While mobile data revenues are projected to increase as more consumers own 3G-capable devices, voice will continue to be the main source of revenue. Besides voice and mobile data, the study sees premium mobile content as a strong revenue segment.

The study says that the trends seen in the North American market in 2007 - high-speed networks, emergence of the prepaid segment, third generation (3G) and fourth generation (4G) networks, slowing subscriber growth rates, mobile advertising and search, mobile social networking, mobile banking and payments, location-based services, and mobile broadcasting - will continue in 2008 and beyond.

- Twice as Fast 3G iPhone at Half the Price

- SDK Downloads Top 250,000

- Debuts MobileMe - ‘Exchange for the rest of us’

About 12 months after the iPhone hit the market to a gushing chorus of “oohs and aahs,” Apple marked the first anniversary with the launch of a new, faster 3G iPhone at half the price on Monday at the Moscone Center in San Francisco.

Worst Secret

That Apple would launch a 3G iPhone at its developers’ conference was, of course, the world’s worst kept secret. And had Apple CEO Steve Jobs failed to introduce the new iPhone, surely there would have been an uprising on the streets of San Francisco and in the gullies and alleys of the Internet.

Clad in his customary black turtleneck and blue jeans, Apple CEO Steve Jobs unveiled to a large throng of developers and media the new iPhone, which supports the faster 3G network and comes with built-in GPS capabilities and the iPhone 2.0 software that supports hundreds of third party applications as well as a Microsoft Exchange ActiveSync feature that should make the iPhone appealing to enterprises.

3G is the Key

Popular as it was, one of the biggest gripes of the first generation iPhone was that it used the slower 2G EDGE network.

Apple has addressed the problem with the 3G phone using a technology protocol called HSDPA (High-Speed Downlink Packet Access) to download data fast over UMTS (Universal Mobile Telecommunications System) networks.

With the 3G iPhone, e-mail attachments and Web pages are supposed to load twice as fast on 3G networks as on the 2G EDGE networks.

“It’s amazingly zippy,” said Jobs.

In any case, with the iPhone 3G designed to automatically switch between EDGE, faster 3G, and even faster Wi-Fi, users are supposed to get the fastest speeds possible.

Apple’s carrier partner AT&T says its 3G network is available in 280 US metros now and hopes to extend it to 350 metros by year-end.

Beautiful

“It’s really beautiful,” was how Jobs described it as he unveiled the iPhone to applause from the awe-struck audience.

With a nice 3.5-inch display, a full plastic back, solid metal buttons, flush head phone jacks, thinner at the edges and improved audio quality, the iPhone 3G appears to be a cool lil’ thing.

Other Features

There’s more to the new iPhone than the 3G upgrade, GPS, a few enterprise-friendly features or its slick design.

Here are some of the other key features of iPhone 3G:

* Talk time of five hours on a 3G and 10 hours on a 2G network; five-to-six hours of Web browsing; up to seven hours of video playback and up to 24 hours for audio playback.

* Leverages Apple’s new subscription-based MobileMe Internet service that pushes e-mail, contacts and calendars from an online “cloud” to native applications on iPhone, iPod touch, Macs and PCs.

* Built-in speaker, microphone, SIM card tray and 3.5mm stereo headphone mini-jack.

* 2 megapixel camera.

* As with the older version, on the new iPhone too users can multitask with simultaneous voice and data communications. So when users are on a call, they can simultaneously get map directions, check e-mail or browse the Web.

* A new scientific calculator, the ability to mass move and delete multiple e-mail messages and parental control for specified content.

* The new AppStore lets iPhone users buy native applications in various categories including games, business, news, sports, health, reference and travel. To be available in 62 countries at launch, AppStore is said to work over both cellular networks and Wi-Fi.

Price Cut

Weighing a mere 133 grams, iPhone 3G is scheduled to start selling on July 11 for $199 for the 8GB version and $299 for the 16GB model with a two-year contract.

The 8GB model comes only in black but the new 16GB version can also be had in white.

The new pricing is $200 less than for the previous versions of iPhones.

Does anyone still remember that the first iPhone cost $599 at one time?

70 Countries

Apple intends to offer the iPhone 3G in 70 countries later this year, beginning with 22 countries including the US, Canada, Mexico, Hong Kong, Japan, Australia, New Zealand, UK, France, Germany, Austria, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden and Switzerland.

iPhone SDK

Even as all eyes were on the gleaming iPhone 3G, perhaps the more important news was the developer ecosystem that Apple is building around the device.

Apple said 250,000 developers had downloaded the iPhone SDK since its launch on March 6.

The SDK provides developers with a set of Application Programming Interfaces and tools to build native applications.

Several developers including AOL, Cisco, eBay, Electronic Arts, Epocrates, TypePad, Salesforce.com and Sega have built native applications using the iPhone SDK.

Apple said 25,000 people applied for the paid developer program and 4,000 were admitted.

Developers set the price for their applications and get 70% of revenues from the apps.

If the application size is 10MB or less, it can be downloaded over the cellular network, Wi-Fi or iTunes. If the applications are more than 10MB, users can download them over Wi-Fi or iTunes only.

Apple is also planning to provide for enterprises to distribute iPhone apps through the corporate intranet as well as introducing an “ad hoc” method to distribute applications in a compact environment like a university classroom or a small software development team.

Introduces MobileMe

Along with the new iPhone 3G, Apple also rolled out a new subscription Internet service called MobileMe that delivers push e-mail, contacts and calendar and keeps them synchronized on different devices - iPhone, iPod touch, Mac or PC.

“Think of MobileMe as ‘Exchange’ for the rest of us,” said Jobs. “Now users who are not part of an enterprise that runs Exchange can get the same push e-mail, push calendars and push contacts that the big guys get.”

MobileMe costs $99 per year for individuals and $149 for a family pack. The individual account comes with 20GB of storage and the family pack with 20GB for the master account and 5GB for each four additional members. Members can purchase an additional 20GB for $49 or 40GB for $99 annually.

Impact on RIM

The talking heads on CNBC, the US business news TVchannel, feel that the new iPhone will have some impact on Research and Motion, the maker of the Blackberry phone that’s popular in corporate circles, but also think the two can co-exist.

Changes in Business Model

Apple continues to tweak the business model around the iPhones. It started with exclusive deals with operators in geographies like the US, UK, France, Germany and Ireland before starting to sign non-exclusive deals with multiple operators in other regions of the world.

In the latest change, Apple will not get a cut of the monthly service charge from the carriers.

But with the price cut and additional features, the iPhone should now be more appealing to those who stood on the sidelines for the last 12 months because of the high price.

“At just $199, we think the iPhone 3G is going to be affordable to almost everyone,” said Jobs.

Apple says it’s sold six million iPhones since they debuted 12 months ago and is on course to sell 10 million in 2008.

Some analysts feel that the lower iPhone prices could bring in a lot more consumers. “Apple is now better positioned comparatively on price to gain significant share in the handset market,” wrote Merrill Lynch analyst Jeff Fidacaro in a research note although sales may be hurt in the short term as customers wait for the new version.

Whiners

Of course, the iPhone 3G has its share of whiners.

Here’s a brief list of cavils from the whiners on what’s lacking in the iPhone 3G

- lack of video recording and of MMS,

- relatively low spec 2 megapixel camera,

- it still works only on the AT&T service,

- no cut/paste feature

- the phone cannot be used as a modem as many other smartphones can

- it’s not on sale till July 11

If you think of more shortcomings, let us know.

The following analysis is excerpted from a Wireless Watch report. To get a free copy of the complete report, please e-mail paperboy@riderresearch.com with your name and the name of your company and ask for Wireless Watch 256.

In the wake of the creation of the “new Clearwire,” the WiMAX joint venture between Sprint Nextel and the original Clearwire, both partners announced big quarterly losses, but amid a climate of opinion that was turning in their favor, with some analysts even predicting a Sprint turnaround this year. Meanwhile, the cablecos that were not included in the Clearwire venture - which is backed by Time Warner, Comcast and Bright House, as well as Google and Intel - were trying to reassure investors that they do have wireless strategies of their own, with Cox taking a risk on building its own network; Cablevision (like T-Mobile USA) turning to Wi-Fi; and Charter hinting that it would welcome an invitation to join Clearwire.

While participation in Clearwire looks like a clear plus for the three cableco partners, offering a relatively low risk, low cost route to wireless and the quad play, some are determined to plow their own furrows ? even Cox, which was formerly the fourth cable member of the first Sprint partnership, Pivot.

Cox is now looking to take the huge risk and investment of building its own network in the 700MHz spectrum it bought in the recent auction, a venture about which it remains secretive so far, and in which its shareholders may well be hoping it will recruit network partners of its own, with T-Mobile a possible candidate.

In a recent research note, UBS said Cox would spend “less than $100 million a year” on building out CDMA and later LTE, using kit from Huawei. It owns 14 regional licenses covering most of its cable territory and beyond, but would need a roaming deal with another CDMA operator to gain national and international services - which could bring it back to Sprint Nextel.

Cablevision is taking an approach that sounds almost retro, given the recent disappointment in wireless mesh as the basis for metrozone networks to challenge incumbent telcos and potentially provide a partner network for cablecos. The New York and Connecticut provider plans to erect a Wi-Fi canopy over its entire footprint, as a wireless overlay to its HFC network, a project that will take two years to complete. It will then offer free wireless access to its data subscribers, an approach already adopted in assorted variations by some DSL operators, like AT&T, and even cellcos, like T-Mobile.

However, these bundles of free wireless with broadband or mobile services have mainly relied on a network of hotspots, which may be variable in coverage, while by building the Wi-Fi itself, Cablevision is guaranteeing access throughout its territory - though of course, this will not provide the benefits of mobile roaming outside the zone for traveling subscribers, unless it signs roaming deals with a major Wi-Fi operator like T-Mobile USA.

There is logic to its thinking, though most broadband operators that have relied too heavily on Wi-Fi rather than true mobility have seen marginal benefits (example, British Telecom). However, half of Cablevision’s TV customers are already broadband Internet subscribers and half of these users already have Wi-Fi in their homes.

With free wider area Wi-Fi access available, Cablevision has removed one major incentive for these customers to buy a mobile broadband package from Verizon or AT&T. And the cost and risk is far less than that of Cox or Clearwire ? Cablevision estimates a cost of $70 per home passed to support 1.5 Mbps Internet and voice. However, it will also have to cope with the quality of service issues that are inherent to Wi-Fi because of its unlicensed spectrum, however well planned and controlled the mesh.

For vendors, this will be a welcome revival of interest in carrier class Wi-Fi mesh, and likely suppliers could be Motorola, already well established among cablecos through its set-top boxes; Cisco, which has the Cable ServiceMesh platform; or a start-up such as BelAir, which created a cable technology advisory committee in 2006 to develop wireless networks optimized for integration with hybrid fiber/coax networks.

With many of the cablecos fighting hard to achieve a quad play and protect their bases from the onslaught of the telcos, Charter Communications is still weighing up its options. It seems likely to go for partnership rather than build-out, but CEO Neil Smit, speaking at a first quarter results conference call, would only say: “We will continue to test our way into it, and try to determine what offering ? whether it’s voice or broadband or any other offering the consumer accepts well. We are working on some different relationships.” He also said Charter would be “running some tests” related to Clearwire connection. “We are looking into that, but at this point, we have not been approached… as to a partnership.”

By contrast, Mediacom Communications’ CEO Rocco Commisso said last week that it was “just a matter of time before we get involved” with Clearwire.

Cablevision will spend over $300 million to build a network of Wi-Fi hot spots primarily across its footprint on Long Island, NY but also in others parts of the New York City market. The service will be free to Cablevision customers.

The company has already begun the rollout and expects to be finished in two years.

Cablevision, together with Time Warner Cable, is at the epicenter of the market that Verizon has targeted for its fiber optic delivered FiOS pay-TV and broadband service. Verizon can bundle mobile phone and mobile broadband service from its Verizon Wireless service. Cablevision, like most US cablecos, has no wireless service to offer.

Cablevision COO Tom Rutledge says the wireless broadband service will help it keep customers. “Creating this value proposition for customers will enhance our service and cement our relationship with our customers for the long haul,” Rutledge told analysts this week.

US cable TV companies clearly think they need at the very least wireless broadband to compete with the telcos, if not a full-blown mobile phone service. Comcast, Time Warner Cable and Bright House have invested in Clearwire for the specific purpose of getting access to Clearwire’s WiMAX wireless broadband network. Cox, the third largest US cableco, says it’ll use the spectrum it recently acquired in a US government auction to provide some sort of as yet unspecified wireless network to consumers in its footprint.

Wi-Fi hotspots are popular with people that move around and use laptops to connect to the Net as well as owners of mobile phones (iPhones) and portable media players (iPod touches) that have built-in Wi-Fi. AT&T, the exclusive US iPhone distributor, is building a nationwide archipelago of Wi-Fi hotspots. It’ll have 17,000 locations once it gets its gear in every Starbucks, which is expected to happen by year-end.

Lest we forget, Wi-Fi has not proven technologically sound when it comes to covering large areas. The citywide Wi-Fi network in Philadelphia that shut down this week is but one of many that have gone dark. Wi-Fi is good in specific hot spots like at the home or a coffee shop but is totally not a mobile solution. For that a technology like WiMAX should be better. It offers higher speeds, security and the ability to keep devices connected as they are moved around - three characteristics that Wi-Fi lacks, at least in its current iteration.