As Sharma observes, the mobile market crossed a number of important thresholds in the last quarter of 2010. Mobile subscriptions crossed the 100% penetration mark, for example. And smartphone shipments exceeded PC shipments for the first time.

Sharma contends that multi-device data pricing plans will be an important key for success of this segment, as Wi-Fi isn't always practical or dependable. He argues that operators who start to bundle devices under a single data plan will likely do well - an observation that coincides with AT&T's announcement today that it will start selling the Kindle through its stores.

This continued growth in connected devices is clearly important to AT&T, which now has to compete with Verizon for iPhone customers. According to Sharma, connected devices are now 10% of AT&T's subscription base. AT&T has edged ahead of Verizon in terms of the number of connected devices, but for both providers - for all providers in fact - the key will not simply be wooing subscribers but finding a way to adjust billing to keep pace with U.S. consumers' ever-increasing mobile data consumption.

The technologies that are currently in the market and being labeled as 4G are LTE and WiMAX. These represent such a major generational shift from today's 3G networks that it is obvious why marketing departments prefer the 4G moniker, even though the official standard bodies don't consider them to be official 4G technologies.

Let's cut through the marketing speak and look at how we got here, what today's so-called 4G networks offer, what the common acronyms mean, and how they are different from today's 3G networks.

Understanding 3G

Most modern 3G phones (including the iPhone 3G) currently use a technology called HSPA (High Speed Packet Access). It was this technology that allowed users to really use the Internet on their mobile phones, send pictures and watch streaming video at usable speeds. HSPA tops out at about 3.6 Mbps.

Then, with the introduction of HSPA+ - with speeds up to 7.2 Mbps (and with some modifications up to 21 Mbps and a theoretical limit of up to 168 Mbps), wireless speeds started to rival those of many wired connections in users' homes and really allowed for the full spectrum of Internet services to be usable on mobile devices. Just to complicate matters, 3G devices that support speeds around 7.2 Mbps are often called 3.5G devices.

Today's So-Called 4G

Over the last year or so, we have seen the introduction of two so-called 4G technologies: LTE (Long Term Evolutions) and WiMAX. In the U.S., Sprint is using the WiMAX standard for its networks and Verizon is using LTE. With CLEAR, Clearwire is also offering a WiMAX-based broadband network that targets consumers who want fast Internet speeds on their laptops and at home, though the reach of the company's network is still limited to a select number of cities in the U.S.

One of the major differences - besides the faster speeds - between these networks and 3G is that voice - which until now travelled over a separate line - now runs over the same network as the data, and telephony on the phone basically becomes a VoIP application similar to Skype.

With speeds of over 100 Mbps, wireless networks can easily rival the speeds of wired connections. Thanks to this, areas where it is currently too expensive to update wired networks may soon get access to real broadband. By doing away with the enormous costs of physically connecting every household to the wired networks, we will also hopefully see more competition among Internet providers.

WiMAX operators like Clearwire are also able to offer so-called "triple-play" bundles that bring together Internet, phone and television services over the wireless connection.

Real 4G: Coming in 2012

While no actual 4G spec has been finalized yet, the current expectation is that the standard will call for a minimum speed of 1 to 1.5 Gbps. According to a recent report (PDF) by Rysavy Research for 3G Americas, the first networks that will actually fulfill these official requirements for 4G will probably use the LTE-Advanced specifications. The final specs for LTE-Advanced won't be completed until March 2011, though, and the first networks with support for this standard won't go online until 2012. The other real 4G spec that is currently being discussed is the IEEE 802.16m standard, backed by the WiMAX Forum.

Faster speeds are not just the only advantage of these networks. The latency - that is the time it takes the network to respond to a request - is also greatly reduced over these networks.

Image credit: Groupe Aménagement Numérique des Territoires.

Covering a period including 2008 and into 2009, the report, issued today, found that this concentration had increased 32 percent since 2003 and 6.5 percent in 2008, indicating a significant decrease in competition. Less competition usually means fewer choices and higher prices for both individual and enterprise consumers.

"Over the past five years, concentration has increased in the provision of mobile wireless services. The two largest providers, AT&T, Inc. (AT&T) and Verizon Wireless, have 60 percent of both subscribers and revenue, and continue to gain share (accounting for 12.3 million net additions in 2008 and 14.1 million during 2009). The two next largest providers, T-Mobile USA (T-Mobile) and Sprint Nextel Corp. (Sprint Nextel), had a combined 1.7 million net loss in subscribers during 2008 and gained 827,000 subscribers during 2009."

In a statement accompanying the report, FCC Commissioner Michael Copps agreed.

"(C)ompetition has been dramatically eroded and is seriously endangered by continuing consolidation and concentration in our wireless markets," he wrote.

The report also found that capital investment in the wireless industry has declined relative to size.

Bottom photography from Geograph

Unsurprisingly, younger adults under 35 are more likely to have cut their landlines, but the CDC also reports that the number of wireless-only households increased among all age groups. About half of all adults aged 25 to 29 now live in households that are wireless-only, though only 5.2% of adults over 65 have cut their landlines. Renters and adults who have roommates, by the way, are far more likely to live in households with only wireless phones than most other demographics.

For more detailed statistics, have a look at the full report here (PDF).

What Does This Mean for Developers?

For mobile developers, this is an interesting trend. While most developers tend to focus on applications that are meant to be used while on the road, the market for in-home apps that control appliances or allow you to program your DVR will only continue to grow over the next few years.

Verizon Deals Itself into the App Store Game

But what do the VCast Store partners get out of the deal? Not revenue it seems. Only developers and Verizon share in that. Instead, the partners simply get access to a wider audience, which in turn supports their own developer community. And more developers means more apps, and more apps means better smartphone sales. That reasoning may explain why RIM is on board at launch time. Blackberry smartphones, although still a staple in the business world and, interestingly enough, still at the the top of the smartphone OS market in the U.S., don't have the developer community that Apple, Android and even Nokia with its Ovi store do. In fact, recent reports pegged Blackberry's app store size as 4th largest in a lineup that included the top six smartphone makers.

At least RIM is aware of this issue. "It's real simple; for this revenue stream to carry on and thrive," explains Jim Balsille, co-CEO of RIM regarding the company's mobile app offerings, "the applications need to be adopted so we can drive more BlackBerry sales. And this makes the carrier a strategic partner."

One-Click App Shopping

In addition to using its own Web site to provide an online application store where apps can be purchased, rated and downloaded, app store developers who partner with Verizon will also have access to APIs that allow them to tap into other Verizon services like location-based services and messaging. But the biggest benefit is that Verizon app shoppers, whether accessing the store via the website or mobile phone, don't have to pay for their applications on the spot using a specially created VCast account and associated credit card. Instead, the apps purchased are invoiced on a monthly cycle alongside minutes used and texts sent on customers' cell phone bills.

For consumers, the benefit is a one-click process for app buying. For Verizon, the benefit is that they've just re-inserted themselves into the revenue stream that is the mobile application market - a market growing so fast, it's expected to reach $17.5 billion by 2012. Unlike AT&T, which gets nothing every time an iPhone application is sold but then has to support the data traffic new apps bring to its network, Verizon hopes to make the mobile app store something that's mutually beneficial to customers and carriers alike.

The VCast application store will launch March 29. Interested developers can find support and have their questions answered over on the Verizon Developer Community forums.

David Weinberger, co-author of The Cluetrain Manifesto and the more recent Everything is Miscellaneous received a letter today from Verizon. A "legalistic pamphlet" that informed him he has 45 days to opt out of 'agreeing' to let Verizon share his personal information.

This information includes "services purchased (including specific calls you make and receive), billing info, technical info and location info. They promise to only share this with 'affiliates, agents and parent companies.' It will definitely not be shared with 'unrelated third parties' ... unless, perhaps that third party pays Verizon to become an affiliate, whatever the heck 'affiliate' means," Wienberger wrote.

While getting this in the mail is great, what about those people who only receive electronic copies from Verizon? Did they too receive a message? I didn't, so I decided to investigate, and sure enough, after logging into my Verizon Wireless account I couldn't find a mention of the CPNI. As Weinberger pointed out, there is a link to it in my messages, but alas, as he also mentions, the link is "not available."

Verizon has not been having a great run recently. Sure, in January Microsoft opened its wallet to Verizon and struck a five year partnership with the wireless carrier in hopes of getting access to its more than 80 million subscribers, but what if those subscribers begin to slowly dwindle away?

Verizon was dealt a blow last month when the US Court of Appeals for the District of Columbia Circuit denied the company's request to overturn a decision by the Federal Communications Commission regarding its marketing tactics. Earlier this month the Pennsylvania Public Utility Commission decided Verizon's customer service "stinks" and sought a settlement to improve customer service. Next week, Delaware customers with complaints about their telecommunications service will have the opportunity to air them during the states Public Service Commission hearings.

Verizon spokesman Harry Mitchell, in discussing next week's public forum said the company still does not believe the hearings are necessary. "There were some issues we did have, but we worked through those, in collaboration with the commission staff, and made great improvements," he said.

While they may have fixed the problems associated with gripes about their old copper pipes in Delaware, they clearly haven't yet addressed their customer service issues.

For a company that prides itself on operating the nation's most reliable and largest wireless voice and data network, and spends an absolute fortune on creating masterful ads (YouTube link) to entertain us, it clearly still has a way to go. Perhaps it's time the company started putting some of its energy into the Twitter account it set up, and got up close and personal to its community and their needs.

Note: David Weinberger's post walks you through the process of opting out of Verizon's 'share your information' default setting. If you haven't done it yet, we highly recommend you do.

With the DSRC system in place, cars can become nodes on Muni-Wi-Fi networks, Wi-Fi hotspots, and home Wi-Fi networks. The possibilities are nearly limitless for what that could mean. Dealerships can diagnose vehicles cable-free, cars can receive real-time downloads of maps and traffic conditions, they could communicate wirelessly with toll stations, and the vehicles could even automatically download music from home PCs. (Or maybe iTunes Wi-Fi store? We don't see why not.)

In addition the numerous applications that would make a connected car both useful and fun, there's a public safety element to the system as well. Vehicles could alert their drivers of congestion and accidents, could help drivers safely perform maneuvers like lane changes, could help prevent collisions, and much more. As you traveled, the data about what lies on the road ahead could be relayed from car to car so there is no lag between when the tractor trailer overturned and when you, the driver five miles back, is informed of this. "This technology essentially equips vehicles with the ability to see around corners and predict and avoid dangerous situations," said Professor Alex Grant of the ITR project.

Lest you think the connected vehicle is just a pipe dream that won't be realized until sometime in the distant future, listen to this: Cohda Wireless has already completed over than 700 DSRC trials, for 15 distinct DSRC use-case scenarios, in the U.S., Italy and Australia. These trials covered over 10,000 km during which 100GB of random data was transmitted. The results of the trials proved how Cohda Wireless' technology excelled over other in-vehicle Wi-Fi chipsets. The company is now saying the technology will be in wide release by 2012. That's not too distant at all.

For more information about internet-connected objects, see "5 Companies Building an Internet of Things."

Recently, we've seen a handful of companies attempting to develop technologies that could build an "internet of things." One example is Tikitag, a company that presented at the DEMO 08 conference.  With a Tikitag starter kit and some client software, you can program your own RFID tags so that they can do anything you want them to do. They can launch an application, deliver you to a URL, and so much more.

What's great about Tikitag's tags is that you don't need a specialized RFID reader in order to scan them - they're compatible with third party readers like NFC (Near Field Communication) enabled mobile phones. There are already over 40 million of these phones available and analysts expect over 250 millions to be sold in 2012.

You can get the Tikitag starter kit with one reader and 10 tags for 34.95 Euro + VAT/$49.95 U.S. Additional Tikitag RFID tags are sold for 19.95 EURO or $29.95 U.S.

Mir:ror

Mir:ror is a device from a company called Violet that detects the objects you show it and gives them powers. As you wave a device over the USB-attached mirror, you can trigger applications and multimedia content automatically. The "magic" mirror isn't actually sensing the object itself, but is reacting to an RFID tag placed on the object which then tells your computer what to do.

Those tags are embedded in the company's Ztamps, colorful RFID stamps that you stick on the objects you want to connect. They also work with the company's other more well-known internet-connected object: the Nabaztag, an adorable rabbit that can deliver anything from ambient information through lights and sounds to verbal information - like when he reads your email or RSS feeds to you.

Pachube

Pachube is a service that lets you "tag and share real time sensor data from objects, devices, buildings and environments around the world. The key aim is to facilitate interaction between remote environments, both physical and virtual." On their web site, you can either input a feed or use one of the feeds available. The feeds come from devices, buildings, or interactive installations that are already connected to the internet or that send out SMS messages. Also supported are Second Life installations.

By registering a feed on the site, you can share your real-time data with other objects, keep historical records of your data, or create online graphs to use in a web page.

Arduino

Arduino is an open-source electronics prototyping platform made up of open source hardware and software. It's intended for artists, designers, hobbyists, and anyone interested in creating interactive objects or environments - that is, "the internet of things."

For an example of the type of internet-connected objects you can build with Arduino, look at this presentation where the author configured a kid's toy ray gun to react when anyone posted on Twitter about the #barcampliverpool hash tag.

ZeroG Wireless

ZeroG Wireless is a semiconductor company that's focused on building low-power wireless chips. Their low-power Wi-Fi chips can be embedded into any system including consumer electronics, smart energy devices, home and building controls, portable medical sensors, and sensor networks. The company was founded "based on the belief that a new paradigm of wireless connectivity is upon us. According to their web site, they envision a "4th Age of Wireless™ -- the Internet of Things."

Back in 1998, only one third of adults had online access and a desktop PC cost around $1800. At this time, it was mainly upper income Americans, and mostly men, using computers and the internet.

But now, it's mobile access that is bringing the internet to more people. Building from the affordable and easy-to-use cell phone, adoption patterns are different for mobile users than for those accessing the web via traditional PC-based methods. Specially, cell phone internet users include groups that had, before now, lagged in internet adoption, like some minorities and senior citizens. For example, as of December 2007, 50% of Americans age 65 and over had cell phones compared with only 36% who used the internet.

Out of all the cell phone users, on an average day 58% of adults use the devices, including PDAs, for at least one non-voice data application like text, email, photos, looking up maps or directions, or recording video.

The study groups these cell phone users into a demographic called "Mobile Centrics," a diverse group that is more oriented to the cell phone than to desktop internet access. The Mobile Centrics aren't into blogging or idle web surfing, but they do love their mobile games.

If you combine this group of mobile device users (58%) with the 41% of Americans that have logged onto the internet using a laptop or mobile device when away from home, and you have a group of 62% of Americans who have some experience with access to digital data and tools.

Wi-Fi Hotspots Everywhere

Wi-Fi is still growing. The Mobile Broadband Index put out by iPass, a global roaming service that forms relationship with ISPs around the world, summarizes their internal data representing usage behavior across its base of more than 3,000 enterprise customers, including more than 400 of the Forbes Global 2000 and across more that 80,000 hotspots in over 85 countries.

Users at a Wi-Fi Hotspot

Their most recent study showed that Wi-Fi hotspot usage by business users increased 89% worldwide over the second half of 2006, with Europe now overtaking the U.S. in usage. Business use of Wi-Fi nearly doubled.

2007 also showed a rapidly accelerating growth rate, with the number of sessions up 68 percent in the first half of 2007.

In the Wi-Fi hotspot analysis (period July 1-December 31, 2007), Wi-Fi users were logging into their wireless sessions at the usual places: cafes, restaurants, bookstores, transit stations, and office services locations.

What's different now is the length of these sessions. The increase from 2006 to 2007 had the typical café user logged in for 66 minutes, up 35 percent from the previous year; restaurant users were logged in for 44 minutes, up 217 percent; train stations, averaged 26 minutes per user, up 238 percent; bookstores had users online for 79 minutes, up 26% from last year. Only office services (Kinko's et al) saw a lost in number, losing 10% of users from 2006 to 2007. "Other" venues which didn't fit into any of these categories saw growth up 103%.

Says Rick Bilodeau, senior director of marketing at iPass, "We were very confident that there would be growth, but the fact that the growth showed at these levels really came as a surprise."

Mobile Broadband

3G Mobile Broadband use also increased during 2007. From the first quarter to the last saw an increase in overall data transfer, with the average monthly data transfer rate up 25% over the course of the year. (the iPhone effect?) Users transferred an average of 202.5 MB of data over the course of the year. Monthly usage averaged 188 MB in Q1 and 225 MB in Q4, indicating that usage seems to rise with experience.

Over 2007, 62% of users required 2.5G at some point each month. While only 3% of users relied solely on 2.5G during a given month, iPass believes this low number may reflect some users abandoning mobile data for Wi-Fi hotspots or home broadband when they can't get a high-speed 3G connection

Conclusion

It's apparent that mobile web access is a trend that is growing fast and will continue to grow. Breakthrough devices like the ultra-portable PCs and the Macbook Air make it even easier to to take full computers, and not just cell phones, anywhere and everywhere.

However, a lot of users are still using cell phones and for some it's if not the only way, then the most common way, for them to use the internet. For these users, I hope to see cloud computing initiatives that given them access to the tools and resources PC users already have such as mobile/web office suites, online RSS readers, and social networking access. Although there are some applications that provide these types of things to cell phone users today, none are truly stellar. There is still a large, untapped market of potential cloud computing customers who might stop texting and playing games for a minute if given the tools to do more.