Rethink Research has published an interesting article relating the new Wi-Fi voice certification to the outlook for femtocells.

The idea of the article is that voice over Wi-Fi for cell phones is competing with femtocells, and that femtocells may win out. The article distinguishes between business voice and consumer voice, saying that service providers see femtocells as “an important stalking horse for greater control of corporate customers. ” This gives a hint of why femtocells may be unattractive to businesses: many of them would rather not yield this control.

Consumer voice service is controlled by service providers. They have three options in this space: do nothing, deploy femtocells or deploy Wi-Fi. Do nothing is the obvious best choice, since neither of the other options carries a revenue upside. But poor coverage in a home discourages usage and risks cancellations of subscriptions. So in areas of poor coverage something like femtocells or UMA (voice over Wi-Fi) is attractive to service providers. For both technologies the service provider subsidizes the wireless router, but femtocells will remain more expensive than Wi-Fi routers because of their lower sales volumes, so Wi-Fi is more attractive on this count. But UMA requires phones with Wi-Fi, while femtocells will work with any phone in the service provider’s line-up, including legacy ones. So the customers’ experience of femtocells is better - they can choose or keep the phone they want and still get improved coverage at home. This benefit of femtocells clearly outweighs the marginal price advantage of Wi-Fi routers. Femtocells may help subscriber retention in another way: a Wi-Fi router is not tied to any particular cellular service provider, while a femtocell only works with the carrier that supplied it.

The situation in businesses is different. They generally prefer to control their own voice systems, which is why they have PBXs. But a substantial number of business calls are now made on cell phones, even on company premises. These calls don’t go through the PBX, so they are not least-cost-routed and they are not logged or managed by the IT department. Femtocells don’t fix these problems, but Voice over Wi-Fi does. Not service provider Voice over Wi-Fi, like UMA, but SIP-based Voice over Wi-Fi from companies like DiVitas and Agito. What about phone choice though? Won’t corporate customers be stuck with a limited choice of handsets? The answer is yes, only a limited number of phones have Wi-Fi: less than 10% of those sold in 2008. But in the category of enterprise smart phones, like the Nokia Eseries and Blackberries, the attach rate of Wi-Fi will soon be close to 100%.

So femtocells are a good way for service providers to remedy churn caused by poor residential coverage for consumers, but Wi-Fi may be the better option for businesses that want to regain control over their voice traffic.

Most 802.11n access points draw more power than Power over Ethernet (PoE) can supply, while 802.11a/b/g access points work comfortably with PoE. So 802.11n must be more power consumptive than 11g, right?

The answer is yes, but when you delve into the reasons why you may discover that an 802.11n handset can still have comparable, or better battery life than an 802.11g one.

The big power drain for 802.11n is MIMO, for two reasons. First, MIMO demands a separate radio transmitter for each of its channels. In the Farpoint white paper linked above, testing was done with six transmitters - 3 at 2.4 GHz, 3 at 5GHz. The 11n specification allows up to 4 MIMO channels, and Wi-Fi certification requires at least two. Each of these transmitters burns as much power as the single (or dual in the case of an a/g AP) transmitter in an 11a or 11g access point. A second increase in power demand by 11n comes from the increased processing load not just because of the increased number of channels, and not just because of the increased data throughput, but also because each individual MIMO stream places a heavier processing load than a single 11a or 11g stream.

But the Wi-Fi Alliance (WFA) has waived the MIMO requirements for handsets, allowing 802.11n certification for single-radio devices. So none of these increases in power dissipation needs to apply to handsets.

Single-channel 802.11n still requires more processing than single channel 802.11g, because of advanced features like STBC and LDPC, but STBC and LDPC are amenable to hardware implementation (which reduces their power demand), and these and other advanced features of 802.11n improve “rate at range,” meaning that the transmitter is active for shorter times, and can transmit at lower power.

The net is that Redpine Signals, a pioneer of 11n for handsets, claims that a handset using the Redpine 11n chip actually has better battery life than it would with a competitor’s 11g chip.

Wi-Fi state of the art is a rapidly moving target, and over the past 12 months there have been startling improvements in power efficiency. I have written here about the new Atheros chip, for example. So if the latest 11g handset chips are more power efficient than 11n competitors, it is more a function of their recency than their adherence to 11g.

The benefit of 5 GHz operation is compelling for Voice over Wi-Fi, and it will be hard for handset vendors to promote the decade-old 802.11a over 802.11n. 802.11n is already the Wi-Fi flavor of choice for access points and PC clients, and it soon will be for handsets, too. How soon? It’s hard to say. So far the only chip vendors to announce 11n for handsets are TI, Redpine Signals and Conexant, and Conexant exited the handset Wi-Fi business just two months after it announced this chip. No phone is yet shipping with 802.11n although TI said it was sampling its WiLink 6.0 with 11n in February 2007. The Wi-Fi alliance has not yet published its Handheld profile for 802.11n certification. On the other hand, ABI research in September 2006 predicted that the majority of the 300 million Wi-Fi enabled handsets to ship in 2011 will support 802.11n.

If 802.11n handset shipments fall short of this prediction, it won’t be because of battery life considerations.

UBS thinks that the 3G iPhone will be released mid-year. iLounge reports that the much-anticipated iPhone SDK will be delivered in June, at Apple’s Worldwide Developer Conference. A beta version will be released at an announcement event on March 6th.

There are several reports that Apple intends to target business users with the iPhone, competing with Blackberries, Nokia’s Eseries and Windows Mobile devices. Since the SDK reportedly will expose interfaces to the phone and Wi-Fi, developers of Wi-Fi soft-phones and enterprise Fixed-Mobile Convergence systems will presumably add iPhone support to their existing Symbian and Windows-supporting products. It remains to be seen how easy it will be for developers to actually get their software “officially” onto the iPhone. Apple can choose their degree of open-ness from a variety of options discussed here.

For Apple to aim at the business market makes a lot of sense. With the successful transition to Intel processors Macs already run Windows natively, and iPhones are supposedly making inroads among executives. According to ChangeWave, summarized here, the iPhone has a 5% share of corporate smartphones already, with astronomical ratings for satisfaction.

To make enterprise IT departments happy, though, Apple will have to make the iPhone more manageable; either by building in OMA DM like Nokia with the Eseries, or by letting third parties develop enterprise manageability clients using the iPhone SDK.

Competitors aren’t sitting still for this. The October 2007 announcement of “Microsoft System Center Mobile Device Manager” was a step forward for Windows Mobile in the enterprise. Microsoft is also leaking stories about how when Windows Mobile 7 is released in 2009 it is going to be more of a pleasure to use than the iPhone. It is conceivable, I suppose, but Microsoft’s track record on usability is pretty consistent. The fundamental part that they invariably seem to get wrong is instant response to user input.

Owners of iPhones know that web browsing on the iPhone is a completely different animal than on any other cell phone. How different? Well, it would appear to be thirty to fifty times different.

Thirty times is difference in data usage between iPhone users and others on the T-Mobile network in Germany, according to Unstrung.

Fifty times is the difference in the number of Google searches by iPhone users compared to others according to Google.

The coming crop of smartphones are data friendly, third-party software friendly phones with Wi-Fi. But there’s more! The processing power of the ARM application processors used in phones lags that of mobile PC CPUs by about 7 years, so this year’s phones will have roughly the computing power of a 2001 laptop.

These changes come together to make phones chip away at the uses of notebook PCs. Many people who used PCs only for email now use Blackberries instead. Many phones are good substitutes for personal organizer software on PCs. The iPhone can credibly substitute for a PC for web browsing.

These trends motivated Instat to say last November:

Smartphone use will grow mostly from use as a laptop replacement

According to Gartner, the year-on-year notebook sales growth numbers for notebook PCs from 2004 to 2007 remained healthy: 36%, 28%, 22%. The crossover in unit volume came in 2006, when smartphones and notebooks both shipped roughly 80 million units worldwide. That 22% unit growth in notebook sales from 2006 to 2007 represented a jump to over 100 million units shipped. Compare this to a 70% jump in smartphone unit shipments in the same period, to over 130 million.

I have previously written about OpenMoko. It seems now that it was the drop before the deluge. Google’s Android appears to have gained good traction with Sprint and T-Mobile joining the Open Handset Alliance, with Dell rumored (update) to be planning an Android-based phone, and with Verizon expressing lukewarm support. Nokia has for some time sponsored open source handset software through Maemo.org, but this week it upped the ante with its acquisition of TrollTech. Trolltech is responsible for Qtopia, a semi-open source platform used in Linux-based phones. That makes four credible Linux-based mobile phone software platforms. Update: Make that five - the LiMo Foundation is a consortium of carriers (including NTT DoCoMo and Vodafone), phone makers (including Samsung, Motorola and LG) and others “dedicated to creating the first truly open, hardware-independent, Linux-based operating system for mobile devices.”

But a phone doesn’t have to be open-source to be an open application platform, and this category is just as vigorous, but better established. Nokia’s Symbian phones have always been open to an extent - there are over 2 million developers registered in Nokia’s developer organization, Forum Nokia. Then we have Microsoft. Microsoft claims that sales of Windows Mobile phones are set to double year-on-year, to 20 million units. Windows Mobile provides a sufficiently open application environment that applications like Skype run on it. The iPhone is not yet officially an open application environment, but there is still a healthy slate of applications from third parties for those with the stomach to take the unofficial route. This is scheduled to change in February when the open-ness goes official with the release of Apple’s SDK for the iPhone. So that’s three major open application environments for smart phones.

2008 is also the year that Wi-Fi phones will come into their own. The dam broke with the iPhone. Wi-Fi on the iPhone raises the bar for all the other smart phones, making Wi-Fi a baseline checklist item for the next generation of smart phones. Previously mobile network operators were fearful that Wi-Fi in a phone would divert traffic from their data networks. This fear led, for example, to AT&T’s removal of Wi-Fi from their version of the Nokia E61. But there is now new evidence. At last week’s IT Expo East I heard an unsubstantiated report that 60% of wireless data usage in December was by 2% of the phones: iPhones. If this is even partly true, it would demonstrate that a web-friendly phone will drive traffic on the cellular data network even when it has Wi-Fi.

David Hattey, CEO of FirstHand Technologies points out in an opinion piece on CNET that US mobile network operators may be opening up their phones to third party applications. He cites two announcements from last November: Apple’s announcement of an SDK for the iPhone, and Verizon’s “Any Apps, Any device” announcement.

This point was echoed in the New York Times article on the 700MHz spectrum auction that I wrote about earlier today:

The new rules have already begun to reshape the rapidly emerging wireless broadband industry. It prompted Verizon and AT&T to change their policies and open their networks to new applications and devices, just as Google and its allies had hoped.

“The issue has melted away,” Mr. Martin said. “It is no longer as controversial, as the major providers have moved to open up their networks.”

Tango Networks was founded in 2005 and fully funded by February of 2007. It is one of several startups addressing the enterprise FMC market, integrating with the corporate PBX, but it claims a unique twist in that it also integrates closely with service provider infrastructure.

Tango has a box plugged into the MNO’s call control infrastructure talking directly to another Tango box that plugs into the corporate PBX. These boxes are named Abrazo-C (carrier) and Abrazo-E (enterprise). Abrazo is the Spanish for embrace, reinforcing the concept of the carrier side and the enterprise side being tightly connected. This balanced architecture enables Tango to offer a rich feature set while maintaining versatile.

One of the aspects of this versatility is that they aren’t fixated on dual mode phones. Tango works with any cell phone, and hands off between the corporate desk phone and the cell phone in response to the user punching in a star code on their phone keypad. This method of input also gives the user complete access to all the features of the corporate PBX over the cellular network. But Tango acknowledges that star codes are not the most user friendly of interfaces, so they do provide an “ultra thin client” for those phones that support third party software.

Requiring a box in the carrier network helps with things like caller ID manipulation and number translation (like 4 digit dialing to PBX extensions from your cell phone). On the other hand it limits Tango’s ability to sell directly to enterprises. The primary customer for all sales has to be a carrier. Marketing efforts directed to end users serve only to provide pull through.

Offering a box on the enterprise premises addresses the major concern of businesses evaluating VCC and other carrier centric FMC solutions: businesses don’t want to lose control of their voice network. By leaving the enterprise side of the system under the control of the corporate IT department, Tango resembles the PBX model of business voice more closely than the never popular Centrex model.

The genesis of the Google phone project is described in this Boston Globe article by Scott Kirsner.

The Open Handset Alliance will release its SDK on November 12th, 2007. The iPhone SDK will not be released until four months later. Microsoft and Symbian already have not only mature SDKs, but vigorous development communities: in mid-2007 Windows Mobile had 650 thousand registered developers, and Forum Nokia had 2 million registered individuals and 440 companies in its “Platinum Program.”

As usual with a new development environment, it’s a chicken and egg situation, but the chicken is coming out in pretty good shape; if the base platform debuts with comparable functionality to what the iPhone came out with, it’s a low-risk proposition for the phone OEMs, and Google’s magic coattails will ensure hysterical enthusiasm in the developer community.

The Open Handset Alliance was announced today by Google and 30 or so other companies. Until now the highest-profile open source handset operating environment was OpenMoko.

The list of participants has no real surprises in it. Nokia isn’t on the list, most likely because this project competes head on with Symbian. This may also help to explain why Sony Ericsson isn’t a supporter yet, either. But the other three of the top five handset manufacturers are members: Motorola, Samsung and LG. All of these ship Symbian-based phones, but they also ship Windows based phones, so they are already pursuing an OS-agnostic strategy. Open standards are less helpful to a market leader than to its competitors.

Of course the other leading smartphone OS vendors are also missing from the list: Microsoft, Apple, Palm and RIM.

Ebay is there because this massively benefits Skype.

Silicon vendors retain more control of their destiny when there is a competitive software community, so it makes sense that TI is aboard even though it is the market leader in cellphone chips. Intel is another chip vendor that is a member. Intel can normally be relied on to support this type of open platform initiative, and although Intel sold its handset-related businesses in 2006, its low power CPU efforts may evolve from ultra-mobile PCs down to smartphones in a few years.

Among MNOs Verizon and AT&T Mobile are notorious for their walled-garden policies, so it makes sense that they aren’t on the list, though Sprint and T-Mobile are, which is an encouraging indication.

At the launch of the iPhone Steve Jobs said that the reason there would be no SDK for the iPhone was that AT&T didn’t want their network brought down by a rogue application. I ridiculed this excuse in an Internet Telephony column. Even so, the carriers do have a valid objection to completely open platforms: their subscribers will call them for support when the phone crashes. For this reason, applications that use sensitive APIs in Symbian must be “Symbian signed.” When he announced the iPhone SDK, Steve Jobs alluded to this as a model that Apple may follow.

So Sprint’s and T-Mobile’s participation in this initiative is very interesting. Sprint’s press release says:

Unlike other wireless carriers, Sprint allows data users to freely browse the Internet outside its portal and has done so since first offering access to the Internet on its phones in 2001.

Open Internet access is actually available from all the major US MNOs other than Verizon; AT&T ships the best handset for this, the iPhone. But the iPhone doesn’t (officially) let users load whatever software they want onto the phone. Symbian and Windows-based phones generally do, and again all the major MNOs ship handsets based on these operating systems. An open source handset goes a big step further, but who benefits depends on what parts of the source code are published, and what APIs are exposed by the proprietary parts of the system. As a rule of thumb, one would think that giving developers this greater degree of control over the system will increase their scope for innovation.