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Mobile Breakfast Series – Dallas – LTE & Beyond: The future of mobile networks April 3, 2013

Posted by chetan in : 4G, 4th Wave, LTE, Mobile Breakfast Series, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

We are pleased to announce Mobile Breakfast Series is coming to Dallas for the first time. Below are some details about the program:

Mobile Breakfast Series - Excellent Speakers. Invaluable Insights. Peerless Networking.

Mobile Breakfast Series is a quarterly event that brings together thought leaders and visionaries from the global mobile industry to interact and share ideas, insights, and best practices with the entrepreneurs, enthusiasts, and everyone who is passionate about mobile. We dive into the most important issues and opportunities in front of our industry with the executives who are making things happen.

Date: June 25^th, 2013

Time: 7:30-11am. 7:30am – Registration, 8:30am – Discussion Begins, 10:00am - Networking

Venue: Tower Club, 1601 Elm Street, Thanksgiving Tower, 48th Floor, Dallas, TX 75201

Registration is open now.

Topic: LTE and Beyond – The future of mobile networks

US is leading the globe in LTE deployment. In fact, most of the cutting-edge engineering with mobile networks is happening here with all major operators deploying LTE. What’s next for mobile networks? How will they evolve over the course of the next decade? Will we be able to keep ahead of the insatiable consumer demand for more? We will have an in-depth discussion with our distinguished speakers.

Fireside Chat:

Kris Rinne, Senior Vice President – Network Technologies, AT&T Labs

Vish Nandlall, Chief Technology Officer & Head of Strategy, Ericsson

Chetan Sharma, President, Chetan Sharma Consulting (moderator)

Kris Rinne, SVP – Network Technologies, AT&T Labs

Kris Rinne is responsible for network architecture, service platforms, radio access roadmap and initial implementation, wireless device requirements and certification, network platforms, network performance analysis, and industry standards development at AT&T. Previously, Rinne served as Cingular’s chief technology officer with similar responsibilities. She earlier served as vice president—Technology and Product Realization, responsible for new product development from a technology standpoint, handset certification, and infrastructure vendor coordination. Prior to joining Cingular, she was vice president—Technology Strategy for SBC Wireless, responsible for new product development and network operations support. She has worked for Southwestern Bell Mobile Systems as managing director—Operations. In 2011, Kris was named as “The Most Influential Woman in Wireless” by Fierce Wireless and was a member of the Global Telecom Business Power 100 list of the most powerful telecom executives.

Vish Nandlall, CTO and Head of Strategy, Ericsson

Vish Nandlall is Head of Strategy, Marketing and Chief Technology Officer for Ericsson’s North American region. He is responsible for identifying Ericsson’s long-term vision, defining the overall company strategy, and driving business value creation for Ericsson’s customers in North America. Nandlall joined Ericsson in 2010, most recently serving as Chief Technical Officer for the company’s AT&T Customer Unit. He previously served as CTO of Extreme Networks and CTO and distinguished member of technical staff for Nortel Carrier Networks. Nandlall has led architecture and standards direction for product portfolios ranging from GSM, CDMA, WiMAX, LTE, metro DWDM, carrier routing and switching, and carrier VoIP portfolios. His recent areas of research include M2M, augmented reality, and mobile virtualization.

Mobile Breakfast Series – June Events March 26, 2013

Posted by chetan in : HTML5, LTE, Mobile Breakfast Series, Mobile Future Forward, Wireless Value Chain, Worldwide Wireless Market , add a comment

Greetings,

It was awesome to see so many of you at the Mobile Breakfast Series Event last week. For those of you who couldn’t make it, here is the summary.

We also announced the date for our Mobile Future Forward program – Sept 10th in Seattle. Stay tuned for some really exciting announcements regarding speakers and the program.

Also pleased to announce the next two breakfast series events.

June 11th – Seattle – HTML5 – Is it really disruptive?

HTML5 has been talked about for a long time as the most disruptive force for mobile applications since the Apple Appstore was launched 5 years ago. But, can it really change the industry dynamics? How do you solve the reach problem for the developers? Many interesting initiatives in 2013 like Firefox OS but will they make a difference? How do developers view HTML5? We will take the pulse of the industry and ask the tough questions.

Hank Skorny, Vice President and GM – Consumer Software, Intel

June 25th – Dallas – LTE and Beyond – The Future of Mobile Networks

Kris Rinne, Senior Vice President, Architecture and Network Planning, AT&T

Vish Nandlall, Chief Technology Officer and Head of Strategy, Ericsson

.. more speakers to be announced.

Registration is open now. First come, first served.

If you have any burning questions or any feedback, please feel free to send us a note.

Have a great spring and we will see you soon.

Thanks

Mobile Breakfast Series Recap – Cloud, SDN, and the art of mobile computing March 25, 2013

Posted by chetan in : 4th Wave, AORTA, ARPU, Applications, Big Data, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Privacy, Security, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Mobile Breakfast Series entered its 5th year of operation this week with our first event of the year in Seattle. The topic of discussion was Cloud, SDN, and the art of mobile computing.

2012 has been an incredible year for mobile. Despite the global economic doldrums, mobile is a $1.5 trillion economy with new entrants, new disruptions, new devices, technologies, networks, etc. One of the major shifts is in how the revenue is generated for the industry. Mobile operators around the world capture over 85% of the industry’s profits. However, if you take a look at the top 5 global players by profits – it is China Mobile, Apple, Verizon, AT&T and DoCoMo. Still dominated by service providers but Apple wasn’t on the list 2 years back. So, how will the list look like 5 years from now?

There is a clear shift going on what I call “the fourth wave” i.e. industry’s new revenues are going to come from services and solutions. And mobile operators are not silent participants on this wave. Players like Verizon, AT&T, Telefonica, and DoCoMo are going toe-to-toe with the OTT or Internet players. If you remember the early 2000s, mobile data wasn’t even registering on the revenue scale; 10 years ago mobile data revenues were less than $1 billion per year in the US. Last year, we reported $79 billion, this year it will grow to $90 billion. In fact, we might see a shift where data revenues > voice revenues this year in the US. It has already happened in Japan, over 65% revenue coming from data. But what happens when data saturates, the revenue is going to come from fourth wave services and solutions. You will start to see operators break out revenues from digital services.

So, the question is what those services are – cloud is on top of the list, big data and analytics is on the top of that list? How are these going to be supported – by LTE network, buy SDN enabled network infrastructure? To discuss all of this we assembled a great panel.

Mitch Lewis, Vice President, Juniper Networks

Biju Nair, EVP and Chief Corporate Strategy Officer of Synchronoss

Randy Wagner, Executive Director, B2B Sales and Marketing, Verizon Wireless

Louis Brun, Senior Vice President, Marketing and Product Strategy, Guavus

Chetan Sharma, President, Chetan Sharma Consulting (moderator)

Before we began, Mitch Lewis gave a talk on “Seven Leadership Principles From Everest” .. yes, you read it right, Everest. Mitch has not only climbed Everest but each of the 7 highest peaks on the 7 continents. If that were not enough, he has run 7 marathons on these continents as well. It was indeed a thrill and a privilege to host my friend Mitch and have him talk about his experiences and the lessons from a dream that he accomplished over the course of 8 years. Just a phenomenal achievement.

Below is his presentation and a video from his talk. Enjoy and get motivated.

We could have just stopped there

But we had plenty to discuss on the state of mobile cloud computing and the emergence of SDN.

Below is the summary of the discussion:

Cloud Computing

One can’t think about M2M w/o thinking cloud. The billions of sensors that will come onboard over the next few years will be talking to the cloud in some shape or fashion.
While there is a lot of focus on enterprise cloud, Synchronoss has been focused on the personal cloud and how personal information from the device is backed-up, shared, and run analytics on to create new services and revenue opportunities.
(Infinite) Mobile storage is really not free. One way or another consumer is going to pay and the provider is going to get the money either directly or indirectly.
Health vertical is seeing great traction. Others like retail and transportation are also seeing good action.
Some of the emerging markets and emerging operators like Bharti see 4th wave as an opportunity to leapfrog some of the traditional thinking and while access is important to them, they want to focus on digital revenues more aggressively than even some of their western counterparts.
Hybrid clouds are going to be most prevalent.
Security is hugely important for cloud, for both SMBs and large enterprises and while there are going to be vulnerabilities, it is going to be no different than how things are on the Internet and customers are getting more educated about security issues and best practices.
While we have made significant progress with cloud solutions, video and associated bandwidth issues remain a problem and there is no specific solution in sight thought LTE-Broadcast seems to be on horizon.
Cloud interoperability requirements will become much more important and companies are already working on abstracting the complexity of different competing clouds from the application.
Consumers might not like their service providers but they trust them and hence the opportunity to provide cloud related solutions to them.
The mobile network traffic for Dropbox is 25 times that of iCloud and 20 times that of Evernote.

SDN

Juniper acquired Contrail Systems, Cisco acquired Cariden, VMware acquired Nicira – accelerating the interest in SDN and what it means to the infrastructure business.
It is uncertain how SDN is going to impact the financials of the mobile operators and the infrastructure providers. Does the revenue stream just move up to software?
SDN clearly provides flexibility and more manageability to the network and we can expect some deployments by the end of the year. There are a number of trials underway.

Privacy and Security

Everything and everyone can be tracked even with the phone off. Keep that in mind next time
Given that all this data is being sent to the cloud, one can expect that the security requirements to become even more strict.
Security, scalability, and global IP backbone is how Verizon is differentiating with the likes of Amazon. Verizon has over 200 data centers around the globe.
There is big internal debate at the operators as well as discussions with the regulators as to how big data should be used and monetized. How much privacy is enough? How do you make your partners also accountable for the data use? What information to sell and when? 2013 might provide some answers.
Policy plays a significant role in managing privacy and security both in the network and at the device level.
Identity is emerging as a service offering. We might get rid of the phone number and just use IP address (dynamic or static) for devices that are tied to the user. Dynamic SIM allocation based on usage could be introduced as well.
For verticals such as Healthcare where HIPAA compliance is necessary, operators typically have private tunnels for added security.

Big Data

Big Data has been around for a long time but we are starting to harness useful signals from the noise in real-time to make effective use of the intelligence in data.
Mobile operators are using the data and exposing it for their own use as well as to the developers with APIs such as customer profile. Same data is also being used for churn management, network performance, etc.
In Europe, big data is being used to offer insurance on mobile devices by effectively targeting consumers.
TV stations are also using big data to target consumers when they engage with their content on mobile.

As usual, it was a lively discussion and with the added presentation from Mitch, a memorable one indeed. Mobile cloud has become a layer of computing just like security or connectivity. This fundamental capability has led to a thousand new companies looking to move the art of computing a bit forward. Software Defined Networking is slated to disrupt the infrastructure in a big way, provide more flexibility to service providers and developers to create even more compelling services and user experiences.

We also announced the date of our 2013 Mobile Future Forward. On Sept 10th this year, leaders of the mobile industry will gather in Seattle to brainstorm the future of mobile. As usual, it is going to be a delight to host the best and brightest. So mark your calendars, make your plans, and we hope to see you there later this year. More news to come in the coming weeks.

Thanks to all those who attended and thanks to Synchronoss for being our series partner.

Chetan

Mobile Breakfast Series Recap – Mobile 2013 December 13, 2012

Posted by chetan in : Chetan Sharma Consulting, Mobile 2013, Mobile Breakfast Series, Mobile Predictions , add a comment

The Mobile Breakfast Series Event returned back to its home ground in Seattle after a detour to Atlanta and London earlier this year. As is the tradition, we go into the pontification mode for the last event and assemble experts to help us gauge what’s going to be exciting in the coming year, the shakeups that are coming and what should we keep an eye on.

The panelists were:

Zaw Thet, Advisor, Signia Venture Partners

Zaw is a veteran entrepreneur who has been at the forefront of search, social networking, mobile, and adtech since the age of 19. Most recently Zaw was the founder and CEO of 4INFO, one of the largest mobile advertising platforms in the world. Business Week recognized him as one the “Mobile Barons” helping to shape the mobile ad industry since 2004.

Omar Javaid, Managing Director, BBO Global

Omar is the managing director of BBO Global, a boutique advisory and early stage venture firm in the wireless and media space. Prior to BBO, Omar Javaid is Vice President, Product Management of Emerging Technologies Group at Motorola Mobility, a Google company. He was part of the executive team that lead the successful turn-around of Motorola, culminating in the $12.5B acquisition by Google. In this role, he was responsible for next generation smart phone and convergence products Motorola Mobility.

Tracy Isacke, Director of Investments and Business Development, Telefonica Digital

Tracy started her career at Xerox, rising to be the first female member of the UK Board, leading a team of over 450 people. Tracy joined Telefónica in 2006 as the head of the Enterprise Sales Team for O2 UK, then she led on Telefónica’s $207m acquisition of Jajah, the Valley-based VOIP/IP Telephony company. Tracy is currently spearheading the growth of Telefónica Digital as Director of Investments and Business Development, focusing primarily on Silicon Valley, Israel and Europe, with a growing team of half a dozen employees, based in Mountain View, Madrid, London and Tel Aviv.

Todd Achilles, VP, Mobility, Hewlett-Packard Company

Todd Achilles is Vice President, Mobility for HP’s Printing and Personal Systems business unit, where he leads strategy and execution for delivering a connected experience to HP customers. Todd has spent his career in product, marketing, sales and engineering roles within telecommunications sector, including leadership positions with HTC and T-Mobile USA.

What is in store for Mobile 2013?

2012 has been an incredible year for mobile. We crossed several key industry milestones – 6.5B subscriptions, 1B subscriptions in China, 1B broadband subscriptions, 500M android activations, Apple’s monstrous march towards $1T market cap. We also saw Amazon’s aggressive moves in the mobile space, Facebook eclipsing 1B active users, and Nokia/Microsoft/RIM trying to stem the tide. Some big M&A maneuvers throughout the year. All this is setting up a very exciting Mobile 2013. There was a lot to discuss – from the tussles of Apple and Android to opportunities in commerce and big data, from Microsoft’s comeback to challenges in managing the network growth and consumer expectations. We assembled a stellar panel of mobile veterans to help us brainstorm what the big trends, big movers and shakers, and the big opportunities of 2013.

Below is the summary of the discussion:

Events that captured our imagination in 2012:

Omar – Google-Motorola, growth in smartphones around the globe
Zaw – The rise of mobile gaming and the move towards mobile first
Todd – FCC and the slew of actions they took to frame the wireless industry in the US market
Tracy – London Olympics, which was truly a “mobile” event helping citizens of the world “connect”

Post-PC or PC+

Depends on which business are you in – HP/Microsoft see it is a PC+ world with multiple screens interacting with the consumer, Apple sees it is a clear delineation.
However, the data-centric devices like tablets are starting to challenge the notion of computing.
Also, Smart TVs might start to make an entry that help with inter-device communication and expand developers view of the world

Mobile Platforms

Clearly an iOS and Andorid world. Microsoft will grind it out and become relevant but it is a tough slog ahead. No mention of RIM or any other platform player
Panel cautioned developers to over-rely on Twitter, Facebook and other platforms as a foundation of their business. If they like the business, they will just build that into the platform as a feature. VCs are becoming wary of such startups.
Siri and voice will be much tightly integrated into the OS in 2013. As speech recognition gets better, consumers get more comfortable, we are getting closer to the “star trek” world
Augmented reality could have a big year as consumers become more familiar and comfortable with AR apps.
Telefonica’s work with Mozilla on a web-based OS is going well and offers an alternative to the walled-garden approach of the appstores. It will first start in Latin America and might see deployment in the western markets later in the year.

Digital Telcos

Telefonica is one of the most advanced operators when it comes to attacking the opportunities in digital. It is the most formal with the formation of Telefonica Digital. It has embraced the OTT world with a launch of new initiatives across various verticals – communication, advertising, health, retail, security, cloud, etc. Tracy operator based OTT services can become the core of enterprise and consumer services
OTT players will continue to eat away at the operator voice and messaging revenues. Operators didn’t innovate on these services for over 20 years and we are seeing the impact of that.
There are also significant opportunities in M2M
Cross-operator services for further monetization
The day of data only subscriptions is not far away
More embedded data pricing w/ devices like notebooks

Hardware

Android is enabling new hardware segments
Hardware is hard, supply-chain to build and deliver billions of device is harder and it is going to get tougher in 2013
It will be hard for OEMs to be in the hardware game w/o any services with a possible exception of Samsung which is making its way into the services space
Amazon will be the one to watch in 2013 as it works to introduce tablets and a possible Smartphone
Google glasses is quite interesting and can open up new possibilities for developers and consumers
Intel got surpassed by Qualcomm due to a number of missteps and the street is valuing the future growth of QCOM higher than INTC and it will be difficult for INTC to catch-up
MediaTek is becoming a strong player
Lytro like imaging innovation in smartphones

Commerce

Mobile commerce is growing by leaps and bounds as evident by thanksgiving numbers. Mobile and social commerce will continue to make waves in 2013
Apps model has become an alternate to the web and while not efficient it does provide a distribution vehicle to the developers
App interop will be a big thing in 2013
Advertising works better on apps than mobile web
Wallet wars to continue into 2013

Misc

T-Mobile’s non-subsidy approach might not work out too well as other operators will pound on the opportunity to peel away more subs from TMO. Telefonica Spain tried it along with some other operators around the globe and the experiment didn’t go too well
Big data and analytics will continue to drive all sorts of new services – health to gaming. Panel cautioned startups relying on Amazon for cloud services to have appropriate backups, some startups have lost all their data due to errors and have had no recourse
Big opps in cloud and big data in the enterprise segment, these services will get bundled in with devices and data plans
OTTs are unlikely to wade into the Telco space, too capital intensive and regulatory lens is a negative
Interesting to see what Softbank does with Sprint. He changed the market in Japan and has the capacity to disrupt the US market
Latin America is full of opportunities for 2013
IP battles to continue but most will get settled
2013 will be another great year for mobile. Stay tuned and get ready for the ride

It was a lively discussion and I could have easily gone on for another 2-3 hours. Our audience is always top-notch and is highly educated about the nuances of the industry as was evident from the questions. 2012 was the year when Mobile Breakfast Series spread its wings and went to Atlanta and London. We had a great time putting together each of the events in 2012 and we have many more planned for 2013, so stay tuned.

Our annual thought-leadership summit – Mobile Future Forward returns in Sept 2013. More details to come.

From all of us at Chetan Sharma Consulting, we wish you and yours a great holiday season and a terrific 2013.

Finally, as we do it every year, we launched our Annual Mobile Predictions Survey for 2013. There will be prizes for the 25 lucky winners. Be sure to share your thoughts. The survey ends Dec 28th. We will release the results in January.

Until then,

have a good time.

Chetan

Mobile Breakfast Series Recap – London – Operator/OTT – The Way Forward July 5, 2012

Posted by chetan in : Mobile Breakfast Series, Mobile Operators, OTT, Wireless Value Chain , add a comment

June has been a very exciting month for us at Chetan Sharma Consulting. We took our Mobile Breakfast Series first outside Seattle to Atlanta and then, last week, outside US to London. Both places, it was very well received and we thank all the partners, speakers, and attendees who helped us out. On Jun 29th, we hosted our first European Mobile Breakfast Series at Wayra, Telefonica in London. My thanks to the Telefonica team for hosting us and making the whole experience worry-free. The topic of the discussion was Operator/OTT – The Way Forward. Regular readers would remember, we did a Seattle Breakfast Event on the same topic earlier in June. Wanted to get the European flavor of the same hot topic.

Operator traditional revenue streams are under threat esp. voice and messaging. Access margins will continue to stay under pressure. OTT players are coming in fast and furious and it is not just the big ones like Google but also players like Whatsapp, Voxer, Viber and others. How do operators play in the new landscape – lessen the decline of their traditional revenues while investing in new areas that improve their overall margins and revenues. Do they play the role of an enabler, a utility player, or become the OTT player themselves? In a software-driven world, how do they stay nimble? On the flip side, what are some things that operators can provide to the OTT players that make them successful, take them to the market quickly and maintain a long-term healthy and mutually-beneficial partnership? Operators still generate 70% of the global mobile industry revenues, so they are an important part of the chain but how do they ensure they have an equally relevant share in the profits. The panel will discuss how operators and OTT players think about the challenges and the opportunities, the competition and the coopetition.

To discuss the topic we had excellent panel with Jamie Finn, Director of Product Design at Telefonica Digital. This is a new unit within Telefonica that is doing some great work (recently released TU Me – a messaging application to compete with other VoIP/IP messaging apps) and Jamie is an integral part of the team.

Jamie was joined by Dominique Rougié, Director, TV Interactive Services & Media, Digital Innovation, Orange Group. Dominique has an interesting perspective since he is responsible for services across the three channels – online, cable, and mobile. From the OTT side, we had Andreas Bernström Chief Executive Officer, Rebtel. Rebtel is the second largest VoIP player after Skype with over $80M in revenue slated for 2012. Finally, we had Frank Meehan who has been doing OTT for a long time first at 3Uk and then at INQMobile. Some of the earliest OTT integrations of Skype, Facebook, and Twitter came from his team.

Some highlights from the discussion -

There is this myth perpetuating that operators are just going to fall over and die. AT&T has been around for 100 years and it is likely that they will be around for another 100. These companies will obviously morph and find their relevant role in the ecosystem.
It is likely that the operator business will segment into commodity access business and VAS business that generates more revenue.
OTT players need operators more than operators need OTT players.
The biggest challenge for the operators is internal – getting organized, giving the new group autonomy to operate and innovate independent of the parent organization.
Operators still have a lot of fat. Need to streamline.
It does require a different mindset from the operators to operate in the OTT world – embrace beta launches.
There are great opportunities for the operators in billing, payments, and commerce. Right now the process is cumbersome, can be made much simpler. It will help the OTT players as well.
Right now NFC traction is low, maybe Apple’s inclusion of NFC in the next rev will spur things up?
Rebtel is exploring transfer of credit and money between accounts as some of the new features for their service.
It less about technology and more about talent. How do you get the brightest people to work for your organization. 17 year olds can bring in lot of energy and drive to make something big.
Telefonica Digital launched TU Me – a messaging app in 100 days from concept to app store availability. Lot of learning right away – users cared and demanded a Spanish version which was duly built (The company released some figures yesterday – 250K active users in the first few weeks). The lesson is that you got to launch things quickly and iterate based on feedback.
Telefonica betting big on open mobile devices, essentially a new HTML5 based OS from Mozilla.
For Orange, in working with the OTT players – rev share is the primary business model. Additionally, for some companies, they will also take a financial stake. There is lot of value in operator becoming an aggregator of apps and content.
There are lot of opportunities for operators in identity, security, and privacy.
The best way to look at multiple opportunities is take portfolio-based approach. Invest in the best ideas and compete to win.
Mobile advertising is another big opportunity for the operator though they have been a bit behind the curve in leveraging their assets.
Operators bring the distribution power to the ecosystem. Have the relationship with the customers and for the right startup/app, they can help tremendously.
It is clear that a more clear regulatory regime is necessary but relying on regulators to fix some of the problems might be foolish as you will have to wait too long. Regulators on their part need to create an equitable playing field.
There is lack of consistency in regulations in Europe. For e.g. VoIP regulations vary from UK to France depending on who is launching the service and the competitive dynamics of the market.
For any new service, you have to first build engagement and get scale, only then can you think about monetization.

I really enjoyed the discussion and audience participation. We now take a break from our Mobile Breakfast Series and focus our attention to our annual mobile executive summit – Mobile Future Forward which is going to be held on Sept 10th in Seattle. We have an extraordinary group of executives who are joining us and I hope you can too.

Until then, have a great summer and see you soon.

Mobile Breakfast Series Recap – Atlanta – Connected Devices, Cloud, and Consumer June 24, 2012

Posted by chetan in : 3G, 4G, AORTA, ARPU, Applications, Connected Devices, European Wireless Market, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Devices, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments

We started doing Mobile Breakfast Series in Seattle back in 2009 and after hosting10 straight events, it was time to expand the wings and explore other cities. The first stop in this journey was Atlanta and we worked closely with our partners at “Wireless Technology Forum” to make it a successful event last friday. I also had the good fortune of participating in WTF’s event the night before. Both events focused on Connected Devices and their impact on the consumer, the ecosystem and the value-chains thus making it a “connected week” in Atlanta.

As I mentioned, the night before the event, I had the opportunity to present and moderate a panel on Connected Devices with Glenn Lurie, President of Emerging Enterprises at AT&T and Jeff Smith, CTO at Numerex. Both are movers and shakers in the space and it was such a pleasure meeting with many WTF members and interacting with the top-notch panelists. The event was recorded and is available on WTF’s Youtube Channel.

We hosted the Atlanta Mobile Breakfast Series Event in Atlanta at the Commerce Club of Atlanta which has beautiful views of the Atlanta area.

There is an old Chinese saying, “When the wind of change blows, some build walls others build windmills.” Our industry is going through tremendous change; it won’t be an exaggeration if I say that the tectonic plates are moving and moving fast. The motion is being forced both by the economic conditions but also the technology and business progress. I have been around the industry long enough but it still amazes me – the stuff that’s in the pipeline and how quickly consumers absorb it.

The topic of our discussion was Connected Devices, the Cloud, and the Consumer. With connected devices, I am referring to the broad availability of devices that are connected to data networks – so they include smartphones, tablets, connected auto but also wellness devices like fitbit, energy meters, dog collars, medical devices, etc. as of last year, the subscription penetration was at 6B, next year, we will have more connections than people on this planet. In another 5-7 years, we might touch 20 Billion sensors on the planet. So you can see the growth is going to be astronomical.

Another phenomenon is that of cloud. If a startup mentions Cloud in their presentation to a VC, the valuation doubles, you say mobile, and it quadruples. I don’t know how many of you are a fan of Mark Weisier, the Xerox Parc researcher who pioneered what became “always on, always connected” tagline of pervasive computing. It was more than 20 years ago, we finally are seeing that with the help of broadband networks, amazing devices, and open business models, information is truly available at the fingertips.

The third leg of our discussion was the consumer – their appetite for new and the latest is creating this tremendous opportunity that is shaping their behavior and expectations.

We had an awesome panel to discuss things in detail. First I discussed the topic with David Christopher, Chief Marketing Officer at AT&T Mobility. As most of you might be aware, AT&T is leading not only the US but the globe in their efforts to bring connected solutions to the market. I work around the world with top operators, and I can tell you there is no exciting place in mobile right now than right here in the US of A. US is leading in innovation, technology, and business model. We had lost touch after 1G and US truly teaching rest of the world how to do 4G right. David has a terrific background – a product and operationally driven CMO at one of the world’s biggest mobile operator and it was a delight to have him on the panel.

I have known both Biju Nair and Louis Gump for sometime – several decades of mobile expertise. Louis is with CNN, has been running their mobile efforts which are top-notch. He is a recognized leader in the mobile advertising space and given that CNN’s properties span across multiple screens, he has really great insights as to how consumers behave across n-screens.

Biju is a hard core technologist, has been working at solutions that make Louis’ stuff work across networks and devices. Many of you might not know but Synchronoss where Biju is the Chief Strategy Officer and Products EVP, powers online activation at AT&T. If you bought the iPhone over the last few years at AT&T, there is a good chance your order was processed by Synchronoss.

Highlights from the discussion below:

Many in the industry expected AT&T to take a hit after the iPhone exclusivity ended but AT&T continued to perform better than Verizon and others with devices. David has been the person leading the charge to ensure AT&T maintains its competitiveness. AT&T did that by a) conveying the overall value proposition of an iPhone on the AT&T network b) build out the Android portfolio and c) conveying crisply the benefits of being an iPhone on the AT&T network (talk and text at the same time, etc.)
Consumers understand that 4G is faster than 3G but necessarily understand (beyond the techie crowd) the benefits of LTE.
AT&T is a big supporter of Windows ecosystem. It is good to have more choice for the consumers. While the initial version of Surface is WiFi only, the hope are high for Windows 8. Having a viable third ecosystem for mobile is important for the mobile industry.
Microsoft has done a good job with the design of the OS but have been poor on the opening up of the API front. Developers find the closed ecosystem to be stifling. Unless Microsoft remedies that, interest in the platform might be limited.
It is RIM’s battle to lose. They have good software, loyal users, security framework, email is the best but have been asleep on the wheel for a while. They can turn things around though the probability of that happening are fairly low at this point.
AT&T is studying data share plans and how consumers might react to them. It is a new paradigm in the evolution of mobile data plans and services.
CNN has been doing mobile for a long time but was surprised by the pick up of the tablets. The reach is highest on the browser for them but the engagement is much higher on apps.
Cloud is essentially Client-Server from the years past but applied to new use cases that brings together user experience new and different ways. The trifecta of devices, broadband networks, and content is enabling new services.
Privacy and Security of cloud services is of paramount importance. There is a view that the industry needs to self-regulate and come up with some better solutions quickly.
HTML5 is an important step for the industry but it is clearly not a panacea. It will have a role in the ecosystem but won’t obliterate the need for apps. The holy wars to continue.
There is some conflict between the cloud data usage and data tier plans but WiFi (US consumers have access to WiFi 80% of the time) and smarter configuration to manage data have helped.
Mobile advertising only 1% of the overall mix but mobile has 10% usage so a tremendous growth opportunity (yep, we said that back in 2007).
APIs are open but monetization is still challenging. The first task is to get developers understand the benefits and find ways to enhance the user experience.
Toll free data plans is not a new concept. Remember Sugar Mama from Virgin Mobile from years ago? Still experimental. Content providers like CNN are willing to engage if there is some value exchange that yields to revenue which can be shared. Some interesting opportunities with prepaid.
To some extent there is more ARPU innovation in the developing countries like India which are borne out of necessity – like the Kissan program in India.
In terms of what’s next, virtually every industry is going to be disrupted. Tremendous change on the horizon however a lot will depend on the battery innovation in the coming days and months.

The team at Chetan Sharma Consulting really enjoyed taking the Breakfast Series to Atlanta. My thanks to the terrific team at WTF for their support and to the Atlanta Mobile Community for making the event so successful. Finally, the event wouldn’t have been possible without the support of our series partner – Synchronoss.

As you might be aware, our fall mobile executive summit – Mobile Future Forward is going to be on Sept 10th. Registration is open. We are likely to sell out so grab your tickets early.

Next Stop – London for our first venture across the pond. On June 29th, we host the discussion on Operator/OTT – The way forward with Telefonica, Orange, Rebtel, and Horizons Ventures. Read Frank Meehan’s pre-event interview about the topic here.

Operators and OTT - The Way Forward - London

MBS London – Frank Meehan Interview June 9, 2012

Posted by chetan in : Mobile Breakfast Series, OTT, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

With MBS Seattle behind us, we are gearing up for Atlanta and London. Our good partner Mobile Groove did a nice interview with one of our speakers and my good friend – Frank Meehan who will be with us in London on the Operators/OTT panel. Frank has done terrific stints at Ericsson, 3 UK, INQMobile and now is with Horizons Venture -

Some highlights:

What must mobile operators do?

Yes, OTT players have had a hearty meal at the expense of the mobile operator, but there is still money to be made if mobile operators concentrate on what they do best.

As Frank puts it: “Going out and trying to build a social network is probably not the right thing to do, but there are some great things that operators are doing. I particularly like the way Telefónica Digital has set up really a separate company which is designed to go after digital opportunities. That’s the right way to do it.”

Facing the talent crisis

Operators should stake their turf (connected home, security, the Cloud, etc) and build their business. But, Frank warns, the biggest challenge for operators is talent. “A lot of the young and upcoming talent is going off to work for startups.”

What can operators do to stem the flow of talent to startups (that may one day be their rivals)? A lot! Follow the Telefónica Digital blueprint and give your talent freedom to innovate. “You’ve got to have incentives that compete with startups, or with the Facebooks and Googles otherwise it will become very difficult.”

When it comes to software solutions or the way they are developed, mobile operators should see these are the work of a “separate team outside of the operator standard operations.”

What awaits operators?

As a VC, Frank is convinced there is money to be made. “Operators are cash rich and it’s still a good business and they will snap up things, so certainly there’s an opportunity for investments to crystallize, particularly from a sale — then operators are very interesting.”

Overall, Frank says 2012 has been a great year from “an investment and a start-up perspective.” In his view, it’s “booming” — in part thanks to the Facebook IPO and the excitement it has generated around other companies that tap into our mobile Zeitgeist and requirement for social, sharing and connectedness. “Facebook is literally now the electricity of the Internet … and it’s a huge shift — you’re seeing the big companies like Spotify and others — and it’s just really dragging a huge start-up industry along with it, and it’s accelerating.”

You can listen to the whole interview here.

Mobile Breakfast Series Recap – Operators/OTT – The Way Forward June 8, 2012

Posted by chetan in : AORTA, Applications, Carnival of Mobilists, Connected Devices, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Ecosystem, Mobile Future Forward, OTT, US Wireless Market, Unified Messaging, VoIP, Worldwide Wireless Market , 4 comments

June is the Mobile Breakfast Series Month with 3 programs planned in 3 cities across 2 continents. We kicked things off with the first one earlier today in Seattle. The topic of discussion was Operators and OTT – The Way Forward.

We also announced our fall program of Mobile Future Forward. More about that later.

There is an old Chinese saying, “When the wind of change blows, some build walls others build windmills” Our industry is going through tremendous change; it won’t be an exaggeration if I say that the tectonic plates are moving, in some places quite violently. The motion is being forced both by the economic conditions but also by the technology and business progress. I have been around the industry long enough but it still amazes me – the stuff that’s in the pipeline and how quickly consumers absorb it.

The topic of our discussion was Operators and OTT or Over the Top. These are services like Skype, Youtube, Amazon video, HBO, etc. things that go over the network. I wanted to broaden the discussion to another acronym – VAS or value added services – both for the consumer segment and the enterprise segment. These will be simple things like address backup or CRM applications to more sophisticated supply chain management, in-store location targeting, advertising etc. To discuss this we have an absolutely brilliant panel representing various parts of the value chain.

RealNetworks has been the Kevin Bacon of startups in Seattle. Thanks to the people Rob Glaser hired, RN has done a better job at spawning up new ideas that your bigger cousins in town. Rob is well known for his pioneering work in giving Internet its voice (in the words of Kara Swisher in the 1998 article for WSJ). But lately, Rob has been busy with Sidecar – a next generation communication app that does more things than messaging and voice. If you haven’t tried, please do so.

Mary Jesse is one of the most distinguished engineers in WA State going back from the McCaw days, VP of Eng at AT&T, CTO of RadioFrame and now CoFounder and CEO of an enterprise communications company called Ivytalk. Again, if you haven’t tried it out, please do so.

Michael Shim was with Yahoo before Groupon and Yahoo was one of the true pioneers in the mobile space and now at Groupon he is seeing the new opportunities on the VAS, payments, and commerce. It will be great to get his view of how Groupon thinks about the space.

Have you tried T-Mobile’s Bobsled? Well, Alex Samano is the man and energy behind this service and T-Mobile is one of the few operators globally who are taking this OTT opportunity head-on. At TMO, he has been involved some really interesting initiatives like @home and wifi calling.

Last but not the least, Abhi Ingle from AT&T who heads up the mobile enterprise business. The industry has been talking about enterprise mobility for ages but his team generates more revenue than majority of the industry players combined. Did you know that AT&T is one of the biggest app developer on the planet? I bet you didn’t know that.

Operator traditional revenue streams are under threat esp. voice and messaging. Access margins will continue to stay under pressure. OTT players are coming in fast and furious and it is not just the big ones like Google but also players like Whatsapp, Voxer, Viber and others. How do operators play in the new landscape – lessen the decline of their traditional revenues while investing in new areas that improve their overall margins and revenues. Do they play the role of an enabler, a utility player, or become the OTT player themselves? In a software-driven world, how do they stay nimble? On the flip side, what are some things that operators can provide to the OTT players that make them successful, take them to the market quickly and maintain a long-term healthy and mutually-beneficial partnership? Operators still generate 70% of the global mobile industry revenues, so they are an important part of the chain but how do they ensure they have an equally relevant share in the profits. The panel discussed how operators and OTT players think about the challenges and the opportunities, the competition and the coopetition.

Some highlights from the discussion:

You have heard it before, but Apple really changed the game. It allowed for the OTT players to be born and thrive. iPhone drove the networks to adopt faster and better technologies over a span of 4-5 years and the world changed as a result.
The capabilities that are available in an robust IP environment are leading to tremendous opportunities around the ecosystem.
Groupon drives 30% of its business from mobile. If the payments/commerce piece was more seamless, this could be much higher.
Groupon thinks that if the consumer data is productized by the operators, there are some big opportunities that players like Groupon can take advantage of.
There is significantly more cooperation with the operators in the developing world as the Groupon brand is not well known and the operator channel is great for distribution.
For AT&T, 65% of the postpaid base is using smartphones, 80% of the new devices sold to this group is now smartphones. Changing the landscape pretty dramatically.
Web 3.0 is Mobile Internet.
App providers and Operators have natural tension because they want to compete for the same set of communication features/functionality. However, for some apps like Sidecar cooperation is must because of the QoS issues. While it is hard to do things simultaneously with all the operators, things can be achieved working 1-2 carriers at a time.
To some extent the story is repeating itself, operators used to be in the hardware business but Apple and Samsung rule segment now. Things always change, who knows what the next cycle will bring.
We are just at the start of a phenomenal run that will dwarf the achievements of the past. Like I say, more changes in the next 10 years than in the last 100 years.
Collectively, operators need a better strategy for opening APIs to startups. Currently, they find it tedious and time consuming.
Bobsled user base is growing fast but the contrast to other OTT players is stark. The scale is different because they are driven by different performance metrics. At the end of the day, Operators have to show revenues while OTT players are going after the audience and then worry about revenues later. It is obvious, many of the communication OTT providers won’t succeed, a few will reach the next level but this forces the marketplace to shrink and more players to go after that pie.
RCS has been talked about since 2007 but it has taken 5 years for the functionality to come to market from limited number of operators on limited number of handsets. That’s the dilemma for the operators. While interoperability is important and desired, the rate of time-to-market is more important.
Operators have started to offer cross carrier services for messaging, location APIs and others which will help the ecosystem.
Operators and OTT players will have to settle into a more collaborative approach to reach new heights of service and application deployment.
There was an agreement that too much is made out of the Operators vs. OTT trash talk and there are more synergies than there are differences in overall objectives to make the consumer experience better.

Our next breakfast event is in Atlanta on Connected Devices on June 22nd. Then we revisit the Operator/OTT discussion again from the European point of view in London on June 29th. Tell your colleagues and friends about it. They will thank you for that.

New Research: US Mobile Data Market Update Q1 2012 May 21, 2012

Posted by chetan in : 3G, 4G, AORTA, Connected Devices, Infrastructure, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

US Mobile Data Market Update Q1 2012

http://www.chetansharma.com/USmarketupdateQ12012.htm

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Summary

The US mobile data market grew 6% Q/Q and 21% Y/Y to reach $18.7B in Q1 2012. Data is now over 40% of the US mobile industry service revenue. For the year 2012, we are forecasting that mobile data revenues in the US market will reach $80 billion.

For the first time in the history of the industry, the US operators had a net decline in postpaid subs. The top 7 operators lost a combined 52K postpaid subs. In overall net-adds, Sprint bested both of its bigger rivals for the first time since Q1 2002. That was exactly a decade ago when Cingular and Nextel brands were still around, before Google IPO and before Zuckerberg enrolled into Harvard. In fact, Sprint is the only US operator that has added more than 1 million subs every quarter since Q4 2010. However, most of these net-adds are coming from prepaid and wholesale segments. If we look at the net-adds over the last 4 quarters, AT&T comes out on top by a distance. In terms of postpaid net-adds only, Verizon is the clear leader during the same time period.

In terms of Y/Y growth, Connected Devices segment grew 23%, Prepaid 15%, Wholesale 10%, and Postpaid 1%. AT&T, Sprint, Sprint, and Verizon are number one respectively in these categories.

One-third of US consumers don’t use landline phones. The wireless only US population went past 100M subs in Q1 2012. Mobile will continue to increase its share of the household IT budget and thus improving the overall revenue picture. However, there will be fierce battle for the prized postpaid subs that have been slowly migrating to prepaid as a result of the economic doldrums. It is quite possible, they will come back but predicting the reverse migration is tough.

Q1 2012 will also be remembered for Samsung’s ascend to the top of the hill ending Nokia’s 14 year run. In terms of unit sales, it dominates the overall unit shipments and also the more lucrative smartphone segment. However, Apple dominates both the device revenues and more importantly just crushes the competition on device profits. It has only 8% of the global unit shipment share but over 70% profit share.

Apple has the complete stronghold on the supply chain and has sucked out the oxygen from the OEM world. Samsung for its part has done a credible job at keeping pace and in being competitive. As expected, the Chinese OEMs – ZTE and Huawei (and some new ones that you will hear about in the next few quarters) are coming on strong from the bottom. This means, the players caught in the middle face perilous times.

AT&T edged past NTT DoCoMo to become number two in global mobile data revenues rankings for the first time. Now top positions in the global rankings are occupied by the US operators.

Smartphone sales continued at a brisk pace accounting for almost 70% of the devices sold in Q1 2012.

Operator and OTT – The way forward

We are at a critical juncture of the industry evolution. The OTT phenomenon is shifting the tectonic plates at a rapid pace. What seemed like a minor irritant only a few quarters back is become a nuisance virus that is eating away the core. Some operators have gone into panic mode while others have stepped back, assessed the situation, embraced it, and will try to exploit the opportunity. The truth of the matter is that the two biggest apps – voice and messaging didn’t really evolve a period of two decades. When the last big invention was interoperability and that too a decade ago, you know things are ripe for disruption. Thanks to the availability of always-on IP networks, new and nimble players are pushing the boundaries of what’s possible. It is not that some of these concepts haven’t been around for a while. RCS has been around for the last 5 years and this year there has been some tangible progress. However, while the world waits for interop and wide availability, startups can offer similar and in most cases, better services now. They can iterate rapidly and reach scale at much faster pace. We are in software-defined world after all. Smarter operators are launching their own OTT services while nodding at the standards implementations.

It is such a critical topic for the industry that we are devoting two Mobile Breakfast Series events to this topic. The first in Seattle on June 7^th with AT&T, T-Mobile, Groupon, Ivycorp, and Sidecar and the second in London on June 29^th with Telefonica, Orange, Rebtel, and Horizons Ventures. We will also be delving deep into the subject at our annual mobile brainstorming summit – Mobile Future Forward on Sept 10^th in Seattle.

Mobile First to Mobile Only

Couple of years, the realization in the industry set in that mobile is going to really dominate the world. Senior executives like Eric Schmidt at Google started to preach the gospel. Very quickly, we are at another pivot point wherein the mobile first doctrine is going to move to mobile only. It is not that the desktop world will disappear into oblivion. Far from it. But, the investments, strategy, and execution will be driven by mobile. As we said in our global research update last month, in 3-5 years, with few exceptions, if a company is not doing majority of its digital business on mobile, it is going to be irrelevant. There are already several data points to support the theory. Leading apps and services like Facebook, Twitter, Pandora are already operating in the world where mobile is driving majority of their user engagement. Expedia, Fandango and others are seeing the early signs of migration into the mobile dominated world.

Postpaid Doldrums

For the first time in the history of the industry, the US operators had a net decline in postpaid subs. This is because of the shift to prepaid in recent times as well as the increased competition for the last few potential postpaid subs. So, the question emerges, where will the net-sub and net-revenue growth going to come from in the next few years. The smartphone penetration in the US was at 43% as of Q1 2012 so the significant opportunities are in the upgrades and non-data to data conversion. Family data plans (see below) will help in bolstering data revenues as well. Multiple devices/consumer will increase the sub penetration which is at 110%.

Family data plans

We have been big advocates of family data plans for the last 2 years and they are finally coming to the US market in the next few months if not weeks. Like gravity, it’s inevitable. Consumers want simplicity and common sense. Family data plans doesn’t necessarily mean that all family members will be forced onto a single data plan but rather the consumers given the opportunity to combine data usage under the same umbrella if they wanted to. If all in the family are heavy data users, initially, some of the data tiers might not make sense but for the vast majority, there are always going to be devices or family members who don’t need a separate full-fledged data usage plan.

When I talked to CNBC earlier this year (Jan), I said that there is a 90%+ probability that the family data plans will be introduced in the US market in 2012. I discussed this more with Bloomberg andUSA Today last week. Verizon and AT&T have been preparing the media and the consumers for this eventuality. Once one operator opens the door, expect rest to follow. Our Atlanta Mobile Breakfast Series will touch upon this topic during the discussion on Connected Devices, the Cloud, and the Consumer (with AT&T, Synchronoss, and CNN).

Mobile Data Growth – The Gigabyte Generation

The smartphone data consumption at some operators in the US is averaging close to 800 MB/mo. As we move into the 1GB range along with the family data plans getting introduced shortly, you can expect the data tiers to get bigger both in GBs and $. Mobile data traffic growth continued unabated doubling again for the 8th straight year. We expect the mobile consumption to double again in 2012. Data now constitutes over 85% of the mobile traffic in the US. As new devices and new network technology roll-outs continued in 2012, the data traffic will grow at the expected pace. The signaling traffic is growing at even a faster pace, 3 times in some cases. Stay tuned for our research paper in the Yottabyte paper series on the topic later this year.

Platform wars

Now that Google’s Motorola deal is approved in China and Facebook’s stellar IPO is behind us, we are going to witness a contentious platform battle between the fab five. Google is preparing to get deeper into handset business while Amazon and Facebook are tinkering with their own handsets. Microsoft is banking on the Lumia success and the release of Windows 8 and its impact on the ecosystem will be closely monitored. Samsung is putting some resources behind Tizen to hedge its bets in case things go south with its current partnerships. The platform narrative is still being defined by Apple which has the commanding mindshare of the developers, operators, and the profits. Follow the money and the puzzle unravels in front of your eyes.

Mobile Patents Landscape

2011 was the most active year for mobile patents in terms of disputes. All the major players were active in filing and protecting their turf for the future battles. IBM topped the industry in the most number of mobile patents granted in 2011 in the US followed by Samsung and Microsoft. The rest of the top 10 in order included Sony, Qualcomm, LG, Ericsson, Panasonic, Broadcom and RIM. Of the major players, Nokia occupied #12, Intel #13, Apple #16, Motorola #21, and Google #23 spot in the top 50 ranking. Amongst the mobile operators, Sprint was the leader with 323 patents granted in 2011. We have more research coming out later in the year that shows the relative patent strength of the various mobile players.

Market Consolidation

The AT&T-T-Mobile merger might not have gone through but that doesn’t stop industry to play the M&A speculation parlor game. Except for a few impossible scenarios, all sorts of deals are being contemplated. The market economics is clearly crying out for more consolidations. However, in an election year, there is an uneasy uncertainty that is gripping the market. The smaller M&As won’t move the needle and bigger M&A are not going to be on the table until we get into a new calendar year.

Connected Universe, Monetizing Opportunities

While 2011 was the year of figuring what the opportunities are in the new connected era, 2012 is starting to focus on how to monetize those opportunities. That will be the theme of our Mobile Future Forward Thought-leadership summit in Sept. More details to come. Almost all the vertical industries are benefiting from the connected devices and ubiquity of broadband networks – security, health, retail, utility, transportation, entertainment, and others. We will take a deep dive into the issues, the best case studies, the opportunities, and the players. We are assembling industries who’s who to help you figure out where the industry is headed next.

What to expect in the coming months?

All this has setup an absolutely fascinating 2012 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems.

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

Against this backdrop, the analysis of the Q1 2012 US wireless data market is:

Service Revenues

The US Wireless data service revenues grew 6% Q/Q and 21% Y/Y to $18.7B in Q1 2012. For the year 2012, we are forecasting that mobile data revenues in the US market will reach $80 billion.
Verizon and AT&T dominated the quarter accounting for 68% of the mobile data services revenue and had 66% of the subscription base.
Verizon maintained its #1 ranking in Q1 2012. AT&T also got ahead of NTT DoCoMo to occupy the number two spot in global mobile data revenues ranking. Sprint and T-Mobile maintained their #5 and #9 rank in the top 10 mobile data operators list for Q1 2012.

ARPU

The Overall ARPU increased by $0.54. Average voice ARPU declined by $0.41 while the average data ARPU grew by $0.96 or 5% Q/Q.
The average industry percentage contribution of data to overall ARPU exceeded the 40% mark in Q1 2012 and is likely to exceed the 50% mark next year. All the top three US operators are above the 40% mark with Verizon leading the trio. (For reference, all three major Japanese operators are now at the 60% mark, with Softbank at 65%).

Subscribers

For the first time in the history of the US mobile industry, the postpaid net-adds were negative. While one data point doesn’t make a trend, we are approaching the peak of the curve where new traditional postpaid subscribers will be hard to find. It is possible that the newly minted prepaid subs might return to postpaid subscriptions. The shift is correlated to the economic woes. Majority of the new subscribers will come from connected devices as we have been saying for the last couple of years.
In the last 11 quarters, T-Mobile has been able to add postpaid subscribers in only one quarter which was back in Q2 2010.
At the end of Q1 2012, the mobile penetration in the US stood at approximately 110%.
Sprint had the most net-adds at just over 1 million though most of them were in the prepaid and wholesale category. T-Mobile recovered from massive defections last quarter to add 187K new subs in Q1 2012.
For the tenth straight quarter, AT&T reported more net-adds from connected devices than postpaid subs.
AT&T now accounts for 48% of connected devices in the US (w/ cellular subscription of some sort).
Rebounding from the failed AT&T merger, Deutsche Telekom announced its investment in the US arm and laid out some aggressive LTE launch plans. T-Mobile will launch its LTE network in 2013 in its attempt to catch-up with its stronger rivals.

Applications and Services

While many of its brethren are seeing messaging volume declines, messaging in the US market grew by 6% YOY and 1% Q/Q. US consumers are now sending messages at the rate of 687 messages/sub/mo. Most operators are seeing decline in messaging revenue growth due to IP messaging. As expected, this transition will continue around the world at different rates. In the US, while the change is underway, we don’t expect any dramatic declines like in Philippines or the Netherlands in the near-term.
The market is finally starting to see activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education.
Q1 2012 again saw tremendous activity in the mobile commerce and payments space with a lot of announcements from the operators, Internet players, and startups as well as the retailers and the ecommerce players. All are vying for a piece of the mobile wallet. Much more to come in the next 12 months.

Handsets

Smartphones continued to be sold at a brisk pace accounting for almost 70% of the devices sold in Q1 2012. Operators are averaging 80% of their postpaid sales as smartphones with Android dominating though iPhone leads in revenue and mindshare.
Nokia lost its 14 year old top ranking to Samsung which slowly and steadily gnawed its rivals marketshare. Samsung now leads in every major unit sale category both on the world stage as well as in the US. However, profits are a different equation where Apple overshadows its rivals like Gulliver in the Lilliput land.
While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off.
Apple had another monster quarter and with iPhone 5 around the corner, it is all set to dominate the remainder of the calendar year.
US continues to sell roughly 40% of the world’s smartphone every quarter thus making it the most attractive market for OEMs.
AT&T continues to dominate the connected devices segment with over 47% market share.
Verizon added another 2.9M LTE subscribers making it the leading LTE operator in the world. AT&T’s LTE rollouts are gathering steam and Sprint plans to offer LTE in 2012. T-Mobile announced that it is putting the cash and spectrum it got from AT&T to good use and deploying LTE by 2013. Expect the “fastest network” marketing to continue for at least another seven quarters.
There is always a beauty contest amongst operators as to who sold more iPhones. AT&T again bested its rivals by selling roughly 47% of the iPhones in the US. T-Mobile is still waiting for its date with Apple even though it has started to order the attire.

Mobile Data Growth

The smartphone data consumption at some operators is averaging close to 800 MB/mo. As we move into 1GB range along with the family data plans getting introduced shortly, you can expect the data tiers to get bigger both in GBs and $.
Mobile data traffic growth continued unabated doubling again for the 8th straight year. We expect the mobile consumption to double again in 2012. Data now constitutes over 85% of the mobile traffic in the US.
While the spectrum debate rages on, in addition to the network and backhaul upgrades, policy management and data offload have emerged as top two solutions that operators deploying around the world. Signaling management solutions like Diameter routing are also getting good traction. However, a long-term video solution is still elusive. As we have been saying in our Yottabyte series of research papers, a comprehensive solution strategy is needed to effectively manage margins/bit.
We will have the 3^rd edition of our “Managing Growth and Profits in the Yottabyte Era”research out later this year.

Global Update

Race to a billion – China became the first nation to go past a billion subscriptions. See our detailed analysis of the Chinese and Indian mobile market.
For more details, please see our Global Mobile Wireless Market Update released in April 2012.

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Aug 2012. The next Global Wireless Data Market update will be issued in Nov 2012.

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

CTIA Wireless 2012 Recap May 14, 2012

Posted by chetan in : 3G, 4G, AORTA, CTIA, Carriers, European Wireless Market, Infrastructure Providers, Mobile Breakfast Series, Mobile Future Forward, Mobile Operators, Worldwide Wireless Market , add a comment

CTIA Wireless 2012 Recap

http://www.chetansharma.com/ctiawireless2012.htm

CTIA returned to New Orleans after many years and it was great to see the city revitalized and ready to host the wireless show. Overall there were no big announcements, no blockbuster deals, no zingers from speakers that made the headlines. However, it was good to take the pulse of the industry. We met with several prominent industry executives, long-time colleagues, and new entrepreneurs. This note presents the summary of my observations from the show.

Mobile Web and Apps – I had the opportunity to chair the Mobile Web and Apps event and kick off the proceedings with an opening keynote on the State of the Mobile Industry. It was based on our recent global market update that we released last week. In fact, many CEOs and speakers including FCC Chairman Genachowski frequently referenced from the research throughout the show. Wireless Week did a nice cover story based on the talk. There was good discussion and debate about what’s working and what’s not, how developers try to create demand and monetize eyeballs, the issues of security and privacy. Mastercard announced its payment developer APIs program. In fact, the show had the presence of all the major credit card companies. Payments, wallet, and commerce were the big talking point.

Operators vs. OTT – The theme of Mobile World Congress continued at CTIA with the topic dominating in both open forums as well as behind closed doors. While most of the ink has been focused on how OTT players are killing operator revenue streams, there is the untold story of operator collaboration with the OTTs. I wrote a piece on the topic for Synergy magazine “Mobile Operators and OTTs: Building a win-win.” The manner in which operators respond to the OTT opportunity/threat will end up defining their future in the years to come. Some operators like TeliaSonera have reacted by throwing their hands and just charging extra for OTT services while others like Telefonica are launching innovative services. We have looked at this topic in-depth for many years and have some more new research coming out in the next few weeks. Stay tuned.

The challenge for some of the operators is in stark display. While T-Mobile’s Bobsled app garnered (95% users non-TMO customers) 1 million users, Viber announced the 70 million milestone. To be a relevant app, one needs scale. Operators have the advantage of providing better call quality. The call quality on many mobile VoIP services is subpar and enterprise customers (and consumers) will pay a premium for better call quality.

Digital Life and New Revenue Streams – In the US, AT&T dominates the connected devices spaces. Indeed in terms of rolling out new services, it is a step ahead of the competition. AT&T has been showing the Digital Life concepts at Mobile World Congress and at CTIA they announced the trial and actual product availability in 2013. This clearly bodes well for the industry for there are many adjacent industries where operators can play an important role. Other operators should pay close attention. We will be discussing the Connected Devices opportunities in detail at our Atlanta Mobile Breakfast Series Event on June 22^nd with AT&T, Synchronoss, and CNN.

Traffic Growth and Signaling storm – As we have mentioned in our various research papers and research updates, mobile traffic is roughly doubling YOY in most major markets including the US. While data traffic hogs the headlines, signaling is becoming a menace to network management esp. Android which tends to be more inefficient in handling network resources. We will have a more in-depth discussion of these topics in our upcoming Yottabyte research paper.

TMO Acquisition – Last year, AT&T’s proposed acquisition of T-Mobile rocked the industry and kept the regulators busy for better part of 2011. While there were no blockbuster announcements, T-Mobile’s acquisition of MetroPCS along with Nokia and RIM’s long-term prospects remained popular water cooler topics.

Nokia’s revival – Nokia has a lot to prove. Its future is riding on the success of the Lumia series of devices in 2012. Though it hasn’t exactly set things on fire, the sales are actually doing fine. It is amongst the top selling devices at AT&T and is showing stickiness. However, Nokia is getting crushed in other markets, so the net impact on overall cash position can be significant if it is not able to arrest the downfall in the next 3-4 quarters.

Small Cells – A couple of years ago, small cells and HetNets were just talking point. Now, operators are weaving them into their execution plans as they lay out their 4G networks. Given that mobile data growth is going to stay front and center for the foreseeable future, expect to hear about small cells and HetNets for some time to come.

TMO $4B network deal – Generally, the network deals of this size takes many quarters to iron out. T-Mobile moved fairly quickly to iron out its LTE rollout plans and its vendors. Not surprisingly, the spoils of the deal went to Ericsson and NSN. In light of the collapse of LightSquared, this deal might provide NSN a lifeline to continue operations for a few more years.

Mobile Wallets and Mobile Payments – While 2012 will not be the year of mobile payments; it certainly is the year of mobile wallets launches and lots of them. Every financial institution worthy of its salt has launched a wallet. We are just going through the early turbulence cycle of this new segment. However, the opening up of the payment APIs from the financial industry is leading to some compelling experiences and use cases.

NFC was absent – The talk of NFC as a payment solution was noticeably muted. We have always said that NFC will have more impact from other solutions than payment.

Verizon – LTE – Competing on LTE, the fight to build the fastest and biggest LTE network is on. Verizon has an early formidable lead but in 2013 rivals will start to catch-up.

Messaging innovation – As I mentioned to the NY Times and discussed it in our annual global mobile update, messaging revenue has started to decline in some countries. Some operators in Europe are in a state of panic. Chaos creates new opportunities. While operators have just given up on fighting the OTT war, others are gearing with new apps and services of their own (TU Me from Telefonica, Bobsled from T-Mobile, On from Orange). Several startups are also helping the operators innovate on the messaging front. SMS was invented in the early nineties but operators didn’t really take messaging to the next level for the last two decades. I met with a number of companies which are doing some interesting work on the messaging side – like ZipWhip, Maxx Wireless, OpenMarket, and others. Some of these companies are still in the stealth mode and expect to make some waves in the coming months. We will be taking this topic head-on in our Mobile Breakfast Series in Seattle (w/ AT&T, Groupon) and London (w/ Telefonica, Orange, Horizons Venture, Rebtel)

Sprint Guardian, and other apps – in line with generating more revenue form other apps, Sprint guardian was launched with Safely and the service is seeing pretty good traction in the early days and might be able to increase the lifetime value of the customer. Other US operators have similar services available on their network as well. Operators will have to invest heavily in VAS ecosystem and services to arrest the declining revenue in other segments.

FCC, Spectrum and Regulations – FCC continued to make its case for more spectrum via incentive auction. With a change of guard expected next year, it will be interesting to see how some of these efforts pan out. FCC should create parallel incentive programs like a $1B prize for tangibly solving the spectrum crisis w/o the need of new spectrum.

Absence of large players – The lack of any major announcements was only rivaled by the absence of the former CTIA heavyweights like Samsung, Alcatel-Lucent, Nokia, Motorola, and Microsoft. Others had fairly low-key presence.

Regulations – Regulations lag the technology industry progress and it is getting to the point that they might end up hindering growth esp. related to communication, privacy and monetization of network assets. It is time to consider bringing all communication, and data privacy rules under the same umbrella so both the telecom and Internet players are guided by the same set of principles.

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Nov 2012.

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

Global Mobile Market Update 2012 (Annual Edition) April 30, 2012

Posted by chetan in : 3G, 4G, AORTA, BRIC, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Mobile Breakfast Series, Mobile Future Forward, Mobile Operators, Mobile Patents, Mobile Payments, Patent Strategy, US Wireless Market, VoIP, Wireless Value Chain, Worldwide Wireless Market , 6 comments

http://www.chetansharma.com/GlobalMobileMarketUpdate2012.htm

Global Mobile Market Update

State of the Global Mobile Union - 2012

Total Global Mobile Revenues to hit $1.5 Trillion in 2012, over 2% of Global GDP

– Top 10 operators control 42% of the global data mobile revenues

Mobile Services Revenue exceeded $1 Trillion for the first time in 2011

– The number of mobile operators with > $1 Billion in yearly data revenues will touch 50 in 2012

Total Global Mobile Data Revenues went past $300 Billion in 2011

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

Mobile Operator Profits have more than doubled over the last 10 years.

– However, the wealth is not divided evenly. Asia’s share has tripled at the expense of Europe whose profit share has declined by 50%

Total Global Subscriptions to exceed 7 Billion in early 2013

– China exceeds 1 Billion, India 950 Million. Subscriber growth is in Asia, Revenue growth is in Asia+North America

China and India represent 27% of subscriptions but only 12% of the global service revenues

– US represents only 6% of the subscriptions but 21% of the global service revenues, 26% of the data revenues, and 27% of the global CAPEX

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

– 70% of the device sales in the US are now smartphones. Device Replacement cycle is shrinking

Samsung and Apple now account for 50% of the smartphone unit share and 90% of the profit share

– Difficult environment for other OEMs esp. when ZTE and Huawei are coming strong from the bottom. It will be difficult for pure play device OEMs to survive long-term

Tablets (iPads) has created a new computing paradigm that is having a significant impact on commerce, content consumption, and developer investments

– Apple will continue to dominate the segment and iOS will be the leading OS for the segment. Amazon, ZTE, Huawei, to chip away at the sub-$200 tier.

Mobile Broadband (4G) is being deployed at a faster rate than previous generations, first time data is leading the charge

– Over 1.5 Billion broadband connections by 2012

Global Mobile Apps revenue has completely (and irreversibly) tilted to off-deck

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

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

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

Mobile data traffic 2x YOY in most markets. Mobile Data will be 95% of the global mobile traffic by 2015

– Many countries are facing spectrum exhaust in the next 2-3 years (in certain markets)

Mobile Signaling takes up 2x the resources as Mobile Data Traffic

– Signaling traffic is growing faster than the data traffic on broadband networks

Connected device segment is growing at the fastest pace in the western markets

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

Several multi-billion dollar opportunity segments are emerging

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

Mobile Ecosystem has become very dynamic and unpredictable

– The 5 Platform Amigos – Apple, Google, Amazon, Microsoft, and Facebook dominate though the first two have the real power

Mobile Operator Revenue is under pressure from OTT Players

– OTT Share of the Global Mobile Revenues increased to 4%

OTT players forcing operators to up their game

– Operators are partnering, launching their own OTT apps, increasing tariffs to manage the margins

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

– 21% of all patents granted in US are mobile related. Top 20 control 1/3^rd of the overall mobile patent pool

Mobile Patent Rankings: US – IBM, Microsoft, Nokia. Europe – Alcatel-Lucent, Nokia, Samsung. Overall – Nokia, Samsung, Alcatel-Lucent

– OEMs – Nokia, Samsung, Sony. Service Providers – AT&T, NTT DoCoMo, Sprint

In 3-5 years, with few exceptions, if a company is not doing majority of its digital business on mobile, it is going to be irrelevant

– Majority (by a good margin) of the consumer interactions with brands will be on mobile

Mobile has become the single most important digital channel for engaging consumers and it shows

– In the US, mobile revenues were > all Ecommerce And > Music, ISP, Hollywood, and Cable revenues combined

We have entered the mobile 3.0 era where “data” is all that matters and it disrupts the value chains

– Data will drive majority of the network growth, Contextual data will drive majority of the VAS growth

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

– The value chains will keep disrupting every 12-18 months by the new players and business models. Several verticals are already getting redefined e.g. retail, health, education, etc.

The Big Picture

The global mobile industry is the most vibrant and fastest growing industry. We expect the total revenue in the industry to touch approximately $1.5 Trillion in 2012 with mobile data representing 28% of the mix. Mobile data services revenue stood at 33%. Global Mobile Data revenues eclipsed $300 Billion for the first time in 2011. It is also the first year in which non-messaging data revenues will make up the majority of the overall global data revenues at 53%.

By the end of 2011, the global subscriptions exceeded 6 Billion. The first 1 billion took over 20 years and this last one took only 15 months. The primary growth drivers are India and China which are cumulatively adding 75M new subs every quarter. China became the first country to eclipse the 1 billion mark in March 2012. India is likely to arrive at the milestone by early 2013.

Smartphones are driving tremendous growth around the globe. Amongst the major markets, US leads with 69% sales. The global figure stands at approximately 32%. Some operators expect 90-95% of their device sales to be smartphones in 2012. In terms of the actual smartphone penetration, we expect the US market to eclipse the 50% mark in 2012.

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

Global Mobile Data Growth

Japan continues to be the leader in mobile data with NTT DoCoMo, KDDI, and Softbank Japan ahead of the pack in terms of mobile data revenue and data as a % of total ARPU. Country average is now at 60%.

Next, Australia and the US have made good inroads in the last two years. In fact, if we look at the overall data revenue, US is much further ahead than any other nation due to the size of the market.

While India has the highest subscriber growth rate in the world right now, the revenue generating opportunity remain down right anemic compared to other major markets with average dropping down to $2.50 in overall ARPU. Even with significant subscriber base, there is going to be a general lack of opportunity in the market for the next couple of years relative to other markets.

Devices – Changing Landscape

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

Apple and Samsung are strong on the top. Huawei and ZTE are coming up strong from the bottom. The middle tier players will have a tough time going forward.

It will be difficult for pureplay device OEMs to survive long-term.

Nokia and RIM are under severe market scrutiny as investors and developers leave in droves. Lack of product planning and execution has left their market share in disarray. Nokia’s valuation has been cut into half. Nokia’s release of N9 shows the engineering and creative design depth but a lot is riding on the first generation of Nokia Windows Phones (Lumia). While the market hasn’t shown much appetite for Windows phone thus far, a good family of devices might be able to slow the loss trajectory and position the combined team for the up-for-grabs 3^rd spot in the ecosystem. Given that the computing is shifting to mobile devices, we can expect some of the weaker desktop/laptop players will exit the industry.

Majority of the tablet use is in the WiFi mode because the primary use case is indoors and WiFi gives a better (and cheaper) user experience. However, of the users who use cellular, the churn is low. Once operators start to roll out user-friendly family data plans across multiple devices, we can expect the cellular activation go higher (e.g. Rogers, Vodafone Spain) but will still be dominated by WiFi overall.

Mobile VAS and OTT – The Big Picture

• The traditional operator revenue streams of

– Voice – declining and under threat from VoIP

– Messaging – flattening/declining and under threat from IP messaging

– Access – rising but margins are shrinking fast

– VAS – declining in proportion to the growth of smartphones

• Operators are fighting back with

– Voice – launching their own VoIP apps e.g. Bobsled from T-Mobile, partnering with VoIP players e.g. Skype integration, charging for VoIP apps e.g. TeliaSonera €6/month

– Messaging – launching their own IP messaging apps e.g. Huddle from AT&T, partnering with IP messaging players e.g. Whatsapp partnership

– Access – Tiering

– VAS – launch their own VAS apps and industry vertical apps and services

Managing Mobile Data Traffic and Profits

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

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

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

Mobile Intellectual Property

• The IP tussles are playing out as expected

• Players with strong IP portfolios will be able to command better negotiating positions, new revenue streams, competitive positioning over the long-term

• On average mobile companies file patents 1.7 times more in the US vs. Europe

• Mobile Patent Leaders in US: IBM, Microsoft, Nokia

• Mobile Patent Leaders in Europe: Alcatel-Lucent, Nokia, Samsung

• Mobile Patent Leaders in Infrastructure: Samsung, Alcatel-Lucent, Ericsson

• Mobile Patent Leaders in Devices: Nokia, Samsung, Sony

• Mobile Patent Leaders in Service Providers: AT&T, NTT DoCoMo, Sprint

• Top 20 control 1/3^rd of the total mobile communications patent pool

Mobile Competitive Dynamics

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

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

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

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

Key Industry Micro-Milestones

Apple captures 70% of mobile device profits – defies gravity, obliterates competition
Apple mobile appstore downloads exceed 25 Billion, 100 Million on Mac – can you spell domination
Samsung ends Nokia’s 14 year reign as the device king – brutal execution
Android 300M activations – Juggernaut
Paypal does $7B in mobile transaction volume
Square does $5B in commerce transaction volume
Google > $5B in mobile revenues
Microsoft revenues from Android > Windows Mobile
Pandora’s 70% usage is on mobile, Twitter’s 60% of the usage is on mobile – heading towards a mobile-dominant world
Facebook Instagram Acquisition $1B – Mobile only acquisition to beef up mobile strategy
Angry Birds approaches a billion downloads
ESPN does 3.1 billion minutes on mobile in 3/12 – Mobile is where the action is
Skype traffic over 150 billion minutes – OTT pressure
KPN messaging volumes decline 15% YOY – OTT pressure
Mobile Security threats grow 7x in last two years, Android threats up 3000% – Mobile IS IT
Cisco BYOD ratio – 70% (up 52% in 2011) - BYOD is creating new opportunities for vendors
US data traffic over 130 quadrillion bytes/month in 2011 – Data traffic 2X YOY, welcome to the yottabyte era
Fandango sells quarter of its ticket on mobile – commerce is happening
Expedia does > $1B in mobile commerce – see above
Microsoft Nokia Multi-Billion partnership – It takes two to tango
Lightsquared fails – Keep your friends close, enemies closer
Google Motorola $12.5B – IP becomes key to strategy
Nortel Patent acquisition $4.5B – IP becomes key to strategy
AT&T/T-Mobile Failure – DOJ/FCC put down the gavel
40% of Kenya’s GDP comes from mobile money – impact of mobile is pervasive
Millennial Media IPO at $2B – first public market validation of the mobile advertising space
HP gives up on Palm – Competition forces Corporate Schizophrenia

What to expect in 2H 2012

• More Tiering, faster pace of change of plans. More options, family data plans

• Cost reduction is as important as revenue generation. More players will align their value-chains and cost structures

• Facebook IPO is probably going to be the single biggest event in the technology industry in the next few months.

• Radios will start connecting the digital world with the physical world with significant disruption opportunity

• Mobile Payment Networks will remain intact for the near future as the ecosystem largely focuses on building value on top of the existing exchange platforms

• The intersection of Social, Location, Identity, and Gaming is creating new opportunities

• With connectivity becoming pervasive, mobile will fundamentally start to alter the legacy infrastructure – retail, health, education, energy, computing, travel, entertainment

• Significant tablet adoption in the enterprise directly impacting the traditional computer manufacturers

• Both HTML5 and Apps will continue to grow, the relevancy to any given application will depend on the reach and economics requirements. HTML5 is not going to replace Apps.

• Mobile data growth will double again in 2012. Significant opportunities in managed and understanding of mobile data growth

• Regulators will need to evolve to keep up with the trend to keep their nation globally competitive

• More IP scuffles before licensing settlements

• Consolidation of weaker players, more global M&A

• Significant progress in emerging areas like mHealth, mPayments will come from the developing world while the western countries get mired in regulatory and legacy mess

• Several players face challenging times ahead and 2012 will be critical in their turn around sojourn.

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

Atlanta – Mobile Breakfast Series – Connected Devices – June 22nd April 16, 2012

Posted by chetan in : Mobile Breakfast Series, US Wireless Market, Worldwide Wireless Market , add a comment

Our first Mobile Breakfast Series event was in Seattle back in Sept of 2009. Since then, we have expanded the program to include a full day thought-leadership summit – Mobile Future Forward which is going to be on Sept 10th this year. I am very excited to announce that we are expanding the MBS series to Atlanta and the first edition is going to be on June 22nd. The topic of discussion is “Connected Devices and Connected Consumers.” If you are in Atlanta or nearby cities, hope you will join us. Also, please let your friends know about the event.

Atlanta, June 22^nd 8:30-10:00 am

Commerce Club of Atlanta

Registration

We have a terrific line-up of speakers.

Details below:

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

Fireside Chat

David Christopher, Chief Marketing Officer, AT&T Mobility and Consumer Markets

David Christopher, chief marketing officer of AT&T Mobility & Consumer Markets, leads product strategy, marketing and execution across AT&T’s extensive portfolio of wireless and consumer communications, entertainment products and services. Previously, David served as chief marketing officer for AT&T’s wireless business unit–where he led all marketing functions and drove the company’s strategy to introduce groundbreaking devices and applications. He also served as vice president of product management for AT&T’s wireless unit. David currently serves on the Ad Council’s board of directors and its executive committee.

Panel Discussion

Louis Gump, VP, CNN Mobile

Louis Gump is vice president of CNN Mobile, responsible for managing CNN’s mobile business globally. Recognized internationally as a seasoned leader in the mobile marketplace, Gump directs CNN’s mobile strategy and development to meet consumer needs and grow overall reach, usage and revenue. Before joining CNN, Gump worked at The Weather Channel, where he led their mobile business. Since 2003, Gump has served on the Board of Directors for the Mobile Marketing Association (MMA), where he is past global chairman as well as past global treasurer. Last year, he received the MMA’s first annual Lifetime Achievement Award for his leadership.

Biju Nair, EVP and Chief Strategy Officer, Synchronoss

Biju Nair has over 18 years’ experience as an entrepreneur and technology industry leader. In this role as CSO, Mr. Nair is responsible for leading the strategic vision of the connected devices and cloud computing for profitable growth of the company’s product portfolio. Prior to joining Synchronoss, Mr. Nair was the Chairman & CEO of Sapience Knowledge Systems, Inc., a venture backed wireless software company (acquired by Synchronoss Technologies in 2011). Previously, Mr. Nair held the position of Senior Vice President & GM of the Connectivity and Security Group at Smith Micro Software (NASDAQ: SMSI) and Corporate Vice President & GM and founder of Mobility Solutions Group at PCTEL, Inc. (NASDAQ:PCTI) which was acquired by Smith Micro in 2008).

Mobile Breakfast Series – How Mobile is Impacting Media, Commerce, and Consumer Behavior April 3, 2012

Posted by chetan in : AORTA, Connected Devices, Mobile Breakfast Series, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Future Forward, Wireless Value Chain, Worldwide Wireless Market , add a comment

We entered our 4th year of running Mobile Breakfast Series and hosted 2012’s first Mobile Breakfast Series on March 28th. The topic of discussion was “How Mobile is Impacting Media, Commerce, and Consumer Behavior.”

First of all my thanks to our series partner: OpenMarket and Synchronoss Technologies. Both of them have been great partner to this series and I very much appreciate their support.

Before I get into the details of the panel discussion, a few announcements about the upcoming events. We are planning on hosting MBS events in Atlanta and London this summer and need your assistance in getting the word out. On June 22nd, we will be in Atlanta to host a fireside chat with David Christopher, CMO, AT&T Mobility. The following week, we will be in London and in partnership with O2 UK, we will have some great discussion about the future of the Operator/OTT tussle in the ecosystem.

Our fall summit – Mobile Future Forward is scheduled for Sept 10^th later this year and we are making good progress in setting up the agenda and the topics of discussion, already have some terrific speakers lined up. The theme is to connected universe, monetizing opportunities. We will open up the registration late April, so, keep an eye for that.

We released our yearly update on the US market earlier this month and you might have noted that 40% of the service revenues are now coming from mobile data. In Japan, this figure is getting close to 60%.

If you look at the consumer IT spend – mobile now occupies 50% of that budget and it is increasing. More than 35% households in the US are mobile only. More than 90% of the devices sold last quarter in the US were smartphones. Mobile influences 30-50% of our commerce transactions. In 2009, ESPN noted that their mobile web traffic is exceeding desktop traffic, now most brands have noted that they are already there or within the next 12-18 months mobile will be the majority traffic owner.

The impact of mobile is even more profound in developing countries. The first billion mobile subs took 250 months, the last billion took only 15 months to 6 billion and we will reach 7 billion in 12 months. Mpesa, kenya’s mobile payment now drives 20% of the country’s GDP. In Bhutan, where I spent some last quarter, mobile is the only way to deliver health care to remote areas. Earlier this month, China surpassed a billion subscribers. The opportunities are literally endless. In 2002, I had the good fortune of writing a book with then CTO of NTT DoCoMo, Dr. Yasuhisa Nakamura and he used to say – mobile networks need become omnipresent like air – clearly he didn’t have to pay for roaming data charges. Mark Weiser, from XEROX PARC, one of my heroes, considered the godfather of pervasive computing who first articulated the concept of everywhere, anytime computing back in the eighties and early nineties would have been proud to see the progress we have made.

Mobile is disrupting many industries – two of the most prominent being media and commerce and it is all driven by how consumers perceive the value of mobility, how they interact with content and devices, and how their consumer behavior is shaped over time. To discuss all of that, we had a great panel.

Michael Bayle, Senior Vice President and General Manager, ESPN Mobile. Michael Bayle is Senior Vice President and General Manager of ESPN Mobile. A former Yahoo! and Microsoft executive, Bayle develops and manages all aspects of ESPN’s mobile strategy and execution, including content production, programming and publishing on every ESPN Mobile platform. He reports to John Kosner, Senior Vice President and General Manager of ESPN Digital and Print Media. Before ESPN, he did stints at Amobee, Yahoo, and Microsoft.

Len Jordan, Managing Director, Madrona. Len joined Madrona in January 2010 and is actively pursuing opportunities to lead new investments. He currently serves on the boards of Cedexis, MaxPoint Interactive, and Zapd on behalf of Madrona. Len has served on the boards of ten early-stage companies and on behalf of Frazier Technology Ventures currently serves on the boards of Control4, DSIQ, Medio, and Wetpaint. Prior to joining Frazier Technology Ventures as a General Partner in 2004 Len spent 16 years in the software industry. He most recently served as a senior vice president at RealNetworks.

Megan Tweed, VP, Media, Razorfish. Megan brings bleeding-edge media strategy and planning innovation to clients like Best Buy, Weight Watchers, and Nike. She is a leading agency and industry voice on the benefits of holistic, platform-agnostic planning and measurement across all viable platforms. Before Razorfish, Megan spent time at Carat and UniversalMcCann working on key global accounts.

Vik Pavate, VP of Business Development, Kovio. Vikram Pavate joined Kovio in 2002 with extensive experience in business development, product management and strategic planning. As vice president of business development, he is responsible for Kovio’s corporate strategy, business development, product management and marketing, OEM relationships and strategic joint development and technology alliances.

We touched upon a range of topics, players, issues, and opportunities. Below is the summary of the discussion:

ESPN is one of the leading mobile properties – 20M mobile uniques, 9B alerts, active across all screens, 4th largest network. 55 different networks.
Texting growth have declined but still very important for media and commerce.
NFC is going to be more successful for other things besides payments. 30M NFC phones shipped in 2011, will more than triple in 2012.
Many of the European operators like O2 investing heavily in NFC and related services.
The four major players at the center of mobile commerce evolution are: Google, Apple, Amazon, and Paypal. Apple because they massive number of iTunes accounts, Amazon because of their scale and tenacity in doing things at low margins, Paypal is the most dominant mobile payments player in the market today, and Google because, they are the only major player doing something with NFC and learning.
I might add Square and Starbucks to the mix. Both are doing some interesting stuff that has scale already.
Financial institutions have wrestled away the 3% transaction share opportunity from the operators. The opportunities for the rest of the ecosystem are in going to be built on top of that payment platform like couponing, advertising, marketing, loyalty programs, etc.
US retailers are some of the most inefficient in the world and we are in a for a big reset in the next 2-5 years.
Tablets are a brand new category and eating away from the PC transactions. Expedia already seeing significant commerce traction on tablets.
Tablets are becoming substitute for catalogue for many brands like Best Buy.
50% of the time, consumers have a second device while watching TV. Tablet usage occurs mostly in front of the TV so companies are looking to engage the users on both the platforms at the same time.
Android devices are out shipping iOS 3:1 but revenue for developers is lacking. iOS is taking away 75% of the developer projects. HTML5 is also starting to have an impact.Android development is expensive due to fragmentation, roughly 2 to 3 times more.
Windows, Microsoft, and Nokia likely to make a strong comeback. Nokia is weak in the US but very strong in over 40+ countries. Brands want reach, are likely to gravitate towards Nokia for fulfilling some of their goals. Everyone has
12% of the media spend is digital. Mobile takes a significant share of attention but only a tiny fraction of the advertising spend. Reasons – maturity, disconnect between impression and commerce, lack of quantifiable metrics. Millennial Media’s blockbuster IPO at almost $2B is however a good indicator for the segment as it became the first company in the space to be vetted by the public markets.
There are huge opportunities in local advertising.
Media consumption and commerce are shifting away from desktop to tablets and smartphones. will create new winners and losers.
Mobile operators role is likely to be that of the enabler vs. the creator of new services.
Mobile video consumption and advertising are on the upswing. However, the tiered data plans is starting to give a pause to the advertisers. There are ways operators and content owners/advertisers can work together in the interest of the consumer.
The integration of social with mobile and location is creating new companies and opportunities.

Always, great to moderate a panel with terrific speakers. MBS audience is top-notch as well. Great questions and follow-up. That’s why it is so much fun putting these together. The next MBS event in Seattle will be on June 7th. Hope to see you there.

Until then, do good work and keep in touch.

thanks

Chetan

Bonus: Some ESPN stats that will rattle your mind

ESPN Mobile enjoyed a record-setting month in March, with new highs for mobile web and app usage, as well as video content and alerts. ESPN mobile web and apps served an average minute audience of 103,000 in March, with an average of 5.1 million daily unique visitors (an increase of 22 percent over March 2011) and 3.1 billion total minutes for the month. ESPN apps in March had 3.6 million average daily uniques (up 125 percent over March 2011) and 1.5 billion minutes (up from 595 million in March 2011).

ESPN Mobile delivered 45 million video starts in March, including 24.6 million from mobile web and 19 million from the ESPN ScoreCenter handset and table apps, both record highs for a single month. In addition, ESPN delivered 1.5 billion alerts in March, also a record high for any month.

(Source: ESPN)

US Wireless Market Update Q4 2011 and 2011 March 19, 2012

Posted by chetan in : 3G, 4G, AORTA, ARPU, Applications, BRIC, China, Connected Devices, Indian Wireless Market, LTE, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Future Forward, Mobile Payments, Mobile Search, Mobile Wallet, Networks, Patent Strategy, Smart Phones, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

US Wireless Market Update Q4 2011 and 2011

http://www.chetansharma.com/USmarketupdate2011.htm

Summary

The US market generated $67 billion in mobile data revenues in 2011 accounting for 39% of the overall revenues for the country. The mobile data market grew 4% Q/Q and 19% Y/Y to reach $18.6B for the quarter. For the year 2012, we are forecasting that mobile data revenues in the US market will reach $80 billion.

The US market accounts for 5% of the subscriber base but 17% of the global service revenues and 21% of the global mobile data revenues. It also accounts for 40% for the global smartphone sales.

If the Martians landed on earth in early 2012, they will conclude the following: there are only 3 things certain on earth – death, taxes, and the direction of Apple’s stock price. Apple had a monster quarter with record sales of iPhone and iPad not only in the US but also around the world. Apple sold over 93M smartphones outpacing its nearest rival Samsung by a good distance. Its share of the profits is more than rest of the OEMs combined. Its stratospheric rise is legendary by any measure. Today Apple eclipsed the combined market cap of Microsoft, Google, and Amazon. Think about that for a minute. In 6-12 months, you could probably add Facebook to the equation as well. The question on rivals’ mind is when will Apple stop defying gravity. Until then, better be a fast follower.

Smartphones continued to be sold at a brisk pace accounting for 65% of the devices sold in Q4 2011. US Operators are averaging 80% of their postpaid sales as smartphones with Android dominating though iPhone leads in mindshare. The Obama administration formally placed featurephones on the endangered species list but either chamber is unlikely to pass any resolution to save it.

Nokia launched its Lumia series of devices with good acclaim however it remains to be seen if it will be able to win back the customers in big numbers in 2012.

The Post-PC Era

Ever since the iPad came into being, the chants of the post-pc mantra are getting louder. But what is it? Is it just the untethered devices? Isn’t iPad a person computer too? What about the smartphones? They have more horse power than my first few PCs combined. Is the personal computing morphing into something else or is there a clear delineation between the Mesozoic era and the new tomorrow? While we in the industry get obsessed by these minutiae, what do the real consumers think about it? Clearly, tablets are selling better than the PCs (as our previous research has shown) both in units as well as the revenue. But so did the laptops compared to the desktops.

So, does the miniaturization of a screen and improving computing power represents a big shift or is this just an evolution of personal computing. Consumers rarely think about what computing era they are in. Between the time they wake and go back to bed at night, there are a series of tasks they have to accomplish. The technology is their companion to accomplish them, from keeping calendars to creating corporate presentations to sending messages to watching TV for entertainment to socializing with family and friends.. the list seems endless. Often times, the time is too short. Technology finds a way to give the time back to us by reducing the distance between the tasks as well as compressing the duration.

As I have said before, nothing collapses time and distance like mobile. Tablets, particularly, iPad and the smartphones, if seen through the eyes of the year 2000 make us superhumans providing us capability to process several tasks in parallel. We can even direct the computing device to figure things out while we sleep. Computing is morphing into a true companion, a wily butler who just knows what’s needed next. Being untethered to a desk makes us more productive. Taking the computing evolution further – what if we can create a desktop environment wherever we are instead going to a desk. For my work setup, I have 4 or 5 screens running at the same time and it does help. It is hard to see tablets in their current incarnation competing with that task environment. However, it does allow us to collapse the desktop and take it with us.

Tablet+Network+Cloud is an enormously powerful value proposition. It should be noted that apps and services on the mobile platform are defining the desktop environment now.

For the enterprise worker, many of the day-to-day tasks don’t really need the real-estate of 3 big monitors; we can easily accomplish a lot with a smartphone or better yet the tablet. As such, we are seeing corporations de-investing in desktops and laptops and moving this investment into tablets, smartphones, apps and make their work force more nimble and competitive. This also means, apps that used to be written for Windows will be predominantly written on iOS and Android, at least for the near-term. Microsoft has a strong offering in 8 and the fact that it will work across the three screens gives it some chips to play in the new world. Whether we call it a post-pc era or the computing continuum doesn’t seem that relevant. What matters most is the set of tools that help us accomplish the tasks at hand on a daily basis. The shift is tectonic in nature, and it is creating winners and losers at an incredibly fast pace. However, my sense is that we are finally entering into the ambient computing era where the computing capability is all around us, something that Mark Weiser of Xerox PARC envisioned more than 20 years ago and something we imagined growing up with the original Star Trek.

We will be dealing with multiple connected devices which share a common identity, cloud, media, security layer, and most importantly the apps and services. The traditional PC won’t disappear but our reliance on one single machine for creation or consumption will continue to dissipate. We will have scores of radios around us, multiple objects that can think and communicate from cereal boxes to security alarms; from windows to fabric shirts; from tables to automobiles; it feels more like the connected era - where objects with brains and energy are connected to create an unprecedented universe of intelligence and productivity. This will indeed impact purchasing behavior and the commerce flow. The social and computing interactions are more intimate, have more purpose, and are available everywhere. The work-life boundaries only exist in one’s mind. A business can be started with an app on a smartphone, anywhere serving to any consumer on the planet. The impact on productivity, the shrinking human capital needed for a set of tasks, corporate and nation’s competitiveness is significant.

In many developing nations, the PC era never arrived. They jumped right into the mobile computing era. They have always lived in the post-PC era. The implications are profound.

More than anything else, the old guard is having a tough time adjusting to the new computing paradigm. HP, Dell, and others have tried but failed thus far to either launch a decent tablet or a smartphone. While Apple invented the new computing paradigm only Samsung has been able to stand up as a worthy rival. The success of a vertically integrated success strategy has seduced Microsoft and Google to the doorstep of a vertical strategy. Will they cross the chasm remains to be seen. Much depends on how Nokia performs for Microsoft and how long can Android juggernaut keeps growing for Google. Then, of course, there are Amazon and Facebook who are attacking the market from a services angle. With a strong entry of the likes of Huawei and ZTE, players caught in the middle are struggling for a viable long-term path to success.

The engagement model with the computing resources is undergoing significant evolution as well. Keyboard and mouse seem relics of a bygone era. We are falling in love with gesture computing combined with a myriad of input and intelligence techniques. Data processing at the speed of light is the new competitive advantage at all computing layers.

In every shift, winners and losers are created. The ones who fail to recognize and adapt become the relic of the historical past duly replaced by the new creators and implementers. If we look at the US household IT spend, over 50% of that spend now goes to mobile. The life time value will increase for players who can tie experiences together across multiple screens in a seamless fashion. This will enable them to not only capture the device revenue but also the commerce and services revenue built on top of it.

The battle for the consumer wallet is being fought on Apple’s turf; it is the one driving the industry narrative and the agenda for its competitors and the ecosystem at large. Am pretty sure we will stop using computer to define computing. Interesting times indeed.

Competition

In any other year, the AT&T and T-Mobile merger would have likely gone through. The interconnection of policy, politics, and private enterprise was on vivid display last year. The failure of the merger forced Deutsche Telekom to resort to the only second viable option - to take the plunge and invest in the US market. Whether 4 competitors can survive 3 years from now is still questionable. Given that DOJ and FCC have set the precedent, the only way a major M&A can take place in the US service provider segment in the near term is if one of the tier 2 operators falters Q/Q. We still believe in our thesis as outlined in our research paper “Competition and the Evolution of Mobile Markets” last year that the US market can’t support 4 large operators and we are likely to see further M&A activity in the sector before too long.

Mobile Data Growth – The Gigabyte Generation

Mobile data traffic growth continued unabated doubling again for the 8th straight year. We expect the mobile consumption to double again in 2012. Data now constitutes over 85% of the mobile traffic in the US. Approximately 30% of the smartphone users average more than 1GB/mo. As new devices and new network technology roll-out keep pace in 2012, the data traffic will grow at the expected pace. The signaling traffic is expected to grow in even faster. Stay tuned for our research paper in the Yottabyte series of papers on the topic later this year.

Mobile Patents Landscape

Connected Universe, Monetizing Opportunities

What to expect in the coming months?

All this has setup an absolutely fascinating 2012 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems.

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

Against this backdrop, the analysis of the Q4 2011 and full year 2011 US wireless data market is:

Service Revenues

The US Wireless data service revenues grew 5% Q/Q and 19% Y/Y to $17.6B in Q4 2011. The mobile data services revenues for the US market hit our initial estimate of $67B for the year 2011, a growth of 22% over 2010. For the year 2012, we are forecasting that mobile data revenues in the US market will reach $80 billion.
Verizon and AT&T dominated the year accounting for 68% of the mobile data services revenue and had 66% of the subscription base.
Verizon maintained its #1 ranking in 2011 ahead of NTT DoCoMo with a whopping $23.7B mobile data year. AT&T maintained its #3 position with $22B in data revenues. Sprint and T-Mobile maintained their #5 and #9 rank in the top 10 mobile data operators list for 2011.

ARPU

The Overall ARPU declined by $0.43. Average voice ARPU declined by $0.96 while the average data ARPU grew by $0.52 or 3% Q/Q.
The average industry percentage contribution of data to overall ARPU was 38.9% in Q4 2011 and is likely to exceed 40% by Q1 2012. Now, all the top three US operators are above the 40% mark with Verizon leading the trio. (For reference, all three major Japanese operators are now above the 55% mark).
We expect data revenues to exceed voice revenues in the US market in early 2013.

Subscribers

At the end of 2011, the mobile penetration in the US stood at approximately 110%.
Helped by the growth in connected devices, the overall net-adds increased by 5.1M with AT&T accounting for almost 50% of the growth. For the year, AT&T was a clear leader in net-adds primarily driven by the success in the emerging devices segment. Despite losing the iPhone exclusivity, the operator was able to maintain solid growth throughout the year.
Verizon led in postpaid net-adds.
For the ninth straight quarter, AT&T reported more net-adds from connected devices than postpaid subs. AT&T now accounts for 43% of connected devices in the US (w/ cellular subscription of some sort).
Overall, AT&T has 46% of the connected device share of the market. The connected device segment growth slowed down to 4% Q/Q but is still up 27% Y/Y.
Sprint added more than a million subscriptions for the fifth straight quarter while T-Mobile subscriber woes continued as it lost 569K subscriptions. T-Mobile’s postpaid growth has been especially troubling as it doubled its postpaid net-losses to 2.2M for the calendar year.
Rebounding from the failed AT&T merger, Deutsche Telekom announced its investment in the US arm. T-Mobile will launch its LTE in 2013 in its attempt to catch-up with its stronger rivals.

Applications and Services

After unseating Philippines as the king of TXT messaging earlier in the year, US TXT messaging continues to grow albeit at a slower pace. US consumers are now sending messages at the rate of 680 messages/sub/mo. Most operators are seeing decline in messaging growth due to IP messaging. As expected, this transition will continue around the world at different rates. In the US, while the change is underway, we don’t expect any dramatic declines like in Philippines or the Netherlands in the near-term.
The market is finally starting to see activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education.
Q4 2011 again saw tremendous activity in the mobile commerce and payments space with lot of announcements from the operators, Internet players, and startups as well as the retailers and the ecommerce players. All are vying for a piece of the mobile wallet. Much more to come in the next 12 months.

Handsets

Smartphones continued to be sold at a brisk pace accounting for 65% of the devices sold in Q4 2011. Operators are averaging 80% of their postpaid sales as smartphones with Android dominating though iPhone leads in revenue and mindshare.
Nokia’s position in the market improved slightly with the launch of WP7 devices. While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off.
Apple had a monster Q4 with 37M iPhones sold and recaptured its global smartphone leader title from Samsung though the Korean rival bested it in the US market albeit barely.
40% of all smartphones sold globally in Q4 were sold in the US making it the most attractive market for the OEMs.
Smartphones now account for over 80% revenue of all phones sold in the US.
90% of the tablets use WiFi only (some have inactivated cellular chipset) meaning the operator channel is not a necessary distribution channel. Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category. We expect family data plans to be introduced in the US market soon.
Verizon added another 2.2M LTE subscribers making it the leading LTE operator in the world. AT&T’s LTE plans are gathering steam and Sprint plans to offer LTE in 2012.
There is always a beauty contest amongst operators as to who sold more iPhones. AT&T again bested its rivals by selling a whopping 7.6M units in the quarter more than Verizon and Sprint combined. T-Mobile is still waiting for its date with Apple.

Mobile Data Growth

Mobile data traffic growth continued unabated doubling again for the 8th straight year. We expect the mobile consumption to double again in 2012. Data now constitutes over 85% of the mobile traffic in the US.
While the spectrum debate rages on, in addition to the network and backhaul upgrades, policy management and data offload have emerged as top two solutions that operators deploying around the world. Signaling management solutions like Diameter routing are also getting good traction. However, a long-term video solution is still elusive. As we have been saying in our Yottabyte series of research papers, a comprehensive solution strategy is needed to effectively manage margins/bit.
We will have the 3^rd edition of our “Managing Growth and Profits in the Yottabyte Era” research out early next year.

Global Update

Race to a billion – China became the first nation (ok, there aren’t that many who are going to touch the billion mark) to go past a billion subscriptions. See our detailed analysis of the Chinese and Indian mobile market.
For more details, please see our Global Mobile Wireless Market Update released in July 2011. The next global update will be released in April 2012.

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

2012 Mobile Industry Predictions Survey January 3, 2012

Posted by chetan in : 3G, 4G, AORTA, ARPU, Applications, BRIC, CTIA, Carnival of Mobilists, Carriers, Connected Devices, Disruption, Enterprise Mobility, European Wireless Market, IP Strategy, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Payments, Mobile Search, Mobile Traffic, Networks, Patent Strategies, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 12 comments

2012 Mobile Industry Predictions Survey

http://www.chetansharma.com/MobilePredictions2012.htm

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First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2012. My thanks to all who participated in our 2012 Mobile Predictions Annual Survey. It gives our community an insider’s view of trends.

2011 was a terrific year for the mobile industry. With all its ups and down, consumers embraced devices, applications, services, and technology with more gusto than ever before. In the waning hours of 2011, we crossed the 6 billion subscriptions milestone. While the first billion took 19 years, this last billion only took 15 months.

Smartphones are selling like hot cakes. We estimate that by the end of Q4 2011, over 60% of the devices sold in the US were smartphones and over 30% of the global sales were for the evolved brethren of the primordial featurephones. Sparked by insatiable consumer demand for mobile data, LTE and HSPA+ networks are sprouting all over the planet with US leading the charge for broadband deployment.

Our annual survey is a way for us to engage our community on the trends for the next year. We put some of the pressing questions to our colleagues and industry leaders. We are able to glean some valuable insights from their choices and comments, some tangible shifts, and get a sense of what’s to come. Executives, developers, and insiders (n=150) from leading mobile companies and startups from across the value chain and around the world participated to help see what 2012 might bring to keep us on our toes. What makes this survey unique is that it draws upon the collective wisdom of folks who are at the center of the mobile evolution.

Fifteen names were randomly drawn for the limited edition of the Mobile Future Forward 2011 book. The winners are:

Tor Bjorn Minde, Head of Ericsson Labs, Ericsson
Sunder Somasundaram, Industry Solutions Practice Director, AT&T
C. Enrique Ortiz, Mobile Technologist, About Mobility
Russell Buckley, CMO, Eagle Eye
Marianne Marck, VP – Engineering, Starbucks
John Foster, President, ZED USA
Angel Luis Saez, Sr. Director, Orange Spain
Dilip Mistry, Senior Director, Microsoft Asia
Phyllis Reuther, Advanced Analytics Lab, Sprint
Gene Keenan, VP of Mobile, Isobar
Elizabeth Day, Director of Finance, Trilogy International
Alan Cole, Research Staff Member, IBM T.J. Watson Research Center
X J Wang, VP – GM China, Vesta Corp
Michelle Lee, Director, SK Telecom
Hemant Chandak, Sr. Analyst, Cisco Systems

Thanks again to everyone who contributed. We will be calling on you again next year. It has been a terrific year for us at Chetan Sharma Consulting and we are looking forward to an engaging and productive 2012.

Be well, do good work, and stay in touch.

Thanks and with warm wishes,

Your feedback is always welcome.

Thanks

Chetan Sharma

Now onto the 2012 Mobile Industry Predictions Survey Results.

1. What was most newsworthy in Mobile 2011?

Android had a spectacular rise in 2011 around the globe. Android OEMs collectively shipped the most number of devices and while margins shrank, they were able to put a united front to iOS. 2011 will always be remembered for the passing away of the industry transformer Steve Jobs. His work directly or indirectly touched billions of souls around the planet, many times over – something rarest of human beings are able to achieve in their life time. Regulatory tussles and significant increase in IP disputes also occupied the headlines. Amazon announced its intention for the mobile space with the launch of Kindle Fire.

2. What will be the biggest mobile stories of 2012?

As we look towards 2012, our panel voted for the continued growth of mobile data as the biggest story followed by Amazon’s entry into the mobile space. Some key questions for the year are: Will Microsoft/Nokia devices will make any meaningful progress? Will RIM survive the year? How does Google manage the fragmentation, decline in margins (for the OEMs), and the IP issues? Will any high-profile security and privacy mishaps lead to more regulatory entanglements? Facebook IPO and its mobile ambitions? How do operators manage the data demand? Which M&As will capture industry’s attention? Will Apple continue to dominate on both smartphone and tablet front? What does Apple do with mobile payments? and much more. Clearly, it is going to be a terrific year.

3. Who will be the most open player in the mobile ecosystem in 2012?

File this in the “perception is reality” folder. Despite all the criticism, Google has maintained its strong position as the most open player in the mobile industry.

4. What applications will define 4G?

Still looking for a killer-4G app? Video, cloud computing, and access will continue to drive 4G demand and growth.

5. What will be the breakthrough category in mobile in 2012?

For a second year in a row, the panel voted for mobile payments and mobile commerce as the top two category that will find their voice. Mobile advertising has become mainstream so it lost its ranking in the top 3.

6. What will be the most popular consumer mobile applications in 2012?

Apps preferences vary by regions depending on a whole range of factors. Messaging and Commerce are the top two categories for the developing world while consumers in the developed nations are likely to gravitate towards commerce and location based services.

7. Which will be the most dominant (unit sales) tablet platform in 2 years?

iOS and Android will dominate the tablet landscape for the next 24 months. A late entry by Windows 8 tablets could make a dent but don’t count on it.

8. Who will make the biggest mobile acquisition in 2012?

2011 had its fair share of block-buster acquisitions, some successful while others were not. Our panel expects Microsoft and Google to continue making the biggest acquisitions.

9. How will the "Apps vs. Mobile Web" debate shape up in 2012?

It seems like the pendulum is swinging towards the mobile web though hybrid solutions are likely to stay with us for a long time.

10. Who will define the mobile payment/commerce space?

The financial companies safely locked in the mobile payments space and while the value chain is fairly complicated and definition confusion abounds, the likes of Visa, Operators and Google will continue to drive the payments/commerce space.

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

Managing data growth and margins drives all strategies at mobile operators these days which in turns drives the value chain. 4G, tiered pricing, and mobile offload continue to be the top solutions if one has the spectrum that is.

12. Which category will generate the most mobile data revenue in 2012?

Messaging, access, apps, and advertising are the four broad categories that drive mobile data revenues around the world. The developing markets rely on messaging while the developed markets are increasingly looking to access as their dominant form of revenue generation.

13. What will help mobile cloud computing gain traction in 2012?

Mobile cloud computing will continue to be defined by enterprise, storage, and media needs.

14. Which enterprise segment will mobile impact the most?

Best buy is becoming the next Circuit City. Other retailers will follow unless they can successful reinvent themselves. Health is more regulatory driven so the progress will be slow though it is ripe for a complete overhaul and developing nations are moving much faster in this space.

15. What will be the dominant revenue model for apps in 2012?

In-app revenue model made good strides in 2011 but the combination of the various available revenue models will be the norm for most application developers.

16. What mode of mobile payments will get traction in North America and Western Europe in 2012?

2011 was the year to set the ground work for growth in the mobile payments space. Given the investment and focus, we are likely to see more movement and consumer involvement in 2012 with proximity based solutions and commerce of physical goods on mobile.

17. What will be the most successful non-mobile-phone category in 2012?

Tablets dominate. Period.

18. Which of the following are likely to happen in the near future?

The is a significant shift in computing taking place right in front of our eyes wherein tablets are replacing laptops and even desktops in the enterprise. European operators have been experiencing tough times while some of the Asian operators are flush with cash, they might make their move in 2012 though regulatory hurdles might prove to be an issue. 33% of the nations will have elections in 2012, maybe which will move mobile voting to the forefront in some nations. Our panel thought there is a better chance of humans discovering water on another planet than rise of another significant mobile OS.

19. Which areas will feel the most impact from Regulators in 2012?

Net-neutrality and market competitiveness will keep the regulators busy in 2012.

20. Who was the mobile person of the year?

Clearly, Steve Jobs was an easy choice but who will replace him 2012? Jeff Bezos has an early lead followed by Andy Rubin and Mark Zuckerberg. Angry Birds representing the developer community will be in for another terrific year. Other honorable mentions were Tim Cook, Paul Jacobs, Sanjiv Ahuja, Dan Hesse, and Glenn Lurie.

A lot to look forward to in the New Year. My thanks to all who participated and we hope you found it useful as you embark on your journey for a successful 2012.

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Feb 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

US Wireless Data Market Update Q3 2011 December 12, 2011

Posted by chetan in : 3G, 4G, AORTA, Applications, CTIA, Carnival of Mobilists, Carriers, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Payments, Mobile Search, Mobile Traffic, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 5 comments

http://www.chetansharma.com/usmobileupdateQ32011.htm

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Summary

The US mobile market continued its blistering pace of growth and ecosystem restructuring. While China and India lay claim to the fastest growing markets on the planet, the many of the meaningful and impactful trends are originating out of the US market with software at the epicenter of creation, growth, change, evolution, and destruction.

The US wireless data market grew 5% Q/Q and 21% Y/Y to reach $17B in mobile data service revenues in Q3 2011 and is on course to increase Y/Y by 22% to $67B in 2011.

As predicted, Samsung overtook Apple as the leading smartphone OEM. However, Apple will continue to dominate profit share for the foreseeable future.

Smartphones continued to be sold at a brisk pace accounting for 57% of the devices sold in Q3 2011. Operators are averaging 70% of their postpaid sales as smartphones with Android dominating though iPhone leads in mindshare. The featurephone as a device species is on the verge of extinction.

Mobile Ecosystem Complexity

As expected, Amazon entered the mobile tablet space with a killer value proposition - $200 for a tablet, something the market sorely needed. While other OEMs tried to compete with Apple on performance (and have been retreating from the market one by one), Amazon is entering the battle on its own turf – a hardware platform built on Android with a slew of services to underwrite the device discount. Incumbent OEMs just can’t compete with that strategy without a complete rethink of their product strategy. What happens when Amazon’s strategy migrates to handsets? While Kindle Fire is not a serious threat to Apple iPad, and the current version has a lot of deficiencies, Amazon has carved out a nice market for itself that will continue to grow in the coming days. In some sense, with its tight integration of commerce, cloud, and advertising, it has out-maneuvered even Google.

Amazon’s impact will be felt by many others in 2012 as its strategy becomes more apparent. Retailers will be facing the brunt of the wave that Amazon represents i.e. etailers supplanting physical retailers. Don’t be surprised if Amazon purses Apple like stores to showcase its merchandize and puts a dagger at the heart of retail.

Google has done a masterful job of shepherding Android through the turbulent platform waters and make it the dominant mobile platform in terms of shipments.

Microsoft and Nokia finally introduced the Windows devices and it has at least given them a fighting chance in 2012, though a far more competitive offering would be needed to make any significant market share or revenue share inroads. Microsoft’s Xbox/Kinect integration remains its best card for 2012.

In a severe case of corporate schizophrenia, HP first launched webOS devices, then backed away, then thought of re-launching only to give it away to open source. Similarly, RIM faces critical test in 2012 and all its hopes are pinned on the new OS that is expected to come to the market sometime next year.

Mobile is changing the way we spend

It is very clear that mobile will be at the center of the human evolution for years to come. Mobile collapses time and distance and as such impacts every facet of our lives. While we have come to know the mobile phone as a communications device, their role in our daily lives has been expanding. From checking emails, paying for tickets, sending money transfers, taking pictures of your kids, watching soccer World Cup live, checking commodity pricing, to emergency response to mHealth (mobile Health), mobile devices have become an essential tool to help us navigate our day.

Mobile also plays a key role in how we go about the most basic transaction in a given day that keeps the economy humming – spend. We discussed this and more in the paper “How Mobile Will Change The Way We Spend” that was released last quarter.

What to expect in the coming months?

All this has setup an absolutely fascinating 2012 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems.

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

Against this backdrop, the analysis of the Q3 2011 US wireless data market is:

Service Revenues

The US Wireless data service revenues grew 5% Q/Q and 21% Y/Y to $17B in Q3 2011. The mobile data services revenues for the US market are on track to reach $67B in 2011.
Verizon and AT&T had a good mobile data quarter accounting for 62% of the increase in data revenues in Q3 2011.
For the quarter, AT&T and Verizon accounted for 69% of the market data services revenues and 62% of the subscription base.
Verizon maintained its #1 ranking again just edging past NTT DoCoMo who came in at number two with $5.95B in data revenues for the quarter. AT&T maintained its #3 position with $5.6B in data revenues. Sprint and T-Mobile maintained their #6 and #8 rank in the top 10 mobile data operators list for Q3 2011.

ARPU

The Overall ARPU increased by $0.31. Average voice ARPU declined by $0.49 while the average data ARPU grew by $0.80 or 4% Q/Q.
The average industry percentage contribution of data to overall ARPU was 37.6% in Q3 2011 and is likely to exceed 40% by Q1 2012. As expected, Verizon became the first US operator to eclipse the 40% mark with AT&T and Sprint close behind. (for reference, all three major Japanese operators are now above the 50% mark).
The top three operators were neck-and-neck in data ARPU each recording a 39%+ performance. T-Mobile ended the quarter exceeding the 30% mark for the first time.
We expect data revenues to exceed voice revenues in the US market in early 2013.

Subscribers

Helped by the growth in connected devices, the overall net-adds increased by 4.9M with Verizon accounting for almost 50% of the growth.
For the eight straight quarter, AT&T reported more net-adds from connected devices than postpaid subs. AT&T now accounts for 43% of connected devices in the US (w/ cellular subscription of some sort).
Overall, AT&T has 43% of the connected device share of the market. The connected device segment growth slowed down to 8% Q/Q and is still up 32% Y/Y.
Sprint added more than a million subscriptions while T-Mobile added 126k.

Applications and Services

After unseating Philippines as the king of TXT messaging last quarter, US TXT messaging continues to grow albeit at a slower pace. Philippines is seeing a sharp decline in per user messaging due to IP messaging. Some of the European operators are also experiencing the pain of declining SMS usage. As expected, this transition will continue around the world at different rates. In the US, while the change is underway, we don’t expect any dramatic declines like the Philippines market in the near-term.
The market is finally starting to see activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education.
Q3 2011 again saw tremendous activity in the mobile commerce and payments space with lot of announcements from the operators, Internet players, and startups as well as the retailers and the ecommerce players. All are vying for a piece of the mobile wallet. Much more to come in the next 12 months.

Handsets

Smartphones continued to be sold at a brisk pace accounting for 57% of the devices sold in Q3 2011. Operators are averaging 70% of their postpaid sales as smartphones with Android dominating though iPhone leads in revenue and mindshare.
Nokia’s position in the market improved slightly with the launch of WP7 devices. While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off.
As predicted in the last update, Samsung overtook Apple in smartphone sales and is unlikely to relinquish the title despite a blockbuster iPhone 4S launch in Q4.
37% of all smartphones sold globally in Q3 were sold in the US making it the most attractive market for the OEMs.
Smartphones now account for over 80% revenue of all phones sold in the US.
In the vertical vs. horizontal platform battle, the ecosystem is shifting towards horizontal domination in the near-term (units sold) while a majority of the profits reside in the vertical column.
87% of the tablets use WiFi only (some have inactivated cellular chipset) meaning the operator channel is not a necessary distribution channel. Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category. As expected, Verizon announced family data plans for 2012. Other operators will quickly follow or may even preempt Verizon.
Verizon added another 1.4M LTE subscribers making it the leading LTE operator in the world. AT&T’s LTE plans are gathering steam and Sprint plans to offer LTE in 2012.
iPhone finally arrived at Sprint. Sales of iPhone 4S have been brisk which is likely to make it the top selling device for the most important quarter of the year.

Mobile Data Growth

While the spectrum debate rages on, in addition to the network and backhaul upgrades, policy management and data offload have emerged as top two solutions that operators deploying around the world. Signaling management solutions like Diameter routing are also getting good traction. However, a long-term video solution is still elusive. As we have been saying in our Yottabyte series of research papers, a comprehensive solution strategy is needed to effectively manage margins/bit.
We will have the 3^rd edition of our “Managing Growth and Profits in the Yottabyte Era”research out early next year.

Global Update

Race to a billion – India’s net-addition rate declined significantly in Q3 2011 while China kept its current pace. We expect that China will be the first country to exceed 1 Billion subscriptions by mid-2012. For India, the event will now occur in 2013.
For more details, please see our Global Mobile Wireless Market Update released in July 2011.

Mobile Future Forward

Our annual mobile thought-leadership summit - Mobile Future Forward was a grand success. Our thanks to all those who attended as well as to the speakers, sponsors, and well-wishers for making it happen. Planning for 2012 summit are underway and we will keep you posted as plans develop.

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

Mobile Predictions Survey 2012

As is the tradition, we are running our annual Mobile Predictions Survey for 2012. Will appreciate your input in understanding the trends and news stories that will make 2012 another big year in mobile. Winners of the survey get our fabulous limited edition Mobile Future Forward 2011 book that contains 19 essays from the global leaders in the mobile industry. (Mobile Predictions Survey Results for 2011 here)

Your feedback is always welcome.

Thanks.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Feb 2012. The next Global Wireless Data Market update will be issued in Apr 2012.

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

New Paper - How Mobile Will Change The Way We Spend – A Mobile Future Forward Paper August 5, 2011

Posted by chetan in : 3G, 4G, AORTA, CTIA, Connected Devices, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Cloud Computing, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Future Forward, Mobile Payments, Mobile Search, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

How Mobile Will Change The Way We Spend

A Mobile Future Forward Paper

The Mobile Future Forward 2011 Book will contain 18 essays from thought-leaders around the globe and is going to be distributed exclusively to the Mobile Future Forward attendees on Sept 12^th. The book is published by FutureText, UK.

The essays from the Mobile Future Forward speakers and industry luminaries are:

1. How Mobile Will Change The Way We Spend – Chetan Sharma, President, Chetan Sharma Consulting

2. The Mobile Cloud Connected Enterprise – Abhi Ingle, VP, Advanced Mobility Solutions, AT&T

3. Mobile and Health Possibilities – Subba Rao, CEO, Razi Health

4. Buying a Mobile Device in 2014 – Frank Meehan, CEO, INQMobile

5. Surviving and Thriving in the Age of Mobile Internet – An MNO Game Plan – Manoj Leelanivas, SVP and GM, Juniper Networks

6. Mobile Future Forward Interview with Steve Elfman – President, Sprint Nextel

7. Is Mobile Local Advertising Finally Poised to Take Off? – William Hsu, SVP and CPO, AT&T Interactive

8. Implications of a Connected Society – Danny Bowman, President, Sprint Nextel

9. Big Data and Mobile – Braxton Woodham, Head of Engineering, AVOS

10. Broadband for All – Sanjiv Ahuja, CEO, LightSquared

11. Wireless Competition and Innovation – Stephen Bye, CTO, Sprint Nextel

12. The Future of the Personal Information Economy: Enabling Success Across the Mobile Ecosystem – Ken Denman, CEO, Openwave

13. T-Commerce – Carving Out and Extending E-Commerce – Ramneek Bhasin, SVP and GM, TheFind

14. The Case for Building a Mobile Broadcast Content Delivery Network – The Critical Piece to Fulfilling Mobile Data Demands of the Future – Erik Moreno, SVP, FOX Network

15. Connected Devices – Redefining the Channel – Biju Nair, Chief Strategy Officer, Synchronoss Technologies

16. How Mobile Can Turn Retailers Into Media Companies – Dale Nitschke, CEO, Ovative Group

17. The Future of (Mobile) Communications – Carlos Domingo, CEO, Telefonica R&D

18. Competition and the Evolution of Mobile Markets – Chetan Sharma, President, Chetan Sharma Consulting

Download (http://www.mobilefutureforward.com and click on the White paper image)

Executive Summary

In his 1943 paper titled “A Theory of Human Motivation”, the famed philosopher Abraham Maslow theorized his observations of human needs and curiosities. His pyramid came to depict the human hierarchy of needs. If we map the physiological, safety, love, esteem, and self-actualization needs onto how much we spend as a community, it correlates rather well. As you would expect, human spending behavior is tightly tied to the basic needs. The amount of money we spend on these basic needs might vary by demographics or region but in aggregate, we tend to spend the most for the things that are the bottom of the pyramid – shelter, food, and water.

Over time, entrepreneurs have used technology to drive fundamental changes in consumer behavior for e.g. Microsoft with personal computers, Google with search, Apple with devices, Facebook with social connections. Of course, the web of interconnection, the various vertical industries that map against the human needs is very complex and as new technology cycles come into play, inventors get busy with enhancing performance sometimes by manifold to keep up with the insatiable demand and appetite to do more.

It is very clear that mobile will be at the center of human evolution for years to come. Mobile collapses time and distance and as such impacts every facet of our lives. While we have come to know the mobile phone as a communications device, their role in our daily lives has been expanding. From checking emails, paying for tickets, sending money transfers, taking pictures of your kids, watching soccer World Cup live, checking commodity pricing, to emergency response to mHealth (mobile Health), mobile devices have become an essential tool to help us navigate our day. As we alluded to earlier, it is not just the traditional phones that have cellular connection these days; we are slowly but surely moving into an era where a majority of electronic devices from small tags to giant billboards will have a communication channel that both machines and humans can interact with.

Mobile also plays a key role in how we go about the most basic transaction in a given day that keeps the economy humming – spend.

In this paper, we will take a look at how the connected universe of devices and sensors are going to impact the way we spend and how all this creates new opportunities to meet the basic human needs.

Your feedback is always welcome.

Thanks

Chetan

Mobile Breakfast Series – Mobile Commerce and Payments June 29, 2011

Posted by chetan in : Mobile Breakfast Series, Mobile Payments, Mobile Wallet, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , add a comment

We held our 7th Mobile Breakfast Series Event earlier today. The topic of discussion was “Mobile Commerce and Payments.”

The killer views of the Olympics and the Sound

Mark Young did a great job moderating the panel

The panel expertly delved into the intricacies of the mobile commerce/payments opportunity

The 2011 Mobile Breakfast Series is sponsored by Amdocs. A big thank you for the support.

At the end of every year, we do a forecast survey. In the last survey, Mobile Payments and Commerce were considered the top two categories for growth in 2011. Given the activities thus far – Google Wallet, ISIS, number of startups – Payfone, BilltoMobile, existing players like OpenMarket, financial guys across the board – past few months have been full of significant activity. The mobile commerce developments are right behind the AT&T/T-Mobile proposed merger and Microsoft/Nokia partnership in terms of news coverage.

I remember back in 2001/2, I was writing my 2^nd book with my good friend and co-author Nakamura-san who was CTO at NTT DoCoMo and while doing some work for DoCoMo and AT&T, we were exploring ways the mobile device will be used for commerce not only for digital goods but also for physical things. MCommerce has been around for the better part of the last 12 years in some form and fashion, in fact today it is a multi-billion dollar market already. Mobile payments are in different states of maturity and experimentation depending on the region. Do you know the value of US payment distribution - $75 Trillion out of which only 5% is based on cards which accounts for almost $3-4 trillion Total Transaction Value. Paypal is expected to process $4B in mobile payments this year generating over $70M in mobile payments revenue.

OpenMarket processes a significant amount of mcommerce business in the US today. As you will hear from the panelists, they are starting to see good traction from merchants and things are moving from digital to physical. However, things are very complicated – it is a highly regulated segment and changes don’t come every so often. The payment networks are from pre-Internet era and yet they maintain their complete dominance of the ecosystem. So, this sets up a very interesting next few quarters and a perfect time for us at Mobile Breakfast Series to assemble a stellar panel to unwind the realities of the evolving landscape.

Our panelists were:

Mark Young, VP - Strategy, NBC Universal and Digital Networks (moderator)

Rodger Desai, Founder and CEO, Payfone

Jim Greenwell, President & CEO, BilltoMobile

Andrew Lorentz, Partner, Davis Wright Tremaine

Michael Goo, VP - Mobile Strategy, T-Mobile

Joe Megibow, VP - Mobile and E-Commerce Optimization, Expedia

Mark has been involved in mobile for a long time and has been at the center of commerce on mobile since the ringtone days at Moviso. Rodger and Payfone have been in the news lately for some raising money and some key partners like Verizon and American Express. BilltoMobile has been involved in mobile payments first in Korea (under Danal) and lately in the US with all the operators for doing payments. Payments is a heavily regulated industry so players in the ecosystem need to have a firm grasp on regulatory winds to ensure their future revenues. Andrew with his deep background in the space was perfectly suited to bring up to speed with pending and existing rules. ISIS has been in the news throughout the year and Michael Goo has been representing T-Mobile to help define the operator strategy in payments. Expedia is one of the largest ecommerce companies and they are seeing some tremendous growth in mcommerce. Joe is right in the middle of all the craziness and his analytical mindset gave audience some great insights.

As i mentioned, mcommerce is not new but mobile web and apps infrastructure along with new methods of interactivity like the NFC are making things simpler for the consumers that it is moving from novelty to convenience to actual dollars.

The panel was just full of great insights and nuggets. The highlights of the discussion was as follows:

For Expedia, the majority of the mobile traffic comes from iPhone, roughly 60-70%, Android is around 25%, Conversion rates are much higher on iPhone, The order size on Android is 10% lower than iPhone.
From a traffic perspective, iPad traffic is double the iPhone traffic though the device penetration is 1/10th. Conversion rates are much higher
Two years ago, the mobile traffic was around 2% when Expedia didn’t have any mobile site. Now it is almost 6% with 10% on Saturdays, Average transaction ranges in the $200-300 range.
Given the traffic dynamics on iPad, it is a unique category in of itself – something we have argued before – it is a new category in terms of consumer behavior.
Most of the traffic for Expedia is from mobile web as SEO and paid search drive traffic to web, difficult to do deep linking, as such mobile web revenue is 5/6 times the app revenue.
In a multi-device, multi-network world, consumers expect the services to just work across the board with same user experience.
Fandango drives impulse purchases of movie tickets using “near me” feature of apps 2-4 hours prior to the show vs. 8-12 hours traditionally.
Charlie Fodie who is on the board of Payfone expects the interchange in payments to go away over time. This will be indeed disruptive, the question is the timing.
Only 25% of consumers have credit card in their profile with their operator in the US. 30% still pay $9-10B in cash/year to the operators by walking into the store.
Payfone sees an opportunity by doing auction based underwriting in real-time to minimize the transaction fee.
The uniqueness of the device can be used as its fingerprint for authentication. Payfone uses the SS7 network for authentication messaging.
Consumers are unlikely to put $1200 plane ticket on their operator bill. The mind shift is not there, maybe things will shift, but not there in the short-term.
Operators are exploring using the consumer data as a way to refine advertising, open it up to the ecosystem.
Durbanization of all forms of exchange fees is near.
Payfone allows transactions over WiFi on operator bill as well.
In Korea, 80% of people do payments using mobile so the blueprint to get more people involved with mobile payments is there
Verizon has a $25/mo limit on carrier billing. A Canadian operator has $500, so on a 6M sub base they have a $4B cash flow thus essentially becoming a bank. The mindset is quite different compared to the US operators
Merchants are not bought into mobile payments yet. They want to see more adoption before they start investing more aggressively with NFC and other forms of payment.
Industry is underestimating fragmentation, consumer confusion, regulatory headwinds, consumer adoption once friction is removed, and how soon all ecommerce will become mcommerce.
Industry is overestimating how much of the space is going to be defined by the western markets

The panel was full of key insights that impact strategy in this space. I was thankful for the speakers to have made the time, especially the ones who traveled great distances to be with us to share their insights.

Next, our focus moves to our annual mobile thought-leadership summit – Mobile Future Forward on Sept 12th in Seattle. It is shaping up really nicely with some terrific speakers. You can take a look at the info here.

The goal of the event is to look a bit into the future 2-5 years out and see what’s on the horizon. We are deep into the planning stages of preparing another successful event. I want to thank our partners of this initiative – Qualcomm, Ericsson, AT&T, Openwave, Millennial Media, Real Networks, and Synchronoss Technologies.

Hope you can join us. It will be worth your while.

Until then, enjoy the summer.

US Mobile Data Market Update Q1 2011 May 9, 2011

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Connected Devices, Indian Wireless Market, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Payments, Mobile Search, Mobile TV, Mobile Traffic, Mobile Users, Mobile Wallet, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

US Mobile Data Market Update Q1 2011

http://www.chetansharma.com/usmarketupdateq12011.htm

The US wireless data market grew 4% Q/Q and 23% Y/Y to reach $15.4B in mobile data service revenues in Q1 2011 and is on course to increase Y/Y by 22% to $67B in 2011.

Of all the segments, the connected device category registered the highest growth at 9.6% Q/Q while the postpaid subscriptions growth was almost flat for the quarter. Connected devices (including tablets, M2M, telematics, eReaders, etc.) now account for 8% of the subscription base.

For the first time, the smartphone sales crossed the 50% share mark in the US. Also, the US now accounts for approximately one-third of all smartphone sales in the world.

The Big News - AT&T’s proposed acquisition of T-Mobile

The big news during Q1 2011 was of course the blockbuster announcement of the acquisition of T-Mobile USA. We had pondered on the viability of 4 operators in the US market in the past. All the major mobile market eventually settle with three main players controlling the market. So, the news wasn’t a surprise as we had expected something to break loose and conform to the natural market evolution. T-Mobile US has been under tremendous pressure for the last 2 years being unable to expand its postpaid base despite modernizing its network/backhaul and introducing a slew of impressive handsets. It was getting squeezed both from the top (Verizon and AT&T) and from the bottom (MetroPCS, etc.) while duking it out with Sprint in the middle. The decision window was closing as Deutsche Telekom had to decide if it wanted to invest in LTE or not (in the US market). Given that the parent business has been under pressure as well, it decided to take the most attractive available option.

The proposed merger will obviously have an impact on the market structure. The market power will get concentrated in the top 2. The HHI3 Index will go from .22 to .31 but the HHI3 value will be at par with UK, Canada (though the Canadian market is not a good proxy for a competitive market), and some of the other markets. The biggest task for the US regulators will be to analyze the impact on the consumer interest and service pricing on a market-by-market basis.

Putting things into perspective, this move is not unusual for a developed market. On average, the top 3 operators in the developed markets around the world control 94% of the market. The proposed merger roughly resembles the merger that took place in UK last year when T-Mobile and Orange, the number 3 and 4 player (each having approximately 19% of the share) respectively in the market merged to form Everything Everywhere and become the number 1 player in the market with 38% market share.

However, if we look at the history of competitiveness in the US mobile market, the market and revenue concentration will be at its highest in the history of the US wireless industry. Such a move is likely to have an impact on the ecosystem depending on the regulatory policies.

Last month, we published a first of its kind in-depth study on competition in mobile markets -“Competition and the Evolution of Mobile Markets - A Study of Competition in Global Mobile Markets”. The paper presents the analysis and an in-depth analytical framework to study the competitive landscape in the global mobile markets.

Transparency as a competitive advantage

An unfortunate side effect of an industry moving too fast is that regulations are often behind the curve (we discuss the role of regulators in our Competition paper mentioned above). Q2 will see a lot of heated debates around privacy and competition. Current regulatory framework in the US seems ineffective to meet the demands of the digital age. The indecision and a weak regulatory framework can be harmful to the ecosystem. While the industry has done a poor job of explaining targeting and relevancy and the associated consumer benefits, by over reacting, regulators can mess up the potential for better services. It is not the mechanics they need to regulate but the “transparency” of services and policies in plain English. Regulating transparency seems to be a more effective way. The ecosystem players will do better if they use transparency not as a threat but as a competitive advantage.

The new troika - AAG

A couple of years back, I gave a talk about the changing mobile ecosystem and what it means to compete in an environment where the ecosystem stacks get reshuffled every few months. I wrote about that in an essay that was published in the Mobile Future Forward book last year. While innovation is coming from all angles - fast and furious - the troika of Apple, Amazon, and Google is leading the way right now. Their interests are clashing in multiple dimensions - device, user data, cloud, advertising, local, commerce, books, etc. In a fast changing environment, either you define the market or be defined by it. The journey from being an arch-rival to a frenemy (and vice-versa) can be a short one.

A significant shift

As we mentioned in our last research note, 2010 marked the milestone of the start of a new computing and communications era. For the first time in the US, the smartphones shipments exceeded the traditional computer segments (that consists of desktops, notebooks and netbooks). Smartphones and the connected devices now account for 51% of the computing devices revenue in the US (devices include desktops, notebooks, netbooks, tablets, eReaders, and conventional feature and smartphones)

The growth in of connected devices

The connected devices category is the fastest growing segment of the market and while the ARPUs are low, due to the higher margins this segment will prove to be the most profitable in the coming years. By the end of 2011, connected devices will be commanding double digit market share. However, not all sub-segments are going to be successful in the operator channel until multi-device data pricing plans are introduced.

Apple’s iPad has been, as expected, a runaway success. Several other tablets launched in 2011 but none has come close to being a credible challenge. OEMs will do well to segment the market and price accordingly rather than follow Apple in performance and pricing. Market is fairly young and there is tremendous room for growth. Another trend that is obvious is the development of an alternate ecosystem. 85% of the tablets use primarily use WiFi for connectivity meaning that OEMs need more diverse distribution channels. Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category.

We do expect multi-device or family data plans to start being introduced in the US market in 2011. Also, the $200-250 Android tablets will start to emerge during the second half of the year to broaden the choices for the consumers.

Turmoil in the OEM land

Another headline grabbing event in Q1 2011 was that of Microsoft’s partnership with Nokia. Nokia’s lack of a credible response to Apple and Android has left the company scrambling for survival. Nokia still dominates the unit sales but the domination of Apple and the Android OEMs has taken away significant profits and ecosystem mindshare. Industry is awaiting the first release of the Windows phone from Nokia which will have a lot riding on it. If the release of iPhone 5 coincides with this release, the Christmas selling season will be interesting.

The OEMs that have impressed the most are HTC and Samsung. The collapsed release cycles and the fierce pace of introduction of new devices have caught many of the traditional players unprepared. These things have a tendency of going in cycles so we expect the pendulum to swing again in the next 12-24 months.

There is a fight for the #3 spot and it is likely that Windows will fill that void. However, for developers, iOS and Android are the only platforms they need to worry about right now.

Verizon finally got its iPhone and as expected it didn’t make a big dent into the AT&T’s financials.

Platforms - Horizontal vs. Vertical

Over the past few quarters, we have seen a fascinating battle brew between the horizontal (Android and Windows) and the vertical (Apple, RIM, Nokia) device platforms. In the US, in the smartphone category, the horizontal platforms (primarily Android) has been gaining significant share since Q1 2010 and now have over 65% share of the new devices sold while the vertical platforms’ share has declined to 35%. However, the revenues and profits are still dominated by the vertical platforms.

What to expect in the coming months?

All this has setup an absolutely fascinating 2011 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 12^th mobile thought leadership summit – Mobile Future Forward which is bringing exceptional industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. Hope you can join us.

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

Against this backdrop, the analysis of the Q1 2011 US wireless data market is:

Service Revenues

The US Wireless data service revenues grew 4% Q/Q and 23% Y/Y to $15.4B in Q410. The mobile data services revenues for the US market are expected to reach $67B in 2011.
Verizon and AT&T had a good mobile data quarter accounting for 76% of the increase in data revenues in Q1 2011.
T-Mobile’s HSPA+ drive is starting to pay dividends. While the postpaid net-adds were still in the red, its data growth is starting to match with its peers. The 27% smartphone base definitely helps.
For the quarter, AT&T and Verizon accounted for 69% of the market data services revenues and 65% of the subscription base.
AT&T edged past China Mobile to become #3 operator by mobile data revenues. Verizon is already at #1 followed by NTT DoCoMo. Sprint and T-Mobile maintained their #6 and #8 rank in the top 10 mobile data operators list for Q1 2011. The proposed merger of AT&T and T-Mobile will make AT&T #1 by a distance and place 20% of the global mobile data revenues in the hands of the top two US operators.

ARPU

The Overall ARPU increased by $0.11. Average voice ARPU declined by $0.36 while the average data ARPU grew by $0.47 or 3% Q/Q.
The average industry percentage contribution of data to overall ARPU was 35% in Q111 and is likely to touch 40% by year’s end.
Verizon and Sprint were neck-and-neck in data ARPU followed by AT&T. In terms of % contribution, all the top three operators exceeded the 30% mark. T-Mobile ended the quarter with approximately 29% of its revenue coming from the data services.
We expect data revenues to exceed voice revenues in the US market before Q2 2013.

Subscribers

Helped by the growth in connected devices, the overall net-adds increased by 4.9M.
For the sixth straight quarter, AT&T reported more net-adds from connected devices than postpaid subs. Connected devices are now almost 12% of AT&T’s subscription base.
Overall, AT&T has 43% of the connected device share of the market. The connected device segment grew 9.6% Q/Q and 48% Y/Y.

· Sprint is on good comeback adding over million customers. Sprint extended its streak of positive net-adds to four quarters by adding over a million subs for the second straight time since Q1 2006.

· T-Mobile however continues to be sandwiched between the top three and the next three and is having a hard time adding postpaid subscribers.

Applications and Services

While the percentage share of the data revenues is declining for messaging, the revenue growth stays strong with almost $5B in revenues.
The market is finally starting to see activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education. The fight for the 3% block is finally in the open. Operators, financial institutions, and the internet players are all vying for a piece of the mobile wallet. Much more to come in 2H 2011. (We will be going in-depth into mobile commerce and payments in our upcoming Mobile Breakfast Series event on Jun 28^th)

Handsets

Nokia sold 108.5M units in Q1 2011 accounting for 28% of the market share. Samsung continues to be one of the most agile players in the device business shipping 70M for a 18% share of the market. The nimble team at HTC outclassed its bigger peers and edged past Nokia in market cap.
Apple, a company that was given a lifeline by Microsoft in 1997 is now valued 45% or $100B more than Microsoft primarily on the strength of its wireless portfolio.
In the US, for the first time, 51% of the devices sold were smartphones. Global average is at 26%. One-third of all smartphones sold were sold in the US making it the hot bed for consumer devices.
Smartphones now account for 80% revenue of all phones sold in the US.
In the vertical vs. horizontal platform battle, the ecosystem is shifting towards horizontal domination in the near-term (units sold) while a majority of the profits reside in the vertical column.
85% of the tablets use WiFi only (some have inactivated cellular chipset) meaning the operator channel is not a necessary distribution channel. Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category.

Global Update

Race to a billion - India went past 800M in Q1 2011 subs and is closing on China and we expect that by the end of the year, India will become the largest mobile market on the planet. By early 2012 both India and China will have more than a billion subscriptions.
China Mobile crossed the 600M subscription mark however its 3G introduction has had a tepid response thus and its 4G strategy remains in flux.
More details to come in our global market update.

Your feedback is always welcome.

Thanks.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Aug 2011. The next Global Wireless Data Market update will be issued in Jun 2011.

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

Mobile Breakfast Series – The Universe of Connected Devices April 28, 2011

Posted by chetan in : Carriers, Connected Devices, Devices, European Wireless Market, Mobile Applications, Mobile Breakfast Series, Mobile Content, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Worldwide Wireless Market , add a comment

Earlier this month, we hosted our 6th Mobile Breakfast Series Event in Seattle at the picturesque Columbia Tower Club. The topic is something that has been occupying everyone’s attention lately with some terrific growth numbers.

We were doing some math earlier this year and the chart above illustrates how fast the mobile ecosystem is subsuming the computing ecosystem as they become one and the same.

As you might have noted in our 2010 US market update, connected devices is the highest growing category in the market at 55%. It is creating new revenue streams and enabling new verticals to get mobilized. It is also disrupting the traditional ecosystems. This made it a perfect time to discuss the topic in-depth.

Our panelists were:

Tyler Davidson, VP, Amdocs

Martin Fichter, VP - Product Management Americas, HTC

Mike Mulica, President and Head of Strategy, Synchronoss Technologies

Ilja Laurs, Founder and CEO, Getjar

Erik Kling, Director - M2M, Vodafone Global Enterprise Group

Wilson Rothman, Deputy Technology and Science Editor, MSNBC.com (moderator)

As always, we try to bring players across the ecosystem to have a good discussion from multiple angles. Our panel didn’t disappoint.

First a bit about the panelists to give you some background on their viewpoints. Erik Kling is deep into M2M and Vodafone is pursuing a very aggressive M2M strategy worldwide with some smart value proposition to the enterprises. That can put some of the domestic operators at a disadvantage. Tyler Davidson focuses his energy on managing customers but also thinks deeply about the management of media in the connected world. The rage of apps is carrying from smartphones to tablets and other connected devices as well and Ilja Laurs knows a thing or two about apps – running the largest independent app store and being quite successful at it.

HTC just crossed Nokia in revenues which was just unthinkable even last year. HTC has run a very effective strategy in devices and Martin Fichter is one of the guys who is making things happen in the US market. If you have an iPhone, you have been touched by Synchronoss Technologies. They activate the iOS and other devices. A billion $ company you might have never heard of. Mike Mulica has deep experience in the mobile space and is driving the strategy of connected devices and related software forward. Last but not the least, our moderator Wilson Rothman has been covering gadgets most of his adult life and is a darn good moderator.

The highlights of the discussion was as follows:

M2M is getting good traction in consumer electronics, telematics, and medical. Vodafone is doing a ton of business with the medical/pharma companies who would like connected devices without the worry of roaming, certification, etc. Within a year, Vodafone’s M2M group has grown up to 200 people and they are hiring at a rapid pace if anyone is looking.
Other M2M areas that are evolving are: security, remote access, home monitoring, etc.
Connected devices are accelerating the move from voice to data
The fact that AT&T is advertising M2M Vending machines on TV shows it is serious business.
HTC passed Nokia in market cap on the back of Android and the 4G devices. For tablets, WiFi is a preferred route rather than operators as that’s what the demand is.
With connected devices avalanche coming our way, WiFi is going to be extremely important, need better technologies for WiFi/Cellular migration.
Consumers chose a device or a service first and the operator is now an afterthought.
Operators need an open environment to operate but want to create a preference for them – it is like “controlled openness” like Microsoft so they can certify devices and apps that go on their network
All this connectivity does need billions of $ of investment so there is a need for a toll for these services. However, we need to reduce friction with security, payment, and plans.
Apple doesn’t want to be an operator but does want a free ride like NetFlix and YouTube.
WiFi is not only necessary, it is essential for the survival of the industry.
Amazon launching an app store is a good thing for the industry, puts pressure on Google a bit.
Companies like Skype would pay the operators for better bandwidth but the process is a bit cumbersome.
Battery Life. Enuff Said.

We also announced that our annual thought-leadership summit on mobile - “Mobile Future Forward” will take place on Sept 12th in Seattle. We have some terrific speakers lined up which lead to some fabulous discussion. Stay tuned for more information early May.

My utmost thanks to David Smith, SVP at Enterprise Ireland for his notes from the event. It helped refresh my memory and pointed out things that I had missed amidst running around.

Thanks all for coming and making it a successful outing. Our next Mobile Breakfast Series is going to be on Mobile Commerce and Payments in late June. Stay Tuned for details.

Mobile Breakfast Series – Dallas – LTE & Beyond: The future of mobile networks April 3, 2013

Mobile Breakfast Series – June Events March 26, 2013

Mobile Breakfast Series Recap – Cloud, SDN, and the art of mobile computing March 25, 2013

Mobile Breakfast Series Recap – Mobile 2013 December 13, 2012

Mobile Breakfast Series Recap – London – Operator/OTT – The Way Forward July 5, 2012

Mobile Breakfast Series Recap – Atlanta – Connected Devices, Cloud, and Consumer June 24, 2012

MBS London – Frank Meehan Interview June 9, 2012

What must mobile operators do?

Facing the talent crisis

What awaits operators?

Mobile Breakfast Series Recap – Operators/OTT – The Way Forward June 8, 2012

New Research: US Mobile Data Market Update Q1 2012 May 21, 2012

CTIA Wireless 2012 Recap May 14, 2012

Global Mobile Market Update 2012 (Annual Edition) April 30, 2012

Atlanta – Mobile Breakfast Series – Connected Devices – June 22nd April 16, 2012

Mobile Breakfast Series – How Mobile is Impacting Media, Commerce, and Consumer Behavior April 3, 2012

US Wireless Market Update Q4 2011 and 2011 March 19, 2012

2012 Mobile Industry Predictions Survey January 3, 2012

US Wireless Data Market Update Q3 2011 December 12, 2011

New Paper - How Mobile Will Change The Way We Spend – A Mobile Future Forward Paper August 5, 2011

Executive Summary

Mobile Breakfast Series – Mobile Commerce and Payments June 29, 2011

US Mobile Data Market Update Q1 2011 May 9, 2011

Mobile Breakfast Series – The Universe of Connected Devices April 28, 2011

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Mobile Breakfast Series – Dallas – LTE & Beyond: The future of mobile networks April 3, 2013

Mobile Breakfast Series – June Events March 26, 2013

Mobile Breakfast Series Recap – Cloud, SDN, and the art of mobile computing March 25, 2013

Mobile Breakfast Series Recap – Mobile 2013 December 13, 2012

Mobile Breakfast Series Recap – London – Operator/OTT – The Way Forward July 5, 2012

Mobile Breakfast Series Recap – Atlanta – Connected Devices, Cloud, and Consumer June 24, 2012

MBS London – Frank Meehan Interview June 9, 2012

What must mobile operators do?

Facing the talent crisis

What awaits operators?

Mobile Breakfast Series Recap – Operators/OTT – The Way Forward June 8, 2012

New Research: US Mobile Data Market Update Q1 2012 May 21, 2012

CTIA Wireless 2012 Recap May 14, 2012

Global Mobile Market Update 2012 (Annual Edition) April 30, 2012

Atlanta – Mobile Breakfast Series – Connected Devices – June 22nd April 16, 2012

Mobile Breakfast Series – How Mobile is Impacting Media, Commerce, and Consumer Behavior April 3, 2012

US Wireless Market Update Q4 2011 and 2011 March 19, 2012

2012 Mobile Industry Predictions Survey January 3, 2012

US Wireless Data Market Update Q3 2011 December 12, 2011

New Paper - How Mobile Will Change The Way We Spend – A Mobile Future Forward Paper August 5, 2011

Executive Summary

Mobile Breakfast Series – Mobile Commerce and Payments June 29, 2011

US Mobile Data Market Update Q1 2011 May 9, 2011

Mobile Breakfast Series – The Universe of Connected Devices April 28, 2011

Recent Posts

Categories

Archive

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