Sidecut Reports

While Google’s new instant search feature certainly impressed many at the news conference in San Francisco Wednesday, the impending launch of Google Instant for mobile devices might be the next application that brings fragile cellular networks to their knees.

Why? Though we probably won’t know until thousands start using Google Instant on their cell phones, the application’s feature of guessing what you are typing may actually mean fewer mobile searches since theoretically you will find your answer faster. But with new results appearing with each letter typed, Google Instant may also cause a lot of unwanted traffic as servers, cell towers and handheld devices engage in constant communications to support the “instant” search results. Could all that search traffic clog mobile networks to the point of saturation? We don’t know for sure, and didn’t get any confident answers Wednesday to make us think that the Googlers have thought this through completely, either.

Google reps at the announcement Wednesday all acknowledged that Google Instant would certainly increase bandwidth needs for either mobile or landline connections, but also pointed out that search results were typically very small bits of information, especially when compared to things like streaming video. But the increased amount of connections needed could cause less-than-instant search-result slowdowns, especially in a mobile situation. In demos of the mobile version (which Google said won’t be available for a month or more), there was a noted latency of a few seconds’ delay when compared to the desktop/laptop version of the program.

Google VP for search Marissa Mayer admitted that some beta testers of the service had to turn it off in cases where their broadband connection wasn’t good, and Google reps at the event said that it (obviously) would work better on Wi-Fi, OK on a 3G connection and not at all on “2G” wireless like AT&T’s EDGE network. Though Googlers Wednesday didn’t think the instant searches would cause someone to burn up their mobile data cap while looking for a nearby restaurant, the mobile version will come with a handy “off” button — just in case.

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Welcome Sidecut Readers to the audience participation segment of the blog! Seriously, we are starting a bit of a new tack here and with an amazing amount of industry experience amongst our readership, we have a few questions to ask, the answers to which will surely interest us all.

More about the “new tack” later; for now we are simply requesting that you answer the question in the simple poll below — namely, tell us who pays for your phone. If you feel limited by the responses please let us know with an email to kaps at sidecutreports.com; otherwise stay tuned and we will parse the results later this week. Thanks for your help!

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The reviews are in on the latest WiMAX smartphone, the Samsung Epic 4G, and they are resoundingly good — meaning that Sprint and its partner in WiMAX Clearwire should have another winner on their hands when the Epic goes on sale Aug. 31. For industry watchers, that date should set a clock ticking on when we might see the first mass-market Long Term Evolution-based smartphone available in the U.S., from big LTE backer Verizon: Will it be Aug. 31, 2011 before we see a Verizon-branded LTE smartphone? Or later? And what does that year-long lead mean for WiMAX’s shelf life?

Given the design complexities that an LTE smartphone from Verizon will have to overcome — namely, multiple radios for different frequencies for LTE upstream, downstream, and 3G and Wi-Fi connectivity — it’s probably safe to bet that LTE smartphones will arrive later, rather than sooner, than the oblique “mid-2011″ deadline Verizon is now publicly stating. And yes, we know that Samsung is planning to release a “LTE smartphone” for MetroPCS in Las Vegas maybe later this year. But one phone for one market does not a national competitor make. It’s interesting for sure, but in any WiMAX vs. LTE entree-provider comparison the MetroPCS offering is sort of a side dish.

Put aside for the moment the kerfluffle about whether or not Clearwire and Sprint will move to LTE in the future, since it’s not something that will happen anytime soon. Instead, start thinking about what will happen in the next 12 months, when Sprint and Clearwire get to keep selling all the HTC EVO 4G phones and Samsung Epic 4G phones they can get their hands on, while Verizon tries to explain why you need to buy an LTE data card and a Verizon smartphone, with limited-download more-expensive data plans for both.

Almost a year ago, I was of the opinion that WiMAX providers needed a snazzy iPhone-like smartphone, if for no other reason than to get the point across. You can market all you want, but what says faster broadband better than a cool phone that can also act as a Wi-Fi hotspot? As I said then, WiMAX folks needed a cool handset to help them spread the message:

What the WiMax industry really needs? A snazzy WiMax-enabled smartphone that can do the talking for them.

Now, the HTC EVO 4G and the Samsung Epic 4G seem to be doing just that. If this device lead can stretch to next summer, will consumers really want WiMAX to go away?

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We’ll break down and unpack the news as we get more info during the afternoon, but the big news from Clearwire today is on two fronts: One, a huge surge in new subscriber adds that had the company adding another million projected subscribers to its yearly predictions; and two, announcement of technical trials of Long Term Evolution (LTE) technology, the same technology that big cellular providers like Verizon and AT&T will use for their forthcoming 4G services.

On the new subscriber side of things, as we predicted Clearwire benefited from a huge surge of network adds from its wholesale partners, most likely Sprint Nextel which had sellout success with its HTC EVO 4G WiMAX smartphone launch in June. For the quarter, Clearwire added 722,000 net new subscribers, with 595,000 of those coming via wholesale channels and another 127,000 added via Clearwire’s own retail sales efforts.

Clearwire now claims 1.7 million subscribers on its network, 752,000 of which are wholesale customers — meaning that by the end of the year, the company may have more wholesale customers than retail. The interesting twist to the wholesale number from Q2 is that more than half (52 percent) of the new 4G customers live in markets where Clearwire’s services aren’t even yet available — meaning that people are either buying 4G products like the EVO simply because they like the device, or they are buying hybrid 3G/4G devices and using them for travel to WiMAX markets. Back in February, Clearwire had seemed a bit optimistic when it predicted it would have 2 million subscribers by the end of the year. Wednesday, Clearwire CEO Bill Morrow said the company now expects to have nearly 3 million network subscribers by year end.

On the LTE side, Clearwire’s tiptoe into the LTE waters became a full-scale immersion Wednesday, when the company said it would conduct multiple technology tests with a partner list that includes Huawei, Samsung and chip maker Beceem. While Clearwire CEO Bill Morrow said the company remains “committed to WiMAX” for its current network buildout plan, expect most followers to take Morrow’s claim that Clearwire could conceivably launch LTE services with “real-world download speeds of between 20 Mbps and 70 Mbps” and match that up against the expected 5 Mbps-12 Mbps speeds forthcoming from Verizon’s LTE services later this year.

We will break down each and every facet of all the news today — buried inside the list of announcements was another wholesale contract with small-business service provider Cbeyond, and Morrow’s contention that Clearwire might look into selling some of its licensed spectrum to help fund the company’s ongoing expansion plans.

While we don’t even have time to dig into Clearwire’s financial numbers — our 30,000-foot view says that revenues and ARPU don’t mean so much right now since the company is so early in its deployments and strategic agreements — it seems clear from the rapidly growing subscriber adds that Clearwire is making the kind of hay it needed to, if it wants to have any chance of competing directly with the larger cellular providers when they ramp up their massive marketing and infrastructure spending machinery.

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Call it the intersection of preparation and opportunity — Clearwire today took a swipe at the network troubles that have been limiting the communication features of Apple iPads and iPhones with the introduction of the “iSpot,” a personal 4G/Wi-Fi hotspot that has an introductory service price of $25 per month for unlimited data use.

The device, in a white case to match the signature Apple casing, is a rebranded version of earlier devices from Clearwire that connect to the provider’s 4G WiMAX wireless broadband network on the back end to provide a Wi-Fi “cloud” for up to eight other devices.

While the device’s retail price is $99.99, Clearwire is offering it online for sale until tomorrow for the price of $29.99. The contracts advertised are month-to-month with no long-term obligation.

Though we haven’t spoken to Clearwire yet about the device, it is clearly designed to take advantage of the hobbled cellular data plans available for Apple devices like the iPhone and iPad via Apple’s exclusive agreement in the U.S. with AT&T. Though the device is marketed as an iPad/iPhone/iPod touch companion, we are guessing that any other device with a Wi-Fi connection can use the services made available from the portable router. UPDATE: According to the Clear blog, the device is actually locked for iPad/iPhone/iPod Touch use only at the $25 rate; to use other equipment it needs to be unlocked by Clearwire folks and you will pay the regular service fees. From the Clear blog:

There has been some confusion out on the interwebs about what devices the iSpot can work with. To clarify, if you take advantage of the $25/mo service plan, your iSpot will only work with iPod touches, iPads, and iPhones. If you want it unlocked to work with any wi-fi enabled devices (laptops, Macbooks, smartphones etc) our Customer Service team can unlock it it you decide to go with the same monthly service plan that is available for the CLEAR Spot 4G.

The Sidecut take says — why lock this thing at all? The more open the better, why introduce the confusion? After all, it’s not like people who buy Apple products are necessarily budget-sensitive, so why give them a better deal than other device holders?