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Virgin Mobile acquires Helio June 27, 2008

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A closing of a chapters of sorts. The last of the major high-end MVNOs is calling it a day and selling out to Virgin Mobile for $39M in equity, a far cry from the millions invested in the joint venture between Earthlink and SK Telecom. See Moconews.net for more coverage.

In our annual predictions last year, the response group predicted that Helio won’t last 2008.

6. Will Helio survive 2008?

Almost 70% respondents thought Helio won’t make it. Given the flameout of some of the prominent new-generation MVNOs, it is hard to see how Helio will see 2009. It will all come down to how persistent is SK Telecom. Earthlink doesn’t have the bank balance to keep funding this initiative.

That magical summer 25 years ago June 26, 2008

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Non-cricket fans please excuse this sojourn down the memory lane.

In 1983 Cricket world cup, the Indian team was the biggest underdogs, a team that seemed alien to the one day format. Even the most ardent supporters and the team members didn’t have much hope from the event. The team had some spectacular players like Sunil Gavaskar, Kapil Dev, Mohinder Amarnath, Sandeep Patil, and the likes but they didn’t really find the one day format comfortable. As a teenager and as a loyal follower, I was glued to the commentary coming out of England. The biggest turning point was the best innings ever played in one day (and unfortunately not recorded) by Kapil Dev, an innings that will forever go into folklore for generations to come. From a pathetic 9-4, India went on to score 266-8 and win the  match by 31 runs. After that India seemed unbeatable at least to us - the fans and the team itself but still the cricket fraternity didn’t give them a chance. Yet, India went on to beat Australia, then England in the semis and went to finals as a favorite underdog. But could they beat the mighty Windies who had won the world cup twice with ruthless efficiency. I remember watching the Indian innings and the match appeared lost when India only scored 183 for 4. I turned off the TV and went to the market but the entire market was on fire glued to their radios. India had been making good progress denting the windies batting line up. The catch that Kapil took to dismiss King Richards was nothing short of breathtaking. There was no stopping after that. We cheered until our throats were sore and India got the last wicket. The country erupted in joy, pride, and celebration.

The memory of that magical summer will remain etched in my mind for ever. It was an upset of such gigantic proportions that there are few equivalents in sports, maybe the US ice hockey team beating the Russians in Olympics comes close. It is also an unfortunate reminder that India hasn’t repeated its feat again.

A great recap of the 83 tournament here.

GigaOM conference Structure 08 live June 25, 2008

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can be watched online here (today)

Nokia’s Open Source move June 24, 2008

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Nobody can accuse the mobile industry for a dull moment, always something happening. Well, not to be done by all this open source hoopla, Nokia decided to steal some limelight, bought the Symbian ownership from partners and made Symbian open source. Does this render Android in effective? only time will tell.

Nokia has been putting together some smart strategic moves lately.

WIRED article: Google’s Open Source Android Phone Will Free the Wireless Web

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Dan Roth of WIRED magazine interviewed me for this piece in the July issue. I talked to him after Google announced Android last year. Dan does an in-depth piece on how Android came about and what it might mean for the mobile industry. It is a lengthy piece, here is the link to the complete article.

Some excerpts:

“Is this interesting to Google?” That’s what Andy Rubin was asking Larry Page. It was a spring day in 2005, and the two were in a conference room just off the main lobby at Google’s headquarters. A simple yes and Rubin would have walked away happy.

“You have a significant challenge in mobile, in that the screens are much smaller, so you can’t display nearly as much advertising or take as much space,” Google cofounder Sergey Brin told Wall Street analysts on a recent conference call. “On the other hand, you have much more relevant and timely information, like what location the person might be in, so on balance that leaves me quite optimistic.”

Telecom consultant Chetan Sharma says that Android’s success depends on Google’s willingness to share the wealth. “What’s the relationship going to be between Google and the carriers in terms of advertising dollars?” he asks. “That needs to be nailed down before we know how big Android can be.”

And if they don’t? Not much downside. If the only thing Android achieves — as Page knew before Rubin walked into Google three years ago — is getting more people to spend more time online, then Google still profits. More users mean more people viewing pages with Google ads. If they’re doing that from an Android phone, great. If not, but they’re on a phone made more Web-friendly thanks to competitive pressure from Google, that’s also fine. “I hope it’s Android,” Page says. But either way, Google wins.

Audience Measurement June 23, 2008

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Google announced free media planning tool to help target audience as well do some audience measurement. Announcement should send a chill down the spine of Comscore and Nielsen, the two dominant players in the market. I like the proactive move from Google. I am not a big fan of panel based measurement, they are prone to errors and inaccuracies. I like the raw data for analysis. As we proved in our research for the book, there can be a wide disparity between “what users say” and “what users do.” I have presented the findings at various conferences and people have been surprised by it. The more you look at the actual data, the better understanding you will have about the audience. Panel-based measurement is like fuzzy math - leaves too much in doubt. In the wireless world, operators better take a look at the move and learn from it. Mobile is next.

Article in International Journal of Mobile Marketing

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IJMM or International Journal of Mobile Marketing is the only major on Mobile Advertising and Marketing. We (co-authors of the Mobile Advertising book) submitted part of one of our chapters as an article for the Jun 08 issue and it got accepted. We choose the piece on “A Five Point Measurement Framework for Mobile Advertising.” For those of you who have read the book or attended one of our presentations on the book tour this year will know our emphasis on Reach, Engagement, Targeting, Viral, and Transactions as the fundamental metrics for thinking about Mobile Advertising. Many companies have adopted the framework in the products and campaign design.

Thanks to Michael Hanley and Michael Becker for putting together the issue and for inviting us to contribute. The press release on the issue is here.

More info on IJMM here.

Featured articles include:

Featured articles include:

Another piece on measurement from our book that was published by the Milestone Group.

BillG’s quotes

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Computerworld does a good job pouring over Bill’s speeches to pick out some gems.

Global Information Report

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The Networked Readiness Index 2007-2008 rankings (Source: World Economic Forum)

 

Rank
1
2
3
4
5
6
7
8
9
10
Country
Denmark
Sweden
Switzerland
US
Singapore
Finland
Netherlands
Iceland
Korea
Norway
Score
5.78
5.72
5.53
5.49
5.49
5.47
5.44
5.44
5.43
5.38

Other notables -
12 - UK,
13 - Canada,
50 - India,
57 - China,
72 - Russia

Android delays

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WSJ has an article on android delays. Not surprising + there is still the open question on advertising revenue something that hasn’t been answered.

Others — such as Greystripe Inc., whose technology inserts ads into mobile games — are staying away until Google clarifies key points, such as how applications will be distributed and how developers will earn revenue from them.

I made the same point in an interview for an article in July issue of WIRED (interview was done at Android launch)

Did AT&T Make the Right Call With Apple’s iPhone? June 22, 2008

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Betsy Cummings of Brandweek interviewed me for this piece.

 

Did AT&T Make the Right Call With Apple’s iPhone?

June 22, 2008

-By Betsy Cummings

AT&T may be the biggest beneficiary of Apple’s latest iPhone price cut.
Though some argued that AT&T overpaid to use Apple’s phone, the new $199 price point should help AT&T further solidify its lead in the market and make inroads into the b-to-b arena.
The situation wasn’t as clear last year when AT&T and Apple announced the deal.
Verizon rejected the iPhone because of Apple’s financial terms and demands (among which Apple wanted control of distribution and a cut of the monthly fees). AT&T then swooped in and inked a reported five-year deal in the U.S.
A year later, many industry experts are praising AT&T’s marketing acumen. “AT&T got what it wanted,” said Roger Entner, svp-communications sector at Nielsen IAG, Boston. “This device, at an attractive price point.”
Research in Motion’s BlackBerry still leads the PDA pack with 44.5% market share in the first quarter of 2008 compared to iPhone’s 19.2%, per the IDC Mobile Technology and Trends report on U.S. smartphones. Palm is third at 13.4% followed by Samsung at 8.6%.
But, late last year Apple came closer to leveling the playing field with 26.7% of the market share in the fourth quarter compared to 35.1% held by RIM.
The new phone, experts said, could put AT&T over the edge now that the service provider’s exclusivity and revenue-sharing arrangement with Apple has been dropped for a traditional plan in which AT&T receives all revenue. (The provider buys the iPhone at a somewhat lower price point from Apple.) “The iPhone at the old price was the second most popular phone at AT&T,” said Entner. “Can you imagine what this will do [at] half the price? I think RIM will very quickly feel an impact.”
AT&T’s decision to use income it once shared to subsidize the cost of the new phones is a smart move, experts said. AT&T says it will recoup the losses by 2010, based upon their theory that a lower price point will increase the overall volume of iPhones sold.
The real stroke of genius, analysts said, was the new iPhone’s potential for corporate users: Connections to corporate VPNs (virtual private networks), PowerPoint capabilities and robust GPS offerings, for example.
“It’s going to be a big hit with business customers,” said Mark Siegel, an Atlanta-based spokesperson for AT&T’s wireless business unit.
Recent figures show AT&T’s numbers climbing. The company says its wireless data traffic is quadrupling each year. At the end of 2007, the company claimed 2 million domestic iPhone customers, a number Apple wants to boost to 10 million worldwide (a total of 5.5 million phones had been sold by the first quarter).
Some complain that AT&T’s new service package, which offers voice plans at $40 a month, bilks consumers by charging them $20 to $30 for the phone’s two data service plans.
That’s an additional $240-plus in revenue that AT&T is receiving with each phone, which is causing some to label the phone’s new price point a marketing gimmick.
Still it is good for AT&T’s revenue and market strength, said Chetan Sharma, president of Chetan Sharma Consulting, a wireless strategy consulting firm in Seattle. “I think overall they still benefit in the sense that they’ve raised the price of [the monthly data service].”
Meanwhile, AT&T’s  and Apple’s rivals are working hard to come up with iPhone killers. For example, Sprint began offering Samsung’s iPhone-like Instinct exclusively last week, which is designed to cut into AT&T’s market share.
“Let the battle begin,” announced Sprint’s Web site this month. It features a series of online demonstrations to allow visitors to “watch the Instinct defeat the iPhone” in Web, TV, video and GPS speed and operating tests.
“We think we have a phone that stacks up very well against iPhone,” said Paul Golden, vice president of strategic marketing at Samsung Mobile, Richardson, Texas. “A lot of press we’ve received and feedback from consumers is we’ve got a winner here.”
Nokia also is planning to release the N78 smartphone this month. Like the iPhone, the N78 and others are converging features like the camera, GPS and high speed Internet access as the market demands more sophisticated software interaction.
The halo from the iPhone may have even allowed the carrier to dial back its own ad spend. AT&T cut its advertising budget 16% to $465.7 million in the first quarter, per Nielsen Monitor-Plus It  has been rallying around its quality of service message with its “More bars in more places message,” via BBDO, New York.
AT&T wouldn’t comment about why it cut its ad budget. The official telecommunication sponsor of the U.S. Olympic Committee is expected to fire up its ad messages in conjunction with the Summer Games.
Despite positive reviews, the new smartphones will have to not only take on iPhone’s features, but Apple’s brand strength, said Boy Genius of The Boy Genius Report in New York. “If you pulled two people off the street and said, ‘Do you want an iPhone or a Samsung,’ they’re going to say, ‘iPhone.’”

Yahoo’s dilemma June 19, 2008

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It is sad to see a pioneering Internet brand whittle away piece by piece. There seems to be no strategic plan in place to take the company out of its doldrums. All the top talent is on its way out with 3 more leaving today. With each departure, value of the company sinks a bit further. Is the board going to let the company self-destruct or will saner heads prevail?

Their mobile business is pretty solid, that alone is worth a lot. The online search business is pretty much done for now, they should focus more and more on mobile and use that to reinvigorate the company and their valuation.

Poor FireFox, Should have known better June 17, 2008

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Instead of high-5s and champagnes, Firefox crew is toiling to keep its servers up and running.

Shifts in advertising

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UK is the most mature online advertising market. According to Enders, Online will overtake TV advertising this year. Though in the US, online trails TV by a good margin, UK reflects on what’s to come.

“Our forecast for 2008 is that online advertising expenditure will grow 26.4 percent in nominal terms to 3.56 billion pounds ($7 billion), overtaking TV ad spend, which we expect to fall 2.5 percent to 3.39 billion pounds.”

IAB Mobile Advertising event

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Our colleague, Matt Synder is putting together a Mobile Advertising event for IAB on July 21st. Should be a good one.

The Zettabyte Era

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In our Mobile Advertising book, we wrote about the Yottabyte era. Cisco released an interesting white paper essentially talking about the same thing but in more detail. Worth a read.

Executive Summary

Annual global IP Traffic will exceed half a zettabyte in four years. At just under 44 exabytes per month, the annual run rate of traffic in late 2012 will be 522 exabytes per year. A zettabyte, or 1,000 exabytes, will be the new milestone to look for beyond 2012.

Global IP traffic will nearly double every two years through 2012. Total IP traffic in 2012 will be six times larger than it was in 2007, and four times larger than it is this year. Driven by high-definition video and high-speed broadband penetration, consumer IP traffic will bolster the overall IP growth rate so that it sustains a fairly steady growth rate through 2012, growing at a compound annual growth rate (CAGR) of 46 percent.

The Internet in 2012 will be 75 times larger than it was in 2002. Internet traffic will generate 28 exabytes per month in 2012, the equivalent of seven billion DVDs each month.

Last year was a year of phenomenal growth in IP and Internet traffic. Total IP traffic grew 55 percent during 2007, and is estimated to grow by 63 percent in 2008. Following the same pattern, Internet traffic grew 46 percent in 2007, and is estimated to increase 51 percent in 2008. After this the annual growth rate will begin to decline, and the growth rate of IP traffic in 2012 will be 32 percent.

P2P is growing in volume, but declining as a percentage. Compared to last year, peer-to-peer (P2P) file sharing networks are now carrying 600 petabytes per month more than they did this time last year, which means there is the equivalent of an additional 150 million DVDs crossing the network each month, for a total monthly volume of over 500 million DVD equivalents, or two exabytes. Despite this growth, P2P as a percentage of consumer Internet traffic dropped to 51 percent at the end of 2007, down from 60 percent in 2006, and is estimated to drop to 44 percent by the end of 2008. The decline in traffic-share is due primarily to the increasing share of video traffic. A secondary factor in the decline is a trend toward web-based file sharing in place of P2P file sharing in some regions.

RIP, Tim Russert June 14, 2008

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It was shocking to learn about Tim’s passing. As a political junkie, I regularly watched his Sunday show. His was the only show worth watching. The world of politics and public policy will be poorer and miss him immensely.

Google to Microsoft: ChekMate! June 12, 2008

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From a pure strategy perspective, Google has been playing its hand deftly, first with the 700MHz auction and now with the Yahoo! deal, they have shown a good knack of the corporate chess game.

Mobile Advertising: Kindle Edition available now June 11, 2008

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For those of you waiting for the Kindle edition, it is available now :-)

 

Mobile Advertising: Supercharge Your Brand in the Exploding Wireless Market

Technology and Advertising June 10, 2008

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Giving a talk on Technology and Advertising specifically Mobile Advertising at Cascadia Community College later tonight. Technology plays a significant role in digital advertising, in our book, we wrote a separate chapter on it - “Technology - The Lifeblood of digital advertising” and that will be the title of my talk. I got several notes from CTOs of big publishing and media houses, they were very pleased with the title :-)