BELLEVUE, WA | September 12, 2012 — AirCloud™ (www.getaircloud.com) today announced its intent to acquire Mobile Prime Time, a Seattle-based company specializing in streaming platforms for regions and locations with limited remote connectivity access. This acquisition expands AirCloud’s mobile content service area and opens doors to address emerging markets where content distribution is limited. Two local streaming platforms, a content distribution system and network, and streaming technology enhancements are included with the acquisition.

“We are ecstatic about AirCloud’s acquisition of Mobile Prime Time,” said Gary Schmidt, CEO of AirCloud™. “This positions the resources of both companies in the direction to quickly acquire market share, a critical move in a constantly transforming industry.”

Mobile Prime Time was formed to address the challenge of streaming content to the traveling public, including airplanes, ships, and anywhere connectivity is limited. “This acquisition is the perfect fit,” explains Peter Lemme, president of Mobile Prime Time, “because both companies share a common vision to make compelling content accessible on personal devices in any location and market. Together we can achieve the quickest time-to-market.”

After the recent introduction of IFExpress’s new ‘Speakers’ Corner’ we were approached by Pal Bjordal, President & CEO of AeroMobile with a request to contribute to the feature. Pal wanted to give our readers a quick look at the growing inflight connectivity market with some data points that you might find interesting. So, this week we are providing our readers with AeroMobiles’ perspective of the future of 3G connectivity at 35,000 feet!

The Advent of 3G Connectivity Inflight
Pal Bjordal, President & CEO, AeroMobile

We’ve seen inflight connectivity grow in the past decade from fledgling roots to a point where most of the world’s major airlines are committed to it.

By 2020, we expect around 6,500 aircraft globally to be equipped with inflight connectivity services.

Passenger expectations have grown as inflight connectivity has become more readily available. We will soon be at a point where they expect to be connected in flight to the same degree that they can be on the ground.

Future planning is vital today to ensure our industry can meet the expectations of the passengers of tomorrow.

We’ll soon be seeing an important step change in that process when a number of major airlines launch Ku-band equipped inflight mobile connectivity.

With download speeds of up to 50 megabytes per second to the aircraft, the Ku service being offered by Panasonic Avionics Corporation and AeroMobile will give passengers enhanced inflight connectivity for the first time.

But we know that demand will continue to grow as we become a society that increasingly expects to download and stream large files from the internet on mobile devices as second nature.

That demand is being fuelled by ongoing developments in mobile devices, the rapidly expanding number of apps available, and the ever increasing amount of video content online which is being streamed.

In 2011, the average amount of data downloaded on a smartphone was 150MB per month. By 2016, this is expected to be 2.5GB per month – a 16 fold increase.

With Ku, we now have the satcom bandwidth in place to meet this demand – both now and with the capacity to grow in the future.

The next step forward is 3G connectivity inflight, which will enable us to use Ku’s bandwidth to its full potential. Ku is the only satcom solution in the marketplace that can handle 3G.

Upgrading the pico cells within an aircraft (which act as inflight mobile base stations) to 3G capability will herald a quantum leap forward in inflight connectivity. A 3G pico cell offers a download speed of 21 megabytes per second – which is around 60 times faster than the 2.5G cells currently in use. With multiple cells on an aircraft, the possibilities are extensive.

And the advent of 3G is coming faster than you might think. We begin testing early in 2013.

Together with Panasonic, we already have commitments from airline customers where 3G is part of the offering. We expect to be delivering 3G into full inflight operation in early 2014.

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And Now For Something Completely Different…

One way or another, the Microsoft-Apple battle touches almost everyone of us and an exchange of email between yours truly and AirCloud CEO, Gary Schmidt hit a resounding note. After pointing out a very relevant article on the subject of a new thrust by Microsoft to be ‘the new Apple’ Gary responded with an email that I thought our readers might like to see: “… they (Microsoft) are followers but sometimes the follower gets to reap the preponderance of the rewards.  If they are cheaper and they can layer in the mobile side of computing… it will be big (which they have done but it requires investment in new hardware).  Here’s the secret sauce though… Microsoft has Xbox which gives them a very “cool” factor that neither Google or Apple has.  With Windows8, Microsoft (for the first time in Microsoft history) has done integration points for email, calendar, contacts, etc. with services like Gmail, Yahoo, Facebook, LinkedIn – huge.  In addition, Microsoft has cannibalized product lines like Outlook which are now integrated into the operating system.  Its really bold what they’re doing but the true test will be the execution which is where Microsoft traditionally fails…and fails miserably.” Interested? Read more here!

We probably should have titled this piece, “What connected passenger experience do travelers want” but we will let the folks at AirCloud tell you in a minute. Without a doubt, as the world of technology changes, grows and accelerates, airline passengers will eventually reap the benefit of advances in hardware, connectivity, software, applications and content. So will the airlines. The iPad® and other smart devices comes to mind instantly when we contemplate the words ‘mobile’ and ‘IFE’ together, but these words mean so much more. For airlines it means less costly IFE systems, weight and fuel savings along with new product lines to monetize. For hardware manufactures it means less static systems and more dynamic hardware deployments. For software, app and content providers it means flexibility and development of more useful consumer applications. All these features make for a better IFE experience for travelers from all walks of life using their own devices, instead (or in conjunction with) airline-supplied devices. Enter AirCloud™, the team whose mobile background aims to make your in-flight mobile/hand-held device usage an experience that virtually replicates one on the ground, who has a focus on airline monetization of that experience, and a plan that updates in-flight content automatically from the “cloud”… AirCloud™ that is!

IFExpress met up with the energetic team in their Northwest offices in Bellevue, WA. We sought to clear up a few ‘clouds’ and cornered AirCloud’s Chief Marketing Officer, Brad David; CEO, Gary Schmidt; and Sr. Operations Manager, Jeremy Rankin (L-R: pictured above). We asked them about the crossover between ground-based and airborne mobile device connectivity:

GARY: “The key to delivering goods and services via digital media has always boiled down to bandwidth. Since the advent of the Internet the question has been how much throughput can you fit in the pipe? After all, the key to good decision making is data. Wi-Fi has certainly helped the acceleration of mobile technology flourishing throughout the world supplementing wireless operator pipes and allowing for meaningful consumer experiences. On the ground or in the air, meaningful customer experience is certainly helped by greater bandwidth, but it is also driven by the content and doing this is exactly what our company has been all about for the last eight years in the mobile space. We aim to do the same thing in the air! While we are a start-up in the eyes of the IFE world AirCloud is a company with a stellar reputation in the mobile content space having worked with every tier-one wireless operator in North America, not to mention hundreds of content companies. Approaching the world of IFE from a mobile content standpoint is what we do at AirCloud™.”

AirCloud’s first planned encounter with inflight connectivity is with business jets. We asked Gary about this project:

GARY: “I cannot tell you much at this point, but we will be working with a tier one business jet IFE provider, which is an ideal platform for demonstrating our ability to talk to virtually all types of carry-on mobile devices. As we understand it, this is prime stepping-stone to move in to the commercial air carrier space. To support this effort we can call on the 80+ content relationships we made while working in the mobile space – that translates to well over 300,000 content pieces and hundreds of household name brands.”

IFExpress went on to ask if the limitations of inflight connectivity (bandwidth/air-to-ground pipe) would force a change on their ground-based model?

BRAD: “Wireless operators and other third party destination sites like Apple’s App Store and Google’s Marketplace sell millions of pieces of content and applications each month. Others like Netflix, Hulu, Spotify, and Pandora use the subscription model to broker content to the masses. From a terrestrial standpoint Internet streaming of content is the new norm as opposed to downloading huge files that eat up bandwidth and valuable consumer time. In the air it is a much different story however as bandwidth is extremely limited and a terrestrial Internet streaming model for airline passengers is simply not viable today. Currently a limited offering of pre-loaded content is uploaded to the existing static IFE system or to the individual tablets or players. This limits the content selection for passengers using these systems. It also makes monetizing of other goods and services like duty free shopping and advertising revenues difficult to deploy and track.”

“It is essential to use Internet bandwidth while on airplanes wisely and to dissect the different types of information being passed through the pipe in real-time. Real-time e-mail, social networking, ad serving, reservations, transactions, and live web searching are the key applications that need to utilize the internet bandwidth coming and going from an airplane, not media content. Media files should be stored locally along with other third party services like shopping malls, destination guides and footage, and other relevant services containing large files.”

“This is where the ‘cloud’ comes in, and that brings us to the introduction of the AirCloud Entertainment™ service, which we will be deploying in the private jet space later in the year. AirCloud is a server-based Wi-Fi connected service that is easily accessed from consumers on any mobile device or PC they bring on board. Smartphones, tablets and PC’s simply connect to the AirCloud Network via the Wi-Fi system running on the plane and download the myAirCloud™ Application (available for any tablet or smartphone in the marketplace regardless of make, manufacturer or screen size) or simply enable the web portal. A myriad of complementary movies, music, games, apps and other services are instantly available.”

We wanted more so we asked Brad how passengers would access and utilize myAirCloud™.

BRAD: “The passenger has the opportunity to sign up for the myAirCloud™ service onboard and open up a world of premium content and services unprecedented in inflight before. Our movie selection will have thousands of movies to choose from. We will cover classics to DVD release movies, keeping pace with what consumers expect at home from their cable providers like Comcast or Cox. We serve thousands of songs, magazines, children’s, books, games and applications. Our stand-alone platform does not require Internet connectivity in order to bring a rich and meaningful experience to each passenger although integration with aircraft ISP’s is very simple and will further expand the overall IFE experience if the GA operator/airline so chooses. It is important to note that virtually all passengers’ devices require a different driver to present the information correctly and proportionally on each individual screen. It is this expertise that we also bring to the table along with our proprietary app carousel technology that makes it easier for the user to navigate through the portal.”

We understand that AirCloud’s technology allows ground-based control of the content offering by individual operators. We asked Brad for a bit more information on this subject.

BRAD: “The two key components of this answer are: 1) The ground-based AirCloud™ server, which hosts a voluminous amount of content via our robust content management system (CMS) known as AirCloud CONTROL™. 2) The Internet, which connects to each aircraft (network). The concept is ground-based control of the portion of the myAirCloud™ server that is accessible via the Internet to change/update as required by authorized personnel. The service offering is then presented to the aircraft (via the Internet) and it is the optimization of what is sent to the aircraft that makes the AirCloud™ a smart server. Let me be clear – we are talking software here, and smart software at that! AirCloud™ is not a hardware manufacturer, but our goal is to team with hardware manufacturers, and content providers as well… even airlines. Another message here is that AirCloud™ is platform agnostic! I cannot say much about this as it is a very proprietary tool; however, later this year we will have much more to say about AirCloud™ and we would be happy to discuss it further with interested parties.”

“To give you a better perspective of the market, one in five mobile users worldwide has a smart device and that number increases daily. In the US there are 92M Smartphones in use and tablets account for over 11% of the global pc market. It’s a natural evolution of IFE that airlines would deploy AirCloud-like services and simply let passengers bring their preferred equipment on-board. Airlines and content owners will share in the revenue model as a new ecosystem is developed around many services not just tablet/device rentals with a very small selection of content.“

Please check out the AirCloud service by e-mailing service@getaircloud.com or brad@getaircloud.com.