Coming soon to a computer store near you: little yellow traffic signs that say “EV-DO On Board”.
Lenovo, which manufactures the IBM-originated ThinkPad brand of laptops, has started shipping ThinkPads with Verizon EV-DO-capable chips embedded inside – just as “Wi-Fi Inside” laptops feature embedded 802.11. What’s different about EV-DO compared to Wi-Fi , however, is that this is not a generic standard but rather a specific carrier’s service that is embedded in the product. Initially, EV-DO in the ThinkPad will work only with Verizon. That is, even though other carriers have EV-DO services, they cannot be accessed from this embedded chip.
“We’re going after a certain specific segment that values EV-DO access anywhere anytime,” says Howard Dulany, worldwide marketing manager for wireless products with Lenovo. “These people will appreciate not having to worry about a card that won’t get lost, won’t break or get left behind.” What’s more, an embedded chip should use up less battery power than a PC Card, and Lenovo has built the EV-DO control software into its Access Connections application so it can be managed centrally alongside other wired and wireless connections. On the other hand, EV-DO PC cards are portable, sharable and easily upgradeable; some people will want this flexibility, something that you don’t get with a hardwired-embedded solution.
Few people remember that ThinkPads were the first Windows laptops to have Wi-Fi on board, too. That was five years ago (can you believe it?). Today, we estimate more than 70% of ThinkPads ship with Wi-Fi on board. That’s a pretty steep adoption curve.
Will embedded EV-DO go down the same path? It’s really hard to tell because there is nothing to build a model off of. Wi-Fi was different, because it was not tied to a specific carrier’s services, as EV-DO is. Wi-Fi also had Intel behind it in massive quantities (both on the hardware side and with the huge Centrino marketing campaign). Still, in the Q3 alone, millions of laptops shipped in the U.S., and if only a fraction of these had EV-DO on board, we know some EV-DO product managers who would be ecstatic.
And therein lies Verizon’s strategy – lock in the end points and the service revenue will come. It’s so important to Verizon, they’re betting a portion of their average revenue per user on it. That’s right, when a user activates their EV-DO chip, Lenovo is getting a piece of the EV-DO revenue stream.
“EV-DO is the first wireless WAN technology to have a broadband feel to it,” Dulany says. “We did not see many sales of EV-DO PC cards through Lenovo prior to this announcement because we weren’t adding any value – it’s just a PC card you can get anywhere. But with the embedded chip, we’re adding a lot of value for those who use EV-DO regularly.”
Lenovo makes the service activation portion of EV-DO extremely easy. When the user first starts the machine, the user is prompted with a splash screen about the Verizon service, and given a phone number to call to provide Verizon with the electronic serial number of their card so the network will link the device with the active service account. If users don’t have an account, they can quickly set one up online or over the phone. Lenovo says that an IT manager can “group activate” a bundle of ThinkPads at once, making it easy to purchase broadband laptops in large quantities.
What’s next for Lenovo? More deals with carriers, here and abroad. “We’re going to see what the needs of our customers are worldwide and support that with more embedded deals,” Dulany says. Lenovo is looking for carriers in Europe and Asia that will complement their Verizon deal, so roaming laptop warriors can log in wherever they happen to be.
It’s going to take some time – each outfitted laptop model has to be certified with the carrier networks, and other supporting links need to be installed (Lenovo knows when laptop owners activate their chips, for example). For now, there are a couple of models in the Z-60 enterprise-focused ThinkPad series that support the embedded EV-DO solution. However, since these models are the only game in town, any small business or consumer who wants embedded EV-DO is looking at a ThinkPad, too. Verizon’s other partners – Dell and HP – are not shipping their boxes until sometime in 2006.
So is this the right thing for a carrier to do? Is embedded EV-DO that right channel to really ramp up EV-DO? If Wi-Fi is an indication, it definitely is. However, given the substantive differences between EV-DO and Wi-Fi, it’s hard to say that Wi-Fi is an indication. The Gartner Group, for example, has advised its subscribers to hold off in going hog wild over embedded laptops, for fear of getting locked in and seeing technical obsolescence.
For now, embedded EV-DO is a niche market focused on the early adopter road warriors who would benefit from broadband wireless access (BWA). We think for this early market, embedded EV-DO is going to make sense. The real questions hit when EV-DO in the U.S. is more fully deployed, and the larger masses of the consumers start to vote with their checkbooks about whether the premium price of an embedded solution makes sense. For this, the jury is still out. There may be creative applications now made possible with the combination of Wi-Fi, Bluetooth and EV-DO in one laptop. We’ll be tracking the embedded EV-DO and WiMAX efforts and let you know as we solidify some of our thinking on this matter. For now, Lenovo’s got a fine implementation in the classic ThinkPad form factor.
Learn more about this topicWhat is EV-DO?
08/01/05Verizon: Out with Wi-Fi, in with EV-DO networks