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CTIA Wireless 2008 Roundup April 4, 2008

Posted by chetan in : AORTA, Carriers, Enterprise Mobility, Speaking Engagements, M&A, 3G, Devices, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mergers and Acquisitions, International Trade, Location based Services, MVNO, Indian Wireless market, BRIC, WiMax, Mobile Gaming, ARPU, Japan wireless market, European wireless market, Mobile TV, Mobile Applications, Smart Phone, Worldwide Wireless Market, Mobile Ecosystem, Speech Recognition, Mobile Search, Wi-Fi, Wireless Value Chain, 4G, CTIA , 2 comments

CTIA Wireless 2008 Roundup

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

The Sin City hosted CTIA Wireless 2008 earlier this week. On Wednesday morning, just before leaving for the convention center, I caught some portion of Ben Bernanke’s congressional testimony on the US economy woes. Few minutes later, strolling the show floor, talking to various companies, and hearing the keynotes, it seemed like I was on a different planet. Either someone failed to deliver the memo or the wireless industry is resilient enough to weather the turmoil in the financial and housing markets with some ease. The show was bigger with more attendees, the booths were returning to their glamorous heydays of the past, and the general buzz and energy at the show all seem to indicate the industry is going to do just fine and is primed for further growth. The general themes were around open network and access, user experience, and bandwidth.

This note summarizes our impressions from the show.

CTIA Wireless in Pictures

First let’s do the numbers: CTIA released their semi-annual statistics on the US market. In summary: For 2007, $23B in data revenues, 2 trillion in MOU, $139B in total service revenues, 48B txt messages/month. (We released our US Market and Global Market updates last month)

Keynotes: In terms of style, Sir Richard Branson stole the show with his pompous exuberance and pep talk (the talk of imaginary flight to Mars was hilarious; investors in Microgin and Viroo must be upset). For substance, Marco Boerries, President, Yahoo Mobile gave a nice compact overview of Yahoo initiatives and products in the market which are pretty darn good. (Marco wrote an opinion piece for our Mobile Advertising Book – “The future of Advertising is in the Consumers’ Pockets”). Yahoo has sewn together a number of deals worldwide that gives them a potential reach of over 600M users.

Vodafone is one operator which has been quite vocal in stating its positions on future infrastructure roadmap and data opportunities. Arun Sarin is probably the only CEO of major global operator who has publicly stated that Mobile Advertising will constitute a significant portion of their revenues in the coming days (Arun’s point person on the initiative Richard Saggers also wrote an opinion piece for our book “Opportunities for Mobile Advertising.” Let me know if you are interested in reading these two opinion pieces).

Microsoft’s Robbie Bach had the tough task of following the Branson-fest. He announced the arrival of a full-blown browser (finally!) for windows mobile. Also, the new windows mobile device from Sony Ericsson (Xperia) looks pretty darn cool. FCC Chairman Martin announced the rejection of Skype petition on the carterphone principle (to Skype’s dismay, it was not an April fool’s joke). Clearly, the definition of “open” is in the eye of the beholder. It means different things to different people. It has also been clear from the various activities and keynotes that the industry is trying its utmost to remain a “Self-regulated” industry and stay away from the clutches of eager politicians.

Lowell McAdam, CEO of Verizon Wireless conducted a panel with CEOs from Alcatel-Lucent, Ericsson, and Nortel and probed them on the 4G migration path, trends in applications and services, and contrasts in adoption and introduction of new technology in various parts of the world. Final day was marked by what is now becoming a trend - keynotes from politicians. This time around Sen. Edwards and Sen. Thompson graced the podium.

Mobile Advertising: In talking with numerous players in the value chain from small developers to large operators to ad networks to media companies, the impression was that things have matured over the last six months. It was gratifying to hear that some companies are adopting strategies and recommendations we propose in our book. Still, some of the basic problems remain – majority of the inventory remain unsold indicating weak demand, CPM rates are still over-rated though they are starting to come down, and fragmentation continues to remain an issue.

The good news is that the size of the mobile campaign budgets are getting bigger with several seven figure RFPs floating around. While some companies are still trying to throw a lot at the wall in the hope that something sticks, others are maturing as companies and are more focused in their positioning and product roadmaps. Integration of various channels is starting to appear on the horizon and the integration with the publishers is becoming tighter. The issue of measurement and auditing standards remains a big issue and unfortunately not much progress to report. There are carrier initiatives and various industry bodies are taking the challenge to rally the ecosystem, but, frankly, consolidation of such efforts is necessary, we can’t afford yet another layer of fragmentation in an already complex ecosystem.

We were interviewed on Mobile Advertising prior to the show by several publications. Some of the articles were published this week to coincide with CTIA

Wireless Wave (CTIA) – Moving Targets: Mobile marketing reaches consumers on their terms by Lynn Thorne

BrandWeek – Mobile Marketing – Fantasy vs. Reality by Ken Hein

Wall Street Journal – Personalized promotions: Sending the right ads to your phone – Peggy Anne Salz

NFC: There were many more NFC-enabled devices on display this time and vendors were talking and demoing NFC and Biometrics based payment solutions. While there are handsets on the roadmap, this market is still very nascent in North America and Western Europe.

Inspiration: The inspiration for new and creative services still comes (at least for yours truly) from Japan (and Korea). I love spending time in DoCoMo’s booth for it gives a glimpse into what’s to come. No other company better understands the development of devices, services and applications that overlay on lifestyles than DoCoMo (e.g. a wellness handset that is a pedometer, heart rate monitor, body and bad breath monitor and yes, you can make voice calls too). They view wireless air-interfaces as nothing more than enablers to solutions that enhance daily lives. Various device manufacturers also displayed some really cool devices. The quality and diversity of handsets that have been introduced into the global markets over the last four quarters is just astonishing. The cycle of innovation and time-to-market keeps on accelerating.

Femto Cells: A number of players like Airwalk, Airvana, and others are bringing Femto cell solutions to the market and carriers are starting to pull this into their strategy as well and look forward to deployments beyond the trials.

4G: LTE vs. WiMAX (vs. UMB): Since the decision of Vodafone and Verizon to support LTE, UMB has been disappearing from the discussion. The 4G discussion is convulsing around LTE and WiMAX now (though Nortel did indicate its support TD-SCDMA as a 4G candidate). Without a doubt the operator community is rallying behind LTE and there might be an opportunity to finally converge to a single standard (haven’t we seen this movie before) but frankly, the advances in silicon to integrate multiple radios has made the standards debate less relevant. WiMAX has forced acceleration of LTE standardization process but is starting to lose its time (and cost) advantage. All eyes are on Sprint’s XOHM business rollouts in the coming days and months.

Accessories: I have never seen so many accessory and reseller outfits at a CTIA show. Business must be booming.

Best Booth: Thought there were several good layouts, LG and Samsung continue to impress with their creativity and “art of marketing.”

Developer and Publisher woes: Along with John Philips (Astraware) and Peter Baldwin (Cellmania), I helped facilitate a few developer session at the Mobile Jam Session organized by WIP. The issues of distribution, discovery, and monetization remain challenging for the small developers worldwide. Even with million user base, they are finding it difficult to monetize but we did discuss a number of success stories. The core elements of success that emerged from the discussion were: choosing the right market, embedding viral component into everything you throw out there, there is no room for mediocrity, and personalizing and customizing go a long way to get traction. An interesting tidbit: the number of page views for mobile MySpace app is a magnitude higher on off-deck vs. ondeck. Several of the companies are trying mobile advertising with varying degrees of success. After spending 4 hours with the developers, I sat on a carrier panel discussing mobile advertising. The contrast between the two worlds was so apparent. Clearly, more needs to be done to help both sides understand each other a bit better.

Green CTIA: There is a stronger emphasis on recycling and contributing to save the environment. The show itself is a big resource hog, so every bit helps.

Alternate Mobile Devices: The universe of alternate devices is expanding. Companies are buying wholesale data packages from the operators and integrating broadband chipsets into hardware to do digital signage (ICG), M2M (Sensorlogic), PND and much more. The definition of being “mobile” keeps on changing.

On Being “Open”: Obviously, given the recent activity around openness, getting a penny for each time the word was uttered by a speaker would have paid off for a lifetime of CTIA trips. While talk is cheap, demonstrable progress is being made by the likes Yahoo, Apple (btw, 3G iPhone is on its way), and AOL.

Another MVNO experiences turmoil: Movida - a Spanish focused MVNO which has garnered almost 300K subs filed for chapter 11.

Voice is becoming mainstream: With the product launches from Nuance, SpinVox, Vlingo, Jott, Yahoo, and many others, voice based navigation and its tighter integration with data services is becoming mainstream.

Where are the opportunities? Last week, I was moderating a panel with executives from AOL Mobile, T-Mobile, Motricity, and Formotus and the themes that emerged were around platform play, user experience, and productivity. At CTIA, in addition to these areas, there was a lot of discussion around social networking (though the market is being saturated with the MoSo noise). It is also clear that we are moving into the phase of “aggregation of fragmentation” with initiatives from Yahoo, AOL, and Google dominating the landscape.

Home Screen Effect: I have been talking about using the home screen for driving data usage for the last 8 years. I think we will see good innovation this year on that front starting with Yahoo’s One Platform. There are several other initiatives in the works where operators and OEMs will be deploying frameworks and technologies to bring information to a “click-less” idle screen environment.

Overall, no major news but industry stays vibrant, healthy, and exciting.

Your feedback is always welcome.

Chetan Sharma

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

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.

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:

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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.

Global update

          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.

Sampling Errors: "Pay attention to what I do, Not what I Say" February 7, 2008

Posted by chetan in : Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Mobile Gaming, Japan wireless market, European wireless market, Mobile Applications, Worldwide Wireless Market, Mobile Ecosystem, Mobile Search, Wireless Value Chain , add a comment

The current primary season in the US provides an exciting time for both political junkies and the number junkies. The stats that have been pouring out from the contests is great data to analyze. It is also interesting to follow the polling of various contests and how on/off the mark they get from time to time. Polling is now getting to these ridiculous daily polls. I often wonder if there is anyone left in the country who hasn’t been polled.

There have been so many errors in the polls even in the ones that were taken a day before and the reasons for them are simple - it is primarily due to sampling errors. The pollsters made mistakes in accurately representing the likely-to-vote population. Some errors creep in due to people not accurately reflecting their choices or change their minds at the last minute.

Why am I talking about this? Similar survey and polls have relevance in the technology world especially in services and products that are consumer oriented. Many companies and service providers fall into the trap of “what consumers say they want.” I always had a feeling that people don’t always accurately reflect their choices either consciously or unconsciously. To prove this point, i looked at data to see the differences between the same user w.r.t. their explicit (what they say) and implicit (what they do) preferences and the results were quite revealing. Majority of the people (80%+) don’t always do what they say - meaning they might indicate that one band is their top choice but their actions reveal something totally different. Also, their preferences evolve and change over time so a survey done today will be outdated in 6 months for the same person.

We have a section in the book “Mobile Advertising” where I looked at some data provided by AgentArts (which got acquired by FAST which got acquired by Microsoft) and present my findings in the section “Pay attention to what i do, Not what i Say”

Always be careful about the data you gather and make sure it represents reality before you start analyzing and crafting strategies based on them.

Pacific Northwest Wireless Summit January 15, 2008

Posted by chetan in : AORTA, Strategy, Middleware, Enterprise Mobility, Security, Speaking Engagements, 3G, Devices, Mobile Advertising, US Wireless Market, Mobile Content, Mobile Entertainment, Location based Services, Indian Wireless market, Mobile Gaming, ARPU, Japan wireless market, European wireless market, Mobile Applications, Worldwide Wireless Market, Mobile Ecosystem, Mobile Search, Wireless Value Chain, Privacy , 1 comment so far

Looking forward to meeting new friends and colleagues at the upcoming PNWS conference in beautiful Vancouver, BC this Thursday.There are some really great speakers and panelists. I have the privilege to present, participate, and moderate in two of the panels.

Mobile Marketing and Advertising

I will be sharing some research from our upcoming book on Mobile Advertising and then participate in a panel discussion with Alfredo Tan, Yahoo! Mobile, Matt Snyder, ADO Strategies (formerly with Nokia), and Olivier Vincent, Canpages. The panel is moderated by Michael Bidu of WINBC.

Understand Mobile Asia

I will be moderating this panel consisting of Asokan Thiyagarajan, Motorola, David Dai, CellOn China, and Karl Weaver, Newport Technologies.

If you would like to see any specific questions answered, please let me know. I will do a conference report later this weekend.

Apart from these panels, there are other panels on Mobile Commerce, Mobile Entertainment and Social Networking, Mobile Trends, Insights, Undeserved Vertical Markets, Mobile Enterprise, Disruptive Technologies, Smart DNAs, Wireless Innovation and Accelerated Commercialization, Go-to-market strategy. CEOs and executives from prominent companies in the region are going to be there. There are keynotes throughout the day including Luni from Medio, Fred Ghahramani, AirG, and Sue Abu-Hakima, Amika Mobile.

Caroline Lewko of WIP and WINBC fame also be moderating a couple of sessions.

There will be discussion about 2010 Olympics as well.

All in all a very packed day from 8am to 9pm and then a mixer that will probably go till midnight.

Hope to see some of you there.

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.

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(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.

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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