The Handset Revolution

There is little question that mobile handsets have progressed far beyond being simple voice communications devices, and the advances are continuing at a bewildering pace. Many of us grew up awed by the unbelievable gadgets James Bond had at his disposal. Those are no longer the product of Hollywood fantasy; in the near future, many such gadgets will be readily available from your local shop for just a few dollars. Tomorrow's mobile services and devices may sound like the stuff of dreams, but what we can only imagine is in fact already on the drawing boards. As mentioned in Chapter 14, "Wireless WANs," Japanese carrier NTT DoCoMo has produced a wonderful video, "Vision 2010," that illustrates what you can expect to experience in the near term and that will help you appreciate just how major the developments are (www.docomo-usa.com/vision2010/).

From a business standpoint, the mobile handsets industry is enormousand continuing to grow. Some 2 million devices are sold per day, resulting in a global device market worth more than US$100 billion. Needless to say, the handset and application trends we are about to discuss have a major impact on all the players in the mobile and wireless industry, signaling the emergence of new business models.

The fact that 3G networks have finally taken off in Europe and North America, following the lead taken by Japan and South Korea, has caused the mobile market to develop substantially since 2005. The migration to 3G signals dramatic changes in the industry value chain, with the mobile handset community increasingly shifting its focus to data rather than voice services. This, of course, means we can expect the industry landscape to change as well, with leading players needing to differentiate their products, resulting in new standards, alliances, partnerships, and investment opportunities.

Vendors are finding that an increasing proportion of their sales are occurring in emerging markets, and these are not the markets for the James Bond gadgets. Instead, they represent a new category of consumer, often at poverty level, with very low expenditure potential. However, they do represent a pool of more than a billion users, so low-end, entry-level products for these regions will also play a key role in generating revenues.

From Mobile Phones to Multimedia Handsets

What is occurring in the world of handsets can be simply described as a transition from mobile phones to multimedia handsets; the new generation of devices can handle functions that include not just voice services but also text, graphics, images, animation, audio, and video. The handset industry has been undergoing a steady evolution, as mobile phones are transformed into high-capacity multimedia devices running intuitive user interfaces.

We have already gone through four phases in the development of mobile multimedia devices, and we are now embarking on the fifth stage. It all began, in 20012002, with the introduction of chord ringtones, replacing what were boring monophonic tones with chords and tunes more pleasing to the human psyche. Much demand and competition were seen in this arena, ultimately producing a downloadable ringtone market with great revenue potential. The second upgrade occurred in 20022003, with the introduction of color screens and easy-to-use graphic interfaces. The third major development, taking place in 20032005, integrated the camera on the handset. In fact, an increasing number of today's devices boast more bells and whistles than most manual cameras, including features such as autofocus, red-eye reduction, digital zoom, and flash. Camera technology will continue to see many advances, with up to 5-megapixel models emerging in 2006. A recent InfoTrends/CAP Ventures study projects that more than 860 million camera phones will be shipped worldwide by 2009, accounting for 89% of all mobile phone handsets shipped (www.capv.com/home/Multiclient/MobileImaging.html). However, there may be a backlash against these devices in some cases. For instance, many establishments ban camera phones because they fear the owners will use them inappropriately or illegally. The fourth major development involves the addition of music-playing capabilities to the handset. Starting in 2005, MP3 players embedded in the handset started the trend toward entertainment being a key function of a mobile device. It also led to competition in terms of storage capacity and battery lifespan. Handsets equipped with MP3 players, FM/AM radio tuners, and voice recorders are now increasingly common, and online music services enable users to play tracks over mobile phones. Apple's iTunes has made a dramatic impact with its model for marketing and delivering digital music. It is believed that mobile music will form a key battleground for handset manufacturers, but the winners and losers may surprise many. The emerging fifth phase is the phase of video functions and applications, heralding handsets capable of DV, MP4, streaming media, and TV. Multimedia will no longer be the exclusive function of high-end handsets; it will quickly become the standard configuration for mainstream handsets as the costs to add the multimedia functions continue to drop. Just as chord ringtones, color screens, and cameras have become standard features, music and video are following.

Mobile Music

There is little doubt that mobile music is high on the list of mobile applications users desire and are willing to pay for. There is particularly high interest among 3G users, and it will come as no surprise that both music and gaming are ranked highest among young users. Support from the music industry is expected to make mobile music the most popular mobile consumer application.

Large music publishers, such as EMI and Warner Music, are moving into the mobile music markets due to the closed nature of cellular networks, which presents a more secure environment for intellectual entertainment property. One of the reasons the mobile music market began to develop is that music publishers became aware that they could convert songs into ringtones, which could be used on mobile phones to alert customers to incoming calls or messages. Combined with falling prices of handsets, new music applications and highly visible cobranded devices will create even more opportunities for mobile content services and drive this market to grow.

Warner Mobile Music Streaming Jukebox (a demo is available at http://wireless.wmg-is.com/javadotcom/index.html) is an innovative service that gives you access to ringtones, lets you view and download artist images, provides updated information about the artists, and has exclusive offers. It also allows you to stream actual music clips to your mobile device. Tools like the java.com Ringtone ReMixer (www.java.com) allow you to create custom mixes of your favorite hits on your PC browser and then send them to your mobile handset, so you can compose your own ringtones and caller IDs.

Motorola has introduced its iRadio service, a service that allows users to access Internet radio and music files through mobile phones in their cars, computers, or home audio systems. iRadio will use two-way Bluetooth technology and a mobile phone to offer listeners continuous entertainment. A user will be able to start playing a song in his or her car, pause it, and continue listening on a home audio system.

According to the Jupiter Research (www.jupiterresearch.com) study, "Mobile Music: Ringtones, Ring-backs & Full-tracks (second edition)," mobile music revenues are expected to exceed US$9.3 billion by 2009 due to the increased popularity of full-track downloads and ringtones. Ringtones alone are expected to be worth US$2.7 billion worldwide by 2010. Europe is expected to lead in revenue growth in the short term but to be overtaken by Asia-Pacific by 2007. From an application standpoint, there were 60 million ringback tone subscribers worldwide in 2005, and that number is forecast to grow to more than 300 million in 2009. Finally, the annual number of full-track downloads is projected to reach 1 billion in 2008.

Over the coming years, intelligence embedded into handsets will become increasingly dense, equipping handsets with features familier in the PC world and converting the traditional mobile phone into an advanced audiovisual device requiring fast, high-capacity wireless networks. In the future, the successful use of new mobile multimedia device services will demand more and more capacity from the network. (Chapters 14, "Wireless WANS," and 15, "WMANs, WLANs, and WPANs," discuss the developments under way to provide such networks.)

The future will also bring what are called multiradio terminals that can deploy different network technologies, allowing the user to flexibly shift from one network to another while moving about between home, workplace, and hobbies. The user will automatically be connected to any number of network alternatives, such as GSM, GPRS, 3G, WLANs, WMANs, and WPANs, without interruptions. (Multiradio technology is discussed in the following sections.)

In the near term, we can expect an increasing number of devices embedded with utility and entertainment applications for both enterprise and consumer use. Road warriors and travellers will see a service portfolio that offers maps, time, currency, and weather applications, all downloadable onto the handsets over the network. Whether it's games, ringtones, pictures, entertainment, sports, or lifestyle, there will be something for everyone.

Software-Defined Radio

One forthcoming application of multiradio technology is software-defined radio (SDR), a collection of hardware and software technologies that enable reconfigurable system architectures for wireless networks and user terminals. SDR-enabled devices and equipment can be dynamically programmed in software to reconfigure the characteristics of equipment. In other words, a single piece of hardware can perform different functions at different times, depending on the software programming. A radio device can become a cellular phone, a GPS receiver, an amateur packet radio, or any other sort of radio transmitting or receiving device. SDR provides an efficient and comparatively inexpensive solution to the problem of building multimode, multiband, multifunctional wireless devices that can be enhanced using software upgrades.

SDR architecture is based on a high-level generic model with specific functional blocks connected via open interface standards recommendations. The SDR architecture supports three specific domains: handheld, mobile, and base station (or fixed site). The software is implemented by controlling the characteristics of equipment/device subsystems through hierarchical and peer-level modules that support scalability and flexible extensions of applications.

The military has successfully demonstrated SDR's abilities and will continue to push this technology to its limits. Commercial wireless products, as well, have slowly evolved toward SDR architectures. The SDR Forum (www.sdrforum.org) has been working closely with global standards bodies and other industry groups, such as Global Radio Standardization Collaboration (GRSC, previously known as RAST; www.rast.etsi.org), the 3G Partnership Project (3GPP; www.3gpp.org), and ANSI (www.ansi.org) to develop standards for bringing SDR to full commercial viability.

Cognitive Radio

What would be the ultimate handset? To many, it would be a device that could seamlessly switch call and transmission modes to whatever makes the most sense, given the location at a given timesometimes cellular, other times Wi-Fi, and yet other times Voice over IP (VoIP). The March 2006 edition of Scientific American magazine describes how such technology, called cognitive radio (CR), will work (www.sciam.com/article.cfm?chanID=sa006&articleID=000C7B72-2374-13F6-A37483414B7F0000&pageNumber=1&catID=2).

CR is the next step in the evolution of SDR. It starts with SDR's ability to adapt to changing communications protocols and frequency bands and adds the ability to perceive the world around it and learn from experience. The term cognitive radio describes a smart system in which a radio device and its antenna can adapt their spectrum use in response to their operating environment, including the radio frequency spectrum, user behavior, and network state. CR detects temporarily unused spectrum segments, such as amateur radio and paging frequencies, and jumps into and out of them without interfering with the transmissions of the authorized users of those segments.

There are several types of CR:

• Full CR (also known as Mitola radio) With this type of CR, every possible parameter is taken into account, including radio frequency spectrum, network state, and user behavior.
• Spectrum-sensing CR This type of CR considers only the radio frequency parameter.
• Licensed band CR This type of CR is capable of using unlicensed bands as well as bands assigned to licensed users.
• Unlicensed band CR This type of CR can use only the unlicensed parts of the radio frequency spectrum.

The majority of research is currently focused on spectrum-sensing CR, particularly on the utilization of TV bands for communication.

CR introduces a unique design problem: interference temperature. A CR device must know its location and sense the interference it may cause to nearby radios, and it must also know exactly which air interfaces are available for it to use at any given moment, regardless of the band. Debate continues on how to best resolve the problem of interference temperature.

Most of the interest in CR to date has come from the military and public-sector emergency services, but the commercial sector recently became interested as well, when the FCC published a report concluding that CR architectures can make efficient and intelligent use of the radio spectrum and encouraging the use and development of CR. The FCC is considering using unused television frequencies (between 54MHz and 862MHz) for CR. The FCC proposes to open up 300MHz of this UHF/VHF spectrum as its first major test of CR. It would permit fixed-access systems transmitting up to 1 watt in power and portable devices up to 100 milliwatts.

CR standards work is taking place as IEEE 802.22, the Working Group on WRANs (www.ieee802.org/22), which is working on the construction of wireless regional area networks (WRANs) using free TV bands. Its goal is to specify a cognitive air interface for fixed, point-to-multipoint WRANs that operate on the unused channels in the UHF/VHF TV bands that the FCC is opening up for experimentation. There is ongoing contention between the WiMax community and the IEEE 802.22 group over who should have access to unused TV spectrum. (WiMax is discussed in more detail in Chapter 15.) The IEEE 802.18 group, Radio Regulatory Technical Advisory Group, has a difficult task ahead in trying to coordinate the various international bodies and existing and emerging standards surrounding radio and radio regulation.

Mobile IP