Mobile Virtual Network Hang Ups

After not following the MVNO (“Mobile Virtual Network Operator”) space very attentively for a number of months, I was stunned to learn that Disney’s much celebrated Disney Mobile service is being terminated as a money-loser.

(MVNOs are companies that offer another company’s wireless service under their own brand — for example, people who had Disney Mobile service were actually using the Sprint network, but didn’t necessarily know it.)

Last year the MVNOs were supposed to crowd out the branding and marketing presence of MNOs (Mobile Network Operators, like Sprint, T-Mobile, Verizon, and AT&T Mobility) because the MVNOs (like Disney) “get” marketing, while the MNOs don’t. And I, like many others, found this intuitively made sense — I was just talking to another friend this morning who has a horrendous “customer experience” with his mobile carrier (I didn’t even bother to ask which).

But the truth is, MVNOs have been really stinking up the place. As reported by Cassimir Medford at, besides the demise of Disney Mobile, there was another Disney-owned MVNO that shut down recently — ESPN mobile. And besides the inglorious end of somewhat lower profile Amp’d Mobile, the really telling revelation was that Virgin Mobile USA announced, on the occasion of it’s IPO, that it had accumulated well over a half-billion dollars of debt over five years time. Since the Disney marketing juggernaut and Sir Richard “Marketing-Meister” Branson have are both taking this bath, I’m emboldened to say that the common wisdom about this marketplace is way off the mark. What happened to the walled garden, where a veritable monsoon of ringtone downloads and SMS overcharges reigns supreme, where the spoils belong to whoever can herd the most sheep in the gate?

Meanwhile, hardware manufacturer and yes, quasi-MVNO Apple Computer has put together an uber-MVNO business model based on a wi-fi enabled (albeit not open platform) device. As Ari Greengart deftly points out in his 10/1/07 RCR Wireless News article, Apple receives:

  • a hefty, non-disounted hardware margin on the iPhone (Apple offers no rebates or other incentives),
  • a share of airtime (voice and data) charges,
  • the ability to drive traffic directly to their lucrative iTunes service without first passing through their MVO partner (in the U.S., AT&T; in Europe, O2, T-Mobile, and Orange),
  • a share of music, movies and ringtones downloads revenue,
  • freedom from the responsibility their MVO partners must bear to acquire and maintain network capacity, and handle customer billing,
  • shelf space in their partners’ sizeable networks of stores.

As Ari says: “Wow.”


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INSANELY GREAT customer service.

Ordinarily I’d resist the temptation to borrow a corporate slogan without intending to parody it. But in this case the slogan and the actual corporate experience coincided perfectly: I recently had an insanely great customer service experience at the Apple Store in Seattle (University Village).

One morning a couple of weeks ago my iMac G5 wouldn’t start up. It was disappointing, as it’s been not only very useful but aesthetically pleasing on my desk for the past three years. But, I told myself, after three years components can break, they outdid themselves jamming all of that stuff into that little shell, I maybe dripped water into a port or covered the air vents or something hastening it along. But mostly I thought: Well, Apple isn’t what it used to be, they’re all grown up now, I guess I have to start lowering my expectations.

But because I knew that Apple Stores have customer service available, I Googled-up the local store and called to find out what my options would be. They scheduled an appointment for me, later the same day. I carried the thing in, waited a few minutes, and made my case to the “Genius” at the “Genius Bar”: See, the screen gets all pixelated and I get a kernel panic on startup.

The first nice touch: I forgot to bring in my power cord, they had one.

Second nice touch: I only had a wireless keyboard, they had a wired one, and by using both we determined that the thing crashed only when bluetooth was in use.

Now “the closer.” He asked me: Is it under warranty? I replied: No, I don’t think so, it’s almost three years old. Should I try using it with a wired keyboard for a while before deciding whether it’s worth fixing? He said: You could do that, but I think it might be under warranty still — let me check. He looked it up — it was. He checked the inventory system — they had the parts. He went to the back room and physically got the parts so that no one else could get them first. He told me he’d call when the repair was done. The call came later the same day, I picked it up that night.

Wow. What a shift from my initial expectations, “I wish I didn’t have to get a new computer today,” to “I just got a free upgrade, completed same day” (assuming the components they installed were at least as good as what I started with).

So, while I understand why even crazed Mac fanatics may be angered by Apple’s blatant running-up-the-tab-on iPhone early adopters (Nitrozac and Snaggy may be expressing just a tad of hostility with this Joy of Tech installment), at least for the moment it looks like Apple still “gets” the insanely great experience.

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What will the gPhone look like?

This Information Week article by Thomas Claburn is a delightful riff on what the ideal “mobile phone” will be like: In short, the home-office of the future, minus the furniture and major appliances. He dangles titillating clues about mobile technology and business trends as well as astute observations about the market forces that are both accelerating and impeding his ultimate gratification.

Here’s his wish list for the gPhone (an idealized mobile device, in other words) starting with the best phone he can find on the market today — the OpenMoko Neo 1973:

The OpenMoko Neo 1973 is built using a Samsung S3C2410AL-26 CPU, capable of running at up to 266 MHz, 64MB Samsung NAND flash, 128MB SDRAM,Texas Instruments (TXN)’ Calypso-based GSM modem, an AGPS module from Global Locate, GPRS analog baseband and RF transceiver chips, an 8GB Samsung microSD card, a TPO mobile LCD display and a Touch Screen controller, an audio subsystem, a vibration module, support for analog and Bluetooth headsets, a Phillips power management chip, and aNokia (NOK) BL5C battery, not to mention a stylus.

The OpenMoko Neo 1973

Being idealistic about this, though, we want a multi-touch screen (making the stylus optional), a more powerful processor (Via’s Mobile-ITX board, perhaps), WiMax support (not to mention UMTS and HSDPA support), Unlicensed Mobile Access (currently being offered in the United States by T-Mobile), an 8 megapixel camera that can take video and transmit it in a live stream, optional programmable buttons, an accelerometer (like the iPhone), ambient noise sensors, a digital compass, a fingerprint sensor, an LED flashlight and laser pointer, FM receiver and transmitter, RFID read/write capability, an inductive charger, a solar recharging panel, and multiple SIM slots.

(The photo is not in the original, I added it because this thing looks cool.) I’m not quite certain (but strongly suspect) that the author meant his second paragraph to be over-the-top — just about everything on the list is recognizable as being available in some handheld device or other at present, but it would be quite a trick to get that all in your pocket at once….

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Microsoft’s new Silverlight offering

Silverlight is just out of beta, meaning it’s officially ready for prime-time as a technology. But what about its value as an artistic tool, its intended role as a marketing engine, and its not-so-secret mission as the usurper of Adobe’s Flash?

What is Silverlight:

  • It’s Microsoft’s alternative to Adobe’s Flash for RIA (rich internet applications) — for example, people can connect to a database of videos that have been made available for viewing, then browse, select and view them via Silverlight.
  • It requires a browser to run in.
  • Few people have the Silverlight plugin at present, but it’s fairly easy to download and install, and the plugin is both Windows and Mac compatible for the most recent generation of browsers — although you can only develop Silverlight applications in a Windows environment.
  • It allows good integration between Silverlight applications and .Net platform code because it uses XAML (the same as “Windows Presentation Foundation” or WPF), it’s code can be generated using Expressions, and it’s code can be managed via Visual Studio.
  • It’s not html, thus like Flash it’s not search engine friendly, not mashable, not universally compatible with mobile devices
  • It’s not rich enough to be a substitute for full-on desktop applications (has many fewer features than WPF).
  • Although it’s Microsoft platform developer friendly, because it uses many familiar tools and idoms, most reviewers consider it graphic designer unfriendly because it has a different design idiom than Flash (more code-like, less graphics like), and no development environment for Mac

Conclusions about the potential market for Silverlight development:

  • The uses for Silverlight are not remarkably different than the uses for Flash (and the related Flex development IDE). Thus, demand for this type of technology (including Flash and Silverlight) on web sites will not change dramatically just because Silverlight has been released.
  • Most web sites will continue to prefer search engine friendly / widely compatible dhtml, plus Ajax for interactivity, that is only supplemented by Flash or Silverlight for special media needs. (Note: more and more media components are being developed for use within browsers, in essence creating competition with Flash and Silverlight).
  • The amount of experimentation with these technologies will increase as competition between Adobe and Microsoft makes it cheaper / easier for more developers to use both technologies.
  • .Net developers who are not dyed-in-the-wool graphic artists will slowly begin using Silverlight instead of Flash for rich internet needs because it will be easier for them.
  • Almost all designers already using Flash will continue to use Flash because they find it more convenient and more design-centric — more PhotoShop-like and Illustrator-like, let’s face it — and new graphic artists coming along will continue to favor Flash for the same reasons.
  • Businesses who already have .Net backends will investigate the idea that Silverlight can make development faster and cheaper; if they find this to be true (keeping in mind the present difficulty finding designers, etc.) this may generate demand.
  • Teams who have designers already comfortable with Flash will prefer keeping Flash because it will be easier for their designers.
  • Businesses worried about online visibility will choose Flash because almost all web browsers already have some version of Flash, Silverlight is still leaving the starting gates by comparison.

Links for more information:,+JavaFX+and+Other+RIA+Platforms/7bx0?talk

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My job

Besides natural curiosity — we live in interesting times, let’s face it — and a background in Internet startups, one of the reasons I track different emerging software technologies is because my employer, iLink Systems (located in Bellevue, WA, half way between Seattle and a certain software giant’s headquarters) builds custom software products.

Our work runs the gamut from mobile applications to business analytics tools, from user interfaces to integration of multiple server applications or databases into a unified system. So I wind up evaluating a lot of different technologies to see if they fit with existing / potential clients or could make the basis for productive partnerships or marketing campaigns for us.

Then there’s the legal aspects of what I do (contacts and such) — for the record, regardless of what you think personally of attorneys as a group or those you know personally, the quality of most contracts is really low (the word “sucks” comes to mind). More about this in future posts….

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