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Mobile Future Forward – Connected Universe. Unlimited Opportunities July 27, 2011

Posted by chetan in : 4G, AORTA, Applications, Connected Devices, Mobile Applications, Mobile Cloud Computing, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

The theme of Mobile Future Forward this year is Connected Universe. Unlimited Opportunities. As a long time reader, you know the very foundation of this blog is depicted in its name – AORTA – Always On Real-Time Access. Since my early days in the mobile world, I longed for a time when connectivity became ubiquitous. In fact, even in my early books in 2000 (Wireless Internet Enterprise Applications) and 2002 (Wireless Data Services with Dr. Yasuhisa Nakamura, CTO, NTT DoCoMo), I had extensively talked about the connected universe. We are finally approaching that vision. To talk about this in more depth, we have the two distinguished leaders who are at the center of it all – Glenn Lurie, President – Emerging Devices, Resale & Partnership at AT&T Mobility and Danny Bowman, President – Connected Devices at Sprint.

Connected Universe. Unlimited Opportunities.

The connected devices segment is the fastest growing category of the market and is also the most profitable due to higher margins. Connected devices are impacting a rethink in virtually all key verticals – healthcare, housing, travel, entertainment, communication, energy, and others. It is also disrupting the traditional value chains and revenue models. Which segments are yielding the highest ROI? Does computing fundamentally change forever or are connected devices just a part of the PC hub? How does M2M fit into the world of smartphones and tablets? How are businesses and solution providers taking advantage of the growing connected universe? What’s most important for the consumer and what are their expectations on design, pricing, and connectivity? From connected cars to wireless pill bottles, our world is going to change forever. Meet the leaders who are shaping the growing connected devices ecosystem to get insights that will inform your strategy and decide your future revenue streams.

Glenn Lurie, President - Emerging Devices, Resale  & Partnerships , AT&T Mobility

Danny Bowman, President – Connected Devices, Sprint

Mobile Future Forward – Disruption is in the air July 25, 2011

Posted by chetan in : AORTA, Applications, Devices, Disruption, Mobile Future Forward, Networks , add a comment

As you know, Mobile Future Forward is fast approaching and we are very excited about the thought-leaders and attendees who are participating. One of the first panel discussion is going to be on the disruptive forces in the ecosystem, from network to devices to applications.

Sanjiv Ahuja, CEO of LightSquared and Jason MacKenzie, President, HTC Americas are going to the headline the panel. Sanjeev and Jason are both industry veterans and have a great sense of the disruptive forces needed to take the industry to a different level.

Sanjiv Ahuja is the chairman and CEO of LightSquared.

In 2007 Sanjiv founded Augere, a company delivering affordable, genuine wireless broadband to underserved customers in developing markets such as Bangladesh and Pakistan. He is also the founder and chairman of Eaton Telecom, a telecommunications infrastructure company with a presence in 12 African countries.

From 2004 until 2007, Sanjiv was chief executive officer of Orange.

Jason Mackenzie, President, HTC North America and Latin America
Previously vice president of HTC North America, Jason Mackenzie has been promoted to president of HTC North America and Latin America. As president, Mackenzie will continue to drive HTC’s strategy and market growth in North America and Latin America where he has contributed to HTC’s strong performance. As one of HTC’s founding North American members in 2005, Mackenzie has led HTC’s strong growth in North America.

Disruption is in the Air

Disruption is the fundamental tenet of progress. Whether it is the technologies, the business models, the players or the alliances, disruptive forces are essential in making things better for the consumer and the larger ecosystem. Is 4G a game change? What does the wholesale business model do to the data economics? Is the halving of the device lifecycle good or bad? Who manages the customer and where does the value shift? Meet the two leaders who are working to disrupt the mobile industry.

Sanjiv Ahuja, CEO, LightSquared

Jason MacKenzie, President, HTC Americas

We look forward to seeing you on Sept 12th.

Data growth and payments July 24, 2011

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

Had a chance to talk to NY Times and Bloomberg Businesweek on iphone, data traffic, congestion, and payments.

NY Times story deals with the impact of iPhone on Verizon and the networks are faring

http://www.nytimes.com/2011/07/23/technology/iphone-bolsters-verizon-results.html

One issue with the introduction of the iPhone to Verizon was whether the carrier would buckle under the crush of the new data-intensive users. It has not, which analysts attributed to the fact that Verizon had several years to upgrade its network and infrastructure while watching AT&T struggle with this problem. “Verizon was better prepared thanks to AT&T,” said Chetan Sharma, an independent wireless analyst.

But even AT&T’s network, long the source of complaints from beleaguered users who said they got poor cellular reception and suffered from dropped calls, has improved over all, Mr. Sharma said.

“Verizon’s had Android for a long time,” said Mr. Sharma, who keeps a close eye on the industry. “This was the first real test between an iPhone and Android and consumers still gravitate towards the iPhone.”

Bloomberg did an in-depth piece on mobile payments

http://www.businessweek.com/magazine/pay-as-you-go-with-smartphones-07142011.html

For any new approach to really catch on, it has to offer some compelling advantage. “If there’s not a significant improvement from the past, either in convenience or in some form of monetary value to the merchant or consumer, payment technologies generally don’t catch on,” says Chetan Sharma, a mobile industry consultant. “There has to be something different about a new technology that makes life better.”

We will have more thoughts and research coming on both topics in the coming days. Stay tuned. Of course, we will covering both these topics in-depth at our Mobile Future Forward Summit.

RCR Bellevue Conference July 23, 2011

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I will be speaking and moderating at the upcoming event organized by our good friends and MFF partner – RCR Wireless in Bellevue on Aug 2nd.

http://rcrlocal.com/bellevue/events/ (be sure to register with partner code for 33% discount)

Will kick things off with a keynote on mobile evolution and the opportunities

11:30 am

General Session: Mobile Evolution 2.0: Managing for Growth and Profits

Chetan Sharma, President, Chetan Sharma Consulting
The last 10 years saw a gradual awareness and increase of mobile data services around the world. In countries like Japan, mobile data is already generating the bulk of operator revenues. The networks around the world are starting to come under duress. The growth in revenues and the management of the margins will be defined by how well the players are able to adapt to the shifting sands. The talk will take a look at the trends around the world, specifically look at the various strategies that need to be deployed, and discuss the evolving landscape this coming decade.

and then have a chance to moderate a great panel on monetization of broadband

04:30 pm

General Session: Monetizing Mobile Broadband Networks

Moderator: Chetan Sharma;

Brian Lent, CTO, Medio Systems
Jeff Giard, Director, T-Mobile
Tyler Davidson, VP, Amdocs
Vern Fotheringham, Chairman, CTB
Steve French, VP, Newbay


Value added services discussions are a dime a dozen; while over the top service providers enjoy astronomical valuations and IPOs,  Experienced industry insiders and investors look into the crystal ball to discuss how carriers are going to drive ROI for shareholders.

Hope to see some of you there

Mobile Future Forward – Prelim Agenda Announced July 20, 2011

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

We have been hard at work this summer to put together a stellar agenda for our upcoming mobile thought-leadership summit in Seattle on Sept 12th.

Again, thanks to our wonderful partners – Qualcomm, AT&T Interactive, OpenMarket, Ericsson, Openwave, Synchronoss Technologies, Real Networks, Millennial Media for making the summit possible.

Below is the prelim agenda. Super Saver expires July 22nd.

More details at http://www.mobilefutureforward.com

Sept 11th 2011
Speakers Dinner

6:00 - 8:00 pm

Sept 12th 2011
Registration Opens. Breakfast and Networking

6:30am

8:15 am
Introduction and Welcome - Chetan Sharma, President, Chetan Sharma Consulting
Mobile Future Forward: Connected Universe. Unlimited Opportunities.
The DNA (Devices, Network, and Applications) of the mobile ecosystem is changing. What opportunities will emerge during the course of this decade? Where are the new billion dollar markets? We will explore these questions and more throughout the day with the influential minds who are shaping the mobile industry.

8:30 am
Keynote - Steve Mollenkopf, EVP and Group President, Qualcomm

9:00 am
Disruption is in the Air

Disruption is the fundamental tenet of progress. Whether it is the technologies, the business models, the players or the alliances, disruptive forces are essential in making things better for the consumer and the larger ecosystem. Is 4G a game change? What does the wholesale business model do to the data economics? Is the halving of the device lifecycle good or bad? Who manages the customer and where does the value shift? Meet the two leaders who are working to disrupt the mobile industry.

Sanjiv Ahuja, CEO, LightSquared

Jason MacKenzie, President, HTC Americas

9:30 am
Design, User Experience and Consumer Behavior

The number of connected devices per user is increasing very quickly. Some users have 10-20 connected screens in the household and the number is only going to increase. How does product and service design leverage this phenomenon? How do monetization strategies change? What are user experience and pricing expectations? How does the value shift between the players? How do developers take advantage of n-screens? The panel will deal with the realities of playing in the n-screen world and debate how to make the most of it.

John SanGiovanni, Cofounder and VP - Product Design, Zumobi (moderator)

Prof. Cliff Nass, Human Computer Interface, Stanford University

Mark Rolston, Chief Creative Officer, Frog Design

Cliff Kushler, CTO and Cofounder, Swype

10:15 am
Playing in the N-Screen Media World

The number of connected devices per user is steadily increasing. Some users have 10-20 connected screens in the household and the number is only going to increase. How does product and service design leverage this phenomenon? How do monetization strategies change? What are user experience and pricing expectations? How does the value shift between the players? How do developers take advantage of n-screens? The panel will deal with the realities of playing in the n-screen world and debate how to make the most of it.

Paul Palmieri, CEO and Cofounder, Millennial Media

Charlie Herrin, EVP – Technology and Products, Comcast

Jeremiah Zinn, EVP – Digital Products,  MTV Networks

Eric Anderson, VP - Content and Product Solutions, Samsung

Frank Barbieri, SVP – Emerging Platforms, YuMe (moderator)

11:00 am
Break

11:15 am
TBD

12 - 1:30 pm

Lunch

Demonstrations – Visions of the Future

Meet the entrepreneurs who are working on technologies that are going to impact the mobile ecosystem and consumers in profound ways. A fascinating dive into the world of biometrics, display, advertising, retail, sports, and consumer electronics.

1:30 pm

Monetizing the Mobile Network

Traditionally, there has been a direct correlation between the mobile network usage and revenue/profits. However, the significant mobile data consumption, lack of adequate spectrum, ecosystem disruption by the Internet players, and the changing of the consumer expectations have provided the opportunity for operators to rethink how they look at their network from a technology perspective but more importantly from a monetization angle. How will operator grow their revenue base beyond measuring the bits and bytes? What network assets can create long-term sustainable revenues and value? Does the role of the operator morph over time? How does the landscape different in different regions of the world? Do operator CTO and CMO look at the network differently? This expert panel will delve into the “future of network monetization.”

Ken Denman, CEO, Openwave (moderator)

Kris Rinne, SVP - Network and Architecture, AT&T Mobility

Janet Schijns, VP – Business Solutions Group, Verizon Wireless

Mathew Oommen, President, Reliance Industries

Mobile Enterprise and the CIO Prism

Mobile is influencing corporate IT in multiple ways – devices, software, security, collaboration, cloud, and investments. How is mobile enabling the enterprise of tomorrow? How are the various verticals adapting to the confluence of broadband network, tablets and smartphones, cloud, and enterprise software. How is the economics of supporting a mobile worker changing? How does mobile virtualization and BYOD impact the enterprise? How are enterprises using mobile to engage with their customers, shrink supply-chains, and drive more efficiency out of their enterprise dollars. We will look at the evolving mobile landscape through the CIO prism. This panel of enterprise veterans will delve into the significant problems they are solving and how they see mobile evolving in the enterprise?

Suja Chandrashekaran, CIO, Timberland

Abhi Ingle, VP – Advanced Business Solutions, AT&T Wireless

Jerry Batt, CIO, PulteGroup

Subba Rao, CEO, Razi Healthcare

2:30 pm

Mobile Commerce & Payments

Mobile is fundamentally reshaping how consumers spend. Mobile not only influences purchase behavior but also all moments of truth. Mobile is thus helping close the nirvana gap for brands and advertisers who seek to connect advertising to actual transactions. All ecommerce will eventually be mobile. How are the various players preparing for the new world of mobile commerce and payments? NFC has been around for some time but will it really help in moving the money around? Will the killer NFC application be commerce, payments, advertising, loyalty programs, or something else? How do the mobile technologies influence the instore experience? The panel will chaff through the hype and noise in the segment to discuss where the value is, who benefits, who wins, and how long before mobile becomes central to the multi-trillion dollar global spend?

David Messenger, EVP and Head of Online/Mobile, American Express Company

Gibu Thomas, EVP – Online/Mobile, WalMart

Dale Nitschke, former President, Target

Mobile Big Data: The Next Frontier for Innovation, Competition, and Opportunities

Data is everywhere. Mobile Cloud is Booming. Data is driving Knowledge. Having the best knowledge about the user to help drive transaction is simply the most valuable currency of commerce. With so much data being generated, how do we efficiently sift through it and make sense to enable engagement and commerce in a fraction of a millisecond? What is data teaching us about the consumer behavior, future product design, and the competitive landscape?  What are the implications for consumer privacy and data security? What new opportunities emerge due to mobile big data? Who will own the user context and how will the knowledge translate into transactions? How do the app developers leverage big data? Our expert panel of engineers and executives will delve into what will be a key trend for this decade.

Braxton Woodham, Head of Engineering, AVOS

Joe Megibow, VP and GM – Mobile and Analytics, Expedia

Hank Skorny, Chief Strategy Officer, Real Networks

Jay Emmett, GM, OpenMarket, SVP, Amdocs

Ramneek Bhasin, GM and VP, TheFind

3:30 pm
Break

4:00 pm

At the Intersection of Mobile, Social, Location, and Gaming

The worlds of mobile, social, location, and gaming are colliding to create enormous opportunities that impact devices, software, applications, services, cloud, interface design, and consumer expectations. How are entrepreneurs taking advantage of the social and interest graphs, open APIs, fast networks and processors, and different input modalities? Meet the innovators who are creating tremendous value and are at the epicenter of this evolving trend.

Will Hsu, Chief Product Officer, AT&T Interactive

Amit Gupta, SVP and CTO, INQMobile

Tim Chang, Partner, NVP (moderator)

Rob Glaser, Chairman, Real Networks

Designing the Mobile Infrastructure for the Next Decade

Mobile Data demand is doubling every year. For many operators more than 75% of their sales is smartphones. The connected devices segment is growing at a 55% Y/Y rate. With seaming insatiable demand, what are infrastructure leaders doing to help out the operators over the next 10 years. What technologies and products are on the horizon to solve some fundamental data network issues? How far do heterogeneous networks, self-organizing networks, offloading, and all-IP infrastructure elements take us? Sprint’s CTO will put the industry problems (and opportunities) in front of the vendors to figure out how we are going to cope with the mobile data tsunami.

Stephen Bye, CTO, Sprint (moderator)

Ken Wirth, President – End-to-End Network Solutions, Alcatel-Lucent

Mike Mulica, President, Synchronoss Technologies

Manoj Leelanivas, EVP and GM Business Group, Juniper Networks

Mikael Back, VP – Product and Portfolio Management, Ericsson

Erik Moreno, SVP – Corporate Development, FOX Networks Group

5:00 pm

Connected Universe. Unlimited Opportunities.

The connected devices segment is the fastest growing category of the market and is also the most profitable due to higher margins. Connected devices are impacting a rethink in virtually all key verticals – healthcare, housing, travel, entertainment, communication, energy, and others. It is also disrupting the traditional value chains and revenue models. Which segments are yielding the highest ROI? Does computing fundamentally change forever or are connected devices just a part of the PC hub? How does M2M fit into the world of smartphones and tablets? How are businesses and solution providers taking advantage of the growing connected universe? What’s most important for the consumer and what are their expectations on design, pricing, and connectivity? From connected cars to wireless pill bottles, our world is going to change forever. Meet the leaders who are shaping the growing connected devices ecosystem to get insights that will inform your strategy and decide your future revenue streams.

Glenn Lurie, President - Emerging Devices, Resale  & Partnerships , AT&T Mobility

Danny Bowman, President – Connected Devices, Sprint

6:00 - 8:00 pm
Adjourn, Reception, and Networking

Agenda subject to change.

Looking forward to seeing many of you at the event.

Payments – Federal Reserve’s final rule to implement the Durbin Amendment July 18, 2011

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

Payment aficionados know the impact of the Durbin act on the mobile payments space. Overnight, it forced ISIS – the mobile operator consortium to reconsider their options. Our friends at Davis Wright Tremaine put together a good summary of the ruling and what it might mean.

Here are the mobile related highlights:

On June 29, 2011, the Board of Governors of the Federal Reserve (Board) released its final rule (Final Rule) to implement Section 920 of the Electronic Fund Transfer Act (EFTA), as enacted by Section 1075 of the Dodd-Frank Wall Street Reform and Consumer Protection Act—generally referred to as the “Durbin Amendment.”

Among other things, the Final Rule establishes a cap for interchange fees for electronic debit transactions, clarifies the types of payment products that are exempt from the interchange fee cap, and prohibits certain types of activities such as network exclusivity and circumvention and evasion of the interchange fee cap.

The Board also released an interim final rule and request for comment (Interim Final Rule) on an available one-cent adjustment to interchange transaction fees that allows issuers to recoup a portion of fraud-prevention costs.

This advisory briefly summarizes the Final Rule including: key definitions; interchange fee standards and exceptions; standards regarding network exclusivity and routing; remedies; adjustments for fraud prevention activities; and other matters, including an update on the TCF Bank litigation.

The full text of the Final Rule may be accessed here, and the Interim Final Rule here. The full text of the Dodd-Frank Act may be accessed here.

§235.2(f) defines “debit card” and generally tracks the definition in the EFTA. Thus, §235.2(f)(1) generally defines the term as any card, or other payment code or device, issued or approved for use through a payment card network to debit an account, regardless of whether authorization is signature-based, PIN-based, or other means. The term applies regardless of whether the issuer holds the underlying account. This part generally applies to any card, payment code, or device, even if it is not issued as a physical card form. Similarly, the term “debit card” would include a device with a chip that links the device to funds held in an account, such as a mobile phone or sticker containing a contactless chip that enables the cardholder to debit an account. Comment 2(f)-1 clarifies that cards or other payment codes or devices are not debit cards if used only for purposes of authenticating the cardholder and used in addition to a payment card or device.

I. Issuer. §235.2(k). §235.2(k) incorporates the statute’s definition of “issuer” that defines the term as any person who issues a debit card or the agent of such person with respect to the card. §235.2(k) follows the statutory definition, but removes the phrase “or the agent of such person with respect to the card” as being unnecessary. As agents are held to the same restrictions as their principals, the Board did not believe that removing this clause will have a substantive effect. Under the definition, the identity of the issuer is determined by which entity authorized the cardholder to use the card (as opposed to which entity performs issuer processing). Although the definition does not specifically address mobile payments, the issuer in a mobile payments setting is the entity that provided the device that ultimately accesses the underlying funds.

J. Payment card network. §235.2(m). EFTA §920(c)(11) defines the term “payment card network” as (1) an entity that directly, or through licensed members, processors, or agents, provides the proprietary services, infrastructure, and software that route information and data to conduct debit card or credit card transaction authorization, clearance, and settlement, and (2) that a person uses in order to accept as a form of payment a brand of debit card, credit card, or other device that may be used to carry out debit or credit transactions. §235.2(m) follows this definition, with revisions for clarity. Because the interchange fee restrictions and network exclusivity and merchant routing provisions of the Dodd-Frank Act do not apply to credit card transactions, the Board believed it is appropriate to exclude from the proposed definition the reference to credit cards in the statutory definition to avoid unnecessary confusion. No substantive change was intended. The Board did not specifically include emerging payment systems, such as those using mobile phones or PayPal, in its definition.

More to come on mobile payments in the coming days so stay tuned.

Partner Event – RCR Wireless

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

Our friends at RCR Wireless are putting together a mobile event in Bellevue on Aug 2nd. I have the honor of keynoting the event.

When: Tuesday August 2, 2011
Conference: 11:30AM - 7:00PM PST
Where:
Hyatt Regency Bellevue |900 Bellevue Way NE |Bellevue, Washington, USA 98004-4272 | and Live-cast online via RCR TV. (View full agenda)
Conference Agenda Highlights

  • Wireless Market Update: New Innovations to Meet Customer Demand and Spectrum Considerations in the Americas
    Speaker: Chris Pearson, President 4G Americas
  • Mobile Evolution 2.0: Managing for Growth and Profits Speaker: Chetan Sharma, President; Chetan Sharma Consulting
  • Beyond Concierge Service - Hospitality DAS Trends
    Speaker: Seth Buechley, President, SOLiD Technologies
  • Outdoor DAS Design
    Speaker: Mark Reudink, Director DAS Engineering, Crown Castle
  • Presentation: The evolution of public safety and enterprise wireless and mobile networks
  • Panel: Field Force Automation
    Panelists: Debra Bennett, Director, Black & Veatch;
    Andrew Bast, Vice President/General Manager, Mobideo
  • Built for Speed - Solving the Wireless Carriers’ Data Dilemma
    Speaker: Osmo Hautanen, CEO, Magnolia Broadband
  • Mobile Enterprise, M2M and Connected Device Trends
  • Ecosystem Requirements for Next Generation Carrier & Enterprise Networks
  • Monetizing Mobile Broadband Networks

Friends of Chetan Sharma Consulting can avail a $35 discount by using the code partner - http://rcrlocal.com/bellevue/

Hope to see you there.

Partner Event – GigaOm – Mobilize

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Our friends and media partner at GigaOm are putting together another great event this year. Be sure to check it out. Friends of Chetan Sharma Consulting get $100 off.

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All eyes are on mobile. All leaders are at Mobilize.

Mobilize 2011
September 26 & 27 – San Francisco, CA

All eyes are on mobile. All leaders are at Mobilize. Opportunity is everywhere. With the success of mobile web, devices and applications, we’re standing at a precipice of innovation with nearly endless potential. That’s why Mobilize 2011 has doubled in scope, now providing two days of insight and analysis.

See the full speaker list here: http://event.gigaom.com/mobilize/speakers/.

Register today (save $100) and join what’s sure to be a sold-out crowd on September 26 & 27 in San Francisco.

Mobile Future Forward – Partners and Speakers July 10, 2011

Posted by chetan in : Mobile Future Forward , add a comment

Hope you had a good weekend. Summer is finally starting to emerge in Seattle after what has been a long winter. Just a quick update on our upcoming Mobile Future Forward Summit in Seattle on Sept 12th.

First of all, really proud and thankful to our terrific partners

real att_interactive  millennial_media open_market openwave Qualcomm

ericsson_logo                             synchronoss

 

Speaker Update

We have been working hard to get some of the best minds in the mobile business. Current confirmed speakers are:

• Glenn Lurie, President, AT&T Wireless
• Gibu Thomas, SVP - Online/Mobile, Walmart
• Charlie Herrin, SVP - Products and Technology, Comcast
• Steve Mollenkopf, EVP and Group President, Qualcomm
• Danny Bowman, President - Connected Devices, Sprint Nextel
• David Messenger, EVP, Head - Online/Mobile, American Express
• Prof. Cliff Nass, Human Computer Interaction, Stanford University
• Jason MacKenzie, President, HTC-Americas
• Sanjiv Ahuja, CEO, LightSquared
• Erik Moreno, SVP, Fox
• Hank Skorny, Chief Strategy Officer, Real Networks
• Jerry Batt, CIO, PulteGroup
• Ken Denman, CEO, Openwave
• Kris Rinne, SVP - Networks, AT&T Wireless
• Mike Mulica, President, Synchronoss Technologies
• Paul Palmieri, CEO, Millennial Media
• Rob Glaser, Partner, Accel
• Stephen Bye, CTO/VP - Technology & Strategy, Sprint
• Suja Chandrasekaran, CIO, Timberland
• Will Hsu, Chief Product Officer, AT&T Interactive
• Abhi Ingle, VP, AT&T Wireless
• Amit Gupta, SVP and CTO, INQMobile
• Carlos Domingo, CEO, Telefonica I&D
• Matt Oommen, President, Reliance Industries
• Braxton Woodham, Head of Engineering, AVOS
• Manoj Leelanivas, SVP and GM, Juniper Networks
• Dale Nitschke, former President, Target.com
• Ken Wirth, President, Alcatel-Lucent Wireless
• Jeremiah Zinn, EVP, MTV
• Janet Schijns, VP, Verizon Wireless
• Mikael Back, VP - Products, Ericsson
• Mark Rolston, Chief Creative Officer, Frog Design
• Jay Emmet, GM, OpenMarket, SVP, Amdocs
• Bob Gessel, VP/Head of Tech/Network Strategy, Ericsson
• Eric Anderson, VP, Content and Product Solutions, Samsung Eletronics
• Ramneek Bhasin, SVP and GM - Mobile, TheFind
• Cliff Kushler, CTO and Founder, Swype

We are looking at another packed day of insights, inspiration, and networking. Hope to see you there. Super saver expires July 22nd so be sure to register soon.

Thanks and enjoy the summer.

State of the Global Mobile Industry – Half Yearly Assessment 2011 July 7, 2011

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Connected Devices, Devices, Enterprise Mobility, European Wireless Market, IP, IP Strategy, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Payments, Mobile Search, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, Student Paper Contest, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 6 comments

 

 

http://www.chetansharma.com/globalmobileupdate1H2011.htm

Download PDF (56 pages, 3 MB)

The big picture

The global mobile industry is the most vibrant and fastest growing industry. We expect the total revenue in the industry to touch approximately $1.3 Trillion in 2011 with mobile data representing 24% of the mix. Global Mobile Data revenues are expected to eclipse $300 Billion for the first time in 2011. It is also the first year in which non-messaging data revenues will make up the majority of the overall global data revenues at 53%.

We expect the total number of subscriptions to exceed 6 billion by the end of 2011. The first 1 billion took over 20 years and this last one is going to take only 15 months. The primary growth drivers are India and China which are cumulatively adding 75M new subs every quarter. Indian and China are also entangled in the race to the billion. At the end of Q2 2011, China was ahead by 50M but India is adding subscriptions at faster rate and is likely to eclipse China before Q2 2012. By then, both nations are expected to exceed 1 Billion in total subscriptions making up 31% of the global subscriptions.

In Q1 2011, US became the first major market to exceed the 50% mark in smartphone sales. The global figure stands at approximately 26%. Some operators expect 90% of their devices sales to be smartphones by the end of the year. In terms of the actual smartphone penetration, we expect the US market to eclipse the 50% mark in 2012.

China leads in the number of subs but US dominates in both total and data revenue. A number of emerging nations are now in top 10 – Brazil, India, Russia, Indonesia, Pakistan, Mexico while once dominant – Korea, UK, Italy, Germany have dropped off or slipped in rankings.

The number of mobile operators with more than $1B in data revenues will increase to 47 in 2011. This number was only at 13 in 2005.

Japan continues to be the leader in mobile data with NTT DoCoMo, KDDI, and Softbank Japan ahead of the pack in terms of mobile data revenue and data as a % of total ARPU. In 2011, it became the first major market to have more than 50% of its mobile revenue from data services. Next, Australia and the US have made good inroads in the last two years. In fact, if we look at the overall data revenue, US is much further ahead than any nation due to the size of the market.

While India has the highest subscriber growth rate in the world right now, the revenue generating opportunity remain down right anemic compared to other major markets with average dropping down to $3.50 in overall ARPU. Even with significant subscriber base, there is going to be a general lack of opportunity in the market for the next couple of years relative to other markets.

Mobile Trends for 2011

1.Total Global Subscriptions to hit 6 Billion

–India and China racing to a billion a piece

2.Total Global Mobile Revenues to hit $1.3 Trillion, almost 2% of Global GDP

–Top 10 operators control 43% of the global mobile revenues

3.Total Global Mobile Data Revenues to eclipse $300 Billion

–Non-messaging data now owns 53% of the global mobile data revenues

4.Mobile Devices are now exceeding traditional computers in unit sales + revenue

–Majority of the device sales in the US are now smartphones. Device Replacement is shrinking

5.Mobile Broadband (4G) is being deployed at a faster rate than previous generations

–Over 1 Billion broadband connections by 2011

6.Global Mobile Apps revenue has shifted to off-deck

–The decline is directly proportional to the increase in smartphone penetration by region

7.All major markets are consolidating with the top 3 players at 85% of the market

–Regulators will have to be more prudent and proactive about managing competitiveness and growth

8.Mobile Data Traffic will be 95% of the global mobile traffic by 2015

–Many countries are facing spectrum exhaust in the next 5 years

9.Connected device segment is growing at the fastest pace

–Operators will have to quickly adapt their strategies to stay relevant in this segment

10.Several multi-billion dollar opportunity segments are emerging

–Mobile Advertising, Mobile Commerce, Mobile Wellness, Mobile Games, and Mobile Cloud Computing to name a few

11.Mobile Ecosystem has become very dynamic and unpredictable

–Apple, Google, Amazon, and Facebook have become the most important revenue generating mobile platforms

12. There will be more changes in the next 10 years than in the previous 100

– The value chains will keep disrupting every 12-24 months by the new players and business models

13. Intellectual Property has become a key component of long-term product strategy

– Top 20 control 1/3rd of the overall mobile patent pool

Devices

Apple has had the tablet space to itself. Thus far the response from the competitors has been tepid esp. on the pricing dimension. Apple has had such a mastery over the supply-chain and months ahead of the competition that by the time they figure out details, Apple already locks up the pricing advantage for the cycle. OEMs try to catch-up on the features but can’t do on the margins. OEMs can grow the pie by bringing products at a better price points that helps attract different demographics to the mix. Microsoft can make good inroads into the space with its Win8 tablet release in 2012 but it will be again in a catch-up mode as the iOS ecosystem will be even more robust by then. The cheaper Android tablets will do well in the market. As expected, tablets will pretty much eliminate the need for netbooks and are starting to eat into the desktop/laptop revenue.

Nokia and RIM are under severe market scrutiny as investors and developers leave in droves. Lack of product planning and execution has left their market share in disarray. Nokia’s valuation has been cut into half while the newcomer HTC edged past the industry giant in a remarkable story of the year. Nokia’s release of N9 shows the engineering and creative design depth but a lot is riding on the first generation of Nokia Windows Phones. While the market hasn’t shown much appetite for Windows phone thus far, a good family of devices might be able to slow the loss trajectory and position the combined team for the up-for-grabs 3rd spot in the ecosystem. HP’s acquisition of Palm is finally bringing some new products to the market but the lack of an effective ecosystem means lack of traction in 2011. Given that the computing is shifting to mobile devices, we can expect some of the weaker desktop/laptop players will exit the industry.

Tablets are primarily being used in the WiFi mode because the primary use case is indoors and WiFi gives a better (and cheaper) user experience. Once operators start to roll out user-friendly family data plans across multiple devices, we can expect the cellular activation go higher but will still be dominated by WiFi overall.

The number of connected devices per subscriber and per family will continue to increase over the course of this decade. As the cost structure and margin profile for these devices will be different, we are likely to measure performance of various operators using margin analysis for e.g. while the ARPU for connected devices is 5-10 times lower than the postpaid subscribers, the margins are typically higher due to lower costs of sales, marketing, support, and subsidy. As such the overall impact is dilutive ARPU but higher margins. So, instead of focusing on just the ARPU, the efficiency of operators will be measured in how well they maintain average margin per user (AMPU) and average margin per connection (AMPC).

Managing the data growth

As a result of the data tsunami, there are two types of opportunities that are being created, one that take advantage of the data being generated in a way that enhances the user experience and provides value and the other in technologies that help manage the traffic data that will continue to grow exponentially.

To be able to stay ahead of the demand, significant planning needs to go in to deal with the bits and bytes that are already exploding. New technical and business solutions will be needed to manage the growth and profit from the services. Relying on only one solution won’t be an effective strategy to manage rising data demand. A holistic approach to managing data traffic is needed and our analysis shows that the cost structure can be reduced by more than half if a suite of solutions are deployed vs. a single dimensional approach and thus bringing the hockey stick curves of data cost more in line with the revenues and thus preserving the margins.

The decision making process within the operator organizations will need to be streamlined as well. Operators should also consider creating a senior post which focuses on both the cost side and the solution side so they can devise and institute a sustainable long-term policy and keep the margins healthy.

Competitive landscape

The Rule of Three is evident in all major markets. While the percentage market share might vary, on an average, the top 3 control 93% of the market in an given nation. It doesn’t matter if the market is defined by “controlled regulation” like in China, Korea, and Japan or if it is “open market” driven in markets such as the US, UK, and India. Eventually, only top 3 operators control the majority of the market. There are niches that others occupy but they are largely irrelevant to the overall structure and functioning of the mobile market.

Markets such as US and India experienced similar competitive environment in their hyper-growth phase. For the US, this phase was in the nineties-mid-2000s while India has been experiencing the similar environment in the last 3-4 years. In both cases, at the start there are 5-6 players with no more than 25% market share but higher than 10% of the mix but gradually the market forces enable consolidation. Over a period of 18 years, US is settling into a “top 3” operator market. India’s brutal price wars are going to trigger the consolidation in the next 12-24 months and will eventually settle into a structure similar to other markets.

The competitive equilibrium point in the mobile industry seems to when the market shares of the top 3 are 46%:29%:18% respectively with the remaining 7% being allocated to the niche operators. To achieve some semblance of equilibrium in the market the top operator shouldn’t have more than 50% of the market share and the number three player shouldn’t have less than 20%. This helps create enough balance in the market to derive maximum value for the consumer.

Mobile operators will face some hard choices in developing and protecting the role they want to play in a given region and the ecosystem at-large. The strategy they choose will have a direct impact on the expected EBITDA margins, investment required over the long-haul, how investors view them, and on the competitive landscape of the country. Given, the fast pace of globalization, new rules and trends might emerge over the course of this decade that further define “communications” and “computing” as we know it.

Apps and Services

As expected, mobile commerce and payment discussions are dominating the ecosystem. There is clearly a lot of investment and marketing dollars being spent. However, the traditional payments networks are largely intact. The new opportunities are being built on top of the existing payment platforms with convenience (Square) and offers and advertising (Google Wallet, ISIS, Groupon). Beyond payments, mobile is getting ingrained into every vertical and every facet of our lives – from healthcare to education, from energy to entertainment, from communication to socialization. And we are in the early innings of figuring out the business models, ecosystem leaders, user behavior, regulatory needs, and the overall impact on society.

Ecosystem Dynamics

It is very clear that the ecosystem dynamics can change very quickly, one just can’t take the competitive and friendly forces for granted. In the past, the silos and segments were clearly defined with little overlap. However, over the course of last couple of years, players have been migrating and surfing in segments across the board - from Apple to Visa, from P&G to AT&T, from Facebook to Time Warner, from Google to Best Buy, every company wants to capture the mindshare and piece of the consumer’s pocketbook. The fine line between partners and competitors can get obliterated in a quarter. Apple is competing with Cisco, Comcast is going after AT&T’s business, Visa and Verizon want to be the payment channel of choice, Amazon is gunning for Microsoft’s enterprise business. One product launch, one acquisition, can change the game in an instant.  And this is only the beginning.

Mobile is fundamentally reshaping how we as consumers spend from housing and healthcare to entertainment and travel, from food and drinks to communication and transportation. Mobile not only influences purchase behavior but also post purchase opinions. When the share button is literally a second away, consumers are willingly sharing more information than ever before. Mobile is thus helping close the nirvana gap for brands and advertisers who seek to connect advertising to actual transactions. The long-term battle is however for owning the context of the users. Having the best knowledge about the user to help drive the transaction is the simply the most valuable currency of commerce.

Mobile Future Forward

We will be discussing the global mobile ecosystem – the challenges and the opportunities at our annual mobile thought-leadership summit – Mobile Future Forward - brought to you in partnership with our terrific partners – Qualcomm, Millennial Media, Real Networks, AT&T Interactive, Synchronoss Technologies, OpenMarket, Ericsson, and Openwave. Hope to see you in Seattle on Sept 12th.

Some of the distinguished guests include:

Abhi Ingle, VP – Advanced Mobility, AT&T Wireless; Amit Gupta, SVP and CTO, INQMobile; Bob Gessel, VP/Head of Technology and Network Strategy, Ericsson; Braxton Woodham, Head of Engineering, AVOS; Carlos Domingo, CEO, Telefonica; Charlie Herrin, SVP - Products and Technology, Comcast; Dale Nitschke, former President, Target; Danny Bowman, President - Connected Devices, Sprint Nextel; David Messenger, EVP, Head - Online/Mobile, American Express; Erik Moreno, SVP, Fox; Gibu Thomas, SVP - Online/Mobile, Walmart; Glenn Lurie, President, AT&T Wireless; Hank Skorny, Chief Strategy Officer, Real Networks; Janet Schijns, VP, Verizon Wireless; Jason McKenzie, President, HTC-Americas; Jay Emmet, GM, OpenMarket; Jeremiah Zinn, EVP, MTV; Jerry Batt, CIO, PulteGroup; John SanGiovanni, Cofounder, Zumobi; Ken Denman, CEO, Openwave; Ken Wirth, President, Alcatel Lucent Wireless; Kris Rinne, SVP - Networks, AT&T Wireless; Mark Rolston, Chief Creative Officer, Frog Design; Matt Oommen, President, Reliance Communications; Mikael Back, VP of Products and Portfolio Management, Ericsson; Mike Mulica, President, Synchronoss Technologies; Paul Palmieri, CEO, Millennial Media; Prof. Cliff Nass, Human Computer Interaction, Stanford University; Rob Glaser, Partner, Accel; Sanjiv Ahuja, CEO, LightSquared; Stephen Bye, CTO, Sprint; Steve Mollenkopf, EVP and Group President, Qualcomm; Subba Rao, former CEO, Tata DoCoMo; Suja Chandrasekaran, CIO, Timberland; Will Hsu, Chief Product Officer, AT&T Interactive

More information at http://www.mobilefutureforward.com

Your feedback is always welcome.

Thanks and have a great 2H 2011.

Chetan Sharma

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 2011. The next Global Wireless Market update will be issued in Jan 2012.

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