Recently, O2 announced a revised set of data tariffs for new and upgrading mobile customers in the UK. Customers will have a choice of “smartphone tariff plans” with a bundled data allocation of 500MB, 750MB or 1GB, depending on the total monthly fee, which ranges from £25 to £60. Earlier this month, AT&T had withdrawn unlimited data plans from its network. If the AT&T and O2 are any indicator of the future, the unlimited data plans could soon be a thing of the past.

In April 2010, Opera Mini users generated over 398 million MB of data for operators worldwide. Opera compresses the data by up to 90% and despite that this huge data was consumed by its users. Opera has close to 26.23% market share as per a report from Statcounter as of June, 2010. This means that the total data consumption across the world is much larger than 1150 million MB (Cisco estimates it to be closer to 2000 million MB) and this has been growing at over 100% annually. Cisco has predicted that the mobile data usage would continue to grow at over 100% CAGR until 2014.

If the data consumption continues to grow at the rate forecasted, the operators have a huge problem at hand. The increasing market share of iPhone and Android (Android has reached 10% share of smartphones in just 6 quarters) is likely to make the situation worse than Cisco’s forecast. In the figure below, it is clear that though Apple and Android have just 25% share in smartphone sales, they consume almost 67% of the total data traffic. This means that the average data usage on iPhone and Android based phones is a little under 3 times than that on any other phone.

The data networks were hugely under-utilized before the launch of iPhone. Operators had invested huge money in 3G networks and the due to low usage, they were finding it difficult to recover the investments. In order to increase usage and adoption, the carriers started to offer flat data plans and some of them went a step further by giving unlimited data plans. This was a great strategy on part of carriers and the analysts lauded it profusely and even lectured the carriers that were not offering unlimited data plans on its value proposition. With the advent of iPhone, the mobile Internet usage shot through the roof as the applications became more data intensive and the users started to download full track music, use peer-to-peer (P2P) file transfer and streaming services.

In US and some European countries, iPhone has really high market share putting extra strain on the carriers in those countries. O2 revealed that less than 0.1% of its subscribers account for a third of all network data traffic. Just 3 percent of users on smartphone tariffs account for 36 percent of its smartphone data traffic. The disproportionate data network usage by smartphone users (especially iPhone) meant that the other users were subsidizing the data usage of smartphone users. This is not only unfair but also unsustainable. O2 has been spending around £1m a day to upgrade its network to cope with the “exponential demand” for data on smartphones. AT&T had also claimed similar numbers on data usage.

It is getting increasingly clear that the operators in most of the countries would be left with two choices: either increase the data capacity by investing in the newer technologies like LTE or stop offering unlimited data plans. Given the financial health of the carriers and the maturity of LTE, it is likely that the carriers would adopt the later approach, i.e. stop offering unlimited data plans to consumers. Alternatively, the carriers can adopt the approach of promoting and offering incentives on handsets like Nokia and RIM that are either more data efficient or the data usage is lower by consumers on these phones.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.
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Apple WWDC 2010 – Steve Jobs Keynote Quicknotes (Contributed by Navdeep Manaktala)

iPhone 4

• US Smartphone Market Share – RIM: 35%,iPhone: 28%, Windows, 19%, Android 9%, other 9%
• US Mobile Browser Usage – iPhone : 57%, Android : 23%, RIM : 13%, Others : 7%
• Hardware
  • New design (leaked iPhone)
  • Thinnest smartphone ever (claim) – 9.3mm thick; 24mm thinner than the iPhone 3GS
  • Stainless steel body for strength
  • Glass display for optical quality and scratch resistance
  • Integrated antenna – The outter rim of the case is the phone’s antenna
  • Display :
    • 3.5 in display
    • 960×460 pixels (4x more than current iPhone)
    • Retina display – 326 pixels per inch (300 is supposedly the highest for the human retina). Highest ever resolution on a phone
    • 800:1 contrast ratio (4x better than current iPhone)
    • IPS Technology for superb color and wide viewing angle
    • Going to set the standard for displays over the next few years (claim)
• A4 processor (same as on iPad. Designed by Apple)
• 40% improvement in battery life (larger battery + improved processor) – 3G Talk (7 hrs), 3G Browsing (6 hrs), WiFi Browsing (10 hrs), Video (10 hrs), Music (40 hrs), Standby (300 hrs)
• 32 GB of storage
• Quad-band HSDPA/HSUPA
• 3-axis gyroscope, adding pitch/roll/yaw, rotation around gravityvide 6 axis motion. Gyro + accelerometer pro – Perfect for gaming
• Camera : 5 Mpx, front & rear, backside illuminated sensor, allowing more light to get to the sensor, 5x digital zoom, LED flash, tap to focus
• Video : HD (720p @30 fps) video, tap to focus, built-in video editing, one click sharing, flash support for videos also
• iMovie App : Create video clips with ability to add pictures, backgrounds, location, music, etc.
• Software (iOS4)
  • Folders, task switcher, unified mailbox, enterprise features (as outlined earlier this month)
  • Choice of Bing for search
  • Will ship 100 millionth iOS device (iPhone, iPod, iPad) this month
  • iBooks now also comes to the iPhone (including download same book for all your apple devices at no extra charge). iBooks will also automatically sync your notes, books, and place wirelessly across all of your deivces
  • PDF support
  • Support for video calling (being called Facetime), front and rear camera support, only via Wifi in 2010, support for landscape and portrait mode
  • To be also made available for existing devices
  • Colours : Black, White
  • Price : $199 for 16GB, $299 for 32GB ; iPhone 3GS (8 GB) is going to be $99
  • Availability : Jun 24^th

iAds

• Objective – To help our developers earn money so they can continue building apps
• Selling iAds for 8 weeks now
• Adverisers so far – Nissan, Unilever, AT&T, Citi, Chanel, GE, Liberty Mutual, State Farm, Geico, Campbell, Sears, JC Penny, Target, Best Buy, Direct TV, TBS, and Disney. Have committed $60 million in iAd advertising
• Support for full screen and full interactivity

Platforms

• Apple supports two platforms – HTML5 (fully open, uncontrolled platform) and the AppStore (curated platform)

iPad

• 8500 native apps
• 35 million app downloads over last 65 days = 17 apps per iPad
• 5 million book downloads from iBooks over last 65 days = 2.5 books per iPad
• New feature on iBooks – Notes (post mark shows alongside wherever you noted)
• PDF support

AppStore

• 225k apps
• 15k apps submitted each week in 30 languages
• 95% of apps approved within a week
• Top reasons for rejection of submitted apps – App doesn’t function as advertised, Use of Private APIs & App crashes
• eBay app – 10 mn downloads of app since its launch last year. 600 mn transcations via the same in the first year and expected to do 1.5-2 bn transactions this year
• NetFlix coming to the iPhone (14 mn subscribers). Like on the iPad, you can resume movies from where you left off on other platforms. Full catalog and Instant Queue access
• Farmville by Zynga, one of the most popular online games of all time with 80 mn players currently, comes to the iPhone with pinch/zoom, notifications, etc.
• Guitar Hero with strumming (certain notes are swiped, rather than tapped) comes to the iPhone
• 5 billion downloads on iPhone. Across the 3 stores, there have been over 16 billion downloads
• Across all three stores (App stores, iTunes, iBooks), Apple has over 150 million credit cards users
• US$ 1 billion payouts to developers to date (70% of end user revenue)

Watch the video of the address on the Apple site.

The smartphones has been the fastest growing category within the mobile phone space for the last couple of years. In 2009, a total of 172 million smartphones were sold which was a growth of 24% over 2008 (source: Gartner) whereas the mobile phone category was more or less flat in 2009 in the backdrop of severe recession. Analysts expect over 240 million Smartphones to be sold in 2010.

What is a Smartphone?

Unfortunately, there is no one universal definition of Smartphones. Some analysts have defined it as phones using open operating system which means that Symbian, Windows and Android based phones qualify as Smartphones but then what about Apple iPhone and RIM that run on proprietary operating system? Some define it as phone that gives PC like functionality and for some, it is the one with most advanced mobile phone features and hence the feature set of smartphones keep changing. A few industry analysts define it at mobile phones running on operating system with standardized interface and that provide easy access to developers for application development.

Whatever is the definition, it is commonly accepted that Smartphones have strong email clients, third party applications of some kind, QWERTY hardware or software keyboard support, high-speed internet, powerful calendar, contact and organizational features and support for powerful processors and touch screens. The operating systems that can support the above feature requirements are Symbian, Windows, Android, iPhone OS, RIM, Maemo (Meego going forward with Maemo’s merger with Moblin) and Palm OS.

Why does everybody want to win the Smartphone battle?

Smartphones are not even 10% of the total mobile phones but still all the handset players want to win this battle for the following reasons:

1. High ASP - The average selling price of a smart phone is almost 3 times that of a non-smartphone which means it has a higher impact on not only the value share but also on the profitability. Apple and RIM though have just 3% market share in the mobile devices but have over 50% share in industry profits which reflects the high profitability of the smartphones.
2. Thought leadership - Success in the smartphone business gives the device vendor the status of “Thought Leadership”. Any vendor having the “Though Leadership” benefits in the non-smartphone devices as well as the consumers want to buy the devices from the leading brands (in terms of “Thought Leadership”) even if they are not buying the devices that gave the vendor this status. This status is like the quality assurance certificate.
3. Future of mobile phones – The smartphone market is expected to expand significantly in future to almost 40% of the total device market by 2013 which means that no vendor can afford to ignore this market.
4. Operators prefer Smartphones – The increasing popularity of iPhones has led to increased data usage on the mobile. This has enabled the carriers to maintain their ARPUs despite fall in voice tariffs. The data usage on smartphones is almost 3 times higher than a normal phone. 55% of iPhone users use mobile social networking and 80% use it for surfing web daily. The high data usage has led to the situation of data scarcity from data abundance and carriers love this situation.

Who will win the battle?

Anybody who wins in the smartphone business has to win it on back of the operating system.

Symbian has been the market leader in the Smartphone segment of the market with 47% market share in 2009. However, Symbian is facing a stiff challenge from iPhone OS, Android and RIM OS and has lost market share in the recent few quarters. The figure alongside gives Smartphone market shares in 2009. Android though has only 3.9% market share in 2009 but is making the most noise in the smartphone segment.

Each operating system has its own positives and negatives and before we attempt to answer the question that who is going to win the battle, it is important to evaluate the pros and cons of top operating systems:

Andriod:

This operating system has been developed by Google with the aim of not only to get a foothold in the lucrative mobile industry but also to change the way the mobile owners consume data on the net.

Pros – Open, free and supporting many devices. Great experience of Google’s web properties on the mobile like messaging

Cons- Fear of excessive fragmentation due to its open architecture and is also more susceptible to security threats

iPhone OS:

This operating system has been developed by Apple and is a closed, proprietary operating system and is only for Apple devices, iPhone and iPod Touch. iPhones have been so popular that they are now being blamed for the increasing data congestion on the networks.

Pros - Single unified platform and its biggest asset is the application store

Cons- Proprietary and hence its dependence on one vendor is a risk. Application submission process is a cumbersome and Apple keeps a tight control on the 3rd party applications.

Blackberry OS:

Blackberry OS is owned by Research in Motion (RIM) and is a proprietary operating system.

Pros - Strong in enterprise mobility segment and has created a perception amongst IT managers of being a much secured OS. Strong messaging service

Cons- Proprietary and hence its dependence on one vendor is a risk. Aged operating system and requires the special BES server. Lack of focus on consumer segment in the past limits the lure to potential developers. This operating system also suffers from lack of optimization on touchscreen devices and a bad web browser.

Symbian:

Symbian is owned by Nokia  and used by many other vendors like Samsung, LG and Sony Ericsson. It is market leader but is seen as an archaic operating system. However, it is still holding out with promise to launch Symbian 3 and 4 by the end of the year.

Pros - Largest installed base and hence the economies of scale. Backing of Nokia, the market leader helps Symbian maintain its market leadership.

Cons- Aged OS and not really optimized for touchscreen devices. It is virtually absent in the North American markets and is facing huge competition from Android, iPhone OS and Blackberry OS. Dependence on Nokia is a risk as many of the other vendors are shifting to Android.

Windows Mobile:

This operating system has been developed by Microsoft and promises to mirror the PC experience on the smartphone. After continuous decline in market share in the past many quarters, Microsoft recently announced Windows Mobile Version 7 which has got rave reviews from analysts and handset vendors.

Pros - Backing of Microsoft which has virtual monopoly on personal computers. Microsoft’s ability to provide resources and its possible integration with its other hot properties like X-Box, Zune can ignite developer interest in this operating system.

Cons- Past failures to haunt version 7. Heavy operating system and hence requires higher hardware specifications. Last version had a bad user interface (UI) and web browser. I hope the new version has targeted the UI for improvement

There are many other operating systems like Maemo, LiMo, Samsung’s Bada that are trying to get a foothold in the lucrative smartphone business but only time will tell if they can manage to break into the top five operating systems.

I am not going to pass a verdict on which operating system will win but I will publish the results of the poll that I conducted on this site and no prizes for guessing the winner (refer to the image on the left). The winner was Android with over 40% of votes. In the backdrop of its popularity and the confidence that the ecosystem players are putting in Android, it is not at all surprising that it is going to be the fastest growing operating system for next five years. In the recently concluded Mobile World Congress, Android managed to get the highest number of handset announcements. Though even iPhone OS is a wonderful operating system but its proprietary nature would limit its expansion.

In your opinion, which operating system and vendor is likely to win in the smartphone space? Please do comment and cast your vote.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Often there is a debate on the next form factor (physical appearance) for mobile devices. There are fancy form factors like fold-able, morph, etc. that are often quoted but I believe that the next wave would be of an existing form factor which is QWERTY.

QWERTY phones have been in use for a long time but they have been widely marketed by device vendors as messaging phones. The trend of linking QWERTY with messaging was started by Blackberry with their ugly looking devices that had the perfect email solution. Later on any QWERTY device was labeled as business device. However, this myth is changing very fast now with the launch of cheap QWERTY devices particularly by Chinese vendors. Chinese vendors, known for innovation, launched QWERTY devices at around $50 price point which turned out to be the tipping point for such devices. These devices were lapped on by financially constraint individuals who were not much literate as well. They found that using a QWERTY phone made the storage of contact details in the phone book easy. They could write SMSs without any goof-ups like writing “Porn” for “POSM” (POSM-Point of Sale Material) or “Pink Panties” for “Pink Panther” while using the predictive text. It helps simplify the input mechanism which is a big barrier to cellphone adoption. The point is that it was wrong to club QWERTY devices with email and social networking. I am not saying that email is not easy with QWERTY but I am trying to emphasize that the market for QWERTY devices would have been much larger had the marketers realized the utility of QWERTY for the poor and illiterate people.

I would reckon that in the coming 3-4 years, we would see growth in shipments of QWERTY devices as high as 200% every year with most of the demand coming from emerging markets like China, India, Africa. The low cost vendors have been able to catch on with this trend pretty early. Will the established players see things from a different prism?

The launch of Apple iPhone three years back made the touch screen popular in the mobile phones. Long back, before Apple, Nokia had flirted with touch screens but did not get the same success as Apple. Some people attribute the success of iPhone, apart from itunes, to its capacitive touch screen and its ability to support multi-touch. Suddenly, all the phone manufacturers wanted to have touch screens but most of the vendors could only supply resistive touch screens which according to a few people did not offer the same user experience. So what is it about capacitive touch screen that makes it stand out? Before I share my views on this, I would first explain the two types of touch screens and the difference between the two:

Resistive Touch Screen

Resistive touch screens are composed of two flexible sheets coated with a resistive material and separated by an air gap or microdots. When pressure is applied to the screen, by a finger or other objects, the sheets are brought into electrical contact which causes a switch closure and a command is registered. The figure (source: Screen Tek) on the left shows how does a resistive screen works. Examples of resistive touch screen phones are Nokia 5800 Samsung Omnia, etc.

Advantages:

1. Cost effective and duarble
2. Can work in all climate conditions and in any environment like the restaurants, hospitals, etc.
3. Input can be made using a stylus or finger. However, stylus is better suited.
4. Less sensitive to scratches as compared to capacitive screens

Disadvantages:

1. Normally does not support multi-touch though Nokia has announced that on its handsets, multi-touch would be supported on both resistive and capacitive touch screens
2. Recalibration might be required over time as resistive touch screens are known to drift over time. However, this is a simple process and can be performed by users by a simple dot mapping.
3. While using fingers, slightly more pressure needs to be put on the screen
4. Provides only 75% optical transparency which means that its clarity is lower than capacitive touch screen

Capacitive Touch Screen

A capacitive touchscreen panel consists of an insulator such as glass, coated with a transparent conductor (mostly indium tin oxide). As the human body is also a conductor, touching the surface of the screen results in a distortion of the body’s electrostatic field, measurable as a change in capacitance. Unlike its resistive counterpart, capacitive touch screens must be touched by a human finger or some sort of conductive device being held by a human hand. The figure on the right from Electronic Design shows how does capacitive screens work. Examples of devices with capacitive touchscreens are the Apple iPhone and the T-Mobile G1. Advantages:

1. Higher clarity display (up to 90% optical transparency)
2. Supports multi-touch
3. High touch resolution
4. High sensitivity

Disadvantages:

1. Needs a human finger to register input. It is not possible to use this screen wearing gloves
2. Cannot be used in all weather scenarios

Which touch screen is better?

Due to the success of iPhone, there is a common perception that capacitive touch screens are better suited for cell phones than the resistive touch screens. However, I believe that it does not matter whether the mobile phone has a capacitive screen or resistive screen – what matters is the software behind it. The operating system defines the user experience and if the operating system is not optimized for touch screen, even the capacitive touch screen would not enhance the user experience.

Do you agree with me? I am eager to hear your views on the issue.

For the last fortnight, there has been a lot of talk about Apple launching its tablet computer. Apple finally unveiled its much touted device, iPad on 27th January, 2010. Such was the hype of this product that as many as 177,000 tweets happened on Apple within an hour of the launch event. iPad is a sleek looking, multi-touch device that has been positioned as a device between a smartphone and laptop. Due to its design a lot of parallels are being drawn between iPad and Amazon’s Kindle. Some of the analysts and blogs have sounded death knell for Kindle.

Amazon launched its Kindle device and created the e-reader segment. Barnes and Noble later launched Nook to take on Kindle but failed to take off due to product and software issues. However, e-readers caught consumer frenzy and around 1 million e-Readers were shipped in 2008 which are expected to go up to 28.6 million units bu 2013 (source: In-Stat). Nearly half of the e-Reader users spend $9 to $20 per month on the content which means over the life time of the consumer, the content revenues far outstrip the device revenues.

Kindle is a smart device which offers convenience as the value proposition. It is the hardware plus the book store plus the download experience of Kindle that has attracted many users to the e-book category. With Amazon Kindle, the users can download the books anywhere in the world without paying anything extra for the bandwidth. The most important aspect is that the Amazon is the data MVNO in this case and hence the users do not have to worry about buying bandwidth separately. Being the first mover and having a virtual book store is another advantage for Amazon as it has existing relationships with the publishers. Availability of a large collection of books and newspaper which can be downloaded in a hassle free way is a big plus of Kindle. In case of iPad, Apple has struck deal with five publishers (Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster). Unless Apple is able to broaden its base, it is unlikely to challenge the big e-book market.

We should analyze the market of Kindle separately from its DX version. Kindle is for $259 vs. iPad’s price tag of $499 which means that there would be a large segment that may not be willing to spend double the amount to buy iPad. However, the price differential between Kindle DX and iPad is just $10 and iPad offers so much more that Kindle DX. So, unless Amazon reduces the price of Kindle DX significantly, I do not see Kindle DX being able to compete with iPad.

Apple iPad is targeting a larger segment than the e-book readers. All iPhone applications are available on iPad which means that even the Kindle store on iPhone is now available to iPad users. Another functionality that works in Apple’s favor is the fact that it has WiFi which means it can connect to hotspots and download the content fast and/or free of cost. iPad has a color screen as opposed to grey screen of Kindle and can be used for a variety of other purposes apart from book reading. In fact, I am more inclined to say that the threat is higher to the net-book market than the e-reader. There would be buyers for e-readers like Kindle if the devices are priced in the range of $200-300. Kindle @ $259 offers great value. Amazon has already making aggressive efforts to fend of competition by launching KDK (Kindle Development Kit) for developers to develop applications for its device in an effort to make the device more valuable and functional to the users.

So, is game over for Kindle? Probably not yet.

Recently, I attended the India Telecom Meet in New Delhi where Mr Nandan Nilekani talked about how mobile phones can be used for authentication. Mr Nilekani is the head of India’s ambitious unique identification number (UID) and is planning to issue biometric based identity numbers to a billion citizens of India. The authentication would be online and since the mobile phones out number the computers, he is hoping that most of the authentication would happen on mobile networks using a mobile device. I normally do not write on any country specific issue but this opportunity is too big to be missed by any telecom player across the world.

There are two parts of the UID project – Issue of unique identification number and authentication services for verification of records. This means that after a number is issued, the record would be maintained in a database which can be fetched online anytime. This is a huge task and the huge opportunity has caught the interest of many companies including Microsoft, Yahoo and Cisco.

There are many use-cases of authentication services that UID is likely to provide. If anybody wants to confirm the identity of a person, all he has to do is to take the fingerprint of the person on a cellphone and send it across to the central database and receive authentication within seconds.The services can be used by a wide spectrum industries like the financial sector, health sector, mobile operators, etc. Many villages do not have a bank branch but banks have appointed their business correspondents (BCs) to help people transact. These BCs can use a mobile device to authenticate the account holder. Mobile operators and banks can use the authentication service to conduct KYC (know Your Customer) . The Government itself can use the authentication to distribute the money of schemes to the right person only after the claimant has been authenticated using his biometrics. This would help in reduction of corruption and the money would indeed reach the right person.  Such projects would go a long way in alleviating poverty in poor nations.

The benefits are likely to accrue to all the mobile ecosystem players. Device vendors would benefit from the demand of authentication enabled devices, the mobile operators would carry the authentication data between the server and the device and the developers would benefit from developing applications that use the authentication APIs. The APIs would be easily available to any developer for embedding them into a mobile application or an internet application. The opening up of APIs is the most interesting part of the UID project. This would enable the developers to create innovative applications which in turn would put the UID database to maximum use. Utility applications utilizing the power of identity of the user would give a big boost to the application economy. The overall opportunity for the various players is said to be around $4-5 billion.

I can think of a few applications (apart from the ideas mentioned earlier) that the developers can work on

• mGovernance – There is a huge potential for developers in the area of Governance. Applications can be developed to enable users to fetch land records, court case records, health records, etc. after proper authentication of the user. Open APIs from UID project can be embedded in the application for this purpose. Recently, addressing the community of developers, D Shivakumar, MD, Nokia Mobile phones and VP, Nokia said, “Government will be a major player in buying applications from the developer community” and urged developer community to think and build innovative applications, which will help government to implement in different sector.
• Micro-Finance Institutions provide loan to poor people to help them overcome poverty but themselves lack the basic productivity tools. This results in high administration costs and ultimately high interest rate for the borrower. Simple applications can be build with authentication mechanism to enable the money collectors to directly upload the data on collections.
• mEducation – Education is the biggest need of the country and I foresee a big role for mobile phones in imparting education and right skill-sets. Developers can work with the content providers to develop applications that enables authentic users to learn and appear in the examination.
• Mobile Banking and Commerce – This is yet another upcoming area that has huge potential but is most susceptible to fraud. Biometric authentication would go a long way in convincing the users and giving them the peace of mind. Again developers have a great potential here.

The consultation paper on UID project can be downloaded here

Global Scenario on Authentication

To put the entire opportunity in context, it is important to look at the Global Market Size for authentication products and services. A report by Goode Intelligence forecasted that mobile phone-based authentication products and services will generate $153 million in 2010 and that the market will grow to almost $760 million in revenue by 2014; an increase of $607 million. My view is that Goode has grossly understated the market and the market is likely to be much larger. As per another report, the market for fingerprint sensor chip alone is expected to grow from $40 million in 2008 to $428 million by 2013.The mobile phone with biometric authentication would be increasingly demanded by enterprise users so that data is safe. Biometric sensors on mobile phones not only protect private data stored on the device, but also can block unauthorized use of mobile phone services,  create personalized user interface shortcuts, and eliminate the need for remembering and typing passwords.It would not be wrong to say that the drivers for biometric sensor on mobile phone are stronger than that on laptops.

In the opportunity captured by various analysts, I am not sure how many have been able to size the authentication requirements of the Government and hence there could be huge upsides there.

Devices Readiness

The biometric includes fingerprints, iris and voice but currently the fingerprint sensors are the most popular form on mobile phones.  The cost of adding finger print module to a mobile handset is less than $10 and with economies of scale, it would come down even further. The biometric authentication phones are not available from the big handset vendors like Nokia and Samsung and if the big brands can come on board, the cost of biometric sensor would come down significantly.

25 phone models with authentication are shipping today, mostly in Asia Pacific regions. In Japan, phones truly lock down the FeliCa NFC payment function with biometric authentication. The Osaifu Keitai operators, DoCoMo, KDDI and SoftBank insist on having eWallet phones secured by “ facial detection”, “finger swipe”, handwriting, or voice recognition for authentication.

Atrua Technologies is the largest provider of fingerprint chips for mobile phones with other providers being Fujitsu, Authen, Atmel and UPEK.

Have you heard about HiPhone, Nckia and Sumsung? I bet you would have seen the phones but would not have realized that it is a fake. Welcome to the world of Shanzhai handsets or Knock-off phones.

I was surprised to read the quarterly results declared by MediaTek. In times of gloom, they managed to report a healthy 80% jump in 2^nd quarter (y-o-y) in profits and more importantly predicted shipment of 300 million of their chipsets for mobile phones in 2009. Given the global handset market size is 1.2 billion units, if all the 300 million chipsets indeed find their way into a handset, MediaTek can claim to have 25% market share. This is no mean achievement for an unknown Taiwanese company which has quietly pulled the rug under the top brands.

MediaTek is a design house in Taiwan that specializes in designing the chipset. MediaTek does not own manufacturing facilities and has outsourced production to become “Fabless”. MediaTek was one of the late entrants (2004) into the market and developed a circuit board that could inexpensively integrate the functions of multiple chips, offering start-ups a platform to produce a low-cost mobile phone. The chip is called SoC (System on Chip) and has helped the smaller players mushroom as producing a handset has now become a lot simpler. A new cottage industry developed in China called the Shanzhai phones which sourced its chipsets from MediaTek. Shanzhai in Chinese means “Mountain Hideout” and they indeed are the bandits as they flout the IPRs and copy the designs of bigger brands to produce what we call illegal and fake handsets. These handsets got a boost in 2007 when companies no longer needed a license to manufacture a handset.

Shenzhen is the foremost production base for Shanzhai handsets. It boasts some 10,000 mobile-phone firms, including 2,000 handset makers, 200 design houses, 3,000 components and parts suppliers, and 1,000 channel firms. It costs just 500,000 yuan (USD 75K) and 10 engineers to start the handset production business which is a fraction of the cost of big players. The time to market is just 28-30 days as the entire solution is provided by MediaTek. Many of the manufacturing units are in the basement of homes or in a small apartment.

In 2007, an estimated 150 million, or 20 percent, of the 750 million handsets produced in China were either counterfeit or off-brand phones, according to CCID Consulting, a market research firm based in Beijing. Of those, over 51 million were sold in China while the remainder were sent to foreign markets. In 2008, the volumes increased to 250 million handsets.

Shanzhai cell phones look exactly like the original branded products. When a new cell phone model is released, the copy hits the market soon after. The cost of production for shanzhai phones is much lower than for the actual products. Since they are technically illegal, the shanzhai producers do not pay any taxes or regulatory fees. Since they steal intellectual property from other companies there are no research and development costs. These phones do not follow standard safety checks leading to huge savings as compared to other brands. Lastly, the complete chain of core technology is provided by MediaTek at a much lower price than the other suppliers. The end result is a really good knock-off at 1/2-1/3 of the price of the branded product. An iPhone in China goes for around 4,000 RMB compared to a little over 1,000 RMB for the Star Phone. Interestingly, the shanzhai employ a concept called the “open BOM” — they share their bill of materials and other design materials with each other, and they share any improvements made; these rules are policed by community word-of-mouth, to the extent that if someone is found cheating they are ostracized by the shanzhai ecosystem. The figure alongside gives a break-up of the cost of a Shanzhai phone (source: New York Times)

The market for Shanzhai cell phones lies not only in China, but also in the surrounding developing countries in Asia or even third world countries in Africa and Latin America. They identify overlooked/underserved market segments by incumbents like the rural areas and focus on these segments. The outstanding sales performance of Shanzhai cell phones is usually attributed to their low price, (usually lower than $50), multi-functional performance and imitations of trendy cell phone design. Although Shanzhai companies do not use branding as a marketing strategy, they are known for their flexibility of design to meet specific market needs. For example, during Barack Obama’s 2008 U.S. presidential election campaign, Shanzhai cell phone companies started selling “Obama” cell phones in Kenya, with the slogan “yes we can” and Obama’s name on the back of the cell phone. They also designed “Bird Nest” and “Fuwa” cell phones in light of the Beijing Olympic Games.

For years, most users used “shanzhai” to just mean “fake”. But the vicious rivalry among Shanzhai mobile manufacturers is shifting the industry from imitation to innovation. With more than 10,000 black market handset makers in Shenzhen alone pushing units for profits of 10 to 20 yuan ($1.5-3) apiece, low revenues and high competition means Shanzhai mobile makers must now get creative to survive. MediaTek SoC has customized 100 different modules for customer differentiation. Shanzhai phones makers are now high on innovations like dual SIM, loud music (6-8 speakers), terrestrial television and even a telescopic lens attachment for the phone’s camera.

Who gains from Shanzhai Phones?

None of the stakeholders seem to gain from these low quality phones.

Consumers: The phones are low in quality and do not necessarily follow the safety standards. Most of the times, the radiations from these phones are beyond the permissible limits and can cause serious damage to the health of the consumer. The FCC has adopted limits for safe exposure to radio frequency (RF) energy. These limits are given in terms of a unit referred to as the Specific Absorption Rate (SAR), which is a measure of the amount of radio frequency energy absorbed by the body when using a mobile phone. The FCC requires cell phone manufacturers to ensure that their phones comply with these objective limits for safe exposure. Shanzhai phones do not follow the SAR norms.

These handsets do not have proper warrantee and have a high failure rate. This means, over time the consumer may have to pay the same amount as the branded handsets or in other words, the life time value of Chinese handsets is low.

Operators: Most of the Chinese handsets have dual SIM slots and allows the consumers to put SIM cards of two different operators. This means that operators would have to share their ARPU with other operators and the competition would lead to lower ARPU and multiple SIM phenomena

Government: The Shanzhai phones do not pay any taxes of regulatory fee resulting in revenue losses to Governments across the world wherever they are sold. Even the Chinese government is in a fix now as the exports benefits given out to these handsets are over claimed. Moreover, since the Shanzhai phones do not have an IMEI number, there is an increased threat from terrorists as it is very difficult to catch a terrorist who uses a mobile handset without IMEI

I believe that the issue of Shanzhai phones is not going to go away anytime soon. Chinese government is unlikely to clamp down on these phones as it would mean many would get unemployed. The entire business is worth over $ 10 billion as year and has already gained a critical mass by capturing huge market share in emerging countries. The consumers are still attracted to the innovative phone models which is a big driver for replacement sales and as the replacement sales increases in emerging nations as well, the established brands have a lot to worry.

Apple Application Store delivered its billionth application to its user on 23^rd April. I do not know if Apple is the first front store to clock a billion downloads but certainly, it is the most talked about application store. The hype created by Apple around applications has made the phone much more personalized and useful to the user. Will Apple  be able to sustain the hype is yet to be seen but one thing is certain, the competitive landscape would be very different in this space in the years to come.

Operators and a few third party stores have been offering the applications for a long time now. Most of the operators have their own content portal from where the users can download the applications. Vodafone has “Vodafone Live”, NTT DoCoMo has “iAppli” and Airtel has “Airtel Live” as portals from where applications can also be downloaded. However, after the launch of Apple Application Store, many other device vendors like Nokia, Palm, RIM and Operating System owners like Google and Microsoft have announced their own specialized applications store. The strong competition from the new players is forcing the operators to alter their strategies.

There are essentially three types of stores:

1. Operator Portals, e.g. Vodafone Live – Normally, these type of stores are within the walled garden of the operator and have an inherent advantage of having the direct billing to consumer facility. The developers need to tie-up with the operator and the operator takes over the responsibility of marketing, distribution and billing. However, in most of the cases, barring Japan, the revenue share is highly skewed in favour of the operator. In Japan, close to 90% of revenues are shared with the developer which is a big incentive for the developers to develop quality applications
2. 3^rd Party Store Fronts, e.g. GetJar – The users use the open internet to access the 3^rd party application stores which supports a large number of platforms and devices. The developer gets a high revenue share but marketing and visibility is a concern in this model. Unlike the operator portal or the device stores, the store does not have direct visibility to the users and hence the users have to search for these stores
3. Platform Application Stores, e.g. Ovi Store, Android Market – These are the new category of application stores that are being built by the device vendors and the operating system vendors. The biggest advantage is that the stores are embedded into the device and hence the discovery is simple. Moreover, they can target a large user base due to the volumes each device vendor does. This high volume potential is a big draw for the developers. Apple has also started the trend of sharing up to 70% of net revenues with the developers which means the developers are in demand like never before. The platforms can be proprietary (e.g. Apple) or open system (e.g. Symbian, Android). The trend in the recent times is towards a more open ecosystem

It is important to understand the economics of applications to be able to fully appreciate the recent competitive intensity in this space. I will use Apple as an example simply because there are more data points available for Apple. Apple Store has seen downloads of 1 billion applications and if we assume that iPod users would have downloaded 38% of these applications (out of 37 mn Apple devices, 23 mn are phones and 14 mn are iPods), then the iPhone users would have downloaded 620 million applications. Out of these 620 million applications, 75% are free applications (based on a survey by Wireless Media Lab, Mar’09) and paid applications had an ASP of approximately $1.1 (most downloads were at 99 cents price point). This means that the iPhone owners paid $171 million as revenues to the Apple Store since the store was launched in Jul-08. Taking a 30% revenues share for Apple, Apple’s net revenues were $51 million ($68 million annualized). This may not be a big amount but considering the pull these applications have, the actual benefit get reflected in the device sales and lower marketing efforts for Apple. Counting the iPod revenues as well, the total store revenues would be in excess of $80 million for nine months.

According to Strategy Analytics, Apple has currently a 12% market share by volume in the mobile application market. If Apple iPhone sold 620 million applications in 9 months time and taking its market share up to 15% by 2009 end, then the annual applications demand in 2009 is likely to be 5.5 billion which is huge!!! The market ASP on an application is around $1.5 (much higher than Apple as Apple has 75% of its download as free vs. 40% free application downloads for the industry) which means that the total applications market is worth $8 billion. 67% of all the application downloads happen through the operator portal or BREW and the rest by other players. Developers get 70% from the device vendor stores, 60% from 3^rd party stores and 50% from the operator portal. This means that the developer’s share of revenues is 53% on average or $4.3 billion out of a total of $8 billion while the operators earn $2.8 billion from revenue share apart from the access charges. The non-operator store owners get the rest of the money i.e. $0.85 billion. The total revenues from applications are expected to double to $16 billion by 2013. Apart from the revenues from the application sales, another stream of revenues is advertisements which could in fact exceed the revenues from application sales in the years to come.

Apart from the revenues that the application stores can drive, there are other indirect benefits of promoting application usage. It is a well established perception that Apple users have a much higher ARPU than the other device users. The Apple users are also likely to be more loyal to their carriers. Now, that is a game changer for operators. Carriers gain the most from the success of the application stores irrespective of who owns the stores. However, the operators still have a fear of getting marginalized and hence are planning to strengthen their own stores and platforms. Vodafone recently announced its intention to open its network from 3^rd party developers. Multi-country operators like Vodafone with large customer base can afford to develop their own platforms but the smaller single country carriers would be left with two options – Either “Do Nothing” and still gain from the revenue share and access charges on account of increased downloads. Alternatively, they can form alliances with other operators across the world and have common platforms. Vodafone has an alliance with Verizon and China Mobile, SingTel has an alliance with Telstra, Airtel, Globe and others. These alliances will provide strength to the carriers in future. Alliances can also be formed with 3^rd party storefronts as they may not pose a huge threat to the operators.

Amongst the device vendors, there are two categories – One that has a huge focus on application stores like Apple, Nokia, RIM, etc. and others like the Korean vendors who have a “Me Too” strategy for application stores and would not like to antagonize the operators by focusing on application store. Operators may want to tie-up with the second category of vendors but the consumer pull may force them not to ignore the first category of the device vendor. The wireless business models are being redifined  and with different ambitions of the entities in the value chain, the power game is now getting interesting.

Continuing with the theme of Mobile Transactions (Mobile Payments – Will the Consumers Adopt; Mobile Payments Business Models) from the last two posts, in this article, I am going to pick up Mobile Ticketing. Mobile ticketing is the process whereby consumers can order, pay for, obtain and validate tickets from any location and at any time using mobile phones. It is yet another illustration of horizontal convergence where the mobile phones are impacting the value chain of other industries.

Mobile Ticketing is likely to redefine the tickets transaction cost in any industry where tickets are issued to the consumers. The benefits would be most but not limiting to the airlines, mass transit system, cinema/events/concert, trade shows, etc. 

Mobile ticketing can increase the sales as the tickets can be sold till the very last moment.  Imagine the consumers roaming in a mall and suddenly decide to watch a movie but not sure if the tickets are available and would not be sold out before they reach the venue. With a mobile phone, the consumers can not only enquire about the tickets but can also book and receive them. On top of this, they can spend extra time in mall as they need not reach the movie hall in advance as the redemption of the mobile tickets is quick. The movie halls are able to sell their tickets which would have otherwise gone unsold and are able to reduce the manpower as well. Fewer ticket windows would be required if many consumers start to prefer mobile ticketing and even the check-in process can be automated. The consumer convenience is enormous in this process as the tickets could be bought, cancelled and re-issued at the click of a button. The tickets are immediately delivered and hence the uncertainty over delivery is not there. The tickets can also have promotional coupons or vouchers that the consumer can redeem at the food counter. Additional benefit that I see is consumer loyalty as this process gives huge consumer convenience. The biggest benefit of mobile ticketing to my mind is to the environment. The reduction in paper tickets would lead to lower carbon footprint. 

According to a Juniper research released early last year, over 2.6 billion mobile tickets will be delivered to just over 208 million mobile phone users by 2011. The mobile ticketing industry would have transactions worth $87 billion by 2011 and savings for the airline industry alone would be of $500 million each year by migrating to mobile boarding passes.  

Typical mobile ticketing process entails enquiry on availability of tickets, pricing details, payment, receipt of ticket and then redemption of the ticket at the venue. The payment for the ticket could be made either by credit/debit card on line or through mobile payments. There are essentially two types of mobile ticketing technologies – Code based (Bar Code or Text) and Contactless (RFID or NFC) 

A code for mobile ticketing is defined as any readable representation of the information in a visual format that is displayed on the mobile screen. The code could be read by the sight or by a machine and can be delivered as SMS, MMS or WAP push. Text message is the simplistic form of mobile ticket that can be send on any type of mobile phone is currently a preferred method in many countries. bCode is providing character based codes that is delivered by SMS and is popular in United States and Australia. Another form of code that is popular is bar codes. A digital signature may also be attached to the tickets to avoid duplication or fraud. There are two types of bar codes one-dimensional (1D) or two-dimensional (2D)  

1D barcodes can be up to 7 digits in length. They appear just like regular barcodes found on retail items.  

2D “data matrix” barcodes are capable of holding more information as they contain multiple rows of unique data and up to 16 characters. 2D bar codes are provided by PDF417, DataMatrix, etc. QR code, a form of 2D code is very popular in Japan. Prominent examples of bar code based companies providing mobile ticketing technologies are Mobiqa, TynTec, GaviTech AG, etc. Barcodes may contain enormous data and can alternatively be used for other promotional activities (see the Scan Life video at the end of the article) 

Contactless – Contactless mobile tickets use the Near Field Communications (NFC) or RFID technology. Smart Card based contactless tickets are already popular in mass transit ticketing. Key technologies in contactless ticketing are FeliCa, MIFARE and NXP. MIFARE is being used in London Underground Oyster Cards whereas FeliCa is being used for Hong Kong underground. The contactless technology is now integrated with mobile phones. 

The code based mobile tickets are likely to continue to remain popular in the near future unless the cost of NFC chips comes down. NFC would become mainstream due to its convenience factor for mobile payments. The best thing about mobile ticketing is that it gives so much convenience to consumers that the consumer acceptance is unlikely to be low. The transactions would increase on its own as more and more players start to offer this service. 

Below are two videos that would explain the mobile ticketing better and would also illustrate the other uses of barcodes. 

Mobile Ticketing Made Easy 

ScanLife 2D Barcode Overview

Part 1: Mobile Payments – Will the Consumers Adopt

Part 2: Mobile Payments Business Models

Part 4: Mobile Money Transfer

(The views expressed in the article are my own view and do not reflect the views of my employer)
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Continuing with my previous article on the “Marginalization of Carriers”, in this post, I would discuss the current and emerging business models in the wireless industry.

The key activities in the value chain of the business model are Service Creation, Identity Management, Service Provisioning and Billing. The key players in the ecosystem are the carriers, handset vendors, platform owners (e.g. Symbian, Android), application providers and the content partners. In different business models, different ecosystem players try to control most of the activities. There are broadly 4 business models that exist today in some form or the other.

1. Carrier Dominance Model: In this model, the users visit the portal screen of the carrier and download/use services from the portal (also called the walled garden). The walled garden directs the user’s navigation within particular areas, to allow access to a selection of material, or prevent access to other material. Traditionally, the carriers have followed the walled garden business model and controlled all the entities of the value chain of the business model. This model got prominence when the wireless industry was in infancy. The carriers took upon themselves to offer end to end solutions to the users. In this model, the content providers need to tie-up with the carriers for their presence on the carrier portal. The carrier is responsible for marketing of the service to the users and also for billing and collection. In return, the carriers charge a huge revenue share (as high as over 50-60%) plus the user access charge. Common examples of this model have been Vodafone Live, NTT Docomo’s i-mode, Airtel Live. AOL followed the most successful walled garden on the web and at one point of time, as per Economist magazine, 40% of the time Americans spent on web was within the confines of the AOL walled garden
2. Device Dominance Model: In this model, the device vendor is controls the device, platform and the content & application partners. Service provider tie-up with the device vendor who puts the service either on its application store or on its own portal. In this case, the device vendor controls the key activities of service creation, identity management, service provisioning and billing. Carriers get the access revenues and have a shared responsibility for identity management. This results in the highest differentiation for device vendors but the least for the carriers. In this situation, the data adoption and usage is normally high and the revenue share is better for the content partners. However, the content partners are expected to take some load of marketing, billing and care in return for higher revenue share. Also, the development cost of services is likely to be high as separate development is required for each device vendor. Common examples of this approach are Apple and RIM. Both Apple and RIM have complete control over the value chain and they decide on which services to offer
3. Platform Dominance Model: In this model, the mobile OS platform takes the dominant position. The platform is available across many device vendors and hence the development effort on part of the content and application partners is lower. There are limited service differentiation opportunities for the carriers or the device vendors. The content players need to partner with the platform owner. The carrier gets the user access revenue and the service revenue is shared between the platform owner and content partner. In this model, the platform replaces the device vendor in the device dominance model. The content partners get better revenue share (up to 70%) in return for billing, care and marketing. Symbian and Android are examples of this kind of approach
4. Application Dominance Model: This model is very much similar to the web model. The application is accessed using the carrier as pipe. The carrier gets the user access charges but entire service revenue goes to the content and application owner. The activities of service creation, identity management, service provisioning and billing are all done by the application owner. The marketing and care responsibilities also lie with the application owner. The role of the device and platform owner does not change in this case. Due to multiplicity of the devices and platforms, the service/application development cost is very high. Facebook, Linkedin, Google gmail client could be examples of this approach. However there are not many examples of paid applications in this model

There are many changes taking place simultaneously in the wireless space. The platforms are changing from proprietary in-house operating system (OS) to proprietary industry OS to collaborative open industry OS. Carriers are lowering the walls of the walled garden due to demands of the users as well as pressures from the content and application vendors. New opportunities are evolving which enable the content providers to completely by-pass of the carrier. All these changes require a change in the business model in the wireless industry

The emergence of the optimal business model needs to ensure that the consumer interests are taken care of and the consumer interests are the weakest if the entire or most of the value chain is controlled by one single large player. In that respect, the platform dominance model probably is best suited to the consumer needs. Due to higher base, the development costs are likely to be lower and all the ecosystem players are likely to have an equal say in the platform dominance model. However, the outcome of the success of any business model would depend on the outcome of the power play between the different entities of the ecosystem

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Last year around the same time, I was in attending a family get together in Jaipur where I realized that I had forgotten to carry my mobile charger with me from Delhi. I asked my folks if they have a Nokia thin pin charger. To my horror nobody had the charger that I needed. People had different phones and though a few people had Nokia chargers, they were not thin pin chargers. I was not connected to the outside world for full 36 hours!!!

One of the most important announcements at Barcelona that got missed in the crowd of other jazzy announcements is introduction of Universal Charger. GSM Association (GSMA) in collaboration with 17 leading mobile operators and manufacturers at the GSM Congress set an ambitious target that by 2012 a universal charging solution (UCS) will be widely available in the market worldwide and will use Micro-USB as the common universal charging interface. The initiative, when it comes on stream, will simplify the charging of mobile phones, which is currently complicated with different manufacturers creating different chargers for the phones they manufacture. It is expected that the chargers would be energy efficient and would help save 50% energy. This initiative will not only simplify our life but also make us good citizens. It will be a green initiative which when aggregated, will lead to huge power savings given that over 4 billion people would have mobile phones in 2012. I would even propose that after 2014, the charger should not be the part of the standard pack. Users can use their old chargers when they replace their handsets (irrespective of the brand that they buy or switch to) or may purchase it separately in case they need a new one.

Another thing that bugs me when I travel to other countries is the different plug points they use. Every time I travel, I need to carry a different plug point adaptor to be able to use my mobile or laptop. I would urge the Governments across the globe to learn from GSMA and introduce universal plug points which are same across the world. Standardization would not only save us from inconvenience but would also lead to a lot of cost saving and a greener planet. There could be other industries as well where standardization could result in high resource savings.

The day when the mobile world congress is celebrating four billion connections, handset vendors and carriers announced a slew of new devices and initiatives. Nokia today took a step forward in implementing its services strategy when it launched its applications store called “Ovi Store”. The Ovi store aims to provide direct access to developers to Nokia’s global application market and promises a huge 70% revenue share to the developers. Given the scale of Nokia, it is likely to become the largest mobile application store in no time. The store will be unveiled in May along with N97 launch. Later in the day, Microsoft also announced its own applications store and it is rumored that Samsung will also announce its application store in the current congress. The developers are certain to be spoilt with choice

Apart from Ovi, Nokia launched new handsets – two new smart phones for business users (E55 & E75) and further updated its navigator 6710. Samsung unveiled a number of new touch screen phones as part of a strategy to implement touch technology across its portfolio. Samsung wants to take on Apple with its new strategy. It launched four new touch handsets – Omnia HD, BeatDJ, BeatDisc and Blue Earth solar powered phone. Sony Ericsson also launched its 12.1 Mega pixel phone code named Idou. Sony Ericsson also unveiled their new strategy that will bring together cell phones with PCs and the TV to share entertainment content. As part of this strategy, the company announced MediaGo, which is an extension of its PlayNow Music service. MediaGo adds a service that lets users download movies onto their PC and then transfer them over to a Sony Ericsson device. The company announced the W995 Walkman phone, which will be able play the feature-length movies. Sony Ericsson is hoping to use links with Sony but it is not clear how far will Sony go in supporting its initiatives. The joint venture between Sony and Ericsson is already under strain due to profitability issues and vastly different focus areas of the two parents. I particularly liked the launch of the green phone (solar powered) by Samsung. This technology, if made available in the entry segment has a great potential in emerging markets like India, Pakistan, African nations, China, etc.

Both Omnia and Idou are on Symbian S60 platforms which further strengthens the market leadership position of Symbian. It was interesting to note that both Samsung and Sony Ericsson have put more faith in Symbian than Windows or Android. HTC caught us flat footed by informing us that it would not be introducing any new Android OS based smart phones at this time. There had been rampant speculation that at least one new HTC built Android device would show itself, but that is not happening.

Though Android could not feature in any high profile launch, Huawei announced a smart phone based on Android platform. China Mobile adopted a more open business model with launch of Android based software platform. It also joined the host of companies launching their application stores. The launch of its own application store could be one of the reasons for China Mobile backing out from launching Apple iphone in China (Apple currently has the largest mobile application store). Not to be left behind, Vodafone announced its own branded consumer GPS phone.

Clearly, three broad themes that have emerged in MWC today are launch of application stores, focus on mobile operating systems and touch phones. It is clear that the next frontier is mobile internet services and all the players in the ecosystem are working hard to get a pie of it. Application stores, navigation and other services are the core of the services strategy of different players with mobile operating systems providing the base and touch devices making input in the phones more user friendly.