Getting ready for CTIA March 28, 2008
Posted by chetan in : US Wireless Market , add a commentHave been traveling so much that CTIA snuck up quietly .. looking forward to meeting interesting companies, making rounds of the show floor, listening to hyperboles, meeting colleagues and friends and making new ones ..
WTIA Event - Mobile Mania, Where’s the Money?
Posted by chetan in : European Wireless Market, Indian Wireless Market, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Search, Speaking Engagements, US Wireless Market, Wireless Value Chain , 2 commentsHad a terrific turnout at the event and it was very well organized by WTIA. Jai Jaisimha, VP, AOL gave the keynote around their Open Initiative which seems like a comprehensive program compared to some of the other initiatives in the market place.
After that I moderated the panel with Jai, Brendan Benzing (Motricity), Ian McKerlich (T-Mobile), and Joe Verschueren( Formotus). We delved into where the opportunities lie in the coming years. Jai and Brendan emphasized platform, Ian talked about user experience and simplicity, and Joe put some emphasis on enterprise applications.
Global Wireless Data Market Update 2007 March 27, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, European Wireless Market, India, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Networks, Partnership, Speaking Engagements, Speech Recognition, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 8 commentsGlobal Wireless Data Market Update 2007
http://www.chetansharma.com/globalmarketupdate2007.htm
As you read this End of Year (EOY) 2007 Global Wireless Data Market update this week, somewhere in India, a new subscription will catapult India over the US as the number 2 global wireless market. 2007 was a banner year for global wireless data market. The global service revenues for the year touched $700 billion, the data service revenues were more than $120 billion, China signed its 500 millionth subscription, and both India (in feb 08) and the US crossed the 250 million subscription mark. 2007 continued to enhance mobile data’s role in the operator ecosystem with approx 17% of the revenue is coming from data services.
For some leading operators, data is now contributing up to 35% of the revenues however increase in data ARPU is not completely offsetting the drop in voice ARPU. 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 2007. Japan and Korea remain the envy of the global markets and the countries to study and learn from w.r.t. new services and applications. The US market has been steadily making strong comeback and for the first time exceeded Japan in 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 hyper growth markets such as China and India. This note summarizes the findings from the research.
- The worldwide markets continue to grow at an explosive pace reaching 3.3B subscriptions by Q407 up 20% from 2006 levels. Significant growth is coming from India and China with both countries registering close to 8-9M net adds per month. India recorded 8.8M net adds in Jan 08 while China added 9.4M in Feb 08. Overall, the world market is at almost 50% penetration.
- US surpassed Japan as the most valuable mobile data market in service revenue with US adding $24.5B vs. $23.2B for Japan in 2007 mobile data service revenues. China with $12.5B was ranked number 3. US registered the highest growth amongst the top 3 with over 55% increase from 2006 levels followed by China at 37% and Japan at 18%. These top 3 markets account for over 50% of the global data service revenues.
- NTT DoCoMo continues to dominate the wireless data service revenues rankings with over $12.13B in service data revenues for 2007 however Q/Q growth has dropped to single digits. DoCoMo crossed 80% in 3G penetration and is expected to touch 90% by end of the year.
- DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T, Sprint Nextel, O2 UK, SK Telecom, Softbank, and China Unicom to round up the top 10 operators by wireless data service revenues. All the top 10 carriers exceeded $3B in data revenues for the year.
- 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%.
- Both India and China added a whopping 85 million new subscriptions (most of them prepaid). This week India edges past US to become the number 2 wireless market (by subscriptions) in the world. In last two years alone it added almost 150 million new subscriptions (in comparison China added 155 million and the US market added 44 million).
- Vodafone Italy reported the highest increase in data ARPU from 4Q06 with 76% growth. Other notable percentage increases in ARPU were from Rogers, AT&T, Verizon Wireless, Sprint, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators with average data ARPU dropping to $0.70.
- In terms of absolute dollar amount, 3 UK leads the pack with $29 data ARPU (qualifying limit: 4 million subs). By comparison, the rest of the top 4 operators are below $22. In fact, 3 UK reported the highest ARPU recorded for the year at approximately $94 (in Q2). Other operators who reported overall ARPU above $60 were KDDI, NTT DoCoMo, Rogers, and 3 Sweden.
- The biggest jump in data revenues was experienced by Verizon Wireless with over 68% increase from 2006 followed by AT&T with 63% jump and O2 UK making 49% gain.
- In 2007, 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 32% during 2007 (from 2006) to reach almost $62 billion in data service revenues, thus accounting for almost half of the global data service revenues though they account for only 27% of the global subscription base.
- 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 ($21.5, 35%) and ($21, 34%) respectively (please see PowerPoint for reference). Since the takeover from Vodafone, Softbank has been making significant strides in the market by taking the highest share of the net-adds in last 9 months.
- 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 55% (or $4) contribution coming from data services.
- Even though China reported approximately $12.5B in data revenues for 2007 and the percentage contribution is over 23%, data ARPU is around $2.3. For India data ARPU dropped below $1 for all major carriers.
- China Mobile with 369M (as of Dec 07, the numbers increased to 384M by Feb 08) remains the #1 carrier in terms of total number of subscribers followed by Vodafone at 252M and China Unicom with 160M 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 many years to come. China Mobile also surpassed Vodafone in market cap which stands at $288B (vs. $164B for Vodafone). 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 293 WCDMA commercial launches worldwide with over 270M 3G users (66% of them are WCDMA users vs. EV-DO). Both Japan and Korea continue to expand their 3G base with both reporting over 75-80% penetration. 3G has picked-up steam in both western Europe and North America per our forecast in the 2005 cover story article “3G: Hitting the Mass Market” published in the Wireless World Magazine. Western Europe and US are approximately at 25% 3G penetration (Italy being the exception reaching 40%).
- China and India represent the biggest opportunities for Infrastructure providers. China has postponed its 3G decision for the umpteenth time and has been 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 areas. In India, regulators are considering inviting bids for the 3G spectrum from foreign entities as well.
- 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 4G, there is a strong momentum behind LTE, UMB in its current incarnation is practically dead, and proponents of WiMAX are pushing the technology as a 4G candidate, though it is starting to lose its time advantage.
- In terms of applications, messaging accounts for lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, 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.
- 2007 also saw the demise of some high-profile MVNOs like Amp’D. Helio continues to struggle while the newer ones like Sonopia and Blyk are testing the treacherous waters with different business models. Asian market is also opening up for MVNOs.
- Nokia eclipsed 100M/quarter unit sale three times in 2007. It sold over 437M handsets in 2007, more than the next three handset manufacturers combined. Nokia’s global market share stood at 40.2%.
- While the talk of “Open Access” and “Open Platform” consumed much of North America, it barely registered a decibel elsewhere. Several significant events including 700 MHz Auction, Android, and Verizon’s “Open Network” initiative elevated the consternation in the ecosystem.
- 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. 2007 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. The estimated market for mobile advertising in 2007 was approximately $2.3B with messaging, search, and browsing accounting for over 84% of the revenues.
Your feedback is always welcome.
Chetan Sharma
Disclosure: Some of the companies mentioned in this note are our clients.
Washington Technology Industry Association Event March 25, 2008
Posted by chetan in : Speaking Engagements , 1 comment so farIf you are in Seattle, there is an event coming up on Thursday. Jai will be giving the keynote and I will be moderating the panel after that.
March Technology in Focus Series: Mobile Mania – SHOW ME THE MONEY!
Westin Hotel, Seattle
3/27/2008
4:30 PM to 8:00 PM
Last Chance to Register - Don’t Miss this Event! Click Here to Register Today!
Join us as we kick-off 2008 with Mobile Mania!
M-commerce is a multi-billion-dollar industry – and it hasn’t even come close yet to peaking. How can you tap into this emerging marketplace? Mobile advertising, content, open access … what does it all mean? Where are the opportunities and how will new developments affect your business? Our expert panel will shed light on the key trends, how the real money will be made, and what you should start planning for now to be ready for the future. Whether you are an entrepreneur, business owner, investor, developer, or a sales, marketing or product manager, this event should be on your agenda for 2008!
Make sure to arrive at 4:30 to check out the Mobile Mania Pavilion – from the latest devices to the area’s hottest m-companies, you’ll want plenty of time to check it all out.
Mobile Mania Pavilion Companies
Formotus - Lilipip - Positive Motion - MGD
Speakers:
- Brendan Benzing, VP Mobile Advertising, Motricity
- Jai Jaisimha, Vice President of Mobile Technology and Product Development, AOL, LLC, a Time Warner Company
- Ian McKerlich, Director Mobile Web and Content Services, T-mobile US
- Chetan Sharma, President, Chetan Sharma Consulting
- F. Joseph Verschueren, CEO & co-founder Formotus Inc.
COM #116
Posted by chetan in : US Wireless Market , add a commentis over at Situational Marketing. As usual, pretty good posts and reading for the week. Thanks.
Recap of Mobile Advertising Events - Stanford and Seattle March 22, 2008
Posted by chetan in : AORTA, ARPU, Carriers, Indian Wireless Market, M&A, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentThis week I had the opportunity to moderate two distinguished panels on Mobile Advertising in two days, one at Stanford University and the other one in Seattle. This post summarizes the issues and points discussed during these two sessions.
Stanford University by Mobile Momentum
The first one was part our book tour and was organized by Mobile Momentum, an organization lead by Prof. Tom Kosnik and his student Mohit Gundecha. The event was sponsored by three of the pioneers in Mobile Advertising space - AdInfuse, Admob, and Rhythm New Media. My co-author Victor Melfi and I walked through some of the salient points of our book. We discussed the history of advertising, the digital revolution of the Internet, delved a bit into the definition of mobile advertising, the challenges and accelerators of this nascent industry, pondered over the business models, illustrated some of the successes using the case studies and our five-points framework (reach, engagement, targeting, viral, and transactions), briefly touched on the technology issues and gave our 2c on what it will take for the industry to go from its current state of “cautious optimism” to promise of “contextual nirvana.” Some of the key points were:
- Keep things in perspective
- Understand the business, not just the technology
- Chant the User Experience mantra
- Give Users Control
- Respect Consumer Privacy
- Focus on the most critical 1%
- Prepare for Data Everywhere
- Visualize Three Screens
- Watch your kids: They are the Market
- Watch for external catalysts to change like Alternate Devices and Open Platforms
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Our talk was followed by a panel discussion with Ujjal Kohli, CEO, Rhythm New Media, Tony Nethercutt, VP, Admob, and David Staas, VP, AdInfuse. All these guys have had distinguished careers in mobile, advertising, and digital evolution of our industry and hence the depth of knowledge on the panel was just great. Each of them has had successes with campaigns around the world, not just in North America. Admob with its billions of impressions every few weeks has blazed the way in the off-deck world. Rhythm has been quite successful with advertising with mobile video snacking at 3 in UK.
AdInfuse has been running some interesting campaigns in Europe like with Swisscom.They were achieving 8% CTR on WAP banner campaigns, 50% of users who clicked through to the WAP landing page completed a purchase. Recall rates were as high as 27%, more than 80% of the users rated the model of “free video content in return of advertising” positively vs. 2% who didn’t like the idea. Rhythm has also experienced similar numbers with their 3 UK campaigns. It is remarkable that 40% of the subscriber base is using the service and one can still watch the ad subsidized videos even if they have run out of prepaid minutes. The reach provided by Admob to its advertisers is phenomenal. Coca-cola’s campaign touched 125 countries. We cover Rhythm’s and Admob’s case studies in more detail in our book as well.
We touched on a wide variety of topics and I was struck by something that Ujjal said. He was previously CMO of AirTouch Cellular so brings in a very unique perspective to the table. He said, “For the carrier, No amount of Mobile Advertising Revenue is worth the risk of losing a customer.” The issues around privacy, customer satisfaction, customer care costs are critical for an operator to assess as they dive deeper into this new emerging medium.
There are a number of developers who are interested in exploiting the opportunity of mobile advertising but don’t want to deal with the complexity of the ecosystem and ad networks. There is an opportunity for some of the existing players to open up the APIs to broaden the reach.
Seattle by TiE
Next day, TiE Seattle organized a panel discussing “Mobile Advertising: Making the most of the next generation in advertising.” The panelists were Scott Silk, CEO, ActionEngine, Brian Lent, CEO, Medio Systems, Eric Hertz, CEO, Zumobi, Jeff Giard, Director, Alltel, and Jason Guenther, Director, Disney. Again, a pretty diverse panel representing various players in the value chain.
I started by probing the panelists on how we go about defining “Mobile Advertising.” Brian, not surprisingly, thought Mobile Search is going to take a lion share of the revenues just like how things evolved in the online world. Eric and Scott articulated their view around On-Device Portals, Widgets, and User Experience. Action Engine has been having good success with many of the large media brands such as MSNBC and WSJ while Zumobi has come out with a platform that takes user experience at the center of its strategy.
Though at number 5, Alltel has been introducing innovations quicker than some of its peers. Its Celltop application is yielding significant results with over 400% increase in usage if the application is within Celltop framework. Next, they are going to be putting the Celltop as a Home Screen (Idle Screen) app like what Koreans and Japanese have been doing for some time. It was refreshing for Jeff to right away state that this industry is not going to move forward if we don’t solve the “fragmentation” problem. I have said before that “Fragmentation is the biggest enemy of the mobile industry” and w/o solving the issues of fragmentation at different layers, we won’t get into the hypergrowth mode that will take the industry from $2B today to $20B in five years. Jeff thought that mobile advertising presents significant opportunities for the industry including the carriers but we need to be mindful of the issues around privacy, customer care, and customer satisfaction.
Disney is world’s premier consumer brand and very few companies understand the three screens better than Disney. Jason’s perspective on how mobile fits into the larger picture was an important one. He views mobile as a critical channel for any content company but reminded that a lot of work needs to be done in terms of standardization, metrics, auditing, and privacy before mobile advertising becomes a thriving industry.
In both places, audience was well informed and highly engaged. Questions ranged from business models to technology intricacies. People didn’t think some of the newer MVNO models like that from Blyk will last too long and that for the trends will different for different geographies. For example, in emerging markets, mobile is going to be the only means to bring digital advertising to the masses, a point we make in our book as well. Will high-end phones be free subsidized by advertising as Eric Schmidt had proclaimed, well, don’t bet your life on it, at least not just yet though if someone like Google makes up its mind, it can, as Victor says, “make the market.”
I really enjoyed engaging with the panelists and the audience. Plenty of questions, we could have gone on for hours if not days. It was quite hectic but fun. Next week, I am moderating a panel “Mobile Mania - Show me the Money” at Washington Technology Industry Association and then facilitating a developer forum “Mobile Jam Session” at CTIA on 31st. On 24th April, I will be giving a class on Mobile Advertising at Stanford University (Prof. Kosnik’s course) and the same evening, I head to Sacramento to give a talk being organized by TechCoire on “Mobile Advertising: A $20B Opportunity?” In May, on the 13th, I will be in NY giving a talk on mobile advertising to the advertising executives, on 20th will be doing a book event being organized by CommNexus in San Diego, and on 21st will be moderating a panel discussion on the promise of mobile advertising at the highly regarded Future In Review Conference.
Hope to see some of you on these sojourns.
CTIA - Calling All Developers March 21, 2008
Posted by chetan in : Mobile Content, Mobile Ecosystem, Worldwide Wireless Market , add a commentI will be facilitating a session at CTIA - Mobile Jam Session for Developers
Details below. It should be a good group of developers and industry insiders conversing about how to make things better. The event is free and there is even food available, so sign-up as soon as you see this 
Here’s the schedule of what’s happening: Improv Sessions Essence Reception & Networking 4:30pm – 6:00pm DEVELOPER PROGRAM REVIEW
Monday, March 31, 2008 (day before CTIA)
9:00 am – 6:00 pm
Las Vegas Convention Center – N255
Free to attend.
Sponsors: dotMobi, Motorola, Symbian, MyStrands, Mobile Distillery
Producers: dotopen, WIP
Rules: No prep, No PPT, No Ties
Mobile Jam Session Agenda
Registration / Networking 8 :30am – 9 :30am
Developer Pitches - share you ideas, projects 9 :30am – 10 :30am
Opening UnPanel – Developer Programs 10 :30am - noon
Lunch/networking Noon – 1 :00pm
6 choices x3 1 :00pm – 4 :00pm
1:00- 1:45 – Chose one
1:45 – 2:30 – Choose One
2:30 – 3:00 – Short break
3:00 – 3:45 – Choose one
3:45 – 4:30pm – Wrap up of Improv
Speakers & Discussion Leaders
10:30pm – 12:00pm
So what’s gives with the mobile ecosystem. Everyone talks a good line about the “F” word, of course we mean fragmentation, but what’s really being done. Are the big guys really working together? Does ‘open’ really mean its going to get any easier. Give your humble opinion on the priorities that will help get applications or technology to market faster, better, stronger. It’s about devices, platforms, operating systems, channels and partnerships. This session will be led by a panel of developers programs and enhanced with a few developers. Lots of questions and opinions from all participants.
Panelists:
dotMobi - James Pearce
Motorola – Claudia Backus
Symbian – TBA
Orange Partner – Steve Glagow
Sony Ericsson - Mikael Nerde
AT&T - Amy Bang
IMPROV SESSIONS
1:00pm 4:30pm – (45 minutes / session – choose 3 too attend & Final Wrap Up)
1. Mobile OS and Platforms
Discussion Leaders: Mobile Distillery - Vincent Berge
2. Mobile 2.0
Discussion Leaders:
AOL- Jai Jaisimha
CellSpin – Vince Laviano
Rococo – Sean Sullivan
Idean - Santtu Toivonen
3. Testing & Certification
Discussion Leaders:
GetJar – Bill Scott
Accenture – Jeff Wang
Mob4Hire – Paul Poutanen
Device Anywhere – David Marsyla
4. Getting to Market / Channels
Discussion Leaders;
Cellmania- Peter Baldwin
AORTA- Chetan Sharma
Astraware/Handmark – John Philips
5. Development – JSRs, MIDP3 and more
Discussion Leaders:
Aplix – Stanley Kao
6. Open Source in Handsets
Discussion Leaders:
Motorola - Asokan Thiyagarajan (Ashok)
Funambol - Greg Gamp
More details at www.mobilejamsession.com
Verizon tops FCC auction March 20, 2008
Posted by chetan in : Mobile Advertising, Mobile Content, Mobile Ecosystem , add a commentAs expected, Verizon topped the FCC auction and Google skillfully played its card to force VZ to pay more and FCC to put in the open rules in place. In our Mobile Industry Predictions - 2008, we noted -
2. Will Google play to win in the 700MHz Spectrum Auction?
Google has played the spectrum chess game effectively. Almost 50% respondents gave it a 75% or higher chance of Google winning the bid. Though expectations are high, Google is unlikely to play to win. Services business is not their cup of tea, they could still fund the Clearwire-Sprint deal but that investment can be spent differently to get better end-results, i.e. mobile ad revenue.
We noted the same thing in the Inside Media podcast in Nov 07.
Had a terrific event
Posted by chetan in : Mobile Advertising, Speaking Engagements , add a commentat Stanford University last night. The response was great and the turnout superb. Thanks all for coming. Heading back to Seattle now and will be moderating the TiE event this evening.
Will have reports from both the events later in the week.
Thanks again to AdInfuse, Admob, and Rhythm New Media for sponsoring the Stanford Event and to Mobile Momentum for being generous hosts.
Russell Shaw March 17, 2008
Posted by chetan in : US Wireless Market , add a commentOver the weekend I learned about passing of Russell Shaw. I didn’t know him personally but I blogged with him at Mobile Messaging 2.0 for a while and ran into his posts on VoIP every once in a while. A prolific blogger, loved by his friends and colleagues, it was sad and shocking to learn about his passing. May his soul rest in peace.
The fragility of life is reminded by such events and hope it helps us focus on what’s “really” important in each of our lives.
Carnival #115 is up
Posted by chetan in : US Wireless Market , add a commentAndrew Grill in London hosts the Carnival. As usual, great set of readings for the week. Thanks Andrew.
Mobile Advertising Events March 14, 2008
Posted by chetan in : Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Search, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so farIt will be a very busy next few weeks
March
Next week on 19th, we are at Stanford University being hosted by Mobile Momentum to do a book event. Details here. RSVP at stanfordevent at chetansharma dot com. Bring your friends and colleagues.
The book discussion will be followed by a panel discussion with some of the smartest brains in the business - Ujjal Kohli, CEO, Rhythm New Media, Brian Cowley, CEO, AdInfuse, and Tony Nethercutt, VP, Admob.
AdInfuse, Admob, and Rhythm New Media are also the generous sponsors of the event. So, many thanks again.
The next day (20th), I fly back to Seattle to moderate a panel on Mobile Advertising being organized by TiE. Event and Registration details here. Panelists are Jeff Giard, Director, Alltel, Brian Lent, CEO, Medio Systems, Scott Silk, CEO, ActionEngine, and Jason Guenther, Director, Disney.
The following week on the 27th, I will be moderating a panel being organized by Washington Technology Industry Association. The topic is Mobile Mania - Show me the Money. Event and Registration details here. Speakers are Jai Jaisimha, VP, AOL, Brendan Benzing, VP, Motricity, F. Joseph Verschueren, CEO, Formotus, and Ian McKerlich, Director, T-Mobile USA.
April
Then, I head off to CTIA in Vegas.
In late April (24th), I will be giving a talk in Sacramento - Mobile Advertising - The $20B Opportunity?. The event is being organized by TechCoire - Sacramento region’s only business-technology education and networking organization. More info on them here. Thanks Gopan for the invite.
I got to know two wonderful people at Stanford University last year - Prof. Tom Kosnik and his student Mohit Gundecha. It was in context of the event that Mobile Momentum organized on the Indian Wireless Market. I serve on the advisory board. In fact, Mohit is single-handedly organizing our Stanford event next week.
Prof. Tom Kosnik has invited me to give a class to his students on Mobile Advertising which is great honor. His course - Global Entrepreneurial Marketing is a very popular course at Stanford and always gets full very quickly.
May
After a brief break, we head down to San Diego on 20th for another book event being organized by CommNexus - a very active High Tech and Communications Industry association.
The same week, I will be at FiRe (Future in Review) conference being organized by SNS and Mark Anderson and will be moderating a brilliant panel on Mobile Advertising. Event and Registration details here.
SNS: Mobile Advertising - from cautious optimism to contextual nirvana March 12, 2008
Posted by chetan in : AORTA, Mobile Advertising, Speaking Engagements, US Wireless Market, Worldwide Wireless Market , add a commentLong time readers would know that this blog is named (AORTA) after a term Mark Anderson coined in 1997. I have been reading Mark’s work since the mid-nineties. His newsletter “Strategic News Service” was the first paid newsletter subscription model on the Internet and is read by the likes of Bill Gates, Michael Dell, Steve Ballmer, Mark Hurd, Sol Trujillo, Paul Jacobs, and a whole list of luminaries from around the world. You should check it out. You might also want to check out his blog to get a taste.
Mark has this unique ability to look at trends across multiple industries and different diverse segments from energy to finance, from IT to wireless, from politics to trade and use that to make very accurate predictions much before the mainstream press comes to the realization of what’s happening.
Needless to say, his work is of the highest order. That’s why I am extremely delighted and humbled by the opportunity to write for the SNS. My piece which was adapted from our Mobile Advertising Book and titled “Mobile Advertising: from cautious optimism to contextual nirvana” was published in SNS yesterday as a Special Letter. Over the years, several prominent authors have written for SNS and I am grateful for the opportunity. Thanks Mark.
Mark has also invited me to moderate a session on Mobile Advertising at his annual “Future in Review (FiRe 2008)” conference in May. We are putting together a pretty exciting panel. The Economist called this conference “The best technology conference in the world” and is perhaps the only conference of its type where such diverse technology and industry topics are discussed. It is known for the participation of high profile visionaries, noble laureates and prominent technologists from around the world and is truly an intellectually stimulating experience. Check out the list of who is coming.
MSearchGroove podcast is online March 11, 2008
Posted by chetan in : Mobile Advertising, Mobile Applications, Mobile Ecosystem, Mobile Search, Speaking Engagements, Wireless Value Chain, Worldwide Wireless Market , add a commentyou can listen it here. Thanks Peggy.
Highlights
As he put it: “They have a different view of the advertising space. And their view of the competition is that the competitors aren’t really [other] operators, but other mediums. So if a dollar is going to TV, then that’s their competition, not a dollar going to their rival [operator].
Other highlights:
Operator assets: Operators should “focus on the unique capabilities that they have from their network and devices and expose that to the ecosystem.” That model is more compelling - and potentially more profitable - than “trying to control and become an agency themselves.”
Google & Co: Operators have the analytics - but time is a luxury they don’t have. Figure it’s 2-3 years before other providers close the gap to offer profiling, presence and location, and the metrics advertisers demand. “In the long run, the challenge will be: Will it [customer data etc…] come from Google, Yahoo, Microsoft, AOL, and some other companies [as they] will have these unique characteristics [and capabilities] as well.” In three years, Chetan reckons “online brands will start to dominate the ecosystem….But if carriers are able to pool together their resources and make a very compelling offer to the media industry…they [carriers] can put up very stiff resistance to online brands.”
Mobile search: Mobile search will play an important role on mobile, but it won’t dominate the mobile Internet or advertising experience. “I think the idle screen plays this role in the long run on the mobile. And I think you’ll see more friction and fights [as companies] try to capture the idle screen user.
We should not think of search as a box, “but rather an intelligent [bot] that searches for relevant content for you and presents that content with relevant ads on the idle screen. If you think of search in that way, then search has a very important role to play. But just searching by key words will probably have a smaller role to play in the long term.
The ones to watch: Chetan and I ran through some case studies and stats from the likes of NearBy Now, which gets high marks for engagement, and mobile Posse, which gets high marks for targeting. I’ll take Chetan’s comments as a cue to line up an interview with each - in fact, I already reached out to NearbyNow for a podcast timed to their next announcement (under embargo)…In the meantime, it’s interesting to note that no company got high marks across all five metrics: reach, engagement, targeting, viral and transactions. (Transaction is the “Holy grail” of mobile advertising, where an ad delivers a sale). As Chetan observed: It’s just early days.
US Wireless Market Update - 4Q07 and 2007 March 10, 2008
Posted by chetan in : 3G, AORTA, BRIC, Carriers, Devices, European Wireless Market, India, Indian Wireless Market, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Smart Phones, Strategy, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 commentsUS Wireless Market Update - 4Q07 and 2007
http://www.chetansharma.com/usmarketupdateq407.htm
The US wireless data market grew 55% in 2007 ending the year with $24.5 billion in data services revenues with 4Q yielding $6.9B. 2007 also saw significant industry milestones like: iPhone launch, US crossing 250 million subscriptions, 3G penetration in the US touching 25% subscriber base, consternation around 700 MHz spectrum auction, MediaFLO launch, Android launch, Nokia crossing 40% market share, WiMAX and Femto Cell trials, and much more. US almost equaled Japan in mobile data service revenues for the year (rounding error and currency fluctuation difference). With several significant launches coming up in 2008, US remains one of the most attractive wireless data markets.
- The US Wireless data service revenues grew 7.8% Q/Q to $6.9B in Q407. For the year 2007, the US wireless data service revenues grew to $24.5B, up 55% from 2006.
- Overall ARPU declined by $0.81and reversed the trend of overall ARPU uptick of the last two quarters. Average voice ARPU declined by almost $1.50 while average data ARPU inched up by $0.68 or 7%.
- Sprint lead in data ARPU with $11.50 (or 19.83% of the revenues) closely followed by Verizon at $11.06. Verizon was ahead in terms of data as % ARPU with 21.3% of its ARPU coming from data services. AT&T with $10 (or 19.89%) and T-Mobile with $8.2 (or 16%) rounded up the top 4.
- The strongest growth in 2007 came from Verizon and AT&T, with both of them tied at 64% YOY jump in data revenues. However, Verizon was ahead in dollar terms at $7.4B, accounting for almost 31% of the US industry data services revenue for the year. The top two were followed by T-Mobile at 56% and Sprint with 31% increase YOY.
- The average industry % contribution of data to service revenues jumped to 19.34%.
- In terms of net-adds, thanks to the Dobson acquisition and the iPhone sales, AT&T added 2.7M new subscribers followed by Verizon at 2M. The overall net-adds improved by 6.2M subs taking the total for the year to 20.8M, down slightly from 2006. Despite the 7% slowdown, there is plenty of growth left in the US wireless market.
- In spite of AT&T’s prolific quarter, Verizon ended up with the highest net-adds for the year at 7.7M subs vs. AT&T’s 6.9M.
- The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the year, Verizon with $7.4B, AT&T with $6.9B, and Sprint with $5.2B in data services revenues stood at #4, 5, and 6 respectively with Verizon closing in on KDDI for the number 3 spot. AT&T became the second US operator after Verizon to be in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
- Non-messaging data revenues continue to be in the 50-60% (of the data revenues) range for the US carriers.
- There was tremendous activity in the area of Mobile Advertising. Google is also laying out its tactical and strategic roadmap in hopes to dominate the space and while it succeeded in pushing FCC to change the 700 MHz auction rules, the future of Android alliance remains uncertain. It did however; help open the “open” debate in the industry. Meanwhile, Yahoo is busy creating some compelling applications and is stitching together carrier deals around the world.
- Venture money continued to flow into the mobile sector with over $4.9B investment in 2007 (Source: Rutberg). Location Services, Mobile Personalization, Mobile Video, Mobile Search and Advertising, Semiconductor, Carrier infrastructure, Device design and development are hot areas.
- iPhone helped AT&T find its voice. Since the introduction of iPhone in June 07, AT&T has reversed the multi-quarter trend of narrowing total subscriber difference with Verizon. Aided by the Dobson acquisition, the difference between the two companies stood at 4.4M subscribers in favor of AT&T (vs. 1.5M in Q107). iPhone also accounted for (higher) disproportionate mobile web usage exciting the ecosystem and media alike.
- Nokia eclipsed 100M unit sale in Q407 for the third straight quarter. It sold over 437M handsets in 2007, more than the next three handset manufacturers combined. Nokia’s global market share stood at 40.2%. Quite impressive.
- 3G penetration in the US touched 25% in 2007, with Verizon leading the pack with over 53% 3G subscriber penetration. AT&T reported that 3G subs have over $20 in data ARPU accounting for 30% contribution to the overall ARPU from such subs. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
- There was tremendous discussion around “openness.” Bowing to the industry pressure, FCC’s 700 MHz spectrum auction included clauses for opening up the network by the winner. Sprint made progress with its upcoming launch of XOHM. Verizon launched its Open initiative. Google’s Android was announced in Q407. Though devices are slated to hit the market in 08, its overall impact remains uncertain.
Global update
- China and India added approximately 86M subscribers in 2007 dwarfing growth in other regions by a distance (China marginally edged out India to retain the top honors). Similar growth trends will continue into 2008. In fact, India will overtake US as the number two wireless market in the world (by total subscriptions) during the week of March 24th 2008.
- NTT DoCoMo continues to dominate the wireless data revenues rankings with over $12B in data services revenue in 2007. 35% of its revenue now comes from data services. DoCoMo will also cross 80% in 3G penetration this month. China Unicom edged past SK Telecom to occupy the number 9 spot.
- Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are consistently topping 30%.
More details in our worldwide wireless data market update coming out later this month.
Your feedback is always welcome.
Chetan Sharma
Upcoming Events March 9, 2008
Posted by chetan in : Speaking Engagements , add a commentHere are some of the events I will be participating in. Hope to meet some new friends and colleagues and revisit with old ones.
19 March
Book Event and Mobile Advertising Panel, Stanford University. Our Seattle event was a great success. More details here.
20 March
TiE, Bellevue, Mobile Advertising
27 March
Washington Technology, Seattle, Mobile Mania, Where’s the Money?
1 - 3 April
CTIA, Las Vegas
20 May
CommNexus, San Diego, Mobile Advertising Book Event and Panel
20-23 May
Future In Review, San Diego, Mobile Advertising: From Buzz to Biz
25 Jun
Structure08, San Francisco
26-27 Jun
Global Wireless Security Conference, Kuala Lumpur. Chetan will be giving a talk to leading CTOs and CIOs on Mobile Security trends and opportunities
Carnival of the Mobilists #114
Posted by chetan in : AORTA, BRIC, CTIA, Carriers, European Wireless Market, Indian Wireless Market, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile Usability, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 8 comments
COM returns to AORTA. Welcome.
Over the past couple of quarters, the mobile industry has been pretty active with a series of initiatives, milestones, and launches and our fellow Mobilists from around the world bring you the analysis, insights, and commentary of the major events, new initiatives, gaffes and goofs, startup action and much more.
The best from the last week are:
Since June 07, Apple has been capturing the headlines like no other company in the ecosystem. Michael Mace at MobileOpportunity gives a thoughtful analysis of Apple’s iPhone SDK. Abhishek Tiwari and Tricia Duryee (at Moconews) also look at iPhone’s SDK and wonder if Apple is the new carrier? More SDK analysis by Gábor Török.
Ajit Jaokar, author and the yeoman at OpenGardens writes another insightful post, this time on “The significance of Google Gears on mobile devices” follow-up from this one.
Russell Buckley at Mobhappy talks about the “Uniqueness of the Mobile Channel” especially from an advertising perspective. Jamie Wells of Mobilestance which focuses on the US Mobile Marketing Perspectives provides insights into Buzzd, a company founded by Nihal Mehta of ipsh! fame. Nihal is well-versed with the mobile market and Jamie’s interview gives information on this new startup.
Peggy Salz at MSearchGroove provides some insightful commentary on the state of mobile search, mobile advertising and social media. She has a good podcast with Kate Edwards, CEO of Jentro Technologies.
Andreas Constantinou at Vision Mobile does a couple of brilliant posts on summarizing “Learnings from the MWC 08″ and lists his 10 predictions for MWC 09. Be sure to check out the Mobile Megatrends presentation as well.
Martin Sauter, author and curator of WirelessMoves opines on the overhyped battle between WiMAX and LTE. Media and analysts need some fights to keep things interesting
Dean Bubley at Disruptive Analysis in his usual analytical style makes the case for dismantling the control over the SIM card and by association, the SIM distributors.
Dennis Bournique of WAP Review provides a detailed review of WebClip2Go a content clipping service for your mobile devices.
Paul Ruppert - the Zenmaestro at Mobile Messaging 2.0 ponders on “what it means to be mobile?”
David Cushman at Fast Future writes about Microblogging and how twitter is enticing him into getting his iPhone.
Finally, some details on the Mobile Jam Session at m-trends. It is being hosted by Caroline Lewko and Rudy De Waele at CTIA in Vegas on March 31st.
Be sure to participate next time. Andrew Grill hosts the next Carnival. Send in your entries to mobilists at gmail dot com. Until next time, happy mobile daze ahead.
Book Tour: Stanford and San Diego
Posted by chetan in : Speaking Engagements , add a commentAfter doing events up north in Vancouver BC and Seattle, we move south to Stanford University on 19th March and San Diego on 20th May. Mobile Momentum is organizing the Stanford event and CommNexus extended the invitation for San Diego. Thanks.
If you are in town, please do join us. For the Stanford event, please rsvp to stanfordevent at chetansharma dot com. More details here.
Details for CommNexus event will be available shortly.
There are a number of other events coming up where I will be participating. I will provide a complete list soon.
Opportunities and Challenges March 8, 2008
Posted by chetan in : Mobile Applications, Mobile Ecosystem, Speaking Engagements, Strategy, US Wireless Market , add a commentEarlier this week, I gave a luncheon keynote at the Northwest Wireless Association - a WA state organization representing interests of the local ecosystem. Amongst other things, I talked about the opportunity areas and things that are challenging for the industry. Here is the list.
- ¨Mobile User Interface and Visualization
- UI, Multimodal, Projection
- IMS, SIP
- Outdoor-Indoor
- Mobile Device Management
Essentially, Device becomes the remote control of our lives
Challenges for companies, especially startups
- ¨Closed Gardens
- Carriers control the mobile data value chain
- Starting to break – iPhone, Android, 700 MHz, WiMAX
- Too much fragmentation at multiple levels
- Countries
- Carriers
- Devices
- Applications
There is a myth percolating in the US industry that there is no growth left as we are approaching 85% subscriber penetration. Last year, we added almost 21 million new subscriptions. Though it dropped 7% from 2006, 21 million ain’t bad. Subscribers will continue to grow as cellular gets embedded in consumer electronics and consumers start owning multiple radios and we will continue to do 15-20M/year for the next few years. Also, the replacement market is very strong and people are replacing handsets at a much faster pace now given the onslaught of smartphones.
More on the US market in the US Q407 and 2007 update coming up next week.
The opening up of the iPhone March 7, 2008
Posted by chetan in : Mobile Advertising , add a commentComputerworld does a good analysis on iPhone SDK (there is good commentary by Tricia on Moconews as well). It is interesting that the control of the carrier storefront (w.r.t. iPhone) moved from the Carrier to Apple. Apple will take a 30% cut of revenues. One thing is not clear. They indicated that for a free app there is not cut.
But, what about ad-subsidized apps or pure advertising apps. They will be free but the revenue will come from advertising. Google’s apps for example? Will there be different arrangements with bigger players vs. smaller ones?
