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2008 in review - revisiting annual predictions July 31, 2008

Posted by chetan in : 3G, AORTA, ARPU, Carriers, Intellectual Property, MVNO, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, US Wireless Market, Unified Messaging, Wireless Value Chain, Worldwide Wireless Market , add a comment

At the turn of the year, we asked a number of industry insiders to opine on upcoming trends for 2008. Below is the summary of survey. Full results here.

Perhaps, it is time to revisit. Updated comments in italics.

1. Will Google introduce a Google Branded Phone in 2008?

Will it? Won�t it? 44.5% gave it a 75% or higher chance of happening while 40% thought it ain�t happening. GPhone is a temptation Google will find hard to resist though a lot will depend on how various initiatives and partnerships shape-up on the ground. In any case, expect another major announcement in the next 2-3 months.

Opinions were mixed. Given the problems with the ecosystem, delay in launch, and unclear business models, while the probability of GPhone launch has gone up, chances for a 2008 launch remain low. Google would want the ecosystem to give it a shot before deciding to compete with them.

2. Will Google play to win in the 700MHz Spectrum Auction?

Google has played the spectrum chess game effectively. Almost 50% respondents gave it a 75% or higher chance of Google winning the bid. Though expectations are high, Google is unlikely to play to win. Services business is not their cup of tea, they could still fund the Clearwire-Sprint deal but that investment can be spent differently to get better end-results, i.e. mobile ad revenue.

We didn’t believe that Google is playing the game to win, only wanted to be an irritant to his fellow brethren. As expected, they funded the Clearwire-Sprint deal.

3. Will Microsoft launch its own mobile phone?

Unless Google comes out with GPhone, Microsoft will stay content with its operator distribution strategy. 63% of respondents gave it less than a 25% chance of Microsoft releasing their own phone. If GPhone comes out and gets some traction, expect Microsoft to get its �fast follower� strategy into high gear.

I think Microsoft is taking a “wait and see” approach on this one and is likely to come out with something once GPhone is out. Remember Zune.

4. Will Mobile Payments get traction in North America and Western Europe?

Only 9% thought it is a sure bet for 2008. True mobile commerce hasn�t really started in the western world. While there are significant movements, 2008 will just be a �lay the groundwork� year for mobile payments.

Even from “laying the ground work” point of view, we seem to be behind. Number of trials and activity though, expect to see some noticeable launches in first half of 2009.

5. Will WiMAX regroup from its setbacks?

Only 35% gave it a 75% or higher chance (of WiMAX resurrecting itself esp. in the US in 2008). A lot depends on how Mr. Hesse deals with Sprint�s WiMAX business. Indications are there will be a deal with Clearwire to off-load the risks via some external investment (Google?).

Well, Mr. Hesse dealt his hand and now all eyes are on Mr. McCaw - can he deliver?

6. Will Helio survive 2008?

Almost 70% respondents thought Helio won�t make it. Given the flameout of some of the prominent new-generation MVNOs, it is hard to see how Helio will see 2009. It will all come down to how persistent is SK Telecom. Earthlink doesn�t have the bank balance to keep funding this initiative.

Well, majority thought, Helio won’t be around and SKT realized it too and sold the unit to Virgin Mobile. At least, it didn’t have to file chapter 11.

7. Will Verizon truly open-up its garden for third-party visitations?

Only 5% thought it is a sure bet for 2008. Verizon�s open posturing was more to ward off any regulators and to improve its image. There is unlikely to be any meaningful progress on this front this year.

Hardly anyone thought that VZ is serious and not much has happened on that front just yet.

8. Will 2008 be the inflection year for Mobile Advertising?

42% gave Mobile Advertising a 75% or higher chance for rapid growth. Market will mature, more consolidation, some privacy gaffes but overall things are looking up for mobile advertising.

There is definitely growth in the Mobile Advertising segment. Inflection point is in the eyes of the beholder. I say, we will make pretty good progress this year but mobile ad spend will still be < 1% of the overall mix. Still lots of foundation work need to be done by the industry. Almost every serious carrier, advertiser, agency, middleware, online player is involved in mobile advertising and it is just a matter of time before things get sorted out.

9. Will Femto-Cells gain any significant momentum in 2008?

It will be an introduction and experimentation year, so no significant traction is expected. Over 52% thought Femto-Cells will be just a buzz word in 2008.

Well, Sprint launched Femto-Cells but it will be a while before they become pervasive.

10. Will Nokia be able to extract iPhone-style rev-share from carriers in 2008?

Less than 20% thought Nokia will be able to do an Apple when it comes to rev-share arrangements. For OEMs, going direct to the consumers was considered treachery to the sacrosanct relationship with the operators. Until Apple showed up with iPhone. Now, Nokia is putting its services strategy in motion and is building a direct relationship with the consumers worldwide and it has a good shot at pulling it off though it will be a long haul.

Given that Apple prudently reversed its business model, the chances of any other OEM extracting iPhone 1.0 type rev-share are going to almost zero.

11. Will Palm survive 2008?

Only 8% gave it a 100% chance of surviving 08 as an independent entity. It will be difficult for Palm to stay in a status-quo mode. They desperately need a hit device that can give them some breathing room. Given all the operational and strategic problems the company is having, a sale is likely.

Most thought (including yours truly) that Palm will have a difficult time surviving 08. However, with some of its recent launches have put some life back into the company and it might go on for a few more quarters. The problems and challenges are still quite stark.

12. Will iPhone truly open up?

Over 45% thought iPhone won�t open-up in any meaningful way. Apple has built-up one of the most profitable closed empires in the digital world. Are they about open things up? While the iPhone SDK is scheduled for early 08, don�t hold your breath on accessing the critical native APIs.

Apple’s Appstore is clearly an idea of the best open closed systems out there. If the closed garden is done well with open flowers can flourish. The system still closed but you can access a number of device APIs to make it worthwhile.

13. Will there be more unsubsidized devices introduced in the US market in 2008?

Almost 49% thought we are likely to see another unsubsidized device in the US market this year. Nokia is looking to go direct and some GSM handset manufacturers are likely to entertain the idea of testing the market with unsubsidized devices.

Given that Apple quickly reversed itself with iPhone 3G, we are unlikely to see unsubsidized devices for some time to come.

14. Will Mobile TV move the needle in 2008?

Almost 70% thought mobile TV won�t make much of a difference in 08.Though AT&T is slated to introduce MediaFLO to join Verizon in the Mobile TV services market, lack of devices and better pricing models will hinder wide adoption in 2008. However, downloadable video and VOD content will experience significant growth.

Mobile TV remains plagued with unreasonable business models and pricing plans. Until that is fixed, this will remain a niche hobby for most.

15. Will Android make a dent in handset shipments in 2008?

Only 15% gave it a more than 75% chance this year. It is going to take some time for Android plans to mature and materialize. Don�t see any material impact in 08.

We didn’t think Android will make progress in 08 beyond some minor launches. Even they seem uncertain and 08 is not their year.

We will do another survey towards the end of the year, look forward to your participation then. Thanks.

eHealth Connection in Bellagio, Italy July 28, 2008

Posted by chetan in : 3G, ARPU, BRIC, Carriers, Intellectual Property, Mobile Ecosystem, Worldwide Wireless Market , 7 comments

Week 3 kicked off today in Bellagio, Italy as part of The Rockefeller Foundation’s month long conference on eHealth.

Some more info below:

mHealth and Mobile Telemedicine - an Overview

Background Papers:

Sizing the Business Potential.pdf

Relationship among Economic Development.pdf

mHealth: A potential tool in India.pdf

mHealth: A Developing Country Perspective

Current Status of eHealth Initiatives in India

Mobile Services Evolution: 2008 - 2018

New Paper: Mobile Services Evolution 2008-2018 July 11, 2008

Posted by chetan in : 3G, AORTA, ARPU, BRIC, CTIA, Carriers, Intellectual Property, Japan Wireless Market, MVNO, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Smart Phones, Speaking Engagements, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Mobile Services Evolution 2008-2018

Bellagio, Italy. July 13 - Aug 1, 2008

This project has been made possible by the generous funding from THE UNITED
NATIONS FOUNDATION

ehealth_connection_cov

Download PDF

http://www.chetansharma.com/UNF-MobileServicesEvolution.htm

This weekend in Bellagio, Italy begins a 4 week long dialogue on the subject of eHealth. The Conference - Making the eHealth Connection: Global Partnerships, Local solutions is being organized by the eminent Rockefeller Foundation. It will bring in experts and organizations from around the world to discuss, share, develop, agree on solutions going forward. Each week deals with a different nuance of the eHealth framework. This will allow for an in-depth study and discussion. Full conference info here.

Week 3 deals with mHealth and Mobile Telemedicine being organized by The UN Foundation, Vodafone Group Foundation, and the Telemedicine Society of India. As part of this conference The Rockefeller Foundation and its partners have released a series of white papers on various subjects. I was asked by The UN Foundation to look into the potential Mobile Services Evolution going forward and how a platform could be developed that will enable a number of applications focused on enterprise, health, public safety and associated sub-segments. While it is difficult to predict with any precision what might happen 10 years from now, one can try to understand the evolution of technologies, business models and their interrelated ecosystems and see the impact on various vertical segments where we use technology to solve some basic problems. Most of the time, technology itself doesn’t cut it, it requires partnerships, collapsing of the bureaucracy, innovative funding means, and just the burning desire to make a difference that matter the most. I strongly believe in Mobile’s central role in a number of social and public services. Mobile Services Evolution 2008-2018 is a small effort to forward that discussion.

Abstract

Over the last 10 years, the progress made in the global mobile industry has been truly stunning. Mobile device ownership has gone from being a luxury item to necessity as the feverish rate of adoption has spread mobile technologies into every corner of the world. As we look into the next 10 years, it is certain that the mobile phone will be used for much more than just voice communications. There is an opportunity for private institutions and public enterprises to build a vision of cohesive mobile services platform that enables and engages the masses to both fundamentally enhance the quality of their daily existence as well as lead to new opportunities globally. This paper takes a look at the potential evolution of mobile technology and services over the course of the next 10 years and discusses an M-Services framework for building and deploying diverse mobile services. The paper also looks into the challenges of such an endeavor and steps that will be needed to achieve the vision.

Table of Content

Abstract	3
Introduction	4
Mobile device: The Remote control of our lives	5
Mobile Technology Evolution 2008-2018	7
Deployment and adoption of mobile technologies in the developing countries	9
Mobile Services Platform	10
What does it take to make it happen?	15
Conclusions and Recommendations	18

Download Complete Paper - PDF

Thanks to THE UNITED NATIONS FOUNDATION for making this work possible. I will be presenting the paper at the conference later this month.

Your feedback is always welcome.

Thanks

Chetan Sharma

DoCoMo Labs Masters of Innovation July 2, 2008

Posted by chetan in : 3G, AORTA, Intellectual Property, Japan Wireless Market, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Wireless Value Chain, Worldwide Wireless Market , add a comment

Yesterday, I had the honor to present at DoCoMo Labs annual Masters of Innovation program in Palo Alto along with Julie Ask of Jupiter and Tim Bajarin of Creative Strategies. The event was made possible by Richard Felix of Aesthetics Scientist. The theme for the afternoon was “What’s to come in the next 2-3 years?” Given my recent work on Mobile Advertising, I talked about what we can expect in the coming days, who the main players are going to be, etc.

Berna Erol, Senior Research Scientist from Ricoh California Research Center was present at the event and did a pretty nice summary. An excerpt below:

Chetan Sharma, President of Technology and Strategy Consulting, talked about mobile advertising. He made a good point that when thinking about mobile advertising one should not only think about cell phones but also other mobile devices such as Amazon�s Kindle, iPod Touch, etc.

Chetan emphasized that from advertisers point of view, the following points are most important:

1. Reach: How many people you can touch with your advertisement
2. Targeting/Purity: Reaching the right target audience
3. Effectiveness: Measuring the effectiveness of the advertisement, does user take any action?
4. Efficiency: Getting the benefit and revenue increase for the money spent on advertising.

Clearly mobile advertising has advantages especially in advertising targeting and measuring the effectiveness of the advertisement.

            Chetan predicts that mobile advertisement will be
            bigger than online advertisement and the mobile ad business
            has potential to be $20B industry by 2013.

When I was listening Chetan I was thinking how annoying it would be to receive mobile advertisements. Then, unknowingly Chetan made a comment and made me a believer: He thinks that idle screen of mobile phones are the holly grail of mobile advertisement, everything will start from there. He thinks, and I agree, people would be willing to receive advertisement and coupon on their idle screen, especially in exchange for reduced monthly mobile provider fees. Another good point was that the location based advertisements (e.g., a restaurant coupon can be delivered when you are close by) would be very important in the near future.

Julie had some really good insights into the social networking impact on mobile while Tim talked the consumer adoption of various technologies over time. Like most, he is a big fan of iPhone.

After our presentations, Ken of Kenradio fame moderated a 90 minute panel discussion and we covered pretty much everything under the sun.

Btw, just for the record, i talked quite a bit about the steps necessary to help enable the market reach $20B in 5 years. Lot of work needs to be done and we have to watch the trigger points.

Future in Review (FiRe) 2008 Recap May 29, 2008

Posted by chetan in : 3G, AORTA, Intellectual Property, Mobile Ecosystem, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 3 comments

It is not every day that you get to hang out with Noble prize winners, top climatologists, renowned science fiction authors, CTOs of Fortune 100 companies, top researchers in medicine, broadband, environment, and fuels, #1 VC on the planet, friend of every Chinese leader since Mao, and more � and all within 48 hours. Well, Future in Review (FiRe) conference last week in San Diego provided such a thrill.

FiRe is organized by Mark Anderson, CEO of Strategic News Service (SNS). Mark has this uncanny ability to consider economic, technology, financial, political, and global trends to multiangulate and come up with some specific and accurate predictions for the IT and telecom markets. His highly acclaimed newsletter is read by who�s who in the industry.

FiRe 083 With Mark Anderson

The setting for the conference was at the beautiful Del Coronado in San Diego (everything was great except the cellular signals, where are the five bars when you need them). This note summarizes the views gathered at the event.

The event started with a keynote on Energy from Vinod Khosla and I was blown away by his grasp on the issues and analysis in depth of the energy industry � now and 30 years from now. He had already proved his mettle in the high-tech industry, by having such a command on another critical sector is truly amazing. His analysis is based on solid facts and economics. He rightly suggested that the energy solutions that don�t take into account the economics that will enable India and China to adopt such solutions will not work long-term. For example, hybrids are both expensive as well as emit more carbon, a non-starter in the developing world. It wasn�t until Vinod took a stand and started investing in energy that investing in �Green� became fashionable. His leadership and work is going to have a real material impact on the energy crisis.

The next three days were a collection of rapid fire engaging sessions from 8 to 5. Guests were noble laureates, scientists, and influencers from their respective fields. These are the doers in the industry who make this happen. It was a treat to watch BBC World News Service�s Stephen Evans host four �hotspot� sessions where he threw questions at technologists talking about things to come. My favorites: Jim Marggraff�s Livescribe pen that recognizes handwriting, records and synchronizes voice with handwriting and oh yes, translates into different languages including Chinese and Arabic; and the discussion Donald Jones of Qualcomm had about disposable Band-Aid sensors that record vital signs and use phones to transmit data (yes! wireless band-aids coming on a body near you).

With Hugh and Gary (Source: Tom Krazit/CNET News.com)

I had the privilege of hosting and moderating a session on �Future of Wireless: From Mobile Advertising to Mobile Payments.� The distinguished panelists included Hugh Bradlow, CTO, Telstra, Gary Roshak, VP - Advertising, Yahoo!, Jonathan Bulkeley, CEO, Scanbuy, and Rajeev Chand, Managing Director, Rutberg. We covered a number of important issues. Rajeev suggested that the tremendous amount of traffic being generated on mobile social networking sites and the movement of eyeballs from online to mobile suggests that mobile web is here to stay. Jonathan who spent the nineties with AOL recounted how the mobile industry exactly feels like the AOL days and the advertising and commerce market in mobile is going to be enormous. Gary who has been active in the mobile data industry for almost two decades said that after due consideration, his team at Yahoo! came to the realization that Open is the only viable business model in mobile. Hugh who has a keen pulse on the market said that operators can increase their value in the ecosystem by providing context-rich personalized content and services however the handset fragmentation could hold back all the progress. (CNET coverage of our panel here)

James McCarthy, a leader of the 2007 noble prize winner intergovernmental panel on climate change (IPCC) and Richard Carson, Professor at UC � San Diego elucidated the perils of the rising temperatures and CO₂ levels and dangers of doing nothing. Politicians who used to run away from the climate change discussion like one would from a plague are trampling over each other in declaring themselves �green.� The awareness is there but the solutions and policies being developed are not in sync with the rate of damage.

William Haseltine, founder of Human Genome Sciences talked about how Indian healthcare system is using technology (including GPS and mobile) to improve delivery of healthcare and as they are mastering the process are turning their learnings and infrastructure into a global business by providing similar services to overseas markets. He estimates if similar procedures and processes were implemented in California, the state would save enormous sums of monies.

A unique feature of the conference was its �CTO challenge� where a group of technologists from HP, Symantec, Calit2, Microsoft, Avanade, and others collaborated to solve the real-life problem given to them within 72 hours. The topic was �How to build solutions to tackle wild fires?� (The Santa Ana winds in San Diego are notorious for inflicting havoc on the neighborhood every year) The team took input from the executives from the San Diego fire department and came up with a well-thought-out plan and solution. The resulting proposal and recommendations will be available on the FiRe website. Emergency response is a problem not only in the developing countries but also in the developed nations. Technologies and systems are not integrated and by the time people try to figure out what to do, valuable lives and property are lost � which is a shame.

Sidney Rittenberg has known every Chinese leader of his generation including Mao, Deng Xiaoping, current president and premier. His perspective on China and how the western world views China was quite interesting especially in light of the recent unrest in Tibet.

FiRe 069 A journey through space at Calit2

FiRe 027 Video Conferencing with profs at University of Melbourne. Yes, this is a ginormous screen.

FiRe 045 Virtual Mars tour. Next best thing to being there.

One of the much anticipated event was a visit to the California Institute for Telecommunications and Information Technology at UC-San Diego hosted by Larry Smarr, Director at the institute. By the time we were done with the engaging tour, our definitions of what �broadband� is and what it can do, changed dramatically, and yes, we all wanted those fat pipes and big screens at our homes. Under Larry�s leadership, UCSD has created a 10Gbps network with leading universities around the world from Amsterdam to Melbourne to Mumbai to Tokyo. The fat pipes enable live collaboration amongst academics and scientists. Imagine a cinema screen with Ultra-HD resolution. The resolution is so clear that you can follow the minutest flicker of candles on the screen, hear the faintest beats in a symphony. Other applications � well, how about looking at the images from Mars Rover in a 180 degree panorama that makes you feel you were right there or a journey into the universe so intense and so (sur)real that will make any sci-fi movie director go wow! Or zoom into an enzyme or my favorite - zoom into a Leonardo da Vinci masterpiece to discover that there are more images and faces beneath what meets the eye and adds a zing to art forensics. The enormous amount of data that can be transferred and processed leads to many interesting applications beyond cool toys in a lab. Curtis Wong of Microsoft gave a cool demo on the big screen of the recently launched Worldwide Telescope. For the skeptics who say �who needs more bandwidth?� � baby! You ain�t seen nothin� yet.

One of the things that impressed me about the conference was the eagerness of participants to engage and help out. Unlike other events where keynotes and speakers are whisked away right after their talks, at FiRe, one was able to discuss and question the participants making each conversation at the table worthwhile. One of them went out of his way to help me out on a couple of questions I had.

FiRe 095 With Sally Anderson, Bruce Sterling

Bruce Sterling, the renowned science fiction author gave �scenario development� a new meaning. The novelist who lives in three countries, has a penchant for Bollywood movies, is just a great guy to talk to, envisions that the climate change issue in 30 years will be like what nuclear issue is now � go in the background. Btw, he was writing about current climate crises almost 30 years ago. His new novel on Ubiquitous Computing is coming out soon.

There is some interesting research going on in the area of battery technology. UC Berkeley and Stanford are duking it out. Prof Nitash Balsara at Berkeley and Prof. Yi Cui at Stanford are both looking at different compounds as electrolytes. Both are aiming to improve longetivity by 50-100% while keeping the rest of the parameters same, and yes by reducing carbon. It will be interesting to track their progress.

�Sustainability� is the new arrow in the strategy quiver. By making your products more �environment friendly,� one can not only do the earth a little good but make some bucks along the way. Prith Banerjee, SVP, HP discussed how sustainability is one of the core components of their product development strategy going forward.

FiRe 099 Dr. Lee Hartwell

Larry Brilliant � the man who on the encouragement from his guru in India helped eradicate smallpox and has had a profound impact on the response to infectious diseases around the world. He is now executive director at Google.org. Larry talked about the need to coordinate efforts in collecting data so we understand the emergence of diseases � a point also echoed by Lee Hartwell, 2001 Noble Prize winner in Medicine. Instead of resorting to �faith� based medicine, he is pushing for �evidence� based science where you collect data at each (micro) step (marker) to see how patients are responding to drugs but getting funding for basic research continues to be a problem (however, several charitable organizations have been stepping in lately).

FiRe won�t be complete without some predictions. Here is one for you. Mark predicted that if Sen. John McCain wins the upcoming election, the price of Oil will be at $125/barrel and if Sen. Barack Obama (I know Sen. Clinton is still in the race) wins, the price will be coming down to $95/barrel.

The breadth of topics was truly amazing � from environment to climate change to quantum computing to wildfires to healthcare to cancer research to battery research to science fiction to economic affairs to globalization, each conversation added to your thinking and worldview.

It was a different kind of conference. Something that will get your neurons fired up. Don�t believe me, the registration for 2009 is open now.

US Wireless Data Market Update - Q1 2008 May 18, 2008

Posted by chetan in : 3G, AORTA, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Intellectual Property, International Trade, Japan Wireless Market, M&A, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

US Wireless Data Market Update - Q1 2008

Download PDF (2.32 MB)

Download PPT (1.28 MB)

http://www.chetansharma.com/usmarketupdateq108.htm

The US wireless data market grew 38% in Q108 compared to Q107 to reach $7.5B in data revenues. iPhone is not only having an impact on data revenues but also on device design, mobile advertising roadmaps, and applications and services that are being contemplated for future. US exceeded Japan in mobile data service revenues for the quarter and the market is expected to reach $34B in data revenues in 2008.

The US Wireless data service revenues grew 7.5% Q/Q to $7.5B in Q108. Compared to Q107, the data service revenues grew 38%.
Overall ARPU declined by $1.12 and for the first time since Q405, the average ARPU dropped more than a dollar Q/Q. Average voice ARPU declined by almost $1.50 while average data ARPU inched up by $0.49 or 5%.
Verizon lead in data ARPU with $11.94 (or 23.37% of the revenues) closely followed by Sprint at $11.50 (or 20.54%), AT&T at $10.80 (or 21.52%) and T-Mobile at $8.50 (or 17%).
The strongest growth in Q108 came from AT&T with 15% and 53% increase in data revenues from Q407 and Q107 respectively. Both AT&T and Verizon generated $2.3B in data revenues and are on target to exceed $10B in data revenues for the year for the first time by any operator worldwide besides NTT DoCoMo. AT&T and Verizon now account for 61% of the market data services revenues. Verizon and T-Mobile registered 10% increase in data revenues from Q407 while Sprint�s declined by 6%.
The average industry % contribution of data to service revenues exceeded 20% and now stands at 20.62%.
The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q108, Verizon had that 48.1M (or 72%) data subscribers. Verizon and AT&T subscribers joined to send over 100 Billion text messages in Q108 translating into almost a message every 3 hours. This compared to users in Philippines where average routinely surpasses a message every hour.
In terms of net-adds, T-Mobile was helped by SunCom acquisition and crossed the 30M subscription mark. Verizon regained its quarterly net-adds title from AT&T by edging its rival 1.5M to 1.2M. Sprint lost customers again, this time exceeding 1M. In March, the US market also slipped behind India to third position in terms of total number of subscriptions (India is predominantly a prepaid market while US is a postpaid market).
The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the quarter, Verizon, AT&T, and Sprint Nextel stood at #4, 5, and 6 respectively. AT&T and Verizon are in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
Non-messaging data revenues continue to be in the 50-60% (of the data revenues) range for the US carriers.
The eagerly anticipated 700 MHz played out as we expected with Google doing enough to make Verizon pay more and kick-in the �open-gardens� provisions. However, the actual impact on the market dynamics is likely to be negligible. It did however, help open the �open� debate in the industry.
There continues to be tremendous activity in the area of Mobile Advertising. While fending off the Microsoft acquisition, Yahoo is busy creating some compelling applications and is stitching together carrier deals around the world.

Venture money continued to flow into the mobile sector with over $1.5B investment in Q108 (Source: Rutberg). Location Services, Mobile Personalization, Mobile Video, Mobile Search and Advertising, Semiconductor, Carrier infrastructure, Device design and development are hot areas.
Nokia eclipsed 100M unit sale in Q108 for the fourth straight quarter. It sold over 115M handsets in Q108, more than the next three handset manufacturers combined. Nokia�s global market share stood at 39%. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008
3G penetration in the US was approaching 30% in Q108, with Verizon leading the pack with over 56% 3G subscriber penetration. T-Mobile finally did its 3G launch in limited cities with plans for expansion in 08. 3G subs have over $20 in data ARPU accounting for 30% contribution to the overall ARPU from such subs. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
Apple is slated to announce a 3G iPhone next month, has been aggressively expanding the distribution partners, and is expected to blow past the 10M unit (it is already past 5M) sale mark easily by the year-end especially as operators consider giving rebates to attract potential users and their mobile data usage.
As expected, Clearwire and Sprint banded together to raise $14.5B from friends and family which included the likes of Google, Comcast, Time Warner and others. IF the companies can execute on their strategy in 2008/9 and get the devices out in the market without messing up with pricing, this venture can be quite disruptive to the market much more than any other open initiative.

Global update

China and India added approximately 55M subscriptions combined in Q108 with India marginally edging out China with a whopping 10.16M net-adds in March (probably for the first time history, monthly net-adds for country have exceeded 10M). By comparison, US added 4.5M in Q1
NTT DoCoMo continues to dominate the wireless data revenues rankings with over $3.4B in data services revenue in Q108. 35.7% of its revenue now comes from data services. DoCoMo also crossed 80% in 3G penetration in Q108 and is expected to cross 90% by early 2009.
Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are consistently topping 30%.

More details in our worldwide wireless data market update in our Global Wireless Data Market Update Mar 2008.

Your feedback is always welcome.

Chetan Sharma

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

TMO launches 3G, finally! May 5, 2008

Posted by chetan in : 3G, AORTA, Intellectual Property , add a comment

T-Mobile became the last of the major carriers to launch 3G in the US market. However, the launch is limited to NYC and is planning to expand the network in other cities as the year progresses. 4 UMTS handsets are available. The lack of network coverage means no immediate impact of the announcement but by the end of the year, TMO will start contributing to the overall 3G growth in the country.

Inside the USPTO: A Guide to the Patenting Process April 30, 2008

Posted by chetan in : AORTA, IP, IP Strategy, Intellectual Property, International Trade, M&A, Mergers and Acquisitions, Mobile Applications, Mobile Content, Mobile Ecosystem, Patent Strategies, Patent Strategy, Patents, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

Inside the USPTO: A Guide to the Patenting Process

by Carlos Villamar and Chetan Sharma

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

Note: We have an integrated approach to strategy as we strongly believe that taking market research, business, technology, and intellectual property inputs into strategic initiatives is essential in obtaining a long-term sustainable competitive advantage in the industry. To further the dialogue on the subject, we will be publishing several articles, white papers, books, and blog posts over the course of next few months. This white paper is to help entrepreneurs and inventors understand the patenting process.

This white paper was a collaboration with Carlos Villamar, Partner, Roberts Mlotkowski Safran & Cole. Carlos is a patent attorney who has also worked as a patent examiner at the USPTO.

Abstract

Patents are a key corporate asset that can give the inventor and the company an invaluable tool to protect and commercialize inventions. The process of obtaining a patent is an important one � from start to finish. Beginning with patent strategy, due-diligence and patent search through the United States Patent Office (USPTO) process to finally getting the grant, one needs to have a good understanding of each step. This increases the probability of success by removing uncertainty from the process. Inside the USPTO: A guide to the patenting process takes a detailed look at the ideation and the patent process, specifically, how patent applications flow through the USPTO. By having a good grasp of the intermediate steps and the various decision points associated with each of them, the paper discusses how entrepreneurs and inventors can maximize their chances of securing a patent.

Introduction

We live in a knowledge economy and Intellectual Property is a key asset in this new ecosystem. Patents are one of the essential elements to creating barriers to entry for rivals, building credibility and confidence of investors, customers, partners, and employees, providing clarity as to the property ownership, demanding leverage from the industry, and for generating revenue from licensing and sale.

The knowledge economy thrives and sustains on ideas and competitive advantage based on intellectual property. For individuals, the prestige associated with being an innovator and �first to secure� patents in a given field motivates them to be creative and innovative. Entrepreneurs, engineers, and inventors can benefit from understanding how to secure and maintain their intellectual property rights. This paper discusses the important steps in designing, filing, procuring, and defending your patent rights.

The following diagram illustrates at a high-level the patenting process and important considerations in the decision flow chart. The flow chart is discussed in detail in the subsequent sections.

Table of Contents

Abstract	3
Introduction	4
Pre filing due diligence	6
Patent preparation	9
USPTO filing	11
USPTO examination	13
After approval	16
Conclusions and Recommendations	17

Download the full white paper here.

Your feedback is always welcome.

Interview with Padmasree Warrior April 23, 2008

Posted by chetan in : 3G, AORTA, Carriers, European Wireless Market, Intellectual Property, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

Last year, I had a chance to interview Padmasree Warrior who was CTO of Motorola at the time and since then she has moved on to Cisco (as their CTO). The interview was conducted for the PiTech Magazine but for various delays the print edition never got released. I am publishing the interview in its entirety for our readers. Padmasree is a terrific technology leader and there are a lot of good insights in her answers.

1. What are some of the exciting initiatives you and your team are working on at Motorola?

The next decade is about the Mobile Revolution. It is quite remarkable how something as simple as the cell phone is transforming the human race by connecting the entire planet. Today almost half the planet communicates via a mobile device. The social, economic, cultural and technological implications of this are profound, particularly in under-developed countries of the world. The Motorola team is working on delivering products and experiences to enable �Seamless Mobility� which is our vision to enable access to communication, information and entertainment whenever, wherever and however people need it.

For example, recently we announced the world’s first wind and solar commercial network GSM cell site in Namibia. By incorporating renewable energy technology into this cell site, we created a cost-effective solution for operators in the region who find fuel generators too costly and don�t want to wait a long time for a main grid connection. Most importantly, we�ve created the infrastructure for people to be able to communicate with each other. That�s powerful and exciting.

2. What will the mobile device in 2012 look and feel like? What new features and functionality will be introduced by then?

The mobile device in 2012 will become an extension of your persona. In other words, it will know your preference, know where you are and will understand the context of what you need. This will simplify how people access communication, information and entertainment. For example, the mobile device will be your computer, wallet, TV, camera, music player, FM radio, alarm clock, flash light, calendar, game system and so on. By 2012 the mobile device will become your remote control for life.

3. How does �Always On� environment change how media and entertainment will evolve over the course of next five years? What does digital convergence mean to you?

The on-demand genie is out of the bottle and there is no way it is going back in. This fundamental shift in consumers� expectations of being able to watch video when they want is having profound impact on nearly every technology component of every network that is capable of delivering a moving series of images . . . LANs, WANs and wireless.

I see convergence not as technology-driven, but experience driven. Convergence is the mobilization, socialization and personalization of content and communications�the technologies are being driven by the desired experiences. This is how Motorola researchers are going about their thinking. With deep expertise across mobile devices, home networking components, set-tops and next-generation networks, Motorola is focused on creating an integrated experience network topology that will excite the consumers and grow business for every player in the new media ecosystem.

4. If you were advising entrepreneurs, which problems would you advise them to tackle? Where is the most innovation needed? What are some of the problems that our industry hasn�t solved? What�s holding us back?

There are many problems to be solved, some are technological and others regulatory. I will answer this question more from a technological perspective. My advice to entrepreneurs is to focus on value added applications for the mobile platform that has many constraints such as battery life, screen size etc. Just forcing the internet designed for a PC onto the mobile device will not work. We need to think about innovation in areas of internet mobility, content mobility and broadband mobility. Areas of particular challenge are power management and battery life. Another exciting opportunity is to think about how this device may be used, when Wireless Broadband becomes a reality with WiMax. I don�t think anything is holding us back. I am an optimist � I believe the human mind can solve most problems. The scale of the mobile revolution is so massive that innovation will occur at many levels both in developed and emerging markets simultaneously.

5. At Java One you talked about Platform Disturbia. How do we solve the problem (or ease the pain) of industry fragmentation at multiple levels? Or is it a fact of life?

“Platform Disturbia” which is my anecdotal way of describing the fragmentation in the mobile industry can be a great opportunity for developers, but brings with it significant challenges. As content and communications go mobile - How does one move content easily and transcode it from one format to another? How does one set the hooks between different networks and mobile devices so the hand off is seamless? With personalization, where should the authentication and personalization engines be located - on the mobile device or on backend servers? Should context and location awareness work with authentication; how much should they reveal and to whom?

It is hard enough dealing with the sheer number of different mobile handsets, screens and separate operating systems. Now we want those devices to talk effortlessly with enterprise infrastructures - to enable secure communications and data sharing with field service people. We want to extend into the home and be able to upload and download content automatically from set top boxes. And deliver a whole new generation of location and context-based services that will make mobile devices even more personal and interactive.

The way to ease the pain of industry fragmentation is through the adoption of standards and for large innovative companies to be transparent about intellectual property rather than extract high royalty rates for patented technologies. The former accelerates time to market and therefore expands market creation with a unified approach. Of course, companies must protect their intellectual property and get fair, reasonable payment for their patent rights. However, often fragmentation occurs when competing technologies are created to avoid high royalty taxation.

The mobile world is a huge and divergent ecosystem where innovation needs all of us to be both visionary and pragmatic - so that we can move to Platform Utopia!

6. India�s wireless market has been exploding at a rapid pace. Could you please discuss the role of wireless communications in India�s economy? What role does India play in the global wireless market?

Yes, the wireless communications market is certainly growing very rapidly in India � nearly every global manufacturer has production and research presence in the country. India adds almost 6 million subscribers every month � that is equivalent to connecting the entire country of Denmark in India every month!

This rapid adoption of mobile communications will have a positive impact on economic empowerment over the long run. This is already starting to happen in other emerging markets. For example, merchants in Zambia use mobile phones for banking. Health workers in S. Africa use them to update records while visiting patients. In Tanzania fishermen use mobile phones to get market, weather and the price of fish while still off shore. Already mobile connectivity is generating big economic benefits according to a London Business School study. The study says that in a typical developing country, a rise of 10 mobile phones per 100 people boosts GDP growth rate by 0.6%. That may not seem much but compounded over a few years it adds up to a substantive increase in the standard of living

India plays a critical role in the global wireless market because the scale of people yet to be connected is large. This demand will become a hotbed for creativity and innovation. When we connect the billions of people, we will see new use cases with mobility. Looking forward, the opportunity in India and support of the government is quite strong. The Indian government has set the target of 500 million subscribers by 2010.

7. How do you manage uncertainty? How do you keep the team of 26,000 focused and motivated?

Managing uncertainty is exactly what innovation is all about. Not knowing the answers, taking risks, disrupting the status quo and challenging conventional wisdom are necessary ingredients to invent and innovate. As inventors, it is our responsibility to think beyond the possible and break barriers to create the never before imagined solution.

However, with this creativity comes the need of one shared vision. At Motorola, our shared vision is of a world in which communications transcends the barriers of space and time to deliver an on-demand consumer experience � what we call seamless mobility. It is this vision that connects our work and keeps our 26,000 focused on one end goal.

Most importantly, I surround myself with very smart people � individuals who are not only experts in their fields, but also possess strong business acumen blended with an entrepreneurial spirit to succeed. It is tough to find people like that, but ultimately people are the backbone of an organization, they are the catalysts for growth and success. Leadership is not about YOU but them � the teams you lead. My advice is to leaders � be humble and don�t be afraid to hire talent that is better than you.

How do you keep up with all the information and technology evolution around you? You have your own blog; do you have some favorites that you read regularly?

I stay connected � to people and information. I read just about anything and everything that comes my way, it is almost addictive. I also spend a lot of time meeting customers, visiting universities across the world, chatting with students - all the way from elementary to post doctoral and interacting with industry thought leaders. This has exposed me to some truly remarkable individuals from all fields. Recently while in San Francisco, Dr. Jill Tarter invited me to the SETI Institute where I met with some brilliant astronomers and scientists and gained a unique perspective on their contributions and achievements.

I also stay connected to information - from blogs to technical papers to trade journals to books, there is always something fascinating that sparks my interest (and keeps me busy on those long cross-Atlantic flights!). Yes, I have my own blog called �Bits at the Edge� - http://blogs.motorola.com/author/padmasree-warrior/. I read many blogs and enjoy the perspective of different bloggers, whether they agree with my opinions or not.

What are the key ingredients of a strategy to outsmart competition?

I always say a Vision without a plan is just a Dream. The key to success is Think Big and Act Fast. Focus on delivering value by solving relevant problems.

10. How can technology companies better understand the needs of customers?

It may sound simple but I would say that we could better understand the needs of customers by being better listeners - especially earlier in the product development cycle. As corporations grow, it is easy to get stifled by what is going inside our own walls and forget to open the doors in the early stages of concepts, to understand the pulse of the marketplace.

At Motorola, we are shifting our focus to delivering enhanced experiences to our customers. Similarly, our research efforts stay focused on discovering the problems of tomorrow and then creating solutions to solve these problems.

Let�s take the example of the original RAZR � our researchers perceived that consumers were in search of a phone that would fit in their shirt pocket; our scientists then brainstormed and developed the solution of an embedded antenna that allowed for a slimmer form.

11. How do you manage work-life balance?

I actually dislike the word �balance� in this context, because it conjures up images of conflict. My work is an integral part of my life and so are my family, my community, my friends and my self. I prefer to think of this more as an integration challenge. I have one life in which I must INTEGRATE each of these. Therefore, it is not important HOW we decide to apportion the time spent on each of these because there is no right answer. The challenge is to COPE with the guilt that comes with however we choose to spend time on each of these. Over the years, I have tried not to feel guilty about things that I am unable to do, but rather enjoy the experiences of what I am able to do. Recently I had to miss our senior leadership strategy session, instead I chose to attend my son�s middle school commencement where he received a President honor award. I had a blast being a proud mom that evening.

12. You are an inspiration to many. Who inspires you? Who has been your role model(s) and why?

Mother Teresa continues to be an inspiration to me. I do not see her just as a martyr but as a pioneer and a bold risk taker. She looked at the world holistically and her work broke down barriers � race, color, ability, wealth and economic status. She left her home country and comfort zone to improve the lives of the poorest of the poor.

13. Who are some people you would really like to meet with that you haven�t been able to meet yet?

Restricting my wishes to people that are living, I would like to meet Nelson Mandela who single handedly and irreversibly influenced the course of apartheid in the world. I would also like to meet Scott Adams � I Iove Dilbert!

14. What�s the last book that you read that really made a difference in your life?

The Alchemist � poetic style of prose that is thought provoking, makes you pause.

15. What are some of your favorite memories of being at IIT?

Dating my then boyfriend (now husband), all night chat sessions in the dorm room, the perennial hikes to street cafes at odd hours in search of chai (tea) that had nothing at all to do with drinking tea per se, heated debates about everything from solving world hunger to cutting classes the next day.

LTE Technology IPR licensing April 14, 2008

Posted by chetan in : Intellectual Property, Worldwide Wireless Market , add a comment

From the press release

Wireless Industry Leaders commit to framework for LTE technology IPR licensing
Alcatel-Lucent, Ericsson, NEC, NextWave Wireless, Nokia, Nokia Siemens Networks and Sony Ericsson have today announced a mutual commitment to a framework for establishing predictable and more transparent maximum aggregate costs for licensing intellectual property rights (IPR) that relate to 3GPP Long Term Evolution and Service Architecture Evolution standards (LTE/SAE). The companies invite all interested parties to join this initiative which is intended to stimulate early adoption of mobile broadband technology across the communications and consumer electronic industries.
The framework is based on the prevalent industry principle of fair, reasonable and non-discriminatory (FRAND) licensing terms for essential patents. This means that the companies agree, subject to reciprocity, to reasonable, maximum aggregate royalty rates based on the value added by the technology in the end product and to flexible licensing arrangements according to the licensors� proportional share of all standard essential IPR for the relevant product category.

Specifically, the companies support that a reasonable maximum aggregate royalty level for LTE essential IPR in handsets is a single-digit percentage of the sales price. For notebooks, with embedded LTE capabilities, the companies support a single-digit dollar amount as the maximum aggregate royalty level. The parties believe the market will drive the LTE licensing regime to be in accordance with these principles and aggregate royalty levels.
This framework balances the prevailing business conditions relevant for the successful widespread adoption of the LTE standard, which continues its progress toward definitive adoption by the industry in the applicable standards forums and organizations.

4G race - Is LTE taking the lead April 9, 2008

Posted by chetan in : AORTA, Intellectual Property, Worldwide Wireless Market , add a comment

Om Malik does a status update on the 4G discussion so far.

He quotes from our recent CTIA roundup.

Our favorite wireless data analyst, Chetan Sharma, did the rounds at CTIA and his conclusion about LTE concurred with our reporting. �Without a doubt the operator community is rallying behind LTE, and there might be an opportunity to finally converge to a single standard,� he says.

Sharma points out that single standards, while nice and dandy, will soon become a thing of the past thanks to �advances in silicon� that now make it possible �to integrate multiple radios� on single chip. Of course, the potential of software-defined radios are finally beginning to be realized as well; Huawei, for example, will be using SDRs in its 700 MHz gear.

So what about WiMAX? Well in the U.S., things aren�t looking so good. Sprint�s Xohm Network has hit some snags and Clearwire is riding rough seas. A rescue in the form of a new, megabillion-dollar funding for a new WiMAX operator might emerge, but we�ll have to wait and see.

As Sharma notes, �WiMAX has forced acceleration of the LTE standardization process but is starting to lose its time (and cost) advantage.� From what I have been able to learn, WiMAX is the technology of choice in the emerging telecom economies. In India for instance, Tata and Reliance, two giant telecom operators, are spending a ton of cash on WiMAX, as is the incumbent Indian incumbent, BSNL.

Charlie Martin, CTO of wireless for Huawei, in an interview with Fierce Broadband Wireless, said, �We view WiMAX as different from CDMA and LTE in terms of the fact that WiMAX is a good alternative for emerging markets and alternative operators.� If there is one company that knows emerging markets, it is Huawei, so I give Martin�s comments a lot of credence.

That last point about Charlie is spot on. The infrastructure business is going to get a shake-up from the Asian vendors in the coming years.

CTIA Wireless 2008 Roundup April 4, 2008

Posted by chetan in : 3G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Smart Phones, Speaking Engagements, Speech Recognition, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 comments

CTIA Wireless 2008 Roundup

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

The Sin City hosted CTIA Wireless 2008 earlier this week. On Wednesday morning, just before leaving for the convention center, I caught some portion of Ben Bernanke�s congressional testimony on the US economy woes. Few minutes later, strolling the show floor, talking to various companies, and hearing the keynotes, it seemed like I was on a different planet. Either someone failed to deliver the memo or the wireless industry is resilient enough to weather the turmoil in the financial and housing markets with some ease. The show was bigger with more attendees, the booths were returning to their glamorous heydays of the past, and the general buzz and energy at the show all seem to indicate the industry is going to do just fine and is primed for further growth. The general themes were around open network and access, user experience, and bandwidth.

This note summarizes our impressions from the show.

CTIA Wireless in Pictures

First let�s do the numbers: CTIA released their semi-annual statistics on the US market. In summary: For 2007, $23B in data revenues, 2 trillion in MOU, $139B in total service revenues, 48B txt messages/month. (We released our US Market and Global Market updates last month)

Keynotes: In terms of style, Sir Richard Branson stole the show with his pompous exuberance and pep talk (the talk of imaginary flight to Mars was hilarious; investors in Microgin and Viroo must be upset). For substance, Marco Boerries, President, Yahoo Mobile gave a nice compact overview of Yahoo initiatives and products in the market which are pretty darn good. (Marco wrote an opinion piece for our Mobile Advertising Book � �The future of Advertising is in the Consumers� Pockets�). Yahoo has sewn together a number of deals worldwide that gives them a potential reach of over 600M users.

Vodafone is one operator which has been quite vocal in stating its positions on future infrastructure roadmap and data opportunities. Arun Sarin is probably the only CEO of major global operator who has publicly stated that Mobile Advertising will constitute a significant portion of their revenues in the coming days (Arun�s point person on the initiative Richard Saggers also wrote an opinion piece for our book �Opportunities for Mobile Advertising.� Let me know if you are interested in reading these two opinion pieces).

Microsoft�s Robbie Bach had the tough task of following the Branson-fest. He announced the arrival of a full-blown browser (finally!) for windows mobile. Also, the new windows mobile device from Sony Ericsson (Xperia) looks pretty darn cool. FCC Chairman Martin announced the rejection of Skype petition on the carterphone principle (to Skype�s dismay, it was not an April fool�s joke). Clearly, the definition of �open� is in the eye of the beholder. It means different things to different people. It has also been clear from the various activities and keynotes that the industry is trying its utmost to remain a �Self-regulated� industry and stay away from the clutches of eager politicians.

Lowell McAdam, CEO of Verizon Wireless conducted a panel with CEOs from Alcatel-Lucent, Ericsson, and Nortel and probed them on the 4G migration path, trends in applications and services, and contrasts in adoption and introduction of new technology in various parts of the world. Final day was marked by what is now becoming a trend - keynotes from politicians. This time around Sen. Edwards and Sen. Thompson graced the podium.

Mobile Advertising: In talking with numerous players in the value chain from small developers to large operators to ad networks to media companies, the impression was that things have matured over the last six months. It was gratifying to hear that some companies are adopting strategies and recommendations we propose in our book. Still, some of the basic problems remain � majority of the inventory remain unsold indicating weak demand, CPM rates are still over-rated though they are starting to come down, and fragmentation continues to remain an issue.

The good news is that the size of the mobile campaign budgets are getting bigger with several seven figure RFPs floating around. While some companies are still trying to throw a lot at the wall in the hope that something sticks, others are maturing as companies and are more focused in their positioning and product roadmaps. Integration of various channels is starting to appear on the horizon and the integration with the publishers is becoming tighter. The issue of measurement and auditing standards remains a big issue and unfortunately not much progress to report. There are carrier initiatives and various industry bodies are taking the challenge to rally the ecosystem, but, frankly, consolidation of such efforts is necessary, we can�t afford yet another layer of fragmentation in an already complex ecosystem.

We were interviewed on Mobile Advertising prior to the show by several publications. Some of the articles were published this week to coincide with CTIA

Wireless Wave (CTIA) � Moving Targets: Mobile marketing reaches consumers on their terms by Lynn Thorne

BrandWeek � Mobile Marketing � Fantasy vs. Reality by Ken Hein

Wall Street Journal � Personalized promotions: Sending the right ads to your phone � Peggy Anne Salz

NFC: There were many more NFC-enabled devices on display this time and vendors were talking and demoing NFC and Biometrics based payment solutions. While there are handsets on the roadmap, this market is still very nascent in North America and Western Europe.

Inspiration: The inspiration for new and creative services still comes (at least for yours truly) from Japan (and Korea). I love spending time in DoCoMo�s booth for it gives a glimpse into what�s to come. No other company better understands the development of devices, services and applications that overlay on lifestyles than DoCoMo (e.g. a wellness handset that is a pedometer, heart rate monitor, body and bad breath monitor and yes, you can make voice calls too). They view wireless air-interfaces as nothing more than enablers to solutions that enhance daily lives. Various device manufacturers also displayed some really cool devices. The quality and diversity of handsets that have been introduced into the global markets over the last four quarters is just astonishing. The cycle of innovation and time-to-market keeps on accelerating.

Femto Cells: A number of players like Airwalk, Airvana, and others are bringing Femto cell solutions to the market and carriers are starting to pull this into their strategy as well and look forward to deployments beyond the trials.

4G: LTE vs. WiMAX (vs. UMB): Since the decision of Vodafone and Verizon to support LTE, UMB has been disappearing from the discussion. The 4G discussion is convulsing around LTE and WiMAX now (though Nortel did indicate its support TD-SCDMA as a 4G candidate). Without a doubt the operator community is rallying behind LTE and there might be an opportunity to finally converge to a single standard (haven�t we seen this movie before) but frankly, the advances in silicon to integrate multiple radios has made the standards debate less relevant. WiMAX has forced acceleration of LTE standardization process but is starting to lose its time (and cost) advantage. All eyes are on Sprint�s XOHM business rollouts in the coming days and months.

Accessories: I have never seen so many accessory and reseller outfits at a CTIA show. Business must be booming.

Best Booth: Thought there were several good layouts, LG and Samsung continue to impress with their creativity and �art of marketing.�

Developer and Publisher woes: Along with John Philips (Astraware) and Peter Baldwin (Cellmania), I helped facilitate a few developer session at the Mobile Jam Session organized by WIP. The issues of distribution, discovery, and monetization remain challenging for the small developers worldwide. Even with million user base, they are finding it difficult to monetize but we did discuss a number of success stories. The core elements of success that emerged from the discussion were: choosing the right market, embedding viral component into everything you throw out there, there is no room for mediocrity, and personalizing and customizing go a long way to get traction. An interesting tidbit: the number of page views for mobile MySpace app is a magnitude higher on off-deck vs. ondeck. Several of the companies are trying mobile advertising with varying degrees of success. After spending 4 hours with the developers, I sat on a carrier panel discussing mobile advertising. The contrast between the two worlds was so apparent. Clearly, more needs to be done to help both sides understand each other a bit better.

Green CTIA: There is a stronger emphasis on recycling and contributing to save the environment. The show itself is a big resource hog, so every bit helps.

Alternate Mobile Devices: The universe of alternate devices is expanding. Companies are buying wholesale data packages from the operators and integrating broadband chipsets into hardware to do digital signage (ICG), M2M (Sensorlogic), PND and much more. The definition of being �mobile� keeps on changing.

On Being �Open�: Obviously, given the recent activity around openness, getting a penny for each time the word was uttered by a speaker would have paid off for a lifetime of CTIA trips. While talk is cheap, demonstrable progress is being made by the likes Yahoo, Apple (btw, 3G iPhone is on its way), and AOL.

Another MVNO experiences turmoil: Movida - a Spanish focused MVNO which has garnered almost 300K subs filed for chapter 11.

Voice is becoming mainstream: With the product launches from Nuance, SpinVox, Vlingo, Jott, Yahoo, and many others, voice based navigation and its tighter integration with data services is becoming mainstream.

Where are the opportunities? Last week, I was moderating a panel with executives from AOL Mobile, T-Mobile, Motricity, and Formotus and the themes that emerged were around platform play, user experience, and productivity. At CTIA, in addition to these areas, there was a lot of discussion around social networking (though the market is being saturated with the MoSo noise). It is also clear that we are moving into the phase of �aggregation of fragmentation� with initiatives from Yahoo, AOL, and Google dominating the landscape.

Home Screen Effect: I have been talking about using the home screen for driving data usage for the last 8 years. I think we will see good innovation this year on that front starting with Yahoo�s One Platform. There are several other initiatives in the works where operators and OEMs will be deploying frameworks and technologies to bring information to a �click-less� idle screen environment.

Overall, no major news but industry stays vibrant, healthy, and exciting.

Your feedback is always welcome.

Chetan Sharma

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

Global Wireless Data Market Update 2007 March 27, 2008

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, European Wireless Market, India, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Networks, Partnership, Speaking Engagements, Speech Recognition, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 8 comments

Global Wireless Data Market Update 2007

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http://www.chetansharma.com/globalmarketupdate2007.htm

As you read this End of Year (EOY) 2007 Global Wireless Data Market update this week, somewhere in India, a new subscription will catapult India over the US as the number 2 global wireless market. 2007 was a banner year for global wireless data market. The global service revenues for the year touched $700 billion, the data service revenues were more than $120 billion, China signed its 500 millionth subscription, and both India (in feb 08) and the US crossed the 250 million subscription mark. 2007 continued to enhance mobile data�s role in the operator ecosystem with approx 17% of the revenue is coming from data services.

For some leading operators, data is now contributing up to 35% of the revenues however increase in data ARPU is not completely offsetting the drop in voice ARPU. From the true and tested SMS messaging to new services such as Mobile TV, Enterprise apps, and others, different services helped in adding billions to the revenues generated for 2007. Japan and Korea remain the envy of the global markets and the countries to study and learn from w.r.t. new services and applications. The US market has been steadily making strong comeback and for the first time exceeded Japan in service revenue generated from mobile data.

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.

The worldwide markets continue to grow at an explosive pace reaching 3.3B subscriptions by Q407 up 20% from 2006 levels. Significant growth is coming from India and China with both countries registering close to 8-9M net adds per month. India recorded 8.8M net adds in Jan 08 while China added 9.4M in Feb 08. Overall, the world market is at almost 50% penetration.
US surpassed Japan as the most valuable mobile data market in service revenue with US adding $24.5B vs. $23.2B for Japan in 2007 mobile data service revenues. China with $12.5B was ranked number 3. US registered the highest growth amongst the top 3 with over 55% increase from 2006 levels followed by China at 37% and Japan at 18%. These top 3 markets account for over 50% of the global data service revenues.
NTT DoCoMo continues to dominate the wireless data service revenues rankings with over $12.13B in service data revenues for 2007 however Q/Q growth has dropped to single digits. DoCoMo crossed 80% in 3G penetration and is expected to touch 90% by end of the year.
DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T, Sprint Nextel, O2 UK, SK Telecom, Softbank, and China Unicom to round up the top 10 operators by wireless data service revenues. All the top 10 carriers exceeded $3B in data revenues for the year.
Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, 3 Italy, 3 UK, and O2 UK are topping 30%.
Both India and China added a whopping 85 million new subscriptions (most of them prepaid). This week India edges past US to become the number 2 wireless market (by subscriptions) in the world. In last two years alone it added almost 150 million new subscriptions (in comparison China added 155 million and the US market added 44 million).
Vodafone Italy reported the highest increase in data ARPU from 4Q06 with 76% growth. Other notable percentage increases in ARPU were from Rogers, AT&T, Verizon Wireless, Sprint, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators with average data ARPU dropping to $0.70.
In terms of absolute dollar amount, 3 UK leads the pack with $29 data ARPU (qualifying limit: 4 million subs). By comparison, the rest of the top 4 operators are below $22. In fact, 3 UK reported the highest ARPU recorded for the year at approximately $94 (in Q2). Other operators who reported overall ARPU above $60 were KDDI, NTT DoCoMo, Rogers, and 3 Sweden.
The biggest jump in data revenues was experienced by Verizon Wireless with over 68% increase from 2006 followed by AT&T with 63% jump and O2 UK making 49% gain.
In 2007, SMS�s vice like grip on data revenues continued to loosen a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 20-40%.
The top 10 operators increased their revenue by 32% during 2007 (from 2006) to reach almost $62 billion in data service revenues, thus accounting for almost half of the global data service revenues though they account for only 27% of the global subscription base.
NTT DoCoMo�s position at the top of the wireless data world has been challenged recently by several carriers esp. by its archrival KDDI. Their data coordinates stand at ($21.5, 35%) and ($21, 34%) respectively (please see PowerPoint for reference). Since the takeover from Vodafone, Softbank has been making significant strides in the market by taking the highest share of the net-adds in last 9 months.
The biggest percentage contribution by data ARPU has been consistently registered (since mid 2002) by two Philippines carriers � Smart Communications and Globe Telecom with almost 55% (or $4) contribution coming from data services.
Even though China reported approximately $12.5B in data revenues for 2007 and the percentage contribution is over 23%, data ARPU is around $2.3. For India data ARPU dropped below $1 for all major carriers.
China Mobile with 369M (as of Dec 07, the numbers increased to 384M by Feb 08) remains the #1 carrier in terms of total number of subscribers followed by Vodafone at 252M and China Unicom with 160M subscriptions. Telefonica, Am�rica M�vil, SingTel, Deutsche Telekom (T-Mobile), and Orange (France Telecom) are the next five largest telecom groups in the world. In terms of individual carriers in a given country, AT&T and Verizon Wireless occupy the #3 and #4 spot respectively ahead of NTT DoCoMo, which is at #5. The two Chinese carriers round up the top two positions and are likely to stay perched at their lookout vistas for many years to come. China Mobile also surpassed Vodafone in market cap which stands at $288B (vs. $164B for Vodafone). Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans. Carriers in Japan and Korea are the most under duress.
As far as 3G is concerned, GSA reported 293 WCDMA commercial launches worldwide with over 270M 3G users (66% of them are WCDMA users vs. EV-DO). Both Japan and Korea continue to expand their 3G base with both reporting over 75-80% penetration. 3G has picked-up steam in both western Europe and North America per our forecast in the 2005 cover story article �3G: Hitting the Mass Market� published in the Wireless World Magazine. Western Europe and US are approximately at 25% 3G penetration (Italy being the exception reaching 40%).
China and India represent the biggest opportunities for Infrastructure providers. China has postponed its 3G decision for the umpteenth time and has been having technical and political problems to get something in place before the 2008 Olympics. India is going through its 3G spectrum policy but unlike China is likely to resolve the issues in short order. Some of the biggest infrastructure contracts will come from these two countries that are looking to expand coverage into rural areas. In India, regulators are considering inviting bids for the 3G spectrum from foreign entities as well.
Carriers with nationwide 3G networks and good distribution of handsets are seeing uptick in data ARPU. The Japanese and Korean carriers along with operator 3, Verizon, Sprint Nextel are all seeing benefits of rolling out their 3G service. Deployment of 3.5G technologies such as HSDPA and EV-DO Rev A (and B) are also gaining momentum. Networks are getting deployed and market is being seeded with some of the early handsets. In terms of 4G, there is a strong momentum behind LTE, UMB in its current incarnation is practically dead, and proponents of WiMAX are pushing the technology as a 4G candidate, though it is starting to lose its time advantage.
In terms of applications, messaging accounts for lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, Mobile Games, IMS, LBS, Mobile advertising, and others have captured industry�s imagination. 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.
2007 also saw the demise of some high-profile MVNOs like Amp�D. Helio continues to struggle while the newer ones like Sonopia and Blyk are testing the treacherous waters with different business models. Asian market is also opening up for MVNOs.
Nokia eclipsed 100M/quarter unit sale three times in 2007. It sold over 437M handsets in 2007, more than the next three handset manufacturers combined. Nokia�s global market share stood at 40.2%.
While the talk of �Open Access� and �Open Platform� consumed much of North America, it barely registered a decibel elsewhere. Several significant events including 700 MHz Auction, Android, and Verizon�s �Open Network� initiative elevated the consternation in the ecosystem.
Several operators reported Mobile Advertising as their key strategic focus for the coming quarters, esp. China Mobile and Vodafone. Sensing the opportunity to seek new sources of revenue stream, Nokia launched its ad service as well. 2007 saw tremendous M&A activity in both the online and mobile advertising space. In a matter of weeks, several billion dollar transactions took place highlighting the intensity in preparing for the next battleground. The estimated market for mobile advertising in 2007 was approximately $2.3B with messaging, search, and browsing accounting for over 84% of the revenues.

Your feedback is always welcome.

Chetan Sharma

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

US Wireless Market Update - 4Q07 and 2007 March 10, 2008

Posted by chetan in : 3G, AORTA, BRIC, Carriers, Devices, European Wireless Market, India, Indian Wireless Market, 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, Smart Phones, Strategy, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

US Wireless Market Update - 4Q07 and 2007

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http://www.chetansharma.com/usmarketupdateq407.htm

The US wireless data market grew 55% in 2007 ending the year with $24.5 billion in data services revenues with 4Q yielding $6.9B. 2007 also saw significant industry milestones like: iPhone launch, US crossing 250 million subscriptions, 3G penetration in the US touching 25% subscriber base, consternation around 700 MHz spectrum auction, MediaFLO launch, Android launch, Nokia crossing 40% market share, WiMAX and Femto Cell trials, and much more. US almost equaled Japan in mobile data service revenues for the year (rounding error and currency fluctuation difference). With several significant launches coming up in 2008, US remains one of the most attractive wireless data markets.

The US Wireless data service revenues grew 7.8% Q/Q to $6.9B in Q407. For the year 2007, the US wireless data service revenues grew to $24.5B, up 55% from 2006.
Overall ARPU declined by $0.81and reversed the trend of overall ARPU uptick of the last two quarters. Average voice ARPU declined by almost $1.50 while average data ARPU inched up by $0.68 or 7%.
Sprint lead in data ARPU with $11.50 (or 19.83% of the revenues) closely followed by Verizon at $11.06. Verizon was ahead in terms of data as % ARPU with 21.3% of its ARPU coming from data services. AT&T with $10 (or 19.89%) and T-Mobile with $8.2 (or 16%) rounded up the top 4.
The strongest growth in 2007 came from Verizon and AT&T, with both of them tied at 64% YOY jump in data revenues. However, Verizon was ahead in dollar terms at $7.4B, accounting for almost 31% of the US industry data services revenue for the year. The top two were followed by T-Mobile at 56% and Sprint with 31% increase YOY.
The average industry % contribution of data to service revenues jumped to 19.34%.
In terms of net-adds, thanks to the Dobson acquisition and the iPhone sales, AT&T added 2.7M new subscribers followed by Verizon at 2M. The overall net-adds improved by 6.2M subs taking the total for the year to 20.8M, down slightly from 2006. Despite the 7% slowdown, there is plenty of growth left in the US wireless market.
In spite of AT&T�s prolific quarter, Verizon ended up with the highest net-adds for the year at 7.7M subs vs. AT&T�s 6.9M.
The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the year, Verizon with $7.4B, AT&T with $6.9B, and Sprint with $5.2B in data services revenues stood at #4, 5, and 6 respectively with Verizon closing in on KDDI for the number 3 spot. AT&T became the second US operator after Verizon to be in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
Non-messaging data revenues continue to be in the 50-60% (of the data revenues) range for the US carriers.
There was tremendous activity in the area of Mobile Advertising. Google is also laying out its tactical and strategic roadmap in hopes to dominate the space and while it succeeded in pushing FCC to change the 700 MHz auction rules, the future of Android alliance remains uncertain. It did however; help open the �open� debate in the industry. Meanwhile, Yahoo is busy creating some compelling applications and is stitching together carrier deals around the world.
Venture money continued to flow into the mobile sector with over $4.9B investment in 2007 (Source: Rutberg). Location Services, Mobile Personalization, Mobile Video, Mobile Search and Advertising, Semiconductor, Carrier infrastructure, Device design and development are hot areas.
iPhone helped AT&T find its voice. Since the introduction of iPhone in June 07, AT&T has reversed the multi-quarter trend of narrowing total subscriber difference with Verizon. Aided by the Dobson acquisition, the difference between the two companies stood at 4.4M subscribers in favor of AT&T (vs. 1.5M in Q107). iPhone also accounted for (higher) disproportionate mobile web usage exciting the ecosystem and media alike.
Nokia eclipsed 100M unit sale in Q407 for the third straight quarter. It sold over 437M handsets in 2007, more than the next three handset manufacturers combined. Nokia�s global market share stood at 40.2%. Quite impressive.
3G penetration in the US touched 25% in 2007, with Verizon leading the pack with over 53% 3G subscriber penetration. AT&T reported that 3G subs have over $20 in data ARPU accounting for 30% contribution to the overall ARPU from such subs. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
There was tremendous discussion around �openness.� Bowing to the industry pressure, FCC�s 700 MHz spectrum auction included clauses for opening up the network by the winner. Sprint made progress with its upcoming launch of XOHM. Verizon launched its Open initiative. Google�s Android was announced in Q407. Though devices are slated to hit the market in 08, its overall impact remains uncertain.

Global update

China and India added approximately 86M subscribers in 2007 dwarfing growth in other regions by a distance (China marginally edged out India to retain the top honors). Similar growth trends will continue into 2008. In fact, India will overtake US as the number two wireless market in the world (by total subscriptions) during the week of March 24th 2008.
NTT DoCoMo continues to dominate the wireless data revenues rankings with over $12B in data services revenue in 2007. 35% of its revenue now comes from data services. DoCoMo will also cross 80% in 3G penetration this month. China Unicom edged past SK Telecom to occupy the number 9 spot.
Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are consistently topping 30%.

More details in our worldwide wireless data market update coming out later this month.

Your feedback is always welcome.

Chetan Sharma

Recap of Pacific Northwest Wireless Summit January 22, 2008

Posted by chetan in : 3G, AORTA, ARPU, Carriers, European Wireless Market, Indian Wireless Market, Intellectual Property, Mobile Advertising, Mobile Applications, Mobile Ecosystem, Mobile Search, Speaking Engagements, Strategy, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment

Beautiful Vancouver, BC hosted the first Pacific Northwest Wireless Summit 16-17. I got up early at 4 and by 4:30 (yes in the morning) was on my way up north. A nice 3 hr drive into the city.

On 16th the conference hosted the leadership summit of prominent folks in the wireless industry from Northwest. I was invited but couldn’t make it. 17th was the main conference while 18th was devoted for investment related discussions. There were keynote presentations spread throughout the day from experienced professionals to young entrepreneurs, a pretty good mix of apps, services, and infrastructure discussion. Some of the most interesting ones were given by Peter Howley, Chairman of Success Generation Systems and Fred Ghahramani, cofounder, AirG.

Conference was divided into the technology track and the business track. I participated mostly on the business track so missed out the technology discussion. The day started with a small presentation I gave on Mobile Advertising which was the first time I was sharing some of the research from our upcoming Mobile Advertising book.

Then, Olivier Vincent of Canpages discussed the role of local content in advertising. Following the two presentations we went straight into the exciting panel discussion. Alfredo Tan, Sr. Director at Yahoo! Mobile and Matt Snyder who recently was very active Nokia Mobile Advertising efforts (and now runs his consulting company) joined in with moderator Michael Bidu.

We had a very engaging discussion on the state, potential, opportunities, and the risks in mobile advertising. We could have gone for hours. The key points I drew from the discussion were that we are early but things are growing fast and as long as we take care of fragmentation and privacy issues, mobile advertising has a strong future ahead.

The second session was moderated by Fred of AirG with Alfredo, Trevor Doerksen (Mobovivo), and Stephen Nykolyn (Material Insight) on the panel. Fred was very keen on the carrier being the dumb-pipe debate trying to corner the panelists into forecasting the fate of the operators in the next few years and like able politicians, no-one attempted to bite.

There was a panel on Mobile Trends and Insights which also led into the discussion of why foreign companies don’t do so well in developing markets. Lack of local presence and strategy is the main reason.

Next, I moderated a panel on Understanding Mobile Asia with panelists - Asokan Thiyagarajan, Motorola, David Dai, CellOn China, and Karl Weaver, Newport. Again, we could have gone for a long time as there is lack of understanding of the Asian markets - China, India, Japan, and Korea. We discussed stats, business models, technologies, strategies for companies to succeed in these markets.

Caroline Lewko has been the fearless leaders of the developers and her work at WIP Connector has helped numerous companies and individuals. She moderated a discussion on go-to-market strategy.

By now, it was time to head back. After managing through the city traffic, it was a smooth ride back after crossing the border.

All-in-all a great start to what I hope will be an annual event.

Mobile Industry Predictions - 2008 January 1, 2008

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, European Wireless Market, Indian Wireless Market, Intellectual Property, 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 Usability, Privacy, Smart Phones, Speech Recognition, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 9 comments

I never think of future, it comes soon enough � Albert Einstein

First things first. Wish you a very happy and successful 2008.

Before we look at what�s to come, let�s do a quick wrap-up of the year that was.

2007 will clearly be remembered as �the year of iPhone.� While there were several other �events/trends of interest� through-out the year, nothing captured the imagination of the world like the iPhone. It was significant for another big reason � it had a profound impact on the business model and ecosystem dynamics. Q4 2007 was also significant for the deafening roar that resonated around �Openness�.

Steve Ballmer exclaimed mobile to be the next battleground while Eric Schmidt pondered why mobile phones are not free (subsidized by Google ads of course).

Google played its chess game effectively and though it is unlikely to play to win the 700 MHz auction or even if they do win would be able to do anything substantive in the short-term, they did, however, with Android and spectrum gambit, force some of the regulation-wary operators to take a stance on openness. Nokia is putting together a brilliant services strategy that looks to connect directly to the consumer. Competition and coopitition will have a different meaning going forward.

Things were looking positive for WiMAX until the end of the year when Clearwire was left standing on its own. It will look towards Google, Sprint, Motorola, and others to rescue its fate.

Mobile Advertising was hailed as a great savior of mobile content and mobile revenues in general. Blyk even launched an advertising-based MVNO. We made significant headway in energizing the 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.

In terms of actual dollars, mobile data market continued its steady growth with substantial shifts in revenue towards non-SMS data applications and services. Several operators are doing $2B/quarter+ in data revenues. Several subscription milestones throughout the year: 3B worldwide, 500M China, 250M US, 225M India. 3G continued to inch towards mass-market in western markets (20-25% penetration) while in Korea and Japan, it was getting hard to find people without 3G (70%+ penetration).

Among other events of significance: Cincinnati Bell and T-Mobile launched UMA devices, Motorola lost its Mojo, Amp�D and Disney Mobile shut down, MediaFLO launched, mCommerce initiatives took hold, China continued to delay 3G, WM got updated, Yahoo cemented some impressive operator deals as GYM got more active in mobile, UMPC fizzled, Mobile Web 2.0 got into the industry physce, LTE got embraced worldwide, M&A galored, IP scuffles continued, Muni projects went into coma, and DRM-adorned content became a thing of the past.

2008 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. This survey was a bit different in the sense that the movers and shakers (and folks from the companies discussed here) and industry insiders participated. We were able to glean some valuable insights from their choices and comments. Participants (n=196) were folks from across the mobile value chain and from around the world.

Many thanks to everyone who participated.

(click for larger image)

Three names were drawn for a copy of our upcoming book �Mobile Advertising� (co-authored with Joe Herzog and Victor Melfi, John Wiley & Sons, 432 pages, Feb 2008).

The winners are:

David Cushman, Director, Emap
Larry Shapiro, VP, Disney, and
Keith Kostuch, SVP, Alltel

Congrats and Thank you.

Now onto the survey analysis.

Figures above and below summarize the responses. We requested respondents to rate the probability of an event happening in 2008 on a scale 1 to 5. 1 being �Not a chance� to 5 being �100% probability� The figure above summarizes the overall probability of the event happening. The figure below provides the breakdown of responses.

1. Will Google introduce a Google Branded Phone in 2008?

2. Will Google play to win in the 700MHz Spectrum Auction?

3. Will Microsoft launch its own mobile phone?

4. Will Mobile Payments get traction in North America and Western Europe?

5. Will WiMAX regroup from its setbacks?

6. Will Helio survive 2008?

7. Will Verizon truly open-up its garden for third-party visitations?

8. Will 2008 be the inflection year for Mobile Advertising?

42% gave Mobile Advertising a 75% or higher chance for rapid growth. Market will mature, more consolidation, some privacy gaffes but overall things are looking up for mobile advertising.

9. Will Femto-Cells gain any significant momentum in 2008?

It will be an introduction and experimentation year, so no significant traction is expected. Over 52% thought Femto-Cells will be just a buzz word in 2008.

10. Will Nokia be able to extract iPhone-style rev-share from carriers in 2008?

11. Will Palm survive 2008?

12. Will iPhone truly open up?

13. Will there be more unsubsidized devices introduced in the US market in 2008?

14. Will Mobile TV move the needle in 2008?

15. Will Android make a dent in handset shipments in 2008?

Only 15% gave it a more than 75% chance this year. It is going to take some time for Android plans to mature and materialize. Don�t see any material impact in 08.

Of course, 15 questions can�t cover the whole industry. As pointed out our respondents, there are a number of other issues and opportunities that will shape the ecosystem - Rise of Facebook as social networking OS for mobile (social networking as a whole starts to go mobile), LBS beyond navigation, Rev-share shuffles, Chinese OEM start to become prominent in the western world, China and India continue to dominate in net-adds, Mobile device security becomes a nightmare for corporate IT, Consumers wake up to mobile privacy snafus and risks, Will Android spread its tentacles beyond nicheosphere, 3G iPhone, Does China Olympics hold any surprises for the mobile industry? Launch of projection handsets, NFC handsets, IMS .. and much much more ..

All in all, consternation and debate will continue into 2008. We will analyze, dissect, and report as events unfold in the new year.

Look forward to the continuing dialogue and meeting with you in person.

Your feedback is always welcome.

Chetan Sharma

Mobile Advertising Book: The Chapters December 31, 2007

Posted by chetan in : 3G, AORTA, Carriers, European Wireless Market, Indian Wireless Market, Intellectual Property, MVNO, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

As promised, some more info on the TOC.

Mobile Advertising - Table of Contents

From Cautious Optimism to Contextual Nirvana

Chapters

1. History of Advertising

Learning lessons from the past is important�hence Chapter 1. As new technologies have driven new media, it has always taken awhile for the technologists and advertisers to understand each other. In putting mobile advertising into a basic historical framework, we hope to show that the basic objective of getting people�s attention and trying to influence their behavior has not changed. All that ever changes is the way the objective can be reached.

2. A Perspective from the World of Web Advertising

In Chapter 2, we look at the powerful dynamics that the Internet drove around digital advertising and consumer control, and their overall impacts to the world of media and advertising. There were critical tipping points on the Internet that helped large-scale digital advertising become possible. The advent of a true digital age, as defined and driven by the Internet, is a powerful, positive, undercurrent for the eventual success of mobile media and advertising. We begin to lay out a baseline of how mobile advertising is affected by these dynamics and how we can leverage them.

3. A Five Points Framework

Once the world moves to digital media, a whole new set of metrics can be applied. In Chapter 3, we cover the measurement effects of the powerful new baseline shift toward digital that was put in place by the Internet advertising ecosystems. With this powerful paradigm shift comes media audience fragmentation. And new media rock stars, the analytics geeks. We have a new benefit of mobile interactivity being rolled out and combined with the new consumer paradigms of engagement and viral media sharing and have come up with a five-points measurement paradigm for reach, targeting, engagement, viral effects, and transactions.

4. Introduction to Mobile Advertising

In Chapter 4, we discuss the basics of mobile advertising and dive into what is working today in the world of mobile advertising. Mobile has some unique aspects and differentiators as a media platform versus other media. Mobile phones are high volume, personal fashion statements. They are always carried and always on, unlike computers. They enable unique user input experiences of cameras and voice, and they have built-in payment mechanisms. In theory, these have powerful enabling effects for mobile media and advertising, but we are not yet fully realizing them. Throughout this chapter, we begin to lay out a fabric of underlying issues as well.

5. Challenges And Accelerators for Mobile Advertising

The major structural issues and mobile market accelerators are discussed in Chapter 5. All is not the glossy, hype-happy smiley picture painted in many analyst or industry media reports around mobile advertising. There are some major, perhaps irreversible, structural flaws in the way of campaigns getting from experimental budgets of $50,000 to over a million and running many of those in parallel. The potential is huge, and the mobile-specific accelerators are massive, but the realities are complex, confusing, and sometimes involve head-popping implementation and measurements or metrics problems. Despite these issues, mobile presents some amazing accelerators. To get to these accelerators, we need to remove major barriers and hurdles.

6. Mobile Advertising Models

In Chapter 6, we cover the various business model shifts that have to happen in mobile media to get to massive consumer usage scales. These eyeballs will then be the base for attractive advertising to major brands. When it all comes in right as a model, a consumer value proposition, and a revenue generator�it can be massive in its impact.

7. Case Studies from Around the World

Mobile advertising is geographically complex and looks very different in many regions of the world. In Chapter 7, we provide several case studies discussing facets of mobile advertising such as user experience, and off- and on-deck. The studies include companies from the United States, China, Japan, South Korea, and India,. We hope these examples give you a good sense of the potential and creative and technical elements of various campaigns.

8. Technology: The Lifeblood of Digital Advertising

Technology is the lifeblood of digital advertising. In Chapter 8, we delve deep into the technology issues that need to be resolved and the processes that will need to be put in place to kick-start the industry. We discuss the opportunities available to entrepreneurs, operators, and other players in the industry who will innovate and solve some of the thorny technical problems.

9. Mobile Advertising - What Comes Next?

In Chapter 9, we take a look at �a day in the life of� consumers�what will their advertising experience be like in the future? We also discuss the major trends that will have a significant impact on the business of mobile advertising. The convergence of �three screens� and the �always-on� era is upon us and their role in changing the user experience will be profound. A focus on youth will continue to drive advertisers to use the new mediums creatively. We also discuss the tensions in the ecosystem and how they might evolve in the next few years.

10. Perspectives

Over the course of this project, we had the good fortune to confer with the key movers and shakers in the industry. Some of the top-notch executives also contributed to the project. Chapter 10 complements our work with thirteen thought-provoking pieces from some of the most brilliant minds in this emerging industry. The reader can gain insights from executives at Ogilvy, Microsoft, Nokia, Qualcomm, Rhythm New Media, Reliance Infocomm, Yahoo!, Nielsen Mobile, Diageo, Vodafone, Mobile Marketing Association (MMA), Disney, and MTV Networks.

11. Conclusions and Recommendations

This book is about the journey of the mobile advertising industry from the phase of cautious optimism to the transcendental state of contextual nirvana. This medium provides context, immediacy, and personalization like no other. In Chapter 11, we summarize our thoughts with a review of the text as well as offer recommendations for key constituents of the value chain.

Stanford University Program - Future of Indian Mobile Value Added Services (MVAS) Market December 8, 2007

Posted by chetan in : 3G, AORTA, ARPU, BRIC, Carriers, India, Indian Wireless Market, Intellectual Property, Japan Wireless Market, Mergers and Acquisitions, Messaging, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Smart Phones, Speaking Engagements, Speech Recognition, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 18 comments

Stanford University Program - Future of Indian Mobile Value Added Services (MVAS) Market

Stanford University hosted a program focused on the Indian Wireless Market � Why Mobile?, Why India?, Why Now? Under the tutelage of Prof. Tom Kosnik of Stanford, Graduate Student Mohit Gundecha and BDA worked on a study looking at the Mobile Value Added Services (MVAS) market in India and presented their research at the event along with the release of their in-depth report on the subject. Prof. Kosnik started the evening by giving a presentation on his Global Leaders Entrepreneurs and Altruists Network (GLEAN) initiative. This was followed by a keynote from Jeffrey Belk, SVP Strategy and Market Development, Qualcomm (sponsor for the event) providing an overview of mobile growth in emerging and developing markets. The evening ended with a panel discussion on the opportunities and challenges of the MVAS space. This note summarizes the discussion from the event and our random musings on the market.

The panelists for the discussion were:

(above L to R)

Eric Allen, VP, FunMobility (Moderator)

Ashok Narsimhan, Chairman and CEO, July Systems,

Ojas Rege, VP, Global Mobile Products, Yahoo!,

Vin Dham, Executive Managing Director, NEA-IndoUS Ventures,

myself, and

Niren Shah, Managing Director, Norwest Venture Partners,

It was an honor to be part of this discussion.

First, let�s do the numbers. As we have reported in our previous research notes, India�s growth has been going through the roof. We are likely to end up with over 80M net-add (subscriptions) for the year taking the overall tally to 232M. In the last 5 months, India has added more subs than China. By early April, Indian Market will cross US as the number 2 wireless market in the world. China remains untouchable with over 500M subs. Indian Government is targeting 500M subs by 2010. So, what does this all mean?

Couple of points on the numbers � Just like in other prepaid markets especially Europe, there is a lot of double counting of subs. Many of the unused SIMs are still being counted so the number of �actual� subscribers is less than the numbers that are generally discussed for the market. Secondly, the new subs that are being added are primarily voice subs and hence ARPU (esp. data ARPU is steadily going down for the market. Overall ARPU is approximately $8-9 with 8-9% from data services (where P2P SMS still dominates). Despite low ARPUs, operator margins remain good. The overall MVAS market is close to $1B. The revenue splits are approx 60% for the operators, 20% for the aggregator and rest for the developer and content owner.

Mobile Advertising Market in India � Having looked at the mobile advertising space in depth for our upcoming book, we found the Indian market one of the most active esp. in coming up with interesting business models both operator driven as well as new startups. One of the first in-application mobile advertising services was launched by Reliance, they have several other interesting programs in place that cater to the advertising industry. One of the mobile advertising campaigns that we discuss in the book generated over 21M impressions and won the Cannes award. Companies like mGinger have come up with simple pyramid viral scheme to use SMS mobile advertising. As Admob numbers indicate, the number of impressions are second only to the US market despite low penetration. Finally, operators in India are quite innovate when it comes to integrating the back-end for triple and quad-play unlike their western counterparts who have primarily focused on bill-integration vs. service and application integration.

So, who is actually making money? Clearly the most amount of money is in the infrastructure-related items. Infrastructure is something that is absolutely needed to expand and though the margins shrink quite a bit, it is somewhat made up in volumes. Unless you have unique Intellectual Property that creates barriers to entry, software and/or content companies haven�t had much luck (similar to the trends in China) as the local competition is stiff. Overseas companies who jump in without understanding the market lured by the growing numbers are destined to be surprised.

Cricket, Bollywood, and Education remain the top categories for MVAS apps. Panelists were bullish on new MVAS applications and services around UGC, LBS, high-end segmentation, and enterprise applications. Everyone agreed that the next couple of years are primarily for educating the market and subscription acquisition and it will take another 2-3 years for the MVAS to mature and take off. Unless you are in for the long haul, tread carefully. This market is not for the faint-hearted. IP issues can pose significant risks and challenges.

Jeff thought 3G rather than WiMAX will drive growth in the Indian Market, while Vin suggest Fixed WiMAX is going to be significant. I think the primary use of WiMAX will be to provide Internet connectivity to desktops and laptops and for backhaul of backend systems.

We kind of joked that Indian market might become the second largest market for iPhones within a few months given the pace of unlocked phone shipment to the region.

A question was asked how is working with operators in India different, if at all? Apart from a larger value chain share, things are quite similar. Indian operators do exhibit the desire to move fast and they can take an app to the market quite rapidly where some of their western brethren can keep trialing forever.

You can access the released report here.

You can watch the video from the panel discussion here (Part I, Part II, you can access other videos from the evening on the same page).

Prof. Kosnik and Mohit are launching a new program called �Mobile Momentum� to create an ongoing dialog between Silicon Valley companies and the vibrant mobile industry in Asia. I have signed on as the founding member of the advisory board and look forward to working with entrepreneurs and companies on both sides of the pacific to share thoughts, research, and best practices.

If you would like to receive my slides from the event, please let me know.

2008 promises to be even more exciting than 07. Happy Holidays.

Your feedback is always welcome.

Chetan Sharma

US Wireless Data Market Update - Q3 2007 November 18, 2007

Posted by chetan in : 3G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, Indian Wireless Market, Intellectual Property, Japan Wireless Market, Location Based Services, MVNO, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Search, Smart Phones, Strategy, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments

US Wireless Data Market Update - Q3 2007

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http://www.chetansharma.com/usmarketupdateq307.htm

US wireless data market continued its growth reaching $6.4B in service revenues for the third quarter. With the holiday quarter to go, the aggregate data revenues for the year are already past the 2006 data revenue mark. Whether it was the first full quarter of iPhone sales, or the debate on the upcoming 700MHz spectrum auction, or the rumors swirling around the gPhone, or the continued M&A activity - the US wireless data market remained vibrant in Q3. Given that majority of the data revenues now comes from non-messaging applications and services and the subscriber penetration for such services is just getting into the inflection zone, US remains one of the most attractive wireless data markets.

US Wireless data service revenues grew 9.4% Q/Q to $6.4B in Q307. For the first nine months of 2007, the US wireless data service revenues stood at $17.7B jumping 59% from the same time period in 2006.
Overall ARPU decreased slightly by $0.12 Q/Q to $53.50. The overall voice ARPU declined by $0.35 to $43.93 while data ARPU continued its steady incline, increasing by $0.53 to $9.57.
Verizon continues to lead in both data ARPU as well as Data as a % of ARPU with $10.6 and 20.30% numbers respectively, in the process becoming the first US carrier to get past the $10 in data ARPU and 20% in data contribution. Sprint also touched $10 in data ARPU but is now last amongst the top four carriers in data % which stood at 16.95%. AT&T�s numbers were $9.35 and 18.4% respectively while T-Mobile�s performance also improved with $8.32 in data ARPU contributing 17.88%
The strongest growth continues to come from Verizon, accounting for almost 31% of industry�s data revenue in Q307. Its data service revenues jumped by 11% Q/Q to $2B (again becoming the first US carrier to get past the $2B milestone). Verizon was followed by AT&T at $1.8B, Sprint at $1.2B, and T-Mobile at $676M.
The % contribution of data to service revenues jumped to almost 18% in Q307 and is likely to touch 20% next quarter.
Last week, US crossed the 250 Million subscription mark. The net-adds stabilized for the quarter even though Sprint lost 337K net subs. While AT&T is the only carrier to cross the 2M mark for net-adds/quarter this year, Verizon is ahead of AT&T in overall net-adds for the year by approximately 820K subs. iPhone couldn�t have come at a better time for AT&T which helped in stemming the tide of losing the market share to Verizon.
The current net-adds rate for the year is 1.65M subs/month down from 1.92M subs/month in 2006 and 2M subs/month in 2005. Though the growth rate has expectedly slowed down, there is still plenty of room for growth over the next five years.
The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the year, Verizon with $5.4B, AT&T with $4.95B, and Sprint with $3.7B in service data revenues stood at #4, 5, and 6 respectively with Verizon closing in on KDDI for the number 3 spot. Verizon became one of only four operators in the world who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI). The carrier indicated that enterprise services such as data card and mobile email are generating in excess of $500M/quarter now.
Non-messaging data revenues continue to be in the 50-60% (of the data revenues) range for the US carriers.
There was tremendous activity in the area of Mobile Advertising. Google is also laying out its tactical roadmap in hopes to dominate the space and its every move in the mobile space makes its fellow brethren in Redmond scratch their heads. Meanwhile, Yahoo is busy stitching together carrier deals around the world. We just finished a comprehensive book on the subject. More details coming soon.

Venture money continued to flow into the mobile sector taking the YTD investments to over $4B. Source: Rutberg. Mobile TV/Video, Mobile Personalization, Mobile Search and Advertising, Semiconductor, Carrier infrastructure, Device design and development are hot areas.
iPhone became the quickest smartphone to eclipse the 1M mark in a quarter (by doing it in its first full quarter). By contrast, RIM took 22 quarters or 5.5 years to crack the 1M/quarter sale mark. Palm is still searching for the elusive milestone and might not find it in this lifetime. iPhone also made its entry into Europe and remains in intense negotiations with operators worldwide.
Nokia eclipsed 100M unit sale in Q307 for the second straight quarter. Its 9 month tally stood at 303.6M followed by Motorola at 117.8M and Samsung at 114.8M. Nokia�s share of the market went up to 39.1% followed by Samsung at 14.6%, Motorola at 12.8% Sony Ericsson at 8.9% and LG at 7.5%. Apple shipped 1.12M iPhones during the quarter generating the revenue of $118M.
Despite the sale of over 239M handsets by the top 5 manufacturers during Q307, the industry remained mesmerized by the advent of iPhone. Uncharacteristically, Apple lowered the price of the phone ahead of the holiday season.
After the launch of iPhone, the talk of gPhone filled the rumoid. While the possibility of a gPhone launch remains open for 1H08, Google launched Android to keep things interesting in the industry.
T-Mobile USA launched the first device with HotSpot @Home service in Q3.
There was a renewed interest in LBS and it generated some huge M&A transactions in the sub-sector led by Nokia�s acquisition of Navteq.
In terms of messaging, T-Mobile keeps their users more engaged than other carriers. Each T-Mobile subs exchanged on an average 758 messages last quarter compared to 584 messages by a Verizon sub and followed by 370 messages by an AT&T subscriber. By comparison, subscribers in Philippines engage in almost 2000 messages every quarter or pretty much a message every hour.
In our 2005 paper on 3G diffusion, we estimated that 2007 will be the inflection year for 3G in the US market. In Q307, the 3G penetration was just shy of 20% with Verizon leading the pack with 50% 3G subscriber penetration. AT&T reported that 3G subs have over $20 in data ARPU accounting for 30% contribution to the overall ARPU from such subs. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
Being �Open� is the new Black. Apple announced SDK for iPhone, Sprint touted XOHM, 700 MHz spectrum auction became a subject of great debate and posturing, and Google launched Android (in nov). The convergence of mediums is creating friction, introspection, fear, and opportunities (FIFO). We clearly live in interesting times.

Global update (more details in our worldwide wireless data market update coming out in Q108)

The RIC in BRIC: We had a chance to visit and spend some time in Russia, India, and China during the past few months. These markets remain vibrant especially China and India adding an aggregate of 15.3M subs a month last quarter. India outpaced China with 24.2M net-adds vs. 21.68M in Q307. Mobile coverage in China is ridiculously good. We found strong RSSI in deep gorges on Yangtze as well as high up on the mountains. Regulators in both countries also gave some indications of granting spectrum for 3G.
NTT DoCoMo continues to dominate the wireless data revenues rankings crossing the $3B/quarter mark and taking its tally for the year to over $8.6B. They also crossed the 75% mark for 3G penetration. China Unicom edged past SK Telecom to occupy the number 9 spot. Rest of the rankings remained the same.
Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are topping 30%.

Your feedback is always welcome.

Chetan Sharma

CTIA Wireless IT and Entertainment 2007 Roundup October 28, 2007

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Infrastructure, Intellectual Property, 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 Usability, Partnership, Privacy, Smart Phones, Strategy, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

http://www.chetansharma.com/ctiaoct07.htm

The early morning full moon over the San Francisco bay was much more inspiring than any gizmos or gimmicks at the annual CTIA Wireless IT and Entertainment show. Maybe it is the conference fatigue setting in but the scaled back event failed to gather steam and one had to rely on alternate sources to get a sense of where things are headed in the next 6-12 months. This note summarizes the observations and commentary from the show.

First let�s do the numbers. CTIA released its mid-year data survey for the year. In summary, as of June 2007 - 243M subs, $67.9B in revenues (first 6 months), $10.5B in data revenues for the year accounting for 15.5% of the total service revenue, MOU exceeded 1 Trillion minutes, 1B TXT messages daily. These numbers were in line with the numbers we reported back in Aug.

Keynotes - The central theme that tied the three keynotes was �Be Open, Do Good Work, and Rest will take care of itself.� The keynotes from Steve Ballmer, Microsoft, Dustin Moskovitz, Facebook, and Atish Gude, Sprint Nextel emphasized the need to have an �open platform� for innovation, applications, and services. Haven�t we been down this lane before?

Steve started by taking a page out of our (upcoming) book, literally (page 243 to be exact) and describing a vision where mobile device becomes the remote control of your life for both workstyle and lifestyle. Too often we focus on separating out personal vs. professional but our lives are so intertwined that one minute you are setting up a doctor�s appointment and the next minute closing a sale. Companies that focus on managing the experience start to finish (waking to sleeping) independent of everything else will be the ones that dominate these turf wars. Microsoft�s big announcement was the release of device management server that includes mobile devices in addition to the desktop world (but it is limited to windows mobile devices only, Open?). Microsoft has been making impressive strides in occupying its place in the mobile ecosystem. Though windows mobile and battery life don�t go together, the fact that they are deployed with 160 operators in 55 countries, shipping 20M devices/year places them at a significant advantage in the coming days.

Facebook�s Moskovitz made the plea for openness of networks, devices, and applications to enable the social networking phenomenon on mobile. The fact that Microsoft and Facebook were doing the keynotes on the eve of strategic investment wasn�t a coincidence. Dustin brought out the elderly statesman Mike Lazaridis to announce the facebook app for Blackberry smartphones. The interesting thing was how the app was introduced - Facebook chose RIM and RIM chose T-Mobile for this app. Device manufacturers are surely getting bolder. Facebook extended its platform to mobile. Getting social networking apps on mobile is a no-brainer. In fact, the coming enhancements with Presence, IMS, Broadband, Profiling, Location, can make mobile social network a society of its own.

I thought the most forceful case for �openness� was delivered by Atish Gude, SVP of the XOHM (WiMAX) initiative at Sprint Nextel. In fact, it was exactly along the lines of our recommendations for the operators in our book. Atish talked about openness across network, devices, content, and applications to deliver a great �customer experience.� Operators focus on delivering the intelligent network by focusing on QoS, Network elements like Presence and Location, Security, and Consistency of throughput and performance and leave the innovation in applications and services on the ecosystem who know how best to exploit the medium. His definition of �device� expanded beyond the mobile phone into consumer electronics and appliances which is a smart way of looking at things. However, vision is one thing and execution is another. Will Sprint be able to deliver on this vision in a timely fashion amidst quarterly Wall Street pressure is going to define the industry more than any of the hoopla of 700MHz.

Enterprise MIA - One of the personalities was clearly missing from the show. Yes, there was an enterprise pavilion but nothing new and different surfaced. Microsoft�s late foray into the device management space was the only worthwhile news that emerged.

LBS - The LBS industry proudly presented its posterchilds TeleAtlas, Navteq, TeleNav, and others. Their imposing presence on the show floor and in some of the sessions was palpable. I have been working in or following this space since 1995 and it finally feels that there is going to be some activity in this space after years of posturing, delays, and hype. However, the true value of �location� can�t be unlocked unless it truly becomes �open� for the application and service developers. The delivery of coordinates for every request is not cheap so some form of business model or technical break through is needed to make the use pervasive. Some of the newer players displaying their wares were Telmap, locr, and earthcomber.

Mobile Advertising - It is great to see the progress over the last 12 months. The distribution, inventory, and ad networks are all improving and size of the campaigns are starting to reach six figures on average. Some of the working demos I saw were really compelling and some unique solutions are going to be introduced in the market in the next six months. Though the space is still nascent, some trends have started to emerge - companies who are focused on solving the problem end-to-end from strategy to execution to understanding the results are separating themselves from the plethora of technology providers in the space. There is tremendous amount of work that needs to be done in the metrics and auditing space in addition to the integration of silos.

WiMAX picks up steam On the heels of WiMAX being declared as part of the IMT-2000 family, WiMAX is slated to gather momentum though a lot still depends on carriers like Sprint to deploy nationwide networks and device manufacturers like Nokia, Motorola, and Samsung to bring cheap devices to the market. Nevertheless, Cisco�s acquisition of Navini, Beceem�s deal with NEC and others are signs of positive movement in this sector.

Mobile Video a dying market? Already? Only a couple of CTIAs ago, Mobile video took the event by storm only to find defending itself as a viable business in a short span of time. The video quality has improved significantly but the business models have not.

Entering the US market - US remains one of the most attractive market for mobile data but very few overseas firm succeed. One of the big European brands �Zed� is making an aggressive and impressive push into the US market and is expecting up to 30% (or $150M) of its revenues coming from the US market in the next 12 months. They have developed a good platform for interactive games that tie the experience across mobile and online really well. EA and the likes should take notice.

Open - not in my backyard The keynotes were in sharp contrast with some of the carrier panels. One of them seemed to be the replay of a session I attended in 2001 or was it 1997. Eerie.

Presence, IMS - The discussion around presence and IMS is intensifying. Demos are getting better and the coordination between carriers to standardize and interoperate is improving but we still have a long way to go.

Coolest gadget - NeuroSky filled the void of a gadget less show by showcasing its mind-over-matter technology. Using brainwaves which are detected by a sensor attached to your head, it allows the user to move, push, and float objects by just concentrating on them. Remember The Matrix. Now, if you throw in Philip�s amBX and Microvision�s PicoP, your cell phone becomes this gaming platform that takes the die-hards to the transcendental state of nirvana.

iPhone continues to dominate the talk - iPhone continues to set the tone of discussion in the industry. Since July, there has hardly been a mobile conference worth its salt that hasn�t had a session on �impact of iPhone.� There hasn�t been a mobile device like this one and it shows. Attendees proudly fiddled with their iPhones in public and were eager to discuss their experience and forecasts.

US vs. Europe - There was quite a bit of us vs. them discussion. CTIA�s Wireless Wave magazine started the discussion by its cover story article �The Continental Divide� (for which we were interviewed). It was soon covered by the likes of WSJ (Walt Mossberg - Free My Phone), GigaOM (How far behind is the US vs. Europe?), Steve Largent (Largent to Mossberg .. Wish you were here in San Francisco), and others. As I say in the article - the picture is more complicated .. and one needs to take a holistic view. This topic is crying for a detailed study.

MCommerce - Behind closed doors there is a lot of discussion on MCommerce and how to enable phone to become the wallet of choice (this will be music to the ears to my colleagues in Japan and Korea). Some new and interesting models are starting to appear. One is from Mobilians, a company that has had good success in South Korea and is now setting its sight on the US market. Their focus is to use the phone to enable payment of online and offline goods. In Korea, Mobilians is registering 7M transactions/ month and over $1B in goods sold/year with up to $250 items (which appear on the carrier bill). This is a totally untapped space for the carrier and is a threat to the credit card companies especially for the low cost items where the 2%+20-25c fee drives up the effective rate for the merchant. A tier-1 carrier is also looking to firm up its mCommerce strategy in the next few weeks. It should be noted that some of the smaller regional carriers who survive due to laser focus customer service are testing and rolling out innovative solutions ahead of their bigger peers. For e.g. CellularSouth launched picture application (with Ontela) and after their successful trials with NFC based payments is looking into launching WirelessWallet. Similarly, some others are in the process of getting some LBS, Mobile Search, and Mobile Advertising solutions in the next quarter or so.

Misc

� AOL Mobile re-launched its mobile suite of products. It has a good suite of assets and the company is starting to integrate and enhance the user experience.

� More M&A activities are expected in the mobile advertising space in the next 6-12 months as startups use every advantage to maximize the returns before the big boys catch-up.

� There was hardly any mention of the gPhone or the zPhone.

� Verizon and Sprint are boosting the holiday season lineups to counter the onslaught of iPhone with similar looking phones.

� Becker - a 60 year old company which launched the first ever car radio showed off its �Traffic Assist� unit which had a good user interface and free real-time traffic info for life.

� M2M players such as Telit and Numerex showed their solutions in the machine-to-machine communications space.

� Talkster talked about its free global calls in exchange of listening to ads.

Your feedback is always welcome.

Chetan Sharma

« newer posts older posts »

2008 in review - revisiting annual predictions July 31, 2008

eHealth Connection in Bellagio, Italy July 28, 2008

mHealth and Mobile Telemedicine - an Overview

New Paper: Mobile Services Evolution 2008-2018 July 11, 2008

DoCoMo Labs Masters of Innovation July 2, 2008

Future in Review (FiRe) 2008 Recap May 29, 2008

US Wireless Data Market Update - Q1 2008 May 18, 2008

TMO launches 3G, finally! May 5, 2008

Inside the USPTO: A Guide to the Patenting Process April 30, 2008

Abstract

Introduction

Interview with Padmasree Warrior April 23, 2008

LTE Technology IPR licensing April 14, 2008

4G race - Is LTE taking the lead April 9, 2008

CTIA Wireless 2008 Roundup April 4, 2008

Global Wireless Data Market Update 2007 March 27, 2008

US Wireless Market Update - 4Q07 and 2007 March 10, 2008

Recap of Pacific Northwest Wireless Summit January 22, 2008

Mobile Industry Predictions - 2008 January 1, 2008

Mobile Advertising Book: The Chapters December 31, 2007

Stanford University Program - Future of Indian Mobile Value Added Services (MVAS) Market December 8, 2007

US Wireless Data Market Update - Q3 2007 November 18, 2007

CTIA Wireless IT and Entertainment 2007 Roundup October 28, 2007

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2008 in review - revisiting annual predictions July 31, 2008

eHealth Connection in Bellagio, Italy July 28, 2008

mHealth and Mobile Telemedicine - an Overview

New Paper: Mobile Services Evolution 2008-2018 July 11, 2008

DoCoMo Labs Masters of Innovation July 2, 2008

Future in Review (FiRe) 2008 Recap May 29, 2008

US Wireless Data Market Update - Q1 2008 May 18, 2008

TMO launches 3G, finally! May 5, 2008

Inside the USPTO: A Guide to the Patenting Process April 30, 2008

Abstract

Introduction

Interview with Padmasree Warrior April 23, 2008

LTE Technology IPR licensing April 14, 2008

4G race - Is LTE taking the lead April 9, 2008

CTIA Wireless 2008 Roundup April 4, 2008

Global Wireless Data Market Update 2007 March 27, 2008

US Wireless Market Update - 4Q07 and 2007 March 10, 2008

Recap of Pacific Northwest Wireless Summit January 22, 2008

Mobile Industry Predictions - 2008 January 1, 2008

Mobile Advertising Book: The Chapters December 31, 2007

Stanford University Program - Future of Indian Mobile Value Added Services (MVAS) Market December 8, 2007

US Wireless Data Market Update - Q3 2007 November 18, 2007

CTIA Wireless IT and Entertainment 2007 Roundup October 28, 2007

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