Friday, July 11th, 2008
You’ve got to wonder whether Apple and AT&T are excited or worried about a repeat of last year’s iPhone mania.
Even though a few people have already started lining up outside Apple’s Fifth Avenue store in New York, the buzz surrounding Friday’s launch of the iPhone 3G has been far less prevalent on our shores this year than last year, when I thought I was going to lose my mind writing about Apple’s first mobile phone.
That makes some sense, since, in many ways, the iPhone is old news. But a new activation process could mean that Apple and AT&T will have to deal with a different kind of buzz: the grumbling of potential iPhone customers in long, slow-moving lines.
The new model is expected to appeal to a wider audience than the first iPhone did because of the lower barrier to entry presented by the $199 price tag and the faster networking connection that will suck in those of us who couldn’t imagine trying to surf the Web on an EDGE chip.
Are new iPhone owners-to-be the types of people who enjoy being part of an Apple product launch, or would they rather just pick up the new phone on their lunch break and be done with it?
Here’s what you need to know if you’re thinking about picking up an iPhone 3G this weekend.
When and where does the iPhone 3G go on sale?
In the United States, you’ll be able to buy the iPhone 3G starting at 8 a.m. local time on Friday, July 11, at your local Apple or AT&T retail store. If you’re outside the States, it depends; some countries, such as the United Kingdom, are launching on the 11th but at slightly different times, while others are waiting a week or two.
Is there going to be a long line like last year?
Probably. The lines might not stretch as long as they did last year, but lines for Apple products and shows aren’t so much about the products or events themselves; many times, people view the line-waiting experience as a community gathering of like-minded souls who want to be a part of something Apple-related.
I’m sure that there are people who will want to be able to say they were first to buy both the original iPhone and the second-generation model, just as there are people ruing the fact that they missed out on all the fun of the original “iPhone Day.”
At least a few people will camp out for the chance to buy the iPhone 3G on day 1.
(Credit: Caroline McCarthy/CNET News.com)
It looks like there ’s going an additional twist this year, at least in New York. Over the holiday weekend, a publicity-minded group of environmental activists decided to use the iPhone launch to promote their own causes. It’s an election year, too; will we see McCain and Obama activists promoting their candidate in front of a captive audience? Who knows.
No matter who’s in the crowd, the launch experience this time around is going to be very different, however, because Apple and AT&T are requiring iPhone buyers to activate their iPhones in the store–and because of the morning start time.
Why are the companies requiring in-store activation? That’s not what my friend/sister/cousin/third baseman had to do last year when she bought an iPhone.
Apple and AT&T spoiled iPhone customers last year with the at-home activation policy that allowed them to rush into the stores, buy the iPhone, and activate it later in the comfort of their homes: a few glitches notwithstanding. In-store activation is a standard operation for most new phones, however, and it’s going to be the way the iPhone 3G is released to the world.
There is one main reason for this: AT&T wants to cut down on the number of iPhones that are bought for the sole purpose of unlocking them and reselling them overseas, so it’s going to make sure that people commit to a two-year contract with early-termination fees before they take the phone home.
In addition, Apple appears to have taken the extra step of “bricking” all iPhone 3Gs before they arrive at retail stores, so the phones have to be both “unbricked,” or essentially turned on, as well as activated to run on AT&T’s network.
That sounds like it’s going to take a while.
It probably will. Last year, the at-home activation scheme allowed Apple to admit iPhone shoppers into its stores 25 at a time, and it meant that store employees just had to hand out iPhones and swipe credit cards. You could have walked into the downtown San Francisco Apple store last year an hour after the iPhone went on sale at 6 p.m. and picked up a unit without having to wait in line for a few days.
Apple employees get ready to welcome the first iPhone shoppers inside the downtown San Francisco store last year.
(Credit: Erica Ogg/CNET News.com)
This time, store employees will have to sign up new customers for AT&T’s service, do a credit check, go over the paperwork for the new two-year contract, explain the early-termination fees, and go through the physical process of both unbricking and activating the iPhone 3G.
That could take anywhere from 5 minutes to 20 minutes per customer, depending on the nature of the transaction; current AT&T customers will probably find it faster than new customers will. The companies have likely given this some thought, and will no doubt put their employees through some intense training in the days ahead of the launch. But, as they say, they play the games for a reason.
I still want one, anyway. How much is this going to cost me?
It depends. If you bought an original iPhone, or if you’re a brand-new AT&T customer, the iPhone 3G will cost you $199 for the 8GB model or $299 for the 16GB model–far cheaper than the opening price last year. If you’re a current AT&T customer but you don’t have an iPhone, the price you pay depends on whether you are eligible to purchase another subsidized phone.
Generally speaking, the longer you’ve been with AT&T using your current phone, the more likely you are to be eligible for the upgrade price, but check with your local representative to be sure. If you’re not eligible for the upgrade price, you’ll pay $399 for the 8GB model and $499 for the 16GB model.
This time around, you’ll also have the option of buying an iPhone without having to commit to two years of service from AT&T. That option is pricey, however: $599 for the 8GB model, or $699 for the 16GB model.
The Unofficial Apple Weblog notes that at those prices, you could buy the regular model for $199, fork over the activation fees, pay for one month of service, cancel that service, and fork over the early-termination fees and still save money as compared to buying the $599 model. You’d still have to unlock your iPhone 3G in order to make it useful at all, however, and whether that will be as easy to do with this model as it was with the original remains to be seen.
No, I meant, how much is it going to cost me over the long run?
You’ve got several options for monthly plans, but in short, it’s going to cost more than the original iPhone did on a monthly basis. The combination voice-and-data plans are running at least $10 more a month than the original plans, and perhaps more, depending on your addiction to text messaging.
How many iPhone 3Gs will sell in the first weekend? Last year, Apple sold 270,000 in just two days.
(Credit: Apple)
So if I want an iPhone 3G, will I have to line up to ensure that I get one this month?
Last year, there was enough supply to make it most of the way through the first weekend, before the iPhone became really hard to find. This year, expect something similar. Apple hasn’t shipped an original iPhone since the middle of May, giving itself plenty of time to start building up the supply of iPhone 3Gs.
With no online-ordering option available–at least in the U.S.–your only option will be to visit an Apple or AT&T store, if you want an iPhone 3G. What will those stores look like on Friday morning? This is hard to predict for stores in urban areas like New York and San Francisco.
If everybody freaks out about the in-store activation process and decides to wait a few weeks, it could be really easy to get an iPhone 3G on Friday. If everybody thinks that the concerns about the lines are overblown and heads to a store on Friday, the activation process could ensure that you’re in for quite a wait. Those of you in smaller cities and towns probably won’t have the same issue, but your local stores probably won’t get as many iPhones as the big guys, either.
Don’t be surprised to see long lines outside Apple and AT&T stores during the day on Friday. The interesting question this time around is whether iPhone 3G early adopters can waltz into the stores with the same ease as last year, or whether “iPhone Day: The Sequel” resembles the wait for “It’s A Small World” at Disneyland.
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Sunday, May 11th, 2008
Video may have killed the radio star, but it doesn’t have to kill the Internet.
That is if Internet service providers can figure out how to keep up with the video-driven bandwidth demand on their networks. Peer-to-peer technology provider BitTorrent says it can help.
Video consumes more network resources than any other media distributed on the Web. Even poor-quality video from YouTube eats up more bandwidth than e-mail, music downloading, and voice over IP services. And when you throw full-length high-definition video into the mix, you’re talking about even more bandwidth. Depending on the compression used, a single HD video stream can eat up 20 megabits per second worth of bandwidth.
And as consumers subscribe to faster and faster broadband connections at home and sites like YouTube and Hulu come online offering all kinds of video choices, more people are watching video on the Web. According to ComScore Video Metrix, Americans are currently watching upward of 10 billion videos online a month. By the end of 2007, online viewers averaged more than one video a day.
This is just the beginning. ABI research forecasts the number of viewers who access video via the Web will nearly quadruple in the next few years, reaching at least 1 billion in 2013.
This summer’s Olympic Games in Beijing marks the first real test of online video as NBC embarks upon the most ambitious online video project ever. NBC plans to offer 3,600 hours of live programming from Beijing, which translates to about 212 live hours for each of the 17 days of the Olympics. The majority of this viewing will be delivered online.
All this video is great for viewers, who are able to pick and choose what they watch and when. But for Internet service providers like the phone companies and the cable operators, it represents a massive challenge. Some providers, such as Comcast and Time Warner Cable, are testing out new ways to deal with “bandwidth hogs” or individual users who use an inordinate amount of bandwidth.
Last month, Comcast began testing a new system that will throttle back or slow down traffic during times of congestion for heavy bandwidth users. The new system was developed after Comcast faced stark criticism for singling out and slowing down peer-to-peer traffic.
Meanwhile, Time Warner Cable, which says it faces the same capacity headaches, also began testing a new billing system that charges customers who exceed their limit for uploading and downloading material.
P2P as a solution, rather than a problem
Eric Klinker, chief technology officer for BitTorrent, which has commercialized the peer-to-peer technology, says that what the cable operators are doing is a good start. But more can be done to help operators deal with the onslaught of video.
“I think what Comcast and Time Warner Cable are doing is a great first step. It gets ISPs out of the business of deciding which applications are important and which aren’t. But there are enhancements to the peer-to-peer protocol, in particular, that can make it easier on all ISPs.”
–Eric Klinker, CTO, BitTorrent,
For one, peer-to-peer protocols, such as BitTorrent, which are often cited as major headaches for network operators because of the big file transfers they enable, need to be utilized rather than singled out as a source of the problem, he said.
“I think what Comcast and Time Warner Cable are doing is a great first step,” Klinker said. “It gets ISPs out of the business of deciding which applications are important and which aren’t. But there are enhancements to the peer-to-peer protocol, in particular, that can make it easier on all ISPs.”
Peer-to-peer technology has gotten a bad rap for years. Since the days of file-sharing networks like Napster, which allowed people to exchange songs on their computer hard drives with others on the Internet, peer-to-peer technology has been demonized in the press. But the truth is that peer-to-peer technology actually allows large files like videos to be distributed more efficiently. And as more video makes it way onto the Web, it’s increasingly being used. In fact, peer-to-peer traffic accounts for about 43 percent of all traffic on the Internet, according to a recent study by the network management company Sandvine.
The way peer-to-peer works is that when a user requests a video, the peer-to-peer network queries other users in the network and takes pieces of the file from different peers and sends it to the user requesting the file. This distributed architecture means that content owners don’t have to assemble large and expensive data centers. It also means that a content distributor doesn’t have to pay for expensive high-speed links to serve up an entire file from a single server farm.
That said, peer-to-peer protocols in the wild can eat up lots of bandwidth because peers on the network can silently and continuously upload pieces of files from their computers all day and all night, seeding dozens or hundreds of file requests. And because upload capacities are generally much slower than downloads, it can create bottlenecks and capacity crunches on the last mile of service providers’ networks. For network operators that are already capacity-constrained, this phenomenon can dramatically affect performance for all users.
The enhanced version of peer-to-peer
Peer-to-peer companies, such as BitTorrent and Pando Networks, have recognized this problem and have been working with service providers, such as Verizon Communications, Comcast, and others to come up with solutions. Verizon and Pando Networks have been working on a project called P4P, which advocates ISPs share information about their network topography and use an enhanced version of peer-to-peer to locate peers in close proximity to the file request. Getting files locally can help reduce the expense associated with carrying peer-to-peer files over long distances.
BitTorrent, whose founder created one of the most popular peer-to-peer protocols used today, has also been working on a solution. The company has developed its own enhancement to the peer-to-peer protocol that tells peer-to-peer applications to stop seeding the network with content when the network is congested.
For example, if a teenager starts playing an online video game at the same time his mother makes a voice over IP phone call and his little sister is downloading music from iTunes, the protocol will tell the peer-to-peer movie application that is running in the background on their family computer to stop uploading bits of the Spider-Man movie that had been ordered from an online movie rental service and is now stored on a hard drive in their home. Instead, the network will search for the content on another peer that is on a network that is less congested.
“If there is contention in the network, my application will back off,” Klinker said. “And it will automatically and seamlessly find someone else in the network to complete uploading that content. The video quality is never disrupted, and the user never knows where the content is coming from.”
BitTorrent has already tested the enhancement with more than 10 million users and it’s currently working with the Internet standards body, the Internet Engineering Task Force, to standardize the technology so that other peer-to-peer companies can embed it in their software client.
Klinker said that new technologies, such as the one developed by his company, as well as efforts on the P4P enhancements will help ISPs manage and control their networks so that even more video can make it to the Web without crippling the infrastructure delivering it.
And once service providers learn how to harness peer-to-peer, they will be able to develop business models that reap the benefits of the technology. For example, Comcast, Verizon, or any other TV provider could add peer-to-peer software to the set-top boxes sitting in their customers’ living rooms to create a distributed peer-to-peer movie network. Instead of serving up on-demand movies from their own servers sitting in expensive-to-run data centers, these TV providers could leverage the content already stored on their customers’ set-top hard drives.
“The cable and phone companies are already spending capital to put set-tops in everyone’s home,” Klinker said. “They could use that same hardware as part of their content distribution model. Then the user pays the electrical bill. And they pay for the bandwidth. It’s just much more efficient.”
Klinker said a solution, such as this one, requires a slightly different business model from BitTorrent’s current business model. But he said that it’s something the company is investigating.
“It’s interesting enough that we’re in discussions and testing some scenarios with ISPs,” he said. “In general, service providers move slowly. So nothing will happen overnight. But I think we’ll see some interesting changes within the next three years.”
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