The impact of Connected Devices April 16, 2010Posted by chetan in : US Wireless Market , 2 comments
Millennial Media released its mobilemix device index this morning and something jumped out for me and that is the % share of the connected devices.
Pretty soon it will eclipse feature phones and give smartphone run for its money. Tremendous impact on how advertising is done and thought about
i will have more on this in the future
NPR: Mobile Apps Market Scales Up From Zero To Billions April 14, 2010Posted by chetan in : US Wireless Market , 2 comments
Had a chance to talk to Wendy Kaufman of NPR on the apps economy and our apps research
Mobile Apps Market Scales Up From Zero To Billions
by WENDY KAUFMAN
[4 min 20 sec]
Roughly 3 billion apps have been downloaded for Apple’s devices. Analysts say Apple has helped expand the app economy from a market offering free apps into one with annual revenues of up to $6 billion.
April 13, 2010
Apps are now big business.
Three years ago the industry barely existed. But recent studies suggest the app economy is growing rapidly and could top $20 billion â€” the amount Americans spend on children’s clothing â€” in just a couple of years.
Roughly 3 billion apps have been downloaded for Apple‘s iPhone, iPod Touch and iPad.
Greg Anderson, a senior software analyst atThe Seattle Times, creates apps for mobile devices. He’s also an independent app developer.
"You know, when Apple recognizes you or when you get up in the morning and you see all the downloads, it’s like Christmas everyday," Anderson says. "It’s like caffeine because people appreciate what you’ve done, so you want to do more."
The Advantage Of Free Apps
Anderson’s new app, which converts Celsius temperatures into Fahrenheit, can be downloaded free. That means he’s not making a penny from this app.
"I think every developer will tell you â€” you’ll get 10 to 15 times more downloads for free than if it costs money," Anderson explains.
Roughly 80 percent of all apps are free. Many of the rest cost just 99 cents.
So how did a market, which focuses on free and almost-free apps, grow into an industry with annual revenues of $5 billion to $6 billion? Analyst Chetan Sharma offers a one-word explanation: Apple.
"Apple really changed the game in many ways. They made it very simple for developers to get their application to the App Store in front of the consumers," Sharma says.
And once it was easier, faster and more lucrative to develop apps and sell them, more developers began to create them. The promise of a digital Swiss army knife became a reality.
But making money from apps is another story.
Charles Golvin, a senior analyst at Forrester Research, says developers who sell millions of their apps â€” even for a tiny price â€” can turn a profit.
"It could be someone as big as Electronic Arts, the largest gaming publisher, or could be two guys in a garage," Golvin says.
And the guys in the garage who are giving their app away free may be hoping to eventually sell a premium version â€” or sell something that goes with it.
Developers typically get 70 cents of every dollar spent to download their app. Golvin says the platform provider â€” like Apple â€” gets the rest. And then there’s a separate stream of revenue from advertising.
Developers get most of the advertising dollars, but companies that that serve up ads make money as well. Zumobi, a Seattle-based company, creates apps and places advertisements to go with them.
"We have several apps coming out focused on the female demographic, parents, [and] that audience is obviously very attractive to advertisers," says John SanGiovanni, a co-founder of Zumobi.
The company often partners with big content providers like NBC and Motor Trend.
Ken Willner, Zumobi’s chief executive officer, suggests that being big in the app industry has some advantages.
"As a publishing network, we can cross-promote aggressively all of our applications," Willner says. "For example, you’ve downloaded our Motor Trend App; we will also suggest our NASCAR app â€” very, very big advantage and frankly something the two guys in the garage can’t take advantage of."
As the number of apps has exploded, it’s becoming more difficult for small guys to get noticed.
In case you missed … April 2, 2010Posted by chetan in : US Wireless Market , add a comment
Stories and articles in March
BusinessWeek – Freeing the iPad from AT&T
WirelessWeek – VCast App Store Opens
WirelessWeek – National Broadband Plan – A Work in Progress
RCR Wireless – America pushes the boundaries of broadband
FierceWireless – Breaking down usage-based data pricing
FierceWireless – User appetite for apps continues to surge
NY Times – LTE may heat up mobile net neutrality debate
PC World – LTE may heat up mobile net neutrality debate
Our Mobile Apps Research received unprecedented global coverage with hundreds of stories, here is a sampling ..
Business Insider – Number of Apps Stores Grew from 9 to 38 in 2009
BusinessWeek – Americans Pay More for Mobile Apps
Cellular News – Mobile apps to be worth $17.5B by 2012
Connected Planet – Apps trump CDs – but do we really need 38 app stores
Connected Planet – Mobile apps explode, but what about the little guys
Communities Dominate Brands – So what do we learn from Chetan Sharmaâ€™s Report on Mobile Apps
Datamation – Mobile Application Sales to reach $17.5B by 2012
Ecommerce Times – Consumers go gaga over apps
Fast Company – Mobile Apps Sales to Hit $17.5B by 2012
FierceMobile – 50B mobile app downloads in 2012
GoMo News – Growth in mobile apps may have hidden dangers
Guardian – Mobile Apps will outsell CDs by 2012
Information Week – Mobile Apps get top dollar in US
Mashable – Mobile App Market to Surge to $17.5B by 2012
Mobile Marketing Watch – Mobile Apps to Soar to $50B downloads by 2012
Mobile Entertainment – Mobile apps to outsell CDs by 2012
Moconews – Evidence that Apple is Onto Something
Msearchgroove – Chetan Sharma first to map app economy and landscape
NPR – App Store Study
PC World – Apps are a goldmine for developers
ReadWriteWeb – Mobile App Marketplace: $17.5B by 2012
Seattle Times – Mobile apps $17B market soon, app seller claims
Techcrunch – Mobile app sales will overtake CD Sales by 2012
TelecomTV – Study forecasts $17.5B apps store revenues
FCC – National Broadband Plan
BusinessWeek – Clear’s Mobile Users Really Use the Service
US Today – Media Morning (MBS)
Seattle Times – Glaser on mobile biz, Apple and the Sesame Street problem (MBS)
Seattle Times – Former FCC boss on fed’s free wireless proposal (MBS)
Techflash – RealNetworks’ Rob Glaser on why Apple’s model must be stopped (MBS)
Techflash – RealNetworks advice to startups: It’s better to be lucky, than good (MBS)
Moconews – Former RealNetwork’s CEO Rob Glaser Says For Now Apple Has Won(MBS)
PC World – Former FCC Chair Says More Fiber Will Help Wireless Crunch (MBS)
PC World – Rob Glaser Thinks Mobile Is the Next Big Thing (MBS)
NPR – SXSW and Mobile Data Network Traffic
FierceBroadbandWireless – New report enforces why operators are talking usage-based data pricing
Techcrunch – In Mobile, Fragmentation is Forever, Deal With It
Mediapost – Coming Soon To A Wireless Store Near You
iPad and Network Congestion: BNN and Business Week April 1, 2010Posted by chetan in : US Wireless Market , 3 comments
It will be fascinating to see how the user behavior develops over time with iPad. It is likely to surprise us and challenge some of the base assumptions. AT&Tâ€™s pricing will pave the way of further granular and tiered pricing for mobile data. I had a chance this morning to discuss some of this on Canadaâ€™s Business News Network and with BusinessWeek.
How I wish the 3G version was arriving tomorrow as well.
AT&T May Find Apple iPad Strains Network More Than Expected
AT&T executives, betting that iPad users will mostly connect via Wi-Fi, may be underestimating the likely impact on their 3G network, analysts say
Publishing professional Peter Costanzo is out to redefine telecommuting. The 45-year-old online marketing director for Perseus Books Publishing in New York has ordered a 3G-capable version of Apple’s (AAPL) iPad tablet computer. He plans to use it during his 75-minute morning commute from Long Island to read the paper, buy e-books, make notes, retrieve e-mail, and, he hopes, glimpse the future of publishing. "As publishers, it’s really important to see how the device performs," he says.
Consumers like Costanzo could give AT&T (T) a headache in coming months. AT&T’s 3G cellular network is already swamped with data traffic from millions of Apple iPhone users, especially in New York and San Francisco. Users have complained of dropped calls and slow Web access.
Some tech industry analysts fear the iPad could exacerbate the problem. AT&T Chief Executive Randall Stephenson said at a Mar. 2 investor conference in San Francisco that he expects the iPad to be mainly "a Wi-Fi-driven product." Some analysts have interpreted those comments to mean that AT&T could be surprised by higher-than-expected use of iPads on its 3G cellular network.
The iPad "is extremely bandwidth-intensive," says Craig Moffett, an analyst at Sanford C. Bernstein who has a market perform rating on AT&T’s stock. "It could set up users for a disappointment." The iPad’s large screen lends itself to bandwidth-hungry applications like watching movies, Moffett says. That means a 3G iPad could wind up consuming double the network capacity that an iPhone does. "AT&T seems to be convinced that most of the time users will be connected to [a] Wi-Fi network," he says. "That’s a pretty big stretch, given it’s a new device nobody’s used before."
CRUCIAL FACTORS: SALES, EXTENT OF USE
Independent wireless industry analyst Chetan Sharma estimates that a 3G-enabled iPad will consume about two-thirds as much network capacity as a 3G iPhone. If Apple sells 2.7 million 3G iPads this year, as Piper Jaffray & Co. (PJC) analyst Chris Larsen forecasts, that could be the equivalent of 1.7 million iPhones hitting AT&T’s network. The iPad "certainly could put a strain" on AT&T’s network, assuming that consumers use its Internet capabilities extensively and sales match his forecast, says Larsen, who has an overweight rating on AT&T shares. "If they were to get into a situation where they again got behind the capacity, it would damage their reputation," Larsen says.
To be sure, the iPad likely won’t bring a large telecom network to its knees. And until consumers start snapping them upâ€”analysts’ estimates range from 2 million to 6 million iPads sold in 2010â€”the industry won’t know for sure how extensively iPad owners will stream video and perform other bandwidth-intensive tasks. Many users may opt for less expensive Wi-Fi-only versions of the iPad and use them in hotspot-laden areas such as their homes, airports, and coffee shops.
Three initial versions of the iPad, which go on sale in the U.S. Apr. 3, will communicate using Wi-Fi wireless Internet technology. Three additional models due later in April will communicate over 3G. Buyers of the 3G-enabled iPads will be able to access AT&T’s cellular network for $15 per month or $30 per month depending on how much data they plan to consume. Those plans will also include access to AT&T’s more than 20,000 Wi-Fi hotspots in the U.S. "We feel very good about where our network is," says AT&T spokesman Mark Siegel.
AT&T, APPLE FORESEE FEW PROBLEMS
Glenn Lurie, AT&T’s head of emerging devices, says the iPad’s ability to gracefully hop between cellular and Wi-Fi connections will help ease any network strain. "We’re giving you the ability to have a very nice experience," he says.
Apple spokeswoman Natalie Kerris says users aren’t apt to experience network congestion. "AT&T is a great partner and they are offering a landmark deal for iPad customers with no-contract data plans at great prices," she says.
Still, many users could consume large amounts of bandwidth by watching videos on the iPad’s 9.7-inch screen. A two-hour movie would likely send three to five times more data to the iPad than watching a similar video file on an iPhone or iPod would, estimates James Brehm, a senior consultant at Frost & Sullivan.
The files would be much larger than those containing electronic books, which have been the predominant use of tablet-style devices like Amazon.com’s (AMZN) Kindle.
Jonathan Schildkraut, an analyst with Jefferies & Co. (JEF) who has a hold rating on AT&T shares, says that the iPad "could be a network hog." "Longer term, you could see it causing network congestion," he says.
Kharif is a reporter for Bloomberg BusinessWeek.com in Portland, Ore. Amy Thomson is a reporter for Bloomberg News in New York.