New Whitepaper: The Untapped Mobile Data Opportunity December 16, 2009Posted by chetan in : 3G,4G,AORTA,ARPU,BRIC,Carriers,Enterprise Mobility,European Wireless Market,General,India,Indian Wireless Market,Infrastructure,Intellectual Property,International Trade,IP,IP Strategy,Japan Wireless Market,Location Based Services,M&A,Microsoft Mobile,Mobile Advertising,Mobile Applications,Mobile Content,Mobile Ecosystem,Mobile Entertainment,Mobile Gaming,Mobile Search,Mobile TV,Mobile Usability,Mobile Users,MVNO,Networks,Smart Phones,Speech Recognition,Storage,Unified Messaging,US Wireless Market,Wi-Fi,WiMax,Wireless Value Chain,Worldwide Wireless Market , 3 comments
The Untapped Mobile Data Opportunity
Sponsored by INQMobile
The last two years in the global mobile market have been truly sensational. Over 1 billion new subscriptions added, over 2 billion new devices sold, and over $300 billion in mobile data revenues. The number of new iconic devices each quarter is on the rise, the consumer engagement is at an all time high and the new startups and entrepreneurs are brimming with ideas and new products. Devices like the iPhone, Storm, Hero, INQ1, Mytouch, Cliq, Droid, N97 and others have captured the imagination of the media like never before. The smartphones or the integrated devices now account for approximately 9% of the global market. However, whatâ€™s often lost in the smartphone euphoria is the remaining 91% of the market and the significant opportunity of data-enabling these customers.
Operators who have focused on data services as their core service have benefited with high data Average Revenue Per User (ARPU). As we quickly transition into the hyper growth phase of mobile data services, players who are designing affordable devices and services with "mobile data" in mind are the ones who will benefit from a higher uptick in adoption and sustainable consumer loyalty. However, as operators have migrated from 2G to 3G, many have missed an opportunity to customize or introduce new services that take advantage of devices being mobile, interactive, and always available.
Traditionally, there has been a big gulf between the functionality of featurephones and the smartphones; however, there is an emerging category of devices that will provide the functionality of a smartphone for the price of a feature phone. Though the average selling price or the ASP of the smartphone has been dropping, the price is still high for a significant majority of the global subscriber base. Consumers who are looking for a sub $50 device still want to the access applications such as Facebook, Twitter, Google search, and make VoIP calls, etc.
In this paper, we will look at the opportunity to attract the 91% of the global user base into the mobile data ecosystem. We will quantify the opportunity, examine what this opportunity means to the mobile value chain specifically to the mobile operators and discuss the success factors to accelerate the migration of non-active data users into the data realm.
Request for participation: 2010 Mobile Industry Predictions December 15, 2009Posted by chetan in : US Wireless Market , 1 comment so far
What a year 2009 has been. Despite the recession, the industry continued to grow, innovation prospered and prospects for a terrific 2010 look better than ever. To help us figure out what might happen, we are doing our Annual Mobile Industry Predictions Survey (20 questions) to gather insights from the collective brain trust â€“ our readers, colleagues, and friends from around the globe. I am hoping you will again help us out with your insights (Last yearâ€™s results here). All answers are kept confidential.
If you leave your email address, we will enter you in the drawing for winning some mind-stretching/thumb-numbing prizes:
- Mobile Phone: INQMobileâ€™s newest social networking device â€“ the INQ Chat 3G from the company that won the best mobile handset at the Mobile World Congress 2009 in Barcelona
- Book: Open Mobile Understanding the Impact of Open Mobile: Implications for Telecoms/Devices, Web, Social Networks, Media and Personal Privacy by Ajit V Jaokar (FutureText) and Anna Gatti (Google)
- Book: Tomi Ahonen Almanac 2010
We will share the results during the first week of 2010.
Please click here to start responding. It will take less than 5 minutes of your time. If the link doesnâ€™t work for you, please let us know.
Survey ends Dec 28th.
The questions are:
1. What will be the biggest stories of 2010?
2. Have we recovered from the recession?
3. Who will be the most open player in the mobile ecosystem in 2010?
4. Will Android handset sales exceed iPhoneâ€™s in 2010?
5. When will we see tiered pricing plans for smartphones in the US from tier 1 operators?
6. What will happen to the mobile prepaid subscriber base in the US?
7. By how much will the mobile advertising ad-spend increase in 2010?
8. What will be the impact of the FCCâ€™s national broadband plan on the mobile industry in 2010?
9. Who will be the mobile comeback story of 2010?
10. What will be the impact of Google Phone?
11. Which areas will feel the most impact from FCC?
12. Which solution will gain the most traction for managing mobile data broadband consumption?
13. When will the carrier-branded appstores lose steam?
14. What will help mobile cloud computing gain traction in 2010?
15. What will be the most successful non-mobile-phone category in 2010?
16. What will be the breakthrough category in mobile in 2010?
17. By the end of 2010, which will have more subscribers?
18. How will Netbooks do through the operator channel?
19. Which standards will gain traction?
20. What mode of mobile payments will get any traction in North America and Western Europe in 2010?
21. For bonus points, Despite conventional wisdom, what will not happen in 2010?
Please feel free to pass this on to anyone who might be interested or has something to say.
Wishing you a prosperous 2010.
NYTimes article on mobile data consumption woes December 13, 2009Posted by chetan in : US Wireless Market , add a comment
Continued the discussion with Prof. Stross at the NYTimes on the mobile broadband data traffic question. Article will appear in tomorrowâ€™s Sunday paper. Another discussion with BusinessWeek here.
1. Which solution will gain the most traction for managing mobile data broadband consumption?
1. Tiered pricing
2. Policy management
3. Mobile offload
6. Backhaul upgrades
NYT looked at the work done by Root Wireless and our â€œState of the Mobile Broadband Nationâ€ paper that was released earlier this week. As the Google Phone (not surprising) news started to emerge earlier today, we are looking for a very interesting Q1 2010. We will have more thoughts and research in the space in the coming weeks. Stay tuned.
Enjoy the rest of your weekend.
AT&T Takes the Blame, Even for the iPhoneâ€™s Faults
By RANDALL STROSS
Consumer Reports has just released its annual survey of cellphone service, and its respondents collectively agree with me about the rankings: AT&T occupies the bottom and Verizon, the top.
My sense of Verizonâ€™s superiority is confirmed every time I see a â€œthereâ€™s a map for thatâ€ Verizon commercial, graphically showing how far more extensive Verizonâ€™s 3G network coverage is in less populated areas. And it is reinforced when AT&T executives publicly confess â€” as Ralph de la Vega, the chief executive and president of AT&T mobility and consumer markets, did last week at an industry conference â€” that the companyâ€™s wireless service in New York and San Francisco was â€œbelow our standards.â€
When I set about looking for independent data, however, to confirm the superior performance of Verizonâ€™s network, I was astonished to discover that I had managed to get things exactly wrong. Despite the well-publicized problems in New York and San Francisco, AT&T seems to have the superior network nationwide.
And the iPhone itself may not be so great after all. Its design is contributing to performance problems.
Roger Entner, senior vice president for telecommunications research at Nielsen, said the iPhoneâ€™s â€œair interface,â€ the electronics in the phone that connect it to the cell towers, had shortcomings that â€œaffect both voice and data.â€ He said that in the eyes of the consumer, â€œthe iPhone has the nimbus of infallibility, ergo, itâ€™s AT&Tâ€™s fault.â€ AT&T does not publicly defend itself because it will not criticize Apple under any circumstances, he said. AT&T and Apple both declined to comment on Mr. Entnerâ€™s assessments.
Neither AT&T nor Verizon was willing to reveal its internal data on performance. But Global Wireless Solutions, one of the third-party services that run network tests for the major carriers, shared some of its current findings. The service dispatches drivers across the country with phones and laptops equipped with data cards. They have covered more than three million miles of roads this year, while running almost two million wireless data sessions and placing more than three million voice calls, said Paul Carter, the president.
The results place AT&Tâ€™s data network not just on top, but well ahead of everyone else. â€œAT&Tâ€™s data throughput is 40 to 50 percent higher than the competition, including Verizon,â€ Mr. Carter said. AT&T is a client and Verizon is not, he added.
More evidence that AT&Tâ€™s data network is head-and-shoulders above Verizonâ€™s comes from Root Wireless, a start-up in Bellevue, Wash., that is developing software for consumers to install on their smartphones to do continuous network tests. This generates empirical data for consumers who â€œtoday are buried under opinions and advertising slogans,â€ said Paul Griff, the chief executive. Root Wireless has no business relationship with any carrier.
This year, Root Wireless ran 4.7 million tests on smartphones for each of the four major carriers, spread across seven metropolitan areas: Chicago, Dallas, Los Angeles/Orange County, New York, Seattle/Tacoma, the San Francisco Bay Area, and Washington. In every market, AT&T had faster average download speeds and had signal strength of 75 percent or better more frequently than did Verizon. (A Verizon spokesman declined to comment about these test results or those of Global Wireless Solutions.)
I asked Ron Dicklin, chief technology officer at Root Wireless, how these results, showing AT&T as the clear leader, could be reconciled with the negative appraisal of Consumer Reportsâ€™ respondents. He explained that his companyâ€™s tests of AT&Tâ€™s data network were done with handsets other than the iPhone, which does not allow non-Apple programs like his to run in the background.
AT&Tâ€™s besting of Verizon in these tests is all the more remarkable considering the sudden jump in the volume of mobile data that its network has had to handle with the introduction of the iPhone 3G in 2008: approximately 4,000 percent.
Chetan Sharma, a telecommunications consultant whose clients have included AT&T and Verizon, said that when the network and the handset were improved, customers â€œjust used it all the more.â€ AT&T didnâ€™t anticipate the rate of growth and didnâ€™t upgrade fast enough in some markets, he said. â€œOther operators have the luxury of watching and learning from AT&T,â€ he said, â€œwhich has the most number of next-generation smartphones, with full browsers and built-in video players.â€
The data seem incontrovertible: AT&T, while meeting 4,000 percent growth in data use, has acquitted itself quite nicely. But the company is saddled with an awful public image as the perennial laggard.
AT&T and Apple could both gain by swapping talent.
Apple, send your marketing wizards to lend your partner a hand. It sorely needs help.
AT&T, send some engineers to redesign the iPhone to make better use of the countryâ€™s fastest wireless network.
Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: firstname.lastname@example.org.
Business Week article on tiered pricing December 12, 2009Posted by chetan in : US Wireless Market , add a comment
Tiered pricing will be the hot topic for the next few months
AT&T Possible Price Moves May Backfire
Potential efforts to charge more for heavy data usage may alienate customers and stymie innovation and growth in the wireless Web
By Olga Kharif
AT&T giveth and AT&T taketh away. The wireless service provider that has mastered all-you-can-eat monthly service packages for its mobile-phone customers is having second thoughts. Concerned that some customers are consuming more than their share of data over wireless networks, the company plans to offer some subscribers "incentives" to "reduce or modify their usage" of bandwidth, AT&T Mobility CEO Ralph de la Vega said on Dec. 9. Analysts and consumer advocates say the changes may backfire.
De la Vega, speaking at a conference in New York sponsored by investment bank UBS (UBS), didn’t specify the company’s plans, but said one step will be giving users more information on how much data they’ve consumed. Analysts speculate AT&T may move to a tiered pricing scheme where subscribers are charged more depending on how much bandwidth they useâ€”say, through downloading videos or sending and receiving big documents. Some carriers in other countries, including Canada and Australia, already use tiered pricing.
Yet in a market where customers have grown accustomed to paying a single fee no matter how much data they consume, a switch by AT&T, the largest U.S. mobile-phone operator, may backfire. Analysts and consumer advocates say the move may curb demand for smartphones and wireless data products, stymie development by programmers who specialize in mobile applications, and push subscribers into the arms of rivals, such as Verizon Wireless, that currently charge flat fees. "This notion that customers must now curb their Internet usage or pay up is not only unfair to consumers, it puts up a roadblock to wireless innovation," says Craig Aaron, senior program director at Free Press, a nonprofit group that advocates for unfettered access to communications.
BLOW TO MOBILE DEMAND
Demand for mobile data is expected to keep rising, though possibly at a slower pace, as carriers take steps to discourage heavy bandwidth use, says Chetan Sharma, an independent wireless consultant based in Issaquah, Wash. Limits on data usage or higher prices may also slow adoption of smartphones, one of the fastest-growing areas of the wireless industry, analysts say.
AT&T declined to elaborate on de la Vega’s comments. Verizon Wireless declined to comment.
Companies that specialize in mobile-Web services and products would also suffer from a drop-off in demand growth for wireless Internet access, investors and analysts speculate. These range from startups such as Ustream, which makes a tool that lets Apple (AAPL) iPhone users orchestrate their own live broadcasts of video captured on the device’s camera, to bigger players such as Skype, a provider of Internet-based calling services.
Developers may need to slash prices on games, e-books, and other tools sold in online bazaars such as the Apple App Store, says Richard Murphy, an analyst at IDC. App developers may also need to change how they make money, relying more on advertising rather than one-time fees or subscriptions over time.
A wide range of service providers would be affected. "Mobile is absolutely central [to our growth]," says Tim Westergren, founder of Internet radio service Pandora, which sells applications that put its streaming stations onto the iPhone, Research In Motion’s (RIMM) BlackBerry, and other smartphones. "It accounts for half of our new listeners and a third of our listening hours. Clearly, the more expensive the [mobile] bandwidth, the worse it is for us."
In the U.S., AT&T is the exclusive carrier of the Apple iPhone. About 3% of AT&T’s iPhone users generate 40% of all the traffic over AT&T Mobility’s network, the company contends. Heavy demand by a small proportion of the user base erodes margins, says Craig Moffett, an analyst at Sanford C. Bernstein (AB).
AT&T supporters contend that unless it changes the way it charges some users for data, customers across the board will end up with worse service. "The alternative is having the network collapse," says Michael Mace, a principal at Rubicon Consulting. AT&T says it is trying to upgrade its network to make it more capable of handling heavy traffic.
But critics say the company shouldn’t penalize customers for what they say is AT&T’s failure to anticipate surging demand for smartphone data. "AT&T’s wireless profits are sky-high, but it still wants an excuse to charge consumers more and continue to advertise a network experience it can’t deliver," says Aaron at Free Press. In December, Consumer Reports reported that AT&T came in last in consumer satisfaction in more than a dozen large cities. The report noted: "If you’re readying to buy Apple’s phone, prepare for possible disappointment with its service."
Kharif is a senior writer for BusinessWeek.com in Portland, Ore.
NY Times article: AT&T to Urge Customers to Use Less Wireless Data December 10, 2009Posted by chetan in : US Wireless Market , 1 comment so far
I have long said that the current unlimited pricing on full browser smartphones is not sustainable. Over the last couple of years, I have written and talked extensively about the problem and solutions needed to address this issue (some thoughts were discussed with Business Week, GigaOM, NYTimes and others) and then in more detail in the Yottabyte whitepaper). Looks like industry is coming around to that realization and we might see some pricing structure changes in Q1 2010. Glad to see the industry is moving in the right direction by acknowledging the issues and coming up with relevant technical and business solutions. We still need a more holistic approach but at least this is a start. Some of the things Mr. De La Vega said yesterday at the UBS conference were straight from our whitepaper recommendations. Much more to come on the subject and this topic will stay in the news in 2010.
AT&T to Urge Customers to Use Less Wireless Data
Published: December 9, 2009
AT&T is considering ways to encourage customers to use less wireless data as its network struggles to keep up with demand, a company executive said Wednesday.
â€œWhat we are seeing in the U.S. today in terms of smartphone penetration, 3G data, nobody else is seeing in the rest of the planet,â€ Ralph de la Vega, president and chief executive for mobility and consumer markets at AT&T, told analysts at a conference in New York. â€œThe amount of growth and data that we are seeing in wireless data is unprecedented.â€
AT&T is the exclusive United States carrier for the iPhone, whose owners are big users of network capacity as they surf the Web and download videos.
The company has been criticized by owners of the phone for delayed text and voice messages, sluggish download speeds and other network problems.
Mr. de la Vega cited the heaviest data users, saying that 40 percent of AT&Tâ€™s data traffic came from just 3 percent of its smartphone customers.
But he emphasized that the company would first focus on educating consumers about their data consumption in the hope that doing so would encourage them to cut back, even though they are paying for unlimited data use.
â€œWeâ€™re going to try to focus on making sure we give incentives to those small percentages to either reduce or modify their usage, so they donâ€™t crowd out the customers on those same cell sites,â€ he said.
The company might consider a â€œpricing scheme that addresses the usage,â€ Mr. de la Vega said. But he said that would be determined by regulatory factors and industry competition, among other issues.
Although the company declined to provide further details, analysts speculated that AT&T could be talking about a tiered pricing structure, not unlike a voice plan.
â€œYou use more minutes, you pay more,â€ said Chetan Sharma, an independent wireless analyst. Mr. Sharma pointed out that carriers in other countries put data-use limits on iPhone customers to manage demand.
Still, Mr. Sharma said pricing plans based on use were only part of the answer to AT&Tâ€™s network congestion.
â€œThey still have to improve things on the back end so they can deal with the issues of multiple users on the network at the same time,â€ he said.
AT&T has announced a goal of adding 2,000 cell sites to improve its network this year. And this week it released an iPhone application called Mark the Spot that lets users report data problems, dropped calls and spotty coverage.
All wireless carriers are preparing for growth in the use of smartphones and mobile computers that will place high data demands on their networks, said James Brehm, a senior mobile consultant with market research firm Frost & Sullivan.
â€œAT&T and other service providers want to be smarter about how they bill customers and maximize all streams of revenue, while growing the number of connected devices and data traffic at the same time,â€ Mr. Brehm said.
Mr. de la Vega acknowledged the companyâ€™s difficulties in meeting the demands of its customers, but said things were improving in some areas. â€œIn New York, I think weâ€™ve turned a corner,â€ he said.
State of the (Mobile) Broadband Nation – A Benchmarking Study December 8, 2009Posted by chetan in : US Wireless Market , 1 comment so far
State of the (Mobile) Broadband Nation – a benchmarking study
We live in an information society that is driven by a knowledge economy. A nationâ€™s competitiveness is directly dependent on its information infrastructure, which includes access to and availability of broadband at a low price. Availability of broadband decreases the digital divide and allows consumers access at a much faster rate, changes user behavior, and has a positive impact on the local, regional, and national economies.
Broadband networks reduce the disadvantages of low population densities in rural areas. New applications such as telemedicine, e-government, public safety, e-commerce, small business assistance, and entertainment can be launched and adopted. As a result, new jobs are created and often new or offshoot industries are created as well. The economic benefits of broadband can also be attributed to indirect factors, including increased commerce, reduction in commute times, increased consumption of entertainment, and savings in health care as a result of sophisticated telemedicine. In the United States, several studies have been released that detail the prevailing economic benefits of broadband deployment.,
Broadband availability becomes ever more important in the global society in which the end-points of any solution can be anywhere. In an interconnected world, for example, healthcare delivery will be much more decentralized and distributed. The local clinic might be responsible for monitoring a patient’s vital signs but the analysis and prognosis might come from a physician thousands of miles away. One might be lying down on a bed in Kuala Lumpur but the surgeon doing the surgery might be in Stockholm on video conference with experts from Cambridge and Chennai.
Given the importance of broadband in fostering the US competitiveness and the economic well-being, the FCC is required by the American Recovery and Reinvestment Act of 2009 to submit a National Broadband Plan to Congress that looks at the broadband policy by Feb 2010. The key initiatives and principles adopted by the FCC will not only impact the US market but will also have wider ecosystem repercussions. In its interim findings, one of the seven gaps that FCC identified is Consumer Information Gap.
To understand the state of the US mobile broadband market, we undertook a benchmarking study with the help of our colleagues at Root Wireless who have developed an innovative approach to collect mobile performance data. Root provided us with copious amounts of data from the urban routes in seven big markets for all four major US carriers. Other benchmarking studies have typically focused only on the data cards and have used limited data samples (though some have covered more cities). This study used over 4.7 million data points for analyzing the mobile broadband performance in the US. Since smartphones are the most important and the fastest growing segment of the US mobile industry, for our analysis, we primarily focused on the smartphones as very little analysis has been done and scant performance metrics have been reported on such devices.
Our goal was to benchmark the state of the US mobile broadband market with respect to the signal quality, realistic mobile broadband speeds, and 3G availability. This paper presents the findings from the study.
 Examples of such studies: Robert Crandall and Charles Jackson, â€˜â€˜The $500 Billion Opportunity: The Potential Economic Benefit of Widespread Diffusion of Broadband Internet Access 2001,â€™â€™ â€˜â€˜Broadband Bringing Home the Bits,â€™â€™ National Academy Press, 2002. In addition, there have been several local and regional studies looking at the impact of broadband to their economies such as â€˜â€˜George Ford and Thomas Koutsky, Broadband and Economic Development: A Municipal Case Study from Florida,â€™â€™ 2005.
 For more discussion on the subject, please see Chapter 2, Fotheringham, Sharma, Wireless Broadband: Conflict and Convergence, IEEE Press/John Wiley & Sons, Nov 2008
Open Mobile December 7, 2009Posted by chetan in : US Wireless Market , 1 comment so far
Telephony Online does an in-depth study of Open Mobile. I talked to Sarah Reedy on the subject. Some of the articles below. you can catch the entire issue here
Open to alternatives
Dec 1, 2009 12:00 PM, Sarah Reedy
more on the topic
In case you haven’t heard, openness is the latest rage of the mobile world. Open networks, open devices, open application certification â€” the status quo is no longer in effect. At least that’s the message mobile operators are touting throughout North America. For the thousands of developers looking to break into mobile phones, this openness means different things, but its meaning is lost to most who couldn’t care less who’s guarding the gate as long as millions of eager consumers wait on the other side.
In speaking with developers for this month’s cover story on openness, it was interesting how many times Apple’s iPhone Application Store, the archetypical walled garden, was cited as an example of an open mobile ecosystem. Despite Apple’s approval process and the level of control it exerts over developer submissions, many people pointed out that the App Store is highly accessible and a significant departure from carriers’ traditional practices. And, as it did for most things in wireless, Apple changed the development game. Furthermore, consumers have shown â€” voting with more than 2 billion Apple app downloads â€” that they don’t care about openness either.
Things have clearly changed for developers since Apple came on the scene. The small â€œFreds in the shedsâ€ have as much a shot at getting app store placement as the largest developers. The revenue share has also swayed in the favor of developers, with operators taking only 30% of the profits on average, and time to market has significantly sped up, as operators let down their guard on the review process. The result of these changes has been that developers are more excited about building apps for the mobile ecosystem in general, said Chetan Sharma, president of Chetan Sharma Consulting.
â€œOpenness is in the eye of the developer,â€ he said. â€œIf the application only requires access to a location or graphics [application programming interface], then for practical purposes [Apple] is open enough; you really don’t need anything else. If you require access to the address book, access to the native voice APIs or anything else, that might not be open at that given point. â€¦ Holistically, even two or three years ago, basic GPS was locked down on most devices. If it was open, it was only available to a certain set of developers the carrier chose. More things are open now, but are they as open as they can be? Certainly not.â€
All of the carriers have committed to some form of openness, whether it be in the networks and the devices they will accept or the applications and services they will offer. They are just beginning to crack open their doors, so it still remains to be seen how they define open versus how they actually practice it. However it ends up, these developers, who spanned the gaming, greeting card and social networking industries, made it clear that whether or not they believe open is a revolutionary concept or an industry buzzword, they don’t really care. Reach and return on investment trump everything else. If that means climbing a 100-foot wall or walking right in, they’ll do it if reach and ROI are the reward.
Breaking Down the Walled Garden
Dec 1, 2009 12:00 PM, Sarah Reedy
more on the topic
Apple is to closed what Google is to open. This was always thought to be a common understanding among wireless developers, but â€” as it turns out â€” the dichotomy isn’t that clear. From the point of view of a developer charged with prioritizing dozens of application stores and standing out among hundreds of thousands of other developers, openness takes on different meanings. And while it has certainly opened doors, it has also opened up a new set of challenges.
In the early days of mobile app development, just getting a meeting with a carrier could take six to nine months and deployment could take a year more, said Peter Farago, vice president of marketing for Flurry Analytics. Developers had to pitch their app, it had to be accepted, often modified and ported across all handsets, and a business model had to be worked out. In traditional carrier environments, there were no options for pricing outside of a few pre-determined price points. And there was no choice of handsets. It had to span their entire portfolio.
â€œApple came in and fixed all that and has been the most successful combination of [original equipment manufacturer] and storefront manager, basically economy-builder in wireless,â€ Farago said. â€œIt is funny they are being reamed for being un-open. You can submit an application for approval, and it only takes a few weeks. You don’t have to know anybody.â€
What open has meant is that anyone, including the typical â€˜guy-in-his-garageâ€™ example, can be a developer and have an equal shot of making it on to an app store. Following Apple’s success, nearly every handset-maker, carrier, software provider and third party has entered the app store market in some form, giving developers more outlets than ever before. Most notable was Google and its Android operating system (OS), which although criticized for limiting access to its software development kit, has positioned itself as the beacon of transparency.
Concrete examples of what has changed as a result of this emphasis on open is the revenue share split and the speed by which apps get to market, said Chetan Sharma, president of Chetan Sharma Consulting. The industry standard used to be 30% to 50% going to developers, and now the common practice is 70/30 in favor of the developers. If an app gets enough volume, it will likely evolve to an 80/20 spit, he said. In terms of speed to market, it can be a matter of days now. â€œIn that respect, more developers are excited about building apps for the mobile ecosystem,â€ he said.
While excitement has risen, it’s no secret that some big developers preferred the preferential treatment of a more closed system. Opening up access to a carrier or OEM platform means it’s truly open for all. Developers of every size, financial backing and prowess have the potential to compete. Difficulty getting discovered has been a common byproduct.
Social game developer Digital Chocolate is platform-agnostic, but as a relatively small developer of 80 games, it has had to pick and choose where to focus its efforts, said CEO Trip Hawkins. Currently, it is partnered with Verizon, AT&T, Vodafone, Google, Nokia, Samsung and Sony Ericsson. While its leading competitors include Electronic Arts, Gameloft, I-Play and Glu Mobile, it has also found itself up against thousands of other games currently offered in app stores.
â€œIf there’s a fixed amount of retail shelf space, there’s a reason why a big company with big brands has the ability to push the smaller and more innovative companies out of the way for more space,â€ Hawkins said. â€œThat is going to limit the growth and evolution of the market. Since we are one of the smaller and more innovative companies, that will discriminate against us. We don’t care for that model.â€
To address issues like this in the app developer space, Jai Jaisimha left AOL Mobile to start an open-source initiative, Open Mobile Solutions. Developers don’t care about the OS, he said, they just want to reach people. Likewise, consumers buy devices based on their functionality, not the OS. Jaisimha started OMS to make it easier for developers to build apps that can run on lots of devices. He is setting out to outline the essential platforms for developers â€” the best-of-breed providers for design, development, testing, porting, distributing, marketing and monetizing â€” and to create a marketplace for mobile app developers to form relationships. Jaisimha said that openness has changed the process because instead of focusing on how developers can make friends with Verizon, for example, the question has become how can Verizon befriend that developer.
â€œTo a developer what it means is that all the sudden [operators] say they are open, but there is so much underlying complexity to take advantage of that new-found openness, which is about accepting content in a low-friction way,â€ Jaisimha said. â€œIt still gives people pause because you have that â€˜Gee, you are willing to accept my app, so I don’t have to spend six months trying to get you to meet with me,â€™ but I think that is the stage we are all in. We want to take advantage of it; there is a lot of underlying complexity, and there are only a small number of people who have the decoder link today. But if you’re new to mobile, you can crack that open.â€
Sarah Reedy November 9th, 2009
Road to Open: For Connected Planetâ€™s December cover story, wireless editor Kevin Fitchard and I took an in-depth look at what open means â€” in theory and practice â€” in the wireless world. In our reporting, we spoke with a number of developers and industry experts with first-hand perspective on working in an open world. In the weeks leading up to the issue, weâ€™ll share their thoughts and insights. As always, we welcome your comments below.
The move to openness is underway, led by Googleâ€™s (NASDAQ:GOOG) Android platform and, surprisingly, even the initiatives of carriers such as Verizon Wireless (NYSE:VZ, NYSE:VOD). It is still early days in the movement and hard for many developers to tell exactly what open will mean for them, but for carriers, embracing open could be their best shot at avoiding disintermediation, said Chetan Sharma, president of Chetan Sharma Consulting.
Concrete examples of what has changed as a result of an emphasis on open is the revenue share split and the speed by which apps get to market, Sharma said. The industry standard used to be 30% to 50% going to developers and now the common practice is a 70/30 split. If an app gets enough volume, it will likely evolve to an 80/20 spit, he said. It can also be a matter of days versus the six to 12 months it used to take to get an app to market, Sharma said, but outside of these factors, openness is in the eye of the developer.
â€œIf the application only requires access to a location or graphics API, then for practical purposes [Apple] is open enough; you really donâ€™t need anything else,â€ Sharma said. â€œIf you require access to the address book, access to the native voice APIs or anything else, that might not be open at that given point. â€¦ Holistically, even two or three years ago, basic GPS was locked down on most devices. If it was open, it was only available to a certain set of developers the carrier chose. More things are open now, but are they as open as they can? Certainly not.â€
While carriers have been forced to become more open, they are also no longer the app channel of choice for most consumers. Especially for smartphones, where the most revenue lies, carriers are no longer a destination, they are only a connection, Sharma said. As such, genuine openness is their best chance of playing in the app ecosystem. If they can mimic what successful app stores have done and attract the same developers, as well as provide more access to user information than competing app stores can, they have the best chance of surviving â€” or even leading â€” the app store movement, he said.
â€œEvery carrier or OEM platform will tout their openness,â€ Sharma said. â€œThe attractiveness of the platform is a combination of what is open, as well as the ease of development and reach the platform offers. Verizon has huge reach but a lot of fragmentation. If someone is trying to build an app for a carrier ecosystem, they have to figure out what devices to support. I might get access to the address book, but it requires I build for a lot more devices. If you build for the iPhone, you have access to 50 million devices, but you might not have all the access you need. But the cost to develop is much, much lower. There are those trade-offs that developers have to grapple with as to what their strategy is short and long term and the need to get to market and so forth.â€
Roundup of second Mobile Breakfast Series event – Mobile Broadband December 6, 2009Posted by chetan in : 3G,AORTA,ARPU,Carriers,CTIA,Indian Wireless Market,Infrastructure,Location Based Services,Mergers and Acquisitions,Mobile Advertising,Mobile Applications,Mobile Content,Mobile Ecosystem,Mobile Entertainment,Mobile Search,Mobile TV,Mobile Users,Mobile Wallet,Networks,Speaking Engagements,US Wireless Market,Wi-Fi,WiMax,Wireless Value Chain,Worldwide Wireless Market , 3 comments
The second Mobile Breakfast Series Event was held at the picturesque Harbor Club in downtown Seattle on Dec 4th. The topic was â€œThe Impact and Evolution of Mobile Broadband.â€ The lineup of speakers was awesome with whoâ€™s who of the mobile broadband world opining about the state of the industry, the opportunities, and challenges posed by the growth in mobile broadband:
Neville Ray, Senior Vice President of Engineering, T-Mobile USA
Hank Skorny, Senior Vice President, Media Cloud Computing and Services, Real Networks
Ken Denman, CEO, Openwave
Dow Draper, Vice President, Technology Partnerships, Clearwire
Charlie Martin, Wireless CTO, Huawei Technologies
Stacey Higginbotham, Senior Writer, GigaOM (moderator)
First of all, a big thanks to our generous sponsors: Motricity, Openwave, and Clearwire of supporting the event series. I am happy to report that Motricity has signed up to be the sponsor for the entire 2010 season. So, thanks Jennifer Moranz and Brendan Benzing. Thanks also to Ken Denman and Lupe Downing at Openwave, and Jeff Giard and Scott Richardson at Clearwire for their support. Thanks also to our esteemed panelists who have taken the time out of their busy schedules to be here with us this morning, esp. Ken, Charlie, and Stacey who had to hop on a plane to be at the event. Also, thanks to GigaOM and Moconews for being such terrific media sponsors.
As our operators continue to enhance the infrastructure both in the US as well as abroad, it is creating new opportunities and challenges for the industry. As you know, our friends at the FCC are also very consumed by the task of creating a National Broadband Policy and mobile is a key component of that proposal.
It was one of the best discussions on mobile broadband I have heard all year long. Panelists were really frank and insightful.
The salient points of the 90 minute discussions were:
- The disparity between the available bandwidth and the bandwidth demand is becoming apparent and the industry is scrambling to find solutions to stay ahead of the curve.
- Even at these high usage rates, mobile data is quite profitable for the operators. Vendors typically donâ€™t a full grasp of the carrier economics and end up making some product choices that are not that directly relevant or useful for the carriers.
- Consumers are willing to pay more for better access, higher speeds, and good content and significant opportunities await us in the coming years.
- There is no such thing as â€œfree lunchâ€ and someone has to pay for the bandwidth. Sometimes it feels that the pie is not big enough to feed all the hands that are the in the revenue share pot.
- Spectrum and capacity is king and whoever has a good spectrum tends to benefit competitively.
- Out of necessity, companies come up with innovative solutions e.g. T-Mobile focusing on WiFi in the early days when AT&T didnâ€™t want to touch it and Verizon mocked it. Now WiFi is central to their mobile data strategy.
- Traffic from non-phones will exceed that from the typical feature and smartphones.
- Business and revenue models that will help sustain the industry are going to come from outside the industry.
- With so much at stake, carriers will figure out ways to participate the appstore value chain.
- Browsers have shattered the control of the ecosystem and we are just at the tip of the iceberg.
- We will soon see the return of the tier-ing price plans. QoS will enter the picture soon. Likely to have platinum vs. gold service concept emerge
- Solutions â€“ mobile analytics, video optimization, traffic shaping â€“ it comes down the â€œart of delivering a packetâ€
- Apps are not a zero-sum game.
- There will be a metamorphosis of physics and economics of mobile data, new group of players will emerge.
- Carriers have historically not done a good job of picking winning applications but they will figure ways to participate in the new ecosystem.
- Compared to the online Internet market, mobile Internet market is quite nascent and we are expected to see significant opportunities emerge in the next couple of years.
- While iPhone has been a great device, it is the Google applications that make it so popular.
- Presence, social networking, and connectedness will all help in creating a brave new world of mobile data services.
- More Carrier branded solutions to come.
- If carriers are cut of the revenue stream, they might have less incentive to upgrade their networks.
- Technographics, Psychographics, and Demographics data very useful for application developers and we can expect operators to open up consumer information gradually for the ecosystem.
- Some see Android getting more closed with each release, OEMs need to open up the device for app developers to take full advantage of capabilities.
- T-Mobile has been rapidly expanding their 3G footprint with expected coverage increase to 200M by end of the year.
- The levers operators can use to control data usage â€“ pricing, QoS
- FCCâ€™s action is having a positive impact on the industry though we need a lot of work (and a lot of spectrum)
Our next event is looking to be another sellout affair with tech titan Rob Glaser, Founder, Chairman, and CEO of Real Networks headlining the event. Be sure to register early to avoid any sellout blues. Date: March 10, 2010.
Until then, a very happy new year to you and yours and have a terrific holiday season that helps you prepare for a successful 2010.
The Impact and Evolution of Mobile Broadband December 3, 2009Posted by chetan in : US Wireless Market , 1 comment so far
Super excited about the event tomorrow. We have a terrific lineup. Like last time, we are completely sold out. In fact, registrations jumped 21% from the first one.
See you guys at The Harbor Club bright and early.
Many thanks to our sponsors
and the media sponsors
Topic: The Impact and Evolution of Mobile Broadband
Stacey Higginbotham, Senior Writer, GigaOM
Stacey has over ten years of experience reporting on business and technology, most recently as reporter with top technology blog GigaOM. There she covers both the infrastructure that allows companies to deliver services via the web, as well as the services themselves. Prior to GigaOM Stacey wrote about technology and finance for The Deal, a finance publication out of New York, and launched its coverage of angel-backed and seed-stage companies. She joined The Deal from the Austin Business Journal which she wrote for after her return from New York City, where she worked at publications that included The Bond Buyer and BusinessWeek. Stacey graduated with a degree in journalism from the University of Texas at Austin.
Dow Draper, Vice President, Technology Partnerships, Clearwire
Dow Draper recently joined Clearwire as Vice President of Product Development and Innovation where he is responsible for strategy and development of WiMAX-based devices and services, and for product marketing of new customer solutions. Dow spent the past four years at Alltel Corporation where he held both marketing and finance roles: Most recently as Senior Vice President of Voice and Data Solutions and prior to that as Senior Vice President of Financial Planning and Analysis where he played a key role in several acquisitions and in Alltelâ€™s sale to Goldman Sachs and TPG. Prior to joining Alltel, Dow spent several years in the Seattle area, first as a consultant with McKinsey and Company working in the aerospace, automotive and wireless telecommunications industries, and second working for Western Wireless (prior to its acquisition by Alltel) as Executive Director of Financial Planning and Analysis. Dow has an MBA from the University of North Carolina at Chapel Hill and an undergraduate degree from the University of Colorado at Boulder.
Charlie Martin, Wireless CTO, Huawei Technologies
Charlie Martin is the Wireless Chief Technology Officer for Huawei Technologies (North America). Martin has more than 20 years of experience in wireless communications and has spent the past nine years in product management, business development and technology development. Previously, Martin served as Nortelâ€™s Director of WiMAX Network and Systems Product Line Management, and, prior to that, as Director of Wireless Technology and Product Strategy for the company. Before joining Nortel, Martin held positions at two service provider companies. At GTE Business Data Products, Martin was a member of a five person product management team responsible for rolling out a nationwide ADSL service in more than 330 central offices in 1998. At Sprint PCS, Martin served as the Manager of RF Design for the Dallas/Fort Worth Engineering and Operations team, which rolled out CDMA service in 1996. Martin earned a Bachelor of Science degree in physics from the University of Maryland.
Neville Ray, Senior Vice President of Engineering, T-Mobile USA
A professional in the telecommunications industry for more than 20 years, Neville Ray has specific experience in the design, deployment and operational management of GSM and WCDMA networks in the United States and worldwide. Mr. Ray is responsible for the management of the national T-Mobile network in the USA, covering in excess of 260M pops, serving 32 million customers and encompassing 43,000+ cell site facilities. HSDPA services were launched in 2008 across all major metro areas of this network. This year T-Mobile rapidly strengthened and grew its 3G network to reach approximately two-thirds of the U.S. population by the end of the year. The faster HSPA 7.2 standard will be enabled across the entire 3G network by year-end. The company also announced it will be the first carrier to launch HSPA+ in the U.S. and conducted a trial in Philadelphia , gearing up for broad deployment by mid-2010 to deliver throughput speeds three to five times faster than todayâ€™s 3G networks â€“ with theoretical peak download speeds of 21Mbps (depending on device and other factors).
Prior to assuming his current national role at T-Mobile USA, Mr. Ray held the position of Vice President of Network Engineering and Operations for the Northeast region of T-Mobile USA where he led the network through the 9/11 terrorist attacks, receiving significant recognition from the New York Police Department, New York state agencies and the Federal Communications Commission.
Ken Denman, CEO, Openwave
Ken Denman is chief executive officer for Openwave Systems (NASDAQ: OPWV) where he is focused on executing Openwave’s corporate strategy and growing the company’s global market share with innovative software infrastructure products and services for mobile and broadband operators. Ken’s career spans more than 20 years in the global telecommunications and IT industries. Before Openwave, Ken served as chairman and CEO of iPass, a world leader in platform-based enterprise mobility services where he guided the company in leveraging the explosion in new broadband and wireless access technologies to make them real and globally available to any enterprise or service provider. Under Mr. Denman’s leadership, iPass grew its revenue by 200 percent and went public in 2003.
Before joining iPass, Ken was the founder, president and CEO of AuraServ Communications, a managed service provider of broadband voice and data applications. Earlier, he served as senior vice president at MediaOne’s National Markets Group (now part of Comcast) where his teams exceeded new subscriber growth targets and dramatically reduced customer churn. He also served as chief operating officer of MediaOne’s International Wireless Group, leading international joint ventures including what would become the leading wireless providers in Poland, Hungary and the Czech Republic. Ken also serves on the board of ShoreTel, Inc., (NASDAQ: SHOR), a leading provider of Pure IP unified communications systems headquartered in Sunnyvale, California. Ken holds an MBA from the University of Washington and a BS in accounting from Central Washington University.
Hank Skorny, Senior Vice President, Media Cloud Computing and Services, Real Networks
At Real Networks, Hank Skorny is leading a new effort to place media into the cloud, offering the ability to protect and access it anywhere. This will allow users to organize, explore and socialize with their media like never before.Hank has nearly 25 years of executive marketing, business development, and engineering experience. Hank had been a successful entrepreneur, serving as CEO of Thumbspeed Inc. which was acquired by OZ Communications Inc. which was subsequently acquired by Nokia. Prior to Thumbspeed, Hank held senior executive positions at Infospace Mobile and AOL Mobile. His career has included general management, senior product management and engineering positions at Adobe Systems, Microsoft and Apple Computer.
Hank also serves as Chairman of Zipwhip, Inc., a leader in internet based text messaging over the web. He serves on the board of Enterprise Ireland and takes an active role in philanthropy organizations that focus on education and stimulating entrepreneurship. Hank studied at Drexel University where he was awarded a scholarship for his early novel research in Xenon Fluorides and by GlaxoSmithKline for his research in computer modeling of reactions involving complex three-dimensional proteins and glycopeptides.