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New Technology Platform and Service Fragmentation of Personal Wireless Communication

New Technology Platform and Service Fragmentation of Personal Wireless Communication. Sonny Wu Sloan Fellows 2001 Email: sonnywu@sloan.mit.edu Tel: 617-818-5698. Motivations What is 3G ? What is a “cell phone” like in 2-3 years? Is it possible to make a “cell phone” for $10-$20 ?

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New Technology Platform and Service Fragmentation of Personal Wireless Communication

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  1. New Technology Platform and Service Fragmentation of Personal Wireless Communication Sonny Wu Sloan Fellows 2001 Email: sonnywu@sloan.mit.edu Tel: 617-818-5698

  2. Motivations • What is 3G ? • What is a “cell phone” like in 2-3 years? • Is it possible to make a “cell phone” for $10-$20 ? • Wireless WAN/LAN/VPN roaming ? • What is the wireless service supply chain like? • Pricing Models for Wireless Services? • What are critical technologies ?

  3. email Wireless Multimedia World • New classes of wireless devices are arising that • deliver a real mobile multimedia experience.

  4. Wireless Technology Evolution 2GCircuit Switched (1999) 2.5 G Packet Data Overlay (2000-01) Up to 2Mbps 3G Integrated Multimedia (2001-02) GSM 1999 - 239M Subs 2004 - 909M Subs CAGR - 31% 4G ? (2003+) GPRS up to 170kbps UMTS TDMA IS-136 1999 - 36M Subs 2004 - 190M Subs CAGR - 39% End-to-endIP-based WirelessInternet GPRS/EDGE up to 384 kbps EDGE 3xRTT 1xRTT up to 144 kbps CDMAIS-95 1999 - 39M Subs 2004 - 265M Subs CAGR - 47% * Courtesy of Nortel Networks

  5. Wireless Operator Competitive Landscape Wireless Operators Territory subscribers Minority Holdings Technology AT&T wireless USA 27M J-phone TDMA Sprint Wireless USA 30M CDMA Vodafone Europe 60M* Asia, Verizon GSM/UMTS Telefonica Spain/Latin America 18M Telmex NTT DoCoMo Japan 30M AT&T/Asia PDC/W-CDMA China Mobile PRC 50M n/a GSM China Unicom PRC 30M n/a CDMA/GSM France Telecom Europe 26M Orange Deutche Telecom Europe 29M VoiceStream USA GSM/UMTS BellSouth+SBC US/Latin America 31M Israel/Europe TDMA/GSM *Vodafone has installed base of 110M users if all minority holdings are included. (Verizon etc.) • Average Cost/POP for 3G license: $60-505 • Vodafone and NTT DoCoMo most aggressive with expansion • Hutchinson with $60B cash war chest

  6. NTT DoCoMo iMode Story * Source Yankee Group report 25 M wireless internet subscribers in Japan today !

  7. European Wireless SMS Story * Source Yankee Group 2000 SMS accounts for ~30% of European Operator Revenue

  8. Buy NetCardio Wireless Critical Success Factors • Moving beyond voice • to Interactive multimedia applications Mobility Mission Critical Multimedia Personalization Personalization, Interoperability and Security are the Missing elements of the wireless Stories!

  9. Network Structure and Services

  10. Today’s Corporate Network • Corporate Network Challenges • TDM/IP Convergence • Cost • Security • Corporate VPN • Wireless WAN/LAN • Internet/Storage/Voice • - 10G Ethernet

  11. New Intelligent Wireless Module Internet Service Providers Personalization End to End Client-Server Encryption with NetCardio High Bandwidth connection • Certification • Authentication • Personalized services Mobility Multimedia Wireless Module • Unified messaging • Inch-Sq size briefcase • P2P Cash • Multimedia file exchange • MP3 download • Family Pictures • Celebrities Posters and Music

  12. Silicon Foundry Economics Factory Type Capital Al Processes Cu Processes Investment 0.18 micron 0.13 micron___ 8 Inch Factory$1.2 B US Wafer Price $1697 $2122 Cost per mm2 die[1]5.4 cents 7.0 cents 12 inch Factory $3.6 B US Wafer Price $2663 $3328 Cost per mm2 die 3.77 cents 4.71 cents [1]Notice the cost metric is cents/mm2 of die, which is the typical size of an embedded processor.

  13. 3G System Specification for DSP/Memory[1] 2G Terminal 3G Terminal System Spec 1998 2002 2002 Memory Size 4 Mb 16 Mb 64 Mb Radio Channel 30 MIPS 30 MIPS > 200 MIPS Speech Coding 3-20 MIPS 3-30 MIPS 30 MIPS Voice Control - 50 MIPS 50 MIPS Video Coding -- -- > 200 MIPS Processor 8-16 bit 10 Mhz 16-32 bit ARM [1]Source: Nokia announcement, Electronics Times, March 12 2001,page 65. Current Battery Technology -> Power Requirement: < 200-250 mW

  14. Low Power System on a Chip Design * source: http://www.berkeley.edu/bwrc

  15. Technology Curves for Smart Cards S Curves for Smart Cards FeRAM RISC Card Java Card E2PROM Card Time to Market • Critical Technologies: • FeRAM • Embedded Low Power System on a Chip Design • Encryption

  16. Technology Curves for E2PROM, Java Card and NetCardio[1] Module Metric E2PROM Java Card NetCardio Module Memory FLASH Embedded Flash FeRAM Size 8-30KB 64KB 4-8MB Access Time 100mSec 100mSec 100 nSec Energy per 32b write[2] 1J 2J 1nJ R/W Cycle 500K 500K 1010 Voltage 5 V 3.0 V 1.5 V CPU None 8-16 bit ARM/MIPS 32bit ARM ClockSpeed 5-10 Mhz 50Mhz 100Mhz Current Cost $0.50 $3-5 $10*[3] [1] NetCardio is an MIT start up by the Author and other Sloan and EECS students working on next generation Smart modules for wireless applications using low power Encryption and FeRAM technology. [2] Data Source: “A survey of Circuit Innovation in Ferroelectric RAM” by A. Sheikholeslami, Proceedings of The IEEE, Vol.88,No 5, May 2000 [3] Cost estimated by David Lim of Sloan ( from Chartered Semiconductors) using Flash memory processing data.

  17. Wireless Service Pricing Models • Pre-Paid Most Popular (eg: New Orange Customer all in Pre-Paid) • Flat Rate better than Differentiated (eg: AOL and AT&T) • Fragmented Model (eg: NTT DoCoMo)

  18. 3G Pricing Scenarios • Price goes Down NOT UP • Marginal Cost for VoIP and Data critical to Pricing Design • Market Elasticity with subscription NOT with ARPU • 3 Billion wireless users instead of 1.5 B by 2004 ?? • Wireless Corporate VPN service IS ONLY revenue for higher ARPU

  19. Wireless Network Cost Trends

  20. Intelligent Wireless Module® Subsystem SpecRadio/DSP Encryption FeRAM Die Size: 10 mm2 50 mm2 100 mm2 Performance: 1000 MIPs 1024 bit RSA 4 MB Power: 100 mW 100 mW 50 mW Die Cost: $5 Packaging: $2 Testing: $3 Overhead:[1]$2-$5 Subtotal Cost $12-15 Pricing of Module $20-25 each [1] assume volume scale of 200M to 500M units/year: equivalent to $1.0 B US of amortization of R&D and Mfg O/H • Low Cost Single Chip Module • Interoperate with wireless appliances • Enabler for Customized wireless services

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