WWDC2004 Session 720

Transcript

Kind: captions Language: en okay well first of all welcome and thank you for attending this this session and which is worse to have a panel directly before lunch or directly after lunch but hopefully we can we can keep you awake here so as Frank Casanova talked about in his digital media so the Union presentation yesterday mobile videos is really an exciting new opportunity for for Apple and QuickTime with QuickTime support for the creation delivery and desktop playback mobile video standards like three GBP and 3gpp2 we are a leading provider of mobile video infrastructure and technology and we're working with a number of operators worldwide on both the development and deployment of multimedia services so in today's session we're going to step back a bit and take sort of a broader view of the marketplace we have some experts from various different leading companies within the mobile universe and they're going to take us through sort of their unique perspective on the market drivers that are helping to shape this this marketplace and turn it into a reality so first up we have David Bernanke with 18t Wireless we have Eugene Sarmiento from Ericsson and last but not least we have Gabriel sent home from France télécom R&D so in terms of the format they're each going to take you through a presentation we could hold questions to the end then we will go through some questions we're actually a little bit of demo in here as well so hopefully that'll that'll deal with the after lunch doldrums but that's that's basically it and I'll open it up to today thanks man german thanks everybody hopefully I won't bore you too much I wanted to spend a few minutes and give you some background around the evolution of data services and the work that ATT Wireless has been doing in this space and talk about some of the opportunities that exist for leveraging some of the convergence that we're seeing of capabilities so you know all the analysts have lots of reports around the importance of wireless data and while they vary on what they think how big the opportunity is I think that are all in agreement that it is pretty substantial you know this is the u.s. forecast through 2006 team forecast for mobile commerce in Europe for example saying that just for mobile commerce alone the forecast there's five billion dollars and this is a data revenue forecast so we're pretty excited we think there's a pretty substantial opportunity here and it's as important to us I think it's important to most of the other operators in that data is our opportunity to reverse the revenue erosion that we've seen happening in terms of decline associated with the pricing of Voice Minutes and services around voice and a good example of this is on the voice side the opportunities to compete are relatively limited there's only so many permutations and voice bundles and minutes that you could create to be competitive and it's always a game of catch-up okay they've got nights and weekends okay now we got nights and weekends so come over dressed so it's just a mad dash of customers running back and forth between different voice plans so we back in 2001 we formed a division within 18t Wireless called the mobile multimedia services division as a part of our investment agreement with NTT DoCoMo and we realized early that we wanted to make sure that we could get ahead of the data game and really move the differentiator or a from being priced competition on on voice to being data services that our consumers would value and that would have provide some stickiness that would keep the customers with ATT Wireless so moving away from the value that you would see in how many Voice Minutes you have or what plan you have to being able to look up the latest sports court while you're on would go being able to check your email from your phone traveling to San Francisco it should be nice to know we're a good restaurant to eat is or even find directions to the hotel so we started this little M mode data experiment way back in the mid-90s when we used to call it pocket net and that was back when there was lots of hyper on the quote-unquote wireless internet I think those two words together back in the mid-90s were kind of an oxymoron since there was really nothing internet about seeing a 5-line black-and-white LCD display trying to communicate what was on the internet running at 9.6 414 4 kbps wasn't necessarily a very compelling experience but it was a great opportunity for us to get our feet wet and learn some lessons and some of the important things that we we picked up through this was obviously devices matter you know back then it was a big clunky Mitsubishi or Sony Ericsson phone and while it was pretty advanced in it today I'm looking at the wireless enter it now I'm pulling up my antenna and waiting for it to connect was a rather underwhelming experience unless you were pretty patient individual and also other thing we learned there was content matters our approach then was a walled garden approach where we said you can have unlimited access to the wireless internet but it's the wireless internet that we give you within our garden and back then there weren't a lot of applications or services that were necessarily enabled or could be easily converted for application and use in the wireless space and probably most importantly one of the things that we learned through this is it's really important for us to focus on the environment and what your customers are going to use the services it's not really practical to expect someone to pick up their phone wait for the connection to happen to try to look up a phone number when they're competing with Voice Minutes and all that to do is all for one one or call somebody to get the information that they're looking for so I think one of the most important takeaways that we had I think it was important for folks to understand as we're looking at creating more advanced services whether they be multimedia services or applications or any application that they think they would like to bring into the wireless space that it needs to be relevant for the mobility in scenario and environment and be relevant to the timeslice because that's really what it mobility is about it's about I have a few seconds I have a time slice of availability to be entertained or client information or connect to those that are important to me so we launched m-mode in early 2002 when we were in the process of rolling out our GPRS network nationwide and at that point we had hundreds of content providers we had lots of applications Java applications ringtones you could go to nineteen different places and get news and it was like walking into Walmart and having never been there before and just having rows and rows of aisle to step to look for and not really knowing how to find it so one of the things that we did in 2003 is rebuilt that whole new and mode data service and what was really important here was we really were trying to focus on again at the point I made earlier about it being relevant to the mobile experience there's some extensive customer interviews and research and working with a leading design firm here in San Francisco we relaunched a mode we made it and we launched it last we launched it last November and what was really important to us was needed to appeal to the mass-market not to a Propellerhead 35 year old person like me who was patient enough and understood the complexities of trying to by phone figure out how to launch a browser get all the settings correct and make it work because our real goal here was to drive daily usage we wanted this to be something that was important part of people's lives and we wanted to be invest in class service through work that we're doing for content partners to make sure it was compelling content and it was meaningful and up to date so today we have over 260 sites and applications available through a mode these are range anywhere from repurposed Internet content or sites that have been rewritten or have a mobile version of their content such as some of the new sites Google and others as well as applications for download primarily a lot of Java content available for phones and additionally we even today still already have some sites that are providing streamed content on the GPRS network so what some of the questions I get from a lot of people is well how does this whole end mode thing work for me or the developer or content provider somebody wants to create an application and bring it to market we at agency Wireless and through our mo platform we don't post content we don't have big servers in our data center aggregating lots of job applications for people to connect to and download and bin them what we do is we follow very closely the NTT DoCoMo's iMode model where M mode is your portal your connection to those content partners and providers within our sphere or without we don't prohibit our consumers or customers from connecting anywhere they would like to but for those content providers that work with us they can have reach into our entire customer base without having to have an individual billing relationship so it makes it really easy for our content partners to bring an application to market and to be able to monetize it without having to worry about how have to print a bill have to figure out how to do all these transactions with the customer because we have a very flexible mobile commerce platform that we've put in place to try to take that burden off the content partner so I know you're all probably one in a while this is really cool what does this have to do with the mobile video or multimedia or QuickTime well bear with me and I'll get there because what we are constantly doing is we're refining our platform and looking to deliver new applications and content some of the new examples of new applications that we've recently launched are the mobile traffic application so that in over 70 cities in the country you can pick up your phone and within two clicks if you subscribe to the application in your phone see the traffic conditions so logical evolution of this would be boy it's really nice I can see the traffic conditions and I see that there's a backup here but what about the traffic cam associated with that so there's a lot of natural extensions that our multimedia capabilities and devices and in the network could enable to extend applications like that we see the same thing with some of the other applications with news with games with movies and movie trailers that we are continually working with our content providers trying to help them understand what capabilities we have in the in the devices and in the network and and our billing platform to help them bring these applications to certain services to market so we've seen some pretty substantial success that we're really excited about we hit in 2003 we crossed over the million subscriber mark 4m mode these are million active users and we see on average seven to eight dollars a month of revenue for those users in addition to their voyage revenue so if you remember back to that previous slide I put up we're really seeing data revenue reversing the decline there and we see advanced applications being a providing us a tremendous opportunity for both ourselves and our developers and content partners to continue that trend so I talked a little bit yesterday when Frank's keynote I mentioned 2004 being the year of convergence some of you may have been there heard me make that comment and some of the trends that I see in that we see is a DAT at AT&T Wireless and with our partners is three key areas that are converging in the in this year and the years to come and some of these enables were already here so we launched our edge Network last year we completed the deployment nationwide so edge if you're not familiar isn't an advancement or enhancement to GPRS and GPRS was the data standard that gsm employees and I'll show a little network evolution slide there but this allows us to provide customers with devices that have the capability to access data at rates up 250 kilobits per second with first up to 200 so the networks are getting their new devices one of the big challenges to delivering richer applications was device capabilities we had years ago Frank and I mentioned going to Asia and seen demonstrations of mobile streaming over wireless networks and you know one of the big inhibitors and challenges was devices we didn't have enough devices that had the horsepower to stream the video didn't have the big enough color displays to actually render it in a format that was meaningful to customers and then there was a battery life you know I walking around with five batteries in my pocket so I can you know watch 15 minutes of video wasn't really compelling experience and of course new types of applications some of those which I've showed you and that will take advantage of and use this capability but more importantly are the tools that are needed to to bring this these applications to market and three years ago a Content partner of ours would have been forced to say okay I want to deliver rich content to my consumers how am I going to do this well I could go out and buy a real server and pay for lots of hardware and lots of licenses or should I use packet video but if I use either of those then I have to work with the device manufacturer to make sure they're putting the appropriate hardware codecs and everything into them and there were a lot of hodgepodge of standards standard we're evolving and weren't quite there yet but this year I think we've really seen the standards turn the corner and that we're actually seeing these capabilities in standard compliant capabilities implemented in tools and I think what apples down with QuickTime and the tool set there for content authoring and creation it's a perfect example of that it's that easy to create your content author and deliver it to the device so devices there's a whole plethora of devices you walk into any of our stores or competitor stores you have a wide variety of devices to choose from on the consumer side from smartphones to camera enabled phones to music capable phones to gaming devices some that have been successful some not so successful I'm sure some of you probably been to that favorite Nokia non Nokia site side talking comm where she lots of people talking on their taco so there's definitely been some lessons learned by in both the operators and the device manufacturers on the NFI side we offer a pretty rich array of devices to support our enterprise customers access to their corporate data applications and email in a secure manner both through devices as well as PC cards and working with various OEMs to ensure that the capabilities are baked into the device at the factory the network evolution has been a really interesting journey for us as I mentioned we launched two GSM and GPRS and completed or build-out in late 2001 and that completed our GPRS deployment last year we did an upgrade nationwide across all of our network which took us to edge which takes us up to 384 kilobits per second aggregate throughput and again that varies by conditions and as capability not every edge device is going to be configured by the manufacturer to take advantage of all the throughput but on average the newer devices such as the device I'll do a little demo on this Nokia 6620 is a four time slot edge device it's a class 10 device for those of you who may be following the some of the wireless standards but what that means is I have the ability to access data at speeds up to about 120-130 killers kilobits per second that's pretty cool considering I'm mobile and for the PowerBook users in the audience this is the greatest wireless modem I ever had because I just turned bluetooth on turn bluetooth on on my laptop and I'm connected blow dial-up away and and now with improvements we've made to our network it's accessible just about everywhere we also announce that this year we would be deploying the next evolution on the GSM data path and that is our move to wideband CDMA or you may have heard it referred to as UMTS we will launch UMTS in four cities this year we've launched there ready it's available in Dallas that was our original launch city that we were testing in we'll watch it in three other cities this year and then some of you may be familiar with the fact that we're being acquired by singular and singular has announced that they will be there fully committed to UMTS and will be launching the MTS nationwide as well so we're really excited that the bandwidth is increasing and there's a pretty robust evolution path that takes us to HS that's a actually misspelled it should be DPA and expands for high-speed data packet access but it's just the next evolution in the gsm/gprs data path so what does this edge thing I talked a little bit about it but what's great about edge is we rolled out edge and all we had to do as a software upgrade to our network we didn't have to go out and replace radios and roll trucks and have forklifts and edge is essentially just a new algorithm that takes what was previously required three data time slots in the GPRS world and condenses that into one one time slot an edge which is really important to us because it not only it frees up capacity on the data side frees up capacity on the boys side so it's a big efficiency improvement for us so what does this mean to services and what does this mean to those folks who want to create multimedia applications and deliver those letting see the evolution here I talked about GPRS we have pretty excited when GPRS came up but the reality is on average a GPS device supports around 30 kilobits per second which means you probably want to do a typical video encode at around 24 kilobits per second and streaming is probably something a lot of people would avoid under GPRS unless you were doing some lower quality a.m. quality audio streams but it was good for cooed video or more of a slideshow or download and playback scenario with edge we've seen significant improvement and edge is substantially better in that we get really good quality streaming for video for audio you can have a pretty decent experience with AAC of 32 K or 64 K encodes an AAC work really well streamed over edge you know pretty decent FM quality and big benefit we get is the latency is much improved that was one of the biggest complaints we got from a lot of folks with that's great you always have an always-on GPRS connection but the latency is really painful edges substantial improvement in latency and that's really important when it comes to applications and then moving to UMTS we have really excellent quality streaming even lower latency and a typical video encoded around 128 kilobits per second provides a pretty compelling experience so we're really excited about the capabilities that are can have converged this year and we're excited about our partnership with Apple and the work that Apple is doing to enable folks like yourselves to create content and deliver this content without having to figure out am i delivering is the desktop how do I encode this what are all these standards that's the beauty of a QuickTime and the offering tools is I just select I want to export it and I don't have to be the rocket scientist to figure this out and it really works recently a little side story here Frank okay make fun of you not really no I won't make any comments about your shirt or anything because Franken ELISA were recently up at our offices we were in a meeting and I was introducing Frank and telling them that you know this Apple jobs just a distraction because Frank's really a musician and he mentioned his website to us well while we were sitting in the meeting I brought that to the Apple web Frank's web site downloaded one of his video clips of him jamming out with some famous guitar players put it into QuickTime exported to 3gp and in the meeting I streamed it over to my phone and showed everybody in the meeting that's how easy it is and that's how easy Apple's made it so with that I'd like to conclude with just a quick demo so we're going to Benjamin what we did is we took some movie trailers and we encoded them and put them up on their Apple QuickTime streaming server what I've done is I've got a session queued up here I'm going to connect to the server and we'll actually stream the alien vs. predator movie trailer over the edge Network and if the demo gods cooperate with him he will actually see it working so let's see dawn over here this is a two-minute clip and I could let it stream and trim and I would get about a Meg and a half worth of data moves through the network so as an operator I get pretty excited about the customers moving on Megan half the data obviously we have data plans and arrangements available to our consumers that make that affordable to them so the best important as well and I don't know necessary that someone wants to watch the entire two-minute video clip which is a great example of how easy it was to take very rich content on the desktop and convert it and deliver it to the mobile device so that thanks thanks thank you very much just a technical expert I'm using a quick testing server and the content is created using that client happens to be a pack of video and we were the number of compliant clients yeah these devices come with the real player on them which supports 3gp but doesn't prevent anybody from downloading other players that's the beauty of having a device with an open operating system and the pack of video player works really well as available across other devices so the operator we don't have bias toward one one player or the other our biases towards standards and our biases towards great customer experience thank you thanks okay so coming in the next from Peter in your structure perspective we have Erickson he's going to talk to you a little bit some of the some of the other components that are involved in delivering rich media to a handset we play a very specific role that we are the streaming engine that delivers content to the handset but there's a whole bunch of other stuff that has to happen before that like billing and authentication and that's really where where Ericsson plays a role and we've been working together to ensure that both of our standards based solutions work forth quite closely together so with that Thank You Benjamin can I borrow this sure whatever so good afternoon everybody first of all I'd like to thank Apple for giving Ericsson this opportunity to address the developer community that you have and to give our insights on the convergence of mobile media we've seen already a lot of things that I might be repeating but I'll try to add the the world view to this in terms of what we see in mobile media from the holistic perspective to start off my name again is Eugene sarmento I'm a product marketing manager for Ericsson I've been working with the streaming and download solution from Ericsson for the past two and a half years working with with the global operators trying to push them towards this mobile and major convergence now the slides I'm about to present to you will mainly cover three main areas first of all what opportunities we see in the mobile media space what's Erickson's role in this space and finally where the key success factors that will you know basically take what we have now into a full-blown service earning millions or billions of dollars so the first question I'd like to address of course is why will mobile when combined with media be successful so what's so interesting about the mobile network that you know will allow for better services of media content well was as a as a start off what I've put on as a slide is of a huge number of mobile subscribers that we addressed today with 2g 2.5 g and 3g networks as you can see in 2004 we have roughly 1.3 billion subscribers that are covered with mobile phone technology now this 1.3 billion subscribers are potential subscribers for media content and we see another billion of growth within the next four to five years so that's amount of potential revenue or potential customers that the mobile media industry will have we see a lot of growth in countries such as re in a in areas such as Asia Pacific specifically talking about that say China and India we see in China alone a growth of 5 million subscribers per month right and in India we have roughly 2 to 3 million subscribers per month and we see the same growth in Southeast Asian countries such as the Bangladesh Pakistan Indonesia and the Philippines all having a total let's say a total population of 100 million each and at this point in time they're only at they only have penetrations of 14% so there's still a lot of growth out there and what you can see is the penetration of mobile phones is much much more than what there is for the web today it's much more than the TVs and what you can see also with the number of phones that are coming out there's more picture messaging capability that are that are coming out then there there are digital cameras that are coming out so we see you know all these factors as key points in making mobile major successful now the first thing that I'd like to address or ask is what's so different what's so different about mobile technologies well I can basically sum it up in two things the first thing is that it's very personal the mobile phone is the only device that you have where you keep very personal information if any of you have mobile phones with picture capability a big probability is that you have your family's picture inside it you have credit card information or password information as I have it and basically this is the only device that you keep right up to your face no other device has that capability and that would mean that you could push content to the mobile phone anytime anywhere and you know we always emphasize in Ericsson mobility mobility mobility because that's actually the key for mobile mobile technologies so it's the person personalization factor of mobile phones the second part to that is is that users are willing to pay for content on a mobile phone this is something that's very different from internet or web technologies because it's very difficult to have the user perception that the Internet is a secure way to pay for content although it's taking off in with Apple's iTunes it's taking off with real networks and a lot of music downloads you see from the web it's still easier for a user with a mobile phone to pay for that content so we see that as a big potential or a big reason why mobile networks are so different just to give you a small example I saw American Idol at home because my mom comes from well my brother comes from San Francisco and you know there was - I come from the Philippines as well and there's two contestants there that are have philippine background and so when my mom visited me in Sweden first thing she said was oh do you know about the American Idol that's like what's that and so she starts streaming you know using our wireless LAN that at home she starts streaming showing me oh these are the singers now I think she would have done the same thing if she had that capability on her phone you know if I was on the train going I think it was a four months ago I was going to an office in Atlanta and there is this guy was just talking to me about Michael Jackson's trial and then his mother called is like Oh have you seen the latest information about Michael Jackson and what's happening there if he could have sent him a link or a telephone number to call to show him to show her that I think she would I mean he would have you know shown me that Christmas at ACC huge here's what's happening with Michael Jackson so there's a lot of potential for mobile media and 3gpp has seen this potential has standardized codecs as well as protocols to make sure that streaming is available on mobile networks I think they're forecasting roughly six billion dollars worth of revenue in five years from now so that's 2008 so that's the first reason why we think mobile media is successful but there's growth drivers and our colleague from AT&T has already mentioned that one of the growth drivers is the technologies that we have right and what technologies that we have today and in in most of the world is 2g technologies where you have up to 28 kbps right if you've monitored how Vodafone is addressed mobile media content on the 2g space since there's very limited bandwidth they don't push or they don't provide streaming applications as their thrust or as their core services they're looking at download services because then you would have the quality of the video even though the bit rates are quite low on on these 2g networks but we've seen a lot of the operators in 2003 move into edge which have 64 to 144 kbps capabilities one of them is AT&T and there's roughly 76 operators around the world who have edge and have launched edge in 50 countries so now we have the network technologies with huge bandwidths to deliver mobile content so these are growth drivers for for mobile media services and then there's 3G which is 3 84 K with 2 megabits and finally for 3G evolved which was HSDPA as here as he explained it 384 to 15 megabytes per second I saw a session yesterday talking about h.264 and other that stand that's already been or it's being introduced in 3gpp and you know there's a lot of hype on that and there's a lot of activity in making that codec available for the wireless handset and I think if you have phones that have the not just 64,000 colors available but millions and million of colors then you have almost DVD DVD quality in 3G networks okay so what else do we see we also see since there's a lot of bandwidth and the operator networks we see that the revenue potential for mobile data is increasing year by year this this figure alone is is from q2 2002 to q4 2003 and you see five percent increases in in in the operators revenue in their in in the revenue that they earn off of data and this has moved up from roughly 10 percent to roughly 30 percent and that's quite a big number for them ok another driver for mobile media is as as you can see here is the handsets there are a lot of handsets coming out last year when we were trying to set well two years ago when we were trying to sell streaming technologies I couldn't find we couldn't find handset so we had to hire application developers for 8 clients put in the eye packs connected to a GPRS phone and then stream content but that's not the case today ok you have all the big brands all the big terminal manufacturers Sony Ericsson Nokia Sonya LG all these Japanese terminal manufacturers coming out with phones which have video call capabilities content streaming capability capabilities download capabilities and this is driving the mobile media market well okay so now that we we have a handset so we have the bandwidth the next thing is of course for operators to take both and offer mobile media services to the customers and what we've seen is there's a last year it was more marketing for Yenta a lot of operators said okay we have streaming capability but not really fully launched it so it was more a marketing campaign that they have that capability were first and basically we have a service up and running but we've seen services like TV to the mobile video on-demand video telephony services I'll just give you a short example in in in Italy and in Sweden they have a service called Big Brother Live has anybody heard about Big Brother here no stay there my brother is a reality TV show and basically a group of people stay in one place they live there and they have cameras everywhere what they did in in Sweden is they had six live feeds of content Plus on-demand content and a director's cut of course the director's cut is the most important aspects of this whole whole show and they were able to generate roughly 50,000 streams per week and these streams were to 1 to 2 euro each time you access it so you know it generated a lot of money for one show ok and this is not the only thing that's picking up we've also seen what we call the master tone download service that's been picking up here as well in the US but it is very popular in Japan especially with KDDI they have roughly 7 million downloads of ringtones per month and each ringtone download is one dollar each so that's 7 million dollars every month right in the US Beyonce launched her song and with this master tone and you could download the Beyonce song and what you what what it generated was 1 million 1 million 1 million downloads so that's roughly a million dollars so apart from that we have the do telephony services where you can call people have video video video to the contrary conferences but also you have the possibility to send numbers and with these numbers stream content and what advantages that have of course is I could push a special number to you and you would dial up through this number and access specific content ok so what else have we seen as you see all the big operators such as Vodafone to t-mobile with their teas owns NTT DoCoMo with their I mode they're all looking at packaging services and integrating that to the handset ok it's all about the personalization quickness to the to access that content and in terms of the services that Ericsson has launched with our operators we've done live TV with a lot of the Hutchinson companies for infotainment services we've done a lot with Telefonica we've done a lot with Amana smart tone we have a traffic cam service I think you were talking about the picture based traffic cam we have streaming based traffic cam services and in Hong Kong where they have certain streets that you can select and find out what the traffic situation is but of course the the most mature markets will always be Japan and South Korea where they have in specifically for South Korea they have roughly 400 different channels and they earn roughly seven point five u.s. dollars per month on top of their previous ARPU because of these streaming and download services okay so there is an opportunity and what we would like to do is you know have a special role in the mobile media space and what is that role first of all we address our customers needs and who is Erickson's customers it's mainly operators AT&T Orange Vodafone t-mobile these are customers and what we provide to them is end-to-end solutions for person-to-person services as well as application to person services okay person to person being sms/mms video call right instant messaging as well as voice over IP over wireless all right apart from that we're also trying to bridge the gap between the media industry and the mobile industry although AT&T is quite advanced in having a lot of partners a lot of content providers already having access to the mobile network and to the mobile clients there's still a lot of operators out in the world that don't have that relationship they don't know what the content content industry is doing they don't know what your competencies are they think that oh maybe it's the same thing as voice and I'll just wish you know find my luck in this service and then they fail so there's a lot of things that we would like to do for them and one of the major things that we would like to do is aggregate content and aggregate applications and this is quite important for us and we have a initiative called mobility world mainly target mainly targeting content developers application providers and bringing bringing them in to our portfolio right testing them verifying it and then saying all right this is a verified application it's a cool service and we'd like to take it to market and so that's what we do now we aggregate applications we do a matchmaking and tell the operator right which one do you want is it the live traffic-cam service is it the music download service called EMU's this is another service we provide and then the operator selects from these and we sell it as part of our portfolio okay so that's what our role is and again as I said we provide person-to-person and application to person so what's Erickson's offering mainly to our operators we cover handsets from Sony Ericsson as well as Erickson's about platforms which is used by terminal terminal six terminal providers we provide access networks which is routing radio base stations wireless networks we have core networks okay switching infrastructure service networks which is basically enablers and we have content and applications as part of our portfolio and apart from the hardware software infrastructure that we sell we provide services to integrate that to manage it and if necessary to host it because we've we've won a lot of outsourcing deals when it comes to supporting wireless networks so we think that we can take the next step towards the convergence of mobile media and our strength in the system side from 2g 2.5 g and 3g along with of course apple because apple enables the whole end-to-end flow without the authoring without them supporting 3gpp it would be very difficult it would submit the market right so I think that the you know our competencies in the wireless network with apples content authoring tools to streaming distribution platforms you know when you tie these these things together you have a very good story and they're very good offering for our operators ok so I have two more slides and basically this one is so now with now we know that there's an opportunity we have a specific role that we've taken as Ericsson and how do we make it successful there's two aspects to it there's the user aspect and then there's an operator aspect from the user aspect we need to make sure that it's easy to use it's easy to pay and it's relevant for the user and we have a lot of initiatives that focus on these three areas from the easy-to-use aspect we have an initiative called zero one two three which is no manuals so zero manuals one button to access Internet services such as that say T zone service or an AT&T service and two seconds to access the content that I want and maximum of three clicks to find that content so that's zero one two three and on the side for relevant relevant services how we address that of course as I said is we have mobility world where we collect the best services around the world and we resell this to our operators but apart from that we do ConsumerLab consumer studies we ask the users what services do you want right is it a peer-to-peer service is it an email service is it a video call service and these are things that we collect right and that after we collect it we create packages around that and then easy to pay this is one of the things that we really need to consider because at this point in time a lot of the operators are missing the growth they should be getting because of the high prices they put in on on the data I think it's averaging roughly twenty to thirty dollars per megabyte of data okay so we need to make sure that the packages are there or we have the capability to do either subscription-based charging event based charging or time-based charging then finally we have the operator aspects which is platforms and handsets and application and content so these are things that if you tie everything together we'll make mobile media successful so as a summary the mobile net network offers great opportunities for both you us because we sell systems and the more traffic that goes in there the more systems we sell Ericsson is leading the way and we'd like to invite all of you you know to if you have bright ideas if you have applications that you'd like to take a market we have the mobility world forum to to take that to allow you to take your applications to market and finally the key to success for mobile media is basically exceeding user expectations it's about the user it's about the user and it's always about the user all right so thank you thank you very much that was a great presentation and not excellent choice of hardware enough architecture slide coming up next we have Gabrielle lucidum from Franklin telephone Arne Gabriel and France Telecom are in a unique position and not only are they one of the lead mobile operators in the world but they're also one of the lead broadband operators and they actually have a R&D facility here in the Silicon Valley and I think you know Gabrielle's role is to be the liaison between what's what's going on in the Silicon Valley and then spreading that throughout all the france telecoms operations worldwide so I'll hand you the clicker all right thank you so a couple of hard acts to follow so I'll try so I wanted to start first by introducing France Telecom just to set the context where we're coming from where we are today the kind of challenges we're facing and then move into our take on the the wireless data space ok so we're we're a global group present on five continents we have about 117 customers worldwide 117 million customers worldwide and we have a some global solution through strong brands and they're listed there we're pretty much a leader in most of our markets and we have both multinational and fixed-line solutions so these are our brands we have orange which is our wireless carrier one I do which is our internet provider ich want is a corporate provider global corporate provider with about 200 220 countries basically there's an airport ich want will be there and then France Telecom which is the brand you see in France and then TP is a is the the Polish carrier which we owned so where we those are our two major fixed properties now it's interesting because this first of all if we go back six seven years we're basically a fixed line carrier you know doing phone doing some basic data and in the last six years through acquisition and growth we've become a full-service provider and to a certain extent this has caused giving us opportunities caused us some problems of course integration and so on but one thing that's positive and all that it has given us the view that we treat our clients across all those different contexts so for us it's really important for us for the kind of in fact were organized around client context the client when he's with you at the enterprise the client when he's at home the client when he's in his personal sphere that is in between those two so our approach isn't so much to say okay what are we going to give him when they're you know what's our fix the services what's our internet service what is our wireless service but it's to treat the customer as a whole and pretty much sure of the different context that that client finds in something market position so if we look at the in France in UK we're a mobile phone leader we have about 47 million customers for our wireless property internet access we have about 10 million 10 million clients and about a quarter of them have broadband access which is probably not impressive for the US but you know it's a pretty good good good good rate for Europe and we're a fixed service leader in France with about half of 50 million customers so basically half of our customers or fixed customers and half are our mobile customers and so you know these are the we use so we have the three major properties that we have a distribution division that distributes the the products and then and that's very important in order to reach that sort of to be able to meet our clients context and then we have a network organization that provides the infrastructure to our business units so let's talk a little about who we are in terms of annual results so we're about a forty seven billion euro company these were the revenues for 2003 re bit about seventeen billion operating results of ten billion and a net income of 3.2 billion now last year this is a to show the improvement over last year over last year we turned ran into a debt problem and have come out of that sense and a lot of the debt issues that the carriers were facing at least in Europe were due to some investments that had to be made for 3G licences so we're very interested in monetizing these investments they made in terms of R and D we have a worldwide about 3,000 engineers and scientists in R&D unit's makes us one of the larger R&D units in terms of a European telecom company in 14 sites last year we had about 600 million euros dedicated to R&D we owned about 6,000 patents including patents for mpeg-4 and patents for ATM and in the last few years we've created about 15 spin-off startups from our R&D unit so these are engineers and business people came up with an idea and then it was I know one company you might know is an vivió who's in the mpeg-4 space in terms of our team missions here in San Francisco so one is technology transfer the identification of technology technologies and new business models especially and then transferring those back to the business unit visioning of new cutting-edge concepts that is developing either a mock-up or a demo or prototype as as their needs are require developing IP and inventions integrating doing an analysis of the impacts of technology integration into our network unit development and management of partnerships and then doing a sort of operational support of our be use in the US we have basically to be use in the US one is equal and the other one is a company called cold-cast which is a satellite services provider anyways I'm not going to go through through this is basically this is our process in terms of detection of new technologies validations and implementation and then a handoff an operational handoff and then just keep doing that over and over again what are our kind of key practices right now they're wireless communications and services the digital content management web services identity and messaging broadband and network engineering emerging technologies and advanced IT one of the sort of the conclusions that we've come out come up with is that as an operator we need to move from being a transport carrier to being an inter mediate ER for our client and so that will as we go through the presentation you'll see what that what that means but that means really being in a position to for example manage the clients preferences and their context and their identities if so required and then because I think the the future isn't so much clients looking for information anymore I think clients are going to want information to find them based on their where they are based on the context they're in you know and so on and I think that that that changing those two words you know instead of clients finding information but basically information finding them it structures a lot of what an operator traditional operator needs to do to move on and succeed because the face of transport as a business is not it's not the future that's a very mature product of the true mature market IP you can become an IP carrier with a very very low cost today so they aren't the usual barriers of entries that we saw ten years ago okay so now let's move into a little of the market positioning in terms of our of our Wireless business so anyways I just wanted to remind the remind you all of the 47 million customers so what's going on in the market right now we're in the 3G launch the official launch is is slated for fourth quarter of this year right now we're bringing up about one city and france per week so it is in test mode so we're testing a lot of the interoperability we're testing a lot of the device management that we can do and of course looking at the users and making sure that what we're providing is is well integrated with the other services we're providing in terms of to A to G 2 and 1/2 G basically we want to there is a growing customer base still and growing our PU and so we're bundling voice offers with some basic data services there's significant pressure from the regulators to open up our network and provide MVNO services which for us could on one hand is a source of revenues and people like sprint have done real good business with providing these MEMS MVNO capabilities other hand it does lower the barriers to entry into market it allows people to come in with more with integrated offers so it allows a content creator some of the owns content to enter the market and be able to provide a bundle service we as a traditional telecom operators have really not gotten into the content business almost stayed out of that because you know we were very careful not to cross certain certain of the boundaries and in the in the value chain so it provides some issues we have to deal with but on the other hand it's clear for us that it also means that we just have to be much better at partnering with content providers in order to be able to play in this market and then of course as we've all heard image music games value-added services that were going to be bundling with a voice so here's what's going on with the take off so the launch take off mass market you see by end of 2004 were pretty much at least for mobile TV and video downloads and video and MMS and photo MMS will be achieving sort of the we'll be getting past the take off stage and getting into the mass market and in the next year having video phone and blog broadcast video being launched these are so in terms of the what's going on in music these are some of the offers in in the European companies of love of ringtones so on average the price of a ringtone is about three and a half euros in Europe so that's one thing that probably is a in contrast of the US market is is the fact that people are paying more for the for the ringtones it's a it's an interesting market because it shows the value of I mean if you think of it you could buy the song for $0.99 and then edit it out and then you know take get the ringtone but it shows that the value of having a service you know that's perceived as being different than actually buying the song so in terms of the music okay so we lost the references here okay I'm sorry so what you see here is the the responses of customers in Italy the blue is UK and then the green is Germany responses to and then we don't so these would be a yeah we lost the the index here so it was on a scale of 6 and so that shows you the the percentage of the people who said yes or no so as you see of most people agreed with downloading being something that's free that people aren't willing to pay for a service to download they might be willing to pay for the content but not for a service that allows them to do the download they also think it's a way it's a first step in perhaps sampling a CD before they buy it what we've seen you a big difference in UK versus some other European countries is that UK kind of like the customers like to pay as they go as opposed to having a flat fee and all-you-can-eat type of model said that that was very interesting in terms of behavior and and basically a basically and AB people were on either side of the scale as to whether downloading was something that was useful or appropriate given their current terminals to stay on the music so this is as we see what's happening in the music market one is transmission speed of the network increases and then you get more powerful telephone and in memory so started probably a couple years ago with the monophonic rate rings in Japan moved on to polyphonic rings and what we see is as we implement 3G the ability to have integral songs being downloaded that is being able to use your your wireless phone as an mp3 player and finally to look at the games we we see a huge growth in people you know downloading games to their to their mobile we did a serve in and although it was a significant differences it seems a small difference but of the people we surveyed 15 percent said they were ready they saw their mobile phone as a way of playing games as opposed to 11 percent who had gaming platforms portable gaming platforms now that could be also I think that's probably a particular characteristics of the of the European market so in terms of some of the conclusions I think that one we really see that this is the way to to to valorize work because let's face it voice is still the killer application on any type of wireless network and in fact 3G actually makes voice more efficient and it's probably a value proposition that's more more more appropriate in the US where as you as you upgrade you get better quality on your voice second thing the point is very important because I think that for us the it's user created content that's going to make this market take off and not necessarily just professionally created content some point I think we're going to see the same phenomena we've seen where people use a service a lot for the first year and then there's a drop-off I think what's truly going to have the stickiness is when users can integrate their own content with professional content or just create their own content and and be able to use it and display it on their your phone of course that also means that there needs to be some developments in the metadata field the fact is being able to capture in real time metadata I think that's going to be one of the source of innovations in the years to come as well you're indexing strategies of that metadata and how you correlate it with user preferences in order to be able to push the right things in order to be able to you make sure you you can recommend to the client you know well if you like this song you might like this song and you know you can download it right now or hear a sample right now and finally well you think we're positioned to provide innovative services that's that sounds probably banal but I think the reason I put that up there because of the I think it's going to be important to all carriers to treat their clients in a holistic manner not as a wireless client sometimes and sometimes as a different type of client their one client with different contexts in different contexts they have access to different devices and by understanding what their contexts are you're in a better position to be able to provide them the content that they may need if I think you you