Looking back at 2007, it’s easy to see that the iPhone launch was the milestone of the year, and perhaps of the upcoming year. Apple predictions that the iPhone’s yearly sales will top 45 million by 2009 may seem like hyperbole, but many experts agree it’s not a far-fetched prediction. While Motorola Inc. still has stronger global distribution than Apple, in just a matter of months, Apple managed to sell millions of iPhone units.
Compete Inc., a Web analytics company, recently released a study that attempted to reflect the impact of the iPod/smartphone combo on the consumer market thus far. The organization analyzed data on millions of users’ pre-purchase and cross-shopping patterns, as well as their attitudes toward entertainment and productivity-oriented devices. The results revealed that iPhone drew higher volumes of shoppers than either the Xbox 360 or Nintendo Wii at the height of their respective launches. It also demonstrated that consumers evaluating iPhones were half as likely as the average wireless consumer to evaluate other phones.
Such loyalty cannot be overstated, as Compete’s analysis found that more sophisticated wireless users comprise 68 percent of the overall smartphone market. Those savvy users are the ones most likely to pay premiums for sophisticated, convergent services, and in the study they indicated they value Web and Internet access more than they value mobile TV. That could be the reason they value iPhone more than Palm and Windows Mobile smartphones.
The other reason could be customer service. Apple users traditionally have been an esoteric group, remaining loyal through the ups and downs of the company’s evolution because of its ease-of-use and focus on customer service.
With iPhone, Apple was well aware it either could attract hordes of newly devoted users, or alienate them. Similarly, AT&T Inc. recognized it could risk its own brand’s reputation if the iPhone launch went badly. Both recognized that an innovative activation platform was going to have to be the bulwark of the iPhone launch — its success or its failure.
Who’s Behind the Curtain?
With the iPhone launch, a little-known company experienced a sort of "coming out" with its automated ordering and activation software: Synchronoss Technologies Inc. and its ConvergenceNow platform. The company already had pre-integrated with AT&T’s back-office environment, but the iPhone launch would require integration of that environment with one that was remarkably different at Apple. "On the one hand, we had a hardware device company that knew little about wireless services, and on the other we had a wireless services company trying to get into a radically unique grab-and-go model," acknowledges John Morgan, vice president of product management and development for Synchronoss.
With only a year to get there, Synchronoss embarked on the journey to integrating the AT&T platform with Apple’s Web-based iTunes interface. That journey was quite daunting, as AT&T would need seamless number portability on the iPhone, as well as easy upgrades from different individual and family plans. "We had to analyze the processes invoked for customer orders, account setup, number porting, feature requests and customer migration, and then consider the types of hardware devices over which these processes would have to take place," explains Morgan.
While determining where to automate so that users could activate through iTunes or over the air, Synchronoss also had to pinpoint where in the activation process there would be potential for errors or fallout that could affect customer service.
"In order to automate, there had to first be consistency in the formatting of data, and a deep understanding of all the different billing plans and handset combinations we’d have to accommodate," says Morgan.
It’s All In the Preparation
Pioneering the integration of wireless activation processes into Apple’s hardware would require consistency in handling different data formats, device types and service feature sets. With that in mind, Synchronoss spent about eight months working with teams at Apple to help the iPhone teams in charge of iTunes interfaces understand the intricacies of activating wireless services. They had to understand wireless pricing bundles and features, such as number portability and plan upgrades, so they could integrate them into the iPod/smartphone combo.
"When you first start this type of initiative, the orders cannot flow seamlessly out of the gate. You take part in sort of a philosophical exercise to try and determine where the processes most directly affect the customer experience. Then you go over it, and over it again, and then back over it, for each and every handset type, pricing plan, service type brings with it new holes for fallout," explains Morgan.
Synchronoss’ identification of additional areas where processes could be automated had a domino effect, as the momentum from one automated process would push into interrelated processes. "We began to see where we could streamline and automate, and where we could optimize the customer experience with less cost," says Morgan.
Despite such progress, AT&T and Synchronoss knew the rollover of subscribers from other carriers still was going to be challenging. The companies then focused on looking at use cases to determine where, historically, the fallouts usually happened in the process for every scenario they could conceive. "We just kept working on improving use cases by finding the bottlenecks and pain points that came up in the porting or activation process with each type of service and device," says Morgan, noting they continuously went through a cost/benefit analysis to see where investment dollars could be applied to get the highest percentage of orders.
Synchronoss then began to devise sophisticated business rules and decision trees in its software, so that the activation and order management systems could handle orders that otherwise would kick out to fallout queues for manual intervention. "Month by month, we tweaked the process until we got as close to 100 percent automation for orders as possible," says Morgan, acknowledging that is an ongoing process.
Simultaneous to automating processes most directly linked to the customer experience, Synchronoss also had to consider AT&T and Apple’s ability to further automate as the service evolved. "They would need visibility into orders if they were to continuously improve automation and service," says Morgan. Synchronoss responded by honing its software’s reporting capabilities so it could be known at any given moment the status of orders, how many orders were processed, and whether there were certain types of orders that were somehow unique and in need of further automation," adds Morgan.
Synchronoss also had to demonstrate flexibility in changing out interfaces to accommodate AT&T’s improvements in its OSS and its network.
In order to accommodate the anticipated surge in Internet usage, AT&T made upfront technical changes to address proactively the potential weaknesses in its EDGE network. Although AT&T made no official announcement, it was purported in the media that an initiative called "Operation Fine Edge" was launched to bolster EDGE throughput, reduce latency and improve coverage for the iPhone launch. Of course, such improvements also would benefit other EDGE handsets.
Though Billing & OSS World magazine was not able to procure specifics from AT&T, some techno-blogs speculated that Operation Fine Edge involved improvements to the data back end and the addition of T1s to bolster certain cell towers or orders to ensure more bandwidth would be allocated to data calls. Word on the street was that performance improved from 40kbps to 80kbps, with a real-world EDGE ceiling of about 200kbps.
Because of iPhone’s focus on Internet usage, some skeptics said an upfront investment in a 3G HSDPA standard upgrade would have been a better choice. AT&T acknowledged that an upgrade would bring a real-world peak of 800kbps — about four times the 200kbps speed of EDGE; however, AT&T believed the time wasn’t yet ripe for it. Only recently, AT&T CEO Randall Stephenson declared 3G would be reality in 2008, but no specifics have been offered.
Both AT&T and Apple have defended the choice to stick with 2.5G for the launch, noting that present-day technologies like Wi-Fi are performing well. In the interim, solid device sales indicate neither AT&T nor Apple suffered a setback from the more limited coverage afforded by EDGE.
While AT&T was focusing on per-formance, so too did Synchronoss. As the launch date neared, Synchronoss prepared for what it anticipated would be a tremendous uptake the first weekend. The company increased the transaction capacity of its ConvergenceNow platform by 65 times the week prior to the launch. It then worked with partners BEA Systems Inc. and Oracle Corp. to test the enhanced platform at its R&D facility in Bethlehem, Md.
Rolling With the Punches
The June launch of iPhone was highly publicized, but no one really predicted thousands of people would stand in line for hours, and in some cases, days, to get their hands on the first iPhones.
Approximately 146,000 activations took place within the first two days of the launch, and Apple reported 1 million phones sold within the first 74 days.
While sitting in the "war room" on that Friday night, Synchronoss principals were pleased with the automation rate at which activations were going through. Most activations took 10 minutes or less. The company also contends "exception" rates were smaller than what they had anticipated.
Though there were no official figures as of press time, it seems the error fallout rate was well within the reasonable range for a new product launch: between 2 to 4 percent.
Most user anecdotes on blogs inferred that errors were due to either inaccurate information provided by customers for number porting, or problems with conversions from AT&T individual plans to family plans. The highest degrees of success seemed to be achieved with customers doing straightforward activations.
Of course, the fallout news rang far louder than the success stories. Individual users, tech bloggers and trade and mainstream media followed every step of the much-hyped launch. For example, Jeremy Horowitz, Editor of iLounge, did a "play-by-play" during the iPhone launch, with periodic updates of his experience activating seven iPhones simultaneously. Five of the seven phones were activated within minutes, as they had straightforward AT&T accounts, but for two of the phones, there were issues relating to conversion from individual to family plans. Horowitz’s "laboratory experiment" seemed to reflect what was happening in the bigger-world launch.
Overall, the majority of activations seemed to go smoothly, even though thousands of new iPhone owners simultaneously were attempting activations, which tested AT&T servers having to support the tremendous volume of orders.
"We had anticipated a 30-minute pause between AT&T stores opening their doors and the first sales-to-order cycle. In reality, it only took 30 seconds!" said Morgan. "We were all surprised by the speed of the orders, and it just kept escalating with every second."
Despite the challenges and criticisms, the consensus months later from users, the media and the iPhone triumvirate of AT&T, Apple and Synchronoss seems to be one of success. As the service improves and evolves, AT&T and Apple expect to expand the features and possibilities for the service.
Already, AT&T is introducing new pricing and bundling domestically and abroad. It recently introduced a new "International iPhone Data Plan," which gives iPhone users 50MB of data per month, and enables international voice and data roaming, as well as international long-distance dialing from the United States for $59.99 per month (in addition to the domestic voice and data iPhone plan customers purchase during iPhone activation).
To support such rapid changes, Synchronoss maintains that flexibility will be the key. "The OSS and BSS environments can no longer be static; they have to be flexible and dynamic enough to handle fast changes in pricing and bundling, as well as interfaces to changes in equipment. Systems have to accommodate the formats of different provisioning and billing systems so that services can transcend different device, network and service types," says Morgan.
As carriers get into 2.5G and 3G, they increasingly will look to automate the management of wireless, video, high-speed Internet, data and voice. Morgan believes the iPhone automation effort will be the case study for up-and-coming convergent services, where customer service will be a deciding factor, and where reducing the "cost per add" with automation will be a persistent goal.
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AT&T Inc. www.att.com |
