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Feature
DECTweb
brings you occasional feature articles from well known names in the cordless
telecommunications industry. If you would like to offer an article for
consideration please e-mail us with your
biographical details and an outline for the proposed feature.
The current feature is contributed by Dominic Clancy,
International Product Marketing Manager with Philips Semiconductors, and addresses the
issue of why data is of importance to the cordless industry.
Dominic has been involved in cordless telecommunications since its inception,
having undertaken the first market studies back in the 1980's and having previously worked
for BIS-Mackintosh (now part of the Giga Group), GPT and Motorola.
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WHY IS DATA IMPORTANT FOR THE
CORDLESS COMMUNITY ?
by DOMINIC CLANCY
Philips Semiconductor
Introduction
As the telecommunications world becomes more competitive
every day, it
is also clear that data also has a higher profile in our lives.
All
the telecom operators already see that the level of data traffic
on
their networks is increasing - to the point that in some
countries,
that data traffic exceeds the level of voice traffic in the
network.
In a parallel development, the cellular operators are
increasingly
targeting the market for residential users. By reducing
their
off-peak tariffs, and by introducing home-cell tariffs, they are
starting to offer their customers residential telephony through
their
cellular service at no cost premium. This gives these
cellular users
the real option of dispensing with the fixed line for voice
traffic.
The cellular operators are therefore starting to target the core
of
the cordless market, the home user of the simple cordless
telephone.
In the words of one operator :
"90% of all mainstream communications - data as well as
voice- will be
on wireless networks, with most households having more than one
mobile
phone"
The attraction for the user is clear - in many cases a subsidised
cellular handset and service costs the same (or less than) a
cordless
phone. Cellular is increasingly used by students and young
people as
the ONLY phone they have, and as they get older, there is little
obvious reason for them to change their telephony habits.
This view
is reinforced by a study in the USA that concluded that 42%of
Americans would switch to mobile services if the price was
comparable
to fixed line service. For the cellular handset
manufacturers, the
existing volume of cordless phones would also be a nice addition
to
their annual sales!
The cellular community however has a significant weakness
in its
armoury. The existing cellular systems are unable to
compete with the
V90 modem technology of the fixed network. The data rates
are low,
and to increase them significantly requires channel combinations
that
make the service financially unattractive for mainstream users.
There
is also the question of how the cellular networks would perform
in the
presence of large numbers of data users in multi-channel
applications. So it is in the area of data that the fixed
line
operators have their advantage, and the cordless terminal
manufacturers have to look for their long-term survival.
This analysis is not altered by initiatives such as Bluetooth
from the
cellular community. Bluetooth addresses the connection interface
and
physical difficulties of getting your cellphone to communicate
with
your laptop easily and at low cost (sometimes referred to
as the end
of "Plug and Pray"). But it does not address the
issue of relatively
low data rates on the cellular network, even under the new packet
data
standards that are now to be introduced. It is of course
acknowledged
that in a mobile environment, convenience and mobility is the
main
selling point, but once those benefits are not the primary
requirement, cellular technology and Bluetooth become less
attractive
a solution.
In the business world, there are many examples where cordless
service
has brought real productivity and service improvements. But
the
majority of the PBX suppliers are ill positioned to help
the customer
realise the full benefits of cordless. This would require a
sales
approach more like the systems integrators of the computing
world.
Not only are these skills in short supply in the PBX sales force
of
the world, but the whole PBX distribution process is not
well
oriented to this type of solution.
It is also notable that in most cases where data has been offered
as a
cordless product offering, it is in conjunction with ISDN.
This
reflects an obsession with high end telephony offerings, which is
unfortunate. This is partly a result of the high cost
of the systems
(which have therefore been forced to a high end market
positioning).
ISDN data represents a niche of the whole data market, cordless
ISDN
even more so. Many data communication applications never go
near a
telephone line at all! In most cases they are between
devices, in an
office, in a factory, in a store. In the small business
sector, the
focus is also on basic services, rather than "high end"
systems. It
is also expected that those systems that do (or will in the
future)
require a telecommunications service will in any case look to
achieve
higher data rates than are currently provided by ISDN.
These services
will be provided by a variety of links, for example by Cable TV
systems, through xDSL local loop technology, and through wideband
satellite or microwave services. These requirements will be
driven by
the PC world, rather than the telecommunications world; by the
internet rather than by voice.
So what are the key success parameters for cordless in the
future, in
particular in the world of data ?
It is first important to identify the market segments.
Suggested as
segments are the Home user, the small business user, the
mobile user,
and large corporations. In addition, there is a segment
comprising a
huge community of integrators who are so far poorly targeted by
the
cordless community.
The Home User
The home user is actually a very wide market segment, with a
diverse
set of requirements and applications. The most fundamental
of these
is convenient connection of the PC and modem to the telephone
line
without running cables. The most sophisticated is a fully
cordless
communications system linking together all the devices (PC and
Audio
Visual) in the home.
A high proportion of these needs can be met with cordless
technology.
For example, Philips uses the same chip that is built into
residential
DECT phones for data products. The software that provides
handsfree,
caller line identification and conference calling is replaced by
one
that handles serial data transparently through the system.
The
difference is the software on the chip, so the data equipment
manufacturers are able immediately to take advantage of the high
volume
residential business and the resulting low prices for the chips.
The
same radio parts are used in both residential and data product.
DECT
cordless is able to offer speeds already up to 512kbps, and with
modifications coming to the standard, 2Mbps will soon be
possible.
For the higher speed in-home data connections, particularly
for
audio-visual applications, other standards are likely to be used,
as
these are predominantly supported by the Consumer
Electronic
manufacturers. The main ones of these are Sharewave and
IEEE1394.
Small Business
For the small business, the main requirements are for data and
voice
in a single system. In contrast to many other earlier
attempts at
such systems, the systems have to be low cost, cheap and
easy to
install and maintain, (even such that the non-technical small
company
owner can install a system themselves) and above all easy to
understand even for the technophobes. Voice is essential in
these
systems, but with the increasing use of email in ALL companies
and
industry sectors, data becomes a requirement in even the smallest
of
products.
The Mobile User
The mobile user that I identify as a segment is NOT a cellular
user.
Rather the mobile user is one who goes from point to point with
specific (and closed) communication requirements. The
easiest to
picture is a meter reader, who could go along a street in a van
to
read the meters very quickly for all the household utilities,
using a
cordless link. It is expected that such co-operations in
billing
services will be the shape of the future, and there are already
independent organisations offering these services to the utility
companies. So far they do not use wireless services
extensively, but
it is expected that this will be common in the future.
Vending
machine companies are another target - it is calculated that one
person can fill 40% more machines in a single day if they go to
the
machine just once, with exactly the right supplies to replenish
the
machine. Cordless data is the ideal technology to provide
this
service.
The mobile user is also a good example of the need to sell
cordless
technology actively to the integrator community. There are
many
thousands of different data applictaions that are dreamed of
every
week by hundreds of different companies throughout the world.
So far the cordless community has only scratched the service of
these
applications, and has made very little of the opportunity that
exists
here. The majority of the systems are already existing -
without any
wireless capability. But in adding the wireless capability,
integrators can greatly increase their value-added, and make
their
current products more in tune with the emerging needs of their
customers.
There are many more applications for data transmission than
voice.
"Data, not voice, will be the primary form of traffic"
according to
Dataquest's analysis of internet and interactive technologies.
It is
believed that with products that seamlessly replace cables with
cordless links in these simple systems, many more integrators
will
incorporate cordless capability into their existing products, and
will
develop new applications based on cordless capability. This
is the
idea behind the Philips Semiconductors "Virtual
Cable" product.
Large Business
This leads on to the question of why cordless is not perceived as
a
need in large business. This gact is constantly reported by
various
analysts, who also report similar low density penetration of
cellular
in this segment. The reasons are various, but I will try to
summarise
them. First, all large corporations are sensitive to financial
implications of introducing systems where they cannot easily
control
the cost or quantify the benefit. Often those
responsible for the
financial implications are not the ones to benefit from the
introduction of the system! Second, the sales approaches
taken to
this sector are often inadequate to overcome this basic
objection, and
are often a by-product of selling to a different segment.
Thirdly, larger corporations often have integrated information
systems, and look to see new data or voice technologies
appropriately
integrated. This is very seldom offered, because the
providers of the
data system have no knowledge of cordless, and the providers of
the
telephone system usually have no knowledge of the data systems.
The
role of the Systems Integrator is a useful one here, but such a
function does not exist in the telecom world. So the real
answer to
why cordless is not perceived as a need in this segment is NOT
that
the need does not exist, merely that it has not been correctly
identified and packaged as an integrated product.
This is difficult for many integrators to do, because all the
cordless
manufacturers have made integrated products themselves for one
application only - the PBX. The rare ones who have made
wireless LANs
have seen their market rapidly eroded by the integration of
ethernet
cards in almost every PC, and the growth of less
complicated cabling
architectures has further reduced the available market.
So why is data important for the cordless community?
The cordless market continues to grow at a tremendous rate, and
increasingly the trend is that digital cordless replaces analogue
as
the product offered by the retailers. The cellular
operators across
Europe also look to the residential users market as a new growth
opportunity. In providing voice only services, their
offering is
attractive, particularly among the young. .In the provision of
data
communications, cellular services are not attractive except in
applications where wide area mobility is an issue. In a
world that
increasingly uses the internet as a basic tool, and where
wireless
connectivity is a commmon feature of many consumer electronic
devices,
cordless technologies are able to fulfill many of the
expectations of
the emerging cordless data / home wireless networking market.
Philips Semiconductors supports this vision in its products for
European and US cordless standards. We believe that
cordless data
will in time become a standard feature in a cordless telephone,
in the
same way that digital answering devices are also becoming
standard in
residentail base stations. By offering such functionality,
we believe
that the cordless community can offer consumers products that
will
make them less tempted by the enticements of the cellular world.
About the Author
Dominic Clancy is International Product Marketing
Manager in the
Telecom group of Philips Semiconductors, based in Zurich,
Switzerland.
The groups products include chipsets for digital cellular,
digital
cordless, digital answering machines and wired telephony
products.
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