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New Paper: Mobile Apps Privacy Framework For Consumer Transparency and Control November 19, 2013

Posted by chetan in : 4th Wave,AORTA,Privacy,Security,US Wireless Market,Usability,Wireless Value Chain,Worldwide Wireless Market , add a comment

Mobile Apps Privacy Framework For Consumer Transparency and Control

A Mobile Future Forward Research Paper

The paper was originally published in the Mobile Future Forward 2013 Book – Mobile 4th Wave: Mining The Trillion Dollar Opportunity


Download PDF (1 MB)



Mobile technology is an integral part of our daily life. Mobile devices help consumers in many ways. They help us connect with loved ones, provide directions, catch-up with news, send emails, text friends and family, monitor our heart rate, stream movies, interact on social media sites, and complete transactions in a matter of seconds. Most of the times, applications and services require end-user related data to understand the context and provide appropriate content. It is well understood that data is critical in providing a great user-experience. However, consumers don’t have a clear understanding of how their personal data is being collected, stored, and used.

The collection of consumers’ personal information is not new. The difference now is that there are tools available that help connect various dots to generate the precise information about the user and build a detailed user profile without consumer knowing about it. Because of the location based technologies and various apps on your phone, companies now have a log of all of your day activities. Over time, the data collected can generate significant details about your habits, likes and dislikes, and pretty much build your identity without you ever knowing about it.

There have been many concerns raised by consumers about privacy of their data collected through mobile devices. For example, a nationwide survey indicated that 57% of all the apps users have either uninstalled an app over concerns about having to share their personal information, or declined to install an app in the first place for similar reasons. A mobile app developer had to settle with the FTC because they were collecting kid’s information without their parent’s consent. Delta airlines had to settle with California State when they were cited for mobile apps privacy violation in a lawsuit. A popular social networking application Path was fined $800K by the FTC for improperly sending consumer’s contact information to their cloud. FTC has repeatedly warned leading mobile app developers and platform providers to be more transparent about consumer data and privacy and even issued a recommendation report in 2013.

Data that provides context to the application developer is definitely needed to provide a robust user experience. Google Maps won’t operate well without location information, Whatsapp will not work well without the address book, Facebook requires the interaction history to provide a better newsfeed, Amazon looks at past transactions to recommend new ones, and so on and so forth. However, there is a lack of a simple and consistent way to convey the intent and the value of the data being collected, stored, and used by various application providers.

These concerns clearly indicate that in order to build consumer trust, we must provide control to consumers over their personal information and be extremely transparent about what, when, and where companies are collecting personal information.  There must be a balance. While protecting consumer privacy, there shouldn’t be a negative impact on innovation.

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in March 2014. The next Global Wireless Data Market update will be issued in February 2014.

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

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

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

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

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

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

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

Mitch Lewis, Vice President, Juniper Networks

Biju Nair,  EVP and Chief Corporate Strategy Officer of Synchronoss

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

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

Chetan Sharma, President, Chetan Sharma Consulting (moderator)

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

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




We could have just stopped there 🙂

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


Below is the summary of the discussion:

Cloud Computing


Privacy and Security

Big Data

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

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

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


US Mobile Data Market Update Q3 2012 November 12, 2012

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

US Mobile Data Market Update Q3 2012





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

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

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

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

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

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

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

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

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

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

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

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

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

Messaging Decline

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

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

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

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

Operator M&A – The Rule of Three Strikes Back

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

Connected Devices

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

More details available here.

Device ecosystem

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

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

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

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

Surface, mini, and the tablet market

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

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

Infrastructure segment faces a tough road ahead

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

What to expect in the coming months?

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

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

Against this backdrop, the analysis of the Q3 2012 US wireless data market is:

Service Revenues

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



Applications and Services


Mobile Data Growth

Your feedback is always welcome.

Chetan Sharma

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Feb 2013. The next Global Wireless Data Market update will be issued in Mar 2013.

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

Mobile Internet 3.0: How Operators Can Become Service Innovators and Drive Profitability February 23, 2012

Posted by chetan in : 3G,4G,ARPU,BRIC,Carriers,China,Connected Devices,Devices,Enterprise Mobility,European Wireless Market,Mobile Cloud Computing,Mobile Health,Security,Smart Phones,US Wireless Market,Wi-Fi,Wireless Value Chain,Worldwide Wireless Market , 1 comment so far


Mobile Internet 3.0

How Operators Can Become Service Innovators and Drive Profitability

Sponsored by Juniper Networks

Download PDF

The mobile ecosystem is going through significant shifts in consumer behavior, the value-chain alignment, and the strategies required in managing the profitability of the service business. Operators around the world are experiencing tremendous mobile data growth. While the mobile data revenues are increasing, the margins are decreasing for many operators. As the percentage of the smartphones on the network increases, the data business is primarily becoming an access business which is difficult to sustain over the long-haul.

Additionally, it is becoming clear that the long-term value will be in the portfolio of value-added services (VAS). As we slowly migrate into the Mobile Internet 3.0 world where mobile data becomes the primary source of service revenues, operators have a fundamental choice to make – either learn to live with the utility business that pushes the margins downwards by 30-50% or selectively compete and/or collaborate with the OTT (over the top) players where they can offer compelling solutions and packages to their customer base and beyond.

Operators who are fully able to grasp the changes occurring in the ecosystem and are willing to refocus will position themselves for higher profitability in the coming years.

A fundamental rethink of the network and the business models is required. Rather than leaving all the VAS business to others, operators should look at ways to launch new services, to micro-segmented consumer base, to enable APIs and services that the developer ecosystem can build on, and to look at the core network to enable incremental revenue streams.

The pace at which the new services are launched needs to accelerate and the marginal cost of the introduction needs to go down significantly. By architecting the “network as a platform,” operators will have more flexibility in deploying an open and programmable network that not only provides operational efficiencies and insights but also paves the way for new generation of services such as mobile cloud, mobile security, health care, and identity management.

The paper looks at the global trends in mobile data and the need for new approaches to operator services that can help increase the mobile data margins and help operators play a more decisive and enabling role in the mobile ecosystem. The paper provides an operator blueprint for succeeding in the Mobile Internet 3.0 era by discussing the operating principles and the long tail of VAS. Several strategies and application areas are analyzed that can help operators in building a viable VAS strategy and sustainable profit streams.

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

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