Pacific Northwest Wireless Summit Next week January 12, 2009
Posted by chetan in : 3G, 4G, AORTA, BRIC, Carriers, European Wireless Market, Mobile Advertising, Mobile Applications, Speaking Engagements, Wireless Value Chain, Worldwide Wireless Market , add a commentThe PNWS is shaping up to be a great event.
In case, you haven’t registered yet (and are in the pacific northwest area), it will be a good idea. The event starts with a Leadership Summit on Sunday which is an invite only forum for 50 CEOs, presidents, CFOs, CTOs and visionaries from small and large successful wireless companies as well as decision makers from government and academia from Canada, US, UK, China, and other parts of the world. I will be moderating a panel on “Global Opportunities” with
Dr. Wang Jing (Secretary General, TD-SCDMA Forum, China)
Tony Fish (Co-founder, AMF Ventures, UK)
Laurence Dunbar (Partner, Fasken Martineau DuMoulin LLP, Canada)
There will be a report published on the days proceedings, so will have more to share later on.
Next day, I will participate on the panel on Mobile Advertising and Consumer Insights, presenting mobile advertising trends in 2009 and then going in the roundtable moderated by our friend Michael Bidu, Executive Director of WINBC, the man behind this event. Other panelists will be:
Olivier Vincent, CEO, Canpages (http://www.canpages.ca)
Simon Backer, CEO, Wireless Image (http://www.wireless-image.com)
Gowri Shankar, SVP Sales and Business Development, SinglePoint (http://www.gosinglepoint.com )
Looking forward to an engaging couple of days.
Mobile Industry Predictions 2009 January 1, 2009
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Enterprise Mobility, European Wireless Market, Gaming, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Privacy, Speaking Engagements, Strategy, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 commentsMobile Industry Predictions 2009
http://www.chetansharma.com/MobilePredictions2009.htm
First things first. From all of us at Chetan Sharma Consulting, wish you and yours a very happy and prosperous 2009.
Before we get into what’s to come, let’s do a quick wrap-up of the year that was.
While 2007 was remembered as “the year of the iPhone,” in 2008, though iPhone and Appstore again dominated the headlines as “Touch” became the new black, iPhone shared the spotlight with Android and the resurgent RIM. The deafening roar of “Openness” that started to bubble up during Q407 permeated the ecosystem in 2008. Responding to the iPhone, OEMs raced to introduce Touch phones - Instinct, Armani, Storm, N2, Glimmer, Vu, G1, Diamond, Dare, N97, 5800, and others.
Apple reached its 10M goal a full quarter early and Gphone’s 1M number was impressive. The Clearwire deal was consummated though it meanders through the clouds of uncertainty. Blyk continued to defy expectations. We made significant headway in energizing the mobile advertising sub segment but the tough problems of privacy, education, control, fragmentation, and user experience remain. LBS picked up steam and mobility started to get into the alternate consumer device universe which with the help of Amazon kindle and PNDs have started a new chain of AORTA devices.
In terms of actual numbers, the mobile industry exceeded 1 Trillion USD in revenues for the first time with services revenue making up 80% of the mix and 20% being contributed by infrastructure, handsets, and misc. Several operators are now exceeding $2B/quarter in data revenues.
Several subscription milestones throughout the year: 50% penetration, almost 4B worldwide, 600M China, 300M India. India and China both added more than 100M subs in 2008. As expected, 3G crossed the inflection point in the western markets (30%+ penetration) while in Korea and Japan, it was getting hard to find people without 3G (85%+ penetration). Mobile web penetration is above 25% and is becoming quite significant.
Thanks to the iPhone, we seem to have settled on sub-$200 smartphones with race to $150 and $100 on the cards. Flat-rate data subscriptions went above 10% in the western markets. Over 20% of the global service revenues are not dependent on data while non-SMS revenues surged past 40%. With the advent of Femto and UMA, we might see a new front in the battle for the digital home, esp. as bundling and quad-play offers become common place and convergence starts to take different shapes, forms, and business models. Carriers are starting to worry about mobile data usage and looking for alternate strategies and business models. Chinese OEMs started to become more dominant and started to win some major accounts. Don’t be surprised by a major acquisition by them in 09.
Among other events of significance: Mobile TV continued to suffer from highpricendititis, Helio shut down, China and India delayed 3G, WM got updated as MS got behind, Yahoo cemented some impressive operator deals as GYM got more active in mobile, Microsoft entangled Yahoo in a mating dance, Mobile Open got into the industry physce, 700 MHz auction drama ensued, Beijing Olympics rocked, SMS handed the presidency to Obama, Whitespaces and FCC tangled, LTE dominated, UMB died, Admob exponentiated, M&A slowed, IP scuffles continued, over 1.2B new devices shipped, Nokia sold more than 100M devices in each quarter, Samsung surged, Motorola pondered, AT&T iJoyed, Vodafone said Namaste India, US edged past Japan in mobile data revenues, DoCoMo continued to dominate the mobile data revenues rankings, India edged past US in total mobile subscribers, Mobile Facebook spread, Twitter tweeped, Symbian went open source, Sequoia panicked, INQ launched, Economy tanked, WalMart started selling iPhone, Palm got a lifeline, Change was in the air.
We covered these is much detail in our regular industry research notes, books, whitepapers, blog posts, speeches, panels, and more. Look forward to continuing the conversation this year.
2009 will also be a pretty eventful year from several perspectives: business models, user experience and expectations, ecosystem posturing, disruption, and friction. How are things going to shape up? What will be hot and what will fade into oblivion? How will competition shape up the new sub-segments?
We put some of the questions to our colleagues in the industry. We were able to glean some valuable insights from their choices and comments. This survey is different from some of the others in the sense that industry movers and shakers participate. Executives and insiders (n=200) from leading mobile companies across the value chain and around the world opined to help us see what 2009 might bring.
Six names were randomly drawn for one of our three books released in 2008 (Mobile Advertising, Enterprise Mobility and Wireless Broadband)
The winners are:
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Akio Orii, CFO and VP, Toyota
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Declan Carew, New Product Strategy Manager, Vodafone
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Helen Keegan, Consultant, Beep Marketing
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Rich Begert, CEO, Singlepoint, and
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Russ McGuire, VP, Sprint Nextel
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Jonathan Ebinger, General Partner, Blue Run Ventures
Congrats and Thank You.
Now onto the survey results. The makeup of the respondents below:
Will we see a pull-back in mobile data spending globally/in the US?
The wireless data industry has been somewhat unharmed so far (though OEMs and Infrastructure providers are bearing the brunt of the economic storm). Flat rate pricing, smartphones, 3G networks, better UX are all helping in the continued surge of mobile data consumption and hence revenues. Most expect that though we might see some scaling back in mobile data spending, overall, the growth will continue. The global markets will be slightly better off than the US.
Will Android handset sales exceed iPhone’s in 2009?
The overwhelming majority thought that iPhone will continue to dominate Android in 2009 though 2010 could be a different story. Android has had a good start and if the number of handsets keep on increasing with more carriers carrying it in more countries, Android might not exceed but can come awfully close.
Mirror, Mirror on the wall, who will be the most open of them all?
“OPEN” was the biggest buzzword of 2008 though it means different things to different people. Almost everyone thinks, Google is likely to set the agenda on “open” for others to follow.
Will Apple launch new iPhone models in 2009?
The answer is yes but will they be just minor upgrades or shake-the-market new models. With Android, Nokia, and RIM breathing down its neck, Apple will need more than just upgrades to maintain the limelight.
Will Mobile Advertising see a rise in ad-spend in 2009?
There might be some slow down but mobile advertising ad-spend will keep on increasing. Targeting capability is increasing and CPMs are coming down making for a more efficient mobile channel for advertising. In our own work, we have seen brands fall into two camps: one who are scaling down on inefficient channels like print and radio and moving money into digital including mobile and the others who don’t have quite the appetite for mobile and want to keep investing in channels that they are most familiar with.
Will India and China launch nationwide 3G in 2009?
After many years of delay, the two powerhouses set to launch 3G in 2009. China with TD-SCDMA/WCDMA and India with WCDMA are set to doll out some of the largest contracts seen in the industry.
Will Mobile Payments get any traction in North America and Western Europe?
The plans for mobile payments launch will get pulled back a bit due to the economic crisis. Limited rollouts and trials to continue. Some progress will be made in international mobile remittances.
Will Microsoft launch its own mobile phone?
Will they, Won’t they? How can they not? The probability increased from last year for an Mphone coming to a store near you. But, with the boeingification of Microsoft, it is hard to get any decisions to the market quickly.
Will Clearwire meet the 1.3 million subscriber target in 2009?
The economic climate might force slow-down of expansion and thus the optimistic subscriber forecasts could be impacted.
Will Mobile Open Source mitigate fragmentation?
Not a clear cut answer. Depends on how other versions of Android phones do in the market and if the application development remains a challenge across the Android and Symbian family of devices.
Will cable companies make a major play in wireless in 2009?
Quad-Play is the name of the game. Cable companies have invested half-heartedly thus far. 2009 might be the year they move in aggressively.
Will Microsoft buy RIM?
RIM has become too big and powerful to be consumed by Microsoft easily but desperate times call for desperate measures.
Will Obama’s administration have a major impact on network neutrality and open networks debate?
Not a priority for now. No high expectations, just regular bureaucratic grind.
Will carriers start launching Apple/Android style appstores?
Opinions remain divided. I think most are tempted to build but will outsource the development.
Will Microsoft make windows mobile free to OEMs?
Android (and to some extent Symbian) has pushed Microsoft in a corner. Will it preempt the demise of its pricing strategy? Reduction in price might be the safest bet at this time.
Will the smartphone penetration hit the inflection point in the western markets?
We are getting to that inflection point. 2009 seems to be the year with major implications for the ecosystem.
Will UMA/Femtocells cement their place in the mobile ecosystem?
As 3G networks get burdened by data usage, carriers will look to making UMA and Femtocells as a critical piece of their network strategy
Will consumer privacy and data security rise to be one of the important issues of 2009?
Privacy? What Privacy? Another celebrity mishap might pull this issue to the front burner.
Despite conventional wisdom, what will not happen in 2009?
There were many. Sampling - Microsoft will not buy Yahoo. US Cellular will not be sold. Global economy will not recover in 2009. LTE won’t be commercially deployed. India and China will struggle to get substantial progress with 3G. Motorola will not breakup. Nortel will not disappear. 2009 won’t be the year of mobile advertising.
It is hard to cover the mobile industry in 20 questions. As pointed out by our panelists, there are a number of other issues and opportunities that will help shape our ecosystem - monetization of social networks, the fight for mobile advertising dollars, continued impact of globalization, security and privacy, NFC, IMS, VoIP, enterprise apps beyond email, battery improvements, new interaction modalities, health risks of RF radiation, OpenSocial, GF/FB Connect, Comes with Music, Mobile Widgets, Mobile 3.0, LTE, MIDs, Off-portal, Embedded Mobile, M2M, and others.
However, be rest assured, we will be tracking these and much more throughout the year and sharing them through various channels.
Thanks again to everyone who contributed. We will be calling on you again next year. We are clearly living in “interesting times” with never a dull moment in our dynamic industry. It has been a terrific year for us here at Chetan Sharma Consulting and we are looking forward to 2009 and seeing many of you along the way.
Your feedback is always welcome.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
2009 Events December 28, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentHere are some of the events I will be participating in starting Jan 09.
On the 18th (Jan), I am heading to beautiful Vancouver BC to participate in the Leadership Summit at the Annual Pacific Northwest Wireless Summit that brings some of the noted executives in the mobile industry for an afternoon of pondering and contemplation. On 19th, I will participate in the day long conference on mobile. I participated in last year’s event and enjoyed it. In fact, launched our Mobile Advertising book at this event, so fond memories.
On 27th Jan, will be going south to Palo Alto to first mingle with the staff at PARC (XEROX) and then moderate a panel on “Location Based Advertising” for the Wireless Communications Alliance (WCA) SIG for LBS. We will be finalizing the program early Jan so stay tuned, should be a great discussion.
Then at CTIA in early April, will be joining my friend and colleague from across the pond - Ajit Jaokar to participate in the discussion on the BRIC markets. Conference agenda is shaping up well. More details to come.
Later in April, Ajit is also putting together “Mobile Web Mega Trends” Conference series with the first one being in Singapore. More details as they become available. Be sure to check them out.
2008 - year in review December 26, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, European Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment2008 has been a great year for the mobile industry with several key milestones. We will be detailing them in an another post. For this one, just wanted to look back and see how we did in our last year’s predictions survey where we invited the industry insiders to predict the events that will shape the industry this year. The full discussion is here.
We will be presenting our 2009 findings next week. For now, let’s briefly look at the year that was:
1. Will Google introduce a Google Branded Phone in 2008?
Will it? Won’t it? 44.5% gave it a 75% or higher chance of happening while 40% thought it ain’t happening. GPhone is a temptation Google will find hard to resist though a lot will depend on how various initiatives and partnerships shape-up on the ground. In any case, expect another major announcement in the next 2-3 months.
Google did announce the G1 and it launched in Sept. Even though it was launched by T-Mobile USA, in the industry it was known as the Google Phone with Google logo prominently embedded on the phone. Look for several Android launches in 2009.
2. Will Google play to win in the 700MHz Spectrum Auction?
Google has played the spectrum chess game effectively. Almost 50% respondents gave it a 75% or higher chance of Google winning the bid. Though expectations are high, Google is unlikely to play to win. Services business is not their cup of tea, they could still fund the Clearwire-Sprint deal but that investment can be spent differently to get better end-results, i.e. mobile ad revenue.
Google has been pretty savvy with its mobile strategy pushing the ecosystem to its tune. We didn’t think that Google was in it for the win, it just wanted to muddy the waters a bit to makes things interesting. As predicted, it also invested in the Clearwire deal.
3. Will Microsoft launch its own mobile phone?
Unless Google comes out with GPhone, Microsoft will stay content with its operator distribution strategy. 63% of respondents gave it less than a 25% chance of Microsoft releasing their own phone. If GPhone comes out and gets some traction, expect Microsoft to get its “fast follower” strategy into high gear.
Our panel didn’t give Mphone much of a chance. Will it happen 2009? well, probability just got higher.
4. Will Mobile Payments get traction in North America and Western Europe?
Only 9% thought it is a sure bet for 2008. True mobile commerce hasn’t really started in the western world. While there are significant movements, 2008 will just be a “lay the groundwork” year for mobile payments.
We didn’t think so. Groundwork was laid but not much real traction.
5. Will WiMAX regroup from its setbacks?
Only 35% gave it a 75% or higher chance (of WiMAX resurrecting itself esp. in the US in 2008). A lot depends on how Mr. Hesse deals with Sprint’s WiMAX business. Indications are there will be a deal with Clearwire to off-load the risks via some external investment (Google?).
The Clearwire deal did happen and as predicted Sprint decided to offload the business with the help of external investments. The success of the venture is still an open question.
6. Will Helio survive 2008?
Almost 70% respondents thought Helio won’t make it. Given the flameout of some of the prominent new-generation MVNOs, it is hard to see how Helio will see 2009. It will all come down to how persistent is SK Telecom. Earthlink doesn’t have the bank balance to keep funding this initiative.
Writing was on the wall and our panelists called it out explicitly.
7. Will Verizon truly open-up its garden for third-party visitations?
Only 5% thought it is a sure bet for 2008. Verizon’s open posturing was more to ward off any regulators and to improve its image. There is unlikely to be any meaningful progress on this front this year.
“Open” was one of the biggest buzzwords of the year. For Verizon, it was more of a posturing game.
8. Will 2008 be the inflection year for Mobile Advertising?
42% gave Mobile Advertising a 75% or higher chance for rapid growth. Market will mature, more consolidation, some privacy gaffes but overall things are looking up for mobile advertising.
While the market matured a lot, consolidation didn’t really take place this year, perhaps in 2009.
9. Will Femto-Cells gain any significant momentum in 2008?
It will be an introduction and experimentation year, so no significant traction is expected. Over 52% thought Femto-Cells will be just a buzz word in 2008.
It was primarily a buzz word with Sprint launching Femto Cells and T-Mobile pushing hard on the @Home strategy. Given the pressure on the 3G networks, Femtocells will become an integral part of the carrier strategies in 2009.
10. Will Nokia be able to extract iPhone-style rev-share from carriers in 2008?
Less than 20% thought Nokia will be able to do an Apple when it comes to rev-share arrangements. For OEMs, going direct to the consumers was considered treachery to the sacrosanct relationship with the operators. Until Apple showed up with iPhone. Now, Nokia is putting its services strategy in motion and is building a direct relationship with the consumers worldwide and it has a good shot at pulling it off though it will be a long haul.
Well, Nokia didn’t and Apple backed off their rev-share scheme coming back to the tried and tested model of the subsidy model.
11. Will Palm survive 2008?
Only 8% gave it a 100% chance of surviving 08 as an independent entity. It will be difficult for Palm to stay in a status-quo mode. They desperately need a hit device that can give them some breathing room. Given all the operational and strategic problems the company is having, a sale is likely.
This is probably the only prediction that we got wrong though we came pretty close. Palm is still struggling and in spite of the $100M investment late in the year and the announcement of Nova coming up at CES, the company is still struggling. It has got some breathing room but desperately needs a hit, a big hit.
12. Will iPhone truly open up?
Over 45% thought iPhone won’t open-up in any meaningful way. Apple has built-up one of the most profitable closed empires in the digital world. Are they about open things up? While the iPhone SDK is scheduled for early 08, don’t hold your breath on accessing the critical native APIs.
Well, “Openness” is in the eyes of the beholder. The Appstore has been a super hit and has become a standard for the industry such that everyone is rushing to copy the model. Apple opened up but lot of work still needs to be done.
13. Will there be more unsubsidized devices introduced in the US market in 2008?
Almost 49% thought we are likely to see another unsubsidized device in the US market this year. Nokia is looking to go direct and some GSM handset manufacturers are likely to entertain the idea of testing the market with unsubsidized devices.
The Apple model changed and that was pretty much the death knell to the unsubsidized device model in the US.
14. Will Mobile TV move the needle in 2008?
Almost 70% thought mobile TV won’t make much of a difference in 08.Though AT&T is slated to introduce MediaFLO to join Verizon in the Mobile TV services market, lack of devices and better pricing models will hinder wide adoption in 2008. However, downloadable video and VOD content will experience significant growth.
Mobile TV suffers from highpricenditis and users stayed away as expected.
15. Will Android make a dent in handset shipments in 2008?
Only 15% gave it a more than 75% chance this year. It is going to take some time for Android plans to mature and materialize. Don’t see any material impact in 08.
1M+. Enough for the buzz but not making any material dent into the market share. 2009 could be different.
Request for Participation: 2009 Mobile Industry Predictions December 9, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, Indian Wireless Market, International Trade, Japan Wireless Market, Location Based Services, Wireless Value Chain, Worldwide Wireless Market , add a commentGreetings.
2009 is upon us. We are doing our annual Mobile Industry Predictions survey (20 questions) to gather insights from the collective brain trust – our readers, friends and colleagues around the globe. I am hoping you will help us out by giving us your thoughts and insights. You can answer any or all questions. All answers are kept confidential. Last year’s survey results here.
If you leave your email address, we will enter you in the drawing for winning a signed copy of one of our three books released in 2008.
- Mobile Advertising by Chetan Sharma, Joe Herzog, and Victor Melfi, John Wiley & Sons
- Wireless Broadband by Vern Fotheringham and Chetan Sharma, IEEE Press and John Wiley & Sons
- Enterprise Mobility: Applications, Technologies, and Strategies, IOS Press
We will share the results during the first week of 2009.
Please click here to start responding. If the link doesn’t work for you, please let us know.
Survey ends Dec 28th.
The questions are:
1. Will we see a pull-back in mobile data spending globally?
2. Will we see a pull-back in mobile data spending in the US?
3. Will Android handset sales exceed iPhone’s in 2009?
4. Mirror, Mirror on the wall, who will be the most open of them all?
5. Will Apple launch new iPhone models in 2009?
6. Will Mobile Advertising see a rise in ad-spend in 2009?
7. Will India and China launch nationwide 3G in 2009?
8. Will Mobile Payments get any traction in North America and Western Europe?
9. Will Microsoft launch its own mobile phone?
10. Will Clearwire meet the 1.3 million subscriber target in 2009?
11. Will Mobile Open Source mitigate fragmentation?
12. Will cable companies make a major play in wireless in 2009?
13. Will Microsoft buy RIM?
14. Will Obama’s administration have a major impact on network neutrality and open networks debate?
15. Will carriers start launching Apple/Android style appstores?
16. Will Microsoft make windows mobile free to OEMs?
17. Will the smartphone penetration hit the inflection point in the western markets?
18. Will UMA/Femtocells cement their place in the mobile ecosystem?
19. Will consumer privacy and data security rise to be one of the important issues of 2009?
20. Despite conventional wisdom, what will not happen in 2009?
Please feel free to pass this on to anyone who might be interested or has something to say.
Thanks and Have a safe and wonderful holiday.
For a prosperous and strong 2009.
Kind regards,
Chetan Sharma
Now it’s Nokia’s turn December 2, 2008
Posted by chetan in : 3G, 4G, AORTA, Carriers, Devices, Worldwide Wireless Market , add a comment
to challenge its friendly rival - the iPhone with N97. The device looks pretty sharp and easy to use. it is sleek and appealing. The problem might be the price of the device - currently at almost $700 w/o subsidies. We know that $200 is the bar set by iPhone and other smartphones have been in the same range ever since. Even with subsidies, N97 will probably be in the $300-$400 range, not a mass-market price. Will it meet the fate of the Nokia Communicator or will Nokia throw in some subsidy dollars to bring the device down to the competing levels.
Also, Nokia as usual will be targeting Europe first and US probably won’t see the device until 12-18 months later, clearly a missed opportunity. They need to learn from Apple how to launch devices and capture the buzz and momentum. N97 looks like a serious challenge thus far to iPhone but other factors might thwart its success.
Seeking your participation November 23, 2008
Posted by chetan in : 3G, 4G, AORTA, US Wireless Market, Worldwide Wireless Market , add a commentLast year we did our end of the year predictions for 2008. We will get to how we did in an another post later this week, but, wanted to take this opportunity to request input for the questions for this year. What’s on your mind? What questions would you like to get answered for 2009? What trends do you see? Which companies are you most interested? Which products?
Let your imagination and help us out.
For your help, we will add your name to the drawing where you can win a signed copy of one of our three books released this year.
For reference, last year’s questions were:
1. Will Google introduce a Google Branded Phone in 2008?
2. Will Google play to win in the 700MHz Spectrum Auction?
3. Will Microsoft launch its own mobile phone?
4. Will Mobile Payments get traction in North America and Western Europe?
5. Will WiMAX regroup from its setbacks?
6. Will Helio survive 2008?
7. Will Verizon truly open-up its garden for third-party visitations?
8. Will 2008 be the inflection year for Mobile Advertising?
9. Will Femto-Cells gain any significant momentum in 2008?
10. Will Nokia be able to extract iPhone-style rev-share from carriers in 2008?
11. Will Palm survive 2008?
12. Will iPhone truly open up?
13. Will there be more unsubsidized devices introduced in the US market in 2008?
14. Will Mobile TV move the needle in 2008?
15. Will Android make a dent in handset shipments in 2008?
Feedback and suggestions most welcome. Thanks very much in advance.
Recap of "Tomorrow’s Wireless Future" November 20, 2008
Posted by chetan in : 3G, 4G, AORTA, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, International Trade, Japan Wireless Market, Location Based Services, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Smart Phones, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 commentsTomorrow’s Wireless Future
One of the reasons I love what I do is that I get a chance to work with really smart people around the world on some cutting-edge projects. Additionally, I get the opportunity to interview some of the brightest minds in the industry. This year has been particularly rewarding. I probably did close to 25 events which were a mix of keynote addresses, panel moderation, panel participation, university lectures, and other speeches. Add in the 20+ client project visits and it all translates into more than a trip every other week to the SeaTac airport. My suitcase has been permanently positioned at the doorstep in my house.
Earlier this week, I had the distinct honor of moderating a panel of some of the most eminent senior wireless research scientists and CEOs of wireless companies from Finland where we explored the future of the wireless landscape from user interface to reduction in carbon footprint to privacy and security issues and much more.
Also, had the privilege to do a Q&A session with Dr. Craig Barrett, Chairman of Intel Corporation after his keynote address. This note summarizes the topics discussed during the “Tomorrow’s Wireless World” event.
Many people might not be aware but the City of Oulu in the central part of Finland is a leading epicenter of wireless activities with many major industry players setting up shops for doing R&D work. In fact, it is quite likely that one of the companies out of Oulu has had an impact in some way on the mobile phone you have in your pocket (and we are not including Nokia).
The topic of our panel was “Your Wireless Future” – a broad topic that is always difficult to cover in 60 minutes or less. My illustrious panel included (from R to L):
· Prof. Juha Röning, Head of the Dept. Electrical and Information Engineering, Oulu University. A leading edge research center, many companies in Oulu have been spun out of this department
· Markus Asplund, VP, Sesca Technologies. A major services firm in the mobile industry
· Ari Pouttu, Director of Center of Wireless Communications, University of Oulu. A leading research center in doing work in access technologies.
· David Chartier, CEO, Codenomicon. A major player in the network security space. Their tools are used for hardening their products by companies such as Cisco, Apple, IBM, Nokia, and others.
· Craig O’Connell, Sr. Manager, Elektrobit. Working with pretty much all OEMs around the world
· Dr. Jussi Paakkari, VP, R&D ICT, VTT. Doing some cutting edge research in the area of network protocols, security, access, machine vision systems, and much more
· Purnima Kochikar, Director, Software and Services. Nokia. Well, you know Nokia
I started by asking the panelists about what in their view have been some of the defining trends over the last 12 months. Summary of answers – iPhone; android; move towards full mobile browser; browser will reduce fragmentation and more innovation will happen on this front; with the rise of smartphones, security and privacy have become an issue,
Some other salient points (read issues and opportunities) from the discussion:
· It is forecasted (by WWWRF) that in another 10 years, we will have 1000 radios per every subscriber. That would translate into few trillion nodes around us. The level of complexity and carbon footprint will be enormous. One has to figure out a way to address both.
· City of Oulu has first of a kind experiment with NFC where the technology has been embedded in day-to-day life from home, school, train station, restaurant, probably every object in the city. Pretty interesting experiment that will lead to interesting use cases and technology implementations.
· There are so many protocols being integrated into the device that hackers are targeting not only the data but the protocol weaknesses to gain access. IT finally starting to address smartphone issue in their networks.
· The role of Cognitive radio and SDRs will gain prominence as more access technologies get introduced.
· In a ubiquitous environment with finite spectrum, “sensing” technologies will have a great role in optimization. Sense and do the best for the consumer, the device, and the network. Hyper connectivity will become the norm.
· In addition to touch, gesture and face recognition will add to a better multimodal experience.
· Mobile payments is coming and going to make a big impact. We have to of course sort out the business models.
· 3Cs of mobile – convergence, context, and community (Nokia’s Mantra).
· The very business of R&D has changed significantly with corporations choosing to outsource R&D and the cycle of concept to market launch has shrunk from 6 years or more to 12-18 months.
· More innovation will come from integration of existing technologies rather than some big breakthrough.
· Demand for bandwidth will keep growing.
· Significant opportunities in medicine, enterprise, and other industry verticals.
· In developing countries, while consumers are willing to pay for expensive devices, they don’t have any appetite for expensive service plans.
Some discussion points from Craig’s speech and our Q&A session:
· World will go to free MIPS and free baud (computing and communications). What happens then?
· Moore’s law is good for another 15 years based on 5 generation of future chipsets that they have in the labs. And it will probably keep going after that.
· Awareness of context really important.
· Many types of devices will proliferate including MIDs, education devices, some designed specifically for special purpose (medical monitors) and geographies (emerging markets).
· Global challenges are education, health, computing, and communication.
· In the developed world, wireless technology can help reduce the cost which is increasing at the rate of $200B/year and in the developing world, technology can help provide access to health care.
· Convenience and access trumps security concerns.
· Areas of opportunities – Telemedicine, education, economic development, governance, energy and environment.
· This is Craig’s 11th recession. Principle to tackle has been the same every time. You cannot save your way out of recession. You can only innovate out of a recession. Intel R&D budgets will remain the same.
· Innovation is key to surviving and competing in the global economy, now more so than ever.
· The fact that so much can be done in these tiny piece of electronics is just amazing and the drive to do better and more using technology keeps him going, keeps him inspired.
Craig is passionate about education and innovation and he serves on more global committees than he would care to admit. His work outside of Intel has been equally impactful.
It should be noted that the Matti Pennanen, Mayor of Oulu who also graced the event with his presence is a technologist at heart and understands the role of innovation in the growth and strengthening of their economy. How many tech-savvy Mayors do we have in other countries? I thought so. I have noticed similar trends in Korea, Ireland, and Israel. They all have something in common – great early education system and maniacal focus on innovation and desire to succeed. It was great chatting with Mayor Matti about technology trends and opportunities. In this global economy, politicians better become tech-savvy really fast or they won’t be serving their constituents well. Cities, states, and countries need to start thinking like startups and compete for every dollar.
My thanks to my friends Victor Vurpillat and Brenda Fox at Global Connexus and Pauliina Pikkujämsä at Oulu Innovation for inviting me to participate in the discussion.
Image Courtesy: Global Connexus
US Wireless Data Market Update - Q3 2008 November 16, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Japan Wireless Market, Location Based Services, Microsoft Mobile, Mobile Advertising, Mobile Ecosystem, Mobile Usability, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far
http://www.chetansharma.com/usmarketupdateq308.htm
Recession: Nice to meet you.
US_Wireless_Data_Market: I don’t know who you are but I won’t mind a bailout package.
The US wireless data market shrugged off the economic doldrums in Q3 2008 and grew 7.3% Q/Q and 37.5% from Q307 to reach $8.8B in data services revenues. The total for the year (for first 9 months) stands at $24.5B which is equal to the revenues generated in 2007 (full year). While the flailing economy has started to hit hard on the wireless data ecosystem esp. the infrastructure and handsets segments, consumers haven’t really pulled back on mobile data spending, just yet.
But will they? That is a $700B question. It is likely that more people will be willing to downgrade their Internet services, wireline usage, cable premium channels, restaurant eating frequency, energy consumption, vacation trips, and the gas mileage every week than reduce their wireless usage. But what about data services - broadly, they are divided into messaging, web and information access (includes data cards and subscriptions) and downloadables (games, ringtones, etc.). It is highly unlikely that people will change their messaging (which now accounts for approximately 40% of the revenues) habits overnight though we might see more subs going for package deals and family plans to save. We might also see growth in prepaid subscriptions in the US market. In fact, Q3 saw a jump in messaging volumes in the US by 38% and messaging revenues grew 6%.
Wireless WAN data card access is very useful for road warriors though some corporations might start limiting the number of employees using such services, we don’t think it will make substantial impact in most cases except for the fact that the layoffs in various sectors will start to ripple into the mobile sector and will start cutting into some of the enterprise mobile data revenues. The downloadables have already been in the declining mode for the last 9 quarters and we might see acceleration of that trend.
Next question is - will the increase in the subscriber base nullify the loss in data subscriptions and the answer seems to be - likely yes. But, if the job loss rate increases substantially, more than it has been in Q3 and into Q4, we might, just might, start to see flattening of data revenues in Q109 and gradual decline over the course of the year. Despite the unprecedented bailout from the US Treasury to abort a long recession, we are likely to be in for a longer winter than most anticipate because current efforts don’t even start to address the fundamentals of the financial crisis. The basic industry structure is still flawed. Unless the new administration strikes at the root cause of this mess, wireless data segment won’t be completely immune to the wider economic crisis. We have already started to see infrastructure (operators are slowing down 3G/4G investment) and device segments (replacement cycles are getting longer) getting hit pretty hard.
Another factor at play is the growth in 3G and smartphone penetration in the US market, both of which have been responsible for increasing the usage and hence the revenues. At the end of Q308, 3G penetration was approximately 37% and the data penetration had reached 56%. Smartphone penetration has been inching up as well. In fact, all the service providers and OEMs have been targeting sub-$200 price point, which seems to be a good sweet spot for consumer adoption. The above two factors will also help negate any cancellations or downgrading of data plans.
However, we are likely to see price pressure on subscription plans and as a result, voice ARPU will continue its downward trend and data ARPU will become a more dominant factor of the overall ARPU mix by the end of 2009. The percentage contribution from data is likely to exceed 25% by the end of 2008 and 30% by the end of 2009.
Operators in Europe have already started to feel the pinch starting with Vodafone and Telefonica who experienced decline in revenues (due to the decline in MOU and price pressure) some of which is a function of the heavy prepaid penetration. But, it should be noted that for Vodafone, though overall service revenues declined 1.7%, data revenues grew 30%. As we have been saying for years, data-mindset is needed for strategy, infrastructure design and investment to stay competitive in the changing landscape. Better offer packaging and lower price plans will also help in reducing service churn. Operators will also look to reduce their opex to boost profits.
Coming back to the 2008 forecasts, we still think that the US wireless data market is likely to come close to hitting our original estimate of $34B for the year given the seasonality of Q4 which is likely to negate any decline experienced by the industry. So, it might not be until Q109 before we know where the various data sub-segment are trending. If consumer confidence starts to reverse its trend in early 2009, we are likely to see slower growth but the data revenues will continue to grow from the current levels. However, the lack of policies or correction will further downgrade consumer sentiment, then, we might start to see decline in the US wireless data market for the first time probably starting around late Q209.
Against this backdrop, the analysis of the Q308 US wireless data market is:
- The US Wireless data service revenues grew 7.3% Q/Q to $8.8B in Q208. Compared to Q307, the data service revenues grew 37.5%.
- Overall ARPU decreased by $0.04. Average voice ARPU declined by $0.94 while average data ARPU grew by $0.90 or 8% almost negating the drop in voice ARPU.
- Sprint led in data ARPU with $13.50 (or 24.11% of the revenues, followed by Verizon at $13.30 (or 25.49% of the revenues - first carrier to cross the 25% threshold),
Verizon led in data ARPU with $13.58 (or 26.03% of the revenues - first carrier to cross the 25% threshold) closely followed by Sprint at $13.50 (or 24.11%),AT&T at $12.29 (or 24.20%) and T-Mobile at $9 (or 18%). - All the top four carriers experienced approximately 8% increase in data revenues compared to the Q208 levels. Verizon with $2.8B in data revenues led AT&T at $2.7B, Sprint at $1.6B and T-Mobile at $850M. Both AT&T and Verizon are on target to be two of the three operators to exceed $10B in data revenues for the year for the first time by (global) operators besides NTT DoCoMo (the two US carriers are already over 75% of the target). China Mobile is the other operator which is going to cross the $10B mark in 2008.
- AT&T and Verizon now account for 62% of the market data services revenues. Sprint had a second consecutive quarter of data revenue growth after falling behind its peers for the past couple of years.
- The average industry percentage contribution of data to service revenues exceeded 23%. A year ago, the percentage contribution stood at approximately 17.7%. US market is likely to exceed the 25% mark in Q408.
- The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q308, Verizon had 74% of its subscribers using some form of data services. The messaging volumes in the US market now average over 105B messages/month or at the frequency of a message/sub every 2 hours. In comparison users in Philippines average routinely send on an average, a message every hour.
- In terms of net-adds, Verizon continued to lead in Q308 with 2.1M net-adds (aided by an acquisition), again edging AT&T which had 2M net-adds for the quarter. Sprint continues to lose subscribers at an alarming rate, loosing another 1.3M in Q308.
- T-Mobile USA moved to number 9 in the top 10 rankings of global mobile operators by data revenues. For the quarter, Verizon and AT&T improved their rankings to #3 and #4 respectively at the expense of KDDI which dropped to #5. Sprint Nextel maintained its # 6 spot. AT&T and Verizon are in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
- Non-messaging continues to grab 50-60% of the data revenues for the US carriers.
- The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe started to take firm roots in the US market with industry wide flat-rate pricing plans that included data. Sprint has been the most aggressive with its “Simply Everything” plans that include data services. 30% of its $100 plan is assigned to data revenues (for accounting purposes). All the major carriers seem to be offering flat-fee access plans for most of the new smartphones being introduced in the market. Approximately 13% of the consumers have flat-rate data plans.
- As expected, the blockbuster acquisition of Alltel by Verizon got approved and the deal will close in the next few weeks making Verizon the top carrier in the US market with close to 85M subs by the end of year.
- Q3 also saw the launch of the fabled G-phone as G1 Google phone launched by T-Mobile in the US market and it is slowly making its way into Europe. While G1 is no iPhone, it introduced long-awaited features such as multiple processes, more open APIs, and others. Motorola is said to be planning to launch Android devices in 2009. The smartphone segment has clearly shaken up the market with Apple, Google, RIM, and Nokia being the main competitors. Microsoft keeps misreading the market and is heavily under leveraging its strength and experience.
- There are probably 18-20 sub-segments within mobile data services and consolidation looms. Who will be the last man standing post the nuclear winter? While the valuations are still high for rapid consolidation, we think that by Q209, the M&A scene is likely to heat up.
- Will Mobile Advertising be the rising star from the crisis or one of its victims? Clearly, there are a number of advertisers and brands that are scaling back on the experimental dollars thus shrinking the mobile ad spend. On the other hand there are some savvy brands who are pulling back from the traditional mediums like print which don’t really work and putting more money into digital including mobile. It will be interesting to see if operators use the opportunity to lay the foundations of a long-term mobile advertising strategy. Stay tuned for some of our thoughts on the subject.
- Venture money in the mobile sector experienced a rapid decline. Compared to Q307, venture financing declined by 88%, and the yearly totals are 35% lower than what they were a year ago. (Source: Rutberg)
- Nokia eclipsed 100M unit sale in Q308 for the sixth straight quarter. It sold over 111.7M handsets in the quarter, more than the next three players combined. Nokia’s global market share declined to 37%. Samsung surged to 52M handset sale. Apple surpassed RIM in smartphone sales. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008 but the overall handset sales will decline in 2009 (though still easily exceeding 1B).
- The 3G penetration in the US went past 35% in Q308, with Verizon leading the pack with over 61% 3G subscriber penetration compared to the 30% 3G subscriber penetration at AT&T. T-Mobile is slowly expanding its 3G coverage. 3G subs have over $23 in data ARPU. The growth in 3G and smartphones is helping offset any downward pressure on the data revenues and overall ARPU.
- As we had mentioned back in July, Apple easily surpassed its 10M target in Q308 buoyed by its 100 country expansion plan. The broadband and appstore capabilities are quite attractive to consumers and it shows. VPN and direct access to Exchange is helping in getting many more users into the mix and making IT folks less apprehensive. The clearcut business model of 30/70 split is also attractive.
- T-Mobile also launched its own Appstore (and so did Google and RIM, even Microsoft) along the lines of Apple’s initiative with promises of greater control to the application developers.
- The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband - metered billing, UMA, Femtocells, Hotspot buys, WiMAX, LTE, and others. We deal with the whole topic of Wireless Broadband in great detail in our recently released book “Wireless Broadband - Conflict and Convergence” (Co-authored with one of the leading entrepreneurs in the space - Vern Fotheringham, published by IEEE Press and John Wiley). We will have more to say on the subject in the coming days and months.
- After raising $14.5B from friends and family, Clearwire’s net-adds continued to drop in Q308. While the deal got approved, the economic climate is putting pressure on a comprehensive rollout strategy. Sprint did launch WiMAX in the Baltimore market with initial feedback from the sparse usage to be as advertised.
- In a sign of convergence battles to come, T-Mobile’s @Home and Sprint’s Femto cell initiatives started to take hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service. Don’t be surprised by some acquisitions in 2009.
Global update
- China and India added approximately 52M subscriptions combined in Q308 with India edging out China. In Sept, India added more than 10M monthly subscriptions for the second time this year and its net-adds total for the first 9 months stands at 82M. By comparison China added 77M and US increased its tally by 11M.
- NTT DoCoMo continues to dominate the wireless data revenues rankings with almost $3.9B in data services revenue in Q308, thus exceeding the $10B mark in just 9 months. Almost 41% of its revenue now comes from data services. DoCoMo also crossed 86% in 3G penetration in Q308 and is expected to cross the 90% mark by early 2009.
- Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Many operators are consistently exceeding 30% with DoCoMo and Softbank being over 40%.
We will be keeping a close eye on the trends in the wireless data sector in our blog and future research reports. The next US Wireless Data Market update and the Global Wireless Data Market update will be issued in March 2009. We will be doing an end of the year piece with forecasts and predictions for the coming year in Dec 2008.
Your feedback is always welcome.
Happy Thanksgiving and Happy Holidays.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
Recap of the Vienna Summit November 11, 2008
Posted by chetan in : 3G, AORTA, ARPU, Carriers, European Wireless Market, Indian Wireless Market, Location Based Services, Mobile Advertising, Mobile Applications, Speaking Engagements, US Wireless Market, Worldwide Wireless Market , add a comment
For the past 2 months, I have been on the road every week, from a day trip to San Francisco to distant but beautiful Vienna (and an extra day in Paris courtesy of Air France mess). Finally getting some break from the hectic travel schedule .
I was invited to give a keynote address in Vienna on Mobile Advertising - the current state of affairs and where it is heading. Over the course of this year, I must have given 20+ talks on the subject and every couple of months I find myself updating stats and case studies as things are changing so fast. Also, have been working several players in the ecosystem to help them with the strategy and positioning in the mobile advertising ecosystem. Working with agencies, brands, carriers, startups, platform providers, OEMs, and VCs gives me a complete 360 view of this evolving space.
My talk looked at the trends in Western Europe, Japan, and North America, compared what’s working and what’s not. Then I got into the key elements that make MA tick - Reach, Engagement, Targeting, Viral, and Transactions; discussed a bunch of case studies; and finally, put forth the expected trajectory for the next 3-4 years.
The event also had presentations (many of them operators) from all over - UK, Turkey, Albania, Ukraine, Belarus, Israel, Germany, and Indonesia. For me the most interesting one was by Evrim Dirik of Turkcell, Turkey. He discussed the ringback tone mobile advertising platform - Tonla Kazan. It is an ingenious use of a simple functionality of ringback to great effect. The effective CPM (or cost per listen - CPL as he put it) is $100. That should raise some eyebrows. Users get tremendous value, advertisers get stickiness, carrier gets revenue ($10K minimum per campaign), and everyone is happy. Turkcell has also done some innovative work in direct marketing and advertising and their revenues from this segment are reaching $38M. Not many operators around the world can claim that.
It was great to meet new colleagues and share ideas and war stories. Didn’t get much time to see around (and it was getting dark around 4:30pm) except a quick run to the Schonbrunn Palace (famous as Mozart’s training ground). A missed connection courtesy of Austrian Airlines and Air France provided the opportunity to spend an evening in Paris. If you are going to get stuck somewhere in Europe, Paris is a good choice. Hey! I even found free WiFi at the hotel (IBIS at the airport, elsewhere, it was a rip-off with $20+/day rates).
Back to the missed connection story - sometimes I feel that airlines compete for hiring the dumbest people around, these guys are so incompetent that it should be criminal. Charles De Gaulle - the Parisian airport is going through some construction, as such getting from one terminal to another - specially on across the pond flights can become a task. People flying on Air France to North America were missing connections left and right and these guys have to provide hotel and food. And then the industry complains about falling profits.
Anyway, barring the airline doldrums, quite a productive trip, learned some new things, got some new ideas, and made new friends.
Next week, I have a short one coming up - a 2 hr hop to San Jose to moderate a great panel of executives from the Finnish wireless industry on the topic of “Future of Wireless.” Really looking forward to it. Hope to see some of you down there.
3G Americas Analyst Summit in Dallas October 15, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 3 commentsYesterday, I was invited to attend the 3G Americas Analyst Summit in Dallas hosted by 3G Americas. The discussions were around LTE, future applications and services, infrastructure requirements, femtocell, and so on and so forth. Who’s who of the industry were present to take on questions from the analysts. Though I am not your typical analyst (who publishes paid reports), my consulting work requires me to stay ahead of the curve a few years out, so the interaction with the industry participants was useful.
T-Mobile, ATT, America Movil, Rogers, and C&W laid out plans for 2011 LTE introduction with trials starting in 2009. Spectrum could be an issue for TMO which might use 1900 as a backup. WiMax seen as a niche if at all relevant technology for mobile access, its role might get relegated for backhaul and fixed access.
I think given the current economic climate, we might see the investment plans being delayed. Of course, with one city launch, some folks can claim LTE launch but pervasive availability will be pushed to 2013 and beyond. I think operators will try to milk HSPA technologies for as long as they can.
Had interesting conversations regarding T-Mobile upcoming open apps models. It has the potential to be really disruptive. Essentially, it shifts the onus on the developer, time to market shrinks drastically, developer can pick and choose the devices they want to support, they will get daily feeds on how they are doing with sales and customer complaints, bad apples are thrown out or charged fee per violation, better performers can exceed 70% rev share. Played a bit with Google phone and while aesthetically it is nowhere close to an iPhone, functionally, it has some attractive functionality - search button, multiple apps running in the background, multiple idle screens, browser, keypad, etc are a plus. The initial response has been quite positive (though the reported 1.5M number is not accurate).
Successful implementation of this model will force other operators to change their application strategy. Another fact was pretty clear. This business of “unlimited” data in its current incarnation is not sustainable. You have to be careful what you wish for. Mobile data usage is “here” thanks to smartphones and consumer awakening of what’s possible but I think the networks are not ready for a huge onslaught of data usage - esp. the kind of things we are used on the Internet like browsing, streaming, uploading, etc. - in large quantities. At some point, there will be enough users on a cell-tower that will start damaging the user experience. The incremental revenue doesn’t totally justify the investment required to support such a surge. So, what gives … we are likely to see more tiered data pricing and less emphasis on “unlimited” data.
Overall, the meetings helped validate some of the concepts and business models percolating in my head. You will see more of that come out in my posts in days ahead.
My thanks to Chris and Vicki for inviting me to the meeting (btw, if you haven’t been to the Gaylord Texan resort in Dallas, i would recommend it, it is like a self-sustaining city in itself - just like Texas - massive)
Tomorrow’s Wireless World featuring Craig Barrett October 10, 2008
Posted by chetan in : 3G, 4G, AORTA, Carriers, Speaking Engagements, Worldwide Wireless Market , 1 comment so farI am delighted to announce my participation in an upcoming event being organized in San Jose on 18th Nov. A high-level Finnish delegation of executives from the wireless industry is coming to US and I will be moderating a panel discussion on “Tomorrow’s Wireless World.” We will be going beyond the current deployments and trends and into something much beyond. The highlight of the event is of course to share the stage with the eminent Dr. Craig Barrett, Intel Chairman of the Board. Am deeply honored.
I gave a keynote address to the Finnish delegation 3-4 years ago and it was great fun, so, am really looking forward to this one.
There is limited seating and they are filling out fast, so, if you are interested, please register.
Details below:
Featuring Craig Barrett, Intel Chairman of the Board
Mayor Chuck Reed of San Jose & Mayor Matti Pennanen of Oulu, Finland
invite you to:
“Tomorrow’s Wireless World ”
November 18th 2008 at the San Jose Hilton Hotel
Share ideas, debate issues and check the pulse of the market with leading wireless R&D experts that have resources to deliver the most advanced wireless technologies in the world.
Keynote
Craig Barrett
Intel Chairman of the Board
Craig R. Barrett became Chairman of the Board of Intel Corporation on May 18, 2005. He became Intel’s fourth President in May of 1997 and Chief Executive Officer in 1998. He was elected to Intel’s Board of Directors in 1992 and served as Chief Operating Officer from 1993 to 1997. Barrett began his tenure at Intel as a Technology Development manager in 1974. Prior to joining Intel, Dr. Barrett was an Associate Professor at Stanford University in the Department of Materials Science and Engineering.
![clip_image002[7]](http://www.chetansharma.com/blog/wp-content/uploads/2008/10/clip-image0027.gif)
Panel Moderator
Chetan Sharma
Chetan is a recognized industry expert in strategy and implementation of wireless data and pervasive computing solutions. Executives from leading wireless companies around the world seek his accurate predictions, independent insights, and actionable recommendations. He has served as an advisor to senior executive management of several Fortune 100 companies in the wireless space. Some of his clients include NTT DoCoMo, China Mobile, Disney, KTF, Sony, Samsung, Virgin Mobile, Sprint Nextel, AT&T Wireless, Alcatel-Lucent, KDDI, Cincinnati Bell, Reuters, Qualcomm, Reliance Infocomm, SAP, Merrill Lynch, American Express, Infospace, BEA, and HP. Chetan is also author of 5 books on wireless.
Panel
Centre for Wireless Communications is a world-class telecommunications research institute focusing on three application areas: Broadband Wireless Access, Short-Range Communications, and Security and Defense.
Codenomicon enables wireless software developers to preemptively mitigate unknown and published threats in products and services prior to release or deployment - before systems are exposed, outages occur and zero-day attacks strike.
Elektrobit (EB) develops products, telecommunications solutions, testing solutions, and automated systems for the wireless industry.
Nokia is the world leader in mobility, driving the transformation and growth of the converging Internet and communications industries. Nokia makes a wide range of mobile devices with services and software that enable people toexperience music, navigation, video, television, imaging, games, business mobility and more.
Oulu University is home to an international scientific community known for delivering high-quality research and education in disciplines that include both national and international wireless technologies.
Sesca Group’s Mobile Software business area offers smartphone software development services for Symbian, Java, Microsoft and Linux platforms.
VTT is Europe‘s leading applied research center creating new technology and science-based innovations with a strong emphasis on wireless technologies.
Agenda
9:30 Registration
10:00 Welcome: Mayor Matti Pennanen, of Oulu Finland, and Mayor Chuck Reed of San Jose
10:15 Panel: “Your Wireless Future”,Moderated by Chetan Sharma
11:15 Q and A
11:45 Buffet Lunch
12:15 Discover Oulu
1:00 Keynote: Craig Barrett – Intel Chairmanof the Board
2:00 Networking
Reserve the date now!
Reserve the date now! As a qualified recipient, you are eligible to receive a complimentary ticket that includes a buffet luncheon, please register at the following link https://www.acteva.com/go/suomi Enter promo code “FINN” for complementary ticket.
Wireless Broadband Book - More Details October 7, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Search, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment
The Wireless Broadband Book is launching next week on 17th Oct. It will be in Wiley stores in a week and then early Nov, available at retailers around the world including amazon.com.
If you are interested, the best discount is available at Wiley.com. We are making it available to all our readers and colleagues. The code is WBR98 and it get you the book 20% cheaper (Amazon is 9% right now).
We also launched the book web site - WirelessBroadbandBook.com. It has lot of details about the book including:
The telecommunications industry has evolved to a point in time when the wireless elements of the global network have eclipsed the legacy wired networks in terms of reach and adoption by the world’s population. There is now a growing tension between the original vision of the cellular network as simply a mobile extension of the traditional wired telephone network that is operated as a closed system under the unilateral control of the service provider and its role as a leading access platform for the global Internet. The powerfully established business and regulatory model of the legacy telephone network operators is now bumping up against the dramatic expansion of the global Internet into a broadband data system that can provide alternatives for virtually every legacy communications service. A historic conflict is evolving over how these two mammoth environments will converge and overlap. Will the well-established institutions that hold sway over the legacy telecommunications networks and service providers capture control of the Internet by leveraging their existing gatekeeper position for access and termination? Alternatively, will these well-established habits of operation yield to creative new forces and competitors who will grow and thrive by implementing new business models that make obsolete the business practices of the incumbents? This conflict is well under way, and its outcome will have tremendous influence on the future of the global economy, the evolution of human rights and freedom, and the daily lives of virtually all the world’s citizens.
The core theme of this book is an examination of contesting factors that have influenced and will continue to influence the deployment and adoption of the broadband Internet Protocol (IP) wireless infrastructure, its devices and its services, which will mark the next major steps in the evolution of wireless worldwide. The implementation of the ubiquitous wireless broadband Internet will reach into every corner of global society. Every segment of the wireless industry will ultimately have to view and plan for its future prospects from the perspective of how it will fit within the emerging IP ecosystem growing out of this major change of state for the entire telecommunications industry. We will consider the impact of new entrants and operators, versus new innovators and the current market leaders in each sector of the industry. We will also examine how the future technology road maps of the 3GPP (Third Generation Partnership Project) and WiMAX (Worldwide Interoperability for Microwave Access) standards promoters will conflict, compete, and ultimately converge. Our efforts will also seek to penetrate the noise and hype, both positive and negative, that presently cloud the perceptions of both industry insiders and the larger publics who will be impacted by this insidious and inevitable broadband evolution.
New broadband wireless deployments will find market share both among and beyond the current base of 3 billion subscribers, most of whom are on secondgeneration (2G) versions of the global system for mobile communications (GSM) systems. The installed base of GSM infrastructure is presently undergoing a slower than anticipated, but inevitable transition to third-generation (3G) platforms. This step along the trajectory to true broadband IP–centric fourth generation (4G) networks can be viewed as the transition from the narrowband 2G environment to the wideband 3G era, which will evolve into the true broadband future matching the vision of the 3GPP technology Long Term Evolution (LTE) for GSM systems, and the emergent Mobile WiMAX standards based on OFDMA (orthogonal frequency division multiple access) technology. The emergence of OFDMA as the technology of choice for the next-generation mobile platforms is a by-product of the dramatic increases in microprocessor power over the past decade that finally enabled OFDMA technology to become practical for application in wireless platforms. These systems will come into existence under the sponsorship of existing cellular operators, and through major telecommunications and computing industry organizations that have to date been essentially left out of direct participation in the wireless industry. Included among these new contributors to the wireless broadband future are the cable television operators, Internet portal and search companies, computer and digital appliance manufacturers, software concerns, and content developers.
Much of the momentum driving mobile wireless broadband services is being created by the widespread adoption of wired broadband Internet services by a large portion of the population. The experience and convenience of broadband access have extended from their original presence in the workplace into approximately 60%of all U.S. households, primarily though digital subscriber line (DSL) and cable modem services.* We are now at the tilting point when it is both practical and logical to seek access to our broadband services and applications wherever we may be, regardless of whether we are at the office, at home, traveling to a remote destination, or mobile betwixt and between these locations. We will address the nature of network and service convergence and the interrelationships that exist between and among each of the broadband network service domains, including all types of wired and wireless networks.
There is a pending collision between the traditional telecommunications industry closed system approach to the market and the open platform environment of the Internet. As broadband wireless service delivery networks proliferate, the migration to expanded openness will accelerate. The traditional ‘‘walled garden’’ environments of the legacy wireless service providers are already breaking down, with pledges to remove existing carrier-defined constraints that only allow network access to user devices obtained from the underlying carrier coming from both Verizon and Mobile WiMAX proponents. How these deeply established traditions of the telecommunications industry are relaxed and eliminated in whole or in part and at what pace over time will mark the next era of the wireless industry.
Numerous contributing factors will impact the pace of the ubiquitous availability of wireless broadband services. These include: (1) the need to resolve a wide range of regulatory constraints and protectionist policies on literally a global basis; (2) the existence of enabling technology development for pending broadband wireless expansion in an increasingly complex intellectual property environment that requires equipment manufacturers to be sensitive to potential business risks, which are very difficult to quantify in advance of drawn-out contentious legal processes; (3) the need for substantial increases in the amount of radio spectrum allocated to existing and new service providers with sufficient contiguous bandwidth to support truly broadband services; and (4) the need for non-discriminatory standardization of networks and user equipment across commercial and political boundaries, which will likely take many years to resolve.
We will attempt to handicap the field contending to be the future winners and losers among the numerous competing factions participating in the broadband convergence movement. Included among the participants for next-generation network services leadership are the reconsolidated and expanded (wireless, Internet, video and long-distance-enabled) legacy telephone companies, called the incumbent local exchange carriers (ILECs), non-ILEC cellular network operators (Cellcos), the multisystem operators (MSOs) in the cable industry, wireless internet service providers (WISPs) led by the new Mobile WiMAX system operators, the direct broadcast satellite (DBS) service providers, and the competitive local exchange carriers (CLEC).
Our direct experience over the past 20 years of the evolutionary march of progress towards a wireless broadband future has revealed many of the obstacles and obstructions that have emerged either as defensive acts of commission by established operators, or acts of omission on behalf of regulators and vendors, which have resulted in a seemingly never-ending series of chicken-or-egg phenomena. Inefficiencies impacting progress abound, including how wireless spectrum is allocated and licensed, how capital formation is organized and aligned with new network requirements, and how the numerous ‘‘standard’’ obstacles that mark the implementation of wireless infrastructure are overcome, such as site acquisition in a crowded market, local zoning obstacles including NIMBY (not in my back yard) issues, and the growing challenge of provisioning broadband backhaul and interconnection for cell sites with vastly increased capacity requirements compared with legacy voice cellular systems.
We are attempting to cover a very wide swath of the issues facing decision makers within the impacted sectors of the economy, with the intention of broadening their awareness of emerging competitive factors and potential opportunities that will decide their future success or failure. In addition, we hope to add worthy contributions to the policy making process to add additional insight and information to the impacted publics on every side of these often polarized issues.
We all share responsibility for the future we create as members of our respective professions and societies as well as members of the global community of nations. Our world is shrinking rapidly, and few technologies are contributing to this evolution of global interaction and interdependency as completely and cogently as broadband communications in all of its multivariate forms.
Foreword by Mark Anderson, Founder and CEO of Strategic News Service, one of the biggest proponents of Wireless Broadband and the one coined the term AORTA from which this blog gets its name.
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We look forward to your feedback and carrying the conversation forward.
Thanks for your continued support.
Global Wireless Data Market Update - 1H 2008 September 28, 2008
Posted by chetan in : 3G, 4G, AORTA, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Gaming, IP Strategy, Indian Wireless Market, Japan Wireless Market, Location Based Services, MVNO, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Smart Phones, Speaking Engagements, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far
http://www.chetansharma.com/globalmarketupdate1H08.htm
Global Wireless Markets continued to grow rapidly especially in India and China where the carriers are adding over 9M new subscriptions every month. India crossed the 300M subscription mark in Aug while China whizzed past 600M in September. Overall, the global subscriptions penetration edged past 50%. During the 1H 2008, revenues further tilted towards data services. The overall global mobile revenues (including equipment) for the year are likely to reach the 1 Trillion dollar landmark later this year (enough to bailout an economy or two), with approximately $800 billion attributed to service revenues. Data revenues now account for almost 20% of the global service revenues.
For some leading operators, data is now contributing close to 40% of the revenues however increase in data ARPU is not completely offsetting the drop in voice ARPU for most operators. From the true and tested SMS messaging to the new services such as Mobile Advertising, Social Networking, Commerce, Mobile Wallet, and others, different services helped in adding billions to the revenues generated for 1H 2008. Japan remains the envy of the global markets and the nation to study and learn from w.r.t. new services and applications. The US market expanded its lead over Japan in mobile data service revenues for the year and is unlikely to cede ground in the months to come.
Buoyed by the global launch of iPhone, Apple is likely to eclipse the 10M goal in Q308. Its App-Store launch along with Android’s imminent arrival dominated the news. Other manufacturers also introduced challengers to iPhone, most notably, Instinct by Samsung on the Sprint network which has also been quite successful in getting users to engage in data services.
WiMAX vs. LTE debate took over the EV-DO vs. WCDMA chatter and while majority of the industry is consolidating around LTE; open-platform advocates are watching the arrival of WiMAX in the US with great interest. Google, Sprint, Motorola, TWC, Comcast and others put new life into the experiment called Clearwire.
Chetan Sharma Consulting conducted its semiannual study on the global mobile data industry. We studied wireless data trends in over 40 major countries - from developed and mature markets such as Japan, Korea, UK, and Italy to hyper growth markets such as China and India.
This note summarizes the findings from the research with added insights from our work in various global markets.
- The global mobile markets continue to grow at an explosive pace reaching 3.6B subscriptions by 1H08 up 9% from EOY 2007 levels and will likely cross the 4B mark by the end of 2008. Significant growth is coming from India and China with both countries registering on an average 9M net adds per month. India and China combined to add approximately 107M new subscriptions during the first six months of 2008. Overall, the world market is now over the 50% penetration mark.
- US edged past Japan again as the most valuable mobile data market in service revenue with US adding $15.7B vs. $13.6B for Japan in 1H08 mobile data service revenues. China with $7.8B was ranked number 3. US registered the highest growth amongst the top 3 with over 18% increase from EOY 2007 levels followed by China at 9% and Japan at 7%. These top 3 markets account for just under 50% of the mobile global data service revenues.
- NTT DoCoMo continues to dominate the wireless data service revenue rankings with over $6.8B in service data revenues for 1H08; however, Q/Q growth is declining. DoCoMo crossed 84% in 3G penetration and is expected to touch 90% by end of the year.
- DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T, Sprint Nextel, China Unicom, Softbank, O2 UK, and T-Mobile USA to round up the top 10 operators by wireless data service revenues. It marks the first time, T-Mobile USA enters the top 10 list as it went past SK Telecom. All the top 10 carriers exceeded $1.5B in data revenues for the first half of 2008.
- For the last couple of years, NTT DoCoMo has been the only carrier exceeding $10B in yearly mobile data revenues. In 2008, it is likely to be joined by China Mobile, KDDI, Verizon Wireless, and ATT in the exclusive 10B club.
- Data revenues for the top 10 operators increased 10.3% from EOY 2007 and now account for almost 50% of the global mobile data revenues though their subscriber share is around 30%.
- Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and Softbank are approaching 40%. 3 UK, O2 UK, Singtel, and 3 Sweden exceeded 30%.
- In March, India edged past the US to become the number two wireless market (by subscriptions) in the world. In last two years alone it has added almost 175M new subscriptions (in comparison China added 169M and the US market added 39M).
- ATT reported the highest increase in data ARPU from 2Q07 with 32% growth. Other notable percentage increases in ARPU were from KDDI, DoCoMo, Softbank Japan, 3 Australia, Vodafone Italy, Rogers, Verizon Wireless, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators with average data ARPU dropping to $0.65.
- In terms of absolute dollar amount, NTT DoCoMo and 3 UK lead the pack with $22 data ARPU. Operators who reported overall ARPU above $60 were 3 UK, Singtel, Rogers, and 3 Sweden.
- The biggest jump in data revenues was experienced by the US carriers, the top 3 being ATT, Verizon Wireless, and T-Mobile USA respectively. SK Telecom, Sprint and O2 UK experienced declines. (For a complete US Market Update, please see our Q208 research note).
- In 1H 2008, SMS’s vice like grip on data revenues continued to loosen a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 20-40%.
- NTT DoCoMo regained its position vis-à-vis KDDI w.r.t. mobile data revenues. Their data coordinates stand at ($22, 39.5%) and ($20.3, 37%) respectively (please see slide 10 for reference).
- Most of the operators in developed nations are contemplating future strategies to boost data revenues such that decline in voice revenues is at least compensated for. There are very few operators who have experienced increase in overall ARPUs. Comparing the ARPU for last 2 years, amongst the top operators, only Singtel, Rogers, T-Mobile UK, O2 Germany, O2 UK, Verizon Wireless and ATT experienced increase in both overall and data ARPU.
- NTT DoCoMo has been at the cutting edge of the mobile data evolution by creating new markets and exploring new technologies and social experiments ahead of almost anybody else in the market. We looked at the data revenue growth at NTT DoCoMo since the introduction of i-Mode almost 10 years ago (see slide on page 17). During the last 9 years, overall ARPU has declined 33% though data ARPU increased over 1800% and now accounts for almost 40% of DoCoMo’s service revenues. The voice ARPU has declined almost 60%. Our long history with the Japanese and Korean markets has taught us that while the individual strategies in each market will differ, one should study the trends and technologies in these markets to get a sense of what’s coming.
- The biggest percentage contribution by data ARPU has been consistently registered (since mid 2002) by two Philippines carriers – Smart Communications and Globe Telecom with over 66% (or $3) contribution coming from the data services. Philippines is also one of the most active messaging nations where users average a message/hr round the clock.
- Even though China reported approximately $7.8B in data revenues for 1H08 and the percentage contribution is over 27%, data ARPU is around $2.3. For India, data ARPU continues to stay below $1 for all major carriers with Reliance experiencing a 50c data ARPU during Q208.
- China Mobile with 428M (as of Aug 08) remains the #1 carrier in terms of total number of subscrptions followed by Vodafone at 269M and China Unicom with 171M subscriptions. Telefonica, América Móvil, SingTel, Deutsche Telekom (T-Mobile), and Orange (France Telecom) are the next five largest telecom groups in the world. In terms of individual carriers in a given country, AT&T and Verizon Wireless occupy the #3 and #4 spot respectively ahead of NTT DoCoMo, which is at #5 (Verizon will overtake ATT after its Alltel acquisition goes through later this year). The two Chinese carriers round up the top two positions and are likely to stay perched at their lookout vistas for many years to come.
- China Mobile remains the most valuable telecom operator with over $200B in market cap. It is followed by Vodafone at around $125B. Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans. Carriers in Japan and Korea are the most under duress.
- As far as 3G is concerned, there were over 350M 3G users (69% of them are WCDMA users vs. EV-DO). Both Japan and Korea continue to expand their 3G base with both reporting over 80%+ penetration. 3G has picked-up steam in both western Europe and North America per our forecast in the 2005 cover story article “3G: Hitting the Mass Market” published in the Wireless World Magazine. Western Europe and US are at approx. 30% 3G penetration (Italy being the exception exceeding 40%).
- China and India represent the biggest opportunities for the Infrastructure providers. China postponed its 3G decision again and couldn’t launch a network for the otherwise wildly successful 2008 Olympics. India is also going through its 3G spectrum policy and is likely to resolve some of the contentious issues shortly. Some of the biggest infrastructure contracts will come from these two countries that are looking to expand coverage into rural areas.
- Carriers with nationwide 3G networks and good distribution of handsets are seeing strong uptick in data ARPU. The Japanese and Korean carriers along with operator 3, Verizon, Sprint Nextel are all seeing benefits of rolling out their 3G service. Deployment of 3.5G technologies such as HSDPA and EV-DO Rev A (and B) is also gaining momentum. Networks are getting deployed and market is being seeded with some of the early handsets. For 4G, there is a strong momentum behind LTE, proponents of WiMAX are pushing the technology as a 4G candidate, and though it is starting to lose its time advantage, all eyes are on the imminent Clearwire launch.
- In terms of applications, messaging accounts for the lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, Mobile Games, IMS, LBS, Mobile advertising, and others have also captured industry’s imagination. Alternate devices with wholesale cellular agreements are also flooding the market. In Japan, Mobile Commerce is expected to do much better than the other hot category - Mobile Advertising. Though not much talked about, enterprise applications are also being adopted widely esp. in North America as more workers become mobile and corporations seek efficiencies in their operations and supply-chain.
- 1H 2008 saw the demise of the last standing next-generation MVNO in the US market - Helio, which got sold to Virgin Mobile at bargain basement prices. In Europe, Blyk continues to make good progress with its unique mobile advertising-based model. Asian market is also opening up for MVNOs.
- Nokia eclipsed 100M/quarter unit sale in both the quarters thus far. It has sold over 237M handsets in 2008, more than the next three handset manufacturers combined. Nokia’s global market share edged past 41%. Samsung at 15%, Motorola with 9.5%, LG with 9.3% and Sony Ericsson with 8% rounded out the top five. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008.
- While the talk of “Open Access” and “Open Platform” consumed much of North America, it barely registered a decibel elsewhere. Several significant events including 700 MHz Auction, Android, and Verizon’s “Open Network” initiative elevated the consternation in the ecosystem. Apple launched its 3G iPhone while Android’s first device is slated to see the light of day next month courtesy of T-Mobile USA.
- Apple launched its App-Store with iPhone 3G which has been quite successful though there is significant clutter to muddle through. The company is likely to announce soon that it eclipsed its 10M goal in Q308, a full quarter earlier than the stated target. These days, any new device that gets launched in the market is looked through the prism of iPhone.
- In the last 10 years, the growth patterns in the mobile industry have completely reversed. In 1998, the developed world accounted for 76% of the subscriber base, in 2008; the percentages have flipped with developing world now accounting for 76% of the subscriber base and are likely to increase to 85% by 2018 (see slide 8). For a more detailed analysis, check out our research paper sponsored by The United Nations Foundation on “Mobile Services Evolution: 2008-2018.” It was presented at The Rockefeller Foundation Healthcare summit in Bellagio, Italy in July 08. (Note: The dichotomy between developed and developing nations is a very simplified concept that has been around for about 50 years. It is clear that a transformation in the distribution of wealth worldwide will change the picture in the next 10 years. Countries that are considered developing in today’s definition will become economic superpowers in 10 years and more dominant than some of the developed nations, even if they have not caught up then with some in terms of GDP per capita. However, for purely the purposes of comparison and illustration, we are using the existing definitions to discuss the shift in the mobile ecosystem).
- Several operators reported Mobile Advertising as their key strategic focus for the coming quarters, esp. China Mobile and Vodafone. Sensing the opportunity to seek new sources of revenue stream, Nokia and Google are getting active in the space as well. 2007 saw tremendous M&A activity in both the online and mobile advertising space and while it slowed down during 2008, it is likely to pick-up again in 2009 as consolidation looms.
- Wireless Broadband continues to be a significant growth driver for the industry. We partnered with our good friend Vern Fotheringham - a true industry entrepreneur and who has been behind many of the industry firsts, to write an exhaustive treatment of the subject in our upcoming book - Wireless Broadband: Conflict and Convergence being jointly published by IEEE Press and John Wiley (see below). Details forthcoming.
Your feedback is always welcome.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
CTIA Wireless IT and Entertainment 2008 Roundup September 12, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, M&A, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile Usability, Privacy, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so farCTIA Wireless IT and Entertainment 2008 Roundup
http://www.chetansharma.com/ctiawirelessit2008.htm
San Francisco hosted the CTIA Wireless IT and Entertainment 2008 show earlier this week. In addition, there were some pre-show events like Billboard’s Mobile Entertainment Live and Mobile Web Strategies. This note summarizes our impressions from the week.
First, Let’s do the numbers CTIA released its mid-year survey results. Bob Roche and John-Paul Edgette at CTIA do a great service to the industry by compiling 6-month of useful data and making it available at each CTIA. In Summary - 262.7M subs, $14.78B in data revenues accounting for 20.3% service revenues, 75B TXT messages/month. We released our US Mobile Data Update for Q208 last month, Global Update coming later this month.
Overall Impression – This year’s show was one of the dullest in recent memory, devoid of any buzz, energy, or announcements. Maybe it was due to the 50,000 other events happening the same week (many in San Francisco). Or maybe, Bernanke’s congressional testimony is playing out in the wireless industry. Or maybe it is just conference-fatigue.
My week started early as I had the honor of giving a keynote address to a group of influential executives at major international operators and agencies worldwide at a well-organized private event. The topic was “US Mobile Advertising: Today and Tomorrow.” We delved into what’s working and what’s not and what will it take to get the industry to the next level, which players are likely to succeed and why?
Next day, I split my time between Mobile Entertainment Live organized by BillBoard and Mobile Web Strategies chaired by our friend Ajit Jaokar. While most of it was rehash of previous events, presentation by Jouko Ahvenainen of Xtract was probably the standout for me where he talked in detail about the importance of “analytics” and “intelligence” in advertising and social media. One of the interesting announcements/discussion was from Nokia regarding “Comes w/ Music” to be launched in UK next month - music subscription is bundled with the device as long as the device is from Nokia. Reliance Entertainment also announced its aggressive push into the US market.
Trip down the memory lane US Wireless Industry is celebrating 25 years of existence. Steve Largent invited Craig McCaw and John Stanton to reminiscence about the good old days - $4000 phones, hundreds of dollars of monthly bills, no roaming, 30 min talk time, obligatory 100 lbs bricksters. Craig emphasized on innovation while Stanton accurately put his finger on the big picture – US operators aren’t thinking like global companies or the media companies and can’t succeed in the new economy over the long haul. Spot On, John.
My first job was with a company that wrote the billing software for McCaw Communications in the early nineties (at that time, I was writing code for fraud prevention using RF fingerprinting for GTE, Ameritech, Bell Atlantic, Nynex, Airtouch, and the likes .. those were the days)
Open is in the Air With each CTIA over the last 18 months, carriers’ embrace of “Openness” is getting tighter and more nuanced. It is amazing how competitive threat can help disrupt the status-quo. While the keynote session sounded very scripted, each of the 3 CEOs from T-Mobile (Dotson), Sprint Nextel (Hesse), and Verizon (Lowell) are putting in place their “Open” Strategy (the current no. 1 operator was MIA). T-Mobile is launching an Apple-like App-Store next week with 50-50% rev-share which goes up to 30-70% in favor of the app developer but advertising is allowed (unlike iPhone Appstore). Streaming is also not allowed. Tricia at Moconews has more details. The balance between open network, customer care cost, and application performance can be a tricky one and everyone is tiptoeing the boiling waters carefully.
My favorite quips:
Hesse – “We have opened the network, Knock yourself out”
Lowell – “Our definition of open is irrelevant, it is what the customer wants”
Dotson – “Walled garden is a thing of the past”
It should be noted that two of the biggest success stories in the industry - iPhone and Blackberry are closed systems. Everything boils down to user-experience and value. We shouldn’t lose sight of that in the Open debate.
Yahoo’s oneConnect Marco Boerries, EVP, Yahoo! (read the piece he wrote for our Mobile Advertising book here) gave a keynote second CTIA running. These guys aren’t distracted by the Microsoft acquisition drama and remain the bright spot in an otherwise flailing organization. Over the past few months, they keep on refining their distribution and monetization strategy but they do need to attract droves of developers to make the initiative successful. Marco announced the launch of “Blueprint” – a framework for building mobile Internet apps and services. The trick is of course to attract developers. AOL is also pursuing a similar strategy.
Mobile Advertising There was a lot of discussion around mobile advertising each day with some new players emerging. Companies like Hipcricket (and many many others) are making real progress but I get a sense of “being stuck” from some of the players. Maybe, it is a function of the economy, or perhaps – fragmentation, lack of education, metrics, is keeping the industry from opening up.
CTIA released a whitepaper on 2D bar code scanning. Good to see some progress but the big question is – who takes the initiative to spend marketing dollars to educate the consumers and to make 2D bar codes pervasive in the US.
Carriers are getting more active in pursuing their mobile advertising strategies but I still see some fundamental missteps. Keep an eye on some of the work we will release later in the year to help guide the discussion, hopefully, in the right direction.
Mobile Social Networking Lot of discussion around mobile social networking (infact too much at times, even the mobile email player Visto considers itself a social networking company now), mobile only social networking, monetization challenges and opportunities. Most of the players are just aggressively focused on building an audience as quickly as possible. The monetization strategies include advertising, value added services, app store. Verizon and ATT announced their social networking strategies (built on the back of Intercasting’s platform) which essentially focus on social networking aggregation. This keeps them pretty safe and relevant. Current monetization model is that of subscription and maybe advertising down the road. For mobile only players the models varies from advertising heavy (Mocospace) to VAS heavy (mig33).
M2M The percentage of M2M companies in the mix increased compared to last time. For the first time I saw, carrier booths in M2M pavilion which was quite interesting. They clearly see this is a growing segment.
Smartphone Mania Devices like iPhone and Instinct are accounting for a disproportionately high share of the mobile download business now. And if data services is the only growth engine, why worry about launching sub-ARM9 devices, the economics is pointing towards cheaper smartphones on a fast network, it doesn’t make sense to port to 50 other devices when 80% of the revenue will come from a small subset of the devices.
For those of you attended the show, hopefully, it warmed you up for a really great mobile event being organized by GigaOM – Mobilize. Some terrific set of speakers and panels. I will be moderating two excellent panels (details below).
Your feedback is always welcome.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
What will we learn from Gustav? September 1, 2008
Posted by chetan in : 3G, 4G, AORTA, Federal, Mobile Ecosystem, Worldwide Wireless Market , add a comment
Stephen Morton/Getty Images (NYTimes)
Thankfully, Gustav won’t be as devastating as Katrina was. The lessons from the previous disaster forced the authorities to put together better evacuation plans, infrastructure contingencies, and better planning in general. Citizens also understood the gravity of the situation better having been there once before in the recent past.
From a technology perspective, there is still a lot that can be done, esp. where mobile can play a significant role in making the organization and communication in crisis better.
As I argued in my United Nations Foundation paper for the eHealth Summit in Bellagio, Italy, mobile can be used in the following ways:
As we have seen over the past many years, no country, whether in advanced state of development or in an emerging state of evolution, is immune to natural and man-made disasters. Mobile will have a significant impact on how we detect, monitor, respond, and analyze small and large-scale disasters. One of the areas where mobile will have the most significant impact is emergency response. The always-on capability of mobile will allow a channel of communication with the populace in an emergency situation. The channel can not only be used to inform but also be used to guide the affected in a very personalized way and in the process save millions of lives. Mobile will have an impact in the following areas of public safety:
Early detection – Just like life-threatening diseases, the chances of survival from a disaster are the greatest if it is detected very early. To gain an upper hand on the crises, the command-center must be in the position to take inputs from a variety of sources – humans, machines, sensors through a variety of channels – mobile, emails, phone calls, etc. By using such an infrastructure of early detection, many serious crises could be averted lowering the human cost.
Data gathering – the biggest impediment in effective command-control during an emergency is lack of data. Command centers are often operating in the dark without any real-time feeds that can help them prioritize and direct resources effectively. By placing various sensors in the impacted area as well as using the available cellular connections as sensor objects, officials will have a much better grasp on “situational awareness”[i] that can have significant impact on planning and execution of a strategy. For example, by having the data inputs of GIS, GPS, wind flow field, temperature, humidity, fuel load, topology, satellite imagery, citizen response, traffic status, evacuation response, etc., first responders in a case of a fire-event can be better prepared to get a quick grasp of the situation and respond appropriately.
Modeling and predicting disasters – Disasters don’t announce their arrival. As such, significant effort must be put in to model and predict behavior of an emergency from disease epidemic to terrorist attacks to wildfires to earthquakes. How are you going to direct an evacuation plan? How would you inform all affected citizens? What if the sensor networks fail? How does one feed the modeled data into a real-time emergency response?
Guidance in Emergency Response – The effectiveness of response is determined by how rapid it is and how good is the communication. By coordinating well with the application platforms and operators, command centers can issue very specific guidance and information to the end-users so that they know exactly what to do, which route to take, how to contact the authorities, etc. The guidance platform is not only for the end-users but will also be used by the authorities as well to coordinate their response by tracking their assets and resources, providing up-to-the-second status, and most important, based on real-time modeling, what to expect in the next few minutes and hours to come.
[i] Some of the ideas discussed in this section were developed during discussions at Future in Review 2008 conference. www.futureinreview.com.
New Book: Enterprise Mobility: Applications, Technologies and Strategies August 24, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, IP, IP Strategy, Indian Wireless Market, Japan Wireless Market, Location Based Services, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Networks, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Strategy, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments
Enterprise Mobility: Applications, Technologies and Strategies
IOS Press
Chapter Contribution
“Enterprise mobile product strategy using scenario planning”
SAMIMUNEER (SAP) and CHETANSHARMA
http://www.chetansharma.com/enterprise_mobility_scenario_planning.htm
Each year, we work on strategies and product plans for our clients around the world that end up touching millions of consumers worldwide and do behind-the-scenes research, due-diligence, and analysis work on several critical deals and transactions that move our industry forward. But, rarely do we talk or write about them, due to obvious reasons.
However, last year, I got an opportunity to briefly write about some of the strategy work. On the request of Dr. Basole at Georgia Tech, my colleague Sami Muneer (Sr. Director, Enabling Solutions at SAP – responsible for all things mobile) and I drew from some of the long-term strategy and product planning work we had done for SAP to put together a paper on “Enterprise mobile product strategy using scenario planning.” SAP is the leading global enterprise player and their view of the world is both comprehensive and long-term. It was a privilege to work with their global team on the project.
Our paper is being published as a chapter in the just released book “Enterprise Mobility: Applications, Technologies and Strategies” (IOS Press, Amsterdam. 272 pages, Editor R. Basole, 2008) as part of The Tennenbaum Institute Series on Enterprise Systems. The chapter is also being published in the special issue of peer-reviewed International Knowledge Systems Management (IKSM) journal published by Georgia Tech.
The book is a collection of 13 chapters from academics and practitioners in enterprise mobility. I often use scenario planning techniques when doing long-term strategic assessment and forecasting. In this chapter, we hope to provide a framework for scenario planning in mobile that can go across verticals, applications, and services.
You can download the chapter here.
IKSM is making available all the chapters online (for free) if you register for a free one year subscription.
For those interested in reading the paper copy can order the book here.
Book Introduction
As the number of enterprises using mobile ICT increases, it becomes imperative to have a more complete understanding of what value and impact enterprise mobility has, what drives and enables it, and in what ways it can and will transform the nature and practices of work, organizational cultures, business processes, supply chains, enterprises, and potentially entire markets. Enterprise mobility is therefore a topic of great interest to both scholars and practitioners. Enterprise Mobility: Researching a new paradigm aims to contribute to and extend both our theoretical and practical understanding of enterprise mobility by exploring the necessary strategic, technological, and economic considerations, adoption and implementation motivators and inhibitors, usage contexts, social implications, human-centered design issues, support requirements, and transformative impacts. The main objective is to discuss applications, technologies, strategies, theories, frameworks, contexts, case studies, and analyses that provide insights into the growing reality of enterprise mobility for scholars and practicing managers. This volume contains thirteen articles from leading scholars and practitioners and includes an examination of the changing nature of work, work practices, and the work environment; a discussion of critical enablers of enterprise mobility; authors exploring strategic considerations; and insightful case studies of enterprise mobility across multiple domains. Together, the articles explore enterprise mobility across the entire continuum.
Enterprise mobile product strategy using scenario planning
Author(s): Sami Muneer and Chetan Sharma
The Mobile industry is changing at a rapid pace and so is the behavior of enterprise workforce which uses mobile technologies. When planning for a long-term product roadmap, one has to consider a myriad of evolution trends and forecasts to determine the probable list of product functionality and their introduction timing in the lifecycle of the product. One has to look at the technology trends by market, the competitive landscape, and the mobile worker adoption trends. However, one can only come up with a prioritized list of capabilities by taking into context the company’s own core competencies, skill sets, and overall mission. This paper looks at how mobile product companies can use scenario-planning methodology to formulate their product strategy and roadmap.
The listing of the chapters is as follows:
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Enterprise mobility: Researching a new paradigm
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The convergence of wireless, mobility, and the Internet and its relevance to enterprises
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Business mobility: A changing ecosystem
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A socio-technical perspective of mobile work
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Designing productive spaces for mobile workers: Role insights from network analysis
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Telecommuting and corporate culture: Implications for the mobile enterprise
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User requirements of mobile technology: A summary of research results
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Mobile interaction design: Integrating individual and organizational perspectives
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A comparative anatomy of mobile enterprise applications: Towards a framework of software reuse
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Protecting data on mobile devices: A taxonomy of security threats to mobile computing and review of applicable defenses
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Enterprise mobility and support outsourcing: A research model and initial findings
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Enterprise mobile product strategy using scenario planning
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The strategic value of enterprise mobility: Case study insights
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Exploring enterprise mobility: Lessons from the field
Your feedback is always welcome.
Thanks.
Chetan Sharma
US Wireless Data Market Update - Q2 2008 August 10, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile Usability, Smart Phones, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 4 comments
http://www.chetansharma.com/usmarketupdateq208.htm
The US wireless data market grew 40% in Q208 compared to Q207 to reach $8.2B in data revenues. The total for 2008 stands at $15.7B for the first six months, 38% higher than the total for the same time period in 2007. The news of Alltel acquisition, iPhone 3G, and the flat rate pricing wars dominated the news. Though the infatuation for iPhone was a few degrees lower, Apple managed to keep the device front and center of the news cycles. US again exceeded Japan in mobile data service revenues for the quarter and the market is on track to reach $34B in data revenues for 2008.
- The US Wireless data service revenues grew 8.6% Q/Q to $8.2B in Q208. Compared to Q107, the data service revenues grew 40%.
- Overall ARPU increased by $0.46. Average voice ARPU declined by $0.05 while average data ARPU grew by $0.50 or 5%.
- Verizon lead in data ARPU with $12.58 (or 24.41% of the revenues) closely followed by Sprint at $12 (or 21.4354%), AT&T at $11.59 (or 22.91%) and T-Mobile at $8.60 (or 17%).
- The strongest growth in Q208 came from Verizon with 13% increase in data revenues from Q108. Verizon generated an industry record $2.6B in data revenues closely followed by AT&T at $2.5B. Both AT&T and Verizon are on target to exceed $10B in data revenues for the year for the first time by any operator worldwide besides NTT DoCoMo (the two US carriers are already close to 50% of the target). AT&T and Verizon now account for 62% of the market data services revenues. Sprint reversed its decline in data revenues during last quarter to increase its data revenues by 3% in Q208. T-Mobile registered a 5% uptick.
- The average industry % contribution of data to service revenues exceeded 21% and now stands at 21.41%. A year ago, the % contribution stood at approximately 17%.
- The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q208, Verizon had that 49.6M (or 72%) data subscribers. Verizon, AT&T and T-Mobile subscribers joined to send over 169 Billion text messages in Q208 translating into almost a message every 2 hours or so. This compared to users in Philippines where average routinely surpasses a message every hour.
- In terms of net-adds, Verizon continued to lead with 1.5M net-adds again edging AT&T by 200K subscribers for the quarter.
- For the first time, T-Mobile USA entered the top 10 rankings of global mobile operators by data revenues replacing SK Telecom which suffered decline for the second straight quarter. In fact, SKT got pushed to the 12th spot by Orange France. The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the quarter, Verizon, AT&T, and Sprint Nextel stood at #4, 5, and 6 respectively with Verizon and AT&T closing in on China Mobile (2nd) and KDDI (3rd). AT&T and Verizon are in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
- Non-messaging continues to grab 50-60% of the data revenues for the US carriers.
- The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe started to enter the US market with industry wide flat-rate pricing plans that included data. Sprint has been the most aggressive with its “Simply Everything” plans that include data services. 30% of its $100 plan is assigned to data revenues (for accounting purposes).
- Q208 saw the blockbuster acquisition of Alltel by Verizon which is likely to close by end of the year. The $28B acquisition will catapult Verizon ahead of AT&T in total number of subscribers by a big margin (10M or so) and make it a leader in almost all major categories.
- There continues to be tremendous activity in the area of Mobile Advertising. AdInfuse, Admob, Amobee, Millennial Media, Nokia, Rhythm New Media, Yahoo, and others ran compelling campaigns. There was also meaningful activity on the carrier front with industry wide initiatives.
- Venture money experienced a decline into the mobile sector. During the first half of the year, private wireless companies announced $1.8B in 173 financings, compared to $2.7B in 209 financings for the same time period last year. (Source: Rutberg)
- Nokia eclipsed 100M unit sale in Q208 for the fifth straight quarter. It sold over 122M handsets in Q208 (out of the total 297M), almost as many as the next four combined. Nokia’s global market share edged past 41%. Samsung at 15%, Motorola with 9.5%, LG with 9.3% and Sony Ericsson with 8% rounded out the top five. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008
- 3G penetration in the US went past 30% in Q208, with Verizon leading the pack with over 60% 3G subscriber penetration compared to 25% 3G subscriber penetration at AT&T. T-Mobile is slowly expanding its 3G coverage. 3G subs have over $23 in data ARPU. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
- Apple announced a 3G iPhone in June and launched an aggressive expansion plan to reach 70+ countries. The broadband and appstore capabilities are quite attractive to consumers and it shows. VPN and direct access to Exchange will get many more users into the mix and IT folks less apprehensive. The clearcut business model of 30/70 split is also attractive. Apple is likely to announce in Sept (may wait for its quarterly results in Oct) that it has reached the 10M goal for iPhone.
- Feeling the threat from Apple and Google, Nokia bought the remaining portion of Symbian and announced the plan to open-source the OS, making things interesting in the wireless ecosystem. It puts Microsoft on the defensive and will be forced to reduce its licensing fee per device closer to zero. While Apple basked in the glow of iPhone 2.0, Google spent time swatting rumors of Android delay. Giving the changing dynamics in the industry, Google might be forced to play its gPhone hand earlier than it had anticipated.
- After raising $14.5B from friends and family, Clearwire’s net-adds dropped in Q208. It needs to get its content and handset strategy in place in short-order.
- In a sign of convergence battles to come, T-Mobile’s @Home and Sprint’s Femto cell initiatives started to take hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service.
Global update
- China and India added approximately 52M subscriptions combined in Q208 with China marginally edging out India. For the year, both countries have added almost identical number of subscriptions (53M). By comparison, US added 7.5M for the same time period.
- NTT DoCoMo continues to dominate the wireless data revenues rankings with almost $3.4B in data services revenue in Q208. Almost 40% of its revenue now comes from data services. DoCoMo also crossed 84% in 3G penetration in Q208 and is expected to cross 90% by early 2009.
- Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are consistently topping 30%.
More details in our worldwide wireless data market update in our Global Wireless Data Market Update Sept 2008.
Your feedback is always welcome.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
The Larry Weber Show: Mobile Advertising and Wireless Technology August 5, 2008
Posted by chetan in : 3G, AORTA, Carriers, European Wireless Market, Intellectual Property, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentThe legendary Larry Weber interviewed me for his Show “MarketEdge with Larry Weber.” It is live now over at Webmaster Radio. The topic of discussion was of course “Mobile Advertising and its implications to the mobile ecosystem.”
Enjoy!
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