Mobile Opportunity - News And Views from Google MO

The bottom line: Google is now an OS company.

The fact that Google’s recently-announced OS products are aimed at mobile devices and social networking sites is interesting, and I’ll talk about the impact of that below. But it’s secondary. I think the big, really important change is that Google has now jumped with both feet into the middle of the operating system world. That potentially has huge implications for the industry.

The impact will depend a lot on how Google follows up. If it pours substantial energy and resources into its OS offerings, it will be extremely bad news for Microsoft and other companies trying to charge money for their own platforms. On the other hand, if Google doesn’t make a serious long-term commitment, it will embarrass itself deeply. This isn’t like launching a new web application — an OS has to be complete, and it has to work properly in version 1, or there won’t be a version 2.

What they announced

It’s kind of ironic. For years after Google became a prominent web company, people speculated about whether or when it would create its own OS. The logic was that Microsoft has its own OS, and Google was challenging Microsoft, so Google would create its own OS too. But then as the years went by and it didn’t happen, people moved on to other subjects. The speculation died out. But one of my rules about the tech industry is that “obvious” things happen only after everyone in the industry has written them off. So I guess Google was due.

The company has been creeping toward the OS space for a while. Google Gadgets is an API to create small applications that run in web pages, and Google Gears is code that lets web apps run offline, making it easier for them to challenge desktop applications. But they were both relatively low-profile (or as low profile as anything Google ever does). But in the last couple of weeks, Google made two much more assertive announcements:

–OpenSocial is an effort to create a shared platform for applications that can be embedded within social websites (link).

–The Open Handset Alliance is an effort to create a shared platform powering mobile devices (link).

Although they’re aimed at very different parts of the industry, they’re both efforts to create a standard platform where there was fragmentation; and they’re both alliances of numerous companies, with Google providing most of the code and the marketing glue. I think there’s a recurring theme here.

Details on the Open Handset Alliance

Open Social was covered very heavily when it was announced a couple of weeks ago, so I won’t recap it all here. If you want more details, Marc Andreessen did an enthusiastic commentary about it on his weblog (link).

The OHA announcement was today, and I want to call out some highlights:

–It’s built around a Linux implementation called Android. Android will be free of charge and open source, licensed under terms that allow companies to use it in products without contributing back any of their own code to the public. This will probably annoy a lot of open source fans, but it’s important for adoption of the OS, as many companies thinking about working with Linux worry that they will accidentally obligate themselves to give away their own source code.

–Google is creating a suite of applications that will be bundled with Android, but they can be replaced freely by companies that want to bundle other apps, according to Michael Gartenberg (link). There is a lot of speculation, though, that if you bundle the Google apps you’ll get a subsidy from Google. The folks over at Skydeck estimate the subsidy could be about $50 per device (link). That might not sound like huge money to you and me, but keep in mind that mobile phone companies routinely turn backflips to squeeze 25 cents out of the cost of a phone. When you sell millions of phones a year, it adds up.

–A huge list of companies participated in the announcement. That’s not as impressive as it sounds; when you have a well-known brand, a lot of companies will do a joint press release with you just for the publicity value. But a few stood out:

Hardware vendors. Samsung, Motorola, LG, and HTC all endorsed the OS. HTC and LG gave particularly enthusiastic quotes. The first three companies have all been playing with Linux for some time, so I wasn’t surprised. But HTC is another matter — it is the most innovative Windows Mobile licensee, and Microsoft must be very disturbed to see it blowing kisses at Google.

(A side comment on Motorola: For a company that said it wanted to consolidate down on a small number of platforms, Motorola is behaving strangely — it jumped all over Symbian a couple of weeks ago, and now is supporting Android as well. I think it has now endorsed more mobile operating systems than any other handset vendor.)

Operators. Participants in the announcement included NTT DoCoMo (a long-time Linux lover), KDDI, China Mobile, T-Mobile, Telecom Italia, Telefonica, and Sprint. That’s a very nice geographic spread, and ensures enough operator interest to make the handset vendors invest.

–Google claims all Android applications will have the same level of access to data on the phone. That’s pretty interesting — most smartphone platforms have been moving toward a multiple-level approach in which you need more rigorous security certification in order to access some features of the phone. I’ll be interested to see how the security model on Android works.

–We’ll get technical information on the OS November 12, and the first phones based on Android should ship in the second half of 2008.

–Although Android’s first focus is mobile phones, the New York Times reports that it can be used in other consumer devices as well (link).

What it means to the mobile industry

It all depends on the quality of Google’s work and the depth of its commitment. If Android has technical or performance problems, it could sink like a stone. If it doesn’t have enough drivers or has poor technical support, the handset vendors will avoid it. If the developers can’t create good applications, users won’t want it. This is a very different business for Google — handset vendors and operators will not tolerate the sloppy, indifferent technical support that Google provides for its consumer web apps.

If, on the other hand, Google’s platform really works and the company invests in it, I think it could have some very important impacts.

Impact on Windows Mobile: Ugliness. The handset companies endorsing Android are also Microsoft’s most prominent mobile licensees. I doubt any of them are planning to completely abandon Microsoft (they don’t want to be captive to any single OS vendor), but any effort they put into Android is effort that doesn’t go into Windows Mobile. So this is ominous.

The whole mobile thing just hasn’t worked out the way Microsoft planned. First it couldn’t get the big handset brands to license its software, so it focused on signing phone clone vendors in Asia, thinking it could use them to pull down the big guys. But Nokia and the other big brands used their volume and manufacturing skill to beat the daylights out of the small cloners.

Now Google is coming after the market with an OS that’s completely free, and may even be subsidized. This will put huge financial pressure on not just Windows Mobile, but all of Windows CE. Even if Microsoft can hold share, its prospects of ever making good money in the sub-PC space look increasingly remote.

Impact on Access: Ugly ugliness. How do you sell your own version of Linux when the world’s biggest Internet company is giving one away? I don’t know.

Impact on Symbian: Hard to judge. Symbian is the preferred OS of Nokia. As long as Nokia continues to use Symbian, it stays in business. The question is how much it’ll grow. After years of painful effort, Symbian just managed to get increased endorsements from Motorola and Samsung. Now Google is messing with both of them. Japan has been a very important growth market for Symbian, now Android is endorsed by both DoCoMo and KDDI. All of that must feel very uncomfortable. If nothing else, it’s likely to produce pressure on Symbian to lower its prices. And Symbian should be asking what happens if Android turns out to be everything Google promises — a free OS that lets handset vendors create great phones easily. It’s not fun competing against a free product that’s been subsidized by one of the richest companies in the world (just ask Netscape).

Maybe if Symbian agrees to enable Google services on its platform it can get the same subsidies as Android does. It’s worth asking. If not, maybe Symbian should be looking for other places where it can add value in the mobile ecosystem.

Impact on mobile developers: Potentially great. Mobile developers have suffered terribly from two things: They have to work through operators to get their applications to market, and they have to rewrite their applications dozens of times for different phones. If Android produces a single consistent Java environment for mobile applications, that would be a big win. And if it can open up the distribution channels for mobile apps, that would be great as well. We don’t have enough details to judge either outcome yet, and the app distribution one depends on business arrangements that may be outside Google’s control.

Impact on Apple, RIM, and Palm: Probably none at all. A lot of the coverage of Android is positioning it as some sort of challenger to iPhone and RIM.

I don’t buy it.

Apple, RIM, and Palm all make integrated systems in which the software and hardware are coordinated together to solve a user problem. Android, by contrast, is only an operating system. It’s plumbing, not the whole house. Unless Google’s handset licensees magically develop the ability to design for users — a feat equivalent to a giraffe sprouting wings — their products won’t be any better as systems solutions than they are today. The OS hasn’t been the thing holding them back, and changing OS won’t alter the situation.

Android puts interesting financial pressure on Microsoft, but it doesn’t directly solve any compelling user problems. If it eventually drives a great base of mobile applications, that might eventually be attractive to some users. But in that case the systems vendors could just add a copy of Google’s application runtime (it’s open source, they can grab it anytime they want). Or they could host their devices on Google’s plumbing. Palm and RIM might both benefit if they could transfer engineers away from core OS and toward adding value that’s visible to users.

Impact on the tech industry: This isn’t just about mobile phones

I have no access to Google’s internal thinking, but even if it sincerely believes it’s only doing a mobile phone OS, I don’t think it can or will stop there. Technology products often develop a momentum of their own, no matter what was intended at the start. The lines between the computing and mobile worlds are breaking down already, and if Google creates an attractive software platform that’s free of charge, that platform will inevitably get sucked into other types of devices. I’m not saying that Android is going to end up in PCs, but if it’s functional and well supported I think it could end up running on just about everything else that has a screen.

Besides, if you look across all of the recent Google announcements, I think it’s clear that Google has a larger agenda: It wants to break down walled gardens, because they interfere with Google’s ability to deliver its services. It has even developed a standard methodology for attacking them: Create a consortium so you don’t look like a bully, and fund an “open” alternative to whatever is in the way. They are doing it to Facebook, and they’re doing it to Windows Mobile. Google doesn’t even have to make money from the consortium, as long as it clears the ground for its services to grow.

Take a lesson from evolutionary history. The most successful animals are not those that adapt to the environment; they are the ones that reshape the environment to match their needs. I think that’s what Google is doing. It’s going to use open source and alliances to suck the profitability out of anybody who creates a proprietary island that it can’t target.

It’ll be interesting to see if and how Google applies this principle to the upcoming frequency auction in the US.

Or to anyone else who gets in its way.

Several people have asked what I thought of the recent change in ownership at Palm. I don’t have any inside information, so all I can do is speculate like everyone else, and try to apply the lessons I’ve learned from working at other companies.

Overall, I’m very happy for the folks at Palm, and cautiously hopeful about what this might mean for the company’s prospects. I think this outcome is a lot more encouraging than any of the buyout rumors that were floated in the last few months. Palm’s new part-owners clearly understand the value of systems design, which is Palm’s biggest potential advantage in the market. I think we really need another great systems company to challenge Apple, and I would love to see Palm step up to that task.

Although a purchase by a Motorola or Nokia would have been very entertaining from a soap opera perspective, they don’t really understand systems design, and it’s very likely that they would have digested Palm without a trace. I’m reminded of a joke we used to tell at Apple in the 1990s when there were rumors that IBM would buy the company:

Q: “What do you get when you combine Apple and IBM?”
A: “IBM.”

The other buyout option what was circulating, a full purchase by private capital, would have left the company independent, but with a load of debt that might have been crippling. Hardware companies must have a big reserve of cash to fund inventory and tide them over if they launch an unsuccessful product. I don’t pretend to understand all the terms of the Elevation deal (they’re wickedly complex), but from my perspective it looks like the financials aren’t crippling. I am a little worried about Palm’s cash levels, though; a lot of their current cash is going into the stockholder payout.

A couple of other thoughts on the impact of the deal:

Bye-bye 3Com. Palm gets three very well respected people for its board, and removes Eric Benhamou, the last vestige of the 3Com legacy. Somewhere I have a photo of the Palm and PalmSource combined management teams from just before the two companies were separated. The photo includes everyone in the company from Mr. Benhamou down to senior directors. That was about 30+ people. Every single one of them is now gone. So if you didn’t like Palm’s management back then, you should take another look at the company because it’s now 100% different.

Irresponsible speculation about politics. After a change like this, the standard sport in Silicon Valley is to speculate about what it means for the job status of the people involved. In that vein, the thing to ask is, “Who’s running Palm in the long run?” The weirdest part of the whole Elevation deal is the arrival of Jon Rubinstein as both Chairman of the Board of Palm and head of product development. As Chairman, Jon is technically the boss of Palm CEO Ed Colligan. As head of product development, Jon technically reports to Ed. So Jon is kind of his own second-level manager.

That feels…unstable.

Palm seems to now have a surplus of product leaders. Jon is in charge of product development, Jeff Hawkins is the designated product visionary, and marketing SVP Brodie Keast is supposed to control the product road map, according to the press release Palm issued when he was hired. It’s hard to picture a car with three steering wheels. Who will really be in charge? In the conference call Palm said that Jon would be the execution guy and Jeff the visionary. “The combination of those two guys is one of the most dynamic… combinations on the planet.” Maybe. Any organization structure can work if the people involved get along well, and I presume they would not have made this arrangement unless they were all comfortable they could work together. So good for them and best wishes.

But if you want to be a cynic, you’d speculate that Jon probably didn’t leave Apple just to be the head of engineering execution at a much smaller company. You wonder if the current situation is just a stage in a longer-term changing of the guards at Palm. I don’t have any evidence that’s the case, and I am not trying to start any rumors. But when you see a nonstandard reporting structure like this, it usually triggers speculation that another shoe is going to drop later.

Only time will tell.

What’s the effect on products? That’s the most important question, and it’s impossible to answer at this time. Hardware product development usually takes 18-24 months, so the earliest Jon could change the Palm road map would be very late 2008. But that’s the middle of the Christmas selling season, and you can’t announce products then. So realistically, the Rubinstein product era doesn’t start until spring 2009.

In the meantime, there’s a lot he can do to make the development of the currently-planned products be more efficient and predictable. Palm has said publicly on numerous occasions that its on-time product delivery needs to improve, and presumably Jon can help with that.

But personally, I think Palm’s bigger problem has been its lack of innovative new product designs. Unless Palm has a bunch of surprise products already in development, it will take quite a while to turn around the product road map.

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Thanks to Twofones for including last week’s post on the Palm Foleo in the latest Carnival of the Mobilists (link).

This afternoon I heard from a reporter that Google and Microsoft are now rumored to be interested in buying Palm. I have no idea who starts these rumors, or whether there’s any truth to them, but they’re not nearly creative enough. Here’s my list of other companies that have absolutely no interest in buying Palm, but ought to be in the rumor mill anyway. Feel free to re-use these if you want to manipulate the stock market. No need to credit me; I don’t want to be visited by the Feds.

7. Airbus

Compelling business rationale. I hear Airbus has a lot of trouble with the wiring in the A380, and there’s a bunch of wires and stuff inside a Treo, so this seems like a good match. (Hey, it makes as much sense as Google buying Palm.)

6. eBay

Compelling business rationale. Most Treos end up on eBay eventually, after their owners upgrade to a new model, so this is an opportunity to “significantly integrate the value chain,” as we say in the business. Each Treo could come with an eBay account, enabling the user to offer it for sale whenever they’re ready.

As an added benefit, a Skype client could be bundled with every Treo sold. (By the way, this is apparently the only way to get Skype to port its full native client to Palm OS.)

5. Ben & Jerry’s

Compelling business rationale. What if Jeff Hawkins designed ice cream flavors?

4. Cisco

Compelling business rationale. Apparently not required for a Cisco acquisition.

3. DaimlerChrysler

Compelling business rationale. I propose a straight-up equity swap: Palm for Chrysler. Daimler would give away a company that’s talented at design, but whose products have fallen behind the innovation curve, and that has problems with execution. In exchange, it would get…exactly the same thing. But as a bonus, Daimler could build a Treo and sync cradle into every car it sells. This fits with the whole convergence thing that’s supposedly driving all industrial development in the western world, so this merger is a natural.

2. HP

Compelling business rationale. No, wait, this one actually makes sense. Never mind.

1. JetBlue

Compelling business rationale. Give a Tungsten to every employee, pre-loaded with a datebook alarm that says, “Time for the airplane to leave now.” The acquisition would pay for itself within three months.

Yes, I know Sprint’s serious about WiMax — it’s spending more than $2.5 billion to build out a mobile WiMax network across the US. That’s old news. The surprise to me is the business model Sprint says it’ll deploy on that network. That hasn’t gotten much coverage at all, but I think it’s critically important. If you believe what Sprint says, its WiMax network will be totally open: any device, any application, without any contract required.

When I first heard Sprint describe that business model, in a panel discussion late last year, I felt like I ought to pinch myself. Did he just say that? I thought. Did a VP at a US carrier really say that?

He said it. What I’m not sure of is whether Sprint has the will and persistence to see it through. If they do, I think the Sprint WiMax network might be very special indeed.

Background on WiMax and Sprint

WiMax is a marketing name for 802.16, a wireless broadband communication specification. Some people call it WiFi on steroids, and although there are some significant technical differences, that’s a reasonable way to think about it. WiMax promises to provide about 10 megabits per second of upload and download, at a distance of 10 kilometers from a base station (although Sprint has said that the real-world throughput will probably be more like two to four megabits per second download and half a megabit per second upload).

There are a lot of different frequencies on which WiMax can be deployed. Sprint owns rights in much of the US to the 2.5 megahertz band, which is considered to be very good for deploying WiMax because it has relatively little interference and because the signals carry well at that frequency. From what I’ve read online, it’s possible that some unlicensed spectrum will also be used for WiMax (so you won’t have to pay anyone to use it, like a WiFi base station), but if that happens it’s likely to have more interference and shorter range. Unfortunately, WiMax is likely to be deployed on different frequencies in other parts of the world. I presume we’ll end up with multi-frequency radios (just as we have for GSM today), but that sounds messy.

In summer of 2006, Sprint announced plans to build out a nationwide WiMax network in urban areas across the US. Motorola and Samsung were listed as key equipment suppliers, and Intel as a chip supplier.

Some other companies also own WiMax related spectrum, most notably Craig McCaw’s new company, Clearwire. He has already raised about $1 billion from investors including Intel, and is planning an IPO for another $400m.

(Intel is a consistent theme here, and some of the people I’ve spoken with fear that Intel will end up dominating WiMax the way it did PC microprocessors.)

If you want more details on WiMax, Wikipedia has a good article. There are some other interesting tidbits here.

The panel

The setting was a Churchill Club evening forum on WiMax. On the panel were senior execs from four companies: Qualcomm, PacketHop, Motorola, and Sprint.

Qualcomm is widely seen as an opponent of WiMax, because it doesn’t control a lot of the patents around it (unlike just about any cellular technology you can think of). The Motorola speaker even cited the absence of Qualcomm patents as a key advantage of WiMax, which tells you everything you need to know about the relationship between Qualcomm and the handset companies.

Sure enough, the Qualcomm speaker, marketing VP Ronny Haraldsvik, spent most of the evening expressing gentle skepticism about WiMax. “Take the hype, add some reality and a couple of years to it,” he said. He predicted that fixed-location WiMax will be successful, but said mobile WiMax will be surpassed by other mobile broadband technologies.

PacketHop provides mesh network wireless broadband that can be deployed quickly for government and business. Basically, it’s a way to get wireless broadband at the site of an emergency or special project, in an area that’s not covered by 3G. I’m not sure why PacketHop was in this particular panel, since Sprint’s plans are focused more on consumers than business.

The Motorola speaker was Raghu Rau, SVP of strategy and business development for the company’s networks business (presumably he’ll be providing network equipment to Sprint). And the Sprint speaker was Bin Shen, Sprint’s VP of broadband.

The panel featured all the usual rhetoric you’d expect from competitors and suppliers, but in between the posturing, Shen said some very interesting things about Sprint’s plans for the network. The excerpts below are paraphrases of what he said, with my comments in italics.

The vision: personal broadband. Mobile broadband will be much more interesting, powerful, and important than landline (DSL or cable) in the long term. Landline is for a family, but mobile broadband will be personalized to the individual. This creates the possibility for all sorts of personalized advertising and services. In the future, mobile broadband reaches beyond homes and handsets; it shows up everywhere in all sorts of consumer electronics devices.

It’s a very starry-eyed vision. You can find some more examples of the sort of story Sprint is telling here. Personally, I’m not very enthusiastic about the idea of building broadband into every consumer electronics device imaginable – it reminds me too much of the Bluetooth-equipped refrigerators that people were predicting in 1999. But I do think that new types of mobile devices paired with mobile broadband will be important.

Mobile data demand is anemic today because it’s forced through handsets. The handset is primarily for voice, Shen said. Among the US operators, Sprint has the largest share of ARPU coming from data (over $10 a month) , but it’s a small percentage of total revenue, with limited growth. There’s always a limitation on how much people will use and pay for data on a handset. On the other hand, the laptop is a data device. So are the iPod and the Playstation Portable. People expect to use data on those devices. How do we connect them to the Internet wirelessly?

I thought that was a stunning statement from a company that has invested heavily in 3G networks and smartphones. He basically said that smartphones are a cul-de-sac; that the future of mobile data will come from devices designed from the ground up to use data.

Right on. I don’t think smartphones are a dead end, but we need a lot more diversity in mobile devices.

Openness is essential. Broadband requires a much more diverse ecosystem. You can’t predict what will be the popular data device. You need an open model with a lot of people participating. There must be a different structure and business model to encourage that. A key issue is partnership and ecosystems. Get the right set of players.

The US carriers exercise lots of control over handsets and application developers. On the one hand that’s very good; it provides a consistent experience for users. But it’s probably not good for innovation. The next generation will be open, with a very robust SDK and API, open for the Internet community to come in.

Another striking admission for an operator: We strangle innovation. This is where I started wanting to pinch myself.

No contract required. WiFi doesn’t have broad coverage. But 200 million units of WiFi have been shipped in the US. That’s one element of why we chose WiMax — it can share a lot of common components with WiFi. We want a WiFi+WiMax chip, at very low cost, so device manufacturers can replace their WiFi-only chip with a dual chip. This enables a very interesting consumer model. Consumers don’t have to decide which network to sign up for; they have a choice to use WiFi or use WiMax whenever they want. If they want to use WiMax, they can pay for it on the fly, without a contract.

Okay, so let’s add this up: an open, broadly-deployed, high-speed wireless network that welcomes any device, open APIs that allow any application, and no contract required. This is everything that the computer and Internet industries have been asking of the operators, and Sprint is apparently saying yes to all of it. The audience at the Churchill Club should have given this plan a standing ovation, but the information came out in dribs and drabs during a 90-minute panel, and it was very hard to assemble all the pieces.

If Sprint really wants to build an alliance around this thing, it needs to do a much better job of outreach to Silicon Valley.

The killer app is open access to the Internet. There are a lot of interesting apps you can do for mobile broadband – location services, video, etc. But the fundamental one is intelligent mobile Internet access. That’s what people want. We did a survey — the number one need is Internet everywhere.

Ouch. Whenever you do a survey on this sort of subject, people ask for the things they already know. So if you ask them what sort of data they want in a mobile setting, of course they’ll say the Internet because that’s what they know from their PCs. What they’ll actually use is a different matter. But if Sprint really makes its network as open as it claims, that will sort itself out because the best mobile apps will naturally rise to the surface.

Hurry up and wait. The most frustrating thing Shen said was that Sprint will start deployment of the new network in late 2007 in Chicago and Washington, DC, with nationwide buildout in 2008. Aside from being frustrated at the length of the wait, I thought their choice of cities was poor — if they really want software developers and consumer electronics devices, they ought to roll out the network first where the software and hardware developers are. Chicago’s a great place, but it’s not exactly a hotbed of Web 2.0 development.

What it all means

Can Sprint stay the course? Sprint’s subscriber base has been growing more slowly than the other US operators, and it has gone through a lot of management turmoil. (As one friend who deals with Sprint told me recently, “they have fired pretty much everyone they could blame for the situation.”) When this sort of change is happening, it’s very difficult to maintain focus on a long-term goal. To make its WiMax plan take off, Sprint will need to get a lot of details right. In particular, evangelism of hardware and software developers is a black art, and not many companies know how to do it well. If Sprint can’t keep consistent management on the WiMax project, and give them the resources and time needed to build up an ecosystem, its new network could become yet another costly mobile data failure.

This has strong implications for Sprint’s management (stay focused, evangelize creative hardware and software companies now). It also means that companies planning to work with WiMax should monitor Sprint’s progress carefully. More management changes, and shifts in strategy, would be major warning signs.

What about battery life? Small implementation details can easily doom a mobile product, and one I worry about for WiMax is battery life. Transmitting lots of data over long distances takes a lot of power. WiFi, for example, consumes far too much power to leave it connected all the time in a handset. I have to assume that Sprint and Motorola are working this issue, and you can find a lot of claims about low power consumption from the WiMax component makers. But I’ve been burned on this issue in the past, and I won’t believe the problem is solved until we see working devices whose battery life we can test directly.

Let’s hear it for desperate operators. I’ve had this conversation with several friends who work in the mobile space. We all agree that the best operator is a desperate operator. When operators are financially secure, they see no need to change their proprietary ways. But when they get scared, they become open to all sorts of interesting, formerly heretical ideas. The situation is similar to what the music industry faced at the turn of the century. They were so scared of music piracy that they willingly helped Apple to set up a music store with radically different pricing than had ever been used in the music industry before. If it hadn’t been for the fear of piracy, do you think iTunes would have ever happened? I don’t.

What you need is an operator that has enough financial resources to make interesting investments, but not so much that it feels secure. Sprint is the ideal example. The Three network is another, and look what they’ve been doing with flat-rate pricing. T-Mobile in the US is another example, although I worry that it’s just going to focus on playing 3G catch-up now that it has bought a lot of new spectrum in the US.

If you’re looking to do business with an operator, I think it’s worthwhile to bypass the top companies and look at the bottom end of the top tier, and the top end of the second tier. They’re likely to be much more open than the leaders to new ideas and radical business changes.

What matters is the business model. Qualcomm claims that other mobile broadband technologies will be more effective than WiMax, and for all I know that might be true. But if Sprint really executes on the things that Shen described, it may not matter. The thing that’s broken in mobile data isn’t the technology, it’s the business model, and Sprint is promising to fix that. As Microsoft has proved numerous times, the right business model paired with mediocre technology often wins decisively.

Come to think of it, what Sprint really ought to do is apply the same open model that it’s planning for WiMax to its EVDO data network. That would be truly spectacular.

It’s worth an intense look. I’ve been critical of Sprint in the past when they’ve done things that I thought were unwise, so now I think I owe them some credit. I believe they’re on the right track with WiMax. There are a lot of uncertainties about execution, but I think companies working on new mobile devices should look intensely at WiMax. It generally takes about 18 months to develop a new hardware product, so right now is the time to get started.