Have you noticed that telecom companies now sell Netbooks?

I believe one of the hot topic in the high tech world for the next couple of years will be Netbooks. Netbooks are lighter and smaller than laptops (screen varies from 5” to 13”), and they are much cheaper than laptops (in general less than $400). Some uses a solid-state storage device instead of a regular hard drive, increasing battery life as there are no mechanical parts in movement.
They also do not feature an optical drive and of course, Wifi is included. But what stunned me, is that some netbooks now include a 3G connection as a standard equipment, and that is a real step forward!

Indeed, until now, laptops has only included a Wifi connection which limited the use of laptops at home or in the office. Now with a 3G connection, netbooks can be used everywhere, as long as there is a 3G network available. I believe this is a true revolution! And you have understood: the revolution is mobility!

3G has been around for quite a long time – it appeared in the early 2000s - but it really started to take off only in 2008 thanks to the iphone 3G, which opened the door to new mobile applications using 3G. But, 3G is already too slow and many users complain of difficulties to access internet applications through 3G, and prefer to use a Wifi connection instead, which is much faster. This is why, cell phone companies are working on a new standard called 4G, which will be at least 5 times faster than 3G, capable of providing users with streaming high-definition television (4G is claimed to provide downlink peak rates of at least 100 Mbps). The worldwide move to 4G is called the 3GPP Long Term Evolution: “LTE”. If some telecom companies have already deployed LTE in some small areas (like Verizon in Seattle and Boston), telecom companies are about to deploy LTE on a wider scale in 2010 and 2011, and years after.

And now comes the last part of the puzzle: the operating system. I would like to point out that during the past few months, we observed very interesting moves from Google, and in particular, the resignation of Eric Schmidt, Google’s CEO, from the board of Apple. The explanation found on the internet is that Google is developing a new Operating System called Chrome OS. This new Operating System actually targets Netbooks, and therefore competes with Mac OS. The second reason is Google Voice, a recent Google’s acquisition, previously called GrandCentral. This application provides users with a single number to forward calls to any landline phones or cell phones for free, which is very attractive because incoming calls on a cell phone are not free in the US (unlike Europe). It also allows to place free calls in the US and to Canada if using the Google application. And this has been the problem: the iPhone Google Voice application is a VOIP application which apparently works both with Wifi and 3G (contrary to Skype which only works with Wifi) and therefore Google Voice does not consume AT&T voice minutes while using VOIP on 3G (Apple has an exclusive distribution agreement with AT&T in the US for the iPhone).

However, I believe VOIP over 3G or 4G networks is for tomorrow, and Telecom companies can not stop this development, as it was the case for landline phones five years ago, while transitioning from analog to VOIP. But Telecom companies need to manage the transition smoothly. And the transition will only be achieved successfully if Telecom companies supply a reliable data network to their customers, with enough broadband to comfortably surf on the web. If telecom companies failed to do so, not only, they will lose market shares from the voice market, but also they will miss the opportunity to earn extra revenues from 3G or 4G.

This is why 4G has become a major challenge for telecom companies, and they absolutely need to succeed if they want to exist in the next 5 years, as voice revenue will reduce dramatically. Even though 4G is not available yet, telecom companies need to attract the maximum number of users to 3G right now in order to build their future market shares. One easy way to get 3G customers is to sell data plans through smartphones. Another way is to subsidize netbooks through 3G plans!

Of course, the availability of 3G/4G networks is going to boost smartphone sales and netbooks sales in the next couple of years. The idea of getting any kind of information in the palm of the hand, anytime, anywhere is very attractive and consumers should not resist to this appeal. It is also not by accident if Nokia recently released a 3G netbook. Obviously, it is a first attempt and many experts doubt that it will be successful. But the issue here is more about being present when 4G is available, and Nokia needs to be prepared to enter this new market, which is, by the way, already very crowded.

4G is going to lead the way to new applications. Look at the iPhone and the number of new applications it has brought to the market. One of the most appealing applications are the geo applications mixing GPS and internet capability (basically: what stores, restaurants, services are around me and how previous users rated them). What is fascinating with the iPhone and 3G, it is the ability of having on-line access to very large databases of information anywhere and anytime: it could be maps, encyclopedias, dictionaries, traffic information, tourist information, phone numbers, CRM apps, on line manuals, social web applications, etc… We can also think about new applications such as installing a 4G device in cars, or for medical purposes. In brief, we are going to live another revolution: The Mobility Revolution!

To summarize, we are entering into a new world where 3G and then 4G networks will enable us to have access to a high-speed internet connection anytime and anywhere. To take advantage of this network, 3G devices and then 4G devices, have started to appear in the market. These devices are smartphones and netbooks which include both a Wifi and a 3G/4G connection. These new devices are already a success in the consumer market, and sales will blow up when 4G is available. Many new mobile applications, such as geo applications which have already hit the market, should appear as well. Given the projected sales of these new devices, Operating System is therefore a key element. The battle has already started, and it looks like this time, Google wants to be a major player with Chrome OS. Anyway, to PC vendors, to phone manufacturers, to telecom providers, and to software developers, I wish you: Happy Sales and Vive la Revolution 4G!