Smartphones are the current ‘poster child’ of the converged mobile devices market and represent the fastest-growing segment of the global market. According to International Data Corporation (IDC), vendors shipped more than 174 million units in 2009 worldwide, an increase of 15 percent from the previous year.

In Asia, and in China in particular, the segment is booming. Apart from the well-documented resilient performance of China’s economy following the success of its government’s mega-stimulus package, other factors are contributing to this boom. A number of reports from market researchers and analysts and have been released recently, which along with input from leading industry players, shed some light on why Asia is leading the charge in the rapidly-growing smartphone segment.

On the revenue stream side, leading investment bank, Credit Suisse, released a report that showed that the increasing affordability of smartphones, with richer features such as larger screens and faster processors is encouraging owners in Asia (and around the world) to use their handsets for web browsing and instant messaging more. As a result, it predicts that non-SMS wireless broadband data revenues in Asia (ex-Japan) will grow from US$1.3 billion at the end of 2009 to US$14.5 billion at end of 2015. Importantly, Credit Suisse expects higher smartphone revenues to “lead directly to higher cash flows.”

In its report, Credit Suisse, forecasts the number of smartphone users in Asia will reach 347 million by 2015. With potential for huge sales growth such as this it’s hardly surprisingly that both global and local vendors, as well as brand new players, are climbing over each other as they rush to clamber aboard Asia’s smartphone bandwagon.

As market competition intensifies in the smartphone segment, communications service providers will increasingly seek compelling, high quality multimedia applications for end-users and enterprises. Making the careful selection of world-class solutions providers that can enable service providers as well as applications developers and hardware manufacturers to differentiate their products to reduce churn and increase customer satisfaction will become even more important for market success.

It’s kind of scary seeing my mug on John’s post from the 27^th about GIPS mobile offerings.  However, as has been widely published in sources like Engadget, Gizmodo and the New York Times, there has been a crack in Apple’s normally impenetrable veil of secrecy around new product developments with the exposure of a prototype of Apple’s next generation iPhone.  The fact that the device has a front facing camera is the best response to the piece covered in John’s post.

A frequent criticism of Apple is that they don’t do anything that revolutionary.  It is that claim that makes Apple’s success all the more spectacular and game-changing.  Portable .mp3 players existed long before the iPod, but Apple’s entry changed not only the company, but the entire industry.  Similarly, the iPhone and the iPad were neither the first smart phone nor the first tablet PC on the market, but their introduction and resulting success have changed their markets significantly.  With the iPhone, hundreds of thousands of applications have proliferated, creating a whole new market for applications developers (historically a weakness for Apple).  Adding voice and video to some of these applications will enrich the experience for the end user.  To be sure, mobile video conferencing is again not a new category, as AT&T introduced video share about three years ago.  However, the service was not very usable and the device support was not where it needed to be.  However, with the introduction of frame-by-frame access to the camera which is included in iPhone OS 4 and the front facing camera which appears to be part of the 4G design, Apple will be poised once again to change the game with mobile video conferencing.

Now, no discussion of the leak would be complete without mention of the heavy handed response of Apple and the local authorities against Gizmodo and the individual who found the lost device.  However, coverage of that topic should be left to the professionals…or at least the fake professions at The Daily Show: 

Last week, Google continued its shopping spree by acquiring San Francisco startup Episodic, a company which provides a platform for real-time video streaming and management. While Google has not yet announced what they plan to do with the acquisition, it is fairly safe to assume the technology will somehow get incorporated into the YouTube platform.

As a company which supplies real-time communications technology, we at GIPS hear quite a bit about real-time streaming technology. To be honest, the term “real-time streaming” seemed to be an oxymoron at first. How can something be considered “real-time” if it is being buffered and sent out with some significant amount of delay? However, the more I have thought about it, the more I think I understand the term. In my somewhat professional opinion, content could be streamed “real-time” if it is more or less being sent as it is captured. The difference between streaming and real-time communication is that streaming is strictly a one way street. There is no interaction between video senders and recipients; simply a video broadcast being sent out as it happens.

While I am not sure of the revenue potential for such technology (never let that stand in Google’s way), I can think of a few interesting applications, citizen journalism being one of them. Take yesterday’s 10^th Annual Bring Your Own Big Wheel race in San Francisco, perhaps my favorite day of the year. What if you didn’t want to brave the rain as a spectator, but still wanted to watch adults go down San Francisco’s curviest street on children’s toys? You could watch videos like the one below (notice Andrew in red at the start, and me in white at the 1:55 mark) in more or less real time.

Now, many people would be fine just watching an archived version of these kinds of events, but maybe there are enough folks who want to view it as it happens so they can feel like they are really there. To me it seems like two social trends- the on-demand/ DVR mentality, and the reality TV/ 15 minutes of fame world- are colliding head on. My guess is Google will simply add another feature to YouTube to make it easier to load and watch mobile videos, but that it will hardly revolutionize the site.

China is the world’s largest Internet, telecommunications and broadcast media market by number of users ( all figures are upto 31^st Dec 2009 ) :

Internet :                             384 million ( source : CNNIC)

Mobile line  :                       747 million ( source : MIIT )

Fixed line  :                        313 million ( source : MIIT )

Cable TV:                             174 million ( source : SARFT)

In a recent announcement, premier, Wen Jiabao, stated that China’s three networks will be converged by as early as 2015. This represents a major shake-up for all three industries and will provide a boost for both local and global service providers, applications developers and hardware manufacturers.

In China, the Internet, telecommunications and broadcast markets have traditionally been separated by industry-specific licensing systems and regimes. In reality, this has often served as a tool for the industry regulators (rival government agencies) to protect ‘firms’ under their own control and has not always worked in the best interests of China’s consumers.

Convergence and the competition that it will create will bring more innovative services such as mobile TV, online video and VoIP (Voice over Internet Protocol). The integration of networks will also help to break down the traditional boundaries between competing segments of the multimedia industry. China’s consumers are set to benefit from greatly improved services, higher quality end-user experiences while all at significantly reduced prices.

It’s always great to see one of our customers get the recognition they deserve. The New York Times’ David Pogue recently wrote about Toktumi and its latest product Line2 –  an iPhone VoIP application that provides you a second telephone number. The application works over 3G, Wi-Fi or Cellular networks using the same number… an industry first.  That’s in sharp contrast to Verizon’s announcement with Skype, which will make calls on Verizon via the existing circuit switched network according to FierceVoIP. So unfortunately that call quality will only be regular cell phone quality if that’s the case.

Line2 iPhone User Guide from Toren Ajk on Vimeo.

What was nice to watch from David Pogue’s video was his recognition of Line2’s voice quality: “It sounds like she’s right there in the room!” While HD voice is something GIPS has offered its customers HD voice for donkeys years, GIPS VoiceEngine technology also deals with the less glitzy side of VoIP, which is the media processing -  solving all the inherent device, network and bandwidth issues that provide stumbling blocks to offering VoIP/HD voice.

Unfortunately, Toktumi had to pull their iPhone app this morning after some bad sport(s) attacked Line2 with an intense denial-of-service computer attack similar to what Twitter has experienced in the past. Booooooo! Well knowing Peter Sisson I’m sure Line2 will be back up soon – and then we can all go on using Line2.

For at least the last couple years, it seems, I have been hearing about how everything is “moving to the cloud”. While it is sometimes difficult to determine exactly what that means, and how much of the talk around cloud computing could be classified as mere hype, I think I have a basic understanding of what people are talking about. As I understand it, cloud computing simply means a model in which most of the applications and services people use will be hosted centrally in the “cloud” (e.g. on a server accessible through the public internet or another data network), instead of on their local machines. There are some, most famously Larry Ellison, who claim that pretty much all computing today is already cloud computing. If that is true, then the cloud is being very poorly run. As I see it, disparate end user platforms are not well integrated, leading me to believe that the cloud computing model is either in its infancy or completely broken.

Lack of Enterprise Email Integration   

If my company utilizes Microsoft Exchange for its mail system, as most companies do, then that means all my email, calendar and contact information is hosted on our Exchange server. This information should be readily available to me regardless of my end device. If I check my email on my home computer via Web Mail, those messages should be marked as “read” when I log into my work machine. Similarly, if I dismiss a calendar reminder on my desktop, it shouldn’t pop up on my mobile phone. Finally, all contact information, whether it was created on my phone, desktop or by our IT administrator, should be merged into one concise contact list readily available on any device or platform. The issue, however, is that these things rarely happen. Each mail application on each platform (mobile, web, desktop) seems to have a mind of its own. When I go home at the end of the work day, I have a list of unopened calendar reminders on my Droid, even though I have dismissed all of them on my work desktop. This may be an issue with Android and Microsoft not wanting to play nice, but if the cloud advocates are correct, these issues shouldn’t exist.

Dumb Web Apps

What is Facebook, if nothing but information hosted within the cloud? If I update my status or post a picture from my phone, it reads the same to everyone as if I were at my home computer. However, when I open a message on my desktop, it does not mark it as “read” on my mobile app. One could even wonder why I need to log in to Facebook at all to read messages, when they are delivered to my personal email account. Once I read a message delivered to Hotmail from Facebook, shouldn’t it be considered “read” the next time I log into my Facebook account?  Apparently not.

Follow Me, Privacy Be Damned

The previous two examples should be incredibly easy to fix, but for some reason they still persist. If we can’t even overcome those problems, then even more advanced capability would appear to be doomed. But, living in a perfect world, wouldn’t it be nice to seamlessly transition between devices and carry on a session from one to the next? For instance, if I am reading a news article on my home computer, and wish to continue to read it on the bus on my mobile phone, wouldn’t it be great if that browser session was instantly available on my phone instead of having to go and search for the article again? Shouldn’t this be possible, especially if my phone and computer use the same browser? If I am logged in to my Google account, and using Chrome on my desktop, and Android/ Chrome on my mobile phone, there shouldn’t be any interoperability issues, and Google should be able to store all this information on their servers. Of course, this scenario could present some privacy issues, but the fact that we appear to be so far away from such a seamless user experience seems to indicate that effective cloud computing is either a myth or a long way off.

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.

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.”

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?