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US Mobile Data Market Update Q3 2012 November 12, 2012

Posted by chetan in : 3G, 4G, AORTA, ARPU, Applications, Infrastructure, LTE, M&A, Mergers and Acquisitions, Messaging, Mobile Advertising, Mobile Applications, Mobile Cloud Computing, Mobile Commerce, Mobile Ecosystem, Mobile Future Forward, Mobile OEMs, Mobile Operators, Mobile Payments, Mobile Traffic, Privacy, Security, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

US Mobile Data Market Update Q3 2012

http://www.chetansharma.com/usmarketupdateq32012.htm

 

 

Summary

The US mobile data market grew 3% Q/Q and 17% Y/Y to reach $19.9B in Q3 2012. Data is now almost 43% of the US mobile industry service revenues. For the year 2012, the market is on track for mobile data revenues in the US market to reach our initial estimate of $80 billion.

Largely due to the strong postpaid performance by Verizon, the US operators added a net of 2.4M new subscribers. Sprint and T-Mobile saw further postpaid declines. For T-Mobile, Q3 marked the nine straight quarters of postpaid losses.

The quarter also saw a couple of block-buster operator M&As that took many in the industry by surprise. T-Mobile found a soul mate in MetroPCS while Softbank showed up at the altar for Sprint. Once the mergers are executed, Sprint is likely to emerge as the stronger of the two.

The two horse OS race got a new participant entry last month – Windows 8. Microsoft and its partners launched a worldwide campaign for a chance to compete. Microsoft also made a splash with the first computing device in its history – Surface. Both got a mixed reception from the market. We will find out how consumers will react in the Q4 numbers. Of all the OEMs, Q4 will be the most critical for Nokia who is running out of runway in its turnaround effort.

Despite setbacks in the IP battles, Samsung continued its march of being the undisputed unit leader in mobile device space. After displacing Nokia in Q1 2012, it continued to dominate in units shipped in Q3 2012. However, Apple dominates both the smartphone revenues and more importantly just crushes the competition on device profits. It has only 6% of the global unit shipment share but over 70% profit share. In tablets, Apple completely dominates the landscape in both shipments and revenue. In fact, 95% of the profits in the tablet segment go to Apple with the remaining ecosystem fighting for the crumbs. Apple has the complete stronghold on the supply chain and has sucked out the oxygen from the OEM world.

Amazon hasn’t been shy about its ambitions in the mobile space. While the world awaits an Amazon smartphone, the company launched a slew of tablets to compete primarily with Google though its eyes are on Apple. Apple also launched iPad mini a mid-tier tablet to ward of threats coming from the bottom tier of the market.

As we mentioned it in our last update, smartphones are now past the 50% mark in the US and continue to sell at a brisk pace accounting for over 75% of the devices sold in Q3 2012.

While the US penetration of smartphones is over 50% as we reported last quarter, the 50% of the sub base is concentrated in only 30% of the households thus leaving plenty of growth left in the marketplace.

In terms of Y/Y growth, Connected Devices segment grew 19%, Prepaid 10%, Wholesale 6%, and Postpaid was flat. The connected devices segment picked up some growth after two straight quarters of sub-5% performance growth (Q/Q).

Verizon and AT&T maintained their top positions in the global rankings by mobile data revenues. A survey of the entire ecosystem shows that the US companies dominate the top 5 rankings of profit share. China Mobile leads the industry with Apple, Verizon, AT&T, and NTT DoCoMo completing the rankings.

Postpaid Doldrums and evolution of metrics – ARPU to ARPA to AMPA

The US market has added roughly 400K postpaid subs in the last two quarters. Verizon has added 2.4M, AT&T 400K, and Sprint and T-Mobile have lost a million each. Clearly, Verizon’s performance is far superior to its competitor and its relentless focus on postpaid has yielded significant benefits. Typically, the postpaid ARPU is roughly 2-3 times that of a prepaid subscriber. So, while other operators have been adding prepaid subs, the improvement to the bottom line has been tepid especially for Sprint and T-Mobile. Sprint’s losses have been primarily due to the bleeding of the Nextel customers. The iDEN network should turn off sometime next year and the continuous loss of overall postpaid subs might stop. T-Mobile faces a deeper challenge. Its net-revenue has declined in every quarter since Q4 2008, which is 15 straight quarters of revenue decline. In fact, its current revenue levels is at the Q2 2006 levels – that was six years ago. Though the company has done a terrific job upgrading the network to HSPA+ and doing blocking and tackling until it upgrades to LTE to come at par with its peers, the continuous bleeding of the postpaid subs needs a new strategy. Metro PCS helps gain new subs and spectrum but doesn’t help with postpaid. In fact, one can expect that the churn will rise as consumers migrate from Metro to T-Mobile. 2013 will be a critical transition year for the company as it tries to compete with its larger competitors. Just being a “value” provider is the race to the bottom.

We have been advocating shared data plans to create more consumer demand for over two years. When I talked to CNBC earlier this year (Jan), I said that in all likelihood the family data plans will be introduced in the US market in 2012. I discussed this more with Bloomberg and USA Today and suggested that most likely Verizon will launch them first. Verizon and AT&T launched the shared data plans this summer with AT&T getting the benefit of launching it second. New types of plans also evolved the decades-old operator metric of ARPU to ARPA (Average Revenue Per Account) given that we are seeing a strong influx of multiple devices per individual/household. Verizon was first to transition and we expect others might introduce new matrices to measure progress and performance. AMPA (Average Margin Per Account) will also become an important metric in the coming days, first internally, and then for the markets.

Messaging Decline

Most western markets have seen the net revenue in the messaging segment decline. The US market has resisted the decline thus far. In Q3 2012, for the first time, there was a decline in both the total number of messages as well as the total messaging revenue in the market. It might be early to say if the decline has begun or the market segment will sputter along before the decline takes place. As we had outlined in our fourth wave paper, once the market segment reaches the 70-90% penetration mark, the decline begins and we might be seeing the start of the decline in messaging revenue. The decline is primarily due to the rise in IP messaging and operators have been slow to evolve their strategies in the segment.

Operator’s Dilemma (And Opportunity): The Fourth Wave

In our paper “Operator’s Dilemma (and opportunity): The Fourth Wave” earlier this year, I proposed that we need a new framework to think about the next generation of revenue opportunities. The fourth curve opportunities are massive but require a different skillset and strategic approach that the past three curves. We are starting to see operators becoming more focused and aggressive. It is being widely adopted in the operator community around the world and some operators have started to break out the 4th wave revenues in their financials. We will have more discussion about how things are shaping up in future research papers.

AT&T has been better prepared in the US market and has embraced the ride on the fourth curve. It is investing in the areas of Digital Life, Mobile Premise Solutions, Mobile Payments, and Connected Vehicles. We discussed the subject at length in our recently concluded annual thought-leadership summit – Mobile Future Forward.

Operator M&A – The Rule of Three Strikes Back

Just when you thought the prospects of any major operator M&A slowed down due to the impending US election, T-Mobile announced its acquisition of Metro PCS giving it more spectrum, access to public markets, a good chunk of subscriber base to become a more competitive number 4. Sprint and Softbank followed the announcement with an absolutely brilliant maneuver. Sun Tzu would have been proud. It provides Sprint access to capital, economies of scale, and becomes a much stronger number 3, and a global telecom player with scale and ambition. There have been some interesting twists and turns but as we have stated before, the US market competitive equilibrium will be complete when Sprint and T-Mobile get together at some point down the road.As outlined in our research paper on the subject, market forces find their way to get to 3 dominant operators that compete for attention and revenues, rest becomes noise. While the regulators might scoff at the idea, the inevitable market forces will find their way around.

Connected Devices

In Q3 2012, we released some research around connected devices. If we just look at the active connected devices which can connect to the Internet directly either by wireless or wired means, either using cellular or WLAN, the total number of connected devices in the globe just crossed the 10 billion mark which means that the connected device to human ratio is now 1.3.

More details available here.

Device ecosystem

Windows 8 arrival – Sept was a big month in Microsoft’s attempt to regain its lost mobile decade. It went from a dominant position to virtually zilch coinciding with the remarkable ascend of iOS and Android. To make any device sell – one needs good and competitive device, distribution channel and marketing muscle, and brand loyalty. I think Windows 8 is genuinely good, is different, and for the first time can stand with its peers (obviously it needs to build a robust apps portfolio and a stronger developer ecosystem).

In the past, while operators, OEMs, and Microsoft announced significant advertising spend, it had almost negligible impact on sales. The actual $ amount spend was tepid, operators didn’t want to be guinea pigs just to prop up a third ecosystem. With Windows 8, things might get better. We can see many more awareness campaigns, more OEMs are launching some quality devices, and operators are warming up to the idea as well. The brand loyalty index for Microsoft Mobile is fairly low and it will take a heavy lift and a few billion dollars of advertising spend to move the needle. The good news is that the devices are shipping and it is not thanksgiving yet.

However, Nokia, once propped at every Windows Phone rally isn’t getting any special love from Microsoft anymore (in public) and it has become one of the many OEMs on the conveyer belt. Its ability to differentiate itself enough in Q4 will decide its 2013.

Last week, Qualcomm eclipsed Intel in market cap marking another milestone in the progression of the mobile ecosystem.

Surface, mini, and the tablet market

Apple launched the iPad mini for some of the same principles that Microsoft launched Surface. It is better to be cannibalized by self than by the enemy. Microsoft saw the notebook market shrink and needed a product to stem the bleeding while Apple saw Amazon and Google attack the bottom tier with a different model that poses a credible threat. Tablet market is indeed fundamentally altering computing in many ways. The changing landscape of computing also has impact on the ecosystem and the application development environment. Developers flock to platform reach, ease of access to the marketplace, and the basic economics of a viable business model. Windows a percentage of computing platform is shrinking which threats not only the platform but also Microsoft’s other software franchises. Surface is classic blocking and tackling to provide a jolt to the shifting ecosystem. With iPad mini, Apple is attempting to lock the mid-top tier of the tablet market and daring its competitors to just play in the bottom tier that leaves no profit on the hardware and revenue stream from services for a very select few.

Apple is getting a lot of grief for its maps app. While the strategic decision to take control of a key application was spot on, it faltered on communications. The half-baked endeavor was nowhere close to being the “best mapping app.”

Infrastructure segment faces a tough road ahead

The infrastructure segment of the wireless industry is facing turbulent and interesting times. The business model for many vendors hasn’t evolved much in the last few years and some of the disruptive forces are bound to have a deep impact on the segment. ALU is facing serious headwinds and will need to figure out its strategic options going forward. Ericsson’s margins are under pressure but more interestingly its services and support revenue exceeded its hardware revenue for the first time. Huawei and ZTE reported decline in revenues but they are making gains in the infrastructure markets outside US and in handsets in the US market. Until Premier Xi Jinping and President Obama sort out their geopolitical differences, the Chinese vendors remain shutout of the US infrastructure market.

What to expect in the coming months?

All this has setup an absolutely fascinating 2013 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems. Players who firmly attach themselves to the 4th wave will reap benefits while the ones who miss it will see their fortunes dwindle.

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 2012 US wireless data market is:

Service Revenues

· The US Wireless data service revenues grew 3% Q/Q and 17% Y/Y to $19.9B in Q3 2012. For the year 2012, we are forecasting that mobile data revenues in the US market will reach $80 billion.

ARPU

Subscribers

Applications and Services

Handsets

Mobile Data Growth

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 Feb 2013. The next Global Wireless Data Market update will be issued in Mar 2013.

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

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.

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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 -

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 Future Forward 2012 Update - Connected Universe. Monetizing Opportunities. June 25, 2012

Posted by chetan in : AORTA, Applications, European Wireless Market, Mobile Cloud Computing, Mobile Commerce, Mobile Future Forward, Mobile OEMs, Mobile Operators, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

Greetings,

Hope all’s well. Just a quick update on how the program is shaping up.

We have been working steadily on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle) and I am very pleased to announce the preliminary program. We will provide an update as we continue to refine the program and announce more speakers. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.

I am delighted to be partnering with some of the leading players in the mobile ecosystem: Intel, Ericsson, Synchronoss, and Tekelec.

Steve Elfman, President, Sprint will give us an update on the state of the wireless industry – the opportunities and the investment areas. Glenn Lurie, President, Emerging Enterprises and Partnerships at AT&T Mobility will provide us with a glimpse into the world of emerging devices and opportunities. Both Steve and Glenn are mobile industry veterans with decades of experience and their perspective will be invaluable for our Mobile Future Forward community.

Mobile commerce has been a hot topic lately. We have two terrific speakers – Mung Ki Woo, Head of Mobile at Mastercard Worldwide and Antonio Benjamin, Global CTO at Citi to lay the roadmap of the mobile commerce ecosystem evolution.

When it comes to retail, brands, and technology, there are not many people with deeper insights than Stephen David, former CIO of Procter & Gamble. He is a highly sought-after advisor to global brands around the world. I have had the good fortune to work with him in the past and his grasp on how wireless is going to disrupt retail is just brilliant. We are delighted to have him back to have a conversation about mobile, brands, retail, and IT.

As you can see below, we have an outstanding group of executives who are responsible for changing the industry every day. Their viewpoints and commentary will be invaluable. The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.

Confirmed Speakers

· Steve Elfman, President, Sprint

· Glenn Lurie, President, AT&T

· Renee James, SVP, Software and Services Group, Intel

· Wim Sweldens, President, Alcatel-Lucent Wireless

· Michael Bayle, SVP and GM, ESPN Mobile

· Martin Fichter, President, HTC

· Stephen Bye, CTO, Sprint

· Bobby Morrison, President, Verizon Wireless

· Erik Moreno, EVP, Fox

· Stephen David, former CIO, Procter & Gamble

· Ed Cantwell, SVP, West Wireless Health Institute

· Jana Messerschmidt, VP, Twitter

.. More to come

· Mung Ki Woo, Head of Mobile, Mastercard Worldwide

· Antonio Benjamin, Global CTO, Citi

· Biju Nair, EVP and Chief Strategy Officer, Synchronoss

· Hank Skorny, VP/GM, Intel

· Jack Kennedy, EVP, News Corp Digital Media

· Marianne Marck, VP – Engineering, Starbucks

· Tim Chang, Partner, Mayfield

· Vish Nandlall, CTO and EVP, Ericsson

· Carlos Domingo, President and CEO, Telefonica R&D

· Kevin Packingham, SVP – Product Innovation, Samsung

· Frank Meehan, Executive, Horizons Ventures

· Oke Okaro, Global Head of Mobile, Bloomberg

Discussion Topics

· Looking back from Mobile 2020 – the last 10 years

· The fight for developers – Apps, APIs, and Dollars

· Will Privacy get in the way of mobile growth?

· PostPC era and the tablets – commerce, engagement, and consumption

· Quantified Self. Quantified Enterprise – how to benefit from big data?

· Gamification of Everything – How to reinvent business models and revenue streams

· When will Mobile Commerce eclipse Ecommerce? And How?

· Mobile Broadband – LTE is here and now. What’s Next?

· Mobile Competitive Policy – Balancing competitiveness, consumer interests, policy, and innovation

· nScreen Connected Consumer – Expectations, Solution roadmap, and Revenue flows

· Operators vs. OTT – Competition, Co-opetition, and the new landscape. Measuring the seismic shifts.

· Big (Mobile) Data – Collection, Management and Use of Data

· Mobile Cloud Computing – Innovation, Competition, and Business Models

· Mobile CIO Prism – Disruption in the enterprise. Opportunities for growth and cost reductions

· Managing networking growth in the Yottabyte Era – strategies to tame signaling and data tsunamis

· Mobile Platforms and Ecosystems – The Cycles and the Eternal Debate

· Mobile Security – BYOD, Hacking, Protecting, and Monetization

· Emerging Markets, Emerging Opportunities

· Battle for the Home – Devices, Apps, Networks

· Retail channel transformation – how are we going to shop and who makes money?

I hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds. Registration is open now. Early bird will expire July 10th. The last two events were sold out so be sure to grab your seat to one of the most anticipated mobile gathering of the year.

Thanks.

Kind regards,

Chetan Sharma

Announcing Mobile Future Forward 2012 June 13, 2012

Posted by chetan in : 4G, AORTA, Connected Devices, Mobile Applications, Mobile Future Forward, Mobile Operators, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

Greetings,

I hope you are enjoying the advent of summer.

We have been working steadily on our fall mobile executive summit – Mobile Future Forward and I am very pleased to announce the preliminary program. We will provide an update as we continue to refine the program and announce more speakers. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.

I am delighted to be partnering with some of the leading players in the ecosystem: Intel, Ericsson, and Synchronoss.

Renee James, Senior Vice President of Software and Services at Intel will be giving an opening keynote. Renee is leading the charge that is making Intel a software powerhouse. It will be great to get her perspective how the trends are shaping up-and-down the innovation stack.

Dr. Vish Nandlall, CTO of Ericsson will be leading a fascinating panel discussion with some terrific industry leaders – Mobile in 2020: the last 10 years. I have had a chance to interact with him in the past and he will be a great person to help us visualize the back from the future journey.

As you can see below, we have an outstanding group of executives who are responsible for changing the industry every day. Their insights will be invaluable. The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.

Confirmed Speakers

· Steve Elfman, President, Sprint

· Glenn Lurie, President, AT&T

· Renee James, SVP, Software and Services Group, Intel

· Wim Sweldens, President, Alcatel-Lucent Wireless

· Michael Bayle, SVP and GM, ESPN Mobile

· Martin Fichter, President, HTC

· Stephen Bye, CTO, Sprint

· Bobby Morrison, President, Verizon Wireless

· Stephen David, former CIO, Proctor & Gamble

.. More to come

· Mung Ki Woo, Head of Mobile, Mastercard Worldwide

· Biju Nair, EVP and Chief Strategy Officer, Synchronoss

· Hank Skorny, VP/GM, Intel

· Jack Kennedy, EVP, News Corp Digital Media

· Marianne Marck, VP – Engineering, Starbucks

· Tim Chang, Partner, Mayfield

· Vish Nandlall, CTO and EVP, Ericsson

· Carlos Domingo, President and CEO, Telefonica R&D

· Kevin Packingham, SVP – Product Innovation, Samsung

Topic Discussions

· Looking back from Mobile 2020 – the last 10 years

· The fight for developers – Apps, APIs, and Dollars

· Will Privacy get in the way of mobile growth?

· PostPC era and the tablets – commerce, engagement, and consumption

· Quantified Self. Quantified Enterprise – how to benefit from big data?

· Gamification of Everything – How to reinvent business models and revenue streams

· When will Mobile Commerce eclipse Ecommerce? And How?

· Mobile Broadband – LTE is here and now. What’s Next?

· Mobile Competitive Policy – Balancing competitiveness, consumer interests, policy, and innovation

· nScreen Connected Consumer – Expectations, Solution roadmap, and Revenue flows

· Operators vs. OTT – Competition, Co-opetition, and the new landscape. Measuring the seismic shifts.

· Big (Mobile) Data – Collection, Management and Use of Data

· Mobile Cloud Computing – Innovation, Competition, and Business Models

· Mobile CIO Prism – Disruption in the enterprise. Opportunities for growth and cost reductions

· Managing networking growth in the Yottabyte Era – strategies to tame signaling and data tsunamis

· Mobile Platforms and Ecosystems – The Cycles and the Eternal Debate

· Mobile Security – BYOD, Hacking, Protecting, and Monetization

· Emerging Markets, Emerging Opportunities

· Battle for the Home – Devices, Apps, Networks

· Retail channel transformation – how are we going to shop and who makes money?

I hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds. Registration is open now. Early bird will expire June 22nd.

Thanks.

Kind regards,

Chetan Sharma

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 22nd 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 innovationAs 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 , 7 comments

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

Global Mobile Market Update

  

State of the Global Mobile Union - 2012

  1. 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

  1. 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

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

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

  1. 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%

  1. 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

  1. 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

  1. 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

  1. 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

  1. 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.

  1. 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

  1. 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

  1. 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

  1. 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)

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

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

  1. 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

  1. Several multi-billion dollar opportunity segments are emerging

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

  1. 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

  1. Mobile Operator Revenue is under pressure from OTT Players

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

  1. OTT players forcing operators to up their game

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

  1. 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 1/3rd of the overall mobile patent pool

  1. 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

  1. 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

  1. 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

  1. 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

  1. 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 3rd 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 1/3rd 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

  1. Apple captures 70% of mobile device profits – defies gravity, obliterates competition
  2. Apple mobile appstore downloads exceed 25 Billion, 100 Million on Mac – can you spell domination
  3. Samsung ends Nokia’s 14 year reign as the device king – brutal execution
  4. Android 300M activations – Juggernaut
  5. Paypal does $7B in mobile transaction volume
  6. Square does $5B in commerce transaction volume
  7. Google > $5B in mobile revenues
  8. Microsoft revenues from Android > Windows Mobile
  9. Pandora’s 70% usage is on mobile, Twitter’s 60% of the usage is on mobile – heading towards a mobile-dominant world
  10. Facebook Instagram Acquisition $1B – Mobile only acquisition to beef up mobile strategy
  11. Angry Birds approaches a billion downloads
  12. ESPN does 3.1 billion minutes on mobile in 3/12 – Mobile is where the action is
  13. Skype traffic over 150 billion minutes – OTT pressure
  14. KPN messaging volumes decline 15% YOY – OTT pressure
  15. Mobile Security threats grow 7x in last two years, Android threats up 3000% – Mobile IS IT
  16. Cisco BYOD ratio – 70% (up 52% in 2011) - BYOD is creating new opportunities for vendors
  17. US data traffic over 130 quadrillion bytes/month in 2011 – Data traffic 2X YOY, welcome to the yottabyte era
  18. Fandango sells quarter of its ticket on mobile – commerce is happening
  19. Expedia does > $1B in mobile commerce – see above
  20. Microsoft Nokia Multi-Billion partnership – It takes two to tango
  21. Lightsquared fails – Keep your friends close, enemies closer
  22. Google Motorola $12.5B – IP becomes key to strategy
  23. Nortel Patent acquisition $4.5B – IP becomes key to strategy
  24. AT&T/T-Mobile Failure – DOJ/FCC put down the gavel
  25. 40% of Kenya’s GDP comes from mobile money – impact of mobile is pervasive
  26. Millennial Media IPO at $2B – first public market validation of the mobile advertising space
  27. 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.

Mobile Patents Landscape – An In-depth Quantitative Analysis April 17, 2012

Posted by chetan in : 3G, 4G, AORTA, European Wireless Market, Infrastructure Providers, Intellectual Property, Mobile Advertising, Mobile Applications, Mobile OEMs, Mobile Operators, Mobile Patents, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment

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

 

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Introduction

In April 2012, in its report on Intellectual Property, the US Patent Office (USPTO) concluded that the entire US economy relies on some form of IP, because virtually every industry either produces or uses it. The foreword of the report said,

“Innovation protected by IP rights is key to creating new jobs and growing exports. Innovation has a positive pervasive effect on the entire economy, and its benefits flow both upstream and downstream to every sector of the U.S. economy. Intellectual property is not just the final product of workers and companies—every job in some way, produces, supplies, consumes or relies on innovation, creativity, and commercial distinctiveness. Protecting our ideas and IP promotes innovative, open, and competitive markets, and helps ensure that the U.S. private sector remains America’s innovation engine.”

Intellectual property has been an integral part of the economic engine of the western world for many decades if not centuries. Over the past two decades, nations and corporations have competed on the creation, funding, execution, and protection of the new ideas. Increasingly, the role of mobile devices, networks, and applications has become an important component of the growth story worldwide.

To say that the mobile devices have become the remote control of our lives would be an understatement. Mobile phones stay attached to us almost 24 hours a day. From waking us up in the morning to keeping us connected and entertained, from speeding up a commerce transaction to being a trusted advisor; mobile is fundamentally changed how we as consumers behave and how societies and cultures evolve over time. As a result, there has been a big influx of investment and innovation over the last decade. This surge of activity has also translated into increased number of patent filings in the two major jurisdictions of US and Europe. Even the developing countries like China and India have seen a significant increase in patent activity in the country. In fact, in terms of filings, China’s share of the global patent grants has increased from 0.8% in 1996 to 15% in 2010 placing it third behind Japan and the US and well ahead of Korea and Europe.

According to the US Patent Office (USPTO), in 2011, the number of applications reached over 535,000 growing by almost 54% from a decade ago. Similarly, the number of patents granted grew 35% to 224,505 by the end of 2011. The numbers of foreign filings are now in the majority for both the applications filed as well as the patents granted. In Europe, similar trends were observed where the EPO (European Patent Office) patent grants increased by 46%.

The number of mobile related patents that were granted by the USPTO and the EPO increased significantly over the course of last decade. The US market saw a 390% increase while the European market saw a 173% increase in mobile related patent grants.

Another interesting fact is that as of Q1 2012, over 21% of the patents granted by the USPTO now are mobile related. This grew from around 2% in 1991 and 5% in 2011. In Europe, roughly 9% of the patents granted are related to mobile.

Chetan Sharma Consulting analyzed almost 7 million patents granted by the USPTO and EPO over the last two decades to understand how mobile has become a key enabler for all technology companies. Furthermore, we looked at patent granted to the top 65 technology companies who are active in the mobile space to understand their relative strengths and weaknesses in the mobile patent landscape. In a first of its kind study, the paper presents and discusses these findings in more detail.

Read the full paper

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.