A Linux smartphone market update from China's E28

[2006/03/30]

<http://linuxdevices.com/articles/AT7316878599.html>

LinuxDevices.com recently caught up with Roger Kung, founder of Linux smartphone specialist E28 in China. E28 shipped the world's first Linux smartphone, and continues to ship Linux smartphones, with a focus on dual-mode cellular/VoIP (voice-over-IP) designs for MVNOs (mobile virtual network operators) around the world, but mainly in China.

E28 background

Kung formerly led Motorola's mobile phone operation in Asia, which grew from annual sales of $200 million to $4 billion on his watch. He retired from Motorola in 2002 to found E28, with the vision of pioneering the development of smartphones based on Linux.

Nonetheless, E28 remains committed to smartphones, which the company defines as communications devices that run an operating system, and are capable of receiving various kinds of content from servers. "We believe that in the future, information will become one of the most important assets for human beings moving around the globe. You need a server, and a device to receive this information. We call that a smartphone," Kung said.

And, E28 remains committed to Linux, both because source code availability allows the customizability needed to support emergent content types, and because of cost. "In the future, more than 50 percent of phones -- about 500 million per year -- will need an operating system. If the operating system costs $10, you can quickly calculate the cost to consumers. [Vendors] have to move into Linux to save cost," Kung asserts.

Lowering smartphone costs

In order to bring costs down and achieve higher volume shipments, E28 adopted an inexpensive Texas Instruments (TI) OMAP platform for its current Linux smartphone designs. Kung says. "Twelve months ago, we moved into a low-tier smartphone platform, dressing it up to high-tier appearance. We now can offer probably the lowest-cost smartphone, yet it performs in features and performance like a high-tier smartphone."

E28 is hardly the only Linux phone specialist to pursue the lower-cost, higher-volume market. While Microsoft resolutely targets its Windows Mobile OS stacks at the fully fledged smartphone market, Trolltech (which keeps an office in China) and MontaVista have long touted their Linux phone OSes as capable of bringing smartphone performance to feature-phone level hardware.

Like Motorola, E28 can control both hardware and software costs in its Linux phone designs. And, like Motorola, it now appears to be successfully spinning multiple phone models from the same base hardware design, which helps contain development costs. "Initially, we introduced one product every year. A good product, with a lot of features, but one product. Now, every year we can come up with 10 products, each with a variety of form factors."

E28's Linux phone lineup

Currently, E28's product line comprises some five base models, each with the option to support a WiFi radio, for dual-mode operation. The models include:

E28 "Phoenix" Phoenix, a flip form-factor business phone with a touchscreen interface, and emphasis on security, capacity, and productivity

E28 "Eagle" Eagle, a low-cost candybar-style music phone with a touchscreen interface

E28 "Falcon" Falcon, a higher-end video-capable phone with touchscreen and slide-out keypad

E28 "Rainbow" Rainbow, a higher-end business phone with a touchpad and flip-down keyboard

E28 "Hercules" Hercules, a high-end multimedia/gaming bar-form phone with big screen and lots of memory

Kung says all of E28's current phones offer a cost advantage, significant smartphone features, and what he calls "smart style." He explains, "They are smart because they can interact with business or multimedia content, and they have style and a slim design in all different form factors."

Additionally, all models have a WiFi chipset option built into their designs, giving them all the capability of being configured for "dual-mode" operation. That is, they can work with either cellular or wireless VoIP (voice-over-IP) networks.

Trend toward dual-mode phones

Kung is especially bullish on phones with WiFi-based voice communications, sometimes called VoWiFi (voice-over-WiFi) or VoWLAN (voice-over-wireless LAN). He says the MVNOs who buy most of E28's Linux smartphones are interested in WiFi, too. "The first wave using our phone will be MVNOs. These guys are aggressive, hungry, and willing to take a risk."

Dual-mode WiFi phones have especially high potential on university and business campuses with WiFi mesh networks and IP telephony infrastructure, Kung believes. "A lot of campuses do WiFi networks, but if whoever runs that network offers a phone that can only do WiFi, then people have to carry two phones," Kung explains.

He adds, "People are content to take advantage of wider bandwidth and cheaper rates to do data or even VoIP work. When they work off-campus or out of the zone, they are happy to switch to a cellular network."

Kung believes that "fixed mobile convergence" (FMC) dual-mode phones that can seamlessly roam between mobile and WiFi networks will eventually arrive. He believes that some will be based on standards such as IMS, while others will use more proprietary approaches. Large operators offering both Internet and phone services will likely be first to market with the technology, he says.

Still, despite the fact that E28 partnered with Bridgeport Networks to demonstrate IMS-based WiFi-cellular network handoffs, he expects several years to pass before the technology is widely deployed. "We believe IMS will an optimal solution, but it probably will not come before 2008 or 2009."

He adds, "The internet network will make a tremendous impact on telecom. It's not a competing, but a complementing technology. But, how long does it take for the telecom operator to realize that WiFi is good, or Yahoo to realize how much voice can help on their current Internet [service provider] business model? That's upcoming. Every revolutionary thing comes in several different stages. Today, we can [envision the day when] telecom and Internet networks will be totally integrated. But in 2006, a lot of people want dual-mode phones, even without seamless roaming."

Kung admits, however, that not all phone customers care about WiFi connectivity. He says, "In India, China, Africa, and Indonesia, people really just want a $20 GSM phone. They just want to be connected. And that is driving a huge demand in the mobile phone market. There are chipsets available for sub-$20 GSM phones."

He thinks dual-mode capabilities will appeal most to users in Europe and the US, rather than in Asia. He explains, "On the higher end, every region is different. In Asia, demand for smartphones has accelerated with the pace of consumerism. Music, video, game, and [unique, stylish designs] are important -- 'what I can see, and what I can hear.'

"In Europe and the US, people are more technology-driven. They want a dual-mode phone, convenience, and lower cost. They want to be able to travel around the world without paying long-distance roaming charges."

Breaking out of China

Kung hopes E28's sleeker dual-mode phones appeal more to European and US phone buyers. "After 3GSM last month, we had more than 20 companies contacting us. We've narrowed that down to three in the US, including Verizon and Vonage, three in Europe, including Crown, and three in Asia, including a mobile operator in Taiwan."

E28 plans to demonstrate its Linux smartphones at the CTIA tradeshow (Cellular Telecommunications Industry Association) next week as well, where Kung is hopeful the company can cement additional partnerships and deals.

Kung is already confident, though, that at least one of E28's Linux-based dual-mode phones will be distributed in the US, this year. "When our Hawk II, a Rainbow type design, becomes available in June, it will definitely come into the US. Definitely."

An earlier interview with Kung, from August of 2004, can be found here.

Be sure to visit our Linux Mobile Phones Showcase.