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It’s always nice to get a little external confirmation about the need for your product.  Here’s an excerpt from the blog of one of the best analysts of the wireless industry, Andy Seybold.  You can sign up for his newsletter at http://www.andrewseybold.com/index.asp.

http://www.andrewseybold.com/commentary.asp?ID=42

…Every new device I receive to try out works a little differently. Some phones let me take a picture and send it with three keystrokes (good) and some require six or eight (bad). I have been using a BlackBerry since 1996 and each model has more features and functionality along with a larger user manual. I don’t know about you, but I don’t have time to read about what these devices can do for me, so I learn as I go along, and sometimes I learn from others who have discovered something neat I didn’t even know existed.

I have been carrying a particular mobile phone for almost a year now and have truly come to hate it. The form factor is great, the functionality is wonderful, but it takes so many clicks and keystrokes to operate that it is easier to simply talk on it and not do anything else with it. Send a photo to someone? Six keystrokes and after you send it off, does it ask if you want to store it or name it? No, even though these are things I would normally do when I take a photo―name it, save it, send it. Should be easy, should be simple, but it is not.

This phone has a two-position button on the side: Push it up and it performs one function, push it down and it performs the opposite function. Easy, sure, until you put the phone in vibrate mode (which I often do). Then, if the key is pushed down, it goes into silent mode. If it is pushed up, it rings (which is better-I have missed dozens of calls because I pushed the button the wrong direction). This is unlike other functions where you are asked to make a choice and answer “yes” when it asks if you really want to do this.

The biggest problem to me, however, is that there are now so many features and functions on our phones that we don’t know how to use, or even find, most of them. Pearl and BlackBerry 8800 users, do you know you can control the speed of the track ball on the front? Do you know you can move the icons around on the screen? (I have been using a track wheel since 1996 and I really miss it, but I do love the 8800 form factor. What I really want is the 8800 with a track wheel on the side!)

One of my biggest gripes, and I have mentioned this before, is that I cannot use my desktop computer to set up my mobile phone. There are many menus, choices and sub-choices on the phone and I am trying to set everything up in spare moments. Why can’t I simply sign onto my network operator’s Website, type in my phone number and have an image of my phone and a series of menus presented to me on my computer screen? I could then peruse the menus, make choices and set options, personalizing my phone to take advantage of some of the features and functions I might otherwise miss. I know I can download ringtones, or ring-back tones and do a few other things to my phone, but why can’t I set everything up on my PC like I do with my iPod where I can change anything and everything through my PC?

While I am on this subject, why can’t I look for software I might want to use, try it out on my desktop and, if I like it, send it to my phone? Why can’t I have software that works on my desktop and my handheld? One of the reasons we awarded Verizon Wireless the Andrew Seybold Choice Award for Most Innovative Business Application for Field Force Manager was because the program is set up and accessed via the Website and then the Website and handheld devices interact with each other in near-real time. This application is a great example of what I am talking about. Why can’t I do this with other applications?

Why can’t I use a Web interface to set up my phone when I buy it or to make changes whenever I want? Why can’t I go to the Web and open a list of applications available for my phone and experiment with them on the Website until I decide which one I want to buy and then have it downloaded to my phone? If the application needs some of my data, why can’t I enter it before I download it?

Alltel’s CellTop was also one of our finalists. It is a great user interface, but it did not take top honors because Verizon Wireless offers a Web user interface and a Web-based program to interact with the handset portion. I believe the user experience is the most important element of any of these devices and the applications they can run.

There are more than a few navigation programs available on phones today and most of them are every bit as good, if not better, than the software in my navigation system in my car. But a few of them require that I enter the address of my destination via the phone. The ones that permit me to enter the address and other details on a Website and then download it to the phone are much more functional.

On several occasions, I have met with people who have showed me a great application and when I ask about Web access, their response is that it will be available in a “future” release. My contention is that, in these times of fierce competition, not having a Web-based method of trying the application and entering data when the product is first released may be the difference between a great product and an also-ran.

Retail sales people don’t have enough time to help customers set up applications or to discuss what is available, or even to set up a new phone. Teens and twenty-somethings might take the time and trouble to figure out some of these things and how to change ringtones, download music or some of the other features. They are the ones being targeted by most of the operators and applications developers, but there are many of us over thirty who really want to be able to use our phones for more than voice calls and SMS messages.

I really want a good expense manager on my BlackBerry, but so far I have been unable to find one I can try on the Web and then download to the device. I want several other good applications I have seen, but entering the data on the phone is too cumbersome and too time-consuming so I will do without. I am sure that I would use my devices more for things other than voice and text messaging if I could have access to them via the Web and if I could try before I buy―not on the phone but on the Web, using a mock-up of the phone.

We are moving very slowly in this direction, and I guess that is my frustration. It is taking too long. We can interface the Web to anything, and there are those who believe that having the same Web on our phones as on our desktops is the killer application for wireless data. I would like to turn this around: The killer application for wireless data is being able to work through the options using a Web browser on the desktop when I have the time and inclination.

Those of us that have been in the industry for a while have been expecting voice pricing to migrate to unlimited for some time. Verizon Wireless was the first to move, and the speed of the competitive response from AT&T and T-Mobile indicates they had all been planning for this possibility for some time. Then, Sprint, in an attempt to one-up the competition announced “Simply Everything” with unlimited use of voice, data and applications. So, what are the implications for the industry?

Pressure Is On to Grow Data Revenue

Data revenues have been growing, but not nearly as fast as carriers had hoped. While text messaging, ringtones and a few other applications have broad penetration, many of the newer applications such as music and TV/video are seeing low single-digit penetration. All the carriers will have a renewed focus on getting customers to buy and use these applications. Sprint’s move to bundle many of these applications was clearly based on the belief that getting customers engaged with all these services will decrease their churn rate. But, ultimately, even free applications will only have the desired effect if the carrier is successful making them part of a customers daily live. I’m only half joking when I say that the industry doesn’t need to launch a single new application for the next two years. They should just focus on improving usability and getting customers to use the applications that are already out there.

New Channels and Tools

To enable increased engagement with mobile applications, carriers are going to need new tools and new channels to help them. The web is completely untapped opportunity for getting customers introduced to these services and helping them use them. This is the focus of my company, Clonefone. In addition, the carriers have announced the “opening” of their networks. Ultimately, they need to tap into the power of the Yahoos, Googles and hundreds of innovative application developers out there to create new applications that customers want and make it easier for innovation to occur.

Turning The Voice Model Upside-Down

For the last 20 years, carriers have been focused on driving more calling minutes. But, in a flat rate environment, every additional minute represents additional cost and lower profit. As a result, I believe we will see a number of new services that 1) take minutes off of the cellular network, and 2) find ways of billing people other than the customer for minutes.

Taking Minutes Off the Cellular Network

As I mentioned in a previous post, I believe the industry will move aggressively to implementing so-called femtocells. Now that every minute is additional cost rather than additional revenue, there is a tremendous incentive to migrate minutes in heavy calling locations (your home and office) to other transport mechanisms. On that note, I believe we will see more dual mode cellular and wi-fi handsets for the same reason. Today a customer must manually switch to the wi-fi network and without a significant incentive to do so, most won’t. As a result, I expect the more seamless femtocell solution to be the winner.

You can even look at traditional services like voice mail. Carriers have been reluctant to implement “visual voicemail” because they prefer that customers use up minutes to check their messages. Increasingly though, customers are more text oriented. In fact many of my friends in the industry have declared that “voice mail is dead”. Going forward, I believe you will see more visual voicemail, voice to text, and other such services. Again, reducing calling minutes now a good thing rather than a bad thing.

Billing Minutes/Data to Other Parties

Carriers will increasingly evaluate the different types of calls and look for ways to generate additional revenue from them. One obvious example is toll-free calls. As a frequent traveler, I make many calls on the road to airlines, rental car companies, hotels and other toll free numbers. Yet, most carriers simply count this as a minute, but don’t share much in the revenue that the toll-free provider collects from the receiving party. I believe that will change. But they can do more than just bill. They can make it easier to remember these numbers through dialing short codes such as **UAL, **HERTZ, etc. And then imagine that when you call your hotel, they automatically text back your confirmation number. The interactivity of mobile phones presents an opportunity to make toll-free calling a much better experience. I believe we will see innovation in this area this year and next.

To date, mobile marketing has generated minimal revenue for carriers. But there are a number of initiatives in this area that will change this over the next couple years. Mobile search has tremendous promise. The continued growth in mobile social networking will no doubt lead to innovation in advertising on mobile phones. Perhaps the biggest opportunity, however, is to use the mobile phone as a way of responding to advertising. These efforts will allow carriers to bill both voice minutes and data to brands rather than customers.

Increased Competition for Cricket (Leap) and MetroPCS

These carriers have positioned themselves as the low cost, unlimited calling alternative since they entered the market. For the last few years, they have seen tremendous subscriber growth due to landline substitution and success in the “credit-challenged” segment. But with all of the providers offering unlimited plans, albeit more expensive ones, they will face a number of challenges. First, they will need to reposition themselves. For example, Metro PCS’s tagline of “Unlimit Yourself” hardly seems differentiated now. Second, they are going to have a much harder time getting heavy talkers that can afford $100 per month. They’d be much more likely to go with a national carrier that can offer better in-market coverage, nationwide coverage and a broader array of services. The success of MetroPCS and Leap will depend on their ability to continue to mine the credit-challenged customers. That’s a difficult market, but the big carriers are not well positioned to capture or support these segments.

I believe we will look back at the move to unlimited pricing as a major move forward for wireless innovation in data services.

Currently, Sprint has launched it’s Airave product using a Samsung Femto cell. This product is only available in Denver, Indianapolis and Durham, North Carolina. I’ve been told by someone at RadioShack that Sprint plans to take this nationwide in March, but have no confirmation of that.

I think these in-home cell sites are going to be huge. They have the ultimate one-two punch for operators. They add capacity where the cell phone networks need it most - in peoples’ homes and the suburbs. Second, for in-home voice calls, these cell sites free up spectrum for operators by adding a microsite in the home that uses the home internet connection (cable/DSL) for sending and receiving calls.

From a consumer standpoint, they now have much better call quality in their home. No longer will they need to go to the window in the corner of the house facing the tower to be able to talk at home. Moreover, the smart move for operators is to couple this move with an aggressive in-home calling package. It’s the ultimate landline replacement. Some of the operators are no doubt thinking about unlimited calling plans along the lines of Leap and MetroPCS, but network capacity would be a huge issue as usage would likely nearly double. Much of this incremental usage would likely be at home where customers would opt to use their mobile phones for all calls, and would be on their “home cell site” where it doesn’t use the wide area cell phone network.

Sprint has already rolled out this unlimited calling plan for $15 per line that uses it. If you believe as I do that the voice market is gradually moving towards unlimited calling for a flat rate, I suspect that one of the operators will start bundling these home cell sites with their core service. You buy the equipment and the calling is free - for you and for your neighbors. These will be the cheapest cell sites that the carriers have ever deployed and I can finally make calls from my kitchen!

The Clonefone team would like to welcome you to our Clonefone blog.

You will find posts here from different members of our expert team that will provide insights, trends, and commentary that we think are relevant to how users bridge their mobile phone experience and their web experience.

We hope you enjoy this blog and provide us feedback!

Sincerely,

Clonefone Team