Global Wireless Data Market Update - 1H 2007 September 12, 2007Posted by chetan in : 3G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Intellectual Property, Japan Wireless Market, Location Based Services, MVNO, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, Mobile TV, Strategy, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far
Global Wireless Data Market Update - 1H 2007
As you read this first half (1H) 2007 Global Wireless Data Market update this week, somewhere in China, the 500 millionth subscription is being signed up for services. In India, the 200 millionth subscription mark was crossed in the last two weeks. In the US, the 250 millionth subscription will be reached by end of the year. In total, these three top mobile markets account for 32% of the total number of global subscriptions.
2007 continued to enhance mobile data’s role in the operator ecosystem. From the true and tested SMS messaging to new services such as Mobile TV, Enterprise apps, and others, different services helped in adding billions to the revenues generated for the first half of 2007. Japan and Korea remain the envy of the global markets and the countries to study and learn from. The US market has been steadily making strong comeback and equaled Japan in terms of most service revenue generated from mobile data.
Chetan Sharma Consulting conducted its semiannual study on the global mobile data industry. We studied wireless data trends in over 40 major countries - from developed and mature markets such as Japan, Korea, UK, and Italy to high-growth markets such as China, India, Brazil, and Russia. This note summarizes the findings from the research.
- The worldwide markets continue to grow at an explosive pace reaching 3B subscriptions by Q207 up 13% from 2006 levels. Significant growth is coming from India and China with both countries registering close to 7M net adds on average in Q2. India recorded 8M net adds (its highest) in July. Overall, the world market is at almost 50% penetration.
- US equaled Japan as the most valuable mobile data market (in terms of service revenue) with both nations reaching just over $11B in mobile data service revenues for the first half of 2007. China with $5.9B was ranked number three.
- NTT DoCoMo continues to dominate the wireless data service revenues rankings with over $5.5B in service data revenues however Q/Q growth has dropped to single digits. DoCoMo crossed 70% in 3G penetration and is expected to cross 80% within 9 months.
- DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T, Sprint Nextel, Softbank, O2 UK, SK Telecom, and China Unicom to round up the top 10 operators by wireless data service revenues. All the top 10 carriers exceeded $1B in data revenues for the first six months of 2007.
- Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, 3 Italy, 3 UK, and O2 UK are topping 30%.
- SingTel reported the highest increase in data ARPU from 4Q06 with 39% growth. Other notable percentage increases in ARPU were from Rogers, AT&T, Verizon Wireless, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators.
- In terms of absolute dollar amount, 3 UK became the first operator (qualifying limit: 4 million subs) to crack the $30 data ARPU mark. By comparison, rest of the top 4 operators are below $18. In fact, 3 UK reported the highest ARPU recorded at approximately $94. Other operators who reported overall ARPU above $60 were SingTel, Rogers, Sprint Nextel, and 3 Sweden.
- The biggest jump in data revenues was experienced by Softbank, Japan. Since taking over from Vodafone, it has turned the operations around and has experienced a 42% jump in data revenues since EOY06.
- In 1H07, SMS’s vice like grip on data revenues continued to loosen a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 20-40%.
- The top 10 operators increased their revenue by 17% during the first half of 2007 compared to second half (2H) 2006 to reach $29 billion in data service revenues.
- NTT DoCoMo’s position at the top of the wireless data world has been challenged recently by several carriers esp. by its archrival KDDI. Their data coordinates stand at ($17, 32%) and ($18, 32%) respectively (please see PowerPoint for reference).
- The biggest percentage contribution by data ARPU has been consistently registered (since mid 2002) by two Philippines carriers – Smart Communications and Globe Telecom with almost 52% (or $3.6) contribution coming from data services.
- Even though China reported approximately $5.9B in data revenues for 1H07, and the % contribution is over 20%, data ARPU is around $2. For India data ARPU dropped below $1 for all major carriers.
- China Mobile with 338M remains the #1 subscriber followed by Vodafone at 200M and China Unicom with 152M subscriptions. Telefonica, América Móvil, SingTel, Deutsche Telekom (T-Mobile), and Orange (France Telecom) are the next five largest telecom groups in the world. In terms of individual carriers in a given country, AT&T and Verizon Wireless occupy the #3 and #4 spot respectively ahead of NTT DoCoMo, which is at #5. The two Chinese carriers round up the top two positions and are likely to stay perched at their lookout vistas for some years to come. Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans. Carriers in Japan and Korea are the most under duress.
- As far as 3G is concerned, GSA reported the crossing of the 200 millionth subscription in Q207. Both Japan and Korea continue to expand their 3G base with both reporting over 50% penetration. 3G has picked-up steam in both western Europe and North America per our discussion in the cover story article “3G: Hitting the Mass Market” published in Wireless World Magazine. Western Europe and US are approximately at 15% penetration (Italy being the exception reaching 35%).
- China and India represent the biggest opportunities for Infrastructure providers. China has postponed its 3G decision for the umpteenth time and is having technical and political problems to get something in place before the 2008 Olympics. India is going through its 3G spectrum policy but unlike China is likely to resolve the issues in short order. Some of the biggest infrastructure contracts will come from these two countries that are looking to expand coverage into rural area.
- Carriers with nationwide 3G networks and good distribution of handsets are seeing uptick in data ARPU. The Japanese and Korean carriers along with operator 3, Verizon, Sprint Nextel are all seeing benefits of rolling out their 3G service. Deployment of 3.5G technologies such as HSDPA and EV-DO Rev A (and B) are also gaining momentum. Networks are getting deployed and market is being seeded with some of the early handsets.
- In terms of applications, messaging accounts for lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Mobile Games, IMS, LBS, Mobile advertising, and others have captured industry’s imagination. Though not much talked about, enterprise applications are also being adopted widely esp. in North America as more workers become mobile and corporations seek efficiencies in their operations and supply-chain.
- 1H07 also saw the demise of yet another high-profile MVNO in the form of Amp’D. Helio continues to struggle while the newer ones like Sonopia and Blyk are testing the treacherous waters.
- Nokia eclipsed 100M unit sale in Q207 for the second time in history (first being in Q406). Its 1H07 tally stood at 191.9M followed by Motorola at 80.9M and Samsung at 72.2M. Nokia’s share of the market went up to 37.9%. Motorola lost significant ground dropping 3.2% Q/Q to 12.4%. Samsung gained as a result and ascending again to the number 2 spot with a 14.1% market share. Sony Ericsson with 9.4% and LG with 7.2% rounded up the top 5.
- Several operators reported Mobile Advertising as their key strategic focus for the coming quarters, esp. China Mobile and Vodafone. Sensing the opportunity to seek new sources of revenue stream, Nokia launched its ad service as well. 1H07 saw tremendous M&A activity in both the online and mobile advertising space. In a matter of weeks, several billion dollar transactions took place highlighting the intensity in preparing for the next battleground. 1H07 was also the time when we were right in the middle of writing a book on the subject and just submitted the manuscript last month (see below).
Your feedback is always welcome.
Mobile Commerce Seminar September 6, 2007Posted by chetan in : US Wireless Market , add a comment
The Mobile Commerce Seminar hosted by Miller Nash is next Friday. Agenda is below. If you would like to attend and get a discount, please let me know and i will send you instructions. Registration details here
Introduction and Overview
Miller Nash LLP
Miller Nash LLP
M-Commerce: Its Rise, Fall and Resurgence (or How Handsets Caught Up to the Hype)
History of M-Commerce; State of the Market Now; What Comes Next
Chetan Sharma Consulting
Carrier Perspective: Inside the Garden Wall
Emerging Legal and Regulatory Issues for M-Commerce
FCC Update; Hot Topics in IP; Other Regulatory Issues
Miller Nash LLP
Miller Nash LLP
Keynote Address ~ Universal’s Approach to Content Driven Opportunities
VP - Bus. & Legal Affairs, eLabs
Universal Music Group
Santa Monica, CA
Lunch (on your own)
Mobile Advertising: What’s Going to be in Your Pocket Tomorrow?
What will Consumers Accept; Analysis of Advertising-Driven Business Models
Hot Niches in the Crowded Mobile Entertainment Market
Where Downloads are Headed
Media Lead LLC
User-Generated Content: Ethics and Legality, Opportunities and Obstacles
Vidiator Technology (US), Inc.
San Diego, CA
Questions and Answers
John Markoff of NY Times interviewed me for this article that will appear in tomorrow’s paper.
Apple Cuts iPhone Price Ahead of Holidays
By JOHN MARKOFF
Published: September 6, 2007
Justin Sullivan/Getty Images
Steven P. Jobs, Apple’s chief executive, unveiled a new iPod at an Apple event in San Francisco.
A new iPod model has touch-screen controls and built-in Wi-Fi.
Apple also introduced a new digital music player modeled after its iPhone and struck a wireless music distribution deal with the Starbucks coffee chain. Apple, which rarely drops the prices on its products, cut the price of its 8-gigabyte iPhone by $200, to $399.
Steven P. Jobs, the chief executive, said in an interview after the announcement that Apple would have been able to hit its publicly declared target of a million iPhones sold in the United States by the end of this month, even without a price cut.
“We’re a high-volume manufacturer, and we’re pretty good at getting costs down,” Mr. Jobs said. “It’s very clear we have a breakthrough product on our hands, but it’s also clear that many can afford it, some can’t. We’d like to make it affordable to even more folks going into this holiday season.”
Investors appeared to interpret the announcement negatively. Apple’s stock fell more than 5 percent, closing at $136.76, and most of the loss came during and after Mr. Jobs’s presentation Wednesday morning.
“My suspicion is that they got to 750,000 really quickly, and then it started to slow down,” said Van Baker, an industry analyst at Gartner Group.
The iPhone was first sold on June 29. A number of recent analysts’ reports have noted that it is selling well and is, indeed, outselling its smartphone competitors. But Mr. Jobs said that if the company had waited past the Christmas buying season to reduce prices it would have been forced to delay for another year reaching a broader consumer market. “We’re feeling like being more aggressive,” he said.
Chetan Sharma, a telecommunications industry analyst based in Issaquah, Wash., said, “They’re trying to get the next demographic to bite into it.”
Another breakthrough Apple product, the original Macintosh, initially sold briskly in 1984 and then stalled abruptly. The Macintosh market did not regain its luster until 1986 with the introduction of the Macintosh II. Apple’s market share among computer makers remains small, in part because of the premium price it places on its Macs. (Apple’s market share in music players has not suffered a similar fate, however.)
On Wednesday, Apple executives insisted that the price cut had been planned long ago and that the strategy had been conceived in part to keep the iPhone’s pricing in line with its new iPod Touch, a music player that looks like the iPhone but lacks the phone-calling ability. The sharp price cut, however, suggested that even Apple, which has long lived in a pricing bubble insulated from other personal computer makers, is not immune from the brutal pressures of the cellular phone business.
Mr. Jobs said the company was making a “total refresh” of the iPod line, and he demonstrated a series of new features that showed how Apple was turning the music player into a hand-held computer.
Mr. Jobs displayed the new flagship iPod Touch, which will sell for $299 for an 8-gigabyte model and $399 for one with twice the capacity.
Slightly thinner than an iPhone, the new device has touch-screen controls and a built-in Wi-Fi antenna that allows it to connect directly to the Internet. It also has a browser, which makes it more of a hand-held computer than any other music player.
Users will be able to connect to a new iTunes Wi-Fi store where they can download songs directly to their music players without having to connect to a computer.
Another feature of the iPod software will be the ability to alert a user entering a Starbucks coffee shop to the music being played there. Then, a tap on the screen will download the song from iTunes.
Howard Schultz, Starbucks’s chairman, said Starbucks stores in the United States are being equipped to manage this process. He said that stores in Seattle and New York City would have the ability by Oct. 2 and that other stores across the country would get the service over the next two years.
In other announcements, Apple introduced a new iPod Nano, chunkier than before, but with a bigger screen for viewing video. Mr. Jobs said he still hoped that Apple could salvage its relationship with NBC, which had said it would not sell its programs on iTunes. The two companies could not resolve differences over pricing.
“The other networks are thrilled,” Mr. Jobs said, “because we actually promoted NBC shows a lot last year and we were getting ready to promote them this year for the new season. Unfortunately that’s not going to happen. I think its a loss for both us and NBC, and I hope it gets put back together. But I don’t think that selling TV shows for a lot more than we are makes any sense. You can watch them for free on TV.”
Mobile Advertising Book Cover September 5, 2007Posted by chetan in : Mobile Advertising , 1 comment so far US Wireless Market , add a comment
Yahoo buys Bluelithium for $300M and changeUS Wireless Market , add a comment
Over the last couple of weeks, the rumors of gphone’s imminent arrival have reached a crescendo. Om did a bit of his digging.