jump to navigation

New Research: Competition and the Evolution of Mobile Markets April 28, 2011

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Devices, Enterprise Mobility, European Wireless Market, Gaming, General, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Messaging, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Networks, Patents, Privacy, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Competition and the Evolution of Mobile Markets

A Study of Competition in Global Mobile Markets

clip_image002

http://chetansharma.com/mobilecompetition.htm

Over the course of the last decade, mobile communications has become an essential part of the global fabric of evolution. With almost 70% global subscription penetration as of 2010, mobility is being embedded into almost every facet of our lives. Mobility is also spreading across verticals whether it is m-pesa in Kenya or SMS based counterfeit medicine detection in Ghana or paying for your coffee using your NFC enabled mobile phone in a Tokyo café or watching the cricket world cup broadcast while hiking the Yangtze river near Tibet. Consumers expect access to information everywhere they are and the ecosystem is responding with continued innovation, which has become extremely critical in managing the competitiveness of nations.

It is also apparent that some of the innovation and market dynamics has been evidenced by the competitiveness of these markets at different levels – network, devices, and services. While the market entry conditions into the devices and software services markets have gone through significant overhaul this last decade, the competitiveness framework of the mobile networks has been more structured and controlled in many instances.

Given the importance of the mobile network infrastructure to every nation’s competitiveness, security, and productivity, it is useful to understand how the “competitive mobile markets” are formed. In theory, the perfectly competitive markets are in the best interest of the consumers as they provide the best value given the competitive dynamics and the equilibrium provides good checks and balances for the ecosystem.

The global mobile networks have shown a remarkable adherence to the “Rule of Three” which states that in any mature industry, 3 top players dominate the market. Sometimes it has been dictated by the regulators and in other instances by the markets. Some markets like in Europe have settled into a state of equilibrium while other hyper growth markets like India are shuffling to find the right balance.

The elements of globalization are also shaping how mobile network operators grow. The regulators and the political class are increasingly looking at mobile networks as national assets and any foreign ownership generally goes through tremendous scrutiny.

Having worked in major mobile markets around the world, we have been intrigued by the framework  for a competitive market and this is the theme we explore in this working paper. Having the front row seat in an industry that is growing stupendously has given us some unique perspective on the competitive forces at work in the mobile space. We studied the competitive landscape in 40 top mobile markets around the globe.

This paper presents the analysis and an in-depth analytical framework to study the competitive landscape in the global mobile markets.

Download Paper (45 pages, 2MB)

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

Mobile Industry 1H 2010 Assessment July 8, 2010

Posted by chetan in : 3G, 4G, AORTA, BRIC, CTIA, Carnival of Mobilists, Carriers, Enterprise Mobility, European Wireless Market, Gaming, Indian Wireless Market, Japan Wireless Market, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Partnership, Smart Phones, Speaking Engagements, Strategy, US Wireless Market, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Mobile Industry 1H 2010 Assessment

http://chetansharma.com/1H10mobileassessment.htm

As the mobile world approaches the 5 billion subscription landmark, it is time to do a half yearly assessment of 2010. We will have our official Q2 2010 analysis for the US market in Aug and the global analysis for 1H 2010 in Sept after all the numbers are in. In the meantime, it might be worthwhile to take a stock of the first 6 months, the ensuing trends and what they mean for the long-term.

Mobile Ecosystem has become much more complex

In case you didn’t notice, the competitive landscape has changed significantly over the last 6-12 months. The fine line between partners and competitors can get obliterated in a quarter. Apple is competing with Cisco, Comcast is going after AT&T’s business, Visa and Verizon want to be the payment channel of choice, Amazon is gunning for Microsoft’s enterprise business, Kodak is competing with Yahoo, so on and so forth. One product launch, one acquisition, can change the game in an instant.  And this is only the beginning.

Network evolution: more capacity, more bandwidth, tremendous usage

We have covered this topic in detail in our paper - Managing growth and profits in the Yottabyte era. As we had predicted, the tiering of pricing plan has started in the US which is actually a good thing. It will force some discipline and technology innovation to solve the longer-term problem of network congestion. While AT&T got things in motion, market forces will take care of the right pricing and GB levels in the coming months. Data consumption on TeliaSonera and Clearwire’s network is a good indicator of what’s to come with 3-4x the usage compared to its counterparts.

New sources of revenue: mobile advertising, commerce, and more

Regular readers know that we have been bullish on the mobile advertising space for a long time. Over the last 6 months or so, some of the pieces are coming together though significant amount of work remains. Sergio Zyman, former CMO of Coca Cola once said “There is only one rule: advertising must sell.” And nothing will sell better than mobile. Period. While North America and Western Europe have been slow to wake up to the mobile commerce opportunities, in Japan, it is already a multi-billion dollar industry. Several trials are underway that are going to help open up the western market in the next 12 months for significant opportunities. In fact, the pie for the mobile services will keep on growing bigger but so will the number of players who want a piece of it. This will set up an interesting tug-of-war for the next couple of years

It’s the iPhone, dude!

Just when the competitors think they are all caught up with Apple,  Steve Jobs and co. releases a new product that raises the bar further. Google, Samsung, HTC, LG, Motorola have done well in emulating Apple while Microsoft and Nokia have fallen behind. The embarrassing launch and demise of KIN is a example of how confused things are for some of the players. While both Microsoft and Nokia are capable for mounting good comebacks, it will take more than an org change and a sprinkle of holy water. Android will easily outsell iPhone just by the law of arithmetic but Apple’s secret weapon is iTunes. With over 150M billing relationships, it has fostered a great apps ecosystem that others will find hard to replicate entirely. While some point to Apple’s tiny marketshare, wall street looks at the fat margins - rewarding Apple by making it the most valuable technology company surpassing Microsoft in a major tech tremor. Google has run the mobile chess game with great acumen so far. Despite the Nexus experiment, the explosion of the superphone category has gone according to the plan. Overall, most of the western operators are selling smartphones at 50%+ levels each quarter.

Always On Real-Time Access

The always-connected vision of the late Mark Weiser is finally approaching some realization. Mobile is so perfectly suited for cloud computing. The younger generation is growing with the expectation that they can get access to any content from any device anywhere. The constraints and friction that doesn’t allow them to do that is just not acceptable. As such, the mobile industry is scrambling to provide tools and technologies that help the digerati access content at will. All this has to be designed and developed against the current network, content, and device constraints and evolution paths. Whether it is access to music or movies for a 15 year old or availability of the entire corporate knowledgebase, information will need to be available at a touch of a button. Companies big and small are investing in the infrastructure and software tools to make this happen. We are likely to see some interesting launches in the next 12 months.

Battle for the analytical mind - data, context and intelligence drives everything

Many people don’t realize that the battle for the consumer of 2015-2020 has already begun. The company that has the best understanding about the most consumers will have a pole position in the mobile ecosystem. Players like Google, Apple, Amazon, Mastercard, Microsoft, Facebook, Twitter, China Mobile, Disney, AT&T, Vodafone, Motorola, and others are amassing a lot of information on individuals. Besides Google and Apple, Facebook has quietly become one of the most important players in the mobile ecosystem with its phenomenal reach across many countries, tremendous stickiness of the app, and innovative onboarding process of the carriers. Of course, data is a double edged sword - it can provide enormous benefits to consumers in terms of intelligence, experience, and engagement and can also prove to be problematic when privacy and data breaches happen. In fact, that will be one of the tightest ropes many including the regulators will have to walk this decade - figuring out what they call in Swedish - logam - the right balance.

Apps vs. the Web

Recently, the ecosystem has been more enamored with the apps vs. the web debate than the early departure of Brazil and Argentina from the world cup. It is rather a silly debate. As we mentioned in our apps economy paper, both worlds will coexist for a long time. What matters for the developers is the “reach” of a certain platform or technology and the “cost” and “potential” of that reach. For the user, the only thing that matters is what’s available on “their” device. Obviously, the capabilities of the mobile browser will grow over time and it will make more sense to build certain category of applications for the web vs. on the native platforms but developers live and die in the present.

Internet of Things

Nokia took the leadership stance of announcing that all of their smartphones by the next year will have NFC. You can expect pretty much all major OEMs following the same trend which means that hundreds of millions of devices will be equipped with a chipset that will enable new experiences, applications and services. Though we still need to do a lot of work to complete the end-to-end ecosystem, we are getting close. Further, all major carriers have created separate units to address the M2M and emerging devices opportunity. iPad showed what’s possible - it fundamentally created a new leisure computing category. Also, iPad (and similar form factor devices) will find good usage in the enterprise as well. Pretty soon, it will be hard to imagine a computing device without the communication capability. Operators will have to release pricing plans to accommodate such an evolution.

Nurturing ecosystems - fight for the developer mindshare

It is good to be a developer in 2010. The success of many players goes through developersville. The love fest won’t last forever though, it will depend on how vibrant the various ecosystems become and how profitable individual developer shops are over the course of time. One thing Microsoft did very well with the windows empire was to create a web of partners and developers who were incented to use the tools and develop for the platform. In a more fragmented world of mobile, things are a bit complicated. Developers don’t have time or the energy to go after the newest, shiniest toy, what matters in the end is the “cost” to develop, “reach/distribution” of the platform, and “potential” of the reach. Players who don’t consciously make an effort to make developers thrive in their ecosystem will see their developer efforts collapse like house of cards. While the media attention is squarely on iOS and Android, we are not heading down the duopoly path as the dynamics of the mobile ecosystem are significantly different from that of the PC. RIM, Nokia, Samsung and others will do well, the fight is over the relative rankings in the pecking order.

Shifts in the revenue sand dunes

By the end of 2010, the global ondeck revenues will be overtaken by the offdeck revenues. As the smartphone penetration grows, it is less likely that the user will purchase VAS from the operator. While the carrier gets a healthy access revenue of $15-40 or more/month, the VAS business is shrinking for many. Some operators are trying to extract some value but are likely to follow T-Mobile’s path and give up on the smartphone appstore eventually. On the featurephones and probably low-tier smartphones, operator do have a role to play but perhaps some of it can be outsourced to other appstore providers so that they can focus on higher-margin services. We are going to see a readjusting of the appstores again in the next 12-24 months with the weaker ones whittling away from the landscape.

New experiences - display, interaction and commerce

The man-machine interaction took a significant leap with the introduction of the iPhone. Now the touch-interface is embedded in our evolutionary genes. There is significant work going into accomplishing more with less friction with the help of new interfaces and experiences that can like trying out a new outfit in front of a mirror - at home or in the store and with a flick of finger - choose the color, purchase it, and get it shipped. The amount of time it takes to “accomplish any given task” is going to reduce dramatically. With the help of contextual sensors, extreme personalization, and brainiac software, we will take automation to a new level. This will lead to new experiences that will enable more commerce, social interaction and participation, and general awareness and intelligence about every day things. Examples like Kinect, Augmented Reality, Projection displays are just the start of the decade when the display and interaction paradigms will be fundamentally redefined.

Reallocation of revenues - winners and losers are decided in reallocation

If we take a look at the spending habits of the US consumers on “access and communication services” which includes the spending on Telephone, Cable, Internet, and Cell phones, the total “access” spending over the course of last decade has been consistently around 4% of the total personal income per capita. However, the share of each of the services has been changing steadily. Telephone used to have 65% share of the spending but is going to be below 30% by end of 2010. Others have been climbing at the expense of telephone revenues, especially the cellphones which since 2007 command the highest share. So, the overall spending has stayed constant while there has been significant reallocation of spending. Similarly, within cell phone services, data has gone from being less than 1% of the overall revenues to over 35% in 2010 and is going to be more than 50% of the overall revenue mix by early 2013. Mobile operators will need to figure out how to manage these reallocation undercurrents and maintain the overall life time value of the customer. It will come from re-architecting of the business and technology practices as well through the introduction of new services.

Mobile takes off in Verticals

Mobile has become a full-fledged computing platform and other industries are taking notice. There is significant work going on in the mHealth, mRetail, mCommerce, mEducation, mEnergy, and others to keep things busy for the next few years. There are some really innovative startups focused on making use of the computing power that the device affords and turn them into full-fledged medical instruments. Add the communication bit and you can see the revolution happening in front of your eyes. The impact on saving lives and quality of health care will be tremendous - worldwide. The regulators and the legacy players will need to keep up. As we mentioned before, the NFC wave is coming and if all goes well, it will change the retail experience. Stay tuned.

(Mobile) World is flat

There is a significant readjusting of players going on right now with some of the Asian players flexing their muscles for dominant share of the market. Competition is driving more M&A, the gravity of the mobile data world is slowly shifting from Japan and Korea to the US with Verizon overtaking the long time leader NTT DoCoMo in terms of quarterly mobile data revenues. India’s Bharti became the number 5 operator after completing the acquisition of Zain. On the device front, Samsung and LG have been ferocious in their pursuit of marketshare and have been rewarded well by their performance esp. in the North American market. HTC has undergone metamorphosis and has become a serious competitor. Many non-traditional brands like Dell, Garmin, HP, Cisco are also flexing their muscles in the space that has become the computing battleground. On the infrastructure front, ZTE and Huawei are going to make life difficult for some of the players. We can expect the big “M&As” to continue as the industry consolidates around the top 3 players in different markets and sectors. The local skirmishes will spill into the global arena. North American operators have been curiously silent on the global front. Being the most lucrative mobile market probably has something to do with it  but we can expect some of the bigger players to go shopping in the coming days.

Regulatory Excursions

The much-awaited national broadband plan was finally unveiled earlier this year. The current FCC has done a good job of engaging the industry and informing the citizens, better than its predecessors. It is also taking a deeper interest in setting up guidelines for the industry. The Comcast ruling was a setback but FCC is moving ahead with its plans. It will be interesting to see the execution details and how things pan out over the course of this decade. Similarly, regulatory agencies in other nations are acutely aware of the role broadband plays in nations economy and competitiveness and what they need to do keep their country on track. The mad scramble for more spectrum is underway. FTC is also keeping a close eye on the mobile industry for privacy related violations. If someone has any doubts of how much regulators are likely to get involved in this matter should read through the settlement between the FTC and Twitter.

Scenario Analysis - more changes in the next 10 years than in the previous 100

Despite all the commotion, the excitement, and the turbulence in the ecosystem, the trajectory of the winners and losers is not set. Like the Chaos theory, a lot depends on how the dynamic elements of the mobile universe effect and react to changes.  Players will do well to have strategies in place per scenario so they can adapt quickly and keep the mother ship in the right direction. We can expect more changes in the next 10 years than in the previous 100. The triggers for various scenarios will vary - regulatory, competitive, technology, business model, consumer adoption, economic - each of these can have an impact on how a trend becomes the fact of life.

To discuss all these trends and more, we are putting together a unique Mobile Future Forward Executive Summit and are fortunate to have the company of some of the sharpest minds in the industry, folks who both have the vision to shape the evolution and the authority to invest billions of dollars this decade to make things happen. Hope to see you in Seattle on Sept 8th.

First 25 readers to use the discount code FUTBOL get $200 off the regular price.

Abhi Ingle, VP, AT&T; Amir Mashkoori, CEO, Kovio; Anand Chandrasekhar, SVP & GM, Intel; Bob Azzi, SVP - Network, Sprint Nextel; Chamath Palihapitiya, VP - Growth, Mobile, Intl, Facebook; Christopher Dean, Chief Strategy Officer, Skype; Danny Bowman,President, Sprint Nextel; David Weiden, General Partner, Khosla Ventures; Dr. Boris Nikolic, Sr. Program Officer, Global Health & Discovery, Bill & Melinda Gates Foundation; Dr. Genevieve Bell, Intel Fellow & Director, User Experience, Intel; Dr. Greg Brandenberg,CEO, Columbia Basin Health Association; Dr. Sailesh Chutani, CEO, Mobisante; Dr. Suzanne Clough, Chief Medical Officer, WellDoc; Glenn Lurie, President, AT&T; Hank Skorny, SVP, Media Mobile Cloud Computing, Real Networks; Jack Kennedy, EVP, News Corp; Joe Sims, Lead Partner - Digital Convergence , Booz & Company; Jon Stross, VP & GM - Babycenter, Johnson & Johnson; Ken Denman, CEO, Openwave; Krishna Vedati, SVP & GM - Mobile, AT&T Interactive; Lirong Shi, President, ZTE; Louis Gump, VP Mobile, CNN; Mario Queiroz, VP - Product Management - Android, Google; Mark Selby, VP, Nokia; Matt Bross,CTO and Vice Chairman, Huawei; Michael Sievert, Chief Commercial Officer, Clearwire;Neville Ray, Chief Network Officer, T-Mobile ; Omar Javaid, CEO, BBDO; Paul Palmieri, Founder and CEO, Millennial Media; Rob Glaser, Chairman, Real Networks and Partner, Accel;Sean Cai, VP - Advanced Technology, ZTE; Stephen David, Former CIO, Proctor & Gamble;Subba Rao, CEO, TataDoCoMo; Takayuki Hoshuyama, CEO D2 Communications; Tony Lewis, VP, Verizon; Wim Sweldens, President, Alcatel-Lucent

Each panel discussion will involve luminaries/experts on specific topics, for e.g.

M2M/Internet of Things

Danny Bowman, President, Sprint

Amir Mashkoori, CEO, Kovio

Tony Lewis, VP, Verizon Wireless

Mark Selby, VP, Nokia

Evolution of Communication/ Engagement

Christopher Dean, Chief Strategy Officer, Skype

Chamath Palihapitiya, VP - Mobile, Facebook

Mario Queiroz, VP - Android, Google

David Weiden, General Partner, Khosla Ventures

The size of the panel will be small and the time duration long so we can delve deep into the issues and questions. For more details, please visit http://www.mobilefutureforward.com

Your feedback is always welcome.

Thanks.

Chetan Sharma

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

Announcing Mobile Future Forward Executive Summit June 14, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Speaking Engagements, Speech Recognition, Strategy, US Wireless Market, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

logo

You have seen some hints of the project that we have been working on for sometime. We are proud to announce “Mobile Future Forward” Executive summit to be held in Seattle on Sept 8th, 2010.

Registration is Open Now. Early Bird expires June 30th 2010.

MFF is a gathering of some of the most brilliant minds in the mobile industry. The goal is to look at how mobile is likely to evolve over the course of this decade. We couldn’t have done this without the tremendous support of our excellent sponsors who are paving the way in their respective segments.

image

 

The speaker list includes the who’s who of the mobile industry:

image

Glenn Lurie, President, AT&T

Subba Rao, CEO, TataDoCoMo,

Mike Sievert, Chief Commercial Officer, Clearwire

Louis Gump, VP Mobile, CNN,

Paul Palmieri, Founder and CEO, Millennial Media

Dr. Sailesh Chutani, CEO, Mobisante

Abhi Ingle, VP, AT&T Wireless

Ken Denman, CEO, Openwave

Amir Mashkoori, CEO, Kovio

Stephen David, Former CIO, Proctor & Gamble

Dr. Genevieve Bell, Intel Fellow, User Experience, Intel

Hank Skorny, SVP, Real Networks

Jon Stross, VP & GM - Babycenter, Johnson & Johnson

Dr. Suzanne Sysko, Chief Medical Officer, WellDoc

Dr. Boris Nikolic, Sr. Program Officer, Bill & Melinda Gates Foundation

Krishna Vedati, SVP & GM - Mobile, AT&T Interactive

Christopher Dean, Chief Strategy Officer, Skype

Russ McGuire, VP, Sprint Nextel

Jack Kennedy, EVP, News Corp

David Weiden, General Partner, Khosla Ventures

Anand Chandrasekhar, SVP and GM, Intel

Chamath Palihapitiya, VP Growth/Mobile, Facebook

Rob Glaser, Chairman, Real Networks

Wim Sweldens, President – Wireless Division, Alcatel Lucent

Takayuki Hoshuyama, CEO, D2 Communications

Neville Ray, SVP, T-Mobile

Bob Azzi, SVP—Networks, Sprint Nextel

Mario Queiroz, VP—Android, Google

Matt Bross, Global CTO, Huawei

We will be covering the following topics in detail:

You can read more about what you can expect at the executive summit in the following whitepaper.

Mobile Future Forward Paper

I hope to see you there.

Chetan Sharma

Chief Curator

Mobile Future Forward

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

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

US Wireless Data Market Update – Q1 2010

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

Executive Summary

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

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

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

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

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

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

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

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

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

What to expect in the coming months?

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

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

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

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

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

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

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

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

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

Service Revenues (Slides 7, 16)

ARPU (Slides 8-11)

Subscribers (Slides 12-14)

Applications and Services

Handsets

Open

Data Traffic (Slide 15)

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

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

Your feedback is always welcome.

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

Thanks.

Chetan Sharma

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

Global Mobile Data Market Update 2009 March 31, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, Storage, Strategy, US Wireless Market, Unified Messaging, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

Download PPT (2.6 MB)

Download PDF (3.6 MB)

Executive Summary

The Global Wireless Markets continued to grow rapidly especially in India and China where the carriers (combined) are adding almost 30M new subscriptions every month. Amongst the two, India is outpacing China 2:1. China touched 750M subscriptions while India crossed 525M by the end of 2009. With 4.6B subscriptions, the global subscriptions penetration was above 68%.

The global mobile data revenues reached $220B and mobile data now contributes 26% of the overall global mobile service revenues.

As expected, the overall global mobile revenues stayed pretty flat for the year at around $1.1 trillion as many regions were hit by the recession and the competition pushed the ARPU lower for many operators. While the countries like US, Japan, China, and India showed very little signs of pullback, most of Europe and the developing world experienced a decline in overall service revenues in 2009. All the major markets have their data contribution percentages above 10% now.

For some of the leading operators, data is now contributing almost 50% of the overall revenues. However, the increase in data ARPU is not completely offsetting the drop in voice ARPU for most operators. NTT DoCoMo continues to dominate the carrier ranking in terms of the mobile data service revenues, Verizon Wireless which became #2 replacing China Mobile and is slowly edging towards the #1 spot and is likely to overtake DoCoMo within the next few quarters.

Though 4G as a standard hasn’t been defined yet, the discussions around LTE and WiMAX deployments grew intense. Telia Sonera became the first operator to commercially launch LTE. At CTIA, Sprint/HTC became the first players to launch a WiMAX smartphone and MetroPCS/Samsung took the honors for the LTE smartphone.

2009 also marked the year when the global data traffic (monthly) exceeded the global voice traffic. In the US, the yearly mobile data traffic exceeded the voice traffic for the first time.

We are also entering the phase of global mega-mergers in telecom. Bharti Airtel of India just acquired Kuwait-based Zain Group to become the 5th largest telecom group in the world (at the end of 2009, it was #9). There are now 14 telecom groups with 100M or more subscriptions. While China Mobile’s ARPU is 1/5th of its western counterparts, it operates its business at higher margin, around 51%. There are a number of global players mainly in Europe and Asia who have mastered the art of running lean operations and if they have good bank balance they are going to go shopping in the days ahead.

From the revenue perspective, the $50 billion revenue club is more exclusive with China Mobile, Vodafone, AT&T Mobility, and Verizon Wireless as its sole members.

As we sit at the cusp of the iPad era, there is a bigger transformation taking place and that is of the connected consumer electronic devices (CEDs). Few years from now, most popular CEDs will have connectivity. We are also approaching the start of phase where pricing of access will start to morph - we will see the introduction of family data plans (something we have been advocating for some time), ability to connect multiple devices to the same GB plan, more granular use plans (per session/day/week/mo/yr etc, roll-over GBs anyone?). As the number of connected devices/consumer increases, we will start worrying about Average Margin Per User (AMPU) or Average Margin Per Connection (AMPC) because ARPU won’t quite capture the dynamics of the industry.

Exciting times indeed.

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.

Impact of Global Recession

  • Telecom in general fared better than other industries. In some regions, it hardly caused a tremor. However, in most nations, the impact was felt by the operators. Amongst the 40 major operators we studied, SK Telecom, 3 Australia, KTF, T-Mobile Netherlands, Rogers, Softbank Japan, Singtel, Vodafone Italy, T-Mobile Germany, 3 Sweden, Telstra, China Unicom, and Vodafone Germany experienced increase in both the data ARPU and the overall ARPU during 2009. Some of increase was due to the fluctuation in international currencies e.g. Korea.

  • Looking at the data at a country level, most nations noted a decline in overall ARPU. Only Venezuela, Pakistan, Argentina, Bangladesh, Australia, and Poland showed positive increase in ARPU since 2008.

  • Rule of Three is kicking in most markets with smaller players having to consider the M&A option to remain viable. T-Mobile/Orange, Bharti/Zain tie-ups are just the start of that process. We are likely to see many international mergers in 2010 and beyond as power in the mobile ecosystem self-adjusts.

  • 5 new players joined the 100M subscriptions club. The new members are: Bharti Airtel (India), MTN Group (South Africa), Orascom (Egypt), Etisalat (UAE), and MTS (Russia). The top 9 telecom groups in the world are: China Mobile, Vodafone, Telefonica, America Movil, Telenor, T-Mobile, China Unicom, TeliaSonera, and Orange.

Service Revenues

  • US extended its lead over Japan as the most valuable mobile data market in service revenue with US adding $44.56B vs. $32.5B for Japan in 2009. China with $20.3B was ranked number 3. US registered the highest growth amongst the top 3 with over 40% increase from EOY 2008 levels followed by Japan and China.
  • The top 10 nations by service revenues are: US, China, Japan, France, Italy, UK, Germany, Brazil, Spain, and India.
  • The top 10 nations by data service revenues are: US, Japan, China, UK, Italy, Germany, France, Australia, Spain, and Korea.
  • NTT DoCoMo continues to dominate the wireless data revenues rankings with over $16B in data services revenue in 2009. Almost 46% of its overall revenue now comes from data services. DoCoMo also crossed the 95% 3G mark.
  • NTT DoCoMo was followed by Verizon Wireless, China Mobile, AT&T, KDDI, Sprint Nextel, Softbank Mobile, T-Mobile USA, O2 UK, and China Unicom to round up the top 10 operators by wireless data service revenues.
  • Each of the top 5 carriers exceeded $10B in yearly mobile data service revenues in 2009
  • Data revenues for the top 10 operators now account for almost 43% of the global mobile data revenues.
  • The biggest jump in data revenues was experienced by Verizon, Softbank, and AT&T. DoCoMo saw an 11% increase for the year.
  • Most of the operators in the developed nations are contemplating future strategies to boost data revenues such that the decline in voice revenues is at least compensated for. There are very few operators who have experienced increase in overall ARPU.
  • China reported approximately $20.3B in data revenues for 2009 and the percentage contribution from data services is around 32%, data ARPU is around $3.2. For India, data ARPU continues to stay below $0.50 as most of the new adds are voice only subscribers and there is continued price pressure in the market.
  • China Mobile remains the most valuable telecom operator with over $195B in market cap. It is followed by Vodafone at around $122B. Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans.
  • In 2009, SMS’s vice like grip on data revenues continues 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 has been at the cutting edge of the mobile data evolution by creating new markets. They are exploring new technologies and social experiments ahead of almost anybody else in the market. 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, technologies, and ecosystem dynamics in these markets to get a sense of what’s coming.

· From the revenue perspective, the $50 billion revenue club has limited membership with China Mobile, Vodafone, AT&T Mobility, and Verizon Wireless as its sole members.

ARPU

  • Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like DoCoMo, and Softbank are over 46%. KDDI, 3 Australia, 3 Italy, 3 UK, Vodafone UK, O2 UK, Telstra, and 3 Sweden exceeded 35% and many others are on the verge of crossing the 30% mark.
  • NTT DoCoMo reported the highest data ARPU for the year while Rogers took away the honors for the highest overall ARPU. Other notable percentage increases in ARPU were from 3 Italy, SK Telecom, KTF, T-Mobile Germany, 3 Sweden, and T-Mobile Austria. The Japanese operators saw a decline in ARPU by 3%.
  • 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 53% (or $2) contribution coming from the data services.
  • Softbank of Japan looks set to be the first major operator (outside of Philippines) with more revenues coming from data services than voice.

Mobile Data Traffic

  • We have been calling attention to the tremendous increase in mobile data traffic for some time. The discussion has hit mainstream and many operators are scrambling to nail-down their short-term and long-term strategies to manage the data traffic growth in their networks. See our paper on the subject "Managing growth and profits in the Yottabyte era." The recommendations discussed in the paper are slowly being adopted by various vendors and operators worldwide.
  • The global mobile data traffic exceeded an Exabyte for the first time in 2009. In fact, the data usage is growing so fast that this year, the two territories experiencing the most growth - North America and Western Europe are both going to exceed an Exabyte in mobile data traffic.
  • 2009 also marked the year when the global data traffic (monthly) exceeded the global voice traffic.
  • For many of the superphone heavy operators, devices like iPhone and Android account for more than 50% of their total data traffic.
  • 2010 will mark the first year when the total number of mobile broadband connections will exceed the total number of fixed broadband connections.

For more mobile data traffic analysis, please stay tuned for the second edition of our Yottabyte research

Subscriptions

  • India continues to be the hottest market on the planet in terms of net-adds with (again) a world record-setting month in Jan 2010 with 19.9 million net adds. To give you a perspective, this is almost 1.5 times  the number of subscribers US added in the whole year. It is like adding a Canadian wireless market every month. For the year 2009, India added 177 million subs vs. 106 million for China. Combined, one year of growth in these two market is equivalent to the size of the third largest market - the US, to date. Making money on the net-adds is a different proposition all together (more discussion on the international market in our global market update later this month)
  • Thanks to the explosive growth in the emerging markets, the global mobile market went past 4.6B in 2009 and is likely to cross the 5B mark in 2010. The global mobile subscriptions now represent over 68% of human population on planet earth.
  • China crossed the 700M subscription mark in July while India’s total went past 500 in Nov. In the meantime, US crossed the 90% subscriptions mark in 2009.
  • 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.
  • The top 10 nations by subscriptions are: China, India, US, Russia, Brazil, Indonesia, Japan, Germany, Pakistan and Italy.
  • China Mobile became the first operator (and likely to be the only one for a very long time) to cross the 500M mark. It remains the #1 carrier in terms of the total number of subscriptions followed by Vodafone. Telefonica, América Móvil, Telenor, T-Mobile, China Unicom, TeliaSonera, Orange, and Bharti Airtel round up the top 10 largest telecom groups in the world.

Mobile Apps

· The total number of app downloads in 2009 reached 7 billion resulting in approximately $4.1B in revenues 12% of which was from mobile advertising.

· The number of non-carrier appstores jumped to 38 from 8 in the previous year.

· While Asia had the highest percentage of the download share, North America had the highest share of the apps revenue accounting for over 50% of the total revenue.

· The paid ASP in 2009 was approximately $1.9 and the advertising revenue generated from the free applications was approximately $0.09/user/app/year

For a more detailed analysis of the mobile apps market, please see our paper “Sizing the Global Mobile Apps Market”

Others

  • Messaging still accounts for the lion-share of data service 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 gradually chipped away the share from messaging. Alternate devices with wholesale cellular agreements are also flooding the market. In Japan, Mobile Commerce is expected to do much better than 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.
  • Nokia dominated the year as usual but the revenue share is shrinking and so is the lucrative smartphone share. Apple, RIM, and Google are relentlessly attacking the top tier while Samsung, LG, and others giving a tough fight for the bottom tier. We see a new middle tier emerging that has the form factor of a featurephone and functionality of a smartphone. The smartphone category is getting further split into regular qwerty smartphones like Blackberry and the touch and full browser based superphones like the iPhone and Droid.
  • The year was dominated by several blockbuster device launches like the iPhone 3GS.
  • Next few years will be big for infrastructure providers as many countries both developed and developing get into upgrading their infrastructure.
  • Willcom, the small Japanese carrier that started the flat-rate unlimited phenomenon filed for bankruptcy last month.
  • In the US, the increase in messaging volume catapulted US as the number one texting nation by messages/user/month going past the long-time leader Philippines.
  • Deployment of 3.5G technologies is in full swing. However, it is the discussion of 4G that is occupying the headlines, even though 4G hasn’t been fully defined yet and the current candidates for 4G are nowhere near the performance goals of 4G (150Mbps/50+Mbps). Many larger operators have laid out their plans for deploying LTE starting this year.
  • We are also seeing regulators playing an active role in making the markets competitive and attractive in the long-term.

· The velocity with which the smartphones are being introduced into the market esp. the western markets, one wonders if in five years, we will be using the moniker to describe devices and if the "dumbness" in the device market will be practically eliminated. Led by Apple’s Appstore success, significant investments are pouring into the appstore world. In parallel, the debate over apps vs. mobile web is intensifying. The implications of the transition will be significant on the ecosystem on many levels.

2010 will be a critical year on many fronts. As usual, we will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2010. The next Global Wireless Data Market update will be released in Sept 2010.

Your feedback is always welcome.

Thanks.

Chetan Sharma

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

CTIA Roundup 2010 March 26, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, MVNO, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Traffic, Mobile Usability, Patent Strategy, Patents, Smart Phones, Speaking Engagements, Strategy, US Wireless Market, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment

wordlectia3

CTIA hosted its annual networking party in Vegas. I can appreciate what Bill Murray must have felt like in ground hog day for sometimes I can’t tell which year we are in at CTIA.  Of course, things are moving forward with all the advances and services but the messaging and value props reappear from the dead. In any case, it is always good to reconnect with colleagues and wander around on the show floor to get the pulse of the industry. The highlight of the show was the release of the HTC Evo 4G device by Sprint to mark the entry of the first WiMax smartphone. Not to be outdone, Samsung announced SCH-r900 (who comes up with these names) - the first LTE handset to be launched later this year on the Metro PCS network. Like at the Mobile World Congress, it was clear that industry is courting the “developers”  though few have figured out how to help them with a healthy revenue stream. There was a lot of discussion on 4G, Mobile Advertising, Mobile Web vs. Apps, Femtocells, Smart Driving Solutions (it had its own pavilion), HSPA+, A/V Reality, Spectrum, Congestion management, National Broadband Plan, Taxi lines, and more. This note summarizes the observations and opinions from the event, discussions, and briefings.

My trip started early as I was moderating a panel on Mobile Advertising at the packed Mobile Web and Apps World forum. I am finding that the pre-shows generally have better attendance than sessions during the show. MTV’s Joe Lalley mentioned that the number of RFPs that require mobile advertising as a component have grown 3-4 times in the last 6-12 months. One of the areas that has been lagging is the “industry consensus on metrics” as without consistent numbers across all ad networks and service providers, many in the advertising industry will stay on the fence or will work with only select players in the ecosystem. Gary Schwartz, who is on IAB’s Mobile Marketing Committee updated on the collaboration done between IAB and MMA and we should be seeing some of the work soon. To some extent the story of mobile advertising is playing out exactly as we had imagined in our Mobile Advertising book and once many of the pieces are in place, the use of mobile in advertising will become so pervasive that we will wonder what took so long. And as I mentioned before, Apple could help redefine mobile advertising.

It is good that CTIA is thinking of some diversity when designing their keynotes. Iñaki Urdangarín, René Obersmann, Padmasree Warrior, Michelle Caruso-Cabrera, James Cameron, and Biz Stone were a welcome change not that there is anything wrong with other speakers. It is better to look at the industry from multiple angles. However, the lack of developers on the stage was acutely felt. The consistent message across all keynotes was: tremendous growth ahead and we are barely scratching the surface. That was hardly in doubt, the question is who benefits from it and who goes home.

T-Mobile announced the launch of its HSPA+ upgrade along with many smartphones to launched soon. Per Cole Brodman, CTO, T-Mobile US, this makes T-Mobile the US operator with the fastest network (did you know T-Mobile has more cellsites than Verizon?). With WiMAX and LTE smartphones coming in the next few months, we can expect a good tussle for mindshare. However, as the FCC quoted in its National Broadband Plan from our paper  “State of The (Mobile) Broadband Union” - there is a difference in advertised vs. actual speeds especially on smartphones. We will be doing some more research on the topic later this year.

The highlight of the show was Sprint’s release of the “mother of all smartphones” (from the spec point of view)- the HTC EVO 4G. Consider this: 1GHz processor, 8/1.3MP camera, 720p HDvideo, HDMI out, Hotspot capability (upto 8 devices), 3-6 Mbps (wimax)/.6-1.4 Mbps(evdo), 1GB ROM, 4.3” capacitive display, etc. Full specs here. Of course, the pricing and street performance will determine its success but clearly a milestone for the industry. The device came to the market earlier than most expected and will let the competitive fervor to go up a notch.

A couple of days later, Samsung announced its SCH-r900 (who comes up with these names) - the first LTE handset to be launched later this year on the Metro PCS network. Had it been on Verizon or AT&T, it would have gotten more attention. In any case, Metro PCS is trying to cement its place for the bragging rights. We can expect a number of new LTE smartphones coming into the market early next year. Voice and actual performance are still an open question.

Congestion management remains a big issue for the industry. I was glad to hear that the industry is coming around to the realization that “a holistic approach” is required to solving the problem, something we first outlined in our widely referenced paper “Managing Growth and Profitability in the Yottabyte Era.” Ralph de la Vega, speaking in his capacity as the Chairman of the CTIA and executive at AT&T embraced the principles of a sustainable model - complementary technologies, application efficiencies, network efficiencies, and available spectrum. We should add pricing efficiencies into the mix as well. Chetan Sharma Consulting will be releasing an update to the Yottabyte paper in the next couple of months, so stay tuned.

There was clearly a lot of focus on developers and attempts at giving them more voice and attention. As I alluded to in my talk on the appstore ecosystem at last CTIA, the various appstores need to focus on how to make their ecosystems more vibrant and profitable for the developers, else, we will start seeing them drop like dead flies in the not so distant future. A week prior to the CTIA, we released our research on the appstore economy which was well received. While a number of developers had booths at CTIA, there was no useful traffic. Better forums were organized WIP Connector and OMS.

With the imminent arrival of iPad next week, there was plenty of discussion and display of eReaders/tablets and how it might drive another category. While we won’t see the iPhonesque like sales numbers, it is clearly an exciting introduction to couch computing. I will have more to say on the subject once I get my hands on the device next month. It is also quite apparent that the category of extending the display beyond the device is going to take shape this decade. The interactions and content doesn’t need to be in the confines of the small display. 3D video also surfaced as something many players are working on.

Video was touted as the killer app for 4G though I wondered who will be the hunter and the hunted. I remember the same argument for 3G and mobile video went from the darling of the show to a pariah that no one wanted to touch in a matter of two years. Is video over cellular really the best use of resources? Am sure, the debate will continue for the foreseeable future.

Activity in the mHealth segment is picking up. It was mentioned several times in the various keynotes as well as the number of startups tackling the capture and processing of medical data is increasing. One of them was Mobisante which presented on a VC panel I moderated. They are building a low-cost ultrasound imaging device that uses smartphones.

Some of the other news worthy items were:

We will be discussing many of the future topics in much more detail at our upcoming conference “Mobile Future Forward.” More details to come.

Thanks

Chetan Sharma

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

New Research: Sizing up the Global Mobile Apps Market March 17, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, European Wireless Market, Gaming, Indian Wireless Market, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile Traffic, Mobile Usability, Partnership, Smart Phones, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 6 comments

Sizing up the Global Mobile Apps Market

mobileapps_s

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

Industry Study Commissioned by Getjar

Executive Summary

Mobile applications (apps) have been around since the late nineties and the apps stores have been available for a quite some time as well. Operators have been offering content and applications on their appstores for most of the last decade. But it wasn’t until the launch of Apple Appstore that the appsworld started to blossom in earnest. First, it fundamentally changed the revenue model in favor of the developers which has become the current defacto standard (70/30) in the mobile apps business. Second, it brought more developers into the ecosystem as it fostered the notion of focusing on just 1-2 platforms rather than the entire device ecosystem to be relevant. Third, the time-to-market equation changed for developers so that they can get the application from conception to market in a fraction of a time of what was possible in the past. Finally, the importance of a seamless end-to-end user experience to increase usage and monetization became a core principle in the mobile apps space.

While Apple has played a significant role in reenergizing the mobile apps space by bringing more consumers and developers into the ecosystem, there is significant activity outside the iPhone or smartphones space that is often not discussed. The purpose of this research study is to take a holistic look at the mobile apps space across all platforms and on a global basis to get a sense of the size of the mobile apps market and the direction it is headed.

The overall mobile apps downloads are expected to increase from over 7 billion in 2009 to almost 50 billion by 2012 growing at the rate of 92% CAGR. The revenue from mobile apps which includes both paid downloads and revenue from advertising and virtual goods is expected to increase from $4.1 billion in 2009 to $17.5 billion by 2012 at the rate of 62% CAGR. Though ondeck (operator managed) mobile apps sales exceeded those from offdeck in 2009, by 2012, offdeck is expected to hold the lion share of the mobile apps revenue.

The dynamics of the app market are quite different in emerging nations where to effectively monetize the significant app momentum (app downloads/active user and growth rates in some of these countries exceed those from the western markets, irrespective of the device type), creative strategies are needed to attract new consumers and different business models will be required to make the regional ecosystems viable.

Overall, by enhancing discovery, improving user experience, dropping price barriers, and increasing developer revenue share, the apps ecosystem can continue to prosper. The paper presents the results of the study in more detail as well discusses the future of mobile apps and how the app economy is likely to evolve.

Download full paper

My thanks to Getjar for supporting the research.

Thanks

Chetan Sharma

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

2010 Mobile Industry Predictions Survey January 3, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, Storage, Strategy, US Wireless Market, Uncategorized, Unified Messaging, Usability, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 6 comments

2010 Mobile Industry Predictions Survey

http://www.chetansharma.com/MobilePredictions2010.htm

Mobile Predictions Survey (pdf)

Mobile Predictions Survey (ppt)

First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2010. Thanks to all who participated in our 2010 Mobile Predictions Annual Survey. We have found it is the best way to think about the trends coming our way.

Before we dive into the survey results, let’s do a quick wrap-up of the year that was. Well, since we  just completed one heck of a mobile decade, let’s do a quick jog down the memory lane.

The Last Decade: 2000-2009

Each new decade brings its own consumer and technology trends. During the 2000s mobile cemented its place in the global society fabric, the use of mobility became addictive and pervasive, to be without mobile seemed a curse and innovation blossomed and took user expectations to new heights.

decadeglobal

From a pure statistical point of view, the global mobile subscription penetration grew from 12% in 2000 to approximately 68% in 2009 - phenomenal by any measure. The overall revenues grew over 400%, the data revenue grew 32,600% and the total subscriptions grew 563%. NTT DoCoMo paved the way with the i-mode launch in 1999 and they were the operator to emulate throughout the last decade, leading every single year in data revenues, in new application and service revenue sources, and in innovation and risk taking. They tried to export the success to other regions with little reward but DoCoMo clearly led the industry in taking mobile devices where they have never gone before.

China and India were late to the party but during the second half of the decade caught up with the western world and eventually surpassed all nations becoming number one and two nations by subscriptions respectively. In 2006, China Mobile became the most valuable operator passing Vodafone.

Mobile devices went significant transformation as well. From the early Bluetooth, camera, and music phones to the iPhones, the Storms, and the Androids, the industry was transformed by the introduction of Apple’s iPhone in 2007. While Bluetooth, sleek designs, camera phone defined the first half of the decade, the second half was all about the applications and the mobile web. While Nokia dominated the entire decade in terms of the sales and profits, having missed the touch revolution, it leaves the decade a bit battered and a bit behind playing catch-up to the newcomers who profoundly disturbed the status quo.

decadeoem

Razr carried Motorola through 2006 when its global share peaked but was left to reinvent itself during the second half. It seems to have redeemed itself with the successful launch of Droid and upcoming Android devices. While many in the industry predicted RIM’s demise, the company has only gotten stronger and is looking good for the 2010s. The emergence of Samsung and LG as strong players in the mobile ecosystem was also a big story of the decade with Samsung increasing its share by 380% and LG by 575% becoming the number 2 and 3 players respectively.

While Microsoft’s Windows Mobile had an early start and the enterprise market share, it lost its way through several missteps and is on dialysis as we enter the new decade. One shouldn’t count WM out though but there is a lot of work to be done before it can capture the imagination of the ecosystem which has been sequestered away by iPhone and Android.

While many new application areas were introduced during 2000s, none was able to displace SMS as the leading app category by usage and revenues. However, it’s relative share has started to come down especially in North America and Western Europe.

As data usage grew, so did the data traffic bringing many data networks to their knees. We expect the data traffic consumption to only accelerate. Many people are underestimating the growth rates (as they did previously) and the strain the increase in consumption will put on the unprepared networks. Projector phones will take media  consumption to a new level. Data management is going to be big business in the 2010s.

Overall, the mobile industry became a trillion dollar industry in 2008 and the data revenues are increasing in almost all regions. Voice is being commoditized at fast pace and that has put the traditional economics and ecosystem wealth distribution in topsy-turvy.

decadeus

The US market also experienced tremendous growth with mobile data service revenues climbing 21,327% and becoming a mainstay in the mobile economy. In 2008 it crossed Japan as the most valuable mobile data market. US was late in adopting SMS but caught fire once American Idol started using it and even played a good role in the 2008 Presidential election in showcasing the power of mobile. Verizon started the decade being the number one operator and after trading places with Cingular and ATT grabbed the title back in 2009 (after the Alltel acquisition) to become the most dominant carrier in North America. Many smaller players competed by being innovative with Cincinnati Bell launching the fist UMA device, Sprint the first mobile eReader, and TMO launched the hotspot business which has now become an essential component of an operator strategy going forward.

Mobile is also replacing landline at a much faster pace than expected and within the first half of the new decade, we will have majority of the users using mobile vs. landline. Just like the last decade, this one starts with a new standard deployment of LTE that will keep operators and vendors busy throughout the decade. However, a lot of the developing markets will still be deploying 3G during the first half of the decade.

Infrastructure providers suffered the most in the decade bookended by the two recessions. Consolidation of giants (Alcatel Lucent, Nokia Siemens), bankruptcies of the famous (Nortel), and uprising of the upstarts (Huawei) pretty much defined the decade for the segment. Ericsson and Huawei enter the new decade from a strong position and looking to dominate the global markets.

The last decade was also marked by some prominent IP battles such as RIM vs. NTP, Qualcomm vs. Broadcom, Sony Ericsson vs. Samsung, Upaid vs. Satyam etc. (disclaimer: we worked on some of these cases and testified as an expert)

Here is our “subjective” list of movers and shakers of the last decade

2000-2009

2010-2019

Operator of the Decade

NTT DoCoMo

DCM led the way in almost all new category of apps and services. Its data service revenue was highest in each of the last 10 years

DCM will continue to lead along with KDDI and SKT. However, it might be the carriers with tremendous scale who will have the calling cards in the new decade. Watch for China Mobile, Vodafone/Verizon, Telefonica, Orange, Bharti, Unicom, Singtel

OEM of the Decade

Nokia

Nokia dominated in sales and revenues in each of the 10 years and while the last couple of years took some shine off its glorious past, the company nevertheless came out ahead

RIM, Apple, Nokia, Samsung

Smartphone OEM of the Decade

Apple

Smartphones as we know them were introduced by RIM but Apple defined the category and the subsequent ecosystem

This space will be very competitive with Apple still the gold standard to beat

Infrastructure Provider of the Decade

Ericsson

Its prime rivals struggled to stay afloat while Ericsson grabbed most of the revenues from infrastructure contracts and is very well positioned for the next decade

Ericsson is joined by Huawei as the two top infrastructure provider with Huawei giving tough competition for LTE contracts. ZTE and other Chinese infrastructure providers will also replace some of the incumbents

Nation that led in mobile data

Japan

This is a no brainer. Japan led with Korea a close second. Finland, UK also impressed

US, China, and India are well positioned to make an impression but most likely during the second half. Japan will still be a major player

Device of the decade

iPhone followed by Razr

iPhone impressed with form and function while Razr with its global sales making it a top selling device of all times

The field might get more crowded as all OEMs focusing on the smartphone category. However, OEMs who also focus on the 90% of the market w/o smartphones might win the top prize

The year 2009

Apple continued to dominate the headlines for the third straight year - whether it was the launch of 3GS or the upcoming introduction of the fabled tablet. Google too kept the ecosystem active. It has executed on its mobile strategy with brilliant acumen though causing significant consternation amongst its partners who it needs to be successful. It has been often misunderstood by competitors, regulators, and partners. Often, they have focused on Google’s tactics vs. its strategy. Look for these two players to be very aggressive as they try to fight for the mantle and the mindshare.

While Nokia leads the OEM space by a good distance, its momentum in the smartphone space left a lot of question marks. Motorola made a credible comeback with Cliq and Droid. Samsung and LG continued to innovate and expanded on their share of shipments and revenues.

India outpaced China in net-adds and crossed 500M though it is still quite behind China’s 750M. The M&A and the consolidation process became active in Asia with several of the big regional operators looking to flex muscles in the international markets. After several delays, China started deploying 3G while India again fumbled and postponed its 3G auction.

US mobile data market continued its pace in 2009 with each of the four quarters exceeding $10B in data service revenues. The gap between the top two operators and the rest grew to be the biggest in the decade and the industry weathered the recession with ease. There was a clear shift towards prepaid especially for Sprint, T-Mobile, and the tier 2/3 operators.

2009 was also defined by significant activity on the application front. With Facebook eclipsing 100M subscribers and Appstore exceeding 2.5B downloads, sky is the limit.

The year also saw an unprecedented growth in mobile data consumption. As we had predicted, for some of the networks, the growth proved to be a double-edged sword. Many in the industry are banking on LTE to help relieve the pain but will be surprised that depending solely on the upgrade strategy will not be enough. Declaring spectrum as a looming crisis, FCC also started tinkering with the mobile industry and the broadband plan.

Japan exceeded 90% in 3G penetration while US subscriptions ventured into the 90% territory. Most of western Europe is way past 130%.

All in all, a terrific year considering that we went through one of the worst recessions in a generation. As we bid goodbye to the last decade, Nexus One and iTablet only serve to whet our appetite of what’s to come.

On a personal note, we started our consulting practice this last decade as we were coming out of the bubble recession and have been fortunate to work with some of the brightest brains and companies in the global ecosystem. We also had a chance to work on some key initiatives that impacted the ecosystem in profound ways. Many thanks to our clients, colleagues, friends, and readers. We will be involved with many new initiatives over the next decade and are looking forward to the conversations through the research notes, books, speeches, panels, whitepapers, blog posts, facebook and twitter feeds, and more.

Thanks and Happy New Year. May the upcoming decade leave you happier, healthier, and more successful than the previous one.

As we eluded to earlier, 2010 will 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 it includes industry movers and shakers participation. Executives and insiders (n=150) from leading mobile companies across the value chain and around the world opined to help us see what 2010 might bring.

11 names were randomly drawn for 3 special prizes. The winners are:

  1. Claire Boonstra, Cofounder, Layar- INQMobile 3G Chat device

  2. Michael Libes, CTO, GroundTruth - Open Mobile Book

  3. Henri Moissinac, Head of Mobile, Facebook - Open Mobile Book

  4. Subba Rao, CEO, TataDoCoMo - Open Mobile Book

  5. Saumil Gandhi, Product Manager, Microsoft - Open Mobile Book

  6. Sarah Reedy, Senior Editor, Connected Planet - Open Mobile Book

  7. Mike Vanderwoude, VP & GM, Cincinnati Bell Wireless - 2010 Mobile Almanac

  8. Pinney Colton, VP, GfK - 2010 Mobile Almanac

  9. Tim Chang, Principal, Norwest Ventures - 2010 Mobile Almanac

  10. Laura Marriott, President - 2010 Mobile Almanac

  11. Asha Vellaikal, Director, Orange - 2010 Mobile Almanac

Thanks to INQMobile and my friend Ajit Jaokar for contributing the prize gifts.

Despite conventional wisdom, what will not happen in 2010?

There were many. Sampling - Verizon iPhone, Microsoft Phone, Sprint will not be bought, Femtocells won’t gain traction, RCS will not happen, Google will not enter handset market directly, iPhone won’t lose steam, Android won’t bring coherence, NFC won’t take off, WiMAX won’t disappear, Nokia won’t bounce back, Palm won’t die, “Year of Mobile” noise won’t subside, carriers won’t be delegated as dumb-pipes.

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, augmented reality, 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, Mobile 3.0, LTE, single purpose devices, 3G in India, Bada, app vs web, developer turmoil, featurephones, smart grids, M2M, Chrome, etc.

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 the next decade and seeing many of you along the way.

We hope you enjoyed gaining from the collective wisdom. Your feedback is always welcome.

Be well, Do Cool Work, Stay in touch.

Thanks.

With warm wishes,

Chetan Sharma

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

Now onto the 2010 Mobile Industry Predictions Survey Results

The panel comprised of movers and shakers from around the world

survey2_10 survey1_10

What will be the biggest stories of 2010?

survey3_10

Jan seems to be the Google Phone vs. Apple Tablet matchup. Our panel though voted for the continued growth in mobile data as the top story.

Have we recovered from the recession? (Please select one)

survey4_10

Majority thought we are out of it though some might still feel the pinch

Who will be the most open player in the mobile ecosystem in 2010? (Please select one)

survey5_10

Google has done a great job at maintaining its image as THE open leader

Will Android handset sales exceed iPhone’s in 2010? (Please select one)

survey6_10

Despite Androids coming in droves, iPhone will still be the king of the hill

When will we see tiered pricing plans for smartphones in the US from tier 1 operators? (Please select one)

survey7_10

There are indications that this might happen sooner rather than later

What will happen to the mobile prepaid subscriber base in the US? (Please select one)

survey8_10

Prepaid made a strong comeback in 2009 and a good majority thought that the trend is likely to continue

By how much will the mobile advertising ad-spend increase in 2010? (Please select one)

survey9_10

Mobile Advertising was the only advertising segment with positive growth last year so it is no surprise that folks expect it to more than double this year

What will be the impact of the FCC’s national broadband plan on the mobile industry in 2010? (Please select one)

survey10_10

Not much is expected from the various rulings that might come this year with most expecting the courts to have the final word.

Who will be the mobile comeback story of 2010?

survey12_10

Having bet its future on Android, Motorola was voted as the comeback kid of 2010

What will be the impact of Google Phone?

survey13_10

It’s pretty clear, Google and Apple are duking it out for the developer mindshare. Google wins in either case.

Which areas will feel the most impact from FCC?

 survey11_10

Net neutrality is the area where they will have the most impact

Which solutions will gain the most traction for managing mobile data broadband consumption?

survey14_10

While only a holistic approach can provide complete relief, tiered mobile data pricing might have the most impact

When will the carrier-branded appstores lose steam? (Please select one)

survey15_10

Most expect carrier-branded appstores to be a thing of the past in 2010

What will help mobile cloud computing gain traction in 2010?

survey16_10

Mobile cloud computing is gaining steam and the reason is storage and media

What will be the most successful non-mobile-phone category in 2010? (Please select one)

survey17_10

Netbooks seem to be the strongest category followed by eReaders, Tablet, and M2M

What will be the breakthrough category in mobile in 2010? (Please select one)

survey18_10

Mobile Advertising and Mobile Payments share the top honors

By the end of 2010, which will have more subscribers? (Please select one)

survey19_10

LTE might have the momentum but WiMAX has the subscribers

How will Netbooks do through the operator channel? (Please select one)

survey20_10

No major impact from the operator channel

Which standards will gain traction?

survey21_10

No major impact from the standards

What mode of mobile payments will get any traction in North America and Western Europe in 2010?

survey22_10

The category will expand in different ways with more items being charged on the operator bill

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 , 3 comments

Mobile Industry Predictions 2009

http://www.chetansharma.com/MobilePredictions2009.htm

Download PPT (2.1M)

Download PDF (2.9M)

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:

  1. Akio Orii, CFO and VP, Toyota

  2. Declan Carew, New Product Strategy Manager, Vodafone

  3. Helen Keegan, Consultant, Beep Marketing

  4. Rich Begert, CEO, Singlepoint, and

  5. Russ McGuire, VP, Sprint Nextel

  6. Jonathan Ebinger, General Partner, Blue Run Ventures

Congrats and Thank You.

Now onto the survey results.  The makeup of the respondents below:

survey1

survey2

Will we see a pull-back in mobile data spending globally/in the US?

survey3

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?

survey4

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?

survey6

“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?

survey5

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?

survey7

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?

survey8

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?

survey9

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?

survey10

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?

survey13

The economic climate might force slow-down of expansion and thus the optimistic subscriber forecasts could be impacted.

Will Mobile Open Source mitigate fragmentation?

survey14

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?

survey15

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?

survey11

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?

survey16

Not a priority for now. No high expectations, just regular bureaucratic grind.

Will carriers start launching Apple/Android style appstores?

survey17

Opinions remain divided. I think most are tempted to build but will outsource the development.

Will Microsoft make windows mobile free to OEMs?

survey12

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?

survey18

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?

survey20

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?

survey19

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.

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

 

Download PPT (1.9M)

Download PDF (3.2M)

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.

Your feedback is always welcome.

Thanks.

Chetan Sharma

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

American Idol and Mobile Marketing May 24, 2007

Posted by chetan in : ARPU, Gaming, Messaging, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, US Wireless Market, Unified Messaging, Wireless Value Chain, Worldwide Wireless Market , add a comment

American Idol was a game changer in the US as far as mobile marketing is concerned. Last night 74M text’d in.

The Mobile Entertainment Forum (MEF) today published a draft Code of Practice (Code) outlining best practices for Participation Television (P-TV) in the United States. P-TV services typically provide viewers the ability to interact with television shows for example, where viewers are asked to text in votes or enter sweepstakes using their mobile phones. Often these shows integrate enhanced content with premium rate mobile services. P-TV is expected to experience continuing fast growth in coming months.

Had a chance ealier today to talk to Edward Boddington, MEF Americas Board member and Telescope, Inc. Founder. Boddington helped develop ‘Pop Idol’ in the UK, which became ‘American Idol’ in the U.S. (he handed the envelope to Ryan Seacrest last night on ‘American Idol’ announcing Jordin Sparks as the new American Idol). 

Some numbers from Ed. $300M P-TV in UK, 30% of it is mobile messaging. In the US, the numbers are in the range of $30-50M though accurate estimates are not available. The final version of the code will be available at www.m-e-f.org within 2-3 months. Thanks to Chris Pfaff for arranging the interview.

Global Wireless Data Market Update 2006 April 29, 2007

Posted by chetan in : 3G, AORTA, ARPU, BRIC, Carriers, Gaming, Indian Wireless Market, Intellectual Property, Japan Wireless Market, MVNO, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Networks, Speaking Engagements, Strategy, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

PPT Download (1.3MB)

PDF Download (2.2MB)

http://www.chetansharma.com/worlddatatrends2006.htm

In 2006, mobile data industry grew across every geography. From the true and trusted SMS messaging to new services such as Mobile TV, LBS, and others, different services helped in adding billions to the revenues generated for the year. Japan and Korea remain the envy of the global markets and the countries to study and learn from. The US market has been steadily making strong comeback and is soon going to become the biggest mobile data revenue generating market in the world. Chetan Sharma Consulting conducted its bi-annual study of the global mobile data industry. We took a look at wireless data trends in over 40 major countries - from developed and mature markets such as Japan, Korea, UK, and France to high-growth markets such as China, India, Brazil, and Russia. The study also took a detailed look at over 30 prominent operators. This note summarizes the findings from the research.

Your comments are always welcome.

Chetan Sharma

Sell Phones: What will make mobile advertising tick? October 12, 2006

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Devices, European Wireless Market, Gaming, Indian Wireless Market, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, Mobile TV, Networks, Privacy, Smart Phones, Strategy, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 4 comments

This column is going to appear in FierceMobileContent tomorrow.

Mobile Marketing and Advertising is the new it in the industry. All the recent industry shows have been buzzing with the potential of mobile advertising. Is mobile marketing going to be another over-hyped industry segment or will it actually help generate revenues, drive exits for VC investments, and most importantly, deliver value to the consumers? While the potential exists, there are several technical, business, and legal hurdles that need to be overcome before mobile advertising becomes a successful industry.

To get a grip on the potential market, we take a look at Japan as the harbinger of whats to come in this space. According to Dentsu, mobile advertising revenues for 2006 will be approximately $373M or close to $3.8 per subscriber (for the year). By 2009, this number is likely to scale to over $6/sub/year. In 2006, US will do less than $1/sub (for the year) in mobile advertising revenues, bulk of which will be SMS marketing. Clearly, potential is big. It is apparent that due to the availability of context, immediacy, and personalization, mobile has significant advantages over the other channels as an advertising medium.

First, lets discuss the technology piece. As we have seen in Japan and Korea, higher processing power handsets and 3G pipes play a significant role in the adoption of rich advertising content. In the US, by 2008, 3G penetration will reach over 25%. Adoption of Smartphones is also increasing. By next year, we will start seeing $100 smartphones. User interfaces are also getting better. UIOne, MYDAS, Flash, Screen 3, 1mm, and other proprietary solutions are extending the possibilities. In addition, search (including local) is going to be at the epicenter — whether advertising is based on declared intent from the user or passive impressions based on users context, history, and preferences.

For mobile advertising to be successful, one needs reach, purity, and analytics. Reach is how many real customers do you have? Purity is the quality of information on the customers. Name and address just dont cut it. Analytics is matching users interests implicit and explicit, context, preferences, network and handset conditions to ads and promotions in real-time. Not just bucketing a user in a group and giving them a number but understanding the user in every way possible and customizing every single interaction to the finest degree possible. Also, what is absolutely needed is an easily accessible control framework for permission advertising so that the user can selectively or globally switch-on or off the types of ads/promotions they would like to entertain and when.

It is clear that mobile advertising and marketing has big potential if industry strives to take into account the user considerations that matter the most. But, which players will dominate and control the ecosystem. Without a doubt, carriers have the purest profile information available, but can they execute their strategies? Well, they have approximately 2-3 year window. Once 3G and Smartphone penetration curves collide and pass 20-30%, if the carriers havent built a good mousetrap (value proposition) by then, all bets are off. Different dominant players will start to emerge, as it will get easier for Internet and traditional brands to build direct relationships with a good proportion of the subscriber base. Brands and service providers who are able to integrate user experience across channels will benefit the most.

Then, there is the whole world of off-net advertising and marketing, where carriers are going to play a lesser role. Here, creative technical and business solutions are needed for accurate targeting. Finally, ads and promotions should be super-distribution-friendly meaning — treat ads and promotions like content that can be passed around easily.

While the potential is immense, there are also significant risks and potential challenges before the industry evolves into a vibrant advertising medium. The prominent amongst them are privacy and data security. Once you start mining user data, significant profile information can be developed. Then how that information is used and by whom becomes an issue and a significant legal minefield. In addition, the security policies and procedures need to be in place to protect the data from theft or misuse if the industry doesnt want regulators to get involved.

It is quite clear from the industry trends that mobile industry is moving from an emerging state to a more interactive and immersive applications environment. By 2011, global advertising industry will be close to $600B. Can mobile start to increase its revenue share from its current levels of less than 0.2% to 2-5% by then? Since this medium can provide context, immediacy, and personalization, the answer is yes. However, there are technical, business, and legal hurdles to be crossed before the industry becomes a thriving institution. Until then, stay tuned to our commentary on the shifts and turns in the ecosystem.

Note: An expanded version of this article will be published soon.

Acknowledgements: My thanks to Sunil Jain, Victor Melfi, Amar Patel, Anne Baker, Sarla Sharma, Shawn Conahan, and Subhadeep Chatterjee for their valuable assistance with this article.

CTIA, MES, MECCA Fall 2006 Roundup September 18, 2006

Posted by chetan in : 3G, 4G, AORTA, ARPU, CTIA, Carriers, Devices, Enterprise Mobility, Federal, Gaming, General, Infrastructure, Intellectual Property, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Networks, Partnership, Patents, Smart Phones, Speech Recognition, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Los Angeles was the venue for the annual CTIA Wireless IT and Entertainment 2006. Pre-show events included Mobile Entertainment Summit (Chetan Sharma Consulting was a research partner) and MECCA. This note summarizes the observations and commentary from the above shows.

First lets do the numbers. Just before CTIA, M:Metrics released some numbers from their most recent survey. Amongst the western nations, US has just over 5% 3G penetration with UK leading the way at 11.4%. Spain and France are at 8.9% and 7.9% respectively. In the US, Verizon is ahead with over 17% 3G subscriber penetration followed by Sprint at 6%. CTIA also released their survey numbers. 12.5 billion messages in the month of June 2006, up 71% from 7.3 billion messages in June 2005. There was 70% growth in service data revenues. You probably already knew most of the above after reading our research notes here and here, weeks and months ahead of the mainstream media.

MES and MECCA. The central theme from both the shows was community and advertising. The buzz shifted from Mobile Search, Mobile TV, and IMS during the last couple of shows to Mobile Advertising. The prospective lifecycle of product development goes like this build community (whether it is around user generated content, games, artists, bands or other) and monetize the community by advertising. The permutation and combination of the business models are: free application and/or free content, subscription, earn credits for watching ads, more credits for feedback/surveys, etc. Companies who are able to build a large mobile community (at least 5-10M active users) and gather some specific demographic data become hot property of the moment. It is important to note that the mindset for an exit strategy for companies in the social media and user generated content space has changed a bit. Instead of getting acquired by software or computing companies like Google and Yahoo (yes, yes, they are media companies as well) to traditional Media companies like FOX and HBO. This was quite apparent in a number of discussions I had with the executives from new media content companies.

Enterprise focus, Finally!. I have been involved in the mobile enterprise space since 1999 and have been coming to the CTIA for a number of years. The fall show is supposedly about dual personalities of Entertainment and Enterprise. For the first time it felt that the Enterprise side was given its due respect and was on an equal footing to its sibling personality - the glamorous, the attention-seeking Entertainment. CTIA started the conference with an Enterprise panel discussion (of course after the surprise Governator keynote). Though the discussion was too high-level to provide any key insights, CIOs confirmed what is well known now that the spending on wireless-data related projects is going up significantly. A surprise revelation was that Chinas growth in enterprise solution is among the highest in the world. It is all about productivity and ROI. Companies are also looking to outsource their IT operations related to wireless devices. Handset guys are coming out with Enterprise targeted devices though we are still in the very early stage development of the cycle. Throwing an email client on the device doesnt make it an enterprise device. Email client is a given in all new handsets now. When will we start seeing embedded enterprise apps? Mobile web services clients and frameworks?

Its an Ad, Ad, Ad, Ad world. Mobile advertising is clearly the buzz of the moment. Everyone wants to build an ad-supported model and also build their own ad network. Currently, most of the talk is around simple rotation of ads or tying ads to the category the user is interacting with. Not much attention on demographics, profiles, or context. Thats where the big impact and value will come into play. Currently, carriers sit on goldmine of user data that is begging to be leveraged for enhancing user experience. Unexpectedly, they sit on a big opportunity that will start to change the advertising industry over the course of the next 5 years. To see where things are going, we just need to look at trends in Japan and Korea. It was interesting that in almost all of the mobile advertising discussions, nobody talked about the elephant that was not in the room - Google, trendsetter in monetizing content. Also, missing were the agencies and their perspective. I have looked at this space quite a bit over the last two years and while agencies are excited about the prospect, they are not ready to jump yet. It will be quite entertaining to watch the new-generation media companies compete/collaborate with the carriers. For the next 3 years or so, carriers will still have an upper hand and if they execute it right, could dominate the space for a long time to come. People also talked about different types of ads IVR, Voice, Interstitials, banner, in-game, before-and-after, etc. Of course, click-to-call or click-to-action are going to be an especially important ingredient of this game. Sprint Nextel and Enpocket announced their mobile advertising program. AmpD also announced mobile advertising plans with Rhythm New Media. Bango launched its Ad initiative as well. Virgin mobiles Ad program Earn Airtime in Your Spare Time is innovative. They are truly in tune with their subscribers.

FMC. Kyocera had some trial handsets that supported WiFi/VoWiFi. One could theoretically make VoIP calls and download content over WiFi but will carriers allow it and how long will they resist. Non-traditional carriers like the MVNOs and the cable operators are very interested in exploring bundling offers. Sprint also announced EV-DO Rev A data cards that provide data rates up to 400-600kpbs. Cingular announced that they will have a majority of the top 100 markets deployed with UMTS/HSDPA by year-end. However, the choice of handsets is still missing and as such adoption for Cingular is behind schedule.

4G. While, we are just starting with 3G (except Japan and Korea), seven of the wireless industrys leading carriers have joined forces to develop a common vision for the future of mobile networks technology. Members of the Next Generation Mobile Networks initiative include China Mobile, KPN, NTT DoCoMo Inc., Orange, Sprint Nextel Corp., T-Mobile and Vodafone. The group said it has created a set of requirements for a future wide area mobile broadband network designed to offer enhanced customer benefits by delivering competitive broadband performance alongside high levels of interoperability. In plainer terms, the NGMN appears to be devising a roadmap for interoperable 4G networks. You can sense the arm-wrestling to come. 4G could end up having some serious IPR issues if all major patent-holders dont participate. The 3GPP licensing regime has been a failure, industry needs to be proactive, dedicate resources to the problem and get is solved to the extent it can.

Telematics. The number of firms talking about telematics or navigation on the phone or devices for your car increased quite a bit. Navteq, TeleAtlas, TeleNav, Inrix, Pharos, Kore, Teydo, and many others displayed their wares. On the consumer side, navigation is getting embedded into Local search apps which are enhancing the user experience quite a bit. FindIt and Google Maps are two examples. There were enterprise focused solutions from Tierravision, LiveCargo and @Road.

WiMax. Spent sometime with Lars Johnsson, VP at Beceem Communications talking about the prospect of WiMax worldwide. Clearly, Intel and Clearwires announcement has reenergized the industry and taken some uncertainty out. Lars is extremely knowledgeable person on everything WiMax. He co-founded Flarion which got sold to Qualcomm last year. It looks like the benefits of 802.16e will render 802.16d useless in short order. e provides better link capacity, Forward Error Correction, power efficiencies, and optimization. The cost of building a WiMax modem is lower than the WCDMA counterpart. A number of cable and wireline players are looking for triple-play offerings. Beceem has strong partnerships with OEMs worldwide and is actively involved in several trials in Korea, Taiwan, Japan, India, and US. The biggest challenges are around interoperability (as always) and quick resolution of IPR issues. From an application perspectives, gaming companies are the ones watching it closely. Also, automobile media player vendors are interested in using WiMax for Broadcast video. Tropos believes that Mesh technology will continue to have relevance in a WiMax-enabled world as the practical ranges of base stations wont exceed 5-10miles.

M&A. Some major M&A news at the show Real acquiring WiderThan for $365M, Lucent acquiring Mobilitec for undisclosed amount, and FOX acquiring 51% stake in Jamba for $188M. This follows Sybases acquisition of Mobile365 last week for $400M. There are several factors at play. Clearly, some segments of the industry that have matured are facing price pressure and hence consolidation. Media companies are also realizing the potential and dont want to miss out or get behind the curve so acquiring companies that have traction, not necessarily the best technology. Some of the valuations just dont make sense but I guess some over-exuberance is to be expected at this time.

Handset launches. You might have missed the announcement; there was no Steve Jobs, no iPhone release. Pearl was probably the highlight of the show though plans had been leaked in the media sometime back. RIM has Razresque aspirations from the device. The big three didnt have anything interesting. Nokia launched E62 (thankfully, taking a cue from Motorola, they are getting rid of their number scheme), however it is missing 3G and WiFi support of its European cousin E61. Kyocera had some interesting devices as discussed above. Sprint launched two EV-DO Rev A data cards from Pantech and Sierra Wireless. Cingular announced a $150 HTC Smartphone. Linux handsets are also on the rise. Obigo/Teleca had some nice tools/products for mobile Linux Browser, IM, Media and Email client. The user experience was quite nice.

Mobile TV/video. At the last two shows, Mobile video and Mobile TV were all the rage. The solutions seem to have matured though uncertainty of its success remains (primarily around time-horizon to success). There are too many providers in the space offering solutions from individual codecs to end-to-end solutions, do-it-yourself toolkits (Nexage) to user-generated video solutions (ComVu, Juicecaster ComVus one click mobile broadcast capability was pretty good) to niche demographics (Viva Vision is getting good traction in the Latino market). Various pieces of the mobile video puzzle have been commoditized, now, it is all about packaging. There were a number of Mediaflo handsets on display as well. The quality of Broadcast is really good. I saw some Broadcast TV services in Seoul earlier this year and the user experience is pretty good. My partner watched the entire South Korea soccer world cup game on his mobile device as he wasnt near a TV. Once the market gets seeded with enough phones and service pricing settles to mass-market scale, we can expect good adoption rate for such services. Imagination Technologies out of UK showed some innovative SoC (System on Chip) solutions targeting Mobile Broadcast video. Some new names in the space are QuickPlay, Picsel (nice user experience), and Convisual. Expect some consolidation in this space over the next 12 months.

The ecosystem friction. The mobile data ecosystem tension is bubbling up. Carriers want control (some more than others) so that they can manage user experience and minimize customer support calls. Content companies want to bypass the carrier and go direct to the consumer. This was also evident in the Walt Mossbergs grilling of the carriers as well as other conversations with participants in the value chain. Things are improving but not at the pace everyone would like it to be. Clearly, ecosystem only proliferates if it is allowed to make money. If certain sections of the chain get strangled, holes start to develop which pollutes the system.

User experience. Didnt see much progress on the UX front. Saw a cool implementation from FAST for Optus in Australia where they used search technology to populate the Active Screen with user preferred content. Optus has been using this offering to entice users to 3G as it is not available on lower bandwidth network and is apparently having good success. Add context and some multimedia and it becomes very very compelling. It is one area that hasnt been exploited that much yet. In the US Cingulars MediaNet implementation uses the same concept but is more browser-based. In different sessions, carriers agonized over limited shelf space and mountain of content. Thats why man invented mobile search. The concept of deck is very limiting. Content needs to get exposed via search whether it is post-query or pre-populated dashboard based on context and preference.

Test equipment Whether it is entertainment or enterprise, very little attention is given to testing and monitoring data applications and services. Keynote launched a really useful product offering (Mobile Device Perspective) that enables developers to test their app from distance on a live network and live devices and control it through manual steps or automation. Currently, such testing is done by flying a team of testers, test, and optimize. This offering can reduce the cost of such operations. I took a look at their R&D and test setup and found it quite compelling. TestQuest also showed a product along the same lines though it is more of a platform play than a service offering.

MVNOs. There is a realization that MVNO business is hard. The unrealistic expectations for customer growth are being recalibrated. It is still a viable business model but one has to give time and execute like a carrier. Virgin Mobile noted that it requires at least 2M subs before a nationwide MVNO (in the US) will cross the line from red to black.

IMS. Talked to Lucent and NMS about their pre-IMS solutions. NMS was displaying a technology around P2P mobile video sharing while talking (though the tasks happened in time-slice mode). Lucent had a solution extensions which converged PBX and Mobility. An example would be you dial a 4 digit extension on your mobile phone that connects you to the other party as if you dialed it from your desktop phone. BUT, networks arent there yet and devices will arrive a bit later. In the interim, companies are looking to stimulate the simulated IMS experience.

Funding news. Several funding news from the show, the one that caught my eye was $10m for Bubble Motion in VoiceSMS (funded by Sequoia Capital). It should be noted that there is prior art in this space and the likelihood that the company is infringing on somebodys patents are high.

Coolest gadget. MyVus media viewer

Coolest booth. Infospaces Tony Hawk show was probably the most exciting thing happening on the show floor. Watching the masters go swing-swong had the crowd go wild with ooohs and aaahs.

Misc. News.

Your comments are always welcome.

Hook Mobile - Mobile Trading Community September 14, 2006

Posted by chetan in : CTIA, Gaming, General , add a comment

Got a preview of the services coming out next week on all four operators. It is around Mobile Trading Community and using content to digitize trading cards, create some exclusivity and hence some viral effect. In future users can create their own trading cards for their social network. Carrier keeps 35% of the subscription fee. Hook Mobile gets 27% and rest goes to the content guys. This could be good for the MMS infrastructure that is collecting dust right now. And yes, you guessed it right; there is an Ad model as well.

amBX from Philips July 21, 2006

Posted by Chetan in : Gaming, Mobile Gaming , 3 comments

Yesterday got a demo from a friend at Philips Research on amBX or “ambient experience”. Very impressive. The experience is immersive in nature whether you are watching a movie or playing a PC or console game. It is visual and tactile. It is Dolby for your eyes and sense of touch. It could potentially revolutionize how we watch movies at home or in theaters or play games. Imagine controlling the visual environment of your game opponent. If you are interested, let me know. More information at http://www.ambx.com