Networked Blogs

9 July 2009

Strangle Me: Apple Awarded Web 0.2 Citation for Delivering Painful Paroxysm of Yechsperience™

Obtuse and Faulty Authentication Process Takes the Checkered Flag

webdot2-logoA Ferrari without a Starter

Chicago, 8 July 2009—Apple over delivers in many categories, and today the company can be proud of its latest accolade: the coveted Web 0.2 Citation. To win by such a landslide, the company had to prove its ineptitude over a period of several months, consistently inducing pain to customers during the Mobile me authentication process. Its performance was hands-down one of the finest examples of yechsperience this year. Here is the report from the judges:

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31 July 2008

Event Brief: Mashing up Mergers & Acquisitions and Web 2.0 at the AM&AA’s Summer Conference

Reports of “Character Building” Market—Significant Parallels with High Tech Bust—Plus, the Emerging Web 2.0 Vein

The sub-prime induced correction of the U.S. financial sector has changed the context around M&A during the last year, and mergers and acquisitions experts met last week to share success stories, lessons learned and admonitions at the Alliance of Mergers & Acquisition Advisors Summer Conference July 22-25, 2008 at Chicago’s Wyndham Hotel. I was asked to present a new talk, “Leveraging a Web 2.0 Ecosystem to Grow Your Business,” and I had the opportunity to attend some of the other sessions. I’ll summarize their key points before adding some thoughts on the promise that Web 2.0 and social networks bring to deal marketing due to significantly decreased transaction costs.

AM&AA members hail from all parts of a rich ecosystem of investment bankers, attorneys, private equity, brokers, intermediaries, CPAs and others who specialize in every aspect of architecting, researching, negotiating and executing deals. To make money consistently in M&A, one needs to know how to identify and manage a wide range of risks. The financial system’s painful correction is changing many of the metrics around M&A, but those who can adjust their strategies can do quite well. It’s necessary to accept the new conditions and to play by them.

As I listened to speakers briefing the audience on “the new reality,” I kept having flashbacks to the Web 1.0 tech bust: flight to quality, increased due diligence, firms having money but not spending it, intermediaries’ difficulty in changing sellers’ expectations. AM&AA members specialize in U.S.-based manufacturing, and their sources of funding aren’t VCs but investment banks and private equity firms. But they’re essentially in the same business: risk management and relationships. Managing exogenous shocks to their ecosystems.

Continue reading Event Brief: Mashing up Mergers & Acquisitions and Web 2.0 at the AM&AA’s Summer Conference

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30 April 2008

Creating Strategic and Tactical Value with Enterprise (Social) Networks

Leveraging B2C “Social” Networks for Real Enterprise Advantage—Flashbacks to Web 1.0—People in Bars

Pan in, circa 1998, and enterprises were beginning to doubt the conventional wisdom that had prevailed during the past three years, namely that “the Internet” was a Silicon Valley fad that would blow over with nary a whimper. It was “for kids,” it didn’t merit adult attention—none of these “businesses” were making money anyway. You can’t be serious, how could a money-losing online bookstore affect GM? It looks silly to read these words today, but that’s only because we know what happened. Here I will suggest that we are on the cusp of a similar shift with Web 2.0 and social networks, I’ll outline an approach you can use to consider your adoption strategy, and I will recommend tactical things you can do right now to leverage LinkedIn, Facebook, Twitter, YouTube, Del.icio.us and others.

Since 2006, my consulting work has encompassed strategic and tactical sides of Web 2.0 and social networks and, in 2008, I launched a tactically-focused service, the Executive’s Guide to LinkedIn, which helps global enterprises to use LinkedIn for process innovation. This has provided the opportunity to deep dive into applying these tools to enterprise processes.

Continue reading Creating Strategic and Tactical Value with Enterprise (Social) Networks

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7 September 2007

Enterprise 2.0: Game-Changer for Investment Banks

Just Released—CSRA Market Advisory Highlights How I-Banks are Using Web 2.0 to Drive Competitiveness

This summer, “Enterprise 2.0″ began to get legs as the new moniker for applying Web 2.0 to the enterprise, reflecting that pragmatists are raising their eyes for an exploratory glance. The market advisory shares how global investment banks are using Enterprise 2.0, and it suggests action steps for executives to take this year and next. Here is the executive summary and a few choice concluding points:

Enterprise 2.0 Enables Executives to Digitize and Monetize Collaboration for the First Time

This is so simple that many will miss it and open themselves to disruptive competition…

  • Banks increasingly use wikis, blogs and other Web 2.0 tools for mission-critical processes, as shown through the examples of Citi, DrKW, Morgan Stanley, ING and JP Morgan..
  • Enterprise 2.0 is a new term that denotes corporate adoption of Web 2.0 and social software tools. It offers investment banks an unusual opportunity to reduce risk and improve their earnings and profits by increasing returns on process, human and knowledge capital.
  • However, Enterprise 2.0 also confronts banks with changing some of their assumptions, approaches and sensibilities. It represents an emergent, self-organizing network of relationships, so the formalized, restrictive cultures of many banks will serve as a significant barrier to adoption.
  • Enterprise 2.0 is not your father’s enterprise software. The tools are relatively open, inexpensive to deploy and manage, and an order of magnitude easier to use; however, they are also robust and secure. They enable unprecedented collaboration.
  • Technology is giving collaboration new teeth. Everyone has always praised teamwork, but when communication and administrative processes were so inefficient, monetizing collaboration was excessively difficult. Enterprise 2.0 is a discontinuous change for the better.
  • Jaded executives will muse that Enterprise 2.0 is another technology buzzword in search of a home. However, they should ask their CIOs about the transformation of enterprise software, and they will answer that technology is steadily emerging from its legacy cage. Service-oriented architecture and Web services are enabling more responsive IT, while virtualization offers a quantum leap in flexibility. Enterprise 2.0 technologies natively enable people and process to adjust to changing requirements. People who do not recognize this distinction will regret it later.
  • The adoption of Enterprise 2.0 will unfold over the next four years, but may well be faster due to the technologies’ and processes’ relative ease of use, affordability and interoperability. The term began to get traction this summer, and more case studies are emerging every week.
  • Enterprise 2.0 adoption will likely produce some disruption in the market. As a group, global enterprises tend to be fast followers. If one/more competitors adopt more quickly, it could have a disruptive impact on your business.
  • Think about Cisco’s results with the WebEx acquisition. We can assume that investment banks would, at a minimum, achieve a fraction of Cisco’s results. Now multiply that by how many acquisitions the bank does. Obviously, results would be similar in many other bank transactions and services that require discussions among far-flung team members, extensive information exchange and negotiation with myriad parties.
  • Read the pdf here.
  • By the way, I’ll be speaking about this at Financial Markets World’s Web 2.0/Enterprise 2.0 in the Capital Markets Industry conference in New York on September 17. Hope to see you there!
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8 August 2007

Cisco CEO Shares Impressive M&A Collaboration Story and Video-Centric Network Vision

Pervasive Consumer Connectivity Vision Upstaged by Enterprise Web 2.0 Collaboration

Cisco’s John Chambers is a master technology marketer who quickens your pulse with technology fire and brimstone. However, as the long-time CEO of Cisco, which epitomized the rise of the (Silicon) Valley when it was briefly the most valuable company in the U.S. in 2000, he has seen the company through the tech bust and proven that he has substance and staying power. Although a hypemeister extraordinaire, he may have crystallized the promise of the Enterprise Web 2.0 better than any other speaker at Digital Hollywood Chicago.

Chambers’ demos of whiz-bang consumer entertainment scenarios were intriguing but far less interesting to an enterprise-focused audience than his accounts of how Cisco had drastically increased its already-leading efficiency in mergers and acquisitions by collaborating with Web 2.0 tools like wikis. We anticipate that his consumer-focused vision will be consummated far in the future, but his message about enterprise collaboration is achievable this year—for those who are looking for it.

Chambers described an emerging future of networks and communication that revolved around pervasive video, which will drive customer experience, collaboration and value. The world is entering a fundamentally new era in which communication is morphing from one-to-many to many-to-many. This will drive a new degree of collaboration and innovation, and it will change business models. Telecoms are not “coming back,” and there will be significant consolidation. Video will rise to prominence and will be created and experienced on any machine or device.

Network-Focused Vision and Business Models

  • Web 2.0 is not new; it is like the Internet was in the 1990s. Telecom is old; the new focus must be Internet (digital) video, which will drive business process change. Video, voice, text, telepresence, blogging all drive more broadband; we have to redefine broadband; we must remove barriers. We estimate that this message is primarily to his clients, telecoms and global enterprises. The latest Cisco routers aim to intelligently deliver the right content to the right (user-operated) device, according to individual preferences, automatically.
  • In the 1990s, we put orders online and outsourced manufacturing. We gave customers input into product development. In 2006, value and product development have slowed (we’ve pateaued). We have to take it to the next level.
  • At Cisco, collaboration is producing incredible value, and we’re able to work must faster. For example, we acquired Scientific-Atlantic in 2005, and the transaction took 45 days to close. In February 2007, we closed the Webex acquisition in 8 days. We do most of the work on the Cisco wiki, and employees, partners and customers have appropriate access.
  • Another proof point: Cisco’s innovation pipeline model (circa 2000) took thousands of innovation ideas and vetted the total down to about 250. We then eliminated all but three, and we acted on those. This year, through our Web 2.0 technology-enabled collaboration, we are doing 18 innovation projects. We have checked our command and control methods at the door. It increases scale and speed, and we feel that it will be sustainable. We are changing our business models to leverage these new capabilities.
  • Cisco’s vision is that the network is becoming intelligent—from technology and human perspectives. Web 2.0 collaboration is making the Web intelligent. When you add unified communications (integrated video, text, audio, graphic), telepresence and open architectures, you realize that resources are available anytime, anywhere anyhow, and the network can infer your preferences based on where you are and what you’re doing and history.
  • telecoms transformation dhcFrom a technology perspective, numerous “resources” that are contained by applications will leach into the network. Examples are security and quality of service.
  • From an enterprise operations perspective, we can tap global services and virtual relationships worldwide (as new resources come on line in India, China and elsewhere).
  • We can get it right by listening to customers. Virtualization is key on the business side; everything has to be online.
  • Voice and video are the future, not text. (Interaction with devices) must be simple; people must get what they want in one click. Each subsequent required click loses customers.
  • Proprietary technology and solutions are over. Everything must be open, must be architected like the human body: get anything anywhere, anytime you want.
  • For example, we will change the experience within the stadium. HDTV offers the ability to see a game from any angle; currently you can choose from 30 angles (and they are not mutually exclusive). People will pay a premium for this.
  • Read our ongoing coverage here(demo with Hotel California) Listening in your car. You turn off your car and it resumes playing on your smartphone. Once you are in your house, the handheld hands off the song to your home stereo, but it fires up a music video. H-D pictures will drive additional demand.
  • (demo with fantasy baseball) In fantasy baseball, you can pick plays (and presumably knit them together into a game; the plays are the building blocks to the game). You can purchase tickets on the device and receive the receipt, which you show to the ticket taker to gain admittance at the stadium.
  • Three screens: content will be (created and) viewable on any device; we will have anytime calendars, and open architecture, which will provide additional revenue. Consumers will drive change. Everyone and everything will be connected.
  • Telepresence (and video) will drive demand for our business. Video routers will be a huge growth area.
  • Japan is experiencing 3-500% annual network growth.
  • We will change the definition of broadband and set-top boxes (which are dumb catchers of data today; they will become far more interactive). People will pay for experience and guaranteed quality of service.

Analysis and Conclusions

  • Chambers’ speech had a technology context, but the most important message was that Cisco was demonstrably accelerating innovation by adopting a collaborative model. Closing corporate transactions like acquisitions far more quickly is proof of an enterprise-scale reduction of transaction costs. That enables Cisco to undertake more transactions and to therefore be more responsive and adaptive. Growing their innovation pipeline six-fold is another huge advantage.
  • Few people in the (communications) business would dispute the content of Chambers’ vision, but the big question is timing. It may take a couple of generations to be comfortable with being online and reachable from anywhere, anytime. It’s too Big Brotherish. But privacy is already shifting significantly, and this shift will continue. This uneven comfort level with the loss of privacy will serve to dampen adoption.
  • Network operators (Cisco’s clients) like video because it is the most resource-intensive content we have and therefore drives utilization of network resources the most. Let’s not forget that Cisco is hawking video routers. Abstracting up a level, however, video is scalable, rich communication, and it is a closer facsimile of face-to-face communication than print. Humans’ first scalable communication was pictures, then writing. Of course, video incorporates audio and therefore stimulates vision and hearing. It does not yet incorporate touch, smell or taste.
  • The network is becoming more intelligent, and this is a natural progression of the ongoing revolution in computing. Computers used to be islands of automation. Then they were connected, and connections served to make their computational power available to more people. Distributed computing and pervasive networks have diminished the relative importance of “computers” because software and hardware resources and services exist within the network, and abstracting out services makes sense in many situations.
  • For most of humans’ existence, we have not had writing, and perhaps writing as a means of communication will diminish. However, for most cultures, writing is a key developmental activity that helps to develop analytical thinking. If it diminishes, how will its disappearance affect humankind’s analytical abilities?
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3 August 2007

AT&T CEO Unveils Telecoms Vision at Convergence Conference

Redefining the Industry to Remain Relevant—The Significance of AT&T’s Big Bet on Mobile

At Digital Hollywood Chicago, AT&T was busy redefining itself as a 21st century communications provider, and we believe that will increasingly mean focusing on content to provide profits. An AT&T veteran but new in 2007 as CEO, Randall Stephenson keynoted the conference by sharing his vision for AT&T and the future of the industry.

Telecoms provide the network infrastructure of distributed computing and global communications, but infrastructure is a tough business with thin margins and high capital requirements. All telecoms are trying to move up the value chain to escape commoditization pressure and relentless price competition. For example, Sprint is betting heavily on WiMAX to redefine itself as the enabler of digital relationships.

In the context of telecoms redefinition, AT&T’s alliance with Apple could be very strategic for each company, as AT&T can use Apple’s design excellence to increase subscribers and push advanced network services while Apple needs a telecom partner to drive its relevance in the growing third screen market with the iPhone. According to Stephenson, the industry must ask itself, “What is a communications company?” to take advantage of consumer empowerment (although he didn’t call it that). As usual, we will outline his comments before turning to our analysis and conclusions.

Redefining Telecoms for the 21st Century

Stephenson sees five key transformational forces at work in the market:

  • The transition from wireline to wireless is accelerating, and the notion of mobility is critical to creating value for today’s (and tomorrow’s) customer.
  • Mobility combined with IP (Internet Protocol)-based services is the context for creating value. Mobility refers to the customer’s experiencing content on the “three screens”: home entertainment (TV), computer and mobile (phone). IP can deliver services on any device.
  • Entertainment is an integral part of the offering, and this holds true for wireless as well. Wireless is rapidly becoming the default. We will soon have multidimensional mobility.
  • Subscription and advertising models will play key roles in bringing content to people.
  • The customer is in charge: s/he is driving what is delivered, when, why, where and how.

Telecoms Insights and Opportunities

  • telecomsWireless is the common link, but providing seamless experience requires an advanced (expensive) network.
  • Wireless is a far more personal way to communicate because it is with people everywhere they go.
  • The decision of buying wireless service drives numerous (downstream) decisions (what network and device type determines features, what kind of content can be experienced and how it can be experienced).
  • Carriers need to become wireless-centric as soon as possible. They also have to become innovation-focused to create excitement and demand. This is the context of AT&T’s partnership with Apple and its iPhone.
  • The customer experience must be superb from the first day. AT&T is striving to get new subscribers through the iPhone, but they realize that experience must be excellent. As of 19 June 2007, 1.1 million customers had inquired about the iPhone, and 40% were not AT&T customers.
  • The network must deliver what customers want, when they want it, and how they want it. It must be ubiquitous, with GSM coverage worldwide. AT&T also has 50,000 hotspots.
  • Stephenson demonstrated a new service in which a customer, while talking on the phone, shot a video and “shared” it, real-time, with another customer.
  • Another technology-led transformation is the move toward IP networks, which integrate voice and data. IPTV is the future of TV: it has more channels and far better picture clarity. Moreover, it points to the convergence of the three screens: digital “TV,” the computer and the mobile (phone).
  • For B2B markets, wireless is also key, as is integrating global operations around GSM. The SMB market closely mirrors B2C.
  • All services must be integrated and attached to the same account, whether wireline, wireless, content (“cable”) or mobile. It is a single sale and revenue commitment.

Analysis and Conclusions

What Stephenson did not say was even more interesting than what he did.

  • The telecoms industry challenges that were mentioned at the conference kept reminding me of airlines, another capital-intensive infrastructure business. Capital concentration has played a big part of driving competitiveness, but it is extremely difficult for all players to make money. Moreover, big infrastructure businesses tend to be inflexible, and they get into trouble when the assumptions on which the are based shift. People inherently don’t value infrastructure very highly; it is too quickly taken for granted. When too many customer expectations change and the players can’t respond, they become vulnerable to new entrants like Southwest Airlines.
  • AT&T’s relationship with Apple seems to be a case of coopitition: AT&T has an explicit three-screen strategy around which it hopes to deliver content seamlessly, but we think that Apple has a stealthy three-screen strategy as well. Telecoms always have the problem of moving up the value chain because their core competencies are network management, not customer experience and content.
  • Stephenson’s point about entertainment was significant, and it was corroborated throughout the conference. People will not readily pay for infrastructure, but they will pay for content. AT&T is moving heavily into the content business, and they dream about leveraging a content model into the mobile phone as well.
  • AT&T is betting big on the iPhone to create demand for its “advanced” network services. “Innovation,” real-time video sharing (takes the most bandwidth). Telecoms have been frustrated at the slow rate of adoption for their advanced services. (They should try cutting prices—significantly.)
  • Mobility is so important because it provides a continuous consumption opportunity, and AT&T is attempting to add value with content. With its three-screen strategy, AT&T is competing in the first screen (cable) and also trying to distribute content to the other screens. Consumers can’t consume content when they are away from the “first screen” (TV) or the “second screen.” (office/computer). Now they can, via the advertising model. I’m not sure Stephenson did his homework here, though: as revealed in numerous other sessions, the ad model is broken, and it’s less tolerated by younger audiences.
  • IP is the means to move content around. It may serve a role analogous to Java’s for IBM (Java—as an interface to object-oriented development—saved IBM’s un-integrated software and hardware offerings by enabling a robust integration platform and approach).
  • There is a huge gap between AT&T’s vision and its ability to deliver. Personally, I have become an AT&T customer across most of its service spectrum (AT&T Wireless became Cingular became AT&T; SBC was my ISP and became AT&T; SBC wireline became AT&T). Their online account management is abysmal. To whit, I have a GSM mobile phone, but AT&T has no decent international rate plan. For my DSL service, AT&T has no access (even dailup) outside the USA.
  • As is the case with other rollups, AT&T is trying to stitch together numerous un-integrated resources on the fly. From past experience, we can be safe in assuming that they will not be seamless and consistent for many years.
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16 July 2007

Reading between the Lines: Apple’s New Business Strategy

Why Apple Could Emerge as a Three-Screen Player Par Excellence

Apple’s name change in early 2007 was heralded as the company’s redefinition as a consumer products company. The conventional wisdom held that the lion’s share of the run-up of Apple’s stock price had been due to the excitement of the iPod and the successful rekindling interest in the company’s Macintosh computers. Moreover, Apple’s stock had limited headroom because consumer electronics heavies were getting into the market for music players, and this would leech profits. The iPhone looked great, but it was overpriced in a hyper-competitive market; it wouldn’t penetrate much beyond a few gadget freaks.

This prevailing view works great for Apple because it keeps people focused on the wrong things—literally. Apple’s business strategy is far more profound. It goes far beyond the SIC, hardware or even software. It is an experience strategy based on content and communications.

Continue reading Reading between the Lines: Apple’s New Business Strategy

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6 June 2007

Rebooting Kraft—CEO Outlines Growth Strategy at Executives’ Club Breakfast

The Innovation Imperative: A Play in Two Acts, Starring the Consumer

Irene B. Rosenfeld, Chairman & Chief Executive Officer of Kraft Foods, outlined her vision for relaunching Kraft at the Executives’ Club of Chicago’s Chicago CEO Breakfast on May 30, 2007 at the Mid-America Club. She was enthusiastic about the company’s second lease on life: having spun off of Altria this spring, the company is newly independent, and she was eager to share her plan to drive growth by addressing the “eye of the consumer.”

Kraft Foods is the second largest food company in the world and the largest in North America. It has seven brands that produce revenue of over $1 billion and fifty that bring in over $100 million each. Central to her strategy is leveraging Kraft’s formidable brand portfolio and other economies of scale. Rosenfeld “came home to Kraft” about a year ago, having had highly visible leadership roles at the company in the past and the top job at Frito-Lay immediately prior.

Continue reading Rebooting Kraft—CEO Outlines Growth Strategy at Executives’ Club Breakfast

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31 May 2007

Leadership, Trust and the Globally Integrated Enterprise

IBM’s CEO Articulates Prescient Vision for the Enterprise—Adapting to the Knowledge Economy

IBMSamuel J. Palmisano, Chairman, President and Chief Executive Officer of IBM Corporation, outlined a new version of the enterprise at a lunch honoring him with the Executives’ Club of Chicago’s Thirteenth Annual International Executive of the Year Award April 12, 2007 at the Chicago Hilton. Entitled “Leadership, Trust and the Globally Integrated Enterprise,” his speech emphasized key points from his Summer 2006 article of the same name in Foreign Affairs. He was especially interesting to hear due to his experience with leading one of the world’s foremost global enterprises as well as his insight from serving global enterprises in every industry.

Yesterday’s model for the global enterprise, the multinational corporation (MNC), looks increasingly outdated due to widespread adoption of standards-based technology, increasingly standardized work processes and a liberalizing regulatory environment. Today, knowledge-based resources are available globally, and the enterprise’s means to create value is choosing how and where to tap the resources to best execute business processes. Moreover, the shift to the globally integrated enterprise means a profound culture shift and outlook, which we will address here.

Continue reading Leadership, Trust and the Globally Integrated Enterprise

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1 April 2007

Joined at the Hip – Sprint Nextel’s Destiny and the Demand for a “New Wireless Future”

How Sprint Nextel is Betting Its Future on a New Wired Society

Gary D. Forsee, Chairman and CEO, Sprint Nextel Corporation, set the stage for the Executives’ Club of Chicago’s Technology Conference by outlining Sprint’s wireless strategy and a new vision for global community at the March enterprise CEO luncheon at the Chicago Hilton.

Sprint’s long history reflects the transformation of the U.S. telecoms market. The company has had a key role in remaking the U.S. telecoms industry during its privatization. It competed as a competitive local exchange carrier (CLEC) and once earned most of its revenue from long distance services, which are now essentially free. After its 2005 merger with Nextel, virtually all its revenue comes from wireless services.

Moreover, Mr. Forsee promised that Chicago would be one of two pilot cities for Sprint’s WiMAX initiative later this year. Chicagoans will be among the first in the U.S. to try 4G network services.

Sprint’s Wireless Future

Sprint Nextel has seen the future, and it is wireless. In 2007, having mostly completed a painful merger, Sprint is pedal to the metal to enable connected communities. People will use its network to keep connected with social network sites, multimedia (much of which will be created with handsets) and, yes, even talking. He hopes that this will help to rebuild the U.S. sense of “community lost.”

Echoing Motorola’s James O’Connor who spoke at the Executives’ Club in December 2006, Mr. Forsee emphasized that there were 2.7 billion mobile phones in use globally, compared with one billion computers. About one quarter of all Internet users access it through handsets; however, they are growing far more rapidly than PC users.

It is easy to forget that Sprint began as a U.S. CLEC and subsequently became a “long distance” telephone company which, along with MCI, challenged AT&T for its long distance franchise. Today, 85% of its revenue and its highest margins come from the wireless business. Reflecting the relative demise of the long distance business, Mr. Forsee shared a little anecdote:

My business cards used to contain an offer of free long distance minutes on the back. Some months ago, I gave one to a restaurant owner while paying for breakfast. She was puzzled, “Why do I need this? All my minutes are free now, no matter where I’m calling!”

Sprint’s merger with Nextel attempts to pair its strong consumer business with Nextel’s B2B focus. The merger has proven to be much more difficult than expected, due to the companies’ different focuses, networks, processes and cultures. But the merger is the centerpiece of a strategy to become a dominant wireless carrier.

In August 2006, Sprint announced its plan to deploy a 4G (4th generation) network in 2007-08, partnering with Intel, Motorola and Samsung. It will provide ultrafast throughput (most wireless in the U.S. is 2.5G as of writing) and deliver last mile connectivity via WiMAX. Sprint has aggressively acquired spectrum licenses in its quest to build a superior wireless network, and its 2.4 GHz licenses cover 85% of the households in the top 100 U.S. markets, the most of any wireless carrier in any single spectrum band.

This effectively means that people will carry their living rooms in their pockets: with wireless handsets, they will be able to exchange video and pictures, watch TV, listen to radio and surf the Internet as quickly as they can today with their computers. They will create much of this content with their handsets as well. These devices will also have e-wallet capabilities.

Sprint Stores and Pilots Set

Mr. Forsee acknowledged that it would be critical to field well designed devices that could contain all that functionality and provide the ease of use necessary to make it accessible to consumers. Taking a page from Apple’s playbook, Sprint will create “help desks” in its stores to help consumers understand and use the devices and network features. The WiMAX technology to be deployed in the network is expected to offer a cost-per-megabit and performance advantage that reflects a substantial improvement in the comparable costs for the current 3G mobile broadband offerings.

In Fall 2007, Sprint will pilot its 4G Wimax network in Chicago and Baltimore.

Analysis and Conclusions

  • Sprint Nextel is taking a substantial risk that, if they build it, customers will come, and I give them credit for that.
  • They are plowing massive investment into a new 4G network, when I’m not at all convinced that consumers in the U.S. will buy the value-added services as readily as Sprint hopes. U.S. consumers have frustrated network operators thus far by their unwillingness to pay for enhanced services.
  • U.S. adoption lags considerably behind Asian hotspots like Korea, Japan and China as well as Europe. My guess is that it has to do with the U.S.’s computer-centric orientation.
  • Although Mr. Forsee didn’t say so directly, it seems obvious that “wireless” will become the communications access service.
  • Even “telephone” service will soon be outmoded: data and voice service are increasingly indistinguishable; they are all communications. You might send a video you shot of some friends doing something wacky rather than calling another friend to explain.
  • On a social vector, I’m not sure what Mr. Forsee meant by the U.S. sense of “community lost,” but let’s hypothesize that it has to do with families living “distributed” lives. It’s a fact that people are more mobile and spend less time in the same physical space than they used to. I believe that communications services can play a role here, but most important is attention, commitment and focus. Sending a video is rarely a substitute for spending time with someone. That also means giving the person your undivided attention, and not paying attention to other things during that time.
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