B. Mann Consulting

A common thinking among "Marketing people " is that for every product that enters the market there must be a path, a target, a need ( real or created) that decides how the product must enter the consumer's life, which part of the population is more likely to go for it, which niche it is going to fill and, most important "...certain things being stated, something other than what is stated follows of necessity from their being so." and that is the final issue: the price.

Depending on those anavoidable patterns a product is more or less ready for a certain market.
High technologically devices, the ones that offer perfect quality and cost a fortune will target the elitarian market, where the price has not big importance (on the contrary, if the price would be lower than what certain people can afford, the product wouldn't reach them) since it means luxury.
When a product ceases to be luxury and begins to be a need, then the mass market is ready. The product can enter 60% of consumers' lives, reach easily a good upgrade in the percentage and become " The New Product of the year 200....".

Let's consider the VoIP market.

Prior to recent theoretical work on social needs, the usual purpose of a product invoked individual (social) behaviors. We now know that these assumptions are not completely wrong.
Wrong would be NON considering them.

In systems where many people are free to choose between many options, a small subset of the whole offer will get a disproportionate amount of traffic (or attention, or income), even if no one of the system actively work towards such an outcome. This has nothing to do with moral weakness, selling out, or any other psychological explanation. The very act of choosing, spread widely enough and freely enough, creates a power law distribution.

Now, thanks to a series of breakthroughs in network theory by researchers we know that power law distributions tend to arise in social systems where many people express their preferences among many options. We also know that as the number of options rise, the curve becomes more extreme. This is a counter-intuitive finding - most of us would expect a rising number of choices to flatten the curve, but in fact, increasing the size of the system increases the gap between the #1 spot and the median spot.

In other words:
give to the people the choice among desktop phones and mobile phones and the majority will choose what they think more convenient, in spite of the cost of the service.
In a way the cost of the service is the only left advantage in favour of the fixed telephony.
If the price was the same the desktop phones would disappear from the life of the average consumer (mass market consumer).

To see how freedom of choice could create such unequal distributions, consider a hypothetical population of a thousand people, each picking their favorite way of telecommunication. One way to model such a system is simply to assume that each person has an equal chance of liking each kind of telephony. This distribution would be basically flat - most kind of telephony will have the same number of people listing it as a favorite. A few will be more popular than average and a few less, of course, but that will be statistical noise. The bulk of the telephony will be of average popularity, and the highs and lows will not be too far different from this average. In this model, neither the quality of the voice, the availability, the design of the device nor other people's choices have any effect; there are no shared tastes, no preferred genres, no effects from marketing or recommendations from friends.

This is the mass market of VoIP as dreamed and forecasted by most hardware producers.
People would choose VoIP in spite of the fact that the systems are not intercommunicating, the available phones are just desktop phones, most of the population doesn't have a "Flat rate DSL" and some do not even have a decent connection, (just one " UP to...) and just because VoIP means cutting cost.

They have a few wrong assumptions:

1) Most of the people want to save calling internationally

2) Most of the people will use a cheap Flat rate connection

3) Most of the people know how to handle a computer or a network, and so solve all the eventual problems that could arise.

But they do not consider that:

1) Most people call locally and just a few once in a while internationally.

2) Most of the people do not have a cheap flat rate Internet

3) Most of the people are not IT experts.

Besides people's choices do affect one another. If we assume that any kind of telephony chosen by one user is more likely, by even a fractional amount, to be chosen by another user, the system changes dramatically.
If Robert ( our average mass market consumer) likes to have a phone in his pocket, available mostly anywhere, it is very likely that Mary would like the same.

Is VoIp ready for the " Mass Market"?

The answer could be No and Yes.

What would VoIP offer more than the existing several choices?

1) Price. Telephone calls would be completely free of charge among two IP phones ( and that believe me is a GREEEEAT THING when you try it)

2) The never enough considered satisfaction to be able to ref..ck who f..cked us for many years...

What would VoIP telephony need to be #1 spot in the curve?

1) A reliable PORTABLE Phone that doesn't need millions of Hot Spot's to work.

2) A reliable, cheap flat rate internet connection anywhere for everybody.

If ONE could put these patterns together, THEN VoIP would really have the chance to be #1.

See my website: http://www.worldonip.com or contact me patrizia@worldonip.com

It seems to be that basic voice connectivity is going to be very competitive, so the channel overheads will not be as easily sustainable.

So, perhaps there will be other attractive (to the user) and profitable (to the service provider) services that the traditional PSTN cannot deliver, that will sustain new channels to market.

Growth of the Internet May Take Nothing Short of a Revolution
PORTALS - By LEE GOMES, WSJ, December 22 2003

A new and crucial chapter in the history of the Internet began last week. Expect all sorts of evolution vs. revolution battles before the chapter is finally written.

Starting Tuesday, researchers from four big universities and other research outfits gathered on the Carnegie-Mellon campus in Pittsburgh for the initial planning session of the "100 by 100" consortium. With a $7.5 million grant from the National Science Foundation, the group is spending the coming few years thinking about how to improve the Internet so that 100 million U.S. homes can have everyday speeds of 100 megabytes a second.

That's more than 100 times as fast as most high-speed home connections today. Files would fly across the Web almost as quickly as if they were taken off your PC's disk drive. Imagine real-time, HDTV video links between grandparents and grandkids.

This being the Internet, in all of its free-wheeling, global splendor, the 100 by 100 consortium isn't the only group thinking about the Net's future. Darpa, the Pentagon agency that created the Internet in the 1970s, is also sponsoring next-generation research under a group headed by MIT's David Clark. The two groups' work -- there are others -- is seen as complementary.

Most people think that improving network speeds is a simple matter of installing faster pipes. But Prof. Hui Zhang, the Carnegie Mellon computer-science professor who heads the consortium, says even with so-called fat pipes everywhere, today's Internet might not "scale up."

The Internet, he explains, can't continue to evolve with the same basic design set down a generation ago. "The Internet has been a huge success," he says. "But the chances are that we are setting ourselves up for a great failure."

Some of the reasons for this concern are obvious to even the most casual Web user, such as today's chronic problems with spam, hackers and the rest.

But Prof. Zhang thinks the vastly bigger obstacle to the Brave New Web involves something more subtle: the growing complexity of the network. Much of this is unseen to average users; it's deep in the software standard used to transmit messages -- known as IP, or Internet protocol.

The professor explains the problem: The routers that serve as the Web's traffic-control devices are so complex that only a few companies can build them. What's more, keeping a big network running is getting harder and more expensive -- "a black art," he calls it.

Dealing with these issues means putting a number of once-solved technical issues back on the table. That's where the evolution vs. revolution debates come in. For example, should the Internet be "connectioned" or "connectionless?" Right now, it's the latter. All communications are tossed into the same big pipe, with routers making sure things get where they ought to.

But one school of thought says the future Internet needs to have something of the "connected" flavor of the old-fashioned telephone network, in which a direct link is established between you and the person you're talking to.

In the world of data-communications types, things don't get any more contentious than this.

As far as pipes, Prof. Zhang thinks that because of the 1998-2000 telecom bubble, there are enough fiber-optic lines buried in the U.S. to handle all of the backbone, "long haul" traffic of even the fastest Internet.

However, connecting up homes -- the "final mile" problem -- remains tricky and expensive, though new ways of using wireless communications, including reallocating some or all of the radio spectrum, could help.

Prof. Zhang acknowledges he stands on contested terrain when he says the Internet can't continue to simply make incremental progress and expect to reach the goals of the 100 by 100 program. The computer industry is full of technologies, such as Intel's microprocessors, that were once written off as dead ends, but which proved resilient under relentless commercial pressure.

What's more, in this evolution vs. revolution debate, the revolutionists have another challenge. Networking companies, which weren't around when the initial decisions about the Net were made, might oppose any technical changes, no matter how well-deserved, that threaten their market positions.

Prof. Zhang said that as revolutions go, his would be fairly staid. Most of the changes he'd want to make to the Net would be built on much of today's system. The biggest change would involve new equipment, like switches and routers -- though Prof. Zhang notes they would probably be changing under any circumstances.

Prof. Zhang is keenly aware of the PR tricks involved in getting people to move to a new technology. The current high-speed Ethernet system used by office-computer networks has little in common with the much slower Ethernet designed decades ago. It keeps the same name largely for marketing reasons, to give people a sense of continuity and easy migration.

Similarly, "whatever kind of gadgets we are going to be making in 10 years," he says, "we will still call them 'routers.' "

• Send your comments to lee.gomes@wsj.com, and check back on Friday for some selected letters at WSJ.com/Portals.