3G-324M – When will the fat lady sing?

Around 5-6 years ago, we have started with our 3G-324M efforts. At that time, when we built the business case for a 3G-324M stack, we stated an opportunity window of 5 years only until this technology becomes obsolete. A lot of water have passed down the river since then, but the fat lady isn’t singing yet - and probably won’t in the near future.

Some history

3G-324M is a protocol used by 3G mobile handsets for their video telephony needs. Every 3G handset today in Europe and Asia includes this protocol embedded in the handset. This protocol was first adopted in Japan and later spread throughout the world (missing the United States like a lot of other mobile technologies).

Operators looking for the next killer application for their mobile handsets decided to try out a video telephony service. Two options were on the table:

1. Circuit switching solution using 3G-324M
2. IP based solution using SIP/IMS

At the time, IMS was a new buzzword, and circuit switching the only viable solution. 3G-324M was taken, with an intention in mind to replace it 3-5 years down the road with a SIP/IMS solution for video telephony.

Today

Fast forwarding to today, 3G-324M is still here, while SIP over real cellular networks for video telephony is somewhere in the horizon. 3G-324M now includes optimizations for call setup time reduction, it now supports the latest audio and video coding technologies and it includes a rich set of services through a large and growing number of servers to support them.

Our 3G-324M stack sales come and go in waves. It started with handset vendors, continued with testing tool vendors, then moved to servers and back to handset vendors.

Commoditization of the servers

The last wave washed us was the most important one from a market point of view. A large number of companies providing switches to mobile operators are now looking for 3G-324M technology to embed directly into their products - they no longer want to use external gateways to hook up with their switches, because of costs.

Integrating 3G-324M into switches is quite an undertaking - it takes time and resources, it requires video transcoding capabilities - not a decision to be taken lightly. And yet, several such vendors are planning to do just that. This means that the market is evolving and reaching a maturity point where pricing becomes sensitive. As these companies try to be more competitive in their offering to operators, they are moving towards acquiring the technology instead of relying on integration with external products.

It means another thing - the fat lady is not going to sing for 3G-324M anytime soon. This technology will last for several additional years.