A cellular watershed

The new Apple Watch with cellular feels like a watershed moment in mobile data connectivity. My wife has been enjoying her new “red dot” Series 3, and I’ve been thinking about what comes next. There have been prior cellular-enabled wearables and other devices, but this product brings a new mix of market appeal, manufacturing scale, and user experience, and I think it heralds a period of quick changes that will work outward from today’s niche products into many kinds of personal devices.

Bigger than watches

A successful LTE watch product line would imply two main things:

I’ll call these the hardware and network shifts; they go hand in hand to lower end-user costs and improve usability, and neither one has the same impact alone. Together, they suggest wider adoption of direct cellular connectivity throughout users’ personal devices.

Virtual personal-area networks

Basically, the need to always have a personal-area network hub (your phone), with smaller devices as peripherals or accessories, is ultimately about asking the end user to manage complexity due to hardware and network limitations.

The personal-area network should virtualize. Devices should use local wireless connections opportunistically to improve performance, user experience, or power usage, and fall back to mobile network connections and cloud services when needed.

In other words, whatever subset of my devices I currently have with me—whatever subset of my phone, tablet, watch, laptop, or earbuds—should feel like a personal network, but no one component should be mandatory.

Subscriber models

If we really adopt this sort of thinking, it seems pretty obvious that carriers’ pricing and subscriber models need to change as well. As a user, it makes sense to pay for network usage, by purchasing the correct tier of service (in terms of total bits per month and peak bits per second). It does not really make sense to pay $10 per month for each additional device. They all share the same pool of network usage, and, as I mentioned, I want them to opportunistically switch between direct network connectivity and local wireless protocols.

There are, of course, carrier infrastructure costs associated with higher numbers of devices. But that’s the carrier’s problem, and it’s not linear with the device count. If I am carrying five mobile devices on the same data plan, I am not using five times as much data; rather, I am moving my attention and therefore traffic from one to another as I work.

I expect the current $10/month we get charged to add a watch to become a point of competition, and head towards zero. I expect this to accelerate as more and more personal devices gain direct cellular connectivity.

Even bigger

The hardware shift, and especially the network shift, have potential beyond the personal-area network. They open the door to totally routing around the home network and its network access.

Consider something like an Apple TV or Amazon Fire TV with a built-in cellular chipset. Initial users would be travelers, people on vacation or with multiple homes, or simply individuals who don’t care to set up and maintain high-speed home networking just to feed their video usage. And carriers would be able to use this to sell users on higher data plans.

Or it might just allow some enterprising non-telecom company like Apple or Netflix to route around the last mile with a private-branded virtual network operator, or some nontraditional access provider like Google Fiber to route around it with small cells attached to neighborhood fiber distribution and device-by-device partnerships. There’s no reason why the data connection used by your computer has to be the same as the one used by your TV box.

This thinking applies to any number of end-user products. Neither last-mile wired access nor home WiFi will go away, but they are a source of cost and complexity to consumers, and I think consumers will pay to lessen that cost and complexity.

The network shift from home and personal hubs to individually-connected devices, possibly connected to different service providers within the same household, is really just the logical next step in an ongoing evolution. After all, the cell phone has, in my lifetime, established the current assumption of one line per user, replacing the classic landline assumption of one line per household.

There are any number of factors I’ve ignored in this post. The US has a highly consolidated mobile network operator market, many users in rural areas with poor coverage, and regulators that cycle between favoring innovators and favoring incumbents. Progress is never easy in telecom. But per-device connectivity and the removal of intermediate hubs offers a lot of value, both to users and to companies trying to offer new services, and the biggest barriers to that transition have clearly been crossed.