Mobile Solutions CI

Is quad play the future for wireless operators?

Slim is making a long term bet on future demand for quad play services, which could affect all his Latin American footprint. Jorge Lagunas of Grupo Financiero Interacciones in Mexico told Bloomberg: "In some point in its history, we could see news about quadruple play from Telmex, or something like that, that could help boost profit at America Movil itself." Mexico is not the first country to indicate the trend - America Movil has already started to offer fixed/mobile bundles in other territories, notably Colombia, where it bought fixed networks last year.

via www.rethink-wireless.com

Carlos Slim has been ahead of the curve for most trends in the industry. Is he right that this form of integration is required for scale? Or will we see a more vertical integration--think an Apple offering wireless services where the main focus is a content library instead of the device hardware?

Contrast this with Huawei's stated intent to use Google as a platform to offer cloud services on devices. Given Huawei's strength as an infrastructure provider that makes perfect sense--offer an end to end device to platform proposition to consumers which follows Google's intent. However, I'd argue that is actually a better path for operators to take as their cloud efforts have more opportunity as B2B within the mobile value chain as opposed to priced-to-consumer offerings.

Will we see a Carlos Slim or an APAC player lead with this model? And will developed regions pay attention if it works?

Average U.S. Smartphone Data Usage Up 89% as Cost per MB Goes Down 46% | Nielsen Wire

In just the last 12 months, the amount of data the average smartphone user consumes per month has grown by 89 percent from 230 Megabytes (MB) in Q1 2010 to 435 MB in Q1 2011. A look at the distribution of data consumption is even more shocking: data usage for the top 10 percent of smartphone users (90^th percentile) is up 109 percent while the top 1 percent (99^th percentile) has grown their usage by an astonishing 155 percent from 1.8GB in Q1 2010 to over 4.6GB in Q1 2011

via blog.nielsen.com

Here is the demand side pressure driving operator consolidation. More users (smartphones rapidly heading to 50% of mobile subscribers) using more data for less money.

The CapEx needs to sustain this don't square up against the consumer ability and willingness to pay for mobile data (with the exception of the top end of the post-paid segments).

The pressure this creates on the industry has resulted in over-the-top content platforms--Apple, Google, Facebook, Amazon--harvesting the bulk of the profit. However their services are accelerating the crunch on operators, which willl in turn force more consolidation, which will then create disruption as alternative business models emerge. 

For example, the post-paid model of subscriber acquisition cost funding OEM price promotion in return for 2-year commitments will continue to migrate up market. Larger opportunities will emerge from prepaid and alternative pricing models similar to Kindle. 

The next three years will be interesting. I expect we will see massive change from areas few expect.

Blogs | Wireless Week

Leap/Cricket, along with MetroPCS, often have been thought of as “bottom feeders,” as Bernstein Research analysts said in a research note released today,but they’re emerging as the new middle market. Nearly all of the industry’s subscriber growth is now coming from the prepaid segment. Prepaid and reseller net adds accounted for an all-time high of 91 percent of the industry’s total net additions in the first quarter, according to Bernstein. In fact, the analysts figure that excluding “connected devices” – laptop cards, MiFi devices and others – it’s likely that the postpaid industry actually lost traditional subscribers in Q1 for the first time ever.

 

At the very bottom, the low-end prepaid subscribers are trading down to USF-assisted SafeLink (TracFone) and Assurance Wireless (Sprint) plans for low-income people who qualify, Bernstein says. At the high end are AT&T and Verizon Wireless, with Sprint (postpaid) and T-Mobile USA getting caught in the middle.

via www.wirelessweek.com

Here is the US wireless industry in a nutshell...

When you look at the structure of the value added content service deal mentioned (Muve) in that context it signals a huge opportunity for someone who recognizes Apple's (and Google's) dependency on consumers basing their activity on a PC and using mobile devices secondarily. Increasingly the middle and bottom thirds of the US market look like EMEA and APAC regions where internet growth happens off PC.

RIM goes off the platform -- BBM as roadmap strategy

The past week or so has been a busy news period for RIM. Their CMO resigned just before playbook hits the market, a key supplier earnings support (Marvel) has started speculation about a low-cost move in the handset portfolio, and lost amidst all of this comes speculation published on long-time Blackberry leak newsite BGR that Blackberry Messenger (BBM) will go cross platform.

This last piece is the smartest thing RIM has done in years! I'm so curious how the person driving that product got the buy-off to do this as I've been unsuccessfully trying to implement a similar strategy for several years now. Neither from the OEM side or carrier side can I get buy-off to actually do it so hat's off to RIM for pulling the trigger.

Now they will be extending a core use case off their devices to expand their customer base. Best of all they get to use license fees, which pay for NOC traffic, to have carriers and enterprises pay the cost of delivering over the top. Brilliant!

In the future I hope to see many device companies follow this model. First build the user experience, propagate it through Facebook and Android and iPhone apps, iterate as it builds, then once you have a living community build the physical platform/product to optimize the experience based on actual usage information--UX traffic paths, day/time/place/intensity/frequency stats, support feedback, time on page analysis, and perhaps most importantly studying where people are falling out of the experience. 

For RIM this allows them to extend their customer base off of Blackberry OS as it is today, onto the application layer (both on and off device), then bring those customers back to the QNX platform within a familiar UX. What a great platform migration roadmap to solve the problem of an active user base--and what a great way to incent current device owners to upgrade to new QNX devices.

Why Android's app store will never rival Apple's

IDC released a report on mobile advertising that is receiving a lot of commentary. IDC estimates that Google’s $1 billion in mobile ad revenues is mostly coming from mobile web display and search ads. It's not rocket science given Google's last earnings call; here is what Google told us:

"Mobile is on an annualized run rate of over $1 billion. This means the people who are accessing our products and services through their mobile phones are adding a $1 billion annually to our existing revenue streams. Clearly, this is the future of search in the Internet, more people in more countries coming online from these smartphones. Our mobile search queries have grown five times over the past couple of years. And of course, a lot more of those queries are now coming from Android phones."

Apple's app store revenue has come mostly from their role as billing platform provider, which is an interesting distinction to think about. I'll write more about the differences between these two models later.

What caught my attention about IDC's report is what it implies for the many Android ecosystem partners who have been anxious for Google to pay more attention to developing and fostering android marketplace. Google has no incentive, and possibly a counter-incentive, to improve the marketplace and the app store model according to this report. Look at the last round of updates Google rolled out and consider what level of progress the marketplace has seen in two years. Not much.

Think about what that means for the Android UI and where it will evolve.

Apple will continue to be an app-driven experience, but Google is driving Android to be a browser-based experience. If you deliver content or services through an application you need a plan for how that will work in a browser-based UI. Where will discovery come from? How will cross promotion work?

These are big questions to unravel for service providers, OEMs, and content players.

Come play with the latest and greatest android devices! http://bit.ly/9xTjT5

T-Mobile USA is co-hosting a hands-on play session at F5 networks tomorrow night.

Come October 20th, 2010 to our usual room at F5 Networks for hands-on time with the latest android devices - G2, Charm with MotoBlur, Vibrant GalaxyS, and many more.

Those of you who came to our last Device Breakout Session know how it goes, but for the rest of you it will be a couple hours of time with you, your laptop, an interesting device, and a couple guys from T-Mobile to ask all the questions you want :)

Of course, you are welcome to come even if you don't have a laptop or an application - these are some of the latest and greatest Android devices out there. We will have something of interest for everyone!

F5 Networks will be supplying, as always, food, beverages, networking connectivity, power, and the use of our game room for the evening.

 

Is there a Deloitte study showing apps don't drive smartphone sales?

In a typically internet experience, the smartphone news of today is dominated by links to a cnet story about a Deloitte study which "surveyed 1,960 people between the ages of 14 and 75 in June and July, 58 percent of consumers say a smartphone's size, quality, keyboard style, and price factor into their smartphone buying decisions. Just 18 percent of respondents said that mobile applications influence which smartphone they eventually decide to buy."

Begin lengthy commentary...

Except--there is no such study on the Deloitte website. Or listed in Deloitte press releases. And every mention of this study I can find eventually links back to the same CNet story. So what is this study and how do I get it?

Because I question the conclusion. I wonder what relationship the 20% -ish of people who supposedly care about mobile applications bear to the 25% -ish of consumers who HAVE a smartphone. The article gives some commentary about application uptake within the smartphone base but without being able to see the study (or more precisely it's data) it is hard to know what is actually claimed.

Mobile App Marketplace Review

Stuart Dredge has posted a collection of app store stats to demonstrate growth and uptake of Android Marketplace and iPhone App Store (also some RIM info) over at Mobile Entertainment news. It's a nice collection of trending info bits if you are looking to benchmark the two marketplaces.

The false choice of mobile apps versus mobile browser

GigaOm has an article up arguing that mobile app uptake will be balanced in the coming months or years with mobile browser uptake. This is such a meaningless discussion that I have a hard time understanding why it remains such a popular meme.

To begin with there is this comment: "Eventually, a spot on the home screens of smartphones will become like beachfront property in Monte Carlo –- highly coveted real estate."

If you develop and deliver mobile content you are already laughing. A spot on a device home will BECOME high coveted? Really? Consider for just a moment how incredibly constrained and fought over this real estate has been in mobile content ecosystem over the last ten years. And is now. Anyone in mobile can tell you the mobile home screen has been a Manhattan penthouse always and the iPhone introduced a boardwalk square but that filled up pretty damn quick.

Even if we ignored all of that I would point out that mobile browser usage has always gone hand in glove with mobile app uptake. Look at any reporting numbers from any provider and you will see that people who use mobile apps use mobile web equivalently.

Let's stop arguing over the channel for information and realize that we need to solve what information and how it is discovered. This is true across and within channels. The old "browser versus app" argument just says you have no revenue model, no strategy, and no clue.

Mobile Breakfast Series recap

This week I attended Chetan Sharma's Mobile Breakfast Event, which he recaps here. It was great to see some familiar faces and hear startup stories from a range of services. 

I'm grateful that Chetan puts on these events and brings such a focused community together.

Listening to the commentary on application distribution and startup's path to commercial viability is interesting now that I am sitting on the carrier side of the fence. While the audience is not as virulently anti-carrier as a SV meeting it was close which has always struck me as amusing. If eliminating carriers would be such a panacea why not just go to market only on the web?

Problem solved as is evident by the great number of web-only startups in 2009 and 2010 which have generated fast growing user bases with scaling revenue models...oh, wait. 

Beyond that equation there were some interesting discussions on time to market in general and the business model implications of aligning with carriers, OEMs, etc. Swype and Root had interesting stories to tell on this topic.

One topic which was interestingly absent was cloud computing or even HTML5. Has the iPad launch killed that hot topic for consumer mobile services? The app store route on iPhone and Android seemed a forgone conclusion to both speakers and audience, with one notable nod to RIM.