re encoding at a bit rate of 810 kbps and defaults to using Flash, probably with ON2 VP6 as the codec. For the Windows user, Windows Media is also available.

However, most people probably prefer to watch the stream in full screen mode. This is where I think SVT Play fails to deliver. If you look at the image below, which is a part of a full screen video sequence on SVT Play, you can see severe aliasing at the edges. This is the most apparent at the edge between the man’s neck and his shirt.

The aliasing appears due to bad – or nonexistent – interpolation when upsampling the images. Whether or not this has to do with problems with Flash or SVT Play I cannot tell for sure, but we can at least assume it can be solved since watching a YouTube video (which also uses Flash) in full screen looks good, as is demonstrated in the screen capture of a section of a full screen YouTube clip below.

There have recently been a lot of discussions about the video tag in HTML5, and what codecs to use with it. Some prefer license-free codecs, while some prefer the best possible performance. But one thing is for sure: regardless of how good your codec is, the experience is what is most important. Having bad post-processing will always have the last say, no matter how many bits and CPU cycles you spend on encoding your video source.

Perhaps this has been something simmering under my skin for a number of years – but when I saw this news headline, “Apple admits using child labour” I had a repeat vision of an old peddled story that is indicative of trash reporting at its worst. First off – child labour seems to imply (to me at least) a 7-year-old anemic, malnourished child not the 11 instances Apple reported themselves of 15-year-olds working in a factory manufacturing parts for the iPhone in China.

I’m not here to defend Apple but rather provide a personal alternative view based on personal experience – so yes this is a disclaimer that this is a personal point of view – not one necessarily shared by the Company.

10 years ago I worked in Phnom Penh, Cambodia for a well-respected English newspaper, The Cambodia Daily. One Sunday, a small band of high-profile investigative reporters from the Big Smoke descended upon the little capital of Cambodia hot on the tale of a hard story: Child labour at clothing factories. As a result of the “investigation” both Gap and Nike suspended their activities in the country, which meant they also suspended the wages of thousands of people, with tens of thousands of family members dependent on the best honest wage in town.  Should Nike and GAP have pulled out? No but that’s another story. Thousands of families who relied on the clothing factory wage of $40 per month (nearly four times the wage paid to civil servants at the time) were laid-off. Families who lived on this lifeline were left with scant alternatives – perhaps other factory work but prostitution and begging were also high among those alternatives

The right of journalists and pressure groups to investigate should always be defended whether it’s to verify that strict codes of conduct are followed by large corporations or the factory conditions in developing countries that manufacturer for multinational corporations. However, journalists also have a responsibility to provide the full story – not just headlines aimed to grab attention and point the finger for the sake of readership or a personal career notch on the belt. The incident in Cambodia was a disaster for many families.

So with this latest headline trotted out, I see the danger in repeating the same bad journalistic mistake. The question of why were 15-year-olds working in these factories should be asked and what is going to be done to resolve the issue?  Child labour does happen (and no I’m not condoning child labour) and will continue to happen, sometimes because families need to survive. However, the alternatives can be much worse. To Apple’s credit they published the report that identified the instances of child labour. It’s a good example of corporate responsibility – it’s not perfect but the Company is striving for improvements:

“Apple discovered three facilities that had previously hired 15-year-old workers in countries where the minimum age for employment is 16. Across the three facilities, our auditors found records of 11 workers who had been hired prior to reaching the legal age, although the workers were no longer underage or no longer in active employment at the time of our audit.”

A rising tide lifts all boats and with improved corporate social responsibility from multinational companies, the standards in developing countries can rise.

It’s not often I see public telephone boxes anymore – they are out there but who uses them? A recent article in the New York Times got me thinking about this archaic piece of equipment. Here in the US, we live in a society where 277 million people subscribe to a mobile phone service.

The ubiquitous home phone is also seeing a decline too. “The decline in the cordless phone market is indicative of a larger story,” says ABI Research practice director Jason Blackwell, “which is that of wireless substitution worldwide. In developed nations a growing number of people are dropping their fixed phone lines altogether in favor of mobile-only services.”

There are a multitude of reasons for this decline: mobile phone usage, cultural, cheaper long-distance calling services, the economy and perhaps relevance. Much like cable television losing out to the Internet, the landline telephone is losing relevance with the introduction of its younger sibling – the sleeker, smarter mobile phone.

However, the television may be set to regain its position in the household and push out its little cousin the telephone.

Only recently at CES did both LG Electronics and Panasonic announce Internet-enabled TV’s and a partnership with Skype. The Television is growing into new and expanded places and could function as both the PC and telephone. The possibilities for content, cable and Telco providers to monetize additional communication services in this way are vast.

Next week – GIPS will be presenting a webinar on the subject, so if you would like to sign up click here.

In a recent post, I wrote about how smartphones are red hot in Asia, and in China in particular, right now. Well there’s yet another smart ‘new’ category of devices targeting the mobile computing market that is emerging. This category may also take global markets by storm (or maybe not, who knows in this game?): ‘smartbooks’.

No doubt, smartbooks will arouse market interest worldwide. Market demand from Asia is (as with most everything these days) expected to be strong. Taiwan, is both a global design and ODM/OEM manufacturing hub for portable devices and as such has already shown keen interest in this new category. In fact, a number of Taiwan OEMs have already showcased smartbooks at Computex in Taipei June last year.

The devices and their lower price points (sub-US$200, possibly as low as US$100) have also attracted a lot of interest in mainland China. According to Young Liu, special assistant to the CEO at Foxconn, the world’s largest contract electronics manufacturer, the company has had requests from a number of telecommunications companies in China to develop smartbooks.

Qualcomm, which makes microprocessor chips based on ARM Holdings’ semiconductor intellectual property (IP) is at the forefront of popularizing the smartbook. In fact, it coined the name, taking it from the combination of the words that describe the two device categories that it claims this third new category sits between: the smartphone and the netbook. Both computing and cellphone companies are paying attention with Asus, Acer, Lenovo and Toshiba as well as Nokia, LG and HTC all developing smartbooks.
These new devices are based on technology traditionally found in smartphones, such as Qualcomm’s Snapdragon chip. Snapdragon is a beefed-up cell phone processor that runs at 1GHz and includes integrated support for 3G wireless connections as well as WiFi, Bluetooth, and GPS.
Nvidia, also seem excited at the prospects of smartbook devices powered by its ARM-based Tegra chip. The company has forecast that we may see computer makers’ launching laptops that include detachable screens that would be able to independently access the Internet and process data. So you’d be getting laptop with an e-reader type device thrown in.

The phenomenal uptake of web technology globally has fundamentally changed our everyday lives. Consumers’ expectations about what their PCs and mobile computing devices should deliver are growing rapidly. There’s never a dull moment in this industry is there?

While there are hundreds of reviews of Mobile World Congress in the news and media, I thought it might be interesting to get an exhibitor’s point of view of the event especially as the media tend to get stuck in the headlights of oncoming shiny new mobile devices from the big players in the industry and not the ecosystem that the event represents.

In general the show appeared to have more visitors (50,000) in attendance than in 2009 and as one senior executive that I talked with over lunch said “I’ve got 20 years in the mobile industry and I’m still astounded and confounded at all the companies at this event – many of which I still don’t know what they do.”

GIPS made an announcement the week prior about availability of GIPS VideoEngine on the iPhone platform, which generated a good amount of press coverage but also added to the increased amount of people visiting GIPS at the show.  The visitors (at least to GIPS stand) also appeared to be more senior in attendance and I saw a lot more lists in people’s hand of “companies to visit,”  perhaps a sign that were people were doing their homework this year.

Whereas many industry events offer free tickets, Mobile World Congress charge nearly 600 Euro per ticket and they closely guard who comes in and out of the show – even with a pass each person must show their ID too. In 2009 the mood was downbeat and 2010 it was the complete opposite. Hopefully the optimistic tone is a true reflection of where the industry is heading now and a sign of things to come.

The show for me illustrated that the sum is greater than the parts, so while the likes of Google, HTC, Samsung, Huawei and the BBC (did I mention the Beeb stopped by our stand ; ) grabbed major headlines – this only illustrated the icing layer on the cake and not all the ingredients that go into making this event a good reflection of the mobile telecommunications ecosystem.

After AT&T’s announcement last fall that they would allow VoIP applications to use the 3G network very little has happened. No applications offering such services have actually been approved by Apple to be sold in the Apps Store. Until now, that is. Today our customer Toktumi announced that their latest upgrade of the Line2 application for iPhone has been approved by Apple. This application is touted by Toktumi as “the first iPhone calling app that works over 3G, Wi-Fi, and cellular networks using the same number”. This is pretty big news. The end user can get better call quality (HD Voice), improved coverage (through WiFi), and save a lot on call charges. VoIP applications have previously only been available on Symbian, Windows Mobile, and most recently Android devices, while maybe the most popular smartphone has lacked such support.

The Line2 application offers much more than just a standard VoIP application (As opposed to e.g. iCall, which is another VoIP application fro the iPhone). In fact, I use it on my Blackberry even though there is no VoIP support on that platform. This is because RIM hasn’t opened up the development environment in such a way that it is possible to develop a true VoIP application for the Blackberry environment. That topic is worth its own post so I will refrain from commenting more on this very frustrating issue…

Hello again from Barcelona. Today has been quite busy. I have had lots of great conversations with people stopping by the GIPS booth, as well as with other exhibitors. I also got a chance to see what all the handset providers are doing, and was frankly unimpressed.  Here are a few observations, as well as today’s highlights (and lowlights):

-          Yesterday, Microsoft announced Windows Phone 7, which from what I can tell is just the next generation, rebranded Window’s Mobile OS. The demo I saw today made the platform look much slicker and user-friendly than previous iterations of Windows Mobile, and the closer relationship between Microsoft and handset manufacturers should lead to better designed products. However, I don’t think there is anything earth-shattering about this news. I also couldn’t help but laugh when the person giving the demonstration proudly announced the first Windows Phones will be available this upcoming holiday season. Only James Cameron films create more hype longer before a launch date. All in all, the announcement looks like a desperate attempt by Microsoft to catch up to the rest of the smartphone market.

-          Speaking of trying to catch up, I saw a demo of the Samsung Wave, running the Bada OS. The phone looked pretty neat, but just seemed like it was trying to copy iPhone and especially Android. For instance, the location services app doesn’t appear to have anything already not offered by Google Maps.

-          The observation I made yesterday about the importance of apps was reinforced when I visited the App Planet pavilion- an entire exhibit hall which, as the name suggests, is dedicated to application developers and related technology. There were probably dozens of companies offering some sort of platform or tool that enables application development, which leads me to believe the entire market is oversaturated.

-          I saw the back of the Queen of Jordan’s head as she was whisked into an exhibition hall to promote a global education initiative. It is nice to hear that more is going on here than pure commerce.

-          No one at the Motorola booth was able to tell me if the company will offer a version of Droid that supports a GSM SIM card. As a Droid owner, it has been incredibly frustrating being without cell service while attending the largest mobile communications show in the world. I would be curious to know the thinking behind offering a phone that only utilizes CDMA. Is Verizon concerned that users will violate their exclusive agreement and take their phones to another provider? Does it cost more to include an additional radio than the revenue generated from international roaming charges? Whatever the reason, I hope they give customers the ability to actually communicate when they are outside the US.

-          Spaniards appear to be more afraid of water than cats are.  There was a light drizzle this morning, and people were huddled under building overhangs, presumably waiting for clear sky to make the short 2 minute walk between buildings. This jibes with the behavior I have witnessed at Spanish beaches, in which hundreds of people will stand just at the water’s edge, but go no deeper than their ankles, despite overwhelming heat.

-          The most entertaining booth at the show has to belong to Mobile King. I will let you guess why.