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As the rumors swirl about a new iPhone model, there’s speculation that the phone will include a GPS chipset. The original iPhone simulated GPS though some Google technology, as described in this Business Week article by Arik Hesseldahl. He believes that Apple might wait on true GPS, and add it to the 3rd generation iPhone in 2009.

I think that we will see a GPS-enabled iPhone this month. Om Malik claims the new iPhone will have new GPS capabilities because of FCC regulations. Emergency 911 services are just one way that GPS can help mobile phone users.

Google engineers have been working hard on the company’s Android platform for mobile phones. This is a Linux-based system that can be used in a wide ranges of devices, from low-power basic models to CPU-intensive touch screen devices.

It’s about advertising revenue

Google, Apple and advertisers really want mobile phones to produce ongoing revenue streams, and the easiest way to do that is by placing advertising on the devices.

The Android platform will let Google serve ads onto these phones in a seamless, personalized manner. GPS chips help content providers find and serve appropriate ads based on the user’s location.

Apple and Google saw early indications that users wanted accurate location-based mobile services within the first 3 months of iPhone service in the US, according to another Om Malik article. Google Maps usage on iPhones rose quickly, while YouTube usage lagged.

The first generation iPhone suffers from its slow EDGE connection to AT&T’s network. Users want to access location-based services when they are on the move, away from WiFi networks. YouTube is a connection-intensive application, and a good indicator of user acceptance for bandwidth-intensive, media-rich location-based service.

Related posts and pages on billso.com

• Our iPhone page has over 25 articles from billso.com
• 29 April 2008: New iPhone will be subsidized, faster and thinner
• 22 April 2008: Android vs iPhone

From BoingBoing, Memex, SaveTheInternet, TenPercent and TorrentFreak comes this story: Virgin Media’s new CEO, Neil Berkett, believes that net neutrality is “bollocks”. He wants to sell faster access on Virgin’s broadband network to the highest bidders - most likely large portals and advertisers.

Of course, Virgin Media could also use QoS (Quality of Service) protocols that are built into modern TCP/IP implementations to market a premium high speed service that would let subscribers get faster access to the entire Internet - for a price.

I discussed net neutrality in a billso.com post on 4 March 2008. It’s an important topic, especially as telecom firms and government look for new ways to squeeze more revenue out of subscribers.

There’s a long discussion thread at BoingBoing, with comments from several UK readers who want to break their Virgin Media contracts over this issue. Virgin Media is one of the largest providers of Internet broadband connectivity in the UK. It’s possible that the UK government will stop Virgin’s plans to shift almost all traffic to a lower priority.

Charlie Stross believes that Virgin Media, which used to be NTL/Telewest before a rebranding effort in 2007, is dropping packets for residential connections that use routers.

After the media attention regarding Phorm’s advertising cookies, which I discussed in a billso.com post on 9 April 2008, one would think that British telecoms would be a bit smarter than this.

UPDATED 20 May 2008: Kimberley Edwards has some additional comments in her 24 April 2008 article.

From the New York Times and Om Malik: Google and five telecom companies will build a trans-Pacific cable between Tokyo and Los Angeles, to increase bandwidth and reduce costs. The Times reported on the Unity consortium last September, but this new announcement confirms the US$300 million project. GearLog has more information on this topic. I haven’t determined if this new cable will connect with Honolulu.

It’s an important announcement because, as Om notes, this is the first time that Google has publicly confirmed its corporate strategy of building its own international telecom infrastructure through acquisition and investment. Google claims it wants to provide more reliable service to its users, so the company is entering the undersea cable industry not as a competitor but as a customer and complementor of Bharti Airtel, Global Transit, KDDI Corporation, Pacnet and SingTel.

As I mentioned on 7 February 2008 and 31 January 2008, the oceanic cable business can be risky. Google will have priority on the 7.68 terabit connection when it is completed. Adding more bandwidth is an essential part of providing scalable, reliable web services in North America and the Pacific Rim. If Google controls its own network as a source of competitive advantage, will competitors like Yahoo and Microsoft face higher costs to stay in business?

Last night, every Starbucks store in the United States closed at 1730 local time for a three-hour training session. See this New York Times article about the training project.

I’ve written a long article, so you might want to get comfortable and find a tasty beverage.

The company’s CEO, Howard Schultz, wants Starbucks to return to its roots: making excellent coffee beverages, slowly. But Starbucks is working harder than ever to turn its miik-and-coffee shops into WiFi-enriched media listening lounges. It’s a plan that’s rife with assumptions about how the digital consumer entertains themselves.

Starbucks’ fascination with recorded music has never made much sense to me, because most fast food chains try to maximize customer turnover during the day. Serving customers faster should mean additional revenue per hour. A corporate playlist, slow service and comfy chairs should have the opposite effect.

Then again, most franchised burger joints don’t have merchandise displays on the floor. Starbucks stores do, and I often wonder who buys these items. If the service will be slower, and the company is returning to its roots, why doesn’t Starbucks remove the displays so that more customers could stand in line?

In the end, Starbucks wants its customers to spend more time in the store. It’s a core piece of the company’s strategy. If these customers have the means to afford a laptop computer or an iPod, they might buy a dessert or an extra beverage.

If at first you don’t succeed…

A few years ago, Starbucks experimented with CD burning kiosks in a few stores. Here’s some articles from Business Week in 2004 and KioskNews in 2006 about this dubious idea. I loved Howard Schultz’s quotes from the 2004 article – he was an enthusiastic champion of he projec.t Customers rarely used these stations, which housed a touch-screen Hewlett-Packard computer that helped users assemble their own playlists from an inventory of digital music. The service was slow, and the prices were about the same as itunes and other online merchants. The few customers that tried the kiosks usually figured out that they could burn their own CDs at home.

A recent New York Times article discussed an updated version of the media kiosk. Instead of a disc, customers would insert a USB memory stick. The payment and transfer process could take anywhere from a few minutes to an hour, depending upon the quality and size of the files involved. Flash memory transfer can be slow, after all.

The Starbucks kiosk project was designed to induce customer to try downloading digital music. The kiosks could hold between 250,000 and a million songs on their hard drives. Baristas aren’t known for their computer troubleshooting skills, however. When the kiosks malfunctioned, customers could not get assistance.

Last year, Starbucks decided to welcome Apple as a partner. After all, iTunes is the dominant digital music service in the USA, as I pointed out yesterday. There’s a legion of iPod users who already use iTunes at home to download music and videos.

Serving up slow coffee and fast downloads

It makes sense to ditch the kiosk and its limited inventory, and offer the entire iTunes inventory in each Starbucks. But video files are much larger than audio files, and Apple keeps adding more content to the iTunes store every day. Customers might be more likely to view and buy digital media at Starbucks if the download speeds are as good or better than their residential Internet connection.

Starbucks had to develop a way to offer the entire iTunes inventory without excessive bandwidth costs and slow download speeds. TUAW.com reported earlier this month that Starbucks may be installing edge servers in its stores. This type of server stores or caches content at the edge or end of a network, to give users faster access to files and services. An edge server is a good way to reduce bandwidth demands and manage latency by storing popular audio and video files inside the Starbucks store itself.

During the day, AT&T WiFi customers would use the WiFi access point at that Starbucks store to receive and buy audio and video content from Apple’s iTunes Store. Content would be saved to customers laptop computers, mobile phones, iPhones and iPods.

Popular audio and video files, including new releases, this week’s TV shows and best-sellers would be stored on the store’s edge server, so the user would receive their files at WiFi speed, instead of a much slower transmission from AT&T’s GSM mobile network or a remote server on the store’s broadband connection.

The edge server would receive fresh content late in the evening, based on local usage patterns and marketing plans, while the store is closed and bandwidth is less expensive. So Starbucks stores in Honolulu would probably get more Hawaiian music and “Lost” episodes on their edge servers, while Starbucks sites in Texas would store more country music and NASCAR highlights in their edge servers.

What’s the cache?

Akamai Technologies uses a similar approach to cache or store web applications, web pages, audio, video and other content in its global content distribution network network, and iTunes does use Akamai services. Yahoo, CNN, Slide and the NBA also use Akamai servers to mirror content for their web sites. Akamai’s network is designed as a cache for any Internet user, regardless of their connection. I discussed Akamai and latency on 6 June 2007.

Akamai’s network, and similar networks run by competitors, help Web publishers reach millions of users per day by mirroring content. I’ve never had this problem on billso.com, but it’s possible that someday my little web server will be swamped with requests from thousands of users for the same article. Don’t worry, billso.com has a cache feature that I can activate if I need it, so I don’t exceed my monthly bandwidth allocation.

The iTunes store inventory is placed on multiple servers located in major population centers, and connected to several fast Internet connections. Web retailers use these same networks to handle heavy shopping days like Mother’s Day and Black Monday.

Surfing on the edge is very akamai

Content distribution networks can also help remote locations with large Internet user populations. Honolulu is a great example. It makes much more sense for Hawaiian Telcom and Oceanic Time Warner to cache audio and video content on Oahu than to handle thousands of transoceanic requests for the same files. See my discussion on 7 June 2007.

The Wikipedia page for Akamai has some basic information, and links to additional articles and resources, including this 2006 Business Week article, a 2006 article from SeekingAlpha, and this MIT video – there is a play link above the photo on that page. The video is about an hour long, and it requires RealPlayer. It’s a great discussion of how an academic research project can be commercialized, but there’s a lot of technical jargon.

Cisco Systems, the world’s largest network equipment company, has released its largest switch ever. The Nexus 7000 can move 15 terabytes of data per second, and is designed to connect distant data centers together. According to Forbes, that is fast enough to move the entire Wikipedia in about 40 seconds. The 1-meter tall box will require special cabling and cost US$200,000 a year to maintain and operate.

As companies move their servers and data storage into larger data centers, these types of switches are necessary. The continued growth of web-based applications is also supporting this trend. Networks are a lot like plumbing, but there’s only a finite amount of water on the planet. The amount of data produced and stored continues to grow.

According to a Reuters article, John Chambers, the long-time CEO of Cisco, believes network growth will continues at a fast pace for the next ten years as ISPs and data centers add capacity.