The iPhone on AT&T – who’s the bottleneck?

About every few weeks I read an article about the latest iPhone outrage.  At SXSW, hordes of hipsters were left unable to tweet or surf YouTube leaving them with nothing to do other than enjoy the music festival they traveled thousands of miles to see.  More recently the NY Times wrote about “angered” customers frustrated with iPhone 3G speeds.  Inevitably the blame falls on AT&T since nobody wants to believe it’s the fault of the expensive brick they just bought.

More likely the blame lies somewhere in between.  Cell phone reception isn’t just a function of transmission but also reception.  Building a competent 3G phone is neither trivial nor cheap.  This is why Apple’s first generation phone – way back in ‘07 – didn’t even have 3G capability (or even a camera for that matter).  That they could get $600 for it is a statement on both the sheer marketing genius of Apple and the irrationality of its consumers.

Second time around the iPhone was (finally) 3G capable although with a radio which only supported roughly half the download speeds of AT&T’s HSDPA network.  So while AT&T’s network is capable of 7.2MB/s download speeds in some locations, your iPhone is only able to utilize half of it at most.  The newer 3GS finally upgrades the radio along with the processor to fully take advantage of available bandwidth.  Beyond just the processor and radio, factors such as antenna design/placement and power supply also factor into download speeds.  In short, the phone design is as important if not more important than transmission quality in determining quality of experience.

BusinessWeek last year reported on a source which claimed, “Apple programmed the Infineon chip to demand a more powerful 3G signal than the iPhone really requires. So if too many people try to make a call or go on the Internet in a given area, some of the devices will decide there’s insufficient power and switch to the slower network.”  Hard to know whether this is the case, but there’s more than enough support to find that Apple has some culpability in the issue.

I’m by no means an AT&T booster though I’ve enjoyed its 3G service for years without any issue.  I hacked my Treo 750 to be HSDPA capable and never had any issues with dropped calls or download speeds.  My current phone – a Nokia E51 – is quad-band with WiFi and 3G and has also performed flawlessly.  Keep in mind that within days of the iPhone 3G’s launch, consumers were reporting significant issues with dropped calls and 3G connectivity.  It’s not likely the network was congested with such a limited amount of phones in circulation at that time.

The bigger story here is resisting the temptation to look at components of a system in isolation.  What’s interesting in the iPhone case is the tendency of consumers to blame the service provider rather than the device.  Most of the time we bang the side of the television or shake the phone if we experience a decline in quality.  We tend to blame what’s most visible even though the culprit may be hidden.

The Gartner Hype Cycle – What Goes Up Will Come Down

The last few decades have provided a lot of lessons in bubble mentality whether it’s real estate, dot com stocks or beanie babies.  Some of these bubbles burst forever (I doubt beanie babies are making a comeback…ever) though most simply fall back to more reasonable expectations.  While these examples are ‘megatrends’ – broad movements across broad sectors – most technological innovations follow a similar cycle on a micro level.  Gartner has nicely codified this lifecycle with something called the hype cycle:

Gartner Hype Cycle

Using Twitter as an example (my current favorite fad to flog), the product is somewhere between the peak of inflated expectations and the trough of disillusionment.  It will probably be the case where Twitter collapses under the weight of lofty expectations and then re-emerges in more focused applications with far more reasonable presumptions on its value.

To get more specific, virtualization (as in VMWare implementations) was as hot as hot could get a couple of years ago.  I couldn’t get through a single meeting without a company telling me about their ‘virtualization project.’  Sure there’s an obvious gain to virtualization via server consolidation, but it also brings about its own set of headaches.

Now in the slope of enlightenment phase, early adopters are running into reality.  There are conversations about security concerns or the explosion of licensing costs to maintain software on those thousands of virtual servers which cropped up out of nowhere.  Many corporate buyers fear being left behind in a complex, quickly moving IT environment and, once the momentum gets rolling, it’s off to the races.

Where the Gartner cycle comes in handy is in rationalizing the way in which new technologies emerge.  Inevitably they come off intially as more than advertised.  This is part marketing hype, part overeager consumer afraid of being left behind.  Regardless, it’s a useful tool in predicting the trajectory of emerging technologies.

Move over Big Mac index…

For quite some time, The Economist has been calculating a Big Mac index which was intended to show price differences in various cities to show purchasing power parity – that is, what the US dollar will buy when adjusted for exchange rate and local cost of living.  But today the New York Times hinted at a pizza index of sorts with its article on the $5 slice in Brooklyn.

After I returned to the US, I used to joke that a dollar doesn’t buy anything here any longer.  Even in the midst of a major recession, I’m always surprised when I hear of suppliers raising prices (or shrinking package sizes… sneaky).  But every now and then I’m surprised.  The mid-point of my morning bike ride offers a 25 cent cup of coffee and during my recent visit to upstate NY I was pleasantly surprised at the $1.75 per slice pizza joint.  Even in Jackson, WY – which is generally a premium priced destination – two slices and a Pabst tall-boy runs $7 at one of the locally run establishments.

Yet still there’s a movement toward charging super-premium prices for pretty basic food.  A local establishment here offered a chicken pad thai ’special’ for … $18?  So what’s behind these insane prices?  One thing; the fact that people continue to pay them.  Says one Brooklynite who blew $60 on pizza for four; “You’re going to pay for quality.”  More than likely you’re paying for someone’s vacation home.

Read more:
Creative Loafing laments Chipotle downsizing burritos and upsizing prices

HuffPo points to broad trend in increasing restaurant prices in ‘09

The Twitter bubble…

Newshour with Jim Lehrer covered it and CNBC had a parade of pundits saying that businesses need to be on it.  Twitter is now the favored child of 2009 (replacing the 2008 winner, Facebook and the 2007 winner, Myspace).

Of course one distinct difference is that Twitter generates absolutely no revenue.  Everyone loves you when you’re free and there’s no cost – other than turning over some personal info – for signing up for an account.  I’ve been reading any number of analyses of the “free” business model (if it can be called a business) and Mark Cuban has some interesting thoughts over at his blog.

The Myspace/Facebook/Google models are actually extreme versions of models which have been around for quite some time.  Adobe distributes its Reader software for free while charging for Acrobat.  The idea is that content providers pay to publish in a format which is easily accessible by a broad audience via a free platform.  In this model there’s a win-win.  Adobe gets to propagate a standard (which in turn increases the value of its software) while the consumer is able to easily access a variety of content through a single viewer.  By nature these platforms need to achieve a massive scale to have much value at all and this is particularly true with social networks.

30 years ago one of the internet’s pioneers, Bob Metcalfe, put forward something now called Metcalfe’s Law which stated that the value of a network is proportional to the square of its users.  This concept was also the basis of an old shampoo commercial where you tell your friends about it and they tell their friends and so on and so on…  Twitter internal documents now speculate that the network will have a billion users by 2013 which I’m sure is based on some optimistic extrapolation of current trends.

A billion people is roughly 15% of all people on the planet.  Somehow that kind of reach generates $1.5B in revenue and only costs $400K $400M (projections are for $1.1B in net earnings).  If anyone is aware of a way in which I can create a business to reach 1 in every 6 people on the planet which operates on less than half a million billion a year, I’m all ears.

Reality will likely be far less kind to Twitter.   Myspace is consistently losing users to Facebook and it’s not likely many people still remember Friendster.  A big problem is that most people can only be a meaningful part of a handful of networks.  The value of users is not simply their presence, but the content they generate.  If I post more on Facebook, I probably post less on Myspace and there’s something of a zero sum game.

Back to the Adobe analogy – the reason pdf has value is because it’s something of a standard.  Most publishers aren’t interested in pushing content through a dozen different formats so they pick one and stick to it.  Likewise, social networking users aren’t that keen on posting 10 different status messages and photo albums across a variety of sites.  Social networks are either #1 or maybe #2 or they’re toast.

The challenge social networks face is that their consumers are also their publishers.  As users leave, so too do all their photos, user updates, and posts.  At a certain point the user exodus means social networks need to pony up for paid content (witness Myspace) which all of a sudden turns a free business model where advertisers pay to reach your users into a money pit where you’re buying content to keep the neighborhood from moving away.  Youtube and Myspace are already actively striking partnerships to secure professionally created content and the terms of those deals are highly dependent on the quality and scale of the audience they can deliver.  I’m not sure I’d want to be caught between that rock and a hard place.

Twitter’s unique dilemma is the fact that its content is so… lame.  140 characters of text comprising your innermost thoughts.  Once all the clever people start to migrate elsewhere, how does Twitter fill the void?  Duly noted there are hybrid applications like Blip.fm but, while it’s based on the Twitter concept… it’s not Twitter.

No such thing as a free market for healthcare

Well, and of course there’s no such thing as a free market anywhere.  Nearly any organized economy has some element of regulatory structure.  But the free market ideal is what’s often proposed by some as the solution to nearly any problem under the sun.

SC Senator Jim DeMint has been all over the airwaves claiming that the only thing that needs to be done to improve the healthcare system is to move it closer to a free market (in part by allowing insurers to compete across state lines).  Just to play along with the idea for now, the notion is that by opening up all Americans to insurers somehow the magic of competition will decrease costs and increase coverage.

But here’s the rub.  How much choice do you really have in selecting an insurer?  The problem is that certain Americans are inherently unprofitable customers and, left a choice, no insurer would touch them with a 10 foot tongue depressor.  If you’ve had cancer in your past – in other words you’re likely to cost insurers a bunch of money – your odds of obtaining a policy are slim and none.  Ah, but that’s where the mandate comes in, right?

A mandate is a good idea in theory, but how does it practically work?  Does it make sense that while we’re pursuing this free market ideal we’re also putting price caps on premiums?  Not likely.  So whatever premium you’re offered, the odds you can pay it are between slim and none.

The point is that health care costs aren’t regular, periodic or predictable.  It’s not like buying groceries or financing a car.  It’s more like having your house burn down.  You don’t know if it will happen, when it will happen and how much it will cost.  It is by nature a circumstance requiring insurance and by nature insurance requires a risk pool.  If you’re in the pool, you’re covered.  If you’re not, you’re screwed.  And who controls your access and cost of entry to the risk pool?  Insurance companies.

Back in 1931 a guy named Dr. Michael Shadid set up the country’s first cooperative health insurers.  Small farm communities pooled their money to support construction of a hospital and salaries to bring doctors.  These doctors were contracted to provide whatever care was needed by the community’s residents.

In this scenario, the patients protected themselves against unscrupulous doctors (or these days, insurers) who would withhold care until the patient met their price.  Whether it’s a resurrection of cooperatives or availability of a public plan, the key to healthcare reform is not to provide more autonomy for insurers to cherry-pick the most profitable patients, but to open access to all.  What’s being called a move toward a free market by some Republicans will be anything but free – especially for patients.

Mobile phones control irrigation in India

Via slashdot.org, an article from IDG which explains how Tata Teleservices of India is enabling farmers in India to use mobile phones to monitor and control remote irrigation pumps.  The entire set-up – including the phone and pump control made by Ossian Agro Automation – is less than $100.  The phone can also be used as… a phone.

IDC estimated nearly 250 million phones were shipped in the first quarter of 2009.  That kind of run-rate means a phone for every person on the planet in less than a decade.  Given that mobile phones and service have penetrated even the most remote villages at affordable prices, it seems logical to use this infrastructure to deliver value-added services to rural populations.

Revisiting One Laptop Per Child

I’ve written before about the One Laptop Per Child initiative (OLPC) and it’s a provocative project on many levels.  It showcases both the opportunities and obstacles to deploying technology infrastructre in the developing world while also reflecting on the state of technology innovation in general.

Just a few years ago consumers were challenged to find a reasonably competent laptop computer under $1,000.  At the time, Negroponte’s goal of a $100 computer seemed audacious (despite the fact that $100 is still a substantial amount in many developing nations).  Now there are netbooks dipping below the $200 range which are not only competent, but rely on largely off-the-shelf components in wide supply.

OLPC was not intended to be a hardware development effort but rather an educational initiative delivering content to developing world children.  In what I see as the biggest flaw in the initiative, Negroponte took a developed world solution – the laptop computer – and tried to shoehorn it into the developing world environment.  It’s as if GM took a Cadillac and set out to adapt it for sale in rural India.

Negroponte recently made press by criticizing some of the development efforts behind the XO but, ironically, it shows that the focus is on the technology rather then the end goal or initiative:

“Sugar should have been an application [residing] on a normal operating system,” he told ZDNet Asia in an interview. “But what we did…was we had Sugar do the power management, we had Sugar do the wireless management…”

This kind of techie overanalysis – while interesting – ignore the larger issues of whether or not the laptop paradigm is even suitable for the intended purpose.  A few potential challenges:

• How much swahili (for example) content is even available on the internet?  Or in any other local dialect or language?  The lack of users speaking these languages means the content is limited.  Understood that this is circular – increase the number of users and thereby increase the content – but is it wise to believe that one can be effective by disaggregating content by splintering it into dozens of languages?
• Along those lines, much of the internet is squarely aimed at high bandwidth/higher income users.  From an ADSL connection in Tajikistan, I was routinely thwarted when trying to access sites like Delta Airline’s which is chock full of bandwidth sucking features and is largely useless without a wide pipe.
• Does it make sense to give an 8 year-old a piece of equipment which is likely the most valuable item in the household?  Is it reasonable to believe that learning and education requires a computer and internet connection?

These are big questions which go well beyond the wonky discussion of operating systems and power supplies.  In effect the OLPC initiative did become a technology development project rather than an educational initiative.  As a result, the project gets put in direct comparison with netbook development efforts and the end result looks modest by comparison.  Had the focus been on delivering educational content perhaps the results could’ve been more compelling…?

Passing the foreign service officer test (FSOT)

I had taken the test early in June after having missed the last window.  Oddly enough, there was no test location in all of the Philippines despite the long history of US presence there.  There was even a test location in Tashkent which gives you an idea of the far flung nature of some of the sites.  Finally back in the US, I showed up at the local high school.

Fortunately I passed on my first attempt since it’s an 11 month wait to retake it.  While the job knowledge section was probably the trickiest, the test was dominated by English usage and biographical questions.  The most difficult aspect of the biographical questions was typing the explanation of your answer in 100 characters or less.  Maybe if I had a Twitter account I’d be better able to truncate my thoughts, but my text was routinely cut off for exceeding the maximum length.  On the essay I just plain ran out of time.  I’m a slow, methodical writer who wants to get it right on the first iteration.  Think twice, write once is my mantra but I managed to scribble a summary paragraph in the final few minutes of the section.

I’m a bit anxious to know my scores for the individual sections, but it requires a faxed signed request and a 6-8 week wait to receive them.  I don’t even have a land line let alone a fax machine so I’ll have to set up a scanner and Efax account to satisfy my curiosity.

Next step is submitting a set of five personal narratives probing for critical skills like communication, cultural awareness, etc.  It’s actually very similar to the assessment of candidates for Kiva fellowships (well known to me as I’ve been knee deep in conducting interviews for the new crop).  I have three weeks to submit them before I’m put before the qualifications panel which has until early October to make a decision.  Not exactly a fast track but I understand it’s improved somewhat.  Stay tuned…

Yellowstone

Yesterday was a Yellowstone day trip and I hadn’t been since I was 8 or 9 years old.  I may as well have never been since my only memory of it was through old photos.  But I also can’t help but think that my childhood outdoor adventures were instrumental in developing my adult appreciation of the natural world.

Bison, elk and deer dotted the park and whetted my desire for a longer lens.  The tourists, on the other hand, could only be captured effectively with a 20mm wide angle.  I had forgotten I’m back in the land of big trucks and big people.  Those Cruise America rental RVs are everywhere too.  I’ve been doing the mental math to figure out whether driving around in such a behemoth is more economical than finding a $70/night motel:

23′ RV for 7 nights = $1,250
700 miles = $224
70 gallons gas x $3.00 = $210
7 nights campground = $140
GRAND TOTAL = $1,824 or  $260/day

7 nights at Flagg Ranch Resort = $1,360
Weekly rental car = $350
35 gallons gas = $105
GRAND TOTAL = $1,815

So you can have your own shower and avoid chugging around in a 6,000lb. gas guzzler while saving a few bucks.  Not sure I get the appeal of an RV.  But things can get quite pricey on the hotel side, particularly in Jackson and $70/night motels don’t exist.  Here at the Rustic Inn a creekside cabin goes for $399 and the Flagg Ranch mentioned above goes for $170.  Nothing like Manhattan prices in the middle of nowhere although the Rustic facilities are quite nice with an equally delicious breakfast…

Tomorrow on to Denver and the road trip comes to a close soon after.  Will be driving along to an MJ mix CD to mourn the passing…

Never been to Iran…

Nor have most people who all of a sudden seem to be well-versed in the intricate politics of the region.  As with most things, they are far more complex in reality than they seem on the surface.

The simplistic notion is that Ahmadinejad is the ‘bad guy’ and Mousavi is the ‘good guy.’  Why?  They don’t know, but it’s what they hear on television.  Mousavi has a cool wife and is the ‘opposition’ to the bad guy.  But he also happened to be a strong supporter of Ayatollah Khomeini’s fiercely anti-American and fundamentalist revolution and was prime minister during the American embassy seige in 1980.

This isn’t so much a revolution as a struggle for power.  Many (but not all) people clearly want change but it’s not clear whether it will be a fundamental change in a more liberal direction.

As a blogger at The Economist pointed out, “Moussavi is hardly the perfect representative of the reformist, liberal Iranians who have taken to the streets.  And…this will likely lead to some disappointment should Mr Moussavi win power.”

Will he be better or worse than Ahmadinejad?  Hard to say.  Mousavi says the right things with respect to women’s rights and accepting the existence of the Holocaust.  But how much of it is a result of reading the political tea leaves and how much represents a marked change in policy?

Regardless, the degree to which the opposition is being supported by the American public and news media defies any reasonable notion of the potential impact of a Mousavi victory.  There seems to be far more interest in creating a narrative of an epic and historic struggle for democracy.  In reality, the President probably has it right when he said, “the difference between (the two)…may not be as great as has been advertised.” Hopefully the situation can resolve peacefully and perhaps spur some to dig a bit deeper than a superficial analysis of regional politics.