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Mobile Video Advertising May 28, 2010

Posted by chetan in : Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile TV, Mobile Traffic , 2 comments

Rhythm New Media released some interesting stats today and I had a chance to catch-up with Ujjal Kohli, CEO of Rhythm about the various trends.

What’s fascinating is that mobile video usage is spread throughout the day, meaning mobile plays a nice compliment to regular TV.

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Wi-Fi plays a crucial role

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People are watching quite a bit of video

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and most interestingly, the completion rate is significantly high (compared to TV)

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Source: All data Copyright, 2010, Rhythm New Media

As the devices get better and better, video consumption is growing because the quality of content is increasing manifold. This leads to higher viewing time which leads to higher ad dollars, you see where i am going. Thanks to Rhythm for making the data available.

US Wireless Data Market Update – Q1 2010 May 16, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Wallet, Networks, Partnership, Patent Strategies, Patents, Privacy, Speaking Engagements, US Wireless Market, Unified Messaging, WiMax, Wireless Value Chain, Worldwide Wireless Market , 5 comments

US Wireless Data Market Update – Q1 2010

http://www.chetansharma.com/usmarketupdateq12010.htm

Executive Summary

The US wireless data market grew 5% Q/Q and 22% Y/Y to exceed $12.5B in mobile data service revenues in Q1 2010 - on track so far to our initial estimate of $54B for the year.

In a significant milestone that went largely unnoticed, Verizon Wireless edged past NTT DoCoMo - the decade old leader in mobile data revenues to become the biggest mobile data operator by data revenues. Helped by its 93M subscriber base and high ARPU, the Verizon juggernaut is steamrolling. Rest of the 3 top US operators also occupy leading positions amongst the top 10 global mobile data operators.

The US subscription penetration was approximately 94% at the end of Q1 2010. If we take out the demographics of 5 yrs and younger, the mobile penetration is now past 100%. While the traditional net-adds have been slowing, the “connected device” segment is picking up so much so that both AT&T and Verizon added more connected devices than postpaid subs in Q1 2010. Given the slow postpaid growth in, operators are fiercely competing in prepaid, enterprise, connected devices, and M2M segments.

Data traffic continued to increase across all networks. US has become ground zero for mobile broadband consumption and data traffic management evolution. While it lags Japan and Korea in 3G penetration by a distance, due to higher penetration of smartphones and datacards, the consumption is much higher than its Asian counterparts. Given that it is also becoming the largest deployment base for HSPA+, LTE and WiMAX, most of the cutting edge research in terms of data management and experimentation with policy, regulations, strategy, and business models is taking place in the networks of the US operators and keenly watched by players across the global ecosystem.

We are starting to see the inevitable changes in broadband pricing starting with T-Mobile and MetroPCS. Over the course of this year, we are likely to see newer pricing models that tie usage to pricing and add multiple devices to a single data bucket.

The fabled iPad landed in the market and it is a winner. Apple’s latest gizmo has created a new user experience category of casual and couch computing that will foster growth in the connected device space. Kids of the now generation are growing with connected electronics that is fundamentally altering the behaviors and expectations of interaction, communication, consumption, and monetization.

Privacy brouhaha has been brewing for some time and the polity class is getting interested in stepping in. If people are really serious about tackling privacy, OEMs and carriers should build a physical/soft privacy button on the device with 3-5 levels (just like for the ringer volume) that allows users to open/close privacy across all applications and services with the touch of a button. All apps and services should adhere to the principle via APIs. The other mistake companies make about privacy is by treating everyone the same. Privacy is about the perception of control and transparency. If it is given back to the consumer, they are likely to engage more and have a more positive impact on revenue streams that are likely to flow.

In an another global milestone, Softbank became the first major operator to have more service revenues from data services than voice services. In Q1 2010, 55% of its service revenues were attributed to data services. (While Smart and Globe have been reporting 50%+ revenues from data services for a long time, the total revenues are not at scale with the leading global operators. Incidentally, for the first time in many years, the data revenue % slipped below 50% for the both operators in Q1). Based on current projections, US is likely to cross the 50% data revenue threshold in late 2012 or early 2013. NTT DoCoMo is next in line to cross the 50% mark this year.

All this has setup an absolutely fascinating period in the communication/computing industry. Convergence is everywhere and is leading to fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 8th event – Mobile Future Forward which is bringing leading industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. Hope you can join the discussion.

What to expect in the coming months?

The pace of product introduction is accelerating with each quarter. Devices of all shapes and sizes are coming into the market. Players are having to re-evaluate their businesses and long-term strategies. Several new impressive handsets got introduced during the course of 1H of 2010. iPad finally launched and even the next generation iPhone walked into a bar.

Microsoft announced its comeback with the W7 launch though the time it is taking to launch is making partners nervous. The change in UI was refreshing though the inability for the OEMs to differentiate is not winning friends. HP acquired Palm in attempt to become relevant again in the mobile device space. Some other players missed out in buying an attractive IP portfolio. It has been an action packed 2010 thus far and we can expect more of the same for the remainder of the year.

2010 has also been active on the regulatory front as the national broadband plan was unveiled in March (our thoughts on the plan). The Comcast ruling delivered a blow to the FCC and any directives or policies will hardly have any impact on the ecosystem in the short-term.

With the looming spectrum shortage, regulatory bodies can have a significant impact on the competitiveness of a nation. Many countries in South America have imposed unnecessary spectrum caps. Others are behind in sorting out their spectrum allocations. The industry and regulators need to work hand-in-hand to make progress beyond speeches and paperwork.

To start planning for 4G, 5G, and beyond, US should think about rolling a 50 year broadband plan. While more spectrum is always helpful, will we have all the spectrum we need in 2050? or do we need to invent new technologies and business models that use spectrum more wisely? This topic will keep the industry occupied for some time to come. (Former FCC Chairman, Kevin Martin headlined our Mobile Breakfast Series event in March and discussed the Spectrum Crises. Our June 10th event is bringing CEOs of some of the most innovative mobile startups to discuss the ecosystem)

2010 is also the year of network rollouts. T-Mobile has been rolling out HSPA+ at an impressive rate, Clearwire has been expanding the network so fast that it has become the biggest construction company in the US, Verizon is betting big on LTE and AT&T has been adding backhaul, upgrading to HSPA+ and planning for LTE all at once. Even the smaller carriers like MetroPCS are looking for competitive advantage with quicker LTE launch and beat others by carrying the first LTE smartphone. (We will be releasing the next edition of our “State of the “Mobile” Broadband Nation” paper later this year)

As we had mentioned last year, the mobile data traffic kept on growing disproportional to the revenues. A series of solutions have come into the market from players big and small. We will be releasing the second edition of our in-depth research paper on data growth - "Managing Growth and Profits in the Yottabyte Era" later this month.

We will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q1 2010 US wireless data market is:

Service Revenues (Slides 7, 16)

ARPU (Slides 8-11)

Subscribers (Slides 12-14)

Applications and Services

Handsets

Open

Data Traffic (Slide 15)

· As we noted in our last update, the data traffic is now significantly more than the voice traffic. The good news is that there are several solutions that available and are being invented that will help manage the data growth. The question is how fast will the operators deploy some of these solutions.

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Aug 2010. The next Global Wireless Data Market update will be issued in Sept 2010.

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Mobile Breakfast Series: June 10th: Startup Nation May 14, 2010

Posted by chetan in : US Wireless Market , add a comment

Hope you are enjoying the summer. Just wanted to get you up to speed with the June 10th MBS event which is shaping up really nicely.

We are excited to welcome OpenMarket as a supporter and sponsor for the event series.

Generous Sponsors: Motricity, OpenMarket, Openwave, WDSGlobal. Many thanks for your support

The theme for the morning is “Startup Nation” and we are going to hear from CEOs of some of the most innovative mobile companies in our ecosystem. We have tried to bring a broad cross-section of expertise so we can get a good pulse of the industry – from mobile advertising to mobile health, carrier-centric to OEM-centric, D2C to B2C, location-based to messaging-based, push messaging to crowd-sourcing – we got it all.

One of the key areas that these CEOs are focused on is “scale” whether it is billions of ad imprints or saving billions of dollars for the carriers or the health industry or being on billions of handsets. The expert panel consists of folks who have been around the block a few times. We will learn from their experience and insights – so really excited about the program.

The two panels are:

Panel I - Mobile Opportunities and Challenges through the Eyes of Startup CEOs

Olga Kharif, Senior Writer, Bloomberg Businessweek (moderator)

Paul Griff, CEO, Root Wireless

Sailesh Chutani, CEO, Mobisante

Paul Palmieri, CEO, Millennial Media

Mike McSherry, CEO, Swype

 

Panel II - Startups - Engage the experts

Kevin Foreman, CEO, PointInside

Derek Spratt, CEO, Mobidia

Scott Kveton, CEO, Urbanairship

John Lauer, CEO, Zipwhip

Jeff Giard, Director, Clearwire

Bill Bryant, Managing Director, EnvisionVentures

Peter Wilson, Ex-Google, Ex-Microsoft

The program will be as follows:

07:30 - 08:30 - Registration, Breakfast, and Networking

08:30 - 09:30 - Panel I
09:30 - 10:30 - Panel II
10:30 - 11:00 - Networking

As you can see we are altering the format a little bit so please try to be on time as it will be a busy morning.

Location: Columbia Tower Club, 701 5th Ave, Suite 7600 (entrance is from the 75th floor), Seattle, WA 98104 (Directions)

There is parking available in the building but it is a bit pricey. There are several other parking options available nearby. Good public transportation options are also available in case you want to ride in.

If you plan to attend and haven’t registered, I will encourage you to do so at your earliest convenience. This will help us in capacity planning so we can accommodate as many people as possible. Registration Link

If you have any questions or suggestions, please do let me know.

Thanks and looking forward to seeing you all on June 10th.

In case you missed … May 2, 2010

Posted by chetan in : US Wireless Market , add a comment

Here are stories from April

April

Bizrepot - MerchantCircle launches location-based app service

BusinessWeek - Social Phones Offer Shortcuts to the Web

Mediapost - Vanity vs. Sanity: Putting Apps in Context

TelecomTV - Technicality stops Skype on Verizon Android phones

NPR - Mobile Apps Market Scales Up From Zero to Billions

Bloomberg Law Reports - Why Continue to Invest in Patents?

Moconews - Microsoft’s Kin: Too Little, Too Late

Mobile Entertainment - Android rising in Japan

The Globe and Mail - Talk isn’t cheap in world’s biggest cellphone market

Mercury News - Apple: Enhanced multi-tasking will be added to iPhone software

FierceMobileContent - Portals, Entertainment, Travel lead Mobile Advertising Spend

Econsultancy - Mobile: Less phone, more data

Telemanagement - Mobile data is king: surpasses voice

GCN - Mobile data volume exceeds voice traffic for the first time

Nasdaq - Seismic shift in mobile use

Jerusalem Post - Android in Japan

Hot Hardware - Mobile Data Surpasses Voice Traffic for First Time

Phone+ - Analyst: Believe it, iPad will Strain AT&T’s Network

AllThingsDigital - A New First in Mobile: Data traffic Outstripped Voice Traffic Last Year

Business News Network - iPad and Mobile Networks (video)

Mediapost - US Led in Mobile Data Growth in 2009

PaidContent - A new first in mobile: Data traffic outstripped Voice traffic last year

Pluggd.in - Mobile App Stores - Asia leads the download race

BusinessWeek - AT&T may find Apple iPad Strains Network more than expected

BusinessWeek - Verizon joins AT&T and others in Booking Costs from Health-Care Law