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Time Series Journal: Article

A Nightclub in Your Pocket

A Nightclub in Your Pocket

4G will revolutionize wireless entertainment by allowing users to access content at broadband speeds. The killer apps for entertainment include gaming, books/magazines, gambling, video, and adult content. 4G wireless - wireless ad hoc peer-to-peer networking - eliminates the spoke-and-hub weakness of cellular architectures because the elimination of a single node does not disable the network. Simply put, if you can do it in your home or office while wired to the Internet, you can do it wirelessly in a 4G network.

My son was playing Pokemon red version on his GameBoy the other day. Bored with that apparently, and bored with the other color versions of the Pokemon spectrum, and with no other kids within one meter to connect his GameBoy to via a cable, his journey with Pikachu ended for that day. But what if my son could battle against Ash, Misty, and Brock without a cable, whether they were down the street or an ocean away? Fourth-generation (4G) wireless could make Pokemon not just a game played around the globe, but a truly global game.

Many professionals in the mobile wireless space argue that voice is the killer app for now, but data is the killer app of the future. And because Voice over Internet Protocol (VoIP) is simply another kind of data, this prediction is likely true just by definition. But you can get voice with the current generation technology and the device you already own. So the issues become: What other applications will make companies deploy this 4G technology? And what will make consumers buy new devices?

There are many fields that could greatly benefit from 4G, which has yet to have a universally agreed-to definition, including public safety, telematics, last-mile, and mobile broadband. But entertainment, which includes gaming as described above, is a killer app when the term is broadened to include music, books/magazines, gambling, video, and adult content.

What is 4G?
Wire telegraph is a kind of a very, very long cat. You pull his tail in New York and his head is meowing in Los Angeles. And radio operates exactly the same way: you send signals here, they receive them there. The only difference is that there is no cat.
- Albert Einstein

First-generation (1G) wireless introduced the cellular architecture that is still being offered by most wireless companies today. Though these new companies offer sleeker devices and better quality of service (QoS) than that of 1G's analog cellular networks, they are still trapped by the spoke-and-hub weakness inherent to cellular systems.

2G cellular supported more users within a cell by using digital technology, and voice quality improved over time. But only voice and very low data-rate features, like short messaging service (SMS), were available. So-called 2.5G and third-generation (3G) cellular offer the promise of greater bandwidth - basically bigger data pipes to users - which will allow them to send and receive more information.

But both of these architectures are still cellular, with singular points of failure, because all transmissions to a given cell must pass through that one cell. And the kind of broadband these technologies promise, but seem unlikely to deliver given the cost of deploying a 3G network, will not support the kind of mobile entertainment that will drive users to buy new devices.

4G wireless - wireless ad hoc peer-to-peer networking - eliminates this spoke-and-hub weakness of cellular architectures because the elimination of a single node does not disable the network. These self-healing networks also enable mobility, streaming audio and video, and real-time geo location, at speeds that rival cable modems and Digital Synchronous Lines (DSL). Simply put, if you can do it in your home or office while wired to the Internet, you can do it wirelessly in a 4G network.

4G mobile communications was originally conceived by the Defense Advanced Research Projects Agency (DARPA) for the U.S. military, specifically for battlefield situations where cellular infrastructure was not viable. On a battlefield, a communications tower is simply a big, stationary target.

4G wireless distributes the communications functions from towers and base stations to the individual users. If an individual radio is destroyed, the network retains its functionality. That is because every user in a 4G network is also a router/repeater for the network. When the user is not sending and receiving data to/from his device, that same device is allowing other devices to hop through it in an ad hoc peer-to-peer mode (see Figure 1).

Let's Play Around
Wireless entertainment contains all the elements of the mass entertainment market, with the exception of current box office movies. According to Business 2.0 (September 2002, p.38), Figure 2 illustrates the share of entertainment revenue for 2001.

4G can deliver games, music, books/magazines, video, as well as gambling and adult content - arguably the two most profitable online services - into mobile users' hands all over the world, and allow them to interact in real-time with other users.

PC makers are always looking for the next killer app to replace what was first word processing, then e-mail, then instant messaging. Gaming, and the wide demographic interested in playing, is - if not a killer app - a phenomenon still on the upswing. Nowhere is this more true than in Korea. A Wired writer, J.C Herz reported in the August 2002 issue, that:

(Japan's) consumer electronics have traditionally been all but verboten thanks to both trade policy and cultural resentment. No PlayStations, no Sega, no Nintendo. As a result, PCs have become the dominant game platform in South Korea - unlike in the rest of the world, where consoles rule. And in 1998, with Starcraft the most popular game on the market, PC Baang (Internet cafe owners) started hosting tournaments to boost business. That snowball has now reached the bottom of the hill. Starcraft is not just a game in South Korea, it is a national sport, what football was in America in the 1970s. Five million people - equivalent to 30 million in the U.S. - play. And three cable stations broadcast competitive gaming full-time to a TV audience.

Although the broadband connections found in Internet cafes, offices, and some homes provide the needed throughput to compete, these connections do not allow people to play while commuting or otherwise in mobile environments. A Frost & Sullivan study reported that the mobile game industry generated $436.4 million in 2001 and will grow to $9.34 billion in 2008.

Asia-Pacific will continue to dominate the world's mobile gaming markets, UK consultancy BWCS predicts. A new BWCS report says that although global revenues from cellular games will grow from $104.8 million this year to $7.76 billion in 2007, most of this will be in Asia. BWCS predicts that by 2007, more than 200 million mobile subscribers will be playing games on their handsets.

4G wireless provides the user with the bandwidth and the mobility that is required. More importantly, when gaming is coupled with 4G, it offers carriers an application on which people are already spending money. According to Wired, many of the most popular so-called "massively multiplayer mobile games" charge users a monthly fee of up to $25. It is not unreasonable to predict these same users would pay a little more for mobile gaming.

You pull up to the light, and coming from the car next to you is a song you wish you could hear from the beginning. So you pull out your PDA, type in the title or the artist's name, and about five seconds later you are listening to that song. Your MP3 player cannot do that today. Your satellite radio will never do it. But you can do it, today, with 4G (see Figure 3).

The song was delivered to you as a Moving Pictures Experts Group Audio Layer 3 file, more conveniently called MP3. MP3s allow for digital audio files to be compressed, while still maintaining their original sound quality. It's a technology that has led to the creation of new companies, new devices (Apple's iPOD, SONICblue's Rio series, and Dioneer's credit-card sized DionMX), and enough litigation to keep a whole generation of lawyers employed. But all these companies fail to address mobile distribution - namely, how to make any audio file available anywhere, anytime.

The popularity of the MP3 format exploded primarily because it allowed bandwidth-limited users to share music, particularly important for teenagers using a dial-up connection. And MP3s are portable because the compression reduces storage needs. But an MP3 player still has a finite amount of memory (in the MP3 format, 1Mb is roughly equivalent to one minute of music). So there's only so much music you can download to your PC, and then upload into your MP3 player to take with you.

This physical limitation can be overcome by not being entirely dependent on this download/upload process. By freeing users from the limited capacity of their local storage, an infinite amount of music becomes available. Streaming MP3s from network-based storage or from other MP3 devices can supplement or even replace the local storage of MP3 files on the device.

According to a spring 2002 study conducted by KnowBetter.com and eBookWeb.org, 93% of respondents said they "e-read" for recreation, as opposed to work, education, or reference. This means that most of these readers are not at work or school, where a broadband connection is likely. They are on the beach or riding the train to or from work, and are in need of content. There is obviously a wealth of content, and now 4G offers carriers a means to deliver that content to paying mobile customers.

According to Mitchel Harad, director of business development for NewlettersOnline.com, there are many profitable models for delivering this content:

  • Online subscriptions: Currently, paper and electronic versions are usually identical. This is ideal for publishers, since it slashes production and delivery costs. Harad predicts that there will be "more specialized online content, following the lead of many magazines," in the future.
  • Pay-per-view: "A lot of publishers think this is the road to fortune, but very few have bothered to invest the marketing effort and financial commitment required to make that happen. The few that have are doing fairly well, however," according to Harad.
  • Content redistribution: "The oldest form of electronic publishing is definitely worth a new look. While lots of publishers signed up for Nexis, Dow Jones, and the like, I'm seeing a ton of new opportunities on the Web. Specifically, the rise of the vertical portal has created thousands of very targeted Web sites that are craving content," says Harad.

    The Internet is also proving to be a powerful weapon in the war against government censorship. No longer can a state-owned press continue its monopoly over what the local populations see and read. 4G, simply as a cost-effective delivery medium (the so-called "dumb fat pipe"), is reason enough to deploy the technology. But the ability to deliver information to anyone, anywhere, is an argument that goes beyond the business case.

    Online casino gambling began in 1995 with estimates of 9 million registered online gamblers in 2002, and up to 15 million in 2004. 2002's "consumer spend" (the difference between losses and wins) at the world's approximately 1,200 online casinos, sports books, and lotteries will be about $3 billion, according to Riaan de Jager of AquaOnline, who explains:

    Online gaming is minuscule compared with its bricks-and-chips counterpart - the highest estimates put it at perhaps 1% of the overall business - but it's growing fast and is likely to boom, because established gaming companies like Britain's Ladbroke's and William Hill are joining the action. London-based Merrill Lynch analyst Andrew Burnett says online gambling could generate more than $150 billion in revenues by 2015. (Bans on Internet gambling in the United States, while essentially unenforceable against consumers, have kept American companies mostly on the sidelines so far.)

    In Europe, which has higher wireless penetration rates than the United States and fewer restrictions on online gambling, business is growing. NetValue reports that in June 2002, Norway experienced a 31% increase in visits to gambling Web sites, Spain had a 25% increase, Italy increased 19%, and Germany was up 18%. One exception in Europe is Greece, which recently outlawed all electronic games across the country, including those that run on home computers, GameBoy-style portable consoles, and mobile phones. Greek Law Number 3037, enacted at the end of July 2002, was reportedly introduced in an attempt to prevent illegal gambling.

    The notion of video-on-demand (VOD) is what drove the push to deploy DSL in suburban neighborhoods. Although VOD has yet to displace Blockbuster and other video outlets, the business case is clear. There is a market to replace making consumers drive to the video store, reminding them to rewind, and making them drive back to return it. VOD will replace Blockbuster one day, especially with the move to adopt a common format and compression scheme called MPEG-4, similar to MP3 standard for music. 4G wireless will only hasten the pace of VOD, as it increases the number of users and the number of venues where those users can watch.

    Adult Content
    Although it is difficult to calculate or prove, adult Web sites are generally considered to be among the first profitable online genres. "In new technologies, adult services usually account for 80% of traffic. It has been so with video, the Internet, and DVD. It is natural to assume it will be the same with mobile Internet," according to Charles Prast. The ready availability of inexpensive content and the seemingly constant demand combine for a profitable business.

    One of the most famous names in the soft porn space, Playboy, announced in August 2002 its plan to license Playboy images to mobile phones with color displays, handheld computers, and BlackBerry wireless e-mail devices. The first of the Playboy titles is expected to have a retail price of $19.95. Playboy, which also has a cable TV channel and an online site, would seem to have the content to provide mobile video services, too, in a 4G network. Playboy, and the many other adult content providers, will also be able to use 4G to deliver video and magazine-based content (text and photographs).

    The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
    - Arthur C. Clarke

    I showed the first paragraph of this article to my 9-year old son. His reaction might be similar to that of many other readers, "Is this really possible?" It is.

    4G wireless is a "disruptive technology," according to Clayton Christiansen's 1997 book, The Innovator's Dilemma. Vendors of wireless hardware fear 4G because it means the end to the giant cell towers they are trying to sell. Incumbent carriers fear 4G because it means their customers will get a taste of the possible and demand the feature set that 4G can deliver. Handset makers fear 4G because it will hasten the migration from phones to voice-enabled PDAs. But the consumers, those who ultimately will dictate how the term 4G is defined, will embrace this technology and force the industry to deliver these services. My son certainly hopes so.

  • More Stories By Allen H. Kupetz

    Allen H. Kupetz is the director of international sales for MeshNetworks, Inc. (www.meshnetworks.com), and an adjunct professor for international affairs at the Hamilton Holt School of Rollins College (www.rollins.edu/holt/). He served as the telecommunications policy officer for the U.S. Embassy in Seoul from 1992-96. Allen is also the founder of www.4Gwireless.org and the author of more than a dozen articles and international conference presentations on fourth generation (4G) wireless. He has an MA in international relations from the University of Texas in Austin.

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    Most Recent Comments
    A Kupetz 04/27/03 04:54:00 PM EDT

    Typo in previous message: the Web site for additional 4G content is www.4gwireless.org (not .com).

    A Kupetz 04/27/03 04:49:00 PM EDT

    I certainly agree that 4G is not yet a given. I also agree that content is the key to any future broadband technology. That is the beauty of 4G. 3G offers users a small screen on a phone. A phone should only be used for voice. 4G is the mobile Internet, exactly as we are using the wired Internet today. No need to change your current content. And speaking of content, for other articles on 4G, please check out www.4gwireless.com Thanks for reading the article and sharing your comments.

    George Faigen 04/25/03 05:35:00 PM EDT

    Interesting article, yet these are the exact same claims made by 3G representatives starting in 1997/8 and as we have seen, success has not been achieved with that technology. The self-healing nature of 4G is clearly an improvement over 3G's single point of failure and constraints, yet, compelling content, not redundancy weaknesses has stalled the consumer market for 3G. This article points to some compelling content, which is refreshing, however it does not cover any competitive or alternative ways consumers will get this content. 4G, like practically all technologies, are incremental not replacements. PDAs did not replace PCs, MP3 players did not replace home stereos or Walkman or radios, or... So if 4G is going to be successful, it has to offer good value for money and given that the costs of implementing 4G are high, carriers will have to wonder who is going to pay for yet another pipe.

    [email protected] 04/25/03 01:39:00 PM EDT