Moderator Scott A Snyder PhD snyder4ggmailcom 6102560662 Scott A Snyder 2010 Panel Introductions Scott Snyder moderator DSIWharton School Dan Deeney New Venture Partners Anton Wahlman Industry Analyst ID: 732719
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4G Mobile VenturesPanel Discussion
Moderator:Scott A. Snyder, PhDsnyder4g@gmail.com610-256-0662
©Scott A. Snyder 2010Slide2
Panel Introductions:
Scott Snyder (moderator), DSI/Wharton SchoolDan Deeney, New Venture PartnersAnton Wahlman, Industry AnalystMacy Summers, Lockheed MartinAndreas Koch, Juniper Networks©Scott A. Snyder 2010Slide3
Is Wireless Ready to Take-off?
4B+ wireless usersWiMax and LTE being widely deployed300M wireless sensors shipped to date (ABI Research)App store model has demolished entry barriersImmersive applications beginning to appearConvergence of ICT trends towards a ubiquitous “Cloud”Cuts across all major verticals and intersections
Government investing $7.2B into broadband initiatives via ARRA
Breakthru LLC Confidential Information
Is Wireless the Internet of the Coming Decade?Slide4
Strong Signals…
Breakthru LLC Confidential Information“This year's International Consumer Electronics Show (CES) was all about wireless. In fact, wireless was probably the most pervasive of all technologies at this year's show, extending its reach to every sector of technology, from Ford's Sync system to set-top boxes, home entertainment systems, healthcare, e-readers, tablets and M2M.”
- Blog Post by Andrew Berg Monday, January 11, 2010
Google has just announced that it has acquired
AdMob
, the mobile ad platform that has been especially popular on the iPhone, for $750 million. This is a big win for the company’s early investors, which include Sequoia Capital and Accel Partners (this is a huge day for Accel — they were also investors in Playfish, which was just
acquired
by EA). More recent investors include DFJ and Northgate Capital.
Mobile advertising company
Quattro Wireless
confirmed Tuesday that it's been acquired by Apple, in a blog post by Quattro CEO Andy Miller, who's identifying himself now as Apple vice president of mobile advertising. A price wasn't named, but AllThingsD reported that it's $275 million
when it broke the news on Monday
.Slide5
But the trends are not great…
$3.3 billion invested in 252 mobile companies in 2006 (Thomson Reuters)$2.5 billion invested in 237 mobile companies in 2007U.S. VCs put just over $2 billion into 204 mobile companies in 2008$1 billion invested in 66 mobile companies through Q3 2009Many venture capitalists believe that the Wireless sector will experience declines with 37 percent predicting lower levels for next year as well (NVCA 2010 Predictions)Slide6
Mobile Investment/M&A ProfileSlide7
Innovation Opportunities Exist at the Intersections
©Scott A. Snyder 2010Slide8
8
4G Investment Landscape8
Transmission
IP Core
RAN
Packet Core
SGSN
GGSN
IuPS
Gn, APN
Voice Core
MGW
GMSC
MSS
VoIP
Wireless Infrastructure
Innovative backhaul solutions
Small base stations
Enterprise networking
Semiconductor / RF Components
Baseband chips (3G / 4G)
Power amplifiers, RF filters
MIMO antennae configurations (4x4)
Mobile Applications
Enterprise applications
Embedded software
Carrier grade BSS/OSS software
General
Interest
Security – network, devices
Mobile analytics / subscriber usage
Real-time optimization of IP trafficSlide9
Network Capacity Continues to be a Challenge
Capacity problems experienced today in 3G networks will exist in 4G worldWhile 4G capacity gains may initially be in 5-10x range, ‘effective’ capacity gains in urban areas will be incrementalNew devices, services and applications will contribute to complex capacity planning and network management Underlay network of small, dense sites needed to support umbrella of marcocells
Investments that provide operators with increases in network capacity will gain traction in the market
Small base stations with innovative backhaul
Real-time optimization of traffic in meshed 4G IP networks
Improved network intelligence on capacity drivers will be key
Mobile network analytics, subscriber profiles and usage patterns
Improved service delivery based on device and service requirementsSlide10
The Acute Need For 4G
3G in 2003: Solution in search of a problem4G in 2010: Fire hose applied to a fireLTE around the world…eventuallyWiMax early lead, but struggling with phonesWiFi: augments everythingSlide11
4G Megatrends
VoIP replaces GSM/CDMA2000But which kind of VoIP?Carrier-based managed VoIP…or over-the-top providers?Security, Security, SecurityHacking VoIP becomes #1 trend by 2011-12VoIP encryption to become #1 most desired app…extending to IP-based videoconferencingSlide12
Consolidation: Too much already!
Infrastructure systemsEricsson, Huawei, Cisco, Alcatel, Motorola, Samsung, AlvarionOperating systems – and handsetsRIM, Apple, Google, Microsoft, Nokia, PalmDell, Samsung, LG, HTC, HPSlide13
Mobile Ventures
Where Capital is to be Deployed?
Capital Markets are still investing in Mobile businesses.
New trends in technology, unattended sensors, enterprise integration and security will drive significant growth in mobile telecommunications capital deployment.
Deal Flow candidates:
Mid-stage, recession resistant, capital efficient companies with attractive exit pathways and an experienced management team have the best profile for many Technology Funds.
1. NEW APPLICATIONS & TECHNOLOGIES
2. THE “SEA OF LTE” (AND WiMAX too)
3. NEW BUSINESS MODELS
4. CYBER & SECURITYSlide14
UNIQUE NEEDS
GOVERNMENT & MILITARY Mission Markets
SECURITY
MOBILITY
TACTICAL QoS
Security, Governance, Enterprise Integration, Data Exposure, Mobility, RF Challenges, Tactical Quality of Service are some of the Government challenges using 3/4G wireless for Mission Operations.
GOVERNANCESlide15
Today’s SP Network
Video
Network Features Dedicated to NSP Walled Garden Specific Services
Business Model Transformation
The New Services Ecosystem
Services Ecosystem
Network Transformation
OTT App/Content Providers
Developer Community
NSPs
Device OEMs
Fixed Line Voice
Mobil Voice
Fixed BB
Business Data
Digital TV (IPTV)
Mobile Data Services
The New SP Network
Service Elements in Cloud Computing Layer
Policy & Identity Management
Access and Transport Fabric
Current Services
($1.8Trillion Revenue WW)
Future Services Revenue
($2.5Trillion)Slide16
The Open Mobile BB Challenge
Implications
NSPs will have less bargaining power with content and device partners
NSPs will need to find new ways of adding value to participate in content revenues!
Mobile devices and network will become vulnerable to security threats
Affordable consumer smart phones
iPhone is changing the game
User friendly: easy access to web
~50X BW usage of other smartphones
Millions sold even without subsidy – now subsidized at prices $200
Elimination of handset/deck bottleneck
Easier for content providers to go direct
Massive increase of mobile IP traffic
True mobile broadband data speeds
3.5/4G Network Buildouts
HSPA, Wimax, LTE
Adoption of 3G/4G handsets
Elimination of bandwidth bottleneck
Opens mobile to web applications
Advertising driven revenue models
Emergence of mobile advertising models
Search advertising (incl. local)
Targeted ad insertion
Growing role of search, portal and web services players
Subsidization of “free” mobile apps
Open handset operating systems
Open Handset Alliance Android
First open, free mobile platform
Google open OS with developer kit
Growing share of Linux operating systems
Carrier no longer controls OS and apps
Proliferation of optimized mobile apps Slide17
SP Network and Cloud Based App AccessSlide18
The Value of the Service Provider Network
Internet
Applications
Residential
Business
Identity
Experience
Best Effort
Enhanced
Assured
Security
L3/L4
Stateful
L7 Signature
L7 Application
L3/L4
Stateless
Virtualization
L2 VPN
L3 VPN
L7 VPN
Routing/Switching
Mobile
Web
Services
Video
Gaming
Home
TelemetrySlide19
Network MonetizationSlide20
Hot areas for 4G network investments
Context aware mobile multimedia applicationsThe Network Infrastructure Enabling Their DeliveryContext aware policy engines driving QoE and securityEnd to end mobile security – app to device to datacenter to networkOpen service delivery platforms – enabling integrated OSS/BSS, including clearinghouse DRM functions
Virtualization across wireless broadband networks
Thin client, cloud-based application delivery architectures
Advanced content distribution architectures optimizing trade offs between CDN, P2P and
Context Intelligent Mobile Networking – Application Assured Cloud InfrastructureSlide21
Questions?
Will investments in this space require a high degree of collaboration to succeed (operators, device vendors, app/content players, end-users, etc.)?What are the biggest lessons learned in making investments in emerging technologies like 4G?When will the enterprise application space become exciting as a 4G investment?Do you have any advice to start-ups with a 4G innovation looking for capital?