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Global Wireless Data Market Update 2007 March 27, 2008

Posted by chetan in : AORTA, Infrastructure, Carriers, Security, Speaking Engagements, M&A, 3G, Partnership, Devices, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, Location based Services, MVNO, Indian Wireless market, India, BRIC, WiMax, Mobile Gaming, Networks, ARPU, Japan wireless market, European wireless market, Mobile TV, mobile users, Mobile Applications, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Speech Recognition, Mobile Search, Wi-Fi, Wireless Value Chain, 4G, CTIA , 7 comments

Global Wireless Data Market Update 2007

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

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

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

Chetan Sharma Consulting conducted its semiannual study on the global mobile data industry. We studied wireless data trends in over 40 major countries - from developed and mature markets such as Japan, Korea, UK, and Italy to hyper growth markets such as China and India. This note summarizes the findings from the research.

• The worldwide markets continue to grow at an explosive pace reaching 3.3B subscriptions by Q407 up 20% from 2006 levels. Significant growth is coming from India and China with both countries registering close to 8-9M net adds per month. India recorded 8.8M net adds in Jan 08 while China added 9.4M in Feb 08. Overall, the world market is at almost 50% penetration.
• US surpassed Japan as the most valuable mobile data market in service revenue with US adding $24.5B vs. $23.2B for Japan in 2007 mobile data service revenues. China with $12.5B was ranked number 3. US registered the highest growth amongst the top 3 with over 55% increase from 2006 levels followed by China at 37% and Japan at 18%. These top 3 markets account for over 50% of the global data service revenues.
• NTT DoCoMo continues to dominate the wireless data service revenues rankings with over $12.13B in service data revenues for 2007 however Q/Q growth has dropped to single digits. DoCoMo crossed 80% in 3G penetration and is expected to touch 90% by end of the year.
• DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T, Sprint Nextel, O2 UK, SK Telecom, Softbank, and China Unicom to round up the top 10 operators by wireless data service revenues. All the top 10 carriers exceeded $3B in data revenues for the year.
• Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, 3 Italy, 3 UK, and O2 UK are topping 30%.
• Both India and China added a whopping 85 million new subscriptions (most of them prepaid). This week India edges past US to become the number 2 wireless market (by subscriptions) in the world. In last two years alone it added almost 150 million new subscriptions (in comparison China added 155 million and the US market added 44 million).
• Vodafone Italy reported the highest increase in data ARPU from 4Q06 with 76% growth. Other notable percentage increases in ARPU were from Rogers, AT&T, Verizon Wireless, Sprint, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators with average data ARPU dropping to $0.70.
• In terms of absolute dollar amount, 3 UK leads the pack with $29 data ARPU (qualifying limit: 4 million subs). By comparison, the rest of the top 4 operators are below $22. In fact, 3 UK reported the highest ARPU recorded for the year at approximately $94 (in Q2). Other operators who reported overall ARPU above $60 were KDDI, NTT DoCoMo, Rogers, and 3 Sweden.
• The biggest jump in data revenues was experienced by Verizon Wireless with over 68% increase from 2006 followed by AT&T with 63% jump and O2 UK making 49% gain.
• In 2007, SMS’s vice like grip on data revenues continued to loosen a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 20-40%.
• The top 10 operators increased their revenue by 32% during 2007 (from 2006) to reach almost $62 billion in data service revenues, thus accounting for almost half of the global data service revenues though they account for only 27% of the global subscription base.
• NTT DoCoMo’s position at the top of the wireless data world has been challenged recently by several carriers esp. by its archrival KDDI. Their data coordinates stand at ($21.5, 35%) and ($21, 34%) respectively (please see PowerPoint for reference). Since the takeover from Vodafone, Softbank has been making significant strides in the market by taking the highest share of the net-adds in last 9 months.
• The biggest percentage contribution by data ARPU has been consistently registered (since mid 2002) by two Philippines carriers – Smart Communications and Globe Telecom with almost 55% (or $4) contribution coming from data services.
• Even though China reported approximately $12.5B in data revenues for 2007 and the percentage contribution is over 23%, data ARPU is around $2.3. For India data ARPU dropped below $1 for all major carriers.
• China Mobile with 369M (as of Dec 07, the numbers increased to 384M by Feb 08) remains the #1 carrier in terms of total number of subscribers followed by Vodafone at 252M and China Unicom with 160M subscriptions. Telefonica, América Móvil, SingTel, Deutsche Telekom (T-Mobile), and Orange (France Telecom) are the next five largest telecom groups in the world. In terms of individual carriers in a given country, AT&T and Verizon Wireless occupy the #3 and #4 spot respectively ahead of NTT DoCoMo, which is at #5. The two Chinese carriers round up the top two positions and are likely to stay perched at their lookout vistas for many years to come. China Mobile also surpassed Vodafone in market cap which stands at $288B (vs. $164B for Vodafone). Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans. Carriers in Japan and Korea are the most under duress.
• As far as 3G is concerned, GSA reported 293 WCDMA commercial launches worldwide with over 270M 3G users (66% of them are WCDMA users vs. EV-DO). Both Japan and Korea continue to expand their 3G base with both reporting over 75-80% penetration. 3G has picked-up steam in both western Europe and North America per our forecast in the 2005 cover story article “3G: Hitting the Mass Market” published in the Wireless World Magazine. Western Europe and US are approximately at 25% 3G penetration (Italy being the exception reaching 40%).
• China and India represent the biggest opportunities for Infrastructure providers. China has postponed its 3G decision for the umpteenth time and has been having technical and political problems to get something in place before the 2008 Olympics. India is going through its 3G spectrum policy but unlike China is likely to resolve the issues in short order. Some of the biggest infrastructure contracts will come from these two countries that are looking to expand coverage into rural areas. In India, regulators are considering inviting bids for the 3G spectrum from foreign entities as well.
• Carriers with nationwide 3G networks and good distribution of handsets are seeing uptick in data ARPU. The Japanese and Korean carriers along with operator 3, Verizon, Sprint Nextel are all seeing benefits of rolling out their 3G service. Deployment of 3.5G technologies such as HSDPA and EV-DO Rev A (and B) are also gaining momentum. Networks are getting deployed and market is being seeded with some of the early handsets. In terms of 4G, there is a strong momentum behind LTE, UMB in its current incarnation is practically dead, and proponents of WiMAX are pushing the technology as a 4G candidate, though it is starting to lose its time advantage.
• In terms of applications, messaging accounts for lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, Mobile Games, IMS, LBS, Mobile advertising, and others have captured industry’s imagination. Though not much talked about, enterprise applications are also being adopted widely esp. in North America as more workers become mobile and corporations seek efficiencies in their operations and supply-chain.
• 2007 also saw the demise of some high-profile MVNOs like Amp’D. Helio continues to struggle while the newer ones like Sonopia and Blyk are testing the treacherous waters with different business models. Asian market is also opening up for MVNOs.
• Nokia eclipsed 100M/quarter unit sale three times in 2007. It sold over 437M handsets in 2007, more than the next three handset manufacturers combined. Nokia’s global market share stood at 40.2%.
• While the talk of “Open Access” and “Open Platform” consumed much of North America, it barely registered a decibel elsewhere. Several significant events including 700 MHz Auction, Android, and Verizon’s “Open Network” initiative elevated the consternation in the ecosystem.
• Several operators reported Mobile Advertising as their key strategic focus for the coming quarters, esp. China Mobile and Vodafone. Sensing the opportunity to seek new sources of revenue stream, Nokia launched its ad service as well. 2007 saw tremendous M&A activity in both the online and mobile advertising space. In a matter of weeks, several billion dollar transactions took place highlighting the intensity in preparing for the next battleground. The estimated market for mobile advertising in 2007 was approximately $2.3B with messaging, search, and browsing accounting for over 84% of the revenues.

Your feedback is always welcome.

Chetan Sharma

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

Recap of Mobile Advertising Events - Stanford and Seattle March 22, 2008

Posted by chetan in : AORTA, Carriers, Middleware, Speaking Engagements, M&A, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Indian Wireless market, Mobile Gaming, ARPU, Mobile TV, Mobile Applications, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Mobile Search, Wireless Value Chain , add a comment

This week I had the opportunity to moderate two distinguished panels on Mobile Advertising in two days, one at Stanford University and the other one in Seattle. This post summarizes the issues and points discussed during these two sessions.

Stanford University by Mobile Momentum

The first one was part our book tour and was organized by Mobile Momentum, an organization lead by Prof. Tom Kosnik and his student Mohit Gundecha. The event was sponsored by three of the pioneers in Mobile Advertising space - AdInfuse, Admob, and Rhythm New Media. My co-author Victor Melfi and I walked through some of the salient points of our book. We discussed the history of advertising, the digital revolution of the Internet, delved a bit into the definition of mobile advertising, the challenges and accelerators of this nascent industry, pondered over the business models, illustrated some of the successes using the case studies and our five-points framework (reach, engagement, targeting, viral, and transactions), briefly touched on the technology issues and gave our 2c on what it will take for the industry to go from its current state of “cautious optimism” to promise of “contextual nirvana.” Some of the key points were:

• Keep things in perspective
• Understand the business, not just the technology
• Chant the User Experience mantra
• Give Users Control
• Respect Consumer Privacy
• Focus on the most critical 1%
• Prepare for Data Everywhere
• Visualize Three Screens
• Watch your kids: They are the Market
• Watch for external catalysts to change like Alternate Devices and Open Platforms

Our talk was followed by a panel discussion with Ujjal Kohli, CEO, Rhythm New Media, Tony Nethercutt, VP, Admob, and David Staas, VP, AdInfuse. All these guys have had distinguished careers in mobile, advertising, and digital evolution of our industry and hence the depth of knowledge on the panel was just great. Each of them has had successes with campaigns around the world, not just in North America. Admob with its billions of impressions every few weeks has blazed the way in the off-deck world. Rhythm has been quite successful with advertising with mobile video snacking at 3 in UK.

AdInfuse has been running some interesting campaigns in Europe like with Swisscom.They were achieving 8% CTR on WAP banner campaigns, 50% of users who clicked through to the WAP landing page completed a purchase. Recall rates were as high as 27%, more than 80% of the users rated the model of “free video content in return of advertising” positively vs. 2% who didn’t like the idea. Rhythm has also experienced similar numbers with their 3 UK campaigns. It is remarkable that 40% of the subscriber base is using the service and one can still watch the ad subsidized videos even if they have run out of prepaid minutes. The reach provided by Admob to its advertisers is phenomenal. Coca-cola’s campaign touched 125 countries. We cover Rhythm’s and Admob’s case studies in more detail in our book as well.

We touched on a wide variety of topics and I was struck by something that Ujjal said. He was previously CMO of AirTouch Cellular so brings in a very unique perspective to the table. He said, “For the carrier, No amount of Mobile Advertising Revenue is worth the risk of losing a customer.” The issues around privacy, customer satisfaction, customer care costs are critical for an operator to assess as they dive deeper into this new emerging medium.

There are a number of developers who are interested in exploiting the opportunity of mobile advertising but don’t want to deal with the complexity of the ecosystem and ad networks. There is an opportunity for some of the existing players to open up the APIs to broaden the reach.

Seattle by TiE

Next day, TiE Seattle organized a panel discussing “Mobile Advertising: Making the most of the next generation in advertising.” The panelists were Scott Silk, CEO, ActionEngine, Brian Lent, CEO, Medio Systems, Eric Hertz, CEO, Zumobi, Jeff Giard, Director, Alltel, and Jason Guenther, Director, Disney. Again, a pretty diverse panel representing various players in the value chain.

I started by probing the panelists on how we go about defining “Mobile Advertising.” Brian, not surprisingly, thought Mobile Search is going to take a lion share of the revenues just like how things evolved in the online world. Eric and Scott articulated their view around On-Device Portals, Widgets, and User Experience. Action Engine has been having good success with many of the large media brands such as MSNBC and WSJ while Zumobi has come out with a platform that takes user experience at the center of its strategy.

Though at number 5, Alltel has been introducing innovations quicker than some of its peers. Its Celltop application is yielding significant results with over 400% increase in usage if the application is within Celltop framework. Next, they are going to be putting the Celltop as a Home Screen (Idle Screen) app like what Koreans and Japanese have been doing for some time. It was refreshing for Jeff to right away state that this industry is not going to move forward if we don’t solve the “fragmentation” problem. I have said before that “Fragmentation is the biggest enemy of the mobile industry” and w/o solving the issues of fragmentation at different layers, we won’t get into the hypergrowth mode that will take the industry from $2B today to $20B in five years. Jeff thought that mobile advertising presents significant opportunities for the industry including the carriers but we need to be mindful of the issues around privacy, customer care, and customer satisfaction.

Disney is world’s premier consumer brand and very few companies understand the three screens better than Disney. Jason’s perspective on how mobile fits into the larger picture was an important one. He views mobile as a critical channel for any content company but reminded that a lot of work needs to be done in terms of standardization, metrics, auditing, and  privacy before mobile advertising becomes a thriving industry.

In both places, audience was well informed and highly engaged. Questions ranged from business models to technology intricacies. People didn’t think some of the newer MVNO models like that from Blyk will last too long and that for the trends will different for different geographies. For example, in emerging markets, mobile is going to be the only means to bring digital advertising to the masses, a point we make in our book as well. Will high-end phones be free subsidized by advertising as Eric Schmidt had proclaimed, well, don’t bet your life on it, at least not just yet though if someone like Google makes up its mind, it can, as Victor says, “make the market.”

I really enjoyed engaging with the panelists and the audience. Plenty of questions, we could have gone on for hours if not days. It was quite hectic but fun. Next week, I am moderating a panel “Mobile Mania - Show me the Money” at Washington Technology Industry Association and then facilitating a developer forum “Mobile Jam Session” at CTIA on 31st. On 24th April, I will be giving a class on Mobile Advertising at Stanford University (Prof. Kosnik’s course) and the same evening, I head to Sacramento to give a talk being organized by TechCoire on “Mobile Advertising: A $20B Opportunity?” In May, on the 13th, I will be in NY giving a talk on mobile advertising to the advertising executives, on 20th will be doing a book event being organized by CommNexus in San Diego, and on 21st will be moderating a panel discussion on the promise of mobile advertising at the highly regarded Future In Review Conference.

Hope to see some of you on these sojourns.

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

Posted by chetan in : AORTA, Strategy, Carriers, M&A, 3G, Devices, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, Location based Services, MVNO, Indian Wireless market, India, BRIC, WiMax, Mobile Gaming, Japan wireless market, European wireless market, Mobile TV, Mobile Applications, Smart Phone, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Microsoft Mobile, Mobile Search, Wireless Value Chain, 4G , 3 comments

US Wireless Market Update - 4Q07 and 2007

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

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

• The US Wireless data service revenues grew 7.8% Q/Q to $6.9B in Q407. For the year 2007, the US wireless data service revenues grew to $24.5B, up 55% from 2006.
• Overall ARPU declined by $0.81and reversed the trend of overall ARPU uptick of the last two quarters. Average voice ARPU declined by almost $1.50 while average data ARPU inched up by $0.68 or 7%.
• Sprint lead in data ARPU with $11.50 (or 19.83% of the revenues) closely followed by Verizon at $11.06. Verizon was ahead in terms of data as % ARPU with 21.3% of its ARPU coming from data services. AT&T with $10 (or 19.89%) and T-Mobile with $8.2 (or 16%) rounded up the top 4.
• The strongest growth in 2007 came from Verizon and AT&T, with both of them tied at 64% YOY jump in data revenues. However, Verizon was ahead in dollar terms at $7.4B, accounting for almost 31% of the US industry data services revenue for the year. The top two were followed by T-Mobile at 56% and Sprint with 31% increase YOY.
• The average industry % contribution of data to service revenues jumped to 19.34%.
• In terms of net-adds, thanks to the Dobson acquisition and the iPhone sales, AT&T added 2.7M new subscribers followed by Verizon at 2M. The overall net-adds improved by 6.2M subs taking the total for the year to 20.8M, down slightly from 2006. Despite the 7% slowdown, there is plenty of growth left in the US wireless market.
• In spite of AT&T’s prolific quarter, Verizon ended up with the highest net-adds for the year at 7.7M subs vs. AT&T’s 6.9M.
• The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the year, Verizon with $7.4B, AT&T with $6.9B, and Sprint with $5.2B in data services revenues stood at #4, 5, and 6 respectively with Verizon closing in on KDDI for the number 3 spot. AT&T became the second US operator after Verizon to be in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
• Non-messaging data revenues continue to be in the 50-60% (of the data revenues) range for the US carriers.
• There was tremendous activity in the area of Mobile Advertising. Google is also laying out its tactical and strategic roadmap in hopes to dominate the space and while it succeeded in pushing FCC to change the 700 MHz auction rules, the future of Android alliance remains uncertain. It did however; help open the “open” debate in the industry. Meanwhile, Yahoo is busy creating some compelling applications and is stitching together carrier deals around the world.
• Venture money continued to flow into the mobile sector with over $4.9B investment in 2007 (Source: Rutberg). Location Services, Mobile Personalization, Mobile Video, Mobile Search and Advertising, Semiconductor, Carrier infrastructure, Device design and development are hot areas.
• iPhone helped AT&T find its voice. Since the introduction of iPhone in June 07, AT&T has reversed the multi-quarter trend of narrowing total subscriber difference with Verizon. Aided by the Dobson acquisition, the difference between the two companies stood at 4.4M subscribers in favor of AT&T (vs. 1.5M in Q107). iPhone also accounted for (higher) disproportionate mobile web usage exciting the ecosystem and media alike.
• Nokia eclipsed 100M unit sale in Q407 for the third straight quarter. It sold over 437M handsets in 2007, more than the next three handset manufacturers combined. Nokia’s global market share stood at 40.2%. Quite impressive.
• 3G penetration in the US touched 25% in 2007, with Verizon leading the pack with over 53% 3G subscriber penetration. AT&T reported that 3G subs have over $20 in data ARPU accounting for 30% contribution to the overall ARPU from such subs. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.
• There was tremendous discussion around “openness.” Bowing to the industry pressure, FCC’s 700 MHz spectrum auction included clauses for opening up the network by the winner. Sprint made progress with its upcoming launch of XOHM. Verizon launched its Open initiative. Google’s Android was announced in Q407. Though devices are slated to hit the market in 08, its overall impact remains uncertain.

Global update

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

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

Your feedback is always welcome.

Chetan Sharma

Carnival of the Mobilists #114 March 9, 2008

Posted by chetan in : AORTA, Carriers, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Indian Wireless market, BRIC, Mobile Gaming, European wireless market, Mobile Applications, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Mobile Search, Wireless Value Chain, CTIA , 7 comments

COM returns to AORTA. Welcome.

Over the past couple of quarters, the mobile industry has been pretty active with a series of initiatives, milestones, and launches and our fellow Mobilists from around the world bring you the analysis, insights, and commentary of the major events, new initiatives, gaffes and goofs, startup action and much more.

The best from the last week are:

Since June 07, Apple has been capturing the headlines like no other company in the ecosystem. Michael Mace at MobileOpportunity gives a thoughtful analysis of Apple’s iPhone SDK. Abhishek Tiwari and Tricia Duryee (at Moconews) also look at iPhone’s SDK and wonder if Apple is the new carrier? More SDK analysis by Gábor Török.

Ajit Jaokar, author and the yeoman at OpenGardens writes another insightful post, this time on “The significance of Google Gears on mobile devices” follow-up from this one.

Russell Buckley at Mobhappy talks about the “Uniqueness of the Mobile Channel” especially from an advertising perspective. Jamie Wells of Mobilestance which focuses on the US Mobile Marketing Perspectives provides insights into Buzzd, a company founded by Nihal Mehta of ipsh! fame. Nihal is well-versed with the mobile market and Jamie’s interview gives information on this new startup.

Peggy Salz at MSearchGroove provides some insightful commentary on the state of mobile search, mobile advertising and social media. She has a good podcast with Kate Edwards, CEO of Jentro Technologies.

Andreas Constantinou at Vision Mobile does a couple of brilliant posts on summarizing “Learnings from the MWC 08″ and lists his 10 predictions for MWC 09. Be sure to check out the Mobile Megatrends presentation as well.

Martin Sauter, author and curator of WirelessMoves opines on the overhyped battle between WiMAX and LTE. Media and analysts need some fights to keep things interesting

Dean Bubley at Disruptive Analysis in his usual analytical style makes the case for dismantling the control over the SIM card and by association, the SIM distributors.

Dennis Bournique of WAP Review provides a detailed review of WebClip2Go a content clipping service for your mobile devices.

Paul Ruppert - the Zenmaestro at Mobile Messaging 2.0 ponders on “what it means to be mobile?”

David Cushman at Fast Future writes about Microblogging and how twitter is enticing him into getting his iPhone.

Finally, some details on the Mobile Jam Session at m-trends. It is being hosted by Caroline Lewko and Rudy De Waele at CTIA in Vegas on March 31st.

Be sure to participate next time. Andrew Grill hosts the next Carnival. Send in your entries to mobilists at gmail dot com. Until next time, happy mobile daze ahead.

Mobile Industry Predictions - 2008 January 1, 2008

Posted by chetan in : AORTA, Carriers, Middleware, Security, M&A, 3G, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, Location based Services, MVNO, Indian Wireless market, BRIC, WiMax, Mobile Gaming, ARPU, Japan wireless market, Unified Messaging, Messaging, European wireless market, Mobile TV, Mobile Applications, Smart Phone, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Microsoft Mobile, Speech Recognition, Mobile Search, Wi-Fi, Wireless Value Chain, 4G, Privacy , 7 comments

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

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

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

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

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

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

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

Mobile Advertising was hailed as a great savior of mobile content and mobile revenues in general. Blyk even launched an advertising-based MVNO. We made significant headway in energizing the sub segment but the tough problems of privacy, education, control, fragmentation, and user experience remain. LBS picked up steam and mobility started to get into the alternate consumer device universe.

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

Among other events of significance: Cincinnati Bell and T-Mobile launched UMA devices, Motorola lost its Mojo, Amp’D and Disney Mobile shut down, MediaFLO launched, mCommerce initiatives took hold, China continued to delay 3G, WM got updated, Yahoo cemented some impressive operator deals as GYM got more active in mobile, UMPC fizzled, Mobile Web 2.0 got into the industry physce, LTE got embraced worldwide, M&A galored, IP scuffles continued, Muni projects went into coma, and DRM-adorned content became a thing of the past.

2008 will be a pretty eventful year from several perspectives: business models, user experience and expectations, ecosystem posturing, disruption, and friction. How are things going to shape up? What will be hot and what will fade into oblivion? How will competition shape up the new sub-segments? We put some of the questions to our colleagues in the industry. This survey was a bit different in the sense that the movers and shakers (and folks from the companies discussed here) and industry insiders participated. We were able to glean some valuable insights from their choices and comments. Participants (n=196) were folks from across the mobile value chain and from around the world.

Many thanks to everyone who participated.

(click for larger image)

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

The winners are:

1. David Cushman, Director, Emap

2. Larry Shapiro, VP, Disney, and

3. Keith Kostuch, SVP, Alltel

Congrats and Thank you.

Now onto the survey analysis.

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

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

Will it? Won’t it? 44.5% gave it a 75% or higher chance of happening while 40% thought it ain’t happening. GPhone is a temptation Google will find hard to resist though a lot will depend on how various initiatives and partnerships shape-up on the ground. In any case, expect another major announcement in the next 2-3 months.

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

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

3. Will Microsoft launch its own mobile phone?

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

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

Only 9% thought it is a sure bet for 2008. True mobile commerce hasn’t really started in the western world. While there are significant movements, 2008 will just be a “lay the groundwork” year for mobile payments.

5. Will WiMAX regroup from its setbacks?

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

6. Will Helio survive 2008?

Almost 70% respondents thought Helio won’t make it. Given the flameout of some of the prominent new-generation MVNOs, it is hard to see how Helio will see 2009. It will all come down to how persistent is SK Telecom. Earthlink doesn’t have the bank balance to keep funding this initiative.

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

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

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

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

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

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

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

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

11. Will Palm survive 2008?

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

12. Will iPhone truly open up?

Over 45% thought iPhone won’t open-up in any meaningful way. Apple has built-up one of the most profitable closed empires in the digital world. Are they about open things up? While the iPhone SDK is scheduled for early 08, don’t hold your breath on accessing the critical native APIs.

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

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

14. Will Mobile TV move the needle in 2008?

Almost 70% thought mobile TV won’t make much of a difference in 08.Though AT&T is slated to introduce MediaFLO to join Verizon in the Mobile TV services market, lack of devices and better pricing models will hinder wide adoption in 2008. However, downloadable video and VOD content will experience significant growth.

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

Only 15% gave it a more than 75% chance this year. It is going to take some time for Android plans to mature and materialize. Don’t see any material impact in 08.

Of course, 15 questions can’t cover the whole industry. As pointed out our respondents, there are a number of other issues and opportunities that will shape the ecosystem - Rise of Facebook as social networking OS for mobile (social networking as a whole starts to go mobile), LBS beyond navigation, Rev-share shuffles, Chinese OEM start to become prominent in the western world, China and India continue to dominate in net-adds, Mobile device security becomes a nightmare for corporate IT, Consumers wake up to mobile privacy snafus and risks, Will Android spread its tentacles beyond nicheosphere, 3G iPhone, Does China Olympics hold any surprises for the mobile industry? Launch of projection handsets, NFC handsets, IMS .. and much much more ..

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

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

Your feedback is always welcome.

Chetan Sharma

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

Posted by chetan in : AORTA, Carriers, Speaking Engagements, 3G, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, Indian Wireless market, India, BRIC, WiMax, Mobile Gaming, ARPU, Japan wireless market, Unified Messaging, Messaging, Mobile TV, Mobile Applications, Smart Phone, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Speech Recognition, Mobile Search, Wi-Fi, Wireless Value Chain, 4G , 15 comments

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

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

The panelists for the discussion were:

(above L to R)

Eric Allen, VP, FunMobility (Moderator)

Ashok Narsimhan, Chairman and CEO, July Systems,

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

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

myself, and 

Niren Shah, Managing Director, Norwest Venture Partners,

It was an honor to be part of this discussion.

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

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

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

So, who is actually making money? Clearly the most amount of money is in the infrastructure-related items. Infrastructure is something that is absolutely needed to expand and though the margins shrink quite a bit, it is somewhat made up in volumes. Unless you have unique Intellectual Property that creates barriers to entry, software and/or content companies haven’t had much luck (similar to the trends in China) as the local competition is stiff. Overseas companies who jump in without understanding the market lured by the growing numbers are destined to be surprised.

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

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

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

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

You can access the released report here.

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

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

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

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

Your feedback is always welcome.

Chetan Sharma

CTIA Wireless IT and Entertainment 2007 Roundup October 28, 2007

Posted by chetan in : AORTA, Infrastructure, Strategy, Carriers, Middleware, Enterprise Mobility, Security, 3G, Partnership, Devices, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, MVNO, BRIC, WiMax, Mobile Gaming, ARPU, Messaging, European wireless market, Mobile TV, Mobile Applications, Smart Phone, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Microsoft Mobile, Mobile Search, Wireless Value Chain, 4G, Privacy, CTIA , 4 comments

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

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

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

Keynotes - The central theme that tied the three keynotes was “Be Open, Do Good Work, and Rest will take care of itself.” The keynotes from Steve Ballmer, Microsoft, Dustin Moskovitz, Facebook, and Atish Gude, Sprint Nextel emphasized the need to have an “open platform” for innovation, applications, and services. Haven’t we been down this lane before?

Steve started by taking a page out of our (upcoming) book, literally (page 243 to be exact) and describing a vision where mobile device becomes the remote control of your life for both workstyle and lifestyle. Too often we focus on separating out personal vs. professional but our lives are so intertwined that one minute you are setting up a doctor’s appointment and the next minute closing a sale. Companies that focus on managing the experience start to finish (waking to sleeping) independent of everything else will be the ones that dominate these turf wars. Microsoft’s big announcement was the release of device management server that includes mobile devices in addition to the desktop world (but it is limited to windows mobile devices only, Open?). Microsoft has been making impressive strides in occupying its place in the mobile ecosystem. Though windows mobile and battery life don’t go together, the fact that they are deployed with 160 operators in 55 countries, shipping 20M devices/year places them at a significant advantage in the coming days.

Facebook’s Moskovitz made the plea for openness of networks, devices, and applications to enable the social networking phenomenon on mobile. The fact that Microsoft and Facebook were doing the keynotes on the eve of strategic investment wasn’t a coincidence. Dustin brought out the elderly statesman Mike Lazaridis to announce the facebook app for Blackberry smartphones. The interesting thing was how the app was introduced - Facebook chose RIM and RIM chose T-Mobile for this app. Device manufacturers are surely getting bolder. Facebook extended its platform to mobile. Getting social networking apps on mobile is a no-brainer. In fact, the coming enhancements with Presence, IMS, Broadband, Profiling, Location, can make mobile social network a society of its own.

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

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

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

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

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

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

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

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

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

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

iPhone continues to dominate the talk - iPhone continues to set the tone of discussion in the industry. Since July, there has hardly been a mobile conference worth its salt that hasn’t had a session on “impact of iPhone.” There hasn’t been a mobile device like this one and it shows. Attendees proudly fiddled with their iPhones in public and were eager to discuss their experience and forecasts.

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

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

Misc

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

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

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

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

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

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

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

Your feedback is always welcome.

Chetan Sharma

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

Posted by chetan in : AORTA, Strategy, Carriers, Middleware, 3G, Devices, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, International Trade, MVNO, Indian Wireless market, BRIC, Mobile Gaming, ARPU, Japan wireless market, Unified Messaging, Messaging, European wireless market, Mobile TV, Mobile Applications, Worldwide Wireless Market, Mobile Usability, Mobile Ecosystem, Microsoft Mobile, Mobile Search, Wireless Value Chain, 4G , add a comment

Whitepaper

Unified Mobile Data Platform An Analytics based approach

Sponsored by InfoSpace Mobile

Download PDF (30 pages, 1MB)

Executive Summary

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

Table of Contents

Executive Summary                                                               2

Evolution of data services                                                      3

Integrated solution offering                                                   11

Mobile Search - providing impetus for integration                   15

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

Analytics driven unified framework                                        21

Mobile Advertising                                                               26

Recommendations                                                               29

Conclusions                                                                         30

Your comments are always welcome.

Chetan Sharma

NY Times Article - Fever Builds for iPhone (Anxiety Too) June 4, 2007

Posted by chetan in : Carriers, Speaking Engagements, US Wireless Market, Mobile Content, Mobile Entertainment, Mobile Gaming, ARPU, Mobile Applications, Smart Phone, Mobile Usability, Wireless Value Chain , add a comment

John Markoff of NYT interviewed me for this iPhone article. It will appear in tomorrow’s paper.

(Source: NYT)

http://www.nytimes.com/2007/06/04/technology/04iphone.html

Fever Builds for iPhone (Anxiety Too)

By JOHN MARKOFF

SAN FRANCISCO, June 3 — During an onscreen demonstration of the iPhone in Apple’s sprawling retail store here recently, an employee, clad in a black T-shirt, of course, surprised a potential customer.

Nonplused, the customer stammered, “You mean it’s a cellphone, too?”

Such is the spell that Steven P. Jobs has cast on the American consumer.

It has been almost six months since Mr. Jobs, the world’s consummate salesman, introduced the iPhone as the Ronco Veg-O-Matic for the Internet era. Tongue only partly in cheek, Mr. Jobs promised that Apple’s entry into the cellular handset market would be a better phone, Web browser and music player.

Mr. Jobs succeeded in building expectations for what some have called “the God machine.” The bar-of-soap-size phone is being coveted as a talisman for a digital age, and iPhone hysteria is beginning to reach levels usually reserved for video-game machines at Christmas.

Although the phones are expected to cost as much as $600 when they go on sale at Apple and AT&T stores later this month, each company has received more than a million inquiries about the product’s availability. Apple disclosed in television commercials Sunday night that the phone would be released June 29.

Further evidence that expectations have been wound up to a fever pitch: the phones, or promises to deliver a phone, are already on sale on eBay for $830. A pundit as unlikely as Arianna Huffington sought out Mr. Jobs directly for advice on being the first to score a phone. (He told her to go to an AT&T store.)

Last week, during an appearance at a technology industry conference in Southern California, Mr. Jobs teased the audience by briefly pulling an iPhone out of his jeans pocket and immediately slipping it back out of sight.

The anticipation, which is inte