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Book Review: The History of Wireless February 11, 2008

Posted by chetan in : BRIC, CTIA, European Wireless Market, Indian Wireless Market, International Trade, Japan Wireless Market, US Wireless Market, Worldwide Wireless Market , 1 comment so far

The History of Wireless: How Creative Minds Produced Technology for the Masses

The History of Wireless: How Creative Minds Produced Technology for the Masses by Ira Brodsky, Telescope Books

Last week a colleague of mine, Ira Brodsky sent me his latest book on the history of the wireless industry and i must say i was hooked on to it until i was done. It is a brilliant book especially for us industry junkies and technology history buffs. Ira has done a superb job of mining vivid details about the history, personalities of the major actors in the drama of the evolution of the wireless industry - starting from Luigi Galvani’s frog experiments back in 1781to the most recent advances in broadband wireless, this books transports you to a front row experience of the how the industry grew, each discovery made, each opportunity missed, and how each of the genius inventors over the past 200+ years through determination and foresight brought us the current day wireless industry. I wish the book was available when i was studying science and electrical engineering in school. The terms volt, faraday, ohm, hertz, etc would have had a different meaning.

We often don’t think about how “true” inventions were made in the wireless industry and take things for granted, in fact the art of original scientific inventions seems to be an endangered species these days. The details of this book are so stunning and Ira has written such a readable book that you feel like you are a fly on the wall while Galvani, Franklin, Faraday, Volta, Maxwell, Hertz, Morse, Bell, Marconi, Edison, Bose, Sarnoff, Galvin, Ericsson, Viterbi, and others were doing their thing.

The book is effective not only in capturing the history so beautifully but for drawing the lessons from successes and failures of inventors and companies. For today’s entrepreneurs there are words of wisdom and inspiration.

New Whitepaper: What is your Patent Portfolio Quotient? July 17, 2007

Posted by chetan in : 3G, 4G, Carriers, Indian Wireless Market, Intellectual Property, International Trade, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Patents, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

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

Over the last twenty years, the global economy has slowly transformed into a vibrant knowledge economy. With reduced barriers to entry and pervasive globalization, a small company in a developing world can compete for its share on the world stage. The invention of new ideas and products remains an integral part of the global economy and the commercial food chain. Patents are an invaluable tool to protect and commercialize the inventions. They are essential to creating the barriers to entry for rivals. They are needed for building the credibility and the confidence of investors, customers, partners, and employees. They are required for providing clarity as to the property ownership, for demanding leverage from the industry, and for generating sustainable revenue from licensing and sale.

In the global marketplace, amongst all the other competitive factors, innovation matters the most and patents can help deliver the competitive edge required to remain viable. Inventors who used to see patents solely as part of their defensive strategy (and to alleviate any future litigation risks) to prevent competitors encroach their space are looking to be more aggressive with their inventions to make patents part of their offensive and licensing strategy. To ensure the financial security of the patents, some companies are embedding their IP programs as part of their Knowledge Management and Risk Management initiatives where they capture know-how, harvest IP and ingrain IP into their product development lifecycles.

Patents will continue to grow in their contribution as a key corporate asset. Since much value is associated with patents, the industry need better tools to assess and to understand the valuation and the strength of the patent portfolios. This paper will introduce the methodology of Patent Portfolio Quotient™ (PPQ) to measure performance of your patent program and portfolio that enables a Return on Investment (ROI) driven approach. PPQ measures the quality of the patent portfolio and the patent program with clear policies and procedures as it relates to the lifecycle of patents within an organization from innovation to licensing or sale. We will review the importance of patents as a tool for competitiveness and their value to a corporation. Next, we will address - why a patent program should be integrated with product development lifecycle to extract the maximum value from their intellectual property assets. Finally, the paper will introduce the basics of PPQ and discuss what inventors and companies can do to increase their PPQ.

Please download the complete paper - PDF (22 pages, 1MB)

 

Table of Contents

Introduction                                                              2

Patents as a tool for Competitiveness                          4

Analyzing Patent Portfolio Quotient or PPQ                 12

Patent Program Strategy                                           15

Integration of IP Strategy with Product Development    17

Recommendations and Conclusions                           19

 

Your comments are always welcome.

Chetan

Whitepaper: Unified Mobile Data Platform - An Analytics based approach June 11, 2007

Posted by chetan in : 3G, AORTA, ARPU, BRIC, Carriers, Devices, European Wireless Market, Indian Wireless Market, Intellectual Property, International Trade, Japan Wireless Market, 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, Strategy, US Wireless Market, Unified Messaging, Wireless Value Chain, Worldwide Wireless Market , add a comment

Whitepaper

Unified Mobile Data Platform An Analytics based approach

Sponsored by InfoSpace Mobile

Download PDF (30 pages, 1MB)

Executive Summary

2006 was a banner year for mobile data. Revenues from mobile data increased for all major carriers across all major regions around the world with data contributing 10-30% to overall revenues. In Q1 2007, US carriers recorded over $5B in data revenues with mobile data contributing to over 16% of the more than $32B in carrier service revenues. In fact, the Average Revenue Per User (ARPU) from data jumped 43% from last year. It has been a long journey though. Driven initially by SMS messaging, the market embraced ringtones, graphics, music, and gaming, each creating multi-billion dollar markets. As we look into the next five years, not only are new content applications such as broadcast video, idle screen, user-generated-content, community, and mobile search being introduced, but the functionality available with these applications, such as the sharing and tagging of data, is also increasing the demand on the mobile entertainment platform to be adaptive to the growing needs of the market. To stay competitive in this rapidly evolving and challenging market place, service providers must move from silo’d point solutions to integrated unified platforms to maximize their returns from the declining services and better prepare for the technical and business challenges in front of them. The vast potential of mobile data services in general and mobile search and advertising specifically can’t be realized without a retooling of the fundamental approach to deploying services, engaging partners, and serving users with the best possible analytics-driven contextual user experience. This paper outlines the evolution of data services, discusses the need for unified mobile data services approach, and lays out the basics and the merits of a services-oriented analytics-driven framework.

Table of Contents

Executive Summary                                                               2

Evolution of data services                                                      3

Integrated solution offering                                                   11

Mobile Search - providing impetus for integration                   15

Rise of the brands - What’s your Audience Strategy?               17

Analytics driven unified framework                                        21

Mobile Advertising                                                               26

Recommendations                                                               29

Conclusions                                                                         30

Your comments are always welcome.

Chetan Sharma

CTIA Wireless 2007 Roundup April 2, 2007

Posted by chetan in : 3G, AORTA, ARPU, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Intellectual Property, International Trade, Japan Wireless Market, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Search, Mobile TV, Mobile Usability, Speech Recognition, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 5 comments

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http://www.chetansharma.com/ctia0307roundup.htm

Orlando was the venue for CTIA Wireless 2007. Pre-show events include Mobile Entertainment Live (Billboard), day long seminars on Mobile Advertising and Emerging Technology. The main themes from the show were Mobile Advertising, NFC and Mobile Payments, Mobile TV, and WiMAX. This note summarizes the observations, interviews of executives, pre-show briefings, and commentary from the above shows.

First let’s do the numbers  Just before CTIA, M:Metrics released some numbers from their most recent survey. At the end of 2006, amongst the western nations, US had approximately 11% 3G penetration with Italy leading the way with 27%. Photo messaging is picking up reaching 15-30% penetration in most markets. CTIA also released their survey numbers. 233M subs, 76% penetration, and $8.7 billion for the latter six months of 2006, up 82% from $4.8 billion in the latter half of 2005. You probably already knew most of the above after reading our research note here. Instat reported that for the first time the handset replacement market was greater than the new purchase market. Replacement market is expected to take 80% share by 2011.

Keynotes  Attendees come to keynotes to be inspired, to get a sense of the direction of our industry. Unfortunately, some use the opportunity as a sales platform and rehash of press releases. What a waste of time and the platform. What an insult to the audience. I thought the best keynote came from EMI CEO Eric Nicoli, who first eloquently laid out the potential of the industry and then brought us back to reality by outlining the hurdles that we need to overcome to realize the potential. At the most basic level, it is all about simplicity, valuable functionality, and the right pricing. However, the highlight of the show was being in the same room (along with a few hundred others) with two former heads of state – Presidents Bush and Clinton.

Mobile Advertising  As expected, the hottest theme out of this CTIA was Mobile Advertising. The pre-event seminar on the subject was packed with discussions and viewpoints from all parts of the value chain. The involvement of agencies was refreshing. They can help guide the industry by articulating the needs of the brands and agencies in an overall advertising framework, develop standards, and not develop point solutions that won’t scale beyond MDF campaigns. But they are keenly aware of mobile and reported positive results from their tests for some big brands. David Rittenhouse from Ogilvy noted that Lenova experienced 188% lift (n=1495) in awareness from a mobile ad campaign. Third Screen reported up to 7.5% click rates on its network. Still missing were Internet players like Google and Yahoo. Vendor driven standardization processes are not very productive and take too long to become meaningful. Since, mobile advertising is the most buzzable topic in the industry right now; companies are adjusting their positioning to become mobile advertising players (akin to becoming Web 2.0 compliant). There was some debate whether off-deck impression is worth more than an on-deck impression. CPMs are a bit out of whack and will need to drop and stabilize. Premium CPMs range from $27-35 going as high as $60. User profile is of course the holy grail of mobile advertising. Visa demonstrated that mobile advertisements isn’t really limited to messaging, keyword auction, and banner ads, but also includes promotions that drop in your applications based on your transaction history. Can carriers stop them from running this downloadable app on the device? They are running some trials to find that out. Code/Image-based advertising is also picking up – Qcode, NFC, barcodes, pictures, etc as input to trigger content/ad delivery is making its way to the US.

Amongst the various enablers (that I was able to talk to and look at), The Hyperfactory has the most comprehensive view of the space and it shows in their campaigns. Not only cross carriers and cross handsets, but also cross modality and cross countries. Mobile Advertising needs to seamlessly fit in the overall digital strategy of a brand or else there will be too much friction. GSM association has taken some lead in helping define standards in this space. MMA is also updating its best practice guide though it needs to do more to expand its vision. Companies that made their presence felt were Third Screen Media, Ad Infuse, Millennial Media, Yahoo, Smaato, Mindmatics, Bango, Medio, JumpTap, Blyk, Admob, iLoopMobile, GreyStripe, Enpocket, and Rhythm.

Not to be outdone, Alcatel-Lucent and Motorola were also showing some future mobile advertising concepts that allow for cross medium advertising. For e.g. purchasing or activating advertising subsidized content on one device (like mobile) and viewing on another (like IPTV) and the experience is subsidized and interstitialized with advertisements.

Note: As some of you know, we have been involved in helping players in the value chain with mobile advertising strategy for the past two years. Well, we are now writing the book on it, literally! This book on Mobile Advertising is a collaboration with two brilliant co-authors and is going to be published by a major publisher. It will explore the key elements that will make mobile advertising tick. If you know of interesting case studies or people we should talk to, please do let us know. Check out our two part series on the subject published in Wireless World Magazine. Track the progress and become part of the conversation and the book at http://www.chetansharma.com/blog/category/mobile-advertising

Mobile TV  With Mediaflo’s launch, the discussion in the US has changed from unicast/multicast to broadcast. With Cingular and Verizon adopting Mediaflo, it is hard to see DVB-H’s future in the US. Spent some time with Dr. Kamil Grajski, Chairman of the FLO forum. FLO’s advantage comes from better channel switching time and slightly better spectrum efficiency. The goal is to pursue individual partnerships by geography that fuses spectrum, technology, and content. KDDI partnership is such an example. The quality is very impressive and the user experience raises the bar. With the introduction of clipcasting that enables some personalized content filtering on the device (e.g. Entire NASDAQ quotes are streamed but only your portfolio is displayed), broadcast can extract more value from the spectrum. Though Mediaflo has an edge, the future beyond the US shores is tough. Majority of Europe is going to go to DVB-H and similar standards. But, the potential customers are not only cellular operators but also include cable and satellite operators. Companies looking for Triple and Quad play strategies will have to come up with their mobile Broadcast strategy in the next couple of years. While Mobile TV has been in the headlines for some time, the penetration in the US remains quite low – around 2% and represents less than $350M revenue in 2006 (European trends are similar). For the opportunity to scale, pricing and business models will need to be adjusted to market realities. Mobile TV has been around in Japan and Korea for a longer duration and has reached critical mass penetration. Unicast becomes expensive if the usage gets into double digits because pricing pressure doesn’t allow for monetizing by the MB. Broadcast becomes the natural solution but it is limited by spectrum, less interactivity, and lack of handsets in the short-term. Clearly, hybrid models will continue to exist for the foreseeable future. For broadcast, it is about the spectrum first and the technology second.

Near Field Communication (NFC)  VISA has been running NFC trials around the country for some time with VISA credit cards (30K) and POS terminals (50K). The goal is to do NFC on the phone. VISA also released numbers from their NA survey (n=800) – 57% interested, 64% of Gen X/Y will consider switching carriers and credit card for mobile payment capability, by 5:1, consumers prefer to have charges on their credit card bill rather than their phone bill. The first generation of NFC phones is hitting the US market later this year. Kyocera demonstrated buying from a vending machine, downloading content, and doing internet transactions using an NFC-enabled prototype handset. It also had a biometric fingerprint sensor. Korea and Japanese market have been using phone as a wallet for some time (e.g. DoCoMo’s FeliCa) and it will be great to see such enhancements in Europe and North America. There is a demand for such solutions, Visa is providing leadership, and hopefully, the ecosystem will step up. Last year, in US, $7.2Trillion dollars worth of consumer financial transactions took place. Taking a small cut of this pie will be a big deal. Enabler to watch – Ecrio.

Biometrics  NTT DoCoMo introduced handset with biometric capability in 2003, we expect to see it introduced in the US in first half of 2008. AuthenTec has been dominating the market for both PC/laptops and mobile phones. Japan has reached about 10% penetration for biometric sensors in mobile devices. ROW is just getting started. HTC is introducing some devices (for the US market) with biometric sensors later this year.

Mobile Search  Google and Yahoo announced their next release of mobile/local search. Google’s attempts at mobile search reminds me of Microsoft’s early attempts to build an OS for mobile phones. I thought AskMeNow’s semantic search was pretty good though they are still working on indexing which can take a long time due to understanding content. With the recent purchases of BeVocal and TellMe, voice is getting its due attention. V-enable showed their local 411 app and Nuance talked about voice-enabled music search. Voice has become an integral part of any mobile search (and ad) strategy.

Interesting handsets  While the industry is waiting for the June launch of iPhone, several new concepts and phones emerged at the show. Hopefully, NA operators got inspired from the handsets available in Asia and will bring some of that experience here. Samsung launched its dual-faced Ultra. While, it is a first for the industry, the user experience left lot to be desired, the Sharp touch UI is confusing. DoCoMo had the best selection on display. Flipstart is launching a $2000 mobile device (UMPC form factor), which has full PC running on it. It does have some clever user experience enhancements that make the usability acceptable but I am not sure if the price point will hold in the market where you can find an equally powerful laptop for half the price.

User Interface  Apple’s iPhone has raised the bar on device user experience. Zenzui announced their UX technology (based on Microsoft IP) that takes us away from the boring menu-based navigation schemes. Punchcut showed what’s possible utilizing the idle screen. Flipstart had some clever UX enhancements that I hope can get integrated into other forms of computing. Biometric sensors also surprisingly prove to be a good navigation element, better than 5 key dial and even iPOD dial.

Simplicity  EMI’s Nicoli had emphasized on simplicity of applications and services. AT&T’s COO Randall Stephenson echoed similar sentiments. It is a no-brainer, right? So, why do we make things inherently complex and hard-to-use? Hasn’t Apple taught us enough? Ontela’s mobile imaging platform is following on Apple’s footsteps. The technology allows you to take the picture and store it on any other device or destination within 30-60 seconds. No user intervention. It just works.  

GYM is in the house  It was the first CTIA with Google and Yahoo having their own booths, announcing their arrival. Their presence was telling of the battles to come. Microsoft has been coming to the show for some time but primarily to show their devices and talk about enterprise (email) applications.

LBS and Telematics There were a number of firms talking about telematics or navigation on the phone or devices for your car. Navteq, TeleAtlas, TeleNav, Inrix, Pharos, Kore, deCarta, and many others displayed their wares. On the consumer side, navigation is getting embedded into Local search apps which are enhancing the user experience quite a bit. FindIt and Google Maps are two examples. TCS is working on a framework for LBS based mobile advertising that allows carriers and users to control location availability to applications, something I wrote about back in 2001. Sprint has raised the bar by opening the APIs for developers and loosening the pricing friction. GSM operators are awaiting the arrival of OMA compliant phones. European carriers are targeting Christmas 2007 to launch several OMA SUPL devices while US will see such devices from Cingular next year. The best navigation was from Churchill Navigation which gives you a bird’s eye view in a fun-interactive experience.

WiMax. Sprint showed some potential launch devices for their WiMax service. Initially, the focus is limited to data cards and UMPCs. There will be restrictions on data usage and the move to handset form factor devices is uncertain. Samsung showed video conferencing at 12fps and VoIP on WiMax devices (PDA form factor). Since Intel put a boat load of money into Clearwire and Sprint’s endorsement, WiMax industry has been surging ahead but long-term viability is still not certain, how fast will device pricing drop?                

China  While China can’t make up its mind on TD-SCDMA, Chinese manufacturers are increasingly competing with the big boys, the handset rollouts and infrastructure wins are a testament to that. They should just let go of their obsession with TD-SCDMA, there are plenty of opportunities for their manufacturers. Canada, Finland, Taiwan, Sweden, Spain, Ireland, Korea, and UK also had Intl pavilions.

The ecosystem friction  The mobile data ecosystem tension is bubbling up. It was highlighted in the first session of the conference – Jim Ryan (Cingular) vs. Larry Shapiro (Disney) well moderated by Tom Wheeler (past CTIA President). Carriers want control (some more than others) so that they can manage user experience and minimize customer support calls. Content companies want to bypass the carrier and go direct to the consumer. Things are improving but not at the pace everyone would like it to be. This debate is not going away. Perhaps, CTIA can demonstrate some leadership in kicking-off some content interoperability (and treat ad as content) initiatives.

Test equipment  Whether it is entertainment or enterprise, very little attention is given to testing and monitoring data applications and services. Keynote launched its on-demand platform for testing and monitoring for developers who for $500/day can test on live devices anywhere in the world. This service can significantly lower down the cost of procuring handsets and doing testing.

Coolest booth  In my travels around the world, in every major city, you can’t escape the massive ads from Samsung and LG. CTIA is no different. The plastered ads all over and the booth from these two Korean companies were clearly the pick of the show with LG edging out its arch-rival by creating a gigantic music player.

Misc. News.

Your comments are always welcome.

Chetan Sharma

Korean IT Leaders Summit November 15, 2006

Posted by chetan in : 3G, Devices, International Trade, Japan Wireless Market, Partnership, Speaking Engagements, US Wireless Market , add a comment

My love affair with Korea started last year when i was invited by the State Department to put together a Korean-US Trade Summit. I was honored to serve with several other dignitaries on the US advisory committee along with Co-chair Governor Gregoire. I had a chance to meet with several innovative companies at the event as well. Earlier this year, I was hired by the executive team at KTF, the number 2 carrier in Korea to do some strategy work. As a result, I spent sometime in Seoul and go to know more about the industry, the country, and the wonderful folks who are so digitally inclined that they rank #1 in ITU/UN’s Digital Opportunity Index (ahead of Japan and US which is #21). Their engagement with games is at a different spiritual level.

So, it was only fitting that my first sponsorship of an event was rolled out at the Korean IT Leaders Summit which was held in Seattle last week. Proudly displayed my company banner side-by-side with Microsoft. Several senior executives from the Korean companies like SK Telecom were present. It always amazes me that the gulf between the device quality between Korea/Japan and US. Though the gap is closing, we are still worlds apart. I have a top of the line EV-DO LG phone. Comparing it with some of the handsets i saw in delegates hand, there is no comparison. User experience is so much better on handsets in Korea/Japan that us consumers in the US are missing out. I will have more on the Korean market next year.

I will be finishing the year with a stop in Seoul later in December.

If you are looking to do business in Korea or Japan or vice-versa for a North American or European company, let me know.

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

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

This column is going to appear in FierceMobileContent tomorrow.

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

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

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

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

It is clear that mobile advertising and marketing has big potential if industry strives to take into account the user considerations that matter the most. But, which players will dominate and control the ecosystem. Without a doubt, carriers have the purest profile information available, but can they execute their strategies? Well, they have approximately 2-3 year window. Once 3G and Smartphone penetration curves collide and pass 20-30%, if the carriers haven’t built a good mousetrap (value proposition) by then, all bets are off. Different dominant players will start to emerge, as it will get easier for Internet and traditional brands to build direct relationships with a good proportion of the subscriber base. Brands and service providers who are able to integrate user experience across channels will benefit the most.

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

While the potential is immense, there are also significant risks and potential challenges before the industry evolves into a vibrant advertising medium. The prominent amongst them are privacy and data security. Once you start mining user data, significant profile information can be developed. Then how that information is used and by whom becomes an issue and a significant legal minefield. In addition, the security policies and procedures need to be in place to protect the data from theft or misuse if the industry doesn’t want regulators to get involved.

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

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

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

Worldwide Wireless Data Trends - Mid Year Update 2006 August 31, 2006

Posted by chetan in : 3G, AORTA, ARPU, BRIC, Carriers, Devices, Enterprise Mobility, European Wireless Market, India, Indian Wireless Market, International Trade, Japan Wireless Market, MVNO, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, Mobile TV, US Wireless Market, WiMax, Worldwide Wireless Market , 1 comment so far

Download white paper - Worldwide Wireless Data Trends (doc, 320 kb)

Download PPT (1.3MB)

This research note summarizes the wireless data trends in over 40 countries and the analysis of over 30 prominent operators.

Your comments are always welcome.

See you at CTIA.

China 3G August 15, 2006

Posted by Chetan in : 3G, ARPU, BRIC, Carriers, International Trade, Mobile Content , add a comment

Bloomberg.com reports China may delay issuing licenses for high-speed mobile-phone services to the first half of 2007 because locally developed network technology isn’t ready for commercial use, researcher Norson Telecom Consulting said. Telecommunication cos in China, the world’s biggest wireless mkt by subscribers, are looking to 3G services, which offer users faster downloads of videos and music on their handsets, to spur spending.

India - Driving the Next Phase of Global (Wireless) Expansion July 24, 2006

Posted by Chetan in : 3G, AORTA, ARPU, Carriers, Devices, Enterprise Mobility, India, Indian Wireless Market, International Trade, Mobile Content, Mobile Entertainment, Mobile Gaming, Networks, Strategy, WiMax , add a comment

the article is online now http://www.chetansharma.com/India_July06.pdf

INTEROP Russia: BRIC Wireless Markets June 29, 2006

Posted by Chetan in : BRIC, Carriers, International Trade, Speaking Engagements, Strategy, US Wireless Market, Uncategorized , add a comment

6 cities, 5 time zones, 4 countries, 10 days. Last week was quite hectic but it was great. From the exquisite towering cathedrals in St. Petersburg and Kremlin to serene Stockholm, from a midnight stroll in daylight by river Neva in St. Petersburg to 4am walk in Gamla Stan (Stockholm), from reading the subway maps in Russian to catching a soccer match in Amsterdam, the trip was quite memorable. In Moscow, I was speaking at the INTEROP conference on the topic of “BRIC wireless markets – lessons, opportunities and challenges.”

This note highlights some of the points discussed during the talk.

BRIC which stands for Brazil, Russia, India, and China collectively represent the biggest and fastest growing wireless subscriber block. While the sheer volumes represent enormous opportunities for the near and distant future, there are significant challenges and risks associated with these markets as well. Unprepared and naďve companies have been chewed and spat out in no time.

First, let’s do the numbers:

•         Over 682M subs by 2005

•         BRIC markets will account for over 50% net adds 2005-9

–        Net adds – 159M in 2005

•         Subscribers – Brazil (87M), Russia (125M), India (75M), and China (393M)

•         Penetration – Brazil (46%), Russia (86%), India (6.3%), and China (30%)

•         ARPU is low – Brazil ($13), Russia ($7), India ($10), China ($10)

•         Data ARPU is low - $0.8-$1.5

Of course, since Dec 2005, the growth has continued unabated. China surpassed the 400M mark while India crossed the 100M mark and both countries show signs of continued growth. India is on the verge of another surge due to rural network expansion in 2006. However, both countries have some tough 3G spectrum decisions to take care of (have been delayed several times), particularly in China where the government is favoring the controversial TD-SCDMA and carriers opting for standards such as WCDMA. With Olympics looming in Beijing, this makes for an interesting dynamics.

BRIC markets share some characteristics but are also unique in how they have progressed and in how they should be approached. The primary growth drivers with some degree of variability have been:

•         Prepaid dominates

•         Pent-up Rural demand

•         Market reforms driving the industry

•         Competitive pressures on big carriers

•         Low-priced handsets

•         Some of the lowest infrastructure costs

•         Lowest tariffs

•         Carriers profitable despite low ARPUs

As highlighted in our report “Indian Wireless Market” back in May, India and China are adding on an average over 5M subs per month. That is in contrast to 5M net sub adds per quarter in the US and less than a million net adds per quarter in Japan and Korea. With the penetration rate at 12% and 30% respectively for India and China, these nations will continue to add approx 60M subs per year for the next 3-5 years.

Despite the growing subscriber numbers, pressure on ARPU remains strong and the ARPU has been on the decline in all BRIC countries. Data ARPU for BRIC countries is also small compared to some of the other established markets and is bound to stay that way for the foreseeable future. We will cover worldwide ARPU trends in a forthcoming paper. Stay tuned.

Summary of Lessons and observations

•         Government participation essential – Unified telecom Policy

•         Highly price sensitive markets

•         Data applications used as a churn-prevention tool

•         Role of competitive forces an foreign investment is quite important – lowers costs to consumers which stimulates growth

•         Low or zero import subsidies on parts or finished goods

•         Operators control the value chain

•         Operators can lower cost of infrastructure by accepting lower busy-call completion rates

•         Revenue-sharing arrangement with vendors vs. pure licensing deals

•         Low price demands innovation, participation in local economy

•         Network-sharing for rural expansion

•         Role for lower frequency bands (450MHz)  is important

•         Localize data applications

•         E.g. India – Cricket, Bollywood, Education, etc.

•         Significant IP issues especially in China

•         Rural markets key to future growth

•         Consumer driven markets, Poor Enterprise markets

•         Minimal market for foreign application developers

•         Should partner, acquire, or build-up local expertise

•         WiMax is attractive but cost considerations are more important

•         BRIC markets important for infrastructure players, not that much for application developers

•         3G is in planning stages, spectrum issues need to be resolved quickly

•         Considerations for other growing markets like Indonesia and US

Overall, BRIC markets represent significant opportunities but they are not for the faint-hearted. Amidst all the talk of BRIC wireless markets, it is easy to forget that US still remains and will remain the highest revenue generating market in the world for some time with close to $44B in carrier revenues in 2005, almost twice to the second player — Japan and twice of the revenues generated by the carriers in BRIC countries, combined. However, US market presents its own set of challenges and idiosyncrasies. Wireless is doing wonders in BRIC markets and there are tremendous opportunities.

There were also a couple of interesting INTEROP keynotes from Steve Wozniak and Kevin Mitnick.

Overall, it was an action packed conference, covering variety of themes including Wireless, VoIP, and Security. The trip left me longing to return to the region at the next available opportunity.

Your comments are always welcome.

Chetan Sharma

India Challenges China as Fastest Growing Mobile Phone Market May 8, 2006

Posted by Chetan in : 3G, AORTA, Carriers, Indian Wireless Market, Infrastructure, International Trade , add a comment

India Challenges China as Fastest Growing Mobile Phone Market 

 

 Adding five million subscribers per month, India will become
the world’s second largest mobile phone market by 2008

May 8, 2006 – St. Louis, Missouri – The pace of India’s mobile phone market growth is accelerating and the country is on track to surpass Russia and the U.S. in total subscribers. That is one of the conclusions of the updated 86-page report, India’s Wireless Market: Model for the Next Phase of Global Wireless Expansion, released today by Datacomm Research Company.

“The number of mobile phone subscribers added each month in India has more than tripled over the past year,” said Chetan Sharma, President of Chetan Sharma Consulting and the report’s author. “India passed Japan in total subscribers last month.  Within the next few weeks, India will break through the 100 million subscriber barrier,” he added.

The updated version of India’s Wireless Market: Model for the Next Phase of Global Wireless Expansion provides a comprehensive, accurate, up-to-date, and actionable report on India’s wireless market. The study is based on in-depth interviews with executives at operators, application developers, manufacturers, and other players. The report describes India’s market, value chain, competition, and regulation and identifies the best and worst money-making opportunities.

Additional conclusions found in the updated version of India’s Wireless Market: Model for the Next Phase of Global Wireless Expansion:

1.       India’s wireless boom is largely the result of government decisions favoring competition.  Both developing and developed countries can learn from India’s regulatory, network infrastructure, handset, and value-added service innovations.

2.       India will spend several $billion on wireless infrastructure to accomodate subscriber growth, improve rural coverage, and add advanced services. Significant opportunities exist for leveragin the 450 and 800 MHz bands.

3.       India’s consumers require low-cost handsets.  Handsets are now available for as little as $40.  However, many Indian consumers will spend a little more for enhancements such as the ability to download and play music and games.

4.       Thanks to low per-minute charges (under $0.03), most Indian consumers pay less than US$10 per month for voice service.  Wireless data yields higher margins for operators, providing incentives for affordable text, music and video services. 

Full Press release here

CTIA and Mobile Entertainment Summit Roundup April 10, 2006

Posted by Chetan in : 3G, 4G, AORTA, Carriers, Devices, Enterprise Mobility, Federal, General, Infrastructure, International Trade, Location Based Services, M&A, Mergers and Acquisitions, Middleware, Mobile Advertising, Mobile Content, Mobile Entertainment, Mobile Wallet, Partnership, Speaking Engagements, Strategy, US Wireless Market, Usability , add a comment

My week started with a presentation on “US Wireless Market: Trends, Technologies, and Opportunities” to the CTIA-bound Japanese delegation that included very knowledgeable executives from NTT DoCoMo, KDDI, Kyocera, Mitsubishi, Base, MCPC, Vodafone, and Willcom. During networking, had some interesting conversations with our Japanese friends regarding content business, UMA, WiMax, 4G, and new business models.

Spent next three days attending Mobile Entertainment Summit (April 4th; Chetan Sharma Consulting was research partner for the event) and CTIA (April 5-7th), talking to companies, looking at demos, visiting with colleagues and friends, and just absorbing the atmosphere and distilling things down to “what does this mean?” Below is the summary of key observations, thoughts, and digressions.

General atmosphere – As expected, the show grew bigger in terms of attendees (over 40K) and exhibitors marked by return of double story booths, glitz, and million dollar marketing budgets. Samsung and LG clearly were dueling it out for the most recognized brand out there trying to out-do each other in invoking a subliminal conversation with the customers. There was tremendous excitement at the opportunities, fear of missing it out, and yearning for figuring things out to ride the wave.

Booth of the show award is a tie between LG and Motorola with Samsung close behind. Honorable mentions: Philips, Lucent, and Siemens.

Typically, the main CTIA show focuses a lot on infrastructure, middleware, network, and handsets. This time, it was also about applications. There are readjustments going on in the value chain and with the looming consolidation wave, the rubric cubes will be rearranged in several sub segments. Wireless email had already starting shifting that way even though we are below 10% penetration.

Convergence was a big theme of the show. Consulting firms Deloitte and PwC released their reports on the subject and every major infrastructure player was talking about the impact of Fixed-Mobile Convergence (FMC). Convergence across PSTN, Cellular, WiFi, Bluetooth, Cordless Telephony Profile (CTP), Unlicensed Mobile Access (UMA), Session Initiation Protocol (SIP), IP Multimedia Subsystem (IMS), and Digital Living Network Alliance (DLNA) were all discussed in some detail. From a consumer point of view, it comes down to how fast the network is upgraded to provide the functionality and the number of devices in the market to take advantage of the feature-set at reasonable prices. Until then, it is just talk.

Positioning – Several companies are coming around to what DoCoMo taught us about i-mode. It was all about – improving the life experiences of customers. Nokia’s tag line changed from “voice goes mobile” to “life goes mobile” and “work goes mobile”. MTV expresses itself as a “content experience” company. Microsoft is all about “Discover, Innovate, Deliver” while Motorola wants to produce “must do” experiences.

Mobile TV is another area that is priming up for some consolidation as various components are commoditized (esp. for Unicast). It is not that, we are done with the innovation in this segment, in fact, we are only getting started, however, the drive will come from how the video content is packaged with other pieces of content and applications and made more interactive with humans and machines. The number of companies in the space almost doubled since last show (Ortiva, VectorMax, Snell & Wilcox, NMS, Nexage, Vimio). Everyone agrees that MobiTV has a huge advantage. It is a good case study of “first mover advantage”. It will be interesting to see if they can build on their success and compete effectively against broadcast solutions. Broadcast is the future of MobileTV. Mediaflo rocks. Key questions are: can the carriers get the business model right at launch that promotes usage and will the political and regulatory climate foster Mediaflo growth in light of DVB-H (Modeo in US) and DMB. Japan, Korea, and US are fertile ground for this battle. Qualcomm is working on Mediaflo as well as DVB-H chipsets. Slingbox was also showing their place-shift mobile video solution. It will be interesting to see how carriers block-and-tackle this one.

AORTA and 3G revisited – Since the article “3G – Hitting the Mass Market”, the tipping point assessment has been validated by several other analysts. In US and Europe, 3G deployments will start hitting critical mass in the first half of 2007 and we are getting closer to the vision of Always-On Real-Time Access (AORTA).

Mobile Search – During last couple of CTIA shows, mobile search has been an upcoming thing. During the last six months, 3 of the top 5 carriers have launched mobile search solutions with some incredible returns and actual impact on the bottom-line. Some branded solutions have also been launched and various business models are being tested. One can feel the tension between carrier-branded search and solutions from the likes of Google, and Yahoo. Who can build a better mouse-trap? Will carriers cede control and help non-carrier solutions with carrier-resident data? Feature-set is straightforward. Question is what customer data can one use to enhance the user-experience. If carriers are smart about it, they will work with white-label vendors such as Infospace (also Medio, Jumptap, etc.) to develop some really neat analytics that feeds back into user experience. Voice search solutions are also becoming more prominent. In the last 6 months, Voicebox, Voicesignal, Promptu, and V-enable have announced voice search solutions.

User Interface is getting better – Players in the value chain are paying more and more attention to the user-experience. As predicted, MVNOs are having an impact on how device manufacturers and carriers think about customization. Amp’D, ESPN, Disney, and Helio all have custom clients. Rather than relegating the user experience on device browser and archaic transcoding solutions, these MVNOs want to provide a controlled and immersive user experience. With 2nd tier device guys eager to do what-ever-it-takes to make the user experience attractive, mainstream device manufacturers and carriers will need to get their acts together in a hurry. Verizon’s announcement (about using Flash) is recognition of this trend. Also, there were some apps with really cool UIs from startups such as DSI.

Community and User-generated content – There was tremendous activity in the mobile community and user-generated content space, from blogs and SMS to video and music content around community networks. Indeed, it is all about communities and user-generated content plays an incredibly important role in it. Though we have seen significant amount of growth in ringtones, graphics market, this will explode when UGC (including music, video) is put into the mix. This has been validated by multiple data points, the newest one being from 3 in Europe through seemetv service. How quickly will carriers embrace this so that the poor schmuck with 10 goofy videos with no technical capability gets to put their content for sharing, for barter, or for sale. Companies such as Intercasting, Juicewireless, AirG, SMS.ac, Bango, Blogstar, Helio (Myspace) are coming at the opportunity from different angles.

MVNO launches Since last CTIA, ESPN Mobile and Amp’D have launched. This CTIA marked the launch of Disney Mobile and the concept resonated with most attendees esp. folks who have kids. They also got their handset strategy right by pricing it for mass consumption. Service will become available in June. Helio is supposed to launch around the same time. In the meantime, Vegas started taking bets on which MVNO will be the first to fold. As I have discussed in prior articles, MVNOs have clearly raised the bar on user experience and will continue to push the envelope. The willingness of Asian manufacturers to customize at a frantically rapid pace is going to put pressure on the big boys and is already having an impact on their strategy and roadmaps.

Enterprise – Though there were a couple of Enterprise pavilions, the substance was pretty light. Revenue potential of enterprise solutions is equally big if not bigger than the consumer segment, yet it fails to get attention beyond mobile email which itself is becoming a commodity play. It should be noted that there were a couple of vendors that are trying out new approaches to the consumer email such as using MMS for email (Memova).

Mobile Diagnostics and Performance measurement – With the advent of 3G and numerous data apps, the impact on network storage and performance is enormous but is often not talked about. The amount of bytes generated in 3G networks is many times more than 2G and 2.5G networks. As such, the networks need to be planned and monitored appropriately. Testing and simulation of applications, services, and handsets also become more important. Companies such as Vallent, EMC, Keynote, Schema, and Argogroup are looking at the problem from different angles.

4G – Though no body in the industry agrees what it is, some semblance of “Beyond 3G” solutions started showing up at the show from IMT-Advanced solutions from DoCoMo (1Gbps) to WiMax pavilion. Samsung had the WiBro gear at the show – handsets and infrastructure – very cool to see things end-to-end. WiBro trials are ongoing in Korea and we are likely to learn a lot from the results that will help decision makers in the WiMax segment. However, we are still a long ways away (2008) before we see any meaningful mass market penetration for mobile WiMax (There are a number of trials going on around the world from DoCoMo, Willcom, Softbank, KDDI, Sprint, SKT, and KT). It should be noted that US spectrum auction is slated to start June 29th, 2006. It will be interesting to see who ends up with what esp. Clearwire and if any of the non-traditional players such as Google, Disney, DirecTV, and Microsoft make a run for it.

Near Field Communications (NFC) – DoCoMo has had success with FeliCa (Sony’s technology) launch in Japan. Things are increasingly looking bright for NFC-based solutions (mobile wallet, venue check-in, authentication, etc). Mastercard is running some trials on East coast. Cingular has been running some trials in Atlanta area using Nokia phones with Philips NFC technology. In addition to contactless payment capability, NFC-equipped phone can also read data from compatible tags, opening new content discovery avenues. The biggest challenge is of course getting the required infrastructure in place and endorsement or participation by at least one or two major retailers such as Starbucks or McDonalds. Many companies from Philips to smaller players such as MobilyT had neat NFC prototypes. Paypal also launched its mobile payment solution. Many companies are looking to bypass carrier billing so they have more control – it will be an interesting battle to watch.

M2M – With most major western markets reaching saturation, focus has been shifting to M2M applications and device-to-device networking. In addition to the big players such as Siemens, Motorola, and Phillips, newer players such as Esmertec were discussing the potential and applications.

Chinese presence – In the CTIA roundup one year back, I noted “Chinese are coming”. If there was any doubt, it was pretty clear from this show that Chinese wireless players are going to be significant force to reckon with. They are already making an impact in markets outside China, such as in India, Eastern Europe, and Latin America. Booths and showcases from ZTE, UTStarcom, and Huawei rivaled their western counterparts. Noticeably, several software and SI Indian firms also had presence at the show.

Handset business will continue to be brutal. Samsung, LG, Motorola, and Nokia all had a good line up of new handsets. Chinese manufacturers such as Techfaith wireless and Amoi also had some sleek handsets on display (Amoi even had knock-offs of Razr and iPod phone)

Mobile Advertising – Not much substantive progress since last time, except for more talk, and more companies popping up. The concepts and business models are starting to get more serious discussions from carriers, content providers, aggregators, and advertisers. Some interesting ad performance tools are also coming up (Integrated Media Measurement Inc.). It comes down to who has the relationship with the customer, what’s the depth of consumer profile information, and the trust-level established with the customers. ActionEngine’s MSNBC launch, new startups Rhythm NewMedia and VibesMedia, and Free DA (supported by Ads) were among the highlights in this area.

Location Based Services – I remember working on LBS solutions back in 97-98 timeframe and the technology was going to change the world (in the US). Largely due to FCC’s inability to enforce its own rulings, we didn’t see much progress for a number of years. Though Nextel has been providing LBS in the enterprise sector, it was only recently with Sprint opening up its APIs for selected developers that we are seeing some LBS based apps for the consumer sector e.g. FindIt. Disney Mobile is also making location a key feature of its offering for kid-tracker types of apps.

Microsoft dominance starts – It has taken a number of years, but shift is noticeable now. With smart phones penetration increasing, Microsoft is starting to dominate the high-end market. A good percentage of new smart phones are running MS software though Linux is also making some inroads in this market (DoCoMo, China). If the battery power issues can be resolved and the OS moves into the sub-$200 market, it will accelerate MS’s dominance of handsets. There was also talk about Opensource OS for mobile devices.

Open gardens – Pretty soon, being “open” will be considered a competitive advantage. At the two extremes are T-Mobile International (which gave up and opened up its greenhouse to the likes of Google) and Verizon (which might be one of the last ones to open up its nursery). Then we have carriers such as Cingular who are slowly but surely opening up access and getting closer to the i-mode model (e.g. recent Myspace announcement)

Misc. – Impatica was showing their solution of running PowerPoint from blackberry. Pretty slick and easy. Another interesting app I learned about was that of using SIM as a token generator for authentication. This can be really handy for corporate security.

Later this week, I am leaving for Korea to meet with some really smart guys in the wireless industry and experience the wireless broadband capital of the world first hand.

Your comments are always welcome.

Copyright, 2006 Chetan Sharma Consulting. All Rights Reserved

CTIA week April 2, 2006

Posted by Chetan in : International Trade, Speaking Engagements, Strategy, US Wireless Market, Uncategorized , add a comment

This week will be pretty exciting and busy. Monday starts off with a presentation and reception to the CTIA-bound Japanese delegation with folks from NTT DoCoMo, KDDI, Vodafone, Kyocera, Willcom, Mitsubishi, and Base. Tuesday off to Vegas for iHollywood and CTIA. Spending the day at iHollywood event and ending the day with CTIA press reception. Wed and Thu at CTIA with meetings, presentations, and of course the most interesting part - walk through the show floor. Looking forward to meeting old friends and colleagues and new faces.

Governor’s Reception March 23, 2006

Posted by Chetan in : International Trade , add a comment

Earlier this evening, attended Governor’s Reception with Washington State Governor Christine Gregoire. I first met her at the Korea-US pacific states Joint conference where she was the co-chair and i was on the US advisory committee for the wireless and multimedia conference last year. Gov. Gregoire is passionate about international trade and you can feel the energy in the room while she was speaking. Very impressive. She understand globalization and the new rules of the game. What was striking was her vision to look beyond short-term to 40-50 years down the road so one can lay the foundation of solid educational system and economic vitality. It was her 8th event of the day with one more to go and yet she spoke as if it was her first.