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OK, that is a bit over the top! Nielsen Mobile came out with a report that points out that there were 13 million mobile data cards in the U.S. at the end of June 2008. Not a big surprise, since wireless carriers in the U.S. are having a blockbuster year as far as mobile Internet revenues are concerned. The GigaOM Team has about seven of them and uses them for business and filing stuff when on the road. Apparently, so do a lot of people. However, Nielsen points out that there is a change in the making.

…Nielsen’s research reveals that the cards are beginning to play an important role in home and personal Internet access, as well. In fact, 43 percent of mobile data card users report they most often use their data card at home, while 15 percent say they typically use the card at work. Additionally, one in five (21 percent) data card subscribers take advantage of ubiquitous access by heading outdoors and 9 percent use their card while commuting.

An easy explanation would be better price packages and higher speed tiers, thanks to newer 3G technologies. Of the nearly 1,300 mobile data card users Nielsen surveyed, more than 99 percent still kept their wired broadband service: 40 percent of card users also have cable broadband and 34 percent also have DSL in their home. That number can jump to 59 percent, giving wired carriers something to think about.

Maybe the wireless guys need to rethink their wireless broadband plans and bring them forward. For phone companies the prospect of being cannibalized by wireless data connections must be scarier than losing them to voice connections. No wonder they started to limit bandwidth transfers on their connections. (Photo courtesy: Novatel Wireless.)

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The iPhone 3G’s problems are a hot topic of discussion these days, with everyone trying to figure out who’s to blame. Is it the fault of the carrier? The software? Or the chips inside the device? While I have a feeling this is really a witches’ brew of all three, the explanations only add to the mystery.

Users are complaining of four basic problems. And notably, they are the same ones that handset makers and carriers in Europe and Asia had to deal with when they started to roll out 3G systems in those regions:

1. Speed of the 3G network is often not as fast as it should be.
2. Switching between the EDGE and 3G networks leads to broken web sessions.
3. For some, the switch between the networks leads to dropped calls.
4. Weak battery life.

A report on BusinessWeek.com today sheds more light on the issue, though there is still no official comment from Apple. According to the report, the problem is impacting 2-3 percent of iPhone traffic. BW cites an unnamed source who notes that considering 1 percent of AT&T calls get dropped, this is a problem, but not a catastrophe.

AT&T: Network Is Fine

AT&T, displaying a classic head-in-the-sand attitude, issued a statement that said, “Overall, the new iPhone is performing just great on our 3G network.” Right, and overall, the Yankees are on target to win the MLB World Series! If it’s performing so well, why are so many people complaining?

Ask anyone in San Francisco or New York and they will make your ears bleed with their tales of iPhone 3G woes. When we asked our readers about their experience, a majority said they were getting speeds only marginally better than the original iPhone. BW offers some clues as to what the problem might be:

Part of the role of the Infineon chip is to check whether there’s enough 3G bandwidth available in a given area. If 3G isn’t available or there isn’t enough bandwidth, the iPhone will be shifted to a slower network. One source says Apple programmed the Infineon chip to demand a more powerful 3G signal than the iPhone really requires. So if too many people try to make a call or go on the Internet in a given area, some of the devices will decide there’s insufficient power and switch to the slower network—even if there is enough 3G bandwidth available.

Apparently this is resulting in problems in areas of high iPhone density — aka San Francisco, Boston etc. — the very markets where Apple has both a strong retail presence and higher-than-average mind share.

Antenna & Weak Signals

Meanwhile, Swedish magazine Ny Teknik is citing unnamed experts that have come up with yet another theory:

… the most likely cause of the 3G problems is defective adjustments between the antenna and an amplifier that captures very weak signals from the antenna. This could lead to poor 3G connectivity and slower data speeds.

And when I tried to test their theory, it made sense. I currently have three 3G handsets — Nokia E71, Nokia N78 and Sony Ericsson U750a — all of which are optimized for the AT&T 3G network. The speeds on those phones are much faster. Similarly, if I pop a 3G SIM card into one of the USB modems, the speeds on AT&T network are quite fast.

Its the 3G Stupid

Finally there is our friend Mike Puchol, who explains how wireless networks work and outlines some of the problems associated with 3G technologies. In his view, the problem is shared bandwidth:

…key issue to remember is that the download rate is “per tower”, not per user. So, if two users using HSDPA are on the same tower, they will each get a maximum throughput of 3.6Mbps. Divide even further, and the more users you have the worse experience everyone gets.

His explanation also makes sense, and ties in with an earlier post of mine in which I looked at the backhaul problems facing U.S. 3G networks and asked whether or not they’d be able to withstand the iPhone 3G stress test.

I get the feeling that this issue isn’t going to die anytime soon. If you have theories, please share them with us.

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Mobilize — Mobile Web Today and Tomorrow

A few days ago, I pointed out that India was finally getting its 3G act together by coming up with a liberal licensing policy that will boost mobile broadband in that country. A similar scenario is playing out across China, Brazil and Russia, which together with India account for a major chunk of the global mobile footprint.

That is one of the main reasons why Infonetics Research is expecting that by year 2011 there will be one mobile broadband connection for every four wired broadband subscribers. The Campbell, Calif.-research firm made some other bold predictions, among them:

• Worldwide mobile subscribers will hit 5.2 billion by 2011
• Cellular mobile broadband subscribers will grow at a compound annual growth rate of 104 percent between 2007 and 2011.

The research firm claims that WiMAX is going to play a role in the spread of mobile broadband as well.I checked with the firm to get more clarifications on the cellular mobile growth.

They said that the number of worldwide cellular mobile broadband subscribers (not including WiMAX or SMS) will more than triple in 2008 from 2007 and to continue ramping quickly through at least 2011. They went on to point out that “with an expected mobile subscriber base passing the 5 billion bar in 2011, which will be migrated to both 3G and 4G networks, there is a lot of potential for mobile broadband subscribers to outnumber wireline broadband subscribers in the long term ( in the 2015-2020 timeframe).”

As high-speed wireless pipes become commonplace, we can expect this new platform to spur innovation just like wired broadband. The availability of high-speed access over DSL and cable resulted in the formation of Skype, YouTube and Facebook. Despite the carrier chokehold on the networks, innovation will soon start to thrive in the wireless broadband world as well.

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So in a couple of days the iPhone 3G is going to go on sale. Like many of you I am going to get this device as part of my duties as an intrepid reporter (and a shameless Apple-holic.) However, if you are rational, then you might want to read these reviews by the big three tech writers and their take on the iPhone 3G before you decide to hand over your credit card to the sales people.

• Walt Mossberg/WSJ: “I found it to be a more capable version of an already excellent device. And now that it’s open to third-party programs, the iPhone has a chance to become a true computing platform with wide versatility…if you can live with the higher service costs and the weaker battery life.”

• Edward Baig/USA Today: “With GPS newly added to the mix, this handheld marvel has no equal among consumer-oriented smart phones. While not everything on my wish list made it onto the new device, Apple has raised the bar with iPhone 3G. To which I offer an enthusiastic thumbs up.”

• David Pogue/NYTimes: “It’s not so much better that it turns all those original iPhones into has-beens. Indeed, the really big deal is the iPhone 2.0 software and the App Store, neither of which requires buying a new iPhone.”

I am sensing some hesitation on the part of the these reviewers. And now that you have read their reviews, are you still interested in buying the iPhone 3G.

Depending which iPhone rumor you believe, the 3G version of iPhone has either been delayed or already landed on U.S. shores and is on its way to being announced at Apple’s WWDC in San Francisco next month. The interest in the 3G version of the iPhone has been building since AT&T executives “accidentally” talked about it at various events.

But whether it’s a new 2G model or a super-fast 3G, there is one thing that’s for sure: The new iPhone has Global Positioning System (GPS) built into it, thanks to legal requirements put in place by the FCC. The company supplying the GPS to iPhone is going to be a big winner in this space; according to my sources, the contract has been nailed down by Broadcom, a relatively new entrant into the GPS market. The Irvine, Calif.-based chip company had acquired Global Locate in July 2007 for $143 million in cash and $80 million in incentives. In the past such a deal would have gone to someone like SIRF, which is in a bit of pain these days.

A recent report in Popular Mechanics outlines some of Apple’s GPS moves. Last year, Google’s Marissa Meyer told us that the Google Maps usage from iPhone was off the charts. Now imagine that Maps feature married to the built-in GPS; the combo could give location based services a big massive boost. Pelago, an LBS social service has already received $15 million in funding for its iPhone application.

Such applications could drive the demand for iPhones, which in turn could be a pretty good thing for Broadcom. I do wonder what impact it will have on standalone devices and if it will catalyze change and new innovation in that market.

Related Links:

• Will context aware be enough for Nokia.
• Are you ready for location-based advertising?
• Location, Location, Location: Deal Volume proxy for interest in Location Based Services.

As noted earlier, wireless industry experts believe that mobile backhaul networks represent a big opportunity, mostly because of the proliferation of 3G and 4G networks and the easy availablity of iPhone-type devices is going to boost mobile data and video use.

Infonetics Research has issued a report that forecasts 4.4 billion mobile subscribers worldwide by 2011, and estimates that their needs will push the demand for wireless backhaul equipment to over $10 billion by that year. Infonetics predicts that the big spending is going to happen on the IP/Ethernet portion of worldwide mobile backhaul equipment with triple-digit growth rates predicted from 2007 to 2011. No surprise: T-Mobile, Swisscom Mobile and Telecom Italia are all building IP/Ethernet based backhaul networks. Ironically, given the amount of money being spent on this sector there isn’t much startup activity in this space.

Mobilkom austria recently made the fastest data call with a mobile device using the pioneering Internet High Speed Packet Access (I-HSPA) technology from Nokia Siemens Networks. Stelera Wireless, a small U.S. operator, launched data services in rural Texas using this technology as well.

During the trial, the data transmission downlink speed reached 10.1 Mbps. I-HSPA will be capable of data transmission rates over 10.1 Mbps, NSN claims. The I-HSPA functionality is designed for heavy data and rich multimedia usage over the wireless network. I-HSPA connects 3G base stations directly to the Internet, enables cost-efficient scaling of the network, works with all HSPA devices and improves end user experience by reducing latency. I-HSPA flat network architecture also enables smooth migration to LTE.