2010 Mobile Industry Predictions Survey January 3, 2010
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2010 Mobile Industry Predictions Survey
http://www.chetansharma.com/MobilePredictions2010.htm
Mobile Predictions Survey (pdf)
Mobile Predictions Survey (ppt)
First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2010. Thanks to all who participated in our 2010 Mobile Predictions Annual Survey. We have found it is the best way to think about the trends coming our way.
Before we dive into the survey results, let’s do a quick wrap-up of the year that was. Well, since we just completed one heck of a mobile decade, let’s do a quick jog down the memory lane.
The Last Decade: 2000-2009
Each new decade brings its own consumer and technology trends. During the 2000s mobile cemented its place in the global society fabric, the use of mobility became addictive and pervasive, to be without mobile seemed a curse and innovation blossomed and took user expectations to new heights.
From a pure statistical point of view, the global mobile subscription penetration grew from 12% in 2000 to approximately 68% in 2009 - phenomenal by any measure. The overall revenues grew over 400%, the data revenue grew 32,600% and the total subscriptions grew 563%. NTT DoCoMo paved the way with the i-mode launch in 1999 and they were the operator to emulate throughout the last decade, leading every single year in data revenues, in new application and service revenue sources, and in innovation and risk taking. They tried to export the success to other regions with little reward but DoCoMo clearly led the industry in taking mobile devices where they have never gone before.
China and India were late to the party but during the second half of the decade caught up with the western world and eventually surpassed all nations becoming number one and two nations by subscriptions respectively. In 2006, China Mobile became the most valuable operator passing Vodafone.
Mobile devices went significant transformation as well. From the early Bluetooth, camera, and music phones to the iPhones, the Storms, and the Androids, the industry was transformed by the introduction of Apple’s iPhone in 2007. While Bluetooth, sleek designs, camera phone defined the first half of the decade, the second half was all about the applications and the mobile web. While Nokia dominated the entire decade in terms of the sales and profits, having missed the touch revolution, it leaves the decade a bit battered and a bit behind playing catch-up to the newcomers who profoundly disturbed the status quo.
Razr carried Motorola through 2006 when its global share peaked but was left to reinvent itself during the second half. It seems to have redeemed itself with the successful launch of Droid and upcoming Android devices. While many in the industry predicted RIM’s demise, the company has only gotten stronger and is looking good for the 2010s. The emergence of Samsung and LG as strong players in the mobile ecosystem was also a big story of the decade with Samsung increasing its share by 380% and LG by 575% becoming the number 2 and 3 players respectively.
While Microsoft’s Windows Mobile had an early start and the enterprise market share, it lost its way through several missteps and is on dialysis as we enter the new decade. One shouldn’t count WM out though but there is a lot of work to be done before it can capture the imagination of the ecosystem which has been sequestered away by iPhone and Android.
While many new application areas were introduced during 2000s, none was able to displace SMS as the leading app category by usage and revenues. However, it’s relative share has started to come down especially in North America and Western Europe.
As data usage grew, so did the data traffic bringing many data networks to their knees. We expect the data traffic consumption to only accelerate. Many people are underestimating the growth rates (as they did previously) and the strain the increase in consumption will put on the unprepared networks. Projector phones will take media consumption to a new level. Data management is going to be big business in the 2010s.
Overall, the mobile industry became a trillion dollar industry in 2008 and the data revenues are increasing in almost all regions. Voice is being commoditized at fast pace and that has put the traditional economics and ecosystem wealth distribution in topsy-turvy.
The US market also experienced tremendous growth with mobile data service revenues climbing 21,327% and becoming a mainstay in the mobile economy. In 2008 it crossed Japan as the most valuable mobile data market. US was late in adopting SMS but caught fire once American Idol started using it and even played a good role in the 2008 Presidential election in showcasing the power of mobile. Verizon started the decade being the number one operator and after trading places with Cingular and ATT grabbed the title back in 2009 (after the Alltel acquisition) to become the most dominant carrier in North America. Many smaller players competed by being innovative with Cincinnati Bell launching the fist UMA device, Sprint the first mobile eReader, and TMO launched the hotspot business which has now become an essential component of an operator strategy going forward.
Mobile is also replacing landline at a much faster pace than expected and within the first half of the new decade, we will have majority of the users using mobile vs. landline. Just like the last decade, this one starts with a new standard deployment of LTE that will keep operators and vendors busy throughout the decade. However, a lot of the developing markets will still be deploying 3G during the first half of the decade.
Infrastructure providers suffered the most in the decade bookended by the two recessions. Consolidation of giants (Alcatel Lucent, Nokia Siemens), bankruptcies of the famous (Nortel), and uprising of the upstarts (Huawei) pretty much defined the decade for the segment. Ericsson and Huawei enter the new decade from a strong position and looking to dominate the global markets.
The last decade was also marked by some prominent IP battles such as RIM vs. NTP, Qualcomm vs. Broadcom, Sony Ericsson vs. Samsung, Upaid vs. Satyam etc. (disclaimer: we worked on some of these cases and testified as an expert)
Here is our “subjective” list of movers and shakers of the last decade
2000-2009
2010-2019
Operator of the Decade
NTT DoCoMo
DCM led the way in almost all new category of apps and services. Its data service revenue was highest in each of the last 10 years
DCM will continue to lead along with KDDI and SKT. However, it might be the carriers with tremendous scale who will have the calling cards in the new decade. Watch for China Mobile, Vodafone/Verizon, Telefonica, Orange, Bharti, Unicom, Singtel
OEM of the Decade
Nokia
Nokia dominated in sales and revenues in each of the 10 years and while the last couple of years took some shine off its glorious past, the company nevertheless came out ahead
RIM, Apple, Nokia, Samsung
Smartphone OEM of the Decade
Apple
Smartphones as we know them were introduced by RIM but Apple defined the category and the subsequent ecosystem
This space will be very competitive with Apple still the gold standard to beat
Infrastructure Provider of the Decade
Ericsson
Its prime rivals struggled to stay afloat while Ericsson grabbed most of the revenues from infrastructure contracts and is very well positioned for the next decade
Ericsson is joined by Huawei as the two top infrastructure provider with Huawei giving tough competition for LTE contracts. ZTE and other Chinese infrastructure providers will also replace some of the incumbents
Nation that led in mobile data
Japan
This is a no brainer. Japan led with Korea a close second. Finland, UK also impressed
US, China, and India are well positioned to make an impression but most likely during the second half. Japan will still be a major player
Device of the decade
iPhone followed by Razr
iPhone impressed with form and function while Razr with its global sales making it a top selling device of all times
The field might get more crowded as all OEMs focusing on the smartphone category. However, OEMs who also focus on the 90% of the market w/o smartphones might win the top prize
The year 2009
Apple continued to dominate the headlines for the third straight year - whether it was the launch of 3GS or the upcoming introduction of the fabled tablet. Google too kept the ecosystem active. It has executed on its mobile strategy with brilliant acumen though causing significant consternation amongst its partners who it needs to be successful. It has been often misunderstood by competitors, regulators, and partners. Often, they have focused on Google’s tactics vs. its strategy. Look for these two players to be very aggressive as they try to fight for the mantle and the mindshare.
While Nokia leads the OEM space by a good distance, its momentum in the smartphone space left a lot of question marks. Motorola made a credible comeback with Cliq and Droid. Samsung and LG continued to innovate and expanded on their share of shipments and revenues.
India outpaced China in net-adds and crossed 500M though it is still quite behind China’s 750M. The M&A and the consolidation process became active in Asia with several of the big regional operators looking to flex muscles in the international markets. After several delays, China started deploying 3G while India again fumbled and postponed its 3G auction.
US mobile data market continued its pace in 2009 with each of the four quarters exceeding $10B in data service revenues. The gap between the top two operators and the rest grew to be the biggest in the decade and the industry weathered the recession with ease. There was a clear shift towards prepaid especially for Sprint, T-Mobile, and the tier 2/3 operators.
2009 was also defined by significant activity on the application front. With Facebook eclipsing 100M subscribers and Appstore exceeding 2.5B downloads, sky is the limit.
The year also saw an unprecedented growth in mobile data consumption. As we had predicted, for some of the networks, the growth proved to be a double-edged sword. Many in the industry are banking on LTE to help relieve the pain but will be surprised that depending solely on the upgrade strategy will not be enough. Declaring spectrum as a looming crisis, FCC also started tinkering with the mobile industry and the broadband plan.
Japan exceeded 90% in 3G penetration while US subscriptions ventured into the 90% territory. Most of western Europe is way past 130%.
All in all, a terrific year considering that we went through one of the worst recessions in a generation. As we bid goodbye to the last decade, Nexus One and iTablet only serve to whet our appetite of what’s to come.
On a personal note, we started our consulting practice this last decade as we were coming out of the bubble recession and have been fortunate to work with some of the brightest brains and companies in the global ecosystem. We also had a chance to work on some key initiatives that impacted the ecosystem in profound ways. Many thanks to our clients, colleagues, friends, and readers. We will be involved with many new initiatives over the next decade and are looking forward to the conversations through the research notes, books, speeches, panels, whitepapers, blog posts, facebook and twitter feeds, and more.
Thanks and Happy New Year. May the upcoming decade leave you happier, healthier, and more successful than the previous one.
As we eluded to earlier, 2010 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. We were able to glean some valuable insights from their choices and comments. This survey is different from some of the others in the sense that it includes industry movers and shakers participation. Executives and insiders (n=150) from leading mobile companies across the value chain and around the world opined to help us see what 2010 might bring.
11 names were randomly drawn for 3 special prizes. The winners are:
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Claire Boonstra, Cofounder, Layar- INQMobile 3G Chat device
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Michael Libes, CTO, GroundTruth - Open Mobile Book
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Henri Moissinac, Head of Mobile, Facebook - Open Mobile Book
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Subba Rao, CEO, TataDoCoMo - Open Mobile Book
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Saumil Gandhi, Product Manager, Microsoft - Open Mobile Book
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Sarah Reedy, Senior Editor, Connected Planet - Open Mobile Book
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Mike Vanderwoude, VP & GM, Cincinnati Bell Wireless - 2010 Mobile Almanac
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Pinney Colton, VP, GfK - 2010 Mobile Almanac
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Tim Chang, Principal, Norwest Ventures - 2010 Mobile Almanac
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Laura Marriott, President - 2010 Mobile Almanac
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Asha Vellaikal, Director, Orange - 2010 Mobile Almanac
Thanks to INQMobile and my friend Ajit Jaokar for contributing the prize gifts.
Despite conventional wisdom, what will not happen in 2010?
There were many. Sampling - Verizon iPhone, Microsoft Phone, Sprint will not be bought, Femtocells won’t gain traction, RCS will not happen, Google will not enter handset market directly, iPhone won’t lose steam, Android won’t bring coherence, NFC won’t take off, WiMAX won’t disappear, Nokia won’t bounce back, Palm won’t die, “Year of Mobile” noise won’t subside, carriers won’t be delegated as dumb-pipes.
It is hard to cover the mobile industry in 20 questions. As pointed out by our panelists, there are a number of other issues and opportunities that will help shape our ecosystem - monetization of social networks, augmented reality, the fight for mobile advertising dollars, continued impact of globalization, security and privacy, NFC, IMS, VoIP, enterprise apps beyond email, battery improvements, new interaction modalities, health risks of RF radiation, Mobile 3.0, LTE, single purpose devices, 3G in India, Bada, app vs web, developer turmoil, featurephones, smart grids, M2M, Chrome, etc.
However, be rest assured, we will be tracking these and much more throughout the year and sharing them through various channels.
Thanks again to everyone who contributed. We will be calling on you again next year. We are clearly living in "interesting times" with never a dull moment in our dynamic industry. It has been a terrific year for us here at Chetan Sharma Consulting and we are looking forward to the next decade and seeing many of you along the way.
We hope you enjoyed gaining from the collective wisdom. Your feedback is always welcome.
Be well, Do Cool Work, Stay in touch.
Thanks.
With warm wishes,
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are our clients.
Now onto the 2010 Mobile Industry Predictions Survey Results
The panel comprised of movers and shakers from around the world
What will be the biggest stories of 2010?
Jan seems to be the Google Phone vs. Apple Tablet matchup. Our panel though voted for the continued growth in mobile data as the top story.
Have we recovered from the recession? (Please select one)
Majority thought we are out of it though some might still feel the pinch
Who will be the most open player in the mobile ecosystem in 2010? (Please select one)
Google has done a great job at maintaining its image as THE open leader
Will Android handset sales exceed iPhone’s in 2010? (Please select one)
Despite Androids coming in droves, iPhone will still be the king of the hill
When will we see tiered pricing plans for smartphones in the US from tier 1 operators? (Please select one)
There are indications that this might happen sooner rather than later
What will happen to the mobile prepaid subscriber base in the US? (Please select one)
Prepaid made a strong comeback in 2009 and a good majority thought that the trend is likely to continue
By how much will the mobile advertising ad-spend increase in 2010? (Please select one)
Mobile Advertising was the only advertising segment with positive growth last year so it is no surprise that folks expect it to more than double this year
What will be the impact of the FCC’s national broadband plan on the mobile industry in 2010? (Please select one)
Not much is expected from the various rulings that might come this year with most expecting the courts to have the final word.
Who will be the mobile comeback story of 2010?
Having bet its future on Android, Motorola was voted as the comeback kid of 2010
What will be the impact of Google Phone?
It’s pretty clear, Google and Apple are duking it out for the developer mindshare. Google wins in either case.
Which areas will feel the most impact from FCC?
Net neutrality is the area where they will have the most impact
Which solutions will gain the most traction for managing mobile data broadband consumption?
While only a holistic approach can provide complete relief, tiered mobile data pricing might have the most impact
When will the carrier-branded appstores lose steam? (Please select one)
Most expect carrier-branded appstores to be a thing of the past in 2010
What will help mobile cloud computing gain traction in 2010?
Mobile cloud computing is gaining steam and the reason is storage and media
What will be the most successful non-mobile-phone category in 2010? (Please select one)
Netbooks seem to be the strongest category followed by eReaders, Tablet, and M2M
What will be the breakthrough category in mobile in 2010? (Please select one)
Mobile Advertising and Mobile Payments share the top honors
By the end of 2010, which will have more subscribers? (Please select one)
LTE might have the momentum but WiMAX has the subscribers
How will Netbooks do through the operator channel? (Please select one)
No major impact from the operator channel
Which standards will gain traction?
No major impact from the standards
What mode of mobile payments will get any traction in North America and Western Europe in 2010?
The category will expand in different ways with more items being charged on the operator bill
New Book: Enterprise Mobility: Applications, Technologies and Strategies August 24, 2008
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, IP, IP Strategy, Indian Wireless Market, Japan Wireless Market, Location Based Services, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Networks, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Strategy, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments
Enterprise Mobility: Applications, Technologies and Strategies
IOS Press
Chapter Contribution
“Enterprise mobile product strategy using scenario planning”
SAMIMUNEER (SAP) and CHETANSHARMA
http://www.chetansharma.com/enterprise_mobility_scenario_planning.htm
Each year, we work on strategies and product plans for our clients around the world that end up touching millions of consumers worldwide and do behind-the-scenes research, due-diligence, and analysis work on several critical deals and transactions that move our industry forward. But, rarely do we talk or write about them, due to obvious reasons.
However, last year, I got an opportunity to briefly write about some of the strategy work. On the request of Dr. Basole at Georgia Tech, my colleague Sami Muneer (Sr. Director, Enabling Solutions at SAP – responsible for all things mobile) and I drew from some of the long-term strategy and product planning work we had done for SAP to put together a paper on “Enterprise mobile product strategy using scenario planning.” SAP is the leading global enterprise player and their view of the world is both comprehensive and long-term. It was a privilege to work with their global team on the project.
Our paper is being published as a chapter in the just released book “Enterprise Mobility: Applications, Technologies and Strategies” (IOS Press, Amsterdam. 272 pages, Editor R. Basole, 2008) as part of The Tennenbaum Institute Series on Enterprise Systems. The chapter is also being published in the special issue of peer-reviewed International Knowledge Systems Management (IKSM) journal published by Georgia Tech.
The book is a collection of 13 chapters from academics and practitioners in enterprise mobility. I often use scenario planning techniques when doing long-term strategic assessment and forecasting. In this chapter, we hope to provide a framework for scenario planning in mobile that can go across verticals, applications, and services.
You can download the chapter here.
IKSM is making available all the chapters online (for free) if you register for a free one year subscription.
For those interested in reading the paper copy can order the book here.
Book Introduction
As the number of enterprises using mobile ICT increases, it becomes imperative to have a more complete understanding of what value and impact enterprise mobility has, what drives and enables it, and in what ways it can and will transform the nature and practices of work, organizational cultures, business processes, supply chains, enterprises, and potentially entire markets. Enterprise mobility is therefore a topic of great interest to both scholars and practitioners. Enterprise Mobility: Researching a new paradigm aims to contribute to and extend both our theoretical and practical understanding of enterprise mobility by exploring the necessary strategic, technological, and economic considerations, adoption and implementation motivators and inhibitors, usage contexts, social implications, human-centered design issues, support requirements, and transformative impacts. The main objective is to discuss applications, technologies, strategies, theories, frameworks, contexts, case studies, and analyses that provide insights into the growing reality of enterprise mobility for scholars and practicing managers. This volume contains thirteen articles from leading scholars and practitioners and includes an examination of the changing nature of work, work practices, and the work environment; a discussion of critical enablers of enterprise mobility; authors exploring strategic considerations; and insightful case studies of enterprise mobility across multiple domains. Together, the articles explore enterprise mobility across the entire continuum.
Enterprise mobile product strategy using scenario planning
Author(s): Sami Muneer and Chetan Sharma
The Mobile industry is changing at a rapid pace and so is the behavior of enterprise workforce which uses mobile technologies. When planning for a long-term product roadmap, one has to consider a myriad of evolution trends and forecasts to determine the probable list of product functionality and their introduction timing in the lifecycle of the product. One has to look at the technology trends by market, the competitive landscape, and the mobile worker adoption trends. However, one can only come up with a prioritized list of capabilities by taking into context the company’s own core competencies, skill sets, and overall mission. This paper looks at how mobile product companies can use scenario-planning methodology to formulate their product strategy and roadmap.
The listing of the chapters is as follows:
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Enterprise mobility: Researching a new paradigm
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The convergence of wireless, mobility, and the Internet and its relevance to enterprises
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Business mobility: A changing ecosystem
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A socio-technical perspective of mobile work
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Designing productive spaces for mobile workers: Role insights from network analysis
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Telecommuting and corporate culture: Implications for the mobile enterprise
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User requirements of mobile technology: A summary of research results
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Mobile interaction design: Integrating individual and organizational perspectives
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A comparative anatomy of mobile enterprise applications: Towards a framework of software reuse
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Protecting data on mobile devices: A taxonomy of security threats to mobile computing and review of applicable defenses
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Enterprise mobility and support outsourcing: A research model and initial findings
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Enterprise mobile product strategy using scenario planning
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The strategic value of enterprise mobility: Case study insights
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Exploring enterprise mobility: Lessons from the field
Your feedback is always welcome.
Thanks.
Chetan Sharma
Inside the USPTO: A Guide to the Patenting Process April 30, 2008
Posted by chetan in : AORTA, IP, IP Strategy, Intellectual Property, International Trade, M&A, Mergers and Acquisitions, Mobile Applications, Mobile Content, Mobile Ecosystem, Patent Strategies, Patent Strategy, Patents, Wireless Value Chain, Worldwide Wireless Market , add a commentInside the USPTO: A Guide to the Patenting Process
by Carlos Villamar and Chetan Sharma
http://www.chetansharma.com/insidetheuspto.htm
Note: We have an integrated approach to strategy as we strongly believe that taking market research, business, technology, and intellectual property inputs into strategic initiatives is essential in obtaining a long-term sustainable competitive advantage in the industry. To further the dialogue on the subject, we will be publishing several articles, white papers, books, and blog posts over the course of next few months. This white paper is to help entrepreneurs and inventors understand the patenting process.
This white paper was a collaboration with Carlos Villamar, Partner, Roberts Mlotkowski Safran & Cole. Carlos is a patent attorney who has also worked as a patent examiner at the USPTO.
Abstract
Patents are a key corporate asset that can give the inventor and the company an invaluable tool to protect and commercialize inventions. The process of obtaining a patent is an important one from start to finish. Beginning with patent strategy, due-diligence and patent search through the United States Patent Office (USPTO) process to finally getting the grant, one needs to have a good understanding of each step. This increases the probability of success by removing uncertainty from the process. Inside the USPTO: A guide to the patenting process takes a detailed look at the ideation and the patent process, specifically, how patent applications flow through the USPTO. By having a good grasp of the intermediate steps and the various decision points associated with each of them, the paper discusses how entrepreneurs and inventors can maximize their chances of securing a patent.
Introduction
We live in a knowledge economy and Intellectual Property is a key asset in this new ecosystem. Patents are one of the essential elements to creating barriers to entry for rivals, building credibility and confidence of investors, customers, partners, and employees, providing clarity as to the property ownership, demanding leverage from the industry, and for generating revenue from licensing and sale.
The knowledge economy thrives and sustains on ideas and competitive advantage based on intellectual property. For individuals, the prestige associated with being an innovator and first to secure patents in a given field motivates them to be creative and innovative. Entrepreneurs, engineers, and inventors can benefit from understanding how to secure and maintain their intellectual property rights. This paper discusses the important steps in designing, filing, procuring, and defending your patent rights.
The following diagram illustrates at a high-level the patenting process and important considerations in the decision flow chart. The flow chart is discussed in detail in the subsequent sections.
Table of Contents
| Abstract | 3 |
| Introduction | 4 |
| Pre filing due diligence | 6 |
| Patent preparation | 9 |
| USPTO filing | 11 |
| USPTO examination | 13 |
| After approval | 16 |
| Conclusions and Recommendations | 17 |
Download the full white paper here.
Your feedback is always welcome.
Coming Soon: Inside the USPTO - A guide to the patenting process April 29, 2008
Posted by chetan in : IP, IP Strategy, Patent Strategies, Patent Strategy, Patents , add a comment
Abstract
Patents are a key corporate asset that can give the inventor and the company an invaluable tool to protect and commercialize the inventions. The process of obtaining a patent is an important one from start to finish. Beginning with patent strategy, due-diligence and patent search through the United States Patent Office (USPTO) process to finally getting the grant, one needs to have a good understanding of each step to increase the probability of success and thus remove uncertainty from the process. Inside the USPTO: A guide to the patenting process takes a look the ideation and the patent process from start to finish, specifically, how patent applications flow through the USPTO. By having a good grasp of the intermediate steps and the various decision points associated with each of them, the paper discusses how entrepreneurs and inventors can maximize their chances of securing a patent.
Inside the USPTO: An In-Depth look at the art of securing a patent April 18, 2008
Posted by chetan in : IP, IP Strategy, Patent Strategies, Patent Strategy, Patents , add a comment
As some of you know, I work extensively in the Intellectual Property Space. Over the past few weeks, I have been collaborating with a good friend and colleague of mine - Carlos Villamar, Partner at Roberts Mlotkowski Safran & Cole in Washington DC on a paper that takes an in-depth look at the processes and strategies required to secure a patent. In his past life, Carlos was a patent examiner with the USPTO so his insights have been very valuable.
We will be releasing the paper in early May. Stay Tuned.
Nortel and Vonage settle December 31, 2007
Posted by chetan in : Patents , add a commentAnother patent lawsuit settlement, 4th in a row. Who is next? Companies without any IP strategy run the risk of thrown around like a football. Vonage is a perfect case study. They are draining their resources into legal fights whereas it would have been more prudent and cheaper to devise an IP strategy up front.
Samsung receives most design patents in 2007 December 30, 2007
Posted by chetan in : Patents , add a commentIn 2007, Samsung Electronics received over 550 design patents the most ever issued to a single company in one year. Sony holds the most design patents, and is followed closely by Nike
New Whitepaper: What is your Patent Portfolio Quotient? July 17, 2007
Posted by chetan in : 3G, 4G, Carriers, Indian Wireless Market, Intellectual Property, International Trade, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Patents, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 commentshttp://www.chetansharma.com/patentportfolioquotient.htm
Over the last twenty years, the global economy has slowly transformed into a vibrant knowledge economy. With reduced barriers to entry and pervasive globalization, a small company in a developing world can compete for its share on the world stage. The invention of new ideas and products remains an integral part of the global economy and the commercial food chain. Patents are an invaluable tool to protect and commercialize the inventions. They are essential to creating the barriers to entry for rivals. They are needed for building the credibility and the confidence of investors, customers, partners, and employees. They are required for providing clarity as to the property ownership, for demanding leverage from the industry, and for generating sustainable revenue from licensing and sale.
In the global marketplace, amongst all the other competitive factors, innovation matters the most and patents can help deliver the competitive edge required to remain viable. Inventors who used to see patents solely as part of their defensive strategy (and to alleviate any future litigation risks) to prevent competitors encroach their space are looking to be more aggressive with their inventions to make patents part of their offensive and licensing strategy. To ensure the financial security of the patents, some companies are embedding their IP programs as part of their Knowledge Management and Risk Management initiatives where they capture know-how, harvest IP and ingrain IP into their product development lifecycles.
Patents will continue to grow in their contribution as a key corporate asset. Since much value is associated with patents, the industry need better tools to assess and to understand the valuation and the strength of the patent portfolios. This paper will introduce the methodology of Patent Portfolio Quotient (PPQ) to measure performance of your patent program and portfolio that enables a Return on Investment (ROI) driven approach. PPQ measures the quality of the patent portfolio and the patent program with clear policies and procedures as it relates to the lifecycle of patents within an organization from innovation to licensing or sale. We will review the importance of patents as a tool for competitiveness and their value to a corporation. Next, we will address - why a patent program should be integrated with product development lifecycle to extract the maximum value from their intellectual property assets. Finally, the paper will introduce the basics of PPQ and discuss what inventors and companies can do to increase their PPQ.
Please download the complete paper - PDF (22 pages, 1MB)
Table of Contents
Introduction 2
Patents as a tool for Competitiveness 4
Analyzing Patent Portfolio Quotient or PPQ 12
Patent Program Strategy 15
Integration of IP Strategy with Product Development 17
Recommendations and Conclusions 19
Your comments are always welcome.
Chetan
CTIA, MES, MECCA Fall 2006 Roundup September 18, 2006
Posted by chetan in : 3G, 4G, AORTA, ARPU, CTIA, Carriers, Devices, Enterprise Mobility, Federal, Gaming, General, Infrastructure, Intellectual Property, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Networks, Partnership, Patents, Smart Phones, Speech Recognition, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 2 comments
Los Angeles was the venue for the annual CTIA Wireless IT and Entertainment 2006. Pre-show events included Mobile Entertainment Summit (Chetan Sharma Consulting was a research partner) and MECCA. This note summarizes the observations and commentary from the above shows.
First lets do the numbers. Just before CTIA, M:Metrics released some numbers from their most recent survey. Amongst the western nations, US has just over 5% 3G penetration with UK leading the way at 11.4%. Spain and France are at 8.9% and 7.9% respectively. In the US, Verizon is ahead with over 17% 3G subscriber penetration followed by Sprint at 6%. CTIA also released their survey numbers. 12.5 billion messages in the month of June 2006, up 71% from 7.3 billion messages in June 2005. There was 70% growth in service data revenues. You probably already knew most of the above after reading our research notes here and here, weeks and months ahead of the mainstream media.
MES and MECCA. The central theme from both the shows was community and advertising. The buzz shifted from Mobile Search, Mobile TV, and IMS during the last couple of shows to Mobile Advertising. The prospective lifecycle of product development goes like this build community (whether it is around user generated content, games, artists, bands or other) and monetize the community by advertising. The permutation and combination of the business models are: free application and/or free content, subscription, earn credits for watching ads, more credits for feedback/surveys, etc. Companies who are able to build a large mobile community (at least 5-10M active users) and gather some specific demographic data become hot property of the moment. It is important to note that the mindset for an exit strategy for companies in the social media and user generated content space has changed a bit. Instead of getting acquired by software or computing companies like Google and Yahoo (yes, yes, they are media companies as well) to traditional Media companies like FOX and HBO. This was quite apparent in a number of discussions I had with the executives from new media content companies.
Enterprise focus, Finally!. I have been involved in the mobile enterprise space since 1999 and have been coming to the CTIA for a number of years. The fall show is supposedly about dual personalities of Entertainment and Enterprise. For the first time it felt that the Enterprise side was given its due respect and was on an equal footing to its sibling personality - the glamorous, the attention-seeking Entertainment. CTIA started the conference with an Enterprise panel discussion (of course after the surprise Governator keynote). Though the discussion was too high-level to provide any key insights, CIOs confirmed what is well known now that the spending on wireless-data related projects is going up significantly. A surprise revelation was that Chinas growth in enterprise solution is among the highest in the world. It is all about productivity and ROI. Companies are also looking to outsource their IT operations related to wireless devices. Handset guys are coming out with Enterprise targeted devices though we are still in the very early stage development of the cycle. Throwing an email client on the device doesnt make it an enterprise device. Email client is a given in all new handsets now. When will we start seeing embedded enterprise apps? Mobile web services clients and frameworks?
Its an Ad, Ad, Ad, Ad world. Mobile advertising is clearly the buzz of the moment. Everyone wants to build an ad-supported model and also build their own ad network. Currently, most of the talk is around simple rotation of ads or tying ads to the category the user is interacting with. Not much attention on demographics, profiles, or context. Thats where the big impact and value will come into play. Currently, carriers sit on goldmine of user data that is begging to be leveraged for enhancing user experience. Unexpectedly, they sit on a big opportunity that will start to change the advertising industry over the course of the next 5 years. To see where things are going, we just need to look at trends in Japan and Korea. It was interesting that in almost all of the mobile advertising discussions, nobody talked about the elephant that was not in the room - Google, trendsetter in monetizing content. Also, missing were the agencies and their perspective. I have looked at this space quite a bit over the last two years and while agencies are excited about the prospect, they are not ready to jump yet. It will be quite entertaining to watch the new-generation media companies compete/collaborate with the carriers. For the next 3 years or so, carriers will still have an upper hand and if they execute it right, could dominate the space for a long time to come. People also talked about different types of ads IVR, Voice, Interstitials, banner, in-game, before-and-after, etc. Of course, click-to-call or click-to-action are going to be an especially important ingredient of this game. Sprint Nextel and Enpocket announced their mobile advertising program. AmpD also announced mobile advertising plans with Rhythm New Media. Bango launched its Ad initiative as well. Virgin mobiles Ad program Earn Airtime in Your Spare Time is innovative. They are truly in tune with their subscribers.
FMC. Kyocera had some trial handsets that supported WiFi/VoWiFi. One could theoretically make VoIP calls and download content over WiFi but will carriers allow it and how long will they resist. Non-traditional carriers like the MVNOs and the cable operators are very interested in exploring bundling offers. Sprint also announced EV-DO Rev A data cards that provide data rates up to 400-600kpbs. Cingular announced that they will have a majority of the top 100 markets deployed with UMTS/HSDPA by year-end. However, the choice of handsets is still missing and as such adoption for Cingular is behind schedule.
4G. While, we are just starting with 3G (except Japan and Korea), seven of the wireless industrys leading carriers have joined forces to develop a common vision for the future of mobile networks technology. Members of the Next Generation Mobile Networks initiative include China Mobile, KPN, NTT DoCoMo Inc., Orange, Sprint Nextel Corp., T-Mobile and Vodafone. The group said it has created a set of requirements for a future wide area mobile broadband network designed to offer enhanced customer benefits by delivering competitive broadband performance alongside high levels of interoperability. In plainer terms, the NGMN appears to be devising a roadmap for interoperable 4G networks. You can sense the arm-wrestling to come. 4G could end up having some serious IPR issues if all major patent-holders dont participate. The 3GPP licensing regime has been a failure, industry needs to be proactive, dedicate resources to the problem and get is solved to the extent it can.
Telematics. The number of firms talking about telematics or navigation on the phone or devices for your car increased quite a bit. Navteq, TeleAtlas, TeleNav, Inrix, Pharos, Kore, Teydo, and many others displayed their wares. On the consumer side, navigation is getting embedded into Local search apps which are enhancing the user experience quite a bit. FindIt and Google Maps are two examples. There were enterprise focused solutions from Tierravision, LiveCargo and @Road.
WiMax. Spent sometime with Lars Johnsson, VP at Beceem Communications talking about the prospect of WiMax worldwide. Clearly, Intel and Clearwires announcement has reenergized the industry and taken some uncertainty out. Lars is extremely knowledgeable person on everything WiMax. He co-founded Flarion which got sold to Qualcomm last year. It looks like the benefits of 802.16e will render 802.16d useless in short order. e provides better link capacity, Forward Error Correction, power efficiencies, and optimization. The cost of building a WiMax modem is lower than the WCDMA counterpart. A number of cable and wireline players are looking for triple-play offerings. Beceem has strong partnerships with OEMs worldwide and is actively involved in several trials in Korea, Taiwan, Japan, India, and US. The biggest challenges are around interoperability (as always) and quick resolution of IPR issues. From an application perspectives, gaming companies are the ones watching it closely. Also, automobile media player vendors are interested in using WiMax for Broadcast video. Tropos believes that Mesh technology will continue to have relevance in a WiMax-enabled world as the practical ranges of base stations wont exceed 5-10miles.
M&A. Some major M&A news at the show Real acquiring WiderThan for $365M, Lucent acquiring Mobilitec for undisclosed amount, and FOX acquiring 51% stake in Jamba for $188M. This follows Sybases acquisition of Mobile365 last week for $400M. There are several factors at play. Clearly, some segments of the industry that have matured are facing price pressure and hence consolidation. Media companies are also realizing the potential and dont want to miss out or get behind the curve so acquiring companies that have traction, not necessarily the best technology. Some of the valuations just dont make sense but I guess some over-exuberance is to be expected at this time.
Handset launches. You might have missed the announcement; there was no Steve Jobs, no iPhone release. Pearl was probably the highlight of the show though plans had been leaked in the media sometime back. RIM has Razresque aspirations from the device. The big three didnt have anything interesting. Nokia launched E62 (thankfully, taking a cue from Motorola, they are getting rid of their number scheme), however it is missing 3G and WiFi support of its European cousin E61. Kyocera had some interesting devices as discussed above. Sprint launched two EV-DO Rev A data cards from Pantech and Sierra Wireless. Cingular announced a $150 HTC Smartphone. Linux handsets are also on the rise. Obigo/Teleca had some nice tools/products for mobile Linux Browser, IM, Media and Email client. The user experience was quite nice.
Mobile TV/video. At the last two shows, Mobile video and Mobile TV were all the rage. The solutions seem to have matured though uncertainty of its success remains (primarily around time-horizon to success). There are too many providers in the space offering solutions from individual codecs to end-to-end solutions, do-it-yourself toolkits (Nexage) to user-generated video solutions (ComVu, Juicecaster ComVus one click mobile broadcast capability was pretty good) to niche demographics (Viva Vision is getting good traction in the Latino market). Various pieces of the mobile video puzzle have been commoditized, now, it is all about packaging. There were a number of Mediaflo handsets on display as well. The quality of Broadcast is really good. I saw some Broadcast TV services in Seoul earlier this year and the user experience is pretty good. My partner watched the entire South Korea soccer world cup game on his mobile device as he wasnt near a TV. Once the market gets seeded with enough phones and service pricing settles to mass-market scale, we can expect good adoption rate for such services. Imagination Technologies out of UK showed some innovative SoC (System on Chip) solutions targeting Mobile Broadcast video. Some new names in the space are QuickPlay, Picsel (nice user experience), and Convisual. Expect some consolidation in this space over the next 12 months.
The ecosystem friction. The mobile data ecosystem tension is bubbling up. Carriers want control (some more than others) so that they can manage user experience and minimize customer support calls. Content companies want to bypass the carrier and go direct to the consumer. This was also evident in the Walt Mossbergs grilling of the carriers as well as other conversations with participants in the value chain. Things are improving but not at the pace everyone would like it to be. Clearly, ecosystem only proliferates if it is allowed to make money. If certain sections of the chain get strangled, holes start to develop which pollutes the system.
User experience. Didnt see much progress on the UX front. Saw a cool implementation from FAST for Optus in Australia where they used search technology to populate the Active Screen with user preferred content. Optus has been using this offering to entice users to 3G as it is not available on lower bandwidth network and is apparently having good success. Add context and some multimedia and it becomes very very compelling. It is one area that hasnt been exploited that much yet. In the US Cingulars MediaNet implementation uses the same concept but is more browser-based. In different sessions, carriers agonized over limited shelf space and mountain of content. Thats why man invented mobile search. The concept of deck is very limiting. Content needs to get exposed via search whether it is post-query or pre-populated dashboard based on context and preference.
Test equipment Whether it is entertainment or enterprise, very little attention is given to testing and monitoring data applications and services. Keynote launched a really useful product offering (Mobile Device Perspective) that enables developers to test their app from distance on a live network and live devices and control it through manual steps or automation. Currently, such testing is done by flying a team of testers, test, and optimize. This offering can reduce the cost of such operations. I took a look at their R&D and test setup and found it quite compelling. TestQuest also showed a product along the same lines though it is more of a platform play than a service offering.
MVNOs. There is a realization that MVNO business is hard. The unrealistic expectations for customer growth are being recalibrated. It is still a viable business model but one has to give time and execute like a carrier. Virgin Mobile noted that it requires at least 2M subs before a nationwide MVNO (in the US) will cross the line from red to black.
IMS. Talked to Lucent and NMS about their pre-IMS solutions. NMS was displaying a technology around P2P mobile video sharing while talking (though the tasks happened in time-slice mode). Lucent had a solution extensions which converged PBX and Mobility. An example would be you dial a 4 digit extension on your mobile phone that connects you to the other party as if you dialed it from your desktop phone. BUT, networks arent there yet and devices will arrive a bit later. In the interim, companies are looking to stimulate the simulated IMS experience.
Funding news. Several funding news from the show, the one that caught my eye was $10m for Bubble Motion in VoiceSMS (funded by Sequoia Capital). It should be noted that there is prior art in this space and the likelihood that the company is infringing on somebodys patents are high.
Coolest gadget. MyVus media viewer
Coolest booth. Infospaces Tony Hawk show was probably the most exciting thing happening on the show floor. Watching the masters go swing-swong had the crowd go wild with ooohs and aaahs.
Misc. News.
- Melodeo won a major podcasting deal with Cingular.
- Medio Systems announced the big Verizon deal (mobile search including use of voice as input).
- Hookmobile Got a preview of the services coming out next week on all four operators. It is around Mobile Trading Community and using content to digitize trading cards, create some exclusivity and hence some viral effect. In future users can create their own trading cards for their social network. Carrier keeps 35% of the subscription fee. Hookmobile gets 27% and rest goes to the content guys. This could be good for the MMS infrastructure that is collecting dust right now. And yes, you guessed it right; there is an Ad model as well.
- New York City is going to use IPWireless technology to build a $500 million network for police, firefighters and other public-safety agencies
- Users of EV-DO data cards were much happy customers than free Wi-Fi users. Though things were better, under load, the free network comes to its knees fairly quickly.
- SpinVox had a simple but useful offering converting voicemails to text messages. Use case you are in a meeting, somebody leaves a voice message, cant go out to listen, peek under the desk to see (the SMS) if it is important.
- SNAPins solution is designed to address Carriers customer calls. It wouldnt be a stretch if carrier starts selling the deck to other companies especially in the airlines, insurance, and credit-card industry. You dial the number; phone captures it, goes into the system and brings you the answers to the questions you might be most interested in (in a data format).
Your comments are always welcome.
July Systems Patents September 6, 2006
Posted by chetan in : Patents, Strategy, US Wireless Market , add a commentOver the last 2 months or so, July Systems got awarded 3 patents, 2 in DRM arena
7,103,351Policy service system and methodology
7,089,594Application rights management in a mobile environment
7,076,562Application intermediation gateway
I will be looking at the claims to determine if they have any broader implications. There are a number of other players who own DRM patents that get licensed, so it will be interesting to see what’s unique about these. DRM is a critical piece of the puzzle and if they are strong patents, company’s valuation would go up.
