However, one aspect of the deal is likely to send shockwaves through the industry.  That’s the price tag for the acquisition, which is $12.2 million.  Compare that to the value that TI paid for Chipcon in 2005, which was around $200 million.

Jennic is one of the last of the original, independent players to be sucked up by the big boys.  A few, like Greenpeak - the ultra low power chip company are sitting comfortably within specialist niches, but all eyes must now be on Ember.  Ember are the Grand Daddy of ZigBee and have probably seen most success of any of the start-ups, at least in terms of sales.  However, this latest purchases pitches them firmly against the battalion of big boys - TI, NXP, Atmel and Freescale, just at the point where the market is starting to see some traction.

A price tag of $12 million for a fabless company is not going to let investors sleep soundly at night.  Starting a fabless semiconductor company that is based on a standards compliant radio chip and application stack is not a cheap undertaking.  The general consensus is that it costs between $3 and $5 million dollars to spin each new version of chip, and it typically takes three or more versions before it sells in any volume.  Add to that the snail’s pace of a standard taking off commercially and you need to invest around $30 - $50 million to even get to first base.  Ember has currently raised around $89 million.  The question is, after the Jennic sale price of $12 million, who will consider them to be ten times as valuable?

As standards based radios mature, the type of customers for the technology change.  In the early days there are typically lots of small, innovative companies who do interesting things with the standards, but in low volume.  The next phase, as the standard becomes adopted, is for a few large companies to dominate, with the application for the standard being confined to one particular solution which ships in high volume.  The ZigBee community is expecting this to be smart energy, which is already sucking up significant numbers of ZigBee chips.  However, this is the point where the contacts and buying power of the larger chips companies can squeeze the smaller, independent players out.

Time will tell whether this happens to Ember; whether they’re acquired, or whether they establish themselves as an independent silicon vendor.  But with four of the big boys playing, each taking the view that the target market is smart meters and home automation, their room for manoeuvre may rapidly diminish.  A few years ago they struck a joint development agreement with ST, the other major remaining player in this market space.  Both sides may be considering it’s time to cash out on that one, but at what valuation?  The next twelve months will be interesting, both to see whether ZigBee achieves the momentum it has been looking for over the last five years, and which players survive  to profit from it.

This week, following the launch of Bluetooth low energy, the FAQ on the ANT website makes the strange claim that once Bluetooth low energy becomes available in mobile phones, ANT devices can take advantage of a bridge in watches to talk to phones.  It’s difficult to understand what, other than desperation at the advent of real competition, is driving them to say that.  It’s like telling vegetarians that you have a cunning plan which will enable them to eat meat.

Let’s start with the actual question and answer on the ANT site:

Q: Where does ANT fit with Bluetooth low energy (BT-LE)?

A: ANT is thrilled at the prospect of an ultra-low power, low cost wireless portal into cell phones (via an extension to Bluetooth called “low energy”) becoming available at some point in the future. Those wishing to deploy products now and in the next couple of years will be pleased to know that ANT and the ANT+ Interoperable Ecosystem are available now and are proven with millions of installed nodes. Once BT-LE does become available, ANT will provide a seamless, cost effective bridge solution for use in products like watches to enable forward compatibility with the millions of ANT+ devices already in the field at that time. Applications will then be able to take advantage of the best of ANT and ANT+ based products as well as connecting to next generation Bluetooth enabled devices.

I’m glad they’re thrilled about the prospect of Bluetooth low energy, as I am too.  What I don’t quite understand is how they think it is relevant to their future business plan.  Other than as a threat.

Unlike industry standards, like ZigBee and Bluetooth, ANT+ is a wireless standard that was developed by a single company - in this case Dynastream.  It’s not alone in that, and there’s nothing wrong with it, but there are some subtle but important differences between the two approaches.  The first is that standards generated by industry groups normally have multiple companies selling chips. 

It costs a lot to design a wireless chip - typically something between $2 million and $10 million.  So the best way to ensure multiple sources of chips is to get multiple silicon vendors involved in writing the standards.  Having multiple chip suppliers gives manufacturers confidence in the longevity of the standard, increases the number of experts contributing to the standard, so they’re more robust and reliable and helps to get the standard into mainstream products like laptops and phones.  This increases the volumes, driving down the price of chips, persuading more people to use the standard.  It’s a virtuous circle that can work well to get a standard from millions to billions of chips.

Bluetooth low energy was only formally adopted last week, but it already has five different companies offering chips.  For most of its five year life ANT has only had one chip supplier - the specialist RF chip company Nordic Semiconductor, although TI has recently announced support for it.  So it’s not yet seen massive growth, nor is it integrated into any phone of PC.  Whereas Bluetooth low energy will be, as it becomes part of the next generation of Bluetooth chips, which are already in these products.

The ANT answer tacitly acknowledges that it won’t make it into phones, hence the suggestion that it would need a bridge in a watch that converts ANT to Bluetooth.  However, this means the watch needs two radios, which would effectively double its power consumption, halving its battery life.  Which is not the ideal approach for a low power solution.

The second difference between industry standards and company developed ones is that in the latter case it means that one company owns all of the intellectual property in the standard.  They either licence this to each company using it, or bundle the licence through the chips.  It’s an approach that can make it faster to get to market, but it can cause worries.  Standards with lots of members generally ask every member company to agree to pool any relevant patents or IP so that everyone can use them without risk of infringement.  That means that the chance of patent infringement is low, particularly for a standard like Bluetooth, where over 13,000 companies have signed up to this principle.  The risk is not non-existent, but it’s about as good as you’ll get.  It also means that no single company can change their mind and withdraw a patent or control who they are selling the technology to.

That may not normally be a problem with a company owned standard.  It wasn’t with ANT.  Until Garmin acquired them.  At which point a lot of sports and fitness manufacturers realised that they were relying on a wireless technology that was owned by one of their competitors.

Companies are pragmatic; they generally realise that in the early stages of a market, it’s better to work together to grow the opportunity, rather than fight each other.  So the use of ANT has grown.  It’s readily available, easy to use, and it has a fast, efficient process to add new profiles.  But as Bluetooth low energy has come closer to market, more and more of these companies have started to show an interest in jumping ship.  That’s not just to move to a non-competitive licensing regime, but also to take advantage of the potential connections that they can make with billions of Bluetooth low energy enabled mobile phones.  And Bluetooth low energy has put in place a process for introducing new profiles which is just as fast and efficient as that within ANT.  So it will be able to support most of the applications that currently use ANT within the coming months.

That’s a prospect that obviously has ANT rattled.  Within five days of the publication of the Bluetooth low energy standard they’re posting this answer that they can “bridge” to Bluetooth low energy.  It’s certainly possible, but sports and fitness manufacturers don’t need to bridge if they adopt Bluetooth low energy in their products - they can connect directly. 

And any implication that the two are compatible is nonsense - they’re different radios and protocol stacks.  Time will tell which standard is adopted by the industry - they need to compete on their merits.  But it looks as if Bluetooth low energy has won the first round, just by announcing its existence.

(If you’d like to buy one of the anteater toys, go to Custom Coastal Store.  I’m not sure if it has blue teeth, but I thought its blue snout was rather appropriate.)

Bluetooth low energy is not just a variant of the existing Bluetooth specification - it’s an entirely new standard that’s been optimised for low power and internet connectivity.  It marks a step change in short range wireless, providing a new short range connection for a new decade.

That may sound somewhat overblown, but it’s true.  If you look at other wireless standards they differ mainly in topology.  Bluetooth classic (the one you’ve already got) is mostly used as a simple cable replacement to connect two devices to each other, whether that’s a headset, a games controller or a milking machine.  Wi-Fi connects devices to a static access point, which can then link them to a broadband connection and ZigBee connects a collection of devices together into a mesh.  If you want to do anything other than that with any of them, it’s quite difficult.

Bluetooth low energy turns a lot of conventional wireless thinking on its head.  It is a very asymmetric design, allowing you to make very simple devices, which can be very cheap.  These spend most of their life asleep, waking up occasionally to send data about themselves to something like a phone, a PC or a home gateway.  They ask these devices to forward that data to the internet, allowing them to function as web-connected products which can interact directly with web applications.  When they’re not doing that they go back to sleep.

These may seem a minor difference, but it has a profound effect on the way that you can design devices.  The fact that they sleep most of the time, means that they are very, very low power.  For many applications they can run off a small coin cell for years.  It means that the battery essentially lasts for the life of the product.  So you can design connected devices that never need charging.  If you don’t want a battery, you can use a tiny solar cell instead.  Bluetooth low energy takes a fraction of the power of other so-called low power wireless technologies.  The chips are so small, that a complete product can be made that’s the same size as the coin cell that powers it, and only a few millimetres thicker.

When they talk to a phone, they can display their data on the phone, or ask the phone to send it on to the net.  If the phone supports downloadable applications, then the device can tell it which apps to offer to the customer, making it even easier for them to load them.  In other words, it’s an architecture that’s designed for the new world of apps stores and the internet of things.

Blueooth low energy has taken a long time coming, but there are good reasons for that.  It first started life nine years ago in 2001, when it was presented by Nokia as a potential option for 802.15.4.  That’s the standard that eventually grew to spawn ZigBee, 6LowPAN, and a host of other radios.  Nokia’s proposal wasn’t accepted, so they continued to develop it with local partners, before launching it on the world as Wibree.  From there it was transferred to the Bluetooth SIG under the name of Ultra Low Power, from which it morphed into Bluetooth low energy.

It’s turned out to be a fruitful journey.  From the start, it had a different premise to other wireless standards.  Even back in 2001, Nokia’s vision was that it would be a low power radio that would allow everything that we carry with us or have around us to connect to a mobile phone.  Whereas other radios have had their market expectation set by the number of devices they can fit into (five billion for mobile phones, one billion for PCs), by using the mobile phone as a hub, the expectation was that this was a radio whose potential could be trillions of devices.

But if it was ever to get to that volume, or even to tens of billions, everything about it had to be right.  It needed to be the lowest power of any radio; it had to be the most robust against interference; it was vital that it was the lowest cost; interoperability was imperative, as was security and it had to be easy to implement.  Putting all of that together was not an easy task.  And it took time.

The prospect of what it could do galvanised the industry.  RF experts who had previously been involved with proprietary low power wireless chips joined in to add their expertise.  So did those who had designed the ultra low power radio behind ANT.  Drawing on the expertise of its 13,000 member companies, and its own experience of eleven years of wireless design, the SIG took the bold step of giving those designers a largely blank sheet of paper with the task of designing the best low power radio and protocol stack in the world.  Today the resulting specification has been adopted and I believe it is very much fit for purpose.

The task now is to put the chips and development kits into the hands of innovative designers and let their imagination run riot.  Anything that we touch or use can employ Bluetooth low energy to send its data to the net.  When you fill up a beer glass it can tot up your total on your Facebook page.  Your new remote control can work with any piece of audio or video equipment in the house.  When you lose it down the side of the sofa, you can find it using your phone.  Your mouse can run far longer on its batteries (limited only by its optical sensor), and with the advent of new medical sensors, it can send your pulse to your GoogleHealth record whilst you’re struggling to install Microsoft’s latest upgrade.

What gives it an unfair advantage over any other wireless standard is its ability to talk to the next generation of Bluetooth chips in mobile phones.  In a few years these phones will act as internet gateway for billions and then tens of billions of connected devices.  It’s the technology that the sports and fitness market have been waiting for, as has the consumer health industry.  It also gives the smart energy market a real standard to work with that will be ubiquitous in the Home Area Network, where it will gain dominance through its position in the mobile phone and remote control. 

And it has one more trump card - it has a roadmap to a price point that has the potential to decimate other wireless standards.  When Bluetooth chips first appeared on the market, they cost around $20.  Ten years later, in volume, that price has fallen to $1, driven by the volume of a billion chips per year.  Bluetooth low energy was designed to be low cost, even in low volume.  Today, for initial small volume applications, Bluetooth low energy chips will cost a few dollars.  Over the coming years, as it follows the same volume path,  that’s projected to fall to less than 20 cents.  It’s the only way any technology can get to the trillions.  It means it will become cheaper to use Bluetooth low energy as a wireless link than it will be to use a cable and connector.  In cars and household appliance, it will be cost effective to replace cables between front panel controls and displays and the control electronics inside them, which means it really will make sense to have Bluetooth in your fridge.  And the same chip can connect to the net to provide maintenance data, giving double value.  Effectively, connectivity becomes free.

It promises to be a revolution in the way products are designed and used.  If successful, it will do to connectivity what microprocessors did for control and applications.  The Bluetooth SIG has provided the standard.  It’s time to add your imagination.

To learn more about Bluetooth low energy, download the specification from the Bluetooth SIG website.  You can also read about how it works and how to use it in my new book - Essentials of Short Range Wireless, which is published on 7^th July.

Outside the confines of the technical working groups, Bluetooth low energy is still a fairly well kept secret.  Yet it has the potential to overtake Bluetooth usage in just a few years, growing to a volume of multiple billions of chips per year.  It is the only wireless technology that has the potential to challenge and surpass the shipment volumes of cellular.  Yet even within the Bluetooth community, there are many that have not yet understood this potential.

One of the reasons for that lack of understanding is that Bluetooth low energy is a wireless standard for a new generation of applications.  Every previous wireless standard comes from the mindset of being a cable replacement which connects devices that never change their behaviour.  That is true even if there’s a mesh involved.  And it’s the way that most products were designed until a year or two ago. 

Two things have changed that.  The first is the concept of machine-to-machine communications where products connect directly to the Internet.  The second is the emergence of the Apps store, where handset owners can download and install new features every day.  Bluetooth low energy has a new architecture that fits both of these models.  Even more importantly, it allows them to converge.  As such, it is the first wireless technology designed for the second decade of this century.  Here’s why…

Today almost no products in the consumer space are designed that connect to the internet.  It may be possible to connect them to a PC and from there to a web application, but they invariably look as if the internet connection is an afterthought.  In the future, as it becomes simple to make devices connect and communicate with a web application we will see some fundamental changes.  Designers will be able to consider the web connection as a core part of its functionality.  Without it the product will be as useless as it would be without its power supply.  A few companies have pioneered this approach using Wi-Fi, notably the Nabaztag rabbit, the Withings scale and the Chumby radio alarm but none have yet made it to the mainstream, not least because they’re still difficult to set up.

Bluetooth low energy promises to change that.  From a performance point of view, it’s optimised for very low power devices, that can run from coin cells for months or years.  It is limited to small amounts of data, but it compensates by providing a way for products to automatically connect to the net.  Moreover, it’s very small, so it can be squeezed into almost anything we user, or even wear.

It makes internet connectivity easy by allowing a device to be pre-programmed with the web site or service it needs to connect to.  Once it is paired to a phone or another gateway device, it asks the gateway to provide a secure link to that website.  From that point, the gateway acts like a pipe, allowing the device and web application to communicate with each other.  Every time the device has data to send, it just sends it.

It’s a scheme that means that almost any device can be designed to be web connected.  There are some obvious first examples, such as sports and fitness equipment, smart meters and consumer healthcare products.  In some cases they will connect via a mobile phone, in others through a home gateway.  In areas like home automation and smart energy, Bluetooth low energy offers some real advantages.  The radio has been redesigned to improve the range, but retains the Adaptive Frequency Hopping of Bluetooth.  That makes it very robust against interference in the 2.4GHz band, something that is a major concern to smart meter manufacturers.

Although for many users, the phone will act as a transparent pipe, Bluetooth low energy also provides the phone with information that helps it choose the best downloadable applications for the device. So rather than the user having to work out which applications work with their new product, the phone can interrogate it and automatically fetch a list of those it knows will work.  Making it easy is an important tool in making those products fun and desirable.

For users it opens up a whole new world of accessories that can work with their phone.  For operators it allows them to move past the handset and offer services that no longer need the user to touch the keypad of their handset.

And that’s just the first step.  As designers start to understand that they can embed sensors into all sorts of devices, we’ll see innovative new products that measure and do things we’d not expected.  In healthcare, that may be by adding sensors to everyday objects.  For the socially networks, that may be beer glasses that automatically tot up your consumption on your Facebook page.  For product design it will signal a step change in design possibilities similar to that which came with the introduction of the microprocessor.

Members of the Bluetooth SIG (and that’s over 13,000 of the world’s largest companies) can access the specification now.  If you’re not a member, it’s free to join at www.bluetooth.org.  The chip companies are confident that they’ll have development kits available by the summer, so now’s the time start thinking about what an internet connection would mean for your product.

ARPU is precious.  Brand is even more precious.  As without that, you’re just a data pipe.  But both are fading.  The only thing that consumers appear to value these days is downloadable apps, and lots of them.  Last year at MWC, every operator was busy launching their own Apps Store.  A year on, the cellular shires have realised fighting alone didn’t work, so they’ve banded together to pit their combined forces against the dark empire.

It’s an odd alliance, and probably one that is doomed to failure. 

The Wholesale Applications Community is an alliance of twenty four operators, along with Sony-Ericsson, LG and Samsung (a.k.a the handset vendors who don’t have their own high profile apps stores).  This fighting force has been assembled by the GSMA to develop an open platform to deliver applications to their users.  Or presumably those users who don’t own an Apple, Android or Nokia handset.  Essentially, it’s all about supporting widgets, which isn’t a bad thing, by building on the JIL and OMTP BONDI standards. 

I’m assuming that JIL and OMTP think it’s a good idea, as it gets them into more devices, but neither were excited enough to issue a press release.  For that we had to rely on the GSMA.  They waxed lyrical about the way it was completely in line with their principles, and leveraged the work they had already done on OneAPI, which also got its own release.  I’ve always been a bit sceptical about OneAPI, as I don’t see why compelling mobile applications needs to know much about the network.  The good old wired internet seems to have done quite well without a similar knowledge of the ISPs and the grotty last mile of cable.

Which brings me back to that question of doom.  For that I’d like to digress into a brief discussion on jobs and hiring.  Not the sort you and I hanker for, but the rather elegant theories of Clayton Christensen at the Harvard Business School.  If you’ve not read his books, I’d recommend them.  He highlights the distinction between the world where marketeers think they know what consumers want, and what consumers actually do.  In his world, consumers have jobs that need to be done, like constructively wasting their time, or amusing their friends.  Hence they hire a service to fulfil that job - in this case, downloading an app from the iPhone store.  Business models that are successful work on the premise of understanding the job that the consumer needs to do.

My concern with the Wholesale Applications Community is that it doesn’t do that.  Instead it looks at how it can imitate a competitor without understanding the consumer’s job requirements.  Hence I suspect it may quietly die.  To see why, we need to look more deeply into the Apple and Android models.

What most analysts and commentators seem to ignore the fact that Apple didn’t invent the Apps Store model.  Credit to that goes to NTT DoCoMo in Japan, who put all of the pieces in place when they launched their i-mode service back in 1999 (yes, that was back in the last century).  They realised that if everything was going to work they needed to own the handset, the protocols, the application platform, the interfaces, the network, an equitable revenue split with the application developers and a light touch control of the applications themselves.  In other words, you need to own everything in the chain.  A number of European operators tried to bring the i-mode model to Europe, but broke it by trying to change key parts of the model, breaking that end to end ownership.  Apple’s bright idea was to realise that there was one part of the end-to-end chain which you could remove without breaking the model, which was the network pipe.  Their genius was to use the brand awareness they’d already built with the iPod to persuade the operators to let them own every other part of the model.  The rest is history.

i-mode is still going strong in Japan, with 48 million users and growing.  This should be a source of concern for operators, as it suggests that if the Western public behaves in the same way, they’re not going to get bored with their Apples and Androids and switch to something else.

Rather than relying on the hobbits to pull WAC together, what the industry needs is some real wizardry.  At Barcelona, that came in the form of Tadashi Onodera, president and chairman of Japanese operator KDDI.   KDDI don’t support i-mode, having gone down a 3G route, but they do duplicate the end to end control with their iida phones and services.  What Onodera-san was talking about was differential data pricing on an IP network.

Differential data pricing is about being a much smarter pipe, where an operator finds ways to justify billing differently for different data usage.  On a very basic level, my network does that today.  They charge me around 25 millipence for each SMS character I send, but only 4 nanopence for the same byte of internet data.  Which makes SMS data about six million times more expensive than internet data. 

KDDI don’t see why there should be a binary pricing structure, but instead believe that specific value should be assigned to different data usage.  So far, that’s a policy that’s noticeably absent from Western networks.  The Kindle is one example of how it can be done, but the fact that it is still largely tethered to a few U.S. networks illustrates how alien the concept is.  Which is a shame, as without that kind of thinking, flat rate is going to be a very heavy cross to bear, whether or not WAC works.

So the Wholesale Applications Community may just be a reality avoidance strategy that deflects from the more important underlying issues.  The whole thing is aimed to be complete in 12 months, just in time to announce it at Mobile World Congress 2011.  Or do I already hear those furry feet scampering round their ivory burrow looking for a next year’s new initiative?

It has been an extraordinary journey.  I missed the first five years, but have been involved for the last twenty, predominantly trying to encourage data applications and moving services past the phone to internet connected devices.  That’s not been the most successful area of the industry, although I believe its time is about to come.  What last night proved was how radically the growth of the mobile industry has changed our lives.

Given our familiarity and love for our phones, it’s easy to forget just how great that change has been.  Although the evening was peppered with statistics (there are now 1.29 phone subscriptions for every person in the U.K.), the most telling example of the change came from a relative outsider - Stephen Timms - the Minister for Digital Britain.  His constituency is one of the most deprived ones in the East End of London.  He recounted that twenty years ago, when people came to visit him at his surgeries, very few could provide him with contact details allowing him to get back to them.  Today everyone who comes to him for help has a mobile number.  That’s a small personal confirmation of a finding that the Joseph Rowntree Foundation ascertained last year.  For almost all of the population of the U.K., a mobile phone is now an essential item, whereas a car is a luxury.

In the early days of mobile, the U.K. industry thought they were being over-optimistic in designing infrastructure that would support 2 million users.  Today that seems quaintly naïve.  The mobile operators have come to realise that projections and users will grow without limit.  As a number of speakers pointed out, that poses a problem, as technology can only go so far.  LTE and LTE advanced will give us ever increasing bandwidth (and some rather misguided promises of Gbits/sec were thrown around as the evening progressed), but the event horizon of dear old Dr Shannon, plus some basic physics, will prevent cellular seeing a Moore’s law increase in bandwidth.  What the industry needs is more spectrum.  Speaker after speaker pleaded for the Government and regulators to deliver the digital dividend, but the Minister had neatly foreseen that eventuality and made a speedy exit before the tomatoes were thrown.

The big question is, where next?  Today there are over 4 billion mobile subscribers in the world.  By the end of 2010 that is expected to reach 5 billion.  A phone for everyone within the world is now a possibility.  2G handsets can be made and sold for around $10, 3G ones for less than $20.  The hardware cost is no longer a barrier.  More phones are sold than TVs, cars, or computers.  The sheer scale of the industry is phenomenal.

Once every person has a phone, the logical next step is to connect machines - an issue close to my heart.  All of the cellular crystal ball gazers believe that M2M is the next great market.  Some years ago, Deloitte predicted that by 2020 there would be 60 billion machines in the world.  Last night Ericsson predicted that 50 billion of those would have a cellular connection.  That seemed a little extreme.  Although the cellular industry may be owning all of our souls by then, come the next decade, I expect my toaster and dishwasher may still be keeping themselves to themselves, rather than discussing where to hang out with their friends on MachineBook.  On which point, did you know that Britney Spears has more friends that there are people in Belgium? 

That gem came from Jeni Mundy of Vodafone, who distinguished herself by being the only operator to talk about customers.  And talked very intelligently about them.  She made the very valid point that up until now, networks have largely worked on the principle of “if you build the network, the customer will come”.  That’s changing; we’re now at the point where “if you don’t look after the customer, they’ll leave”.  One aspect of customer behaviour that remains unchanged is the willingness to churn.

Other aspects of customer behaviour is changing behaviour.  For years, the network treated SMS as data.  The advent of the iPhone has changed that and data usage has grown exponentially as the iPhone population has turned its attention to applications like iFart.  Ed Candy put up the graph that stated the major problem that networks face - data usage is going up, but revenue is not.  The whole business model is beginning to look as shaky as Gordon Brown’s handling of the economy.  When we consider that the iPhone still only accounts for around 0.5% of mobile phones in use, there could be a major problem around the corner.  Certainly if we want to add another 50 billion machines, we need to make sure that they concentrate on low bandwidth, high value transactions, rather than adding to the demands on bandwidth and spectrum.

It isn’t just usage that’s changing, so are the underlying dynamics of mobile development.  Europe and the U.S. are no longer the centre of development - that is firmly moving to China and India.  Nokia used to be considered unassailable in terms of handset shipments, but if you take Korea Inc. as a whole, they’ve probably already been pushed into number two position.  If they’ve not, it will happen this year.

If Europe is going to continue to be at the forefront of cellular, we all need to continue to innovate.  Every network speaker talked about convergence between cellular and the computing industry.  Yet we heard that by the end of 2011, which is only next year, sales of smartphone will have passed that of computing devices.  Maybe we need to change our mindset and forget convergence.  As smartphones become the device of choice, our mindset should be is that cellular is supplanting traditional computing.  If we don’t make that change, I expect other developers to the East of us will.

The next 25 years will be challenging.  One of the final questions to the panel was who would be sitting on the stage at Cellular 50?  The panellists did a good job of avoiding the question, but it will almost certainly be a different roster.  Will they have all been bought by the Chinese? Or by French utility companies, once they become dumb pipes?  Will there still be a computing industry?  And will a Britney Spears in her mid fifties have more friends than my vacuum cleaner?

The answers to these, and other questions may, or may not be found in last night’s presentations.  But you’ll need to provide your own alcohol to make as much sense of them as we lucky few did.

Over the years I’ve had that Eureka moment with a number of wireless standards.  They don’t all have it.  Wi-Fi doesn’t - it just does a good job of making Ethernet wireless.  GSM has it in the unlikely form of SMS.  Kevin Holley, who was probably more responsible for SMS than anyone else, should be given an award for that.  ZigBee has it - it’s the moment you realise that within the network you’ve just configured, multiple devices can be having their own, independent wireless conversations at the same time. 

Despite years of being involved with Bluetooth, I’ve not found it there.  Bluetooth is very impressive in its thoroughness, but again, it’s good, competent specmanship, which does what it says on the box.  What Bluetooth has done is to provide a solid base of knowledge for the development of the new Bluetooth low energy standard, which was adopted today.  Over the last year I’ve been helping develop the standard and explaining it to designers and engineers around the world.  During that process I’ve realised that it doesn’t have just one, but two of those Eureka moments.  And it’s been obvious at the conferences I’ve been speaking at, that as soon as developers understand it, they share that excitement.  These two features are the ability for a device to talk directly to a web application, and how easy it is to use.

Enabling Internet Connected Devices

The first Eureka moment centres around the way that Bluetooth low energy will enable the design of Internet Connected Devices.  Today, if you want to make a device that has a wireless connection to the web it’s remarkably difficult.  You can use Bluetooth to connect a device to a mobile phone. But you then need to load an application onto the phone that retrieves data from the device, processes it and then forwards it onto the appropriate IP address.  As most Bluetooth devices connect using the serial port profile, which leaves the data protocol and data format up to the discretion of the manufacturer, it means that every device needs its own specific application to be loaded on the phone.  And because there are so many different phone platforms, each with an incompatible operating system, you’ll need to write twenty or thirty different versions of this application.  Not surprisingly, there aren’t many of these around.

Wi-Fi is not much easier, which may come as a surprise.  The problem with making a self contained Wi-Fi product is that you need a pretty hefty processor to run the driver and TCP/IP stack.  That pushes the component and development costs up.  So what seems easy on a laptop, rapidly becomes a project that is heavy on both development cost and battery life.  There are a few such devices around, of which my favourite is the Nabaztag rabbit.  But it’s not something that really works with mobile, low cost devices, although a few companies are trying to change that with low power Wi-Fi chips.  So Wi-Fi based Internet Connected Devices are few and far between.

Eureka Moment Number 1

Now for the first Bluetooth low energy Eureka moment.  For the first time, a specification has looked at the entire ecosystem that is needed for a device to connect to a web application.  It’s designed to spend most of its life asleep, so it can run on a coin cell for years.  When it has something to say, because it’s measured something or someone’s pushed a button, it can send that snippet of information.  Now comes the clever bit.

Every handset that supports Bluetooth low energy can have a generic gateway application loaded at manufacture.  When a Bluetooth low energy device first connects to your phone, it can tell this application which IP address or website it would like to connect with.  The gateway application opens a secure tunnel from the device to this address, and then sits aside while the web application configures the Bluetooth low energy device.  After that, whenever the device has data to send, it informs the phone, which reopens the tunnel and allows the device to talk to its web application.

If you’ve not had the Eureka moment yet, let me explain the beauty of this approach.  You don’t need to load anything onto your phone.  Let me say that again - “You don’t need to load anything onto your phone.”  If you go down to your local store and buy a Bluetooth low energy device, it will be able to connect to its website via your phone as soon as you turn it on.  All you have to do is say “yes” when the phone asks if it’s OK to set up that connection.  It means that every device will work with every phone. 

Once designers get this, they start to look at the things around them with totally different eyes.  Almost everything we own has some intrinsic piece of data.  My chair knows my weight,  my beer glass knows how much I’ve drunk, my tennis racket knows I’ve hit the ball (or missed it).  Today none of these devices share that information.  Bluetooth low energy makes it possible and it makes it cheap.  To help designers start to think abut how devices can share their intrinsic data and turn it into a compelling application, the Bluetooth SIG has been running its Innovation World Cup to encourage them to come up with new ideas in the area of sports and fitness.  The first results get announced next February - expect some exciting new product ideas.

Ease of Use - Eureka Moment Number 2

The second Eureka moment was one I’d not initially noticed, but dawned on me as I started to explain how Bluetooth low energy works to various groups of engineers.  It’s the fact that it’s so easy to use.

With every other wireless standard you need to spend quite a lot of time understanding how the underlying standard works.  That’s because they do a poor job of hiding their complexity.  Instead they tend to let it creep up into their profiles, which become extremely difficult to use.

Bluetooth low energy has a much more streamlined structure, which integrates far more of the protocol and data formatting into the core standard.  Instead of complex profiles, there is an object oriented set of features exposed by each device, which the application at the other end uses to set its behaviour.

The effect of this is that development times plummet from months to days. At the recent Bluetooth low energy conference in Beijing, Texas Instruments showed a video of a remote controlled toy car using their Bluetooth low energy chips.  It demonstrated the excellent range of low energy (around 100 metres), but the thing that most impressed delegates was the development time.  When planning the work, they’d initially though about the timescales they’d seen for other projects - around three months.  With Bluetooth low energy it was days.

The availability of qualified chips should mean we should see development kits landing in the laps of designers early in the New Year.  Bluetooth low energy is so easy to use that I think these will become a must-have for those Friday afternoon projects.  And for the first time, engineers will be able to think of an application one evening and have a real chance of having a demo working by the following evening.  That will change the way we design all sorts of products.  And it’s enough to make anyone jump out of the bath.

For many of the reports, that analysis seems to be based on little more than the relative number of press releases that the two organisations send out.  For some reason known only to itself, the Bluetooth SIG is remarkably reticent about publicising its technology, preferring to sit quietly on its laurels of shipments of over a billion chips per year (1,050 million in 2008 - IMS).  Wi-Fi tends to be more vociferous about its plans, possibly stung by the fact that it manages to ship only just over a third of that (387 million in 2008 - Instat).  As is often the case with young pretenders, noise can be rather more noticeable than actions.  (Incidentally, no other short range standard gets within an order of magnitude of the lower of these figures.)

A few articles dug down a bit more into the technology itself, and came to less of a conclusion as a result.  None of them thought about what really matters, which is what the user experience will look like.  So let’s do exactly that…

First, what are the features of each?  Bluetooth has always used to solve the issue of ad-hoc connections between mobile devices, typically letting users connect phones to headsets and also to transfer content such as photos and music between phones.  The first use case has largely sold to professional users who want to make calls when driving.  The second, of impromptu content transfer, is widely used by kids and students.  (Anyone over the age of twenty-five would probably think of email as the obvious first choice for sharing data.)

In comparison, Wi-Fi’s core ability is to connect laptops and devices pretending to be PCs to the internet via a fixed access point.  The underlying technology - 802.11 has always been able to make ad-hoc connections, but in practice they have not been very compatible and lacked any form of security. 

The problem with ad-hoc content sharing is that the content on mobile devices keeps on getting bigger.  In the early days of Bluetooth, pictures were typically only a few tens of kilobytes, which fitted well with Bluetooth’s 723 kbit/s maximum data throughput.  Today with 10 Mpixel cameras, images have grown to several Mbytes, which take an appreciable time to transfer, even with Bluetooth’s Enhanced Data Rate of 2.1 Mbit/sec. 

Both standards would like to “own” the space of ad-hoc content transfer.  And both sees an opportunity if it can increase its real data transfer throughput, or in the case of Wi-Fi Direct, make ad-hoc connections work.  Earlier this year, Bluetooth made a pre-emptive foray with the release of the Bluetooth 3.0+HS standard.  The HS stands for High Speed (or possibly Hope Springs eternal…).  This is quite a clever approach.  It has not changed the basic Bluetooth radio - that still runs at 2.1Mbps.  But it has worked out a way for Bluetooth to take control of the underlying 802.11g radio within a device and use that just for the data transfer, upping the data throughput to around 24Mbps.  (All of the figures I’m giving are real figures which you might hope to get after all of the protocol overheads have been taken into account.  The headline 54Mbps of 802.11g is a technical fiction as far as real world performance is concerned.) 

The Bluetooth approach has some neat features:

• The security is still covered by the underlying Bluetooth link.  That makes it easy and secure to make new connections to your friend’s device.
• The 802.11 radio is only turned on when it’s needed to increase the data rate, so it doesn’t eat up the phone battery the rest of the time, and
• In theory it’s still possible to use the 802.11 radio for a simultaneous Wi-Fi connection to an access point.

We don’t know much else about Wi-Fi direct, as the announcement is just that - a piece of PR to say it’s coming.  But it has its roots in Ozmo Devices’ Ultra Low Power wireless technology, which has revisited the ad-hoc aspect of the 802.11 standard to fill in the holes and done a good job of that, as well as adding security and reducing the power consumption.   The Wi-Fi direct standard appears to be based on this and is due to appear early in the second half of 2010.  The transfer speed of Wi-Fi Direct is… 

As you can see, there are still a number of technical questions surrounding Wi-Fi direct.  Such as what the transfer speed is, how will it manage ad-hoc security in an easy to use way, will it allow hotspot connections at the same time and what will it do to power consumption?  We won’t really know the answers to these questions until we see the first demos, when we will be able to do a like-for-like comparison.  And Bluetooth will probably have evolved some more in the meantime.  It will be interesting to get that that point.  I suspect there will not be a lot to choose between them in terms of performance.

When that will be is an interesting question.  Like any other standards group, the Wi-Fi Alliance is a group of companies all of whom a vested interest in the standard.  There’s nothing wrong with that, as it brings the industry together.  But in the course of developing a standard many of those companies want to add their own Intellectual Property to it. Partly that’s to improve the standard, by incorporating as many of the best ideas as possible.  And partly that’s to ensure that no one company has an overwhelming technical advantage.  Today I suspect that Ozmo might be in the position of having that overwhelming technical advantage, so it would not surprise me to see the deadline for Wi-Fi Direct slipping from the promise of mid-2010 as competitors try to “improve” the specification to their advantage.

Whether or not that happens is probably irrelevant, because technology is not going to win this battle.  At the end of the day both Bluetooth 3.0+HS and Wi-Fi are just transports.  In other words, they are standards that define how the radios put bits of information over the air and how the protocol stack formats that information.  They’re just the wheels on the car.  Neither defines how the operation is presented to the user.

Bluetooth goes a little further in this respect, by defining application profiles which tell devices how to manage the content transfer, but they don’t extend up into the user interface. 

And this is where we come to the real battleground.  A user does not care how the data gets from one device to another, as long as it’s quick and intuitive.  Today on a phone they will typically select the “Send” function and then choose “via Bluetooth” if they’re under 25, or “via email” if they’re not.  That gives Bluetooth 3.0+HS an advantage, as the user interface remains the same - the underlying specification is responsible for seeing if both devices support the use of 802.11 and if they do, it uses it.

I don’t think users will want to see another option “via Wi-Fi direct”.  But with the way interfaces work today it would need that.  That’s the biggest challenge for Wi-Fi Direct - to get onto the phone’s menu.

What makes this a phony battle is that there’s another stalking technology out there - the femtocell.  If femtocells take off and users get used to using the network itself for transferring data between devices, then ad-hoc transfers may lose out altogether.  It may also signal a change to the way that phone interfaces are written.  I would argue that the Send function on a phone should only need one option - the contact you want to send it to, not the technology used to send it.  Today that’s not there, because the networks are not reliable enough for it to be the only option.  In the future it may be. 

There’s no reason why the phone should not look to see whether the recipient device is close enough to use a Bluetooth or Wi-Fi connection instead, but that should be up to the phone.  Which means that although they’re there, Bluetooth and Wi-Fi Direct become invisible.  Neither Standards body wants to hear that message, but users would probably be elated to get something that just works.

One final thought.   If either succeeds, they will drive a cart and horses through DRM by making it really easy to share content.  But that’s another story…

The mood of the industry has become increasingly upbeat.  It was noticeable in Munich that a significant number of companies have moved from cautious interest to being serious about starting to deploy it.  The questions that they are asking have changed to the practical ones of qualification and access to test equipment.  That change in mood was reinforced by the Bluetooth SIG announcing that the specification is on course to be released this December.  

The Bluetooth low energy standard can be confusing at first.  Although it carries the name Bluetooth, it is a completely new radio with a completely new protocol stack on top of it.   It has been designed from scratch to allow developers to add connectivity to products that only want to send small pieces of data on an irregular basis, but with such low power consumption that it can run on coin cells.  The companies attending the Conference in Munich have understood that difference and are keen to exploit the new products and service models that Bluetooth low energy offers. 

What does the Bluetooth low energy model mean?  Typical applications that send small bits of data are many and varied.  They include TV remote controls, room thermostats, key tags, alarm clocks, running shoes, weighing scales, fall alarms - the things we use in everyday life that occasionally need to tell us something.  The important thing is that they don’t do it all the time.  That means that they can often run off a small battery that lasts for the life of the product.  Bluetooth low energy is designed to let them acquire the ability to send that data wirelessly without having any significant impact on the battery life.  It means that all of these products that have never communicated before can start to have conversations - sending their data to a mobile phone or a website. 

To repeat the important bit, Bluetooth low energy is a new radio.  It works at the same 2.4 GHz frequency as normal Bluetooth, but the two can’t talk to each other.  Which makes people wonder why it’s called Bluetooth?  The reason is that it has been designed so that it is possible to make silicon chips that include both Bluetooth and Bluetooth low energy within the one chip.  The clever piece about this is that the design of Bluetooth low energy lets it share much of the same radio, and use a combined protocol stack.
There’s a lot of clever technology in doing that.  What it means in practice is that chip makers can produce a chip that can talk Bluetooth to your headset at the same time that it is talking Bluetooth low energy to your running shoes.  These chips are called dual mode chips.  And because they share most of their circuitry across these two standards, they’re no bigger and cost no more than today’s ordinary Bluetooth chips.

Dual-mode chips will start appearing in handsets and laptops in the second half of 2010.  As well as supporting all of the traditional Bluetooth applications and use cases, they’ll be the beginning of an ecosystem of Bluetooth low energy devices that will start to open up a whole new world of applications and opportunities. 

At the device end, there will be small, low cost chips that only implement the low power part of the Bluetooth low energy standard.  CSR explained that they’ve been able to put the entire Bluetooth low energy standard onto a chip that is just 4.5mm square.  That’s so small you can fit two of them onto your little finger nail.  So they can be added to almost anything - it’s smaller than the battery.

This is where things get exciting.  All of these new devices will be able to send data to a mobile phone, which can act as a gateway to transfer it to a web application.  That means that everyday devices can start to communicate with web services.  Unlike any standard that has come before, Bluetooth low energy describes how data gets from the device all of the way to the web.  That allows handset vendors to ship their phones with a generic gateway function that will work with any device.  There are two important consequences that come out of that:

• Any device that contains data can talk to the web. 
• Applications developers and service providers can offer services for these devices.

 A device doesn’t need to be complicated to generate data.  Some data is obvious, like weight, or temperature or blood pressure.  But most devices contain intrinsic data.  Light switches have binary ON/OFF data.  A chair knows that someone is sitting on it.  A stapler knows it has run out of staples.  A tennis racket knows you have hit the ball (or missed it).  Bluetooth low energy allows product and application designers to think about what all of this intrinsic data means and how it can be used, particularly when it’s coupled with a web application.

In Munich, we heard from many industry sectors.  We heard about the need for connectivity in health and wellness devices.  Suunto talked about its use in sport and fitness equipment.   Emerson told delegates about the way they plan to use it in home automation, adding it to everything from central heating and air conditioning to smart energy metering and swimming pool controls.  It’s generating interest from car manufacturers, who want to take advantage of it to remove wiring.  And network operators are keen to exploit the new service models that come from connecting devices through mobile phones.

For designers, the tools and chips are starting to arrive.  TI, Nordic and CSR were updating delegates on their chips at the Munich Conference, just hours before EM Microelectronics and Triad were doing the same in California.  Momentum is gathering - there’s a strong feeling that with the standard nearing completion and multiple vendors launching chips, that 2010 will see the first products in the shops.  If you’ve not started looking at it, now’s the time to get to know Bluetooth low energy.

They come as a worrying dose of reality given the promises of Lord Carter’s Digital Britain report.  Whilst 3 can claim to have something approaching the start of coverage (and I’d stress that it’s only the start of coverage), the efforts of the other four, and in particular O2 is nothing less than shameful.

There are a couple of things that make this even more concerning.  The first is that the results are essentially theoretical, based on an agreed propagation model; OFCOM has yet to validate them on a large scale by checking actual reception.  The report mentions that where a comparison was made with test drive data it resulted in an 8dB correction, but they don’t mention in which direction, or whether it is reflected in the maps.  The second concern is that this is presumably the coverage for voice.  If we look at mobile data, we know two things:  a much better link budget is required to achieve decent data rates as edge effects drastically limit the effective size of the cell when multiple handsets are using it (See my earlier post and Moray Rumney’s excellent article).  If these are applied to the coverage maps, the prospect for national mobile broadband looks like a pipedream.

The question is whether publication of this data will shame the networks into improving their coverage.

The prospect is not good.  It probably comes as a surprise to most users that 3 has the best 3G network within the UK, as most people’s experience of coverage is better for the other four networks.  However, that conceals the fact that the other networks also have long established 2G networks running at 900 MHz and 1800MHz.  All of the handsets that they ship are dual mode, switching automatically between the 2G and 3G networks.  As most of our experience is with voice calls, we tend not to notice the poor 3G coverage, as the handset compensates by switching to 2G.  Which lets the other four networks get away with a relatively poor 3G network.  (If you want to experience true 3G coverage on your phone, go to the network setting and set your phone to 3G/UMTS only.  Then try to make a call).

O2’s 3G coverage seems to be all at sea.  From the OFCOM maps it looks as if you’re more likely to get a signal if you’re sailing aroudn the coast than if your’re firmly rooted on terra firma.

One way to extend 3G coverage is to “refarm” the existing 900 MHz and 1800 MHz spectrum for use as a 3G network.  The rationale for doing this is that 3G networks provide greater capacity and we end up with more efficient use of the spectrum.  OFCOM has proposed this and the networks have resisted it.  Looking at the coverage maps it’s easy to understand why.

However, unless they bite the bullet, the prospect for mobile broadband is dire.  OFCOM’s maps indicate how much of the time users are unknowingly relying on the existing 2G networks with data applications running on GPRS and EDGE.  Neither technology offers the capacity to support any significant expansion of usage.  Which is worrying given the desirability of the iPhone and its coming trance of competitors, such as the Android and Palm handsets.  If they come with data intensive applications the networks will grind to a halt.  In the US, a number of disgruntled iPhone users are taking action against Apple.  If UK users take the same route, the OFCOM report is probably all of the evidence they need.

Ten years ago, when WAP first emerged onto the market, the networks excitedly promoted it as Mobile Internet, disappointing customers who believed them.  This time around the technology is capable, but the promise of mobile Broadband looks as if it will be equally empty, due to an inability to provide the infrastructure to support it.  While Lord Carter dreams of a future of mobile broadband, he might be better going out and buying a big boot.