Mobile Breakfast Series – Mobile Commerce and Payments June 29, 2011
Posted by chetan in : Mobile Breakfast Series, Mobile Payments, Mobile Wallet, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , add a commentWe held our 7th Mobile Breakfast Series Event earlier today. The topic of discussion was “Mobile Commerce and Payments.”
The killer views of the Olympics and the Sound
Mark Young did a great job moderating the panel
The panel expertly delved into the intricacies of the mobile commerce/payments opportunity
The 2011 Mobile Breakfast Series is sponsored by Amdocs. A big thank you for the support.
At the end of every year, we do a forecast survey. In the last survey, Mobile Payments and Commerce were considered the top two categories for growth in 2011. Given the activities thus far – Google Wallet, ISIS, number of startups – Payfone, BilltoMobile, existing players like OpenMarket, financial guys across the board – past few months have been full of significant activity. The mobile commerce developments are right behind the AT&T/T-Mobile proposed merger and Microsoft/Nokia partnership in terms of news coverage.
I remember back in 2001/2, I was writing my 2nd book with my good friend and co-author Nakamura-san who was CTO at NTT DoCoMo and while doing some work for DoCoMo and AT&T, we were exploring ways the mobile device will be used for commerce not only for digital goods but also for physical things. MCommerce has been around for the better part of the last 12 years in some form and fashion, in fact today it is a multi-billion dollar market already. Mobile payments are in different states of maturity and experimentation depending on the region. Do you know the value of US payment distribution - $75 Trillion out of which only 5% is based on cards which accounts for almost $3-4 trillion Total Transaction Value. Paypal is expected to process $4B in mobile payments this year generating over $70M in mobile payments revenue.
OpenMarket processes a significant amount of mcommerce business in the US today. As you will hear from the panelists, they are starting to see good traction from merchants and things are moving from digital to physical. However, things are very complicated – it is a highly regulated segment and changes don’t come every so often. The payment networks are from pre-Internet era and yet they maintain their complete dominance of the ecosystem. So, this sets up a very interesting next few quarters and a perfect time for us at Mobile Breakfast Series to assemble a stellar panel to unwind the realities of the evolving landscape.
Our panelists were:
Mark Young, VP - Strategy, NBC Universal and Digital Networks (moderator)
Rodger Desai, Founder and CEO, Payfone
Jim Greenwell, President & CEO, BilltoMobile
Andrew Lorentz, Partner, Davis Wright Tremaine
Michael Goo, VP - Mobile Strategy, T-Mobile
Joe Megibow, VP - Mobile and E-Commerce Optimization, Expedia
Mark has been involved in mobile for a long time and has been at the center of commerce on mobile since the ringtone days at Moviso. Rodger and Payfone have been in the news lately for some raising money and some key partners like Verizon and American Express. BilltoMobile has been involved in mobile payments first in Korea (under Danal) and lately in the US with all the operators for doing payments. Payments is a heavily regulated industry so players in the ecosystem need to have a firm grasp on regulatory winds to ensure their future revenues. Andrew with his deep background in the space was perfectly suited to bring up to speed with pending and existing rules. ISIS has been in the news throughout the year and Michael Goo has been representing T-Mobile to help define the operator strategy in payments. Expedia is one of the largest ecommerce companies and they are seeing some tremendous growth in mcommerce. Joe is right in the middle of all the craziness and his analytical mindset gave audience some great insights.
As i mentioned, mcommerce is not new but mobile web and apps infrastructure along with new methods of interactivity like the NFC are making things simpler for the consumers that it is moving from novelty to convenience to actual dollars.
The panel was just full of great insights and nuggets. The highlights of the discussion was as follows:
- For Expedia, the majority of the mobile traffic comes from iPhone, roughly 60-70%, Android is around 25%, Conversion rates are much higher on iPhone, The order size on Android is 10% lower than iPhone.
- From a traffic perspective, iPad traffic is double the iPhone traffic though the device penetration is 1/10th. Conversion rates are much higher
- Two years ago, the mobile traffic was around 2% when Expedia didn’t have any mobile site. Now it is almost 6% with 10% on Saturdays, Average transaction ranges in the $200-300 range.
- Given the traffic dynamics on iPad, it is a unique category in of itself – something we have argued before – it is a new category in terms of consumer behavior.
- Most of the traffic for Expedia is from mobile web as SEO and paid search drive traffic to web, difficult to do deep linking, as such mobile web revenue is 5/6 times the app revenue.
- In a multi-device, multi-network world, consumers expect the services to just work across the board with same user experience.
- Fandango drives impulse purchases of movie tickets using “near me” feature of apps 2-4 hours prior to the show vs. 8-12 hours traditionally.
- Charlie Fodie who is on the board of Payfone expects the interchange in payments to go away over time. This will be indeed disruptive, the question is the timing.
- Only 25% of consumers have credit card in their profile with their operator in the US. 30% still pay $9-10B in cash/year to the operators by walking into the store.
- Payfone sees an opportunity by doing auction based underwriting in real-time to minimize the transaction fee.
- The uniqueness of the device can be used as its fingerprint for authentication. Payfone uses the SS7 network for authentication messaging.
- Consumers are unlikely to put $1200 plane ticket on their operator bill. The mind shift is not there, maybe things will shift, but not there in the short-term.
- Operators are exploring using the consumer data as a way to refine advertising, open it up to the ecosystem.
- Durbanization of all forms of exchange fees is near.
- Payfone allows transactions over WiFi on operator bill as well.
- In Korea, 80% of people do payments using mobile so the blueprint to get more people involved with mobile payments is there
- Verizon has a $25/mo limit on carrier billing. A Canadian operator has $500, so on a 6M sub base they have a $4B cash flow thus essentially becoming a bank. The mindset is quite different compared to the US operators
- Merchants are not bought into mobile payments yet. They want to see more adoption before they start investing more aggressively with NFC and other forms of payment.
- Industry is underestimating fragmentation, consumer confusion, regulatory headwinds, consumer adoption once friction is removed, and how soon all ecommerce will become mcommerce.
- Industry is overestimating how much of the space is going to be defined by the western markets
The panel was full of key insights that impact strategy in this space. I was thankful for the speakers to have made the time, especially the ones who traveled great distances to be with us to share their insights.
Next, our focus moves to our annual mobile thought-leadership summit – Mobile Future Forward on Sept 12th in Seattle. It is shaping up really nicely with some terrific speakers. You can take a look at the info here.
The goal of the event is to look a bit into the future 2-5 years out and see what’s on the horizon. We are deep into the planning stages of preparing another successful event. I want to thank our partners of this initiative – Qualcomm, Ericsson, AT&T, Openwave, Millennial Media, Real Networks, and Synchronoss Technologies.
Hope you can join us. It will be worth your while.
Until then, enjoy the summer.
Mobile Future Forward Student Paper Contest June 15, 2011
Posted by chetan in : 4G, AORTA, Connected Devices, European Wireless Market, Indian Wireless Market, Mobile Future Forward, Student Paper Contest, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentTo create the future, we must first be capable of imagining it
- Gary Hamel and C.K. Prahalad, Competing for the Future, 1994
The Event
It was the most satisfying experience of my career. The contest and the Mobile Future Forward summit made me reevaluate my research and career from a fresh perspective.
- Lun Huang, Phd Student - Electrical Engineering, Illinois Institute of Technology, 2010 Mobile Future Forward Student Paper Contest Winner
Being selected as one of the winners of the contest presented me with an absolutely enriching experience. The most exciting part of the experience was the opportunity to interact and network with top industry leaders from all major mobile companies.
- Smruti Parichha, Grad Student - Dept of Computer Science and Engineering, University of California, Riverside 2010 Mobile Future Forward Student Paper Contest Winner
Mobile Future Forward is an executive summit attracting some of the most influential minds who are shaping the mobile industry. The experts and visionaries from around the globe will discuss the mobile industry 2-5 years forward, envision what the user experience and use case scenarios look like, discuss and debate the challenges and opportunities in the journey to that vision.
The Contest
The best student paper contest is open to universities and research institutes around the world. Your task is to help us imagine new technologies, new experiences, new applications and services, new use cases, new business models of the mobile future. The paper can be on a specific technical or business subject within the mobile industry from mobile teleportation to fuel cells to a new enterprise collaboration tool and everything in between. The idea is to let your imagination fly without any restrictions and dream of what’s possible in the next 5-10 years. Papers can be about technical solutions to the most pressing problems, about new revenue models, about your vision of how mobile will be used in the future, etc. Paper length: 1000-1500 words.
The Prize
Authors of the top two outstanding papers will get a paid trip to attend the conference and mingle with the who’s who of the wireless industry. Winners will also be eligible for more prizes. Please send in your entries by July 15th, 2011 tocontest@mobilefutureforward.com including a copy of your current student ID. Use of graphics and illustrations is encouraged. While an indication of interest is not required, it is appreciated. A panel of industry experts and executives will vote on the best papers. They will be ranked on originality, ambitiousness, creativity, depth, and clarity of vision. The goal of the contest is to bring out and reward the best thinking from the leaders of tomorrow.
2010 Student Paper Contest
Lun Huang of Illinois Institute of Technology and Smruti Parichha of University of California, Riverside wrote the top two winning papers respectively and were invited to meet with the senior executives in the mobile industry and attend the Mobile Future Forward Executive Summit. Our thanks to all the students who participated, the judges who helped us pick the winners, and Intel for supporting the contest. See details here.
For more Info, please contact contest@mobilefutureforward.com
iCloud – taking consumer cloud to the next level June 7, 2011
Posted by chetan in : Mobile Cloud Computing, Mobile Future Forward, US Wireless Market, Worldwide Wireless Market , 2 commentsApple announced their iCloud offering today. Idea is pretty simple – Cloud becomes the data center for all devices especially for media content – photos, videos, songs, documents, etc. We wrote about that in our Mobile Cloud Computing paper in much detail.
I wrote about the key success factors for any mobile cloud computing offering -
For any mobile cloud computing service to reach the masses, it has to get the basics right specifically around the user experience and the pricing. As past experiences have shown - if one gets these wrong out of the gate, it is very difficult to get the users interested again.
The key success factors for any mobile cloud computing application or service are:
User experience
The success of a product or the service is defined by the “end to end” user experience and the perceived value users have. A product or service that has a positive impact on user’s emotions, needs, preferences, perceptions, and behaviors has a better chance of reaching mass market in a short-amount of time. In the case of mobile cloud computing, the picture is multi-dimensional, as the service has to adapt to multiple devices and networks and hide the complexity from the user. It should just work.
Pricing
Pricing is a key element that makes the difference between a niche service and a mass-market phenomenon. Consumers should perceive that they are receiving more value for what they are being asked to pay. Many excellent services never caught fire primarily because the value equation was imbalanced. For e.g. the MediaFLO service from Qualcomm was technically perfect but because of the high cost structure, limited operator promotion and distribution, and high pricing for the consumers, it never caught on. There are similar examples throughout the history of the mobile industry. Any new service should first earn its value.
Interoperability
We are living in an increasingly fragmented world. Our content and media consumption is across multiple sources and with different providers. Our preferences and tastes are continuously evolving. Any vertically focused service needs to account for this new reality. This means that interoperability is not a feature but a key functionality without which the service won’t get much traction. The cloud computing ecosystem is going to have multiple providers for example, a consumer is likely to have music files with Apple, books with Amazon, pictures with Google, address book with T-Mobile, friends photos on Facebook, family videos with Yahoo and so on and so forth. Any media cloud computing solution should be open enough to ingest content from any service and provide the capability of multiple cloud services from a single interface depending on consumer preferences. Cloud service providers who try to lock consumers into their databases without offering transparent interoperability will see their short-term advantage whittle away over time.
Discovery and Sharing
For the most part, mobile is still limited by the size of the screen. Consumers on the run have different expectations for media/content consumption. Instead of a series of links, they are looking for answers. Whether it is the song lyrics or associated social data of music and video files or the location and auto-recognition of the individuals in a photograph, rich metadata is key to automatically organize content as well as to instantly finding any piece of content across multiple libraries with gigabytes of data. As such, the value of meta data becomes extremely important.
Network and Device Intelligence
Even though the broadband capability has improved over the last few years, mobile is always going to be under the constraints of congestion, network load, and variable device capabilities. Also, it will be unwise to not take advantage of the device storage, capability and the processing power. A hybrid model provides a perfect balance of user experience, performance, and the range of options. Any cloud service should take advantage of the available resources on the device, in the network, and in the cloud infrastructure to deliver the best experience to the user in real-time. This can only be delivered if the service is aware of the network and the devices at all times. For example, the background syncing of music across various user devices can take place using Wi-Fi or during off-peak hours on a cellular network so as to not burden the network or transcoding the image or the video stream on the fly to adapt to the application, device and network characteristics. Hence, any mobile cloud computing service should be network and device aware at all times.
As always, Apple made the process simple and pricing super attractive. Now, others will have to respond in kind or try to do better with features. Pricing is set – FREE for 5GB (at least for now).
We will be discussing Mobile Cloud Computing and the infrastructure needs and requirements in our upcoming Mobile Future Forward event and will have some terrific speakers to address the topic.
New Paper: Mobile Cloud Computing May 25, 2011
Posted by chetan in : 4G, AORTA, BRIC, Connected Devices, Enterprise Mobility, European Wireless Market, Infrastructure, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Future Forward, Mobile Search, Mobile Traffic, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so farMobile Cloud Computing
http://www.chetansharma.com/mobilecloudcomputing.htm
Sponsored by Real Networks
These are exciting times in the wireless industry. The innovation in technology, services, and business models is driving the global industry to new heights. While the global markets were feeling the pain of a brutal recession, the wireless industry for the most part sidestepped the crisis, especially in the North American and Asian markets. Mobile data revenues around the world have been growing at a steady pace. Given the lucrative nature of the market, there are more developers focused on the mobile ecosystem than ever before.
The mobile industry is going through significant transition from being voice-centric to data-centric, from consumers spending 90% of their time talking to being engaged on mobile data services 80% of the time. In Japan, Softbank became the first major operator to have more revenues come from data than voice. Others will follow. In the US, over 35% of the revenues are coming from data services and the data revenues will account for over 50% of the revenues by early 2013.
Mobility is also getting ingrained in the everyday objects, which make up for a fundamental reassessment of how things are done across industries in almost every region of the world. It is not just the phones and the data cards that are being enabled by the broadband connectivity but also the electronic devices such as the tablets, eReaders, automobiles, picture frames, and cameras.
Anything that can be connected will be connected making access omnipresent.
In such a multi-device world, the role of cloud computing becomes central to the content access and sharing. Consumers won’t like to store and upload by device type but would want the same level of functionality available across all their devices necessitating the need for mobile cloud computing. In a mobile environment, one has to contend with the limitations of screen size, the variability of devices, and the network latency. Therefore, the cloud requirements will vary by context.
With the emergence of the smartphones, the mobile operators are being gradually cut out of the value added services space with most of the revenues shifting to rest of the ecosystem. Mobile cloud computing provides an opportunity to leverage their network infrastructure assets and their consumer relationships to open up new revenue streams.
This paper will explore the mobile cloud computing market, its drivers, the opportuniies and the key elements of success in this space. Further, the paper discusses why operators should take a more active role in this space. Mobile cloud computing is here to stay. The winners and losers will be decided based on how players will adapt to empower consumers.
US Mobile Data Market Update Q1 2011 May 9, 2011
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Connected Devices, Indian Wireless Market, Mobile Advertising, Mobile Applications, Mobile Breakfast Series, Mobile Commerce, Mobile Content, Mobile Ecosystem, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Payments, Mobile Search, Mobile TV, Mobile Traffic, Mobile Users, Mobile Wallet, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a comment|
US Mobile Data Market Update Q1 2011 http://www.chetansharma.com/usmarketupdateq12011.htm
The US wireless data market grew 4% Q/Q and 23% Y/Y to reach $15.4B in mobile data service revenues in Q1 2011 and is on course to increase Y/Y by 22% to $67B in 2011. Of all the segments, the connected device category registered the highest growth at 9.6% Q/Q while the postpaid subscriptions growth was almost flat for the quarter. Connected devices (including tablets, M2M, telematics, eReaders, etc.) now account for 8% of the subscription base. For the first time, the smartphone sales crossed the 50% share mark in the US. Also, the US now accounts for approximately one-third of all smartphone sales in the world. The Big News - AT&T’s proposed acquisition of T-Mobile The big news during Q1 2011 was of course the blockbuster announcement of the acquisition of T-Mobile USA. We had pondered on the viability of 4 operators in the US market in the past. All the major mobile market eventually settle with three main players controlling the market. So, the news wasn’t a surprise as we had expected something to break loose and conform to the natural market evolution. T-Mobile US has been under tremendous pressure for the last 2 years being unable to expand its postpaid base despite modernizing its network/backhaul and introducing a slew of impressive handsets. It was getting squeezed both from the top (Verizon and AT&T) and from the bottom (MetroPCS, etc.) while duking it out with Sprint in the middle. The decision window was closing as Deutsche Telekom had to decide if it wanted to invest in LTE or not (in the US market). Given that the parent business has been under pressure as well, it decided to take the most attractive available option. The proposed merger will obviously have an impact on the market structure. The market power will get concentrated in the top 2. The HHI3 Index will go from .22 to .31 but the HHI3 value will be at par with UK, Canada (though the Canadian market is not a good proxy for a competitive market), and some of the other markets. The biggest task for the US regulators will be to analyze the impact on the consumer interest and service pricing on a market-by-market basis. Putting things into perspective, this move is not unusual for a developed market. On average, the top 3 operators in the developed markets around the world control 94% of the market. The proposed merger roughly resembles the merger that took place in UK last year when T-Mobile and Orange, the number 3 and 4 player (each having approximately 19% of the share) respectively in the market merged to form Everything Everywhere and become the number 1 player in the market with 38% market share. However, if we look at the history of competitiveness in the US mobile market, the market and revenue concentration will be at its highest in the history of the US wireless industry. Such a move is likely to have an impact on the ecosystem depending on the regulatory policies. Last month, we published a first of its kind in-depth study on competition in mobile markets -“Competition and the Evolution of Mobile Markets - A Study of Competition in Global Mobile Markets”. The paper presents the analysis and an in-depth analytical framework to study the competitive landscape in the global mobile markets. Transparency as a competitive advantage An unfortunate side effect of an industry moving too fast is that regulations are often behind the curve (we discuss the role of regulators in our Competition paper mentioned above). Q2 will see a lot of heated debates around privacy and competition. Current regulatory framework in the US seems ineffective to meet the demands of the digital age. The indecision and a weak regulatory framework can be harmful to the ecosystem. While the industry has done a poor job of explaining targeting and relevancy and the associated consumer benefits, by over reacting, regulators can mess up the potential for better services. It is not the mechanics they need to regulate but the “transparency” of services and policies in plain English. Regulating transparency seems to be a more effective way. The ecosystem players will do better if they use transparency not as a threat but as a competitive advantage. The new troika - AAG A couple of years back, I gave a talk about the changing mobile ecosystem and what it means to compete in an environment where the ecosystem stacks get reshuffled every few months. I wrote about that in an essay that was published in the Mobile Future Forward book last year. While innovation is coming from all angles - fast and furious - the troika of Apple, Amazon, and Google is leading the way right now. Their interests are clashing in multiple dimensions - device, user data, cloud, advertising, local, commerce, books, etc. In a fast changing environment, either you define the market or be defined by it. The journey from being an arch-rival to a frenemy (and vice-versa) can be a short one. A significant shift As we mentioned in our last research note, 2010 marked the milestone of the start of a new computing and communications era. For the first time in the US, the smartphones shipments exceeded the traditional computer segments (that consists of desktops, notebooks and netbooks). Smartphones and the connected devices now account for 51% of the computing devices revenue in the US (devices include desktops, notebooks, netbooks, tablets, eReaders, and conventional feature and smartphones) The growth in of connected devices The connected devices category is the fastest growing segment of the market and while the ARPUs are low, due to the higher margins this segment will prove to be the most profitable in the coming years. By the end of 2011, connected devices will be commanding double digit market share. However, not all sub-segments are going to be successful in the operator channel until multi-device data pricing plans are introduced. Apple’s iPad has been, as expected, a runaway success. Several other tablets launched in 2011 but none has come close to being a credible challenge. OEMs will do well to segment the market and price accordingly rather than follow Apple in performance and pricing. Market is fairly young and there is tremendous room for growth. Another trend that is obvious is the development of an alternate ecosystem. 85% of the tablets use primarily use WiFi for connectivity meaning that OEMs need more diverse distribution channels. Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category. We do expect multi-device or family data plans to start being introduced in the US market in 2011. Also, the $200-250 Android tablets will start to emerge during the second half of the year to broaden the choices for the consumers. Turmoil in the OEM land Another headline grabbing event in Q1 2011 was that of Microsoft’s partnership with Nokia. Nokia’s lack of a credible response to Apple and Android has left the company scrambling for survival. Nokia still dominates the unit sales but the domination of Apple and the Android OEMs has taken away significant profits and ecosystem mindshare. Industry is awaiting the first release of the Windows phone from Nokia which will have a lot riding on it. If the release of iPhone 5 coincides with this release, the Christmas selling season will be interesting. The OEMs that have impressed the most are HTC and Samsung. The collapsed release cycles and the fierce pace of introduction of new devices have caught many of the traditional players unprepared. These things have a tendency of going in cycles so we expect the pendulum to swing again in the next 12-24 months. There is a fight for the #3 spot and it is likely that Windows will fill that void. However, for developers, iOS and Android are the only platforms they need to worry about right now. Verizon finally got its iPhone and as expected it didn’t make a big dent into the AT&T’s financials. Platforms - Horizontal vs. Vertical Over the past few quarters, we have seen a fascinating battle brew between the horizontal (Android and Windows) and the vertical (Apple, RIM, Nokia) device platforms. In the US, in the smartphone category, the horizontal platforms (primarily Android) has been gaining significant share since Q1 2010 and now have over 65% share of the new devices sold while the vertical platforms’ share has declined to 35%. However, the revenues and profits are still dominated by the vertical platforms. What to expect in the coming months? All this has setup an absolutely fascinating 2011 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 12th mobile thought leadership summit – Mobile Future Forward which is bringing exceptional industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. Hope you can join us. 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 Q1 2011 US wireless data market is: Service Revenues
ARPU
Subscribers
· Sprint is on good comeback adding over million customers. Sprint extended its streak of positive net-adds to four quarters by adding over a million subs for the second straight time since Q1 2006. · T-Mobile however continues to be sandwiched between the top three and the next three and is having a hard time adding postpaid subscribers. Applications and Services
Handsets
Global Update
Your feedback is always welcome. Thanks. 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 Aug 2011. The next Global Wireless Data Market update will be issued in Jun 2011. Disclaimer: Some of the companies mentioned in this paper are our clients. |
Announcing Mobile Future Forward 2011 May 4, 2011
Posted by chetan in : Mobile Ecosystem, Mobile Future, Mobile Future Forward, Student Paper Contest, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentI am really excited to announce or 2011 Mobile Future Forward. We have been working on it for a while and thanks to our wonderful partners and speakers, the program is starting to take shape. As usual, we are deeply focused on the understanding the underlying currents of the mobile ecosystem and how behavior, technologies, and business models will be morphed over time.
First of all, a big thanks to our current partners in this endeavor
We are also grateful to our fantastic thought-leaders who are eager to share and discuss the future of mobile. Current list of outstanding speakers includes:
- Abhi Ingle, VP, AT&T Wireless
- Amit Gupta, SVP and CTO, INQMobile
- Charlie Herrin, SVP - Technology, Comcast
- Danny Bowman, President, Sprint
- David Messenger, EVP, Head - Online/Mobile, American Express
- Erick Tseng, Head - Mobile, Facebook
- Erik Moreno, SVP, Fox
- Gibu Thomas, SVP - Mobile, Walmart
- Glenn Lurie, President, AT&T Wireless
- Hank Skorny, Chief Strategy Officer, Real Networks
- Jason McKenzie, President, HTC-Americas
- Jerry Batt, CIO, PulteGroup
- Ken Denman, CEO, Openwave
- Kris Rinne, SVP - Networks, AT&T Wireless
- Mike Mulica, President, Synchronoss Technologies
- Paul Palmieri, CEO, Millennial Media
- Prof. Cliff Nass, Human Computer Interaction, Stanford University
- Rob Glaser, Partner, Accel
- Sanjiv Ahuja, CEO, LightSquared
- Stephen Bye, CTO/VP - Technology & Strategy, Sprint
- Steve Elfman, President, Sprint
- Steve Mollenkopf, Group President, Qualcomm
- Suja Chandrasekaran, CIO, Timberland
- Will Hsu, Chief Product Officer, AT&T Interactive
We will keep you posted as we have more updates and news.
Mobile Future Forward Early bird registration is open now.
We are also launching our Global Student Paper Contest. If you are a student or you know of one in college, this is a great way to meet the movers and shakers of the industry. Last year’s contest was a runaway success and we are working hard to make this year’s memorable as well.
Thanks and hope to see you at the summit.
New Research: Competition and the Evolution of Mobile Markets April 28, 2011
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Devices, Enterprise Mobility, European Wireless Market, Gaming, General, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Messaging, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Networks, Patents, Privacy, Smart Phones, US Wireless Market, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , add a comment|
Competition and the Evolution of Mobile Markets A Study of Competition in Global Mobile Markets
http://chetansharma.com/mobilecompetition.htm Over the course of the last decade, mobile communications has become an essential part of the global fabric of evolution. With almost 70% global subscription penetration as of 2010, mobility is being embedded into almost every facet of our lives. Mobility is also spreading across verticals whether it is m-pesa in Kenya or SMS based counterfeit medicine detection in Ghana or paying for your coffee using your NFC enabled mobile phone in a Tokyo café or watching the cricket world cup broadcast while hiking the Yangtze river near Tibet. Consumers expect access to information everywhere they are and the ecosystem is responding with continued innovation, which has become extremely critical in managing the competitiveness of nations. It is also apparent that some of the innovation and market dynamics has been evidenced by the competitiveness of these markets at different levels – network, devices, and services. While the market entry conditions into the devices and software services markets have gone through significant overhaul this last decade, the competitiveness framework of the mobile networks has been more structured and controlled in many instances. Given the importance of the mobile network infrastructure to every nation’s competitiveness, security, and productivity, it is useful to understand how the “competitive mobile markets” are formed. In theory, the perfectly competitive markets are in the best interest of the consumers as they provide the best value given the competitive dynamics and the equilibrium provides good checks and balances for the ecosystem. The global mobile networks have shown a remarkable adherence to the “Rule of Three” which states that in any mature industry, 3 top players dominate the market. Sometimes it has been dictated by the regulators and in other instances by the markets. Some markets like in Europe have settled into a state of equilibrium while other hyper growth markets like India are shuffling to find the right balance. The elements of globalization are also shaping how mobile network operators grow. The regulators and the political class are increasingly looking at mobile networks as national assets and any foreign ownership generally goes through tremendous scrutiny. Having worked in major mobile markets around the world, we have been intrigued by the framework for a competitive market and this is the theme we explore in this working paper. Having the front row seat in an industry that is growing stupendously has given us some unique perspective on the competitive forces at work in the mobile space. We studied the competitive landscape in 40 top mobile markets around the globe. This paper presents the analysis and an in-depth analytical framework to study the competitive landscape in the global mobile markets. Download Paper (45 pages, 2MB) Disclaimer: Some of the companies mentioned in this paper are our clients. |
Mobile Breakfast Series – The Universe of Connected Devices
Posted by chetan in : Carriers, Connected Devices, Devices, European Wireless Market, Mobile Applications, Mobile Breakfast Series, Mobile Content, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Worldwide Wireless Market , add a commentEarlier this month, we hosted our 6th Mobile Breakfast Series Event in Seattle at the picturesque Columbia Tower Club. The topic is something that has been occupying everyone’s attention lately with some terrific growth numbers.
We were doing some math earlier this year and the chart above illustrates how fast the mobile ecosystem is subsuming the computing ecosystem as they become one and the same.
As you might have noted in our 2010 US market update, connected devices is the highest growing category in the market at 55%. It is creating new revenue streams and enabling new verticals to get mobilized. It is also disrupting the traditional ecosystems. This made it a perfect time to discuss the topic in-depth.
Our panelists were:
Tyler Davidson, VP, Amdocs
Martin Fichter, VP - Product Management Americas, HTC
Mike Mulica, President and Head of Strategy, Synchronoss Technologies
Ilja Laurs, Founder and CEO, Getjar
Erik Kling, Director - M2M, Vodafone Global Enterprise Group
Wilson Rothman, Deputy Technology and Science Editor, MSNBC.com (moderator)
As always, we try to bring players across the ecosystem to have a good discussion from multiple angles. Our panel didn’t disappoint.
First a bit about the panelists to give you some background on their viewpoints. Erik Kling is deep into M2M and Vodafone is pursuing a very aggressive M2M strategy worldwide with some smart value proposition to the enterprises. That can put some of the domestic operators at a disadvantage. Tyler Davidson focuses his energy on managing customers but also thinks deeply about the management of media in the connected world. The rage of apps is carrying from smartphones to tablets and other connected devices as well and Ilja Laurs knows a thing or two about apps – running the largest independent app store and being quite successful at it.
HTC just crossed Nokia in revenues which was just unthinkable even last year. HTC has run a very effective strategy in devices and Martin Fichter is one of the guys who is making things happen in the US market. If you have an iPhone, you have been touched by Synchronoss Technologies. They activate the iOS and other devices. A billion $ company you might have never heard of. Mike Mulica has deep experience in the mobile space and is driving the strategy of connected devices and related software forward. Last but not the least, our moderator Wilson Rothman has been covering gadgets most of his adult life and is a darn good moderator.
The highlights of the discussion was as follows:
- M2M is getting good traction in consumer electronics, telematics, and medical. Vodafone is doing a ton of business with the medical/pharma companies who would like connected devices without the worry of roaming, certification, etc. Within a year, Vodafone’s M2M group has grown up to 200 people and they are hiring at a rapid pace if anyone is looking.
- Other M2M areas that are evolving are: security, remote access, home monitoring, etc.
- Connected devices are accelerating the move from voice to data
- The fact that AT&T is advertising M2M Vending machines on TV shows it is serious business.
- HTC passed Nokia in market cap on the back of Android and the 4G devices. For tablets, WiFi is a preferred route rather than operators as that’s what the demand is.
- With connected devices avalanche coming our way, WiFi is going to be extremely important, need better technologies for WiFi/Cellular migration.
- Consumers chose a device or a service first and the operator is now an afterthought.
- Operators need an open environment to operate but want to create a preference for them – it is like “controlled openness” like Microsoft so they can certify devices and apps that go on their network
- All this connectivity does need billions of $ of investment so there is a need for a toll for these services. However, we need to reduce friction with security, payment, and plans.
- Apple doesn’t want to be an operator but does want a free ride like NetFlix and YouTube.
- WiFi is not only necessary, it is essential for the survival of the industry.
- Amazon launching an app store is a good thing for the industry, puts pressure on Google a bit.
- Companies like Skype would pay the operators for better bandwidth but the process is a bit cumbersome.
- Battery Life. Enuff Said.
We also announced that our annual thought-leadership summit on mobile - “Mobile Future Forward” will take place on Sept 12th in Seattle. We have some terrific speakers lined up which lead to some fabulous discussion. Stay tuned for more information early May.
My utmost thanks to David Smith, SVP at Enterprise Ireland for his notes from the event. It helped refresh my memory and pointed out things that I had missed amidst running around.
Thanks all for coming and making it a successful outing. Our next Mobile Breakfast Series is going to be on Mobile Commerce and Payments in late June. Stay Tuned for details.
US Mobile Data Market Update Q4 2010 and 2010 February 28, 2011
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile Traffic, Mobile Usability, Networks, Smart Phones, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Mobile Data Market Update Q4 2010 and 2010
http://www.chetansharma.com/usmarketupdate2010.htm
The US wireless data market grew 5% Q/Q and 23% Y/Y to reach $14.8B in mobile data service revenues in Q4 2010. The final tally for the 2010 year was $55B and we expect this to increase by 22% to $67B in 2011.
The US mobile subscriptions officially crossed the 100% penetration mark in Q4 2010.
Of all the segments, the connected device category registered the highest growth at 55% while the postpaid subscriptions grew by only 3% for the calendar year. Connected devices (including tablets, M2M, telematics, eReaders, etc.) now account for 7% of the base.
A significant shift
2010 marked the milestone of the start of a new computing and communications era. For the first time in the US, the smartphones shipments exceeded the traditional computer segments (that consists of desktops, notebooks and netbooks). In 2011, the smartphone segment along with the connected devices (tablets and eReaders) will not only exceed the computer segment in unit shipment but more importantly in the overall revenues as well. Of course, these categories are merging and the lines are blurring but it is good to take stock of the transition which will create new ecosystems and decimate the old ones over the course of this decade.
The evolution of connected devices
The connected devices category is the fastest growing segment of the market and while the ARPUs are low, due to higher margins this segment will prove to be the most profitable in the coming years. By the end of 2011, connected devices will be commanding double digit market share. However, not all sub-segments are going to be successful in the operator channel until multi-device data pricing plans are introduced. Most of the tablets and eReaders can work well with only WiFi most of the times. Monthly data plans make sense for enterprise users but not for consumers who might use these devices occasionally. As such tablets will be more successful in direct and traditional retail channels.
Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category (We will be discussing the connected devices universe in our upcoming Mobile Breakfast Series event in April).
Similarly, OEMs who rely on the operators for sell-through of tablets/eReaders will see low volumes vs. players who have more diverse distribution channels (Apple and HP). We do expect multi-device or family data plans to start being introduced in the US market in 2011.
As we had mentioned in our last research note, iPad (and other tablets) are making Netbooks irrelevant. In fact, tablets are starting to eat into the laptop category as well. As expected, the device has been a hit with many enterprises with mobile workers. Many enterprises are giving out iPads to their workforce instead of laptops or Netbooks.
At CES 2011, hundreds of tablets were introduced. While the total number of releases was noteworthy, we expect iPad to dominate the space in 2011 as competitors will find it hard to compete across all dimensions - price, performance, ecosystem, distribution, and brand power.
Mobile Data Consumption
Mobile data consumption continued to grow across all networks increasing 2-5 times on major US networks. Many of the superphones introduced in 2H10 are clocking 1-1.5GB/mo average. The average data consumption in the US at the end of 2010 was 350 MB/mo. Thus, while the data revenues for the year increased 23%, the mobile data traffic grew 132%.
The significant rise in the smartphones sales and usage in the US market (over 50% devices sold in the US in 2010 were smartphones almost twice the global average) means that by the end of 2011, in the US, the smartphones will consume more data than the data cards for the first time. We also expect US to become the number 1 nation in mobile data consumption this year edging out Sweden. A detailed treatment of the subject can be found in our "Managing Growth and Profits in the Yottabyte Era" paper. Another research update on the topic will be released in 1H11.
The center of gravity has shifted back to the US
As I mentioned in my Time magazine interview earlier this month, there is no question that the center of gravity of the mobile market has shifted back to the US. The Nokia-Microsoft announcement was a wake-up call to many in the industry who were in denial. The innovation is happening all around the world and in many areas other countries are years ahead. The markets are growing faster in India, China, and elsewhere. However, the coordinates of what’s next have clearly changed in the last three years. The software innovation and the next generation network launches in the US are laying the foundation of a solid mobile decade.
US is also the most dominant market in terms of revenue generation for the industry. While the US represents less than 6% of the subscription base, it accounts for over 21% of the data revenues with Verizon Wireless becoming the number one mobile data operator in 2010 edging past the decade long leader NTT DoCoMo. AT&T also went past China Mobile to gain its current number three ranking. By the end of 2013, the US market will account for 25% of the global mobile data services revenues (We will have a detailed analysis of the global markets in our upcoming research note in march).
Nokia-Microsoft partnership
Nokia’s market problem can be summed up thusly - “While Nokia sold 10 times more devices than Apple in 2010, its market cap is 1/10th that of Apple.” It has been clear for some time that things had to change at Nokia.
Weeks leading up to the Mobile World Congress were rampant with curiosity of who will Nokia marry to continue its next phase of device journey. The multi-billion dollar offering from Microsoft proved too hard to resist for Nokia. This news completely dominated the MWC chatter and the topic comes up invariably in many conversations since then. One has to give points to Nokia for decisiveness and for moving quickly under the pressure.
It is also indisputable that the deal is a significant win for Microsoft who has been looking to come back into the game. However, impact on Nokia remains uncertain. While there were risks with Android, going with Win7 is not an assured path to resurrection either. It all comes down to execution. Can the troops be rallied to produce a slew of competitive devices quickly that consumers and operators will find attractive?
Microsoft understands developers better than most and the two companies can bring in tremendous scale and complementary toolsets to attack the market. Nokia has significant talent and it’s a proud company but jumping into the shark-infested cold waters miles away from the shore will require all the stamina, good weather, and skill it can muster to make landfall before thanksgiving.
MeeGo is likely to go back into Intel’s camp and might look interesting to the likes of LG, Samsung and even Motorola though creating a new ecosystem is a tall order. Never a dull moment in the industry, is there?
Impact of iPhone on AT&T
It finally happened. The Verizon iPhone has kept the media busy for the last 3.5 years. It was quite an anticlimactic moment when the device finally came to the 2nd operator in the US. It was inevitable that one of the longest exclusive relationship in the wireless world will come to an end. The iPhone singlehandedly turned around AT&T relative to Verizon in the net-adds race. For 10 quarters leading up to Q2 2007, AT&T was adding less net-adds compared to Verizon, in fact the cumulative net-add loss was 3.7 million subs on an average of 374,000 subs per quarter. As soon as the iPhone was launched in Q2 2007, AT&T started adding more net-adds compared to Verizon with the 14 quarter cumulative net-add difference close to 6 million subs on an average of 426,000 subs per quarter.
What to expect in the coming months?
Kids of the now generation are growing with connected electronics that is fundamentally altering the behaviors and expectations of interaction, communication, consumption, and monetization.
Android and iOS are completely dominating the developer and ecosystem mindshare and the race to become a viable 3rd option is on. Operators would love to see another competitive force emerge in the market.
All this has setup an absolutely fascinating 2011 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 15th mobile thought leadership summit – Mobile Future Forward which is bringing exceptional industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. More details to come.
US is also leading the way in smartphone sales. In Q4 2010, 48% of the devices sold in the US were smartphones compared to 25% globally. The fast pace of device introduction has catapulted the agile players like Samsung and HTC to the forefront while others like LG and Sony Ericsson have lost ground. By singularly focusing on Android, Motorola did quite well in 2010 but 2011 is going to be challenging.
The pace of product introduction is accelerating with each quarter. Devices of all shapes and sizes are coming into the market literally every week. Players are having to re-evaluate their businesses and long-term strategies. There are several players whose future is at stake. The competition has grown fierce and companies are finding it hard to take ideas from R&D to products in market in a short amount of time.
While 2010 started quite active on the regulatory front as the national broadband plan was unveiled in March little substantive progress has been made w.r.t. the spectrum, net-neutrality, and other broadband related issues. The matter has swiftly moved to courts where it will take months before anything useful comes out.
Operators are starting to diversify more aggressively than in the past. AT&T’s mobile enterprise business is a leading indicator of this trend. Their focus by verticals has yielded new revenue streams and positioning them to become a one-stop shop for devices, access, and services in the enterprise market.
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 Q4 2010 and 2010 US wireless data market is:
Service Revenues
- The US Wireless data service revenues grew 5% Q/Q and 23% Y/Y to $14.8B in Q410. The mobile data revenues for the US market reached $55B in 2010.
- Verizon, AT&T, Sprint had a good mobile data quarter accounting for 86% of the increase in data revenues in Q4 2010.
- T-Mobile’s 3G/4G drive is starting to pay off. While the postpaid net-adds were still in the red, its data growth is starting to match with its peers. The 24% smartphone base definitely helps.
- For the calendar year 2010, AT&T and Verizon accounted for 69% of the market data services revenues and 64% of the subscription base.
- Verizon Wireless edged past NTT DoCoMo and AT&T went past China Mobile to become #1 and #3 respectively in operators by mobile data revenues in 2010. Sprint and T-Mobile maintained their #6 and #8 rank in the top 10 mobile data operators list for 2010.
ARPU
- The Overall ARPU decreased by $0.58. Average voice ARPU declined by $0.90 while the average data ARPU grew by $0.32 or 2% Q/Q.
- The average industry percentage contribution of data to overall ARPU was 34% in Q410.
- Verizon led in data ARPU with $18.79 followed by AT&T and Sprint. In terms of % contribution, all the top three operators exceeded the 30% mark. T-Mobile ended the quarter with approximately 28% of its revenue coming from data services.
- We expect data revenues to exceed voice revenues in the US market by Q2 2013.
Subscribers
- US crossed the 100% penetration mark in terms of total subscriptions.
- Helped by the growth in connected devices, the overall net-adds increased by 4.9M.
- For the fifth straight quarter, AT&T reported more net-adds from connected devices than postpaid subs. Connected devices are now almost 10% of AT&T’s subscription base.
- Overall, AT&T edged past Verizon in total number of connected devices. The connected device segment grew 9% Q/Q and 55% Y/Y.
- Sprint made a nice comeback in 2010 reversing the 11 quarter negative net-adds trend by adding three straight positive net-add quarters. Sprint extended its streak of positive net-adds to three quarters by adding over a million subs for the first time since Q1 2006.
- T-Mobile however continues to be sandwiched between the top three and the next three and is having a hard time adding postpaid subscribers. For the year, the operator ended the year 390K subscribers (postpaid) below the 2009 levels. It’s churn rate is almost 60% higher than the average of its top competitors and the cost of postpaid churn was over half a billion dollars in 2010. However, the increased smartphone penetration, quick HSPA+ deployment, backhaul upgrades, and a clever marketing campaign is helping on the mobile data front.
Applications and Services
- While the percentage share of the data revenues is declining for messaging, the revenue growth stays strong with almost $17B in messaging revenues.
- In 2010, there was a significant shift that took place in terms of app revenues. There was more revenues generated (globally) from off-deck than on-deck for the first time and while the on-deck revenues are in billions, the decline trend looks irreversible. In the US, this shift will occur in 2011.
- The usage and data consumption trends are enabling carriers to accelerate their 3.5G/4G plans and develop long-term business and technical strategies.
- The market is finally starting to see activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education. Much more to come in 2011.
Handsets
- Nokia sold 123.7M units in Q4 2010 accounting for 31% of the market share. Samsung continues to be one of the most agile players in the device business shipping a whopping 80.7M for a 20% share of the market. Apple again edged past RIM to be in the top 5 along with the new entrant ZTE which broke into the top 5 for the first time.
Data Traffic
- As we noted in our previous updates, the data traffic is now significantly more than the voice traffic. By end of 2010, the average US consumer was consuming approximately 350 MB/mo up 132% in 12 months. The good news is that there are several solutions available and are being invented that will help manage the data growth starting with the tiered pricing plans.
- Q4 10 also saw significant activity in the 4G space with Verizon launching its LTE network and after the ITU flip-flop, the HSPA+ deployments of T-Mobile and AT&T Wireless along with Sprint’s WiMAX made US the epicenter of 4G growth for the next few years.
Your feedback is always welcome.
Thanks.
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2011. The next Global Wireless Data Market update will be issued in Mar 2011.
Disclaimer: Some of the companies mentioned in this paper are our clients.
New White Paper: The Promise of Mobile Advertising February 2, 2011
Posted by chetan in : 3G, 4G, AORTA, Carriers, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Future, Mobile Future Forward, Mobile Usability, Mobile Users, Privacy, Smart Phones, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far
http://www.chetansharma.com/PromiseOfMobileAdvertising.htm
Commissioned by AT&T Interactive
Executive Summary
The world of advertising is changing at a dizzying pace. New media are transforming advertising, and consumer expectations have changed accordingly. In this dynamic environment, no communications platform holds more promise than the mobile device.
Mobile platforms present a unique opportunity to reinvent advertising. With mobile, the perception of advertising will shift from interruptive broadcast messages to targeted information services of real value to consumers and positive interactions that have an immediate top-line impact.
Advertisers care about two basic metrics – reach and purity. They want to communicate with as many people as possible (reach) and they want to reach the most accurately targeted audience possible (purity). In the past, advertisers have tried to compensate for a lack of purity by casting a wider net, spending inefficiently and often failing to reach their target audience.
With mobile, advertisers can deliver the right information to the right target at the most opportune time; delight the consumer with instant gratification; complete transactions and measure direct correlations between advertising, transactions, and return on advertising (ROA). With the power of real-time metrics in hand, advertisers can scientifically design, measure, and alter their campaigns and deploy strategies for one-to-one relationship building with customers.
Mobile is having a significant impact on local advertising. The attributes of immediacy, location, always-on connectivity, user profile and segmentation, and the viral nature of the medium make mobile the best channel for local advertisers to engage potential customers.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this paper are our clients.
2011 Mobile Predictions Survey Results January 3, 2011
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Enterprise Mobility, European Wireless Market, IP, IP Strategy, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Traffic, Networks, Patent Strategy, Patents, Privacy, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment2011 Mobile Predictions Survey
http://www.chetansharma.com/MobilePredictions2011.htm
First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy,
healthy, and prosperous 2011. Thanks to all who participated in our 2011 Mobile Predictions Annual Survey. We have found it is the best way to think about the trends coming our way.
We put some of the questions to our colleagues and industry leaders 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=225) from leading mobile companies across the value chain and around the world opined to help us see what 2011 might bring.
Ten names were randomly drawn the limited edition Mobile Future Forward book. The winners are:
1. Jared Cornfeld, Industry analyst, FCC
2. Abhi Rele, Marketing, Microsoft
3. Christopher Billich ,Head of Mobile Advertising, Deutsche Telekom AG
4. Gary Cohen, VP/GM North America, Flirtomatic
5. Peter Jarich, Service Director, Current Analysis
6. Darren Austin, Director of Mobile, Expedia
7. Craig Fisher, Software Client Leader, IBM
8. Steve Wood, CEO, Perlego Systems, Inc.
9. Elliott Hamilton, Sr. Director of Strategic Planning, TeleCommunication Systems
10. Vishal Gupta, Vice President North America, Qualcomm Inc
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 2011 and seeing many of
you along the way. We hope you enjoyed gaining from the collective wisdom.
Be well, Do Cool Work, Stay in touch.
Thanks. With warm wishes,
Your feedback is always welcome.
Thanks.
Chetan Sharma
Now onto the 2011 Mobile Industry Predictions Survey Results
The panel comprised of movers and shakers of the mobile industry from around the world.
What will be the biggest stories of 2011?
In last year’s survey, Google/Android narrowly missed out to be the biggest story of the year but this year, the verdict was clear that Google will continue to dominate the headlines with Android devices and new updates and apps. Given that we are in the midst of 4G deployments and ITU’s flipflop on the definition, we could be in for an interesting year.
When will Verizon iPhone launch?
Inordinate amount of ink has been spilt over Verizon’s iPhone speculation. However, given the chatter, our panel voted for a Q1 launch.
Who will be the most open player in the mobile ecosystem in 2011?
In all our surveys Google has consistently cemented its perception of being the most open in the ecosystem.
Will Android tablet sales exceed iOS tablet sales in 2011?
Last year, Android OS edged past iOS, however, given the lead iOS has had in tablets, it might be hard to overcome the number of shipments in 2011.
Who will make the biggest mobile acquisition in 2011?
Got Cash? Big players are likely to go shopping but who will score the blockbuster deal of the year. Google and Microsoft will duke it out with Google taking the spoils.
How will the "Apps vs. Mobile Web" debate shape up in 2011?
Apps vs Mobile Web has been as hotly debated in the industry as the CDMA vs. GSM battles of the past. Our panel thought Apps will continue to grow though mobile web starts to show its muscle.
By how much will the mobile advertising ad-spend increase in 2011?
Our panel was more bullish on mobile advertising than last year with a good 50% of respondents aiming for 200% growth and higher.
Which market will be the biggest infrastructure in 2011 for sales opportunities?
India and China are laying out 3G and North America is expanding on 4G. Infrastructure contracts abound.
Who will be the mobile come back story of 2011?
Many long-time players are under the gun this year. Will Windows 7 help Microsoft or will Meego make Nokia competitive. Story will unfold this year.
Who will end up having the strongest position in the mobile payment/commerce space?
While Japan/Korea markets have developed mature mobile payments solutions, the battle royale of mobile payments in North America will play out between the financial guys and Operators with Internet players making a strong run at it as well. 2011 might help decide the long-term winners in the space. Our panel thinks, the likes of Mastercard and Visa will edge out others in the tussle.
Which areas will feel the most impact from Regulators in 2011?
Regulators can have a huge impact on the course of the industry and nation’s competitiveness. With the laws all but laid out, the real rulings might come from the courts.
Which solutions will gain the most traction for managing mobile data broadband consumption?
2010 saw the emergence of tiered data pricing in North America and operators all over the world are bracing for a long-term challenge of managing mobile data growth. We have written extensively on this subject in our Yottabyte series. Our panel voted for Tiered pricing and 4G as the top two solutions.
Which category will generate the most data revenues in 2011?
Global markets are quite different and while data service revenues have been growing in all regions, our panel breaks down by categories in terms of expected contribution from various segments.
What will help mobile cloud computing gain traction in 2011?
Mobile Cloud Computing is expected to take several strides in 2011 with Media and Enterprise demand at the forefront.
What will be the most successful non-mobile phone category in 2011?
As we have highlighted in our previous research, Connected devices have shown tremendous growth in 2010. Tablet seems to be clear category winner.
What will be the breakthrough category in mobile in 2011?
Mobile payments and commerce are starting to take off and are expected to show the most growth in 2011.
By the end of 2011, how will we end up defining 4G?
ITU’s flipflop means, anything above HSPA+ will be deemed a 4G technology.
Which enterprise segment will mobile impact the most?
Mobile as a platform is booming with Retail finally getting into the swing of things and will show the most activity in 2011.
What will be the dominant revenue model for apps in 2011?
While paid apps dominated the revenue stream in the early days, advertising and in-app payments are taking off on iOS and Android. Developers will play with a combination of models depending on what works on a given platform.
What mode of mobile payments will get traction in NA and WE in 2011?
Operators experimented with mobile payments over the last few years, now is the time to put the solutions to the test.
Who was the mobile person of the year?
Who can compete with King Jobs. Launching iconic devices year after another, Steve Jobs has set the direction of the industry since 2007 and was a clear favorite for the mobile person of the year. The tremendous success of the apps personified by blockbuster hit of "Angry Birds" took away the second spot with Andy Rubin’s Android effort won him the third spot.
Well, there you have it. The top trends and stories we will be talking about in 2011. Thanks again for all who participated and we hope that you found this useful as you embark on your journey for the year.
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 2011. The next Global Wireless Data Market update will be issued in Mar 2011.
Disclaimer: Some of the companies mentioned in this paper are our clients.
US Mobile Data Market Update Q3 2010 November 7, 2010
Posted by chetan in : 3G, 4G, AORTA, ARPU, CTIA, Devices, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Intellectual Property, Location Based Services, MVNO, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Event, Mobile Future, Mobile Future Forward, Mobile TV, Mobile Traffic, Smart Phones, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Mobile Data Market Update Q3 2010
http://www.chetansharma.com/usmarketupdateq32010.htm
Executive Summary
The US wireless data market grew 7% Q/Q and 25% Y/Y to exceed $14B in mobile data service revenues in Q3 2010 - on track to meet (and most likely exceed) our initial estimate of $54B for the year.
Sprint had a second straight positive net-add quarter. T-Mobile also reversed its losses and had a net-positive quarter though postpaid additions were down for both the carriers. 2011 is shaping up to be an interesting year with some big M&As on the cards. The launch of 4G networks provides an opportunity to realign the industry.
The US subscription penetration crossed 96% at the end of Q3 2010. If we take out the demographics of 5 yrs and younger, the mobile penetration is now past 101%. While the traditional net-adds have been slowing, the “connected device” segment is picking up so much that AT&T, T-Mobile, and Sprint added more connected devices than postpaid subs in Q3 2010. Given the slow postpaid growth, operators are fiercely competing in prepaid, enterprise, connected devices, and M2M segments.
The role of connected devices
In the connected device category, tablets led almost singlehandedly by the iPad is taking away the lion share of the revenues. The whole category is catching up speed in the US with 12% growth Q/Q much higher than in the postpaid segment which has trickled down to 1% Q/Q growth by Q3 2010.
We expect that in less than 5 years, the connected devices category will generate more revenue for the operators than the entire prepaid segment in the US. While today, connected devices represent only 3% of the quarterly data revenues, this segment didn’t really exist a few months ago and will keep on gaining strength every year for the foreseeable future.
In terms of financials, the addition of connected devices units and revenues to the mix masks the tremendous growth in smartphone related data revenues. For example, T-Mobile lost 360K postpaid subs but added 300K connected devices for a net loss of 60K subscriptions. Because of lower ARPU, Connected devices have a dilutive impact on the revenues and ARPU so the overall ARPU for postpaid segment for T-Mobile was $52 instead of $55.
iPad literally created a new category and rest of the industry is scrambling to respond. Some just want to follow Apple’s trail to cash in while others don’t want to competing head-to-head with Apple so they are launching smaller sized units. There will be others who will launch devices at every inch increments just to see what sticks. However you might slice and dice the market, the segment is here to stay and as we had mentioned before, Netbooks will take a hit as the category was the creature of a falling economy and with a viable alternate, the need for Netbooks diminishes.
Mobile Data Consumption
Data traffic continued to increase across all networks. There are some superphones that are routinely average more than 1 GB/mo, superphones as a category is averaging 700-800 MB/mo. By the end of 2010, we expect the average US consumption to be approximately 325 MB/mo up 112% from 2009. This puts US right behind Sweden in the top two by per capita mobile data consumption. While the US lags Japan and Korea in 3G penetration by a distance, due to higher penetration of smartphones and datacards, the consumption is much higher than its Asian counterparts. Given that it is also becoming the largest deployment base for HSPA+ and LTE, most of the cutting edge research in areas of data management and experimentation with policy, regulations, strategy, and business models is taking place in the networks of the US operators and keenly watched by players across the global ecosystem.
As we had forecasted, the tiered pricing structure for mobile broadband expanded further with Verizon and T-Mobile following AT&T in deploying policy management strategies for controlling data margins. We will see the pricing evolve over the next 2-4 quarters as the US mobile ecosystem adjusts to the new realities and strategies for mobile data consumption.
What to expect in the coming months?
Kids of the now generation are growing with connected electronics that is fundamentally altering the behaviors and expectations of interaction, communication, consumption, and monetization.
Microsoft launched its much anticipated Windows Phone 7 in a bid to recapture the mind- and unit-share. By taking a different UI route, it actually has a shot to be a viable third option to iPhone and Android and pushing RIM from the top 3.
All this has setup an absolutely fascinating 2011 in the communication/computing industry. Convergence is everywhere and is leading to fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 15th event – Mobile Future Forward which is bringing exceptional industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. More details to come. We will also be discussing the trends and opportunities in our Dec Mobile Breakfast Series event.
US is also leading the way in smartphone sales. In Q3 2010, 47% of the devices sold in the US were smartphones compared to 24% globally. The fast pace of device introduction has catapulted the agile players like Samsung and HTC to the forefront while others like LG and Sony Ericsson have lost ground. By focusing singularly on Android and by broadening the device portfolio, Motorola has written a great comeback script.
The pace of product introduction is accelerating with each quarter. Devices of all shapes and sizes are coming into the market literally every week. Players are having to re-evaluate their businesses and long-term strategies. There are several players whose future is at stake (to put it mildly). The competition has grown fierce and companies are finding it hard to take ideas from R&D to products in market in a short amount of time.
While 2010 started quite active on the regulatory front as the national broadband plan was unveiled in March little substantive progress has been made w.r.t. the spectrum, net-neutrality, and other broadband related issues.
To start planning for 4G, 5G, and beyond, US should think about rolling a 50 year broadband plan. While more spectrum is always helpful, will we have all the spectrum we need in 2050? or do we need to invent new technologies and business models that use spectrum more wisely? This topic will keep the industry occupied for some time to come.
ITU christened LTE-A and Wireless MAN-Advanced as the “official” 4G technologies but the marketing departments cared less. (We will be releasing the next edition of our “State of the “Mobile” Broadband Nation” in the coming months.
As we had mentioned last year, the mobile data traffic kept on growing disproportional to the revenues. A series of solutions have come into the market from players big and small. We released the second edition of our in-depth research paper on data growth - "Managing Growth and Profits in the Yottabyte Era" earlier this year.
Finally, operators are starting to diversify more aggressively than in the past. AT&T’s mobile enterprise business is a leading indicator of this trend. Their focus by verticals has yielded new revenue streams and positioning them to become a one-stop shop for devices, access, and services in the enterprise market.
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 2010 US wireless data market is:
Service Revenues (Slides 7, 17)
- The US Wireless data service revenues grew 7% Q/Q to $14B in Q310. The mobile data revenues for the US market are likely to reach $55B in 2010.
- Verizon and AT&T accounted for 85% of the increase in data revenues in Q3 2010.
- T-Mobile’s 3G drive is starting to pay off. While the postpaid net-adds were still in the red, its data growth is starting to match with its peers. The 21% 3G smartphone base definitely helps.
- AT&T and Verizon now account for 70% of the market data services revenues and 62% of the subscription base.
ARPU (Slides 8-11)
- The Overall ARPU decreased by $0.17. Average voice ARPU declined by $0.99 while the average data ARPU grew by $0.82 or 5% Q/Q.
- The average industry percentage contribution of data to overall ARPU is now 33% in Q310.
- Verizon led in data ARPU with $18.61 followed by AT&T and Sprint. In terms of % contribution, all the top three operators exceeded the 30% mark. T-Mobile ended the quarter with approximately 27% of its revenue coming from data services.
Subscribers (Slides 12-15)
- Helped by the growth in connected devices, the overall net-adds increased by 4.5M.
- For the fourth straight quarter, AT&T reported more net-adds from connected devices than postpaid subs. Connected devices are now 8% of AT&T’s subscription base.
- Overall, Verizon and AT&T are tied in terms of total connected devices on the network thought AT&T has a much more diverse and revenue-rich base.
- The connected device segment grew 12% Q/Q and 42% Y/Y.
- Sprint extended its streak of positive net-adds to two quarters by adding over 600 subs while T-Mobile reversed its customer losing streak thanks to the growth in the prepaid and connected devices segments.
- The national prepaid penetration is touching 20%.
Applications and Services
- Non-messaging services continues to grab 60-65% of the data revenues for the US carriers.
- There is a significant shift taking place in terms of app revenues. In 2010, there will be more revenues generated (globally) from off-deck than on-deck for the first time and while the on-deck revenues are in billions, the decline trend looks irreversible. In the US, this shift will occur next year. (We released our mobile apps economy research paper earlier this year)
- The usage and data consumption trends are enabling carriers to accelerate their 3.5G/4G plans and develop long-term business and technical strategies.
Handsets
- Nokia sold 110.4M units in Q3 2010 amounting for 32% of the market share. Samsung continues to be one of the most agile players shipping a whopping 71.4M for a 21% share of the market. Apple also edged past RIM to be in the top 5.
- While rest of the industry counts units, Apple counts $ and leads in the revenue share. It shipped 9.1M iPhones in Q3 despite the backlash over the antenna design.
Data Traffic (Slide 16)
· As we noted in our previous updates, the data traffic is now significantly more than the voice traffic. By end of 2010, we expect the average US consumer was consuming approximately 325 MB/mo up 112% in 12 months. The good news is that there are several solutions available and are being invented that will help manage the data growth starting with the tiered pricing plans.
Your feedback is always welcome.
Thanks.
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 Mar 2011. The next Global Wireless Data Market update will be issued in Dec 2010. Be sure to participate in our annual mobile industry predictions survey coming out in Dec 2010.
Disclaimer: Some of the companies mentioned in this paper are our clients.
CTIA Enterprise and Applications 2010 Wrap-up October 11, 2010
Posted by chetan in : 3G, 4G, AORTA, ARPU, CTIA, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, MVNO, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Future Forward, Privacy, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a commentCTIA Enterprise and Applications 2010 Wrap-up
http://www.chetansharma.com/ctiaenterprise2010.htm
Déjà vu - the experience of thinking that the current CTIA had occurred before.
This note summarizes the observations and opinions from the event, discussions, and briefings from the CTIA event that just concluded in San Francisco.
The Mobile Ecosystem
For me, the proceedings started with my talk “Mobile Apps: The Big Picture.” I generally start my talks these days by explaining the complexity of the mobile ecosystem. The traditional value-chains are morphing (and some cases being decimated) and the new ones are getting coalesced very fast. It is hard to summarize without going into the intricacies and the dynamic nature of the game. (I will be expanding on this theme again during my talk at University of Oxford this friday)
It is like a long marathon composed of 100m sprints where new players can enter and leave midstream. Players can merge en route to gain strength and speed or blow up before reaching the next 100m. The friends in this segment of the race might turn into competitors in the next segment. To throw a wrinkle into the mix, regulators or any one player can change the rules of the game such that 100m can become 50m or 200m and the players have to adapt and respond accordingly.
The race is in the open so the weather elements can impact but doesn’t stop the race. In such a brutally competitive environment, only the players who are super-agile or super-innovative or both have enough juice left to compete effectively in the next leg of the marathon. The successful ones are those where the C-suite and the troops are watching the KPIs of each step at the granular level so they have real-time intelligence of taking the next stride.
It requires the perfect blend of Usain Bolt and Samuel Wanjiru to compete in the “new” mobile landscape.
For example, Samsung, HTC, and Motorola (recently) have adapted remarkably well to this fast-paced marathon but their friendly rival LG has suffered and will need some time to regroup and be a force again. Microsoft faltered and didn’t adapt while new entrants like Apple and Google set the terms of the race. Watch out for what Facebook does in the space. Given their scale, their user understanding, and their product portfolio, if they execute certain elements of their strategy right, Facebook can be front runner in this ecosystem.
Some of the operators who have traditionally felt safe on their home turf are getting challenged. They are reinvigorating the industry segments they could have dominated before though it is probably too late in some areas.
Mobile Enterprise - The unglamorous cousin of the consumer segment
Enterprise is hot again. AT&T and Sprint have become very focused on becoming the “total solution providers” vs. just providing data subscriptions and devices. A&T is making a big push for the enterprise market and showcased several of its wins in the healthcare, education, retail, shipping, and other verticals. As I have talked about before, (mobile platform will) let a thousand industries bloom! Cloud computing is another area where we are going to see some interesting developments over the course of next 6 months (I will be moderating a panel on Mobile Cloud Computing at the upcoming Open Mobile Summit in Nov)
LTE
At CTIA, Verizon formally announced their LTE plans with almost 40 markets. It has moved aggressively in the last 24 months to get the network and slew of devices ready. Verizon’s marketing machine will let loose come Christmas and CES. AT&T also announced its “LTE ready” devices.
Mobile Devices: Competitive landscape
iPhone is likely to be launched on a second US carrier in Jan and is going to offer first true iPhone vs. Android test. In the meantime, a stable of Windows Phone 7 launched today after the announcement 8 months back in Barcelona. I do like a fresh approach to UI design akin to flipboardification of the apps icon-based layout (which is so desktopish). Things started to move in this direction with Motorola Blur last year and INQ a bit earlier.
The question is not if Microsoft has done a good job with WP7. It has. The question is - how soon does Microsoft come with its second round of handsets and software upgrades? And how soon will it be able to sign up additional OEMs. Remember, a few extra hops doesn’t guarantee unfair competitive advantage for the next 100m. Microsoft is starting from 0 and will have to execute on all fronts to be considered a serious contender come 2011 Christmas season. Finally, there is always room for another player, another platform. These things go in cycles. The trick is to capitalize on your opportunity and not be the one left standing when the music stops.
Coming back to my talk, I do think that an analytics driven UI is where we will end up on the smartphone UI and the whole debate around “mobile web vs apps” will be rendered moot to some extent. I expect Apple will come out with its iteration of the next generation UI soon.
Connected Devices
Mobile as a platform is maturing and we can see this in the growth in connected devices and vertically focused solutions - healthcare, energy, education, etc. The fact that the connected devices have become the next battle ground was clear from the fact that Ford had a major presence at the show. Their telematics strategy is very well executed. In our own work in the space, there is some cool stuff that is going to get rolled out in the next 24 months. Secondly, Samsung was displaying its tablet as if it was the only device it built. Apple has created a new category and others are lining up to cash in.
Mobile Apps vs. Web
The noise around “mobile apps vs. web” is reaching a fervent pitch. It is rather a silly debate. Developer care about reach, revenue potential, and the cost of the reach. Users care about the best user experience and cheapest access. Ecosystems are built around these two simple notions. Recent data from Comscore revealed something interesting. Looking at the smartphone data between apps and browser, while overall, the apps usage was higher compared to that of the browser, browser was considered a better way to navigate in various categories like news, search, and social networking by a good margin. However, games which happens to be generating the lion share of the apps revenue will continue to be a native play for some time to come because developers don’t want to compromise and the browsers are not there yet.
Over all, great to catch-up with friends and colleagues. CTIA, thanks for the networking party. 2011 looks pretty darn interesting already (we will be discussing the trends and opportunities in 2011 in our upcoming Mobile Breakfast Series event on Dec 8th)
Some of the other news worthy items were:
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Sprint launched Sprint ID that helps customize the clutter on the device. Again, the limitations of the icon based UI are becoming clearer.
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Androids keep multiplying like gremlins. Motorola launched a series of Android devices, some squarely focused on the enterprise.
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CTIA released its semi-annual industry survey results: 293M subs, $79B in rev in first 6 months, data revs $25B up 12.4% in the first 6 months. Capital investment of $21.6B in last 12 months. SMS traffic in June 10 - 173B.
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Some are realizing that a flatter network architecture is needed to manage data growth and margins. We have written extensively about this subject in our Yottabyte Series.
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In a show devoid of cool demos, OpenMarket demoed interaction with the vending machine using a mobile device something Finns have been doing for a decade.
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NFC was barely discussed but if all things line up, it could be one of the top stories of 2011.
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More CTIA coverage at Wireless Week, Moconews, RCR Wireless, CNET, etc.
Your feedback is always welcome.
Thanks.
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 Nov 2010. The next Global Wireless Data Market update will be issued in Oct 2010.
Disclaimer: Some of the companies mentioned in this paper are our clients.
Mobile Future Forward 2010 Summit Summary September 20, 2010
Posted by chetan in : 3G, 4G, AORTA, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, Mobile Advertising, Mobile Applications, Mobile Ecosystem, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile Traffic, Mobile Wallet, Networks, Partnership, Patents, Privacy, Smart Phones, Speaking Engagements, Student Paper Contest, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far
Summit Summary
In proud partnership with
Amdocs, Millennial Media, Real Networks, ZTE, Clearwire, Ericsson, Openmarket, Bango, Intel, Openwave, Wavefront, and Department of Commerce
Earlier this month, Chetan Sharma Consulting hosted its first mobile thought leadership executive summit – Mobile Future Forward. The sold-out event attracted leaders from the global mobile industry across the ecosystem to discuss and debate the future of mobile. This note summarizes the various discussions from the summit.
Some of the key themes discussed by the speakers and panelists were:
1. The Mobile Ecosystem is becoming more complex and competitive by the day
2. Broadband is exploding around the globe, Nation’s competitiveness and prosperity is being defined by the quality and depth of Broadband
3. Mobile Device is becoming central to our existence
4. Understand the user, generational usage patterns, geographical differences and customs
5. Communication modes are evolving and morphing rapidly
6. Emerging Devices are taking the lion of share of growth in some western markets
7. Given the devices and networks, content, media, services are moving to the cloud
8. New experiences are being introduced that will impact monetization and interaction with computing and technology
9. World is becoming flatter by the day
10. Mobile as a platform is booming and several industry verticals are exploding
11. Context and Analytics are key currency for tomorrow
12. There is significant reallocation of revenues underway
13. The fight for developer mind share is getting intense
As technologists, we get too enamored with the technical details and specs but what’s most important is how can technologies be applied to make lives of every day consumers better. If a new solution or a service only benefits or thrills a few, it is destined to miss the mass market. No one understands the mass market better than Procter & Gamble, and no company in the world touches more consumers with more products than Procter & Gamble (with over 40-50 billion items per year). Technology plays a central role in how P&G thinks about engaging consumers. Last year, I had the privilege of spending some time with Steve David, our first keynote speaker. His understanding of the interplay between technology and consumer interaction and behavior is very deep and his enthusiasm for using technology to change the world infectious. Steve spent over 30 years at P&G , the final assignment as P&G’s CIO responsible for their Internet Strategy.
Steve laid out the case for Advocacy being the new measure of marketing. It has a lasting impact on the brand, the sales, and the relationship with the consumer. Companies who have a better understanding of the customer via sophisticated analytics and can quickly take the solutions and products that consumer want and need gain long-term competitive advantage. Insights from the market must be processed in real-time that can empower decision making at every level of the company. And mobile is central to this strategic shift. Mobile is being used to attack the counterfeit problem worldwide, in formulating personal recommendations as trust in brands erodes, in collecting analytics, and engaging interactions with products and services using NFC, etc. Steve ended with the old Chinese proverb, “When the wind changes direction, there are those who build walls and there are others who build wind mills.” What are you going to build?
Fred Devereux, President, AT&T West in his address on “The Next Big Thing” honed in on the emerging connected devices ecosystem and how AT&T is retooling itself to take advantage of the boom. The AT&T Emerging Devices organization is setup to behave and operate like a startup with hundreds of devices being approved in a short amount of time. The new generation of connected devices range from eReaders, PNDs, Telematics, Cameras, Camcorders, Picture Frames, Tablets, Tracking Devices, Gaming Devices, and Smart Meters. While the ARPU of these connection is low, the margins are high due to negligible overhead in operations, sales, and marketing. The importance of this category is evident from the research data we reported in our last quarterly report which indicated that there are more connected devices being added than postpaid net-adds and operators are starting to list them as separate line items in their financial statements. Fred also discussed AT&T’s plans to deploy LTE in 2011-.
Dr. Genevieve Bell, Fellow at Intel is one of the most fascinating anthropologists out there with an acute sense of technology evolution and how humans react and adapt to changes around them and how technology needs to adapt to humans and their needs in different habitats. She had some interesting stats from her research e.g. the household sizes vary significantly by countries – India has only 5% of the households as single-person households while France and Germany have over one third households as single-person. Boomers will represent more than half of the population of China, Japan, and EU by 2012. These demographic shifts have significant impact on how technology is used and how media is consumed. The keynote was filled with priceless anecdotes and research items that informed and gave the technologists something to think about and that the technologists are not the proxy for rest of the population. Her book “Telling Techno-Cultural Tales” is being published by MIT Press and is coming out next year. So, be on the lookout for that.
Mobile Advertising is in the news lately in the US. About 11 years ago, a young man named Takayuki Hoshuyama was making waves in the mobile advertising space. In 1999, he helped found D2Communications - a successful joint venture between the largest advertising firm in Japan - Dentsu and the largest and one of the most innovative operator on the planet - NTT DoCoMo. He was one of the original members of the Mobile Advertising Team for the i-mode service 11 years ago. In June, he was appointed CEO of D2C. Hoshuyama-san talked about the future of mobile advertising. Japanese mobile ad market is over $1B (though it represents only 1.7% of the overall ad spent) and with the advent of 4G/LTE the opportunities are enormous. Display outscores Search by 3:1 in ad revenues. Mobile is some embedded in Japanese culture that it is just assumed just like my good friend and coauthor Dr. Yasuhisa Nakamura, then CTO of NTT DoCoMo wrote back in 2002 in our book “the wireless infrastructure will become indistinguishable from air i.e. omnipresent”
Hoshuyama-san also talked about the evolving role of the operators in the ecosystem with some of them focused on becoming the cloud service providers and broadcasters.
After the keynotes, we shifted to panel discussions. The first one dealt with the disruptive forces in the ecosystem with Mike Sievert, Chief Commercial Officer, Clearwire, Lixin Cheng, CEO, ZTE USA, and Subba Rao, CEO, Tata DoCoMo – three leaders who are disrupting the status quo. All three agreed that the openness of Android will make it the most dominant OS in the coming years. Lixin talked about how the infrastructure business is becoming a software business with SDR design of technology standards and evolution. He also suggested that we as an ecosystem need to simplify the business models and the consumer purchasing process of bandwidth and connectivity before the connected device revolution takes significant hold. India is the fastest growing market but the ARPU levels are 1/10th of what they are in the US. Given that the market just spent over $100B on the 3G auction, the investment recovery model is unclear and the market is ripe for a big shakeout. Telenor, having lost over half a billion dollars is desperate to get out of the market. The pains of globalization are showing up in other regions as well. Mike mentioned the high average data consumption at Clearwire (currently at 7 GB/mo) – clearly a precursor of what’s to come (our research shows the national average was 230 MB/mo as of Q2 2010). In terms of new technology areas, the panel was interested in products that help with spectrum efficiency, reducing the cost structure, and in improving the battery performance.
As part of the Mobile Future Forward Initiative, we had also worked on two other projects:
· The Mobile Future Forward Book that consisted of thought provoking essays on the future of mobile from the speakers of the summit and
· The global student paper contest that invited the papers form university students from the around the world
It required enormous collaboration with the folks around the globe in a very short amount of time. We are very proud of the outcome.
Mobile Future Forward Book
The second project related to a limited edition book by Chetan Sharma Consulting (published by Futuretext) exclusively for the event. Some of these summit speakers put their insights and ideas on paper that resulted in this book. We are very grateful to the authors (and their respective organizations) who carved out time from their busy schedules to pen some really insightful commentary on how they see the mobile industry evolve both holistically and in the various segments of the ecosystem. While the views are quite diverse and bring together perspectives from different angles, everyone agrees, 2010-2020 will be one heck of a time period for innovation.
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The book has the following pieces: 1. The Next 10 Years - 15 Trends That Matter - Chetan Sharma 2. Sustainability in a Mobile World - Stephen David 3. Managing The Mobile Data Explosion - Wim Sweldens 4. Show Me The Money! - Brian Shepherd 5. Mobility Revolutionizing Every Product, Service, and Process - Russ McGuire 6. How Constant Connection Is Changing Our World - Ken Denman 7. 4G: The Next Big Thing - Mike Sievert 8. The Untapped Potential of Mobile Advertising and Marketing - Takayuki Hoshuyama 9. Mobile Operators are at the Center of Mobile Advertising - Krishna Vedati 10. Mobile Challenges - Three Imperatives in the Changing Game - Russ Shaw 11. Interacting With Everyday Things - Amir Mashkoori 12. In The End, It’ll All Go Through “Browse and Buy” - Anil Malhotra 13. The Future of Mobile: 5 Trends That Matter Most - Jay Emmet 14. India’s Mobile Future Forward - Subba Rao 15. Cellphone As The New Computing Platform - Sailesh Chutani 16. What 5 billion Phones Could Mean for Health Literacy - Jon Stross 17. Privacy: From Compliance To Competitive Advantage - Sarla Sharma 18. Managing Growth and Profits in the Yottabyte Era - Chetan Sharma |
We will be giving out some copies of the book during our Annual Predictions Survey in Dec, so be on the lookout for that participation request.
Student Paper Contest
Despite, the summer recess, we received an a very positive response from students around the globe. The top six entries went through rigorous scrutiny of our judges:
1. Pankaj Kedia, Head of Mobile Ecosystems, Intel
2. Subba Rao, CEO, Tata DoCoMo
3. Len Barlik, VP, Sprint Nextel
4. Jeff Giard, Director, Clearwire
5. Paul Palmieri, CEO, Millennial Media
6. Matt Oommen, CTO, Sprint Nextel
7. Paul Struthers, Head of Regional Marketing, Amdocs
The top two students were Lun Huang and Smruthi Pariccha and they were invited to join us for the event and receive their prizes.
The final ranking was as follows:
1. UWB Based on Multi-Band MC-CDMA and Magnetic Near-Field –Lun Huang, Electrical and Computer Engineering, Illinois Institute of Technology, US
2. Ubiquitous Peer Proximity Awareness in Mobile Environments –Smruti Parichha, Dept of Computer Science and Engineering, University of California, Riverside, US
As a mobile strategist, I get to see some of the cool technologies before they hit the market. For the demo this year, we selected Microvision’s cool projection technology where you can interact with the projected screen in thin air by waving hands. Yes, you got it. You had to be there to see it. It was shown for the first time to the general public and we are thankful to Selvan Vishwanathan and Andrew Rosen, the two engineers (and their colleagues) behind this exciting emerging technology that will expand the horizons of mobile interactivity and media engagement.
The afternoon sessions started delving into specific topics and details that were touched upon at the high level during the morning sessions. Each of the panels had an absolutely stellar cast who are deeply engaged in defining the mobile ecosystem right now.
Network and Mobile Data Evolution 2010-2015
Wim Sweldens, President - Wireless Division, Alcatel-Lucent,
Neville Ray, Chief Network Officer, T-Mobile,
Bob Azzi, Senior Vice President, Sprint,
Matt Bross, CTO and Vice Chairman, Huawei
Sean Cai, Vice President - Advanced Wireless Technology, ZTE,
Ken Denman, CEO, Openwave (moderator)
There is a big debate about network evolution - how fast does LTE need to come to the market? Will LTE be enough to help with the data tsunami. The consensus was a resounding No but LTE brings in some key capabilities like an all-IP network that enables new capabilities for multimedia applications and services, lowers the per bit cost, and reduces latency for superior user experience. Of course, the RAN is only part of the story, the backhaul needs to get upgraded as well to handle the load. The panel also emphasized simplicity in services without making things burdensome for the consumer with new technology. The other area of concern is of course the spectrum. Will there be ever enough spectrum? The issue is more acute for some operators. Finally, the focus need not to be on the bandwidth or the latency, from a user’s point of view, it is always about the services and things they can do with more bandwidth and lower latency.
Future of Content, Engagement, and Monetization
Louis Gump, Vice President - Mobile, CNN,
Omar Javaid, Vice President, Converged Media, Motorola (moderator),
Paul Palmieri, CEO, Millennial Media,
Rob Glaser, Chairman, Real Networks and Partner, Accel
Superphones and smartphones have changed the landscape for content, engagement and monetization. Superphones are most open and it is reflected in the results, more engagement and higher app usage. Apple/Android have also put US back in the leadership role when it comes to devices. CNN has seen high degree of non duplicated reach and reach is king when it comes to mobile advertising. The ad platforms are going into the next stage of evolution with more multimedia, better monetization opportunities, and higher value for the consumer. For content providers, ads can’t be the only strategy to generate revenue, subscriptions and/or micro transactions need to be part of the equation as well.
The Balance of Privacy and Monetization from Consumer Data
Krishna Vedati, Senior Vice President, AT&T Interactive,
Chris Murphy, Head of Digital Strategy, adidas
Dr. Nitin Shah, CEO, Feeva,
John Giere, Senior Vice President, Openwave,
Jeremy Lockhorn, Vice President - Emerging Media, Razorfish (moderator)
It is a complex issue and our insightful panel talked through the intricacies and the balance of monetizing using consumer data while meeting user’s expectations on privacy. One has to give something of value to the consumer before they trade up. Advertisers like adidas want to move from 1-2-many to 1-2-1 relationship with the consumer that increases the volume and quality of the transactions. The valuable variables to track are location, propensity to buy, past actions, traffic inputs, etc. Discovery and recommendations also become important part of the whole process. Of course, regulators are eager to jump in as well. It will be one of the key issues defining the industry landscape over the next 5 years.
mHealth - The Impact on Society and Global Health
Dr. Sailesh Chutani, CEO, Mobisante (moderator)
Jon Stross, General Manager and VP, Babycenter.com
Tim Wood, Director, Grameen Foundation
Greg Brandenberg, CEO, Columbia Basin Health Association
Dr. Suzanne Clough, Chief Medical Officer, Welldoc
mHealth is one of those areas which has been talked about for a long time and where mobile is starting to have a truly disruptive run at the industry. While the regulations and the dinosaur health care industry have been slow to adapt, there are a number of innovative companies like Welldoc, Babycenter.com, Mobisante, and others who are forcing rethink and change in the status quo. Greg’s CBHA is forced to think differently and has looked to technology to solve their challenges. Serving in the rural areas of WA state, his team has been testing out new solutions such as cell phone based ultrasound system from Mobisante that is 1/10th the cost of what GE sells for. It is much more portable and flexible and works well with the field work force. Tim’s Grameen Foundation is similarly leading the charge in nations like Ghana where mobile has been used to solve real-life health issues. Jon’s Babycenter has been expanding in other regions and increasing revenues at the same time. However, the test results and trials can still take inordinate amount of time (it was 3 years for one of the trials). The opportunity is immense but regulators, healthcare industry, pharma giants, and the rest are starting to come to grips with the role that mobile can play in transforming lives and P&Ls.
Mobile Cloud Computing - At the Tipping Point?
Hank Skorny, Senior Vice President - Media Cloud Computing, Real Networks
Brian Shepherd, President - Mobile Services and Marketing, Amdocs
Marianne Marck, Senior Vice President, BlueNile
Mike Wolf, Vice President - Research, GigaOM (moderator)
Erez Yarkoni, Chief Information Officer, T-Mobile
Cloud is changing IT and cloud is going to change mobile media. It helps take out some of the complexities of media consumption, management, and sharing for the consumers and provides a lower cost structures for the media companies. There are opportunities for operators to provide cloud based services at many levels - storage, media, billing, bandwidth, profile, analytics, network intelligence and so on and so forth. Some are easier to implement while others requires more investment and change in DNA. From a developer’s perspective, cloud based services will be ideal to increase reach but we are not there yet as the capabilities of the browser are not comparable to the native environment on platforms like iOS and Android. Better user experience is essential and developers won’t compromise.
Evolution of Communication and Social Interaction
Mario Queiroz, Vice President - Product Management, Google
David Weiden, General Partner, Khosla Ventures
Robin Schofeld, Principal, Booz&Co (moderator)
Erick Tseng, Head of Mobile, Facebook
Pankaj Kedia, Head of Mobile Ecosystems, Intel
The panel delved into how the communication ecosystems might evolve. While there is discussion about open and closed (too much at times), it is about executing on a strategy that touches the most number of consumers. The closed gardens of Apple is quite dominating and so is the evolving Android ecosystem which is relatively open. At the end of the day, developers are looking to make a buck with the least amount of resources and reach the most of amount of users. Cloud based communications services are about to change the landscape in a big way. Google and Facebook both have had good successes and both suggested that we are just getting started and more innovation is going to come in the form of personalization and social interaction. Operators while ceding some of the communication territory can still have a viable broadband business. As far as social on mobile is concerned, we are still in the early days with lots of opportunities to enhance and engage.
Internet of Things - Emerging Ecosystems
Amir Mashkoori, CEO, Kovio
Danny Bowman, President - Integrated Solutions Group, Sprint
Mark Selby, Vice President - Industry Collaboration, Nokia
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Abhi Ingle, Vice President - Industry & Mobility Application Solutions, AT&T
Peter Koo, Vice President, Ericsson
The fact that there are more mobile phones than toothbrush brings home the point of the pervasiveness of mobile around the globe. The panel gave several examples of how “connectedness” is spreading across other electronic devices as well e.g. in Netherlands, 30K home care workers are equipped with NFC enabled devices which help interact with the patients (opens the door as well) without the need for paperwork, the records, helps with navigation. Overall result - happier workers, higher efficiency, and reduced carbon emission. The mobility for “connected devices” will try to leverage all RF radios as needed - 3G, 4G, Bluetooth, WiFi, Zigby, etc. Digital signage is emerging as a new area for consumer interaction and information. Some of the industries are on the verge of significant change - e.g. insurance where car insurance rates are given based on driving habits learned via telemetry vs. the old actuary table based rating systems. NFC is also enabling a lot of commerce opportunities by bringing the online world together with the physical world. However, as the ecosystem evolves, we need to also worry about QoS, security, and reliability concerns that various vertical industries have. Of course, the net-neutrality debate impacts the evolution. There are several scenarios where prioritization of data traffic is essential in emergency situations (ambulance transmission, fire fighting, etc.).
At the Intersection of Gaming, Social, and Commerce
Tim Chang, Partner, NVP (moderator)
Prashant Fuloria, Director - Facebook Credits, Facebook
David Marcus, CEO, Zong
Andrew Lacy, Senior Vice President, Disney Games
Alex Tokman, CEO, Microvision
Micro transactions is the new currency that scales up to billions of dollars in gaming and social networking. Free drives interest and the core 2-5% drive the revenues. If you ask for payment up front, virality component fizzles and the longevity declines. iTunes has been the gold standard for payments, carrier billing is starting to shape up and it will benefit the developers. HTML5+ in theory makes sense and is nice enhancement but the app experience is compelling for users. Discovery continues to be the sore spot and the burning opportunity. Whichever platform and mode of operation helps developers make more money, that’s where the momentum will shift. Today it is the iPhone but rival models are starting to pop up.
Our heartfelt thanks to everyone who helped in making Mobile Future Forward successful especially the sponsors (Amdocs, Millennial Media, Real Networks, ZTE, Clearwire, Ericsson, OpenMarket, Bango, Intel, Openwave, Wavefront, and Department of Commerce), participants, the moderators, and the speakers. Thanks to Caroline Lewko and David Smith for taking good notes. Planning for Mobile Future Forward 2011 is underway. Until then, best wishes and good luck in your pursuits, and we hope to see you next year. Thank You.
Mobile Future Forward Book September 17, 2010
Posted by chetan in : 3G, 4G, AORTA, ARPU, Enterprise Mobility, European Wireless Market, Mobile Future Forward, Mobile Gaming, US Wireless Market, VoIP, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 13 comments
We had a special project as part of the Mobile Future Forward Initiative. It related to a limited edition book published by Futuretext exclusively for the event. Some of these summit speakers put their thoughts and ideas on paper that resulted in this book. We are very grateful for the authors (and their respective organizations) who carved out time from their busy schedules to pen some really insightful commentary on how they see the mobile industry evolve both holistically and in the various segments of the ecosystem. While the views are quite diverse and bring together perspectives from different angles, but everyone agrees, 2010-2020 will be one heck of a time period for innovation.
The book had the following pieces:
1. The Next 10 Years - 15 Trends That Matter - Chetan Sharma
2. Sustainability in a Mobile World - Stephen David
3. Managing The Mobile Data Explosion - Wim Sweldens
4. Show Me The Money! - Brian Shepherd
5. Mobility Revolutionizing Every Product, Service, and Process - Russ McGuire
6. How Constant Connection Is Changing Our World - Ken Denman
7. 4G: The Next Big Thing - Mike Sievert
8. The Untapped Potential of Mobile Advertising and Marketing - Takayuki Hoshuyama
9. Mobile Operators are at the Center of Mobile Advertising - Krishna Vedati
10. Mobile Challenges - Three Imperatives in the Changing Game - Russ Shaw
11. Interacting With Everyday Things - Amir Mashkoori
12. In The End, It’ll All Go Through “Browse and Buy” - Anil Malhotra
13. The Future of Mobile: 5 Trends That Matter Most - Jay Emmet
14. India’s Mobile Future Forward - Subba Rao
15. Cellphone As The New Computing Platform - Sailesh Chutani
16. What 5 billion Phones Could Mean for Health Literacy - Jon Stross
17. Privacy: From Compliance To Competitive Advantage - Sarla Sharma
18. Managing Growth and Profits in the Yottabyte Era - Chetan Sharma
Thanks to everyone who helped make this project successful
Mobile Future Forward – Student Paper Contest Results Announced August 15, 2010
Posted by chetan in : 3G, 4G, AORTA, ARPU, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Event, Mobile Future, Mobile Future Forward, Smart Phones, Speaking Engagements, Student Paper Contest, US Wireless Market, VoIP, Wi-Fi, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far 
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On behalf of the Mobile Future Forward team, Intel – the contest sponsors, and the esteem panel of Judges from the mobile industry, I would like to thank all the students who participated in our inaugural “Student Paper Contest.” Despite the summer recess and only one month of preparation time, we got an overwhelmingly positive response from students in 9 different countries across Asia, Europe, and North America.
We very much appreciate the time and energy the students put in producing some exceptional papers that are indicative of their potential in the mobile space in the coming days.
We went through a rigorous selection process and our elite jury panel helped us pick and rank the top 6 papers. The contest judges were:
1. Pankaj Kedia, Head of Mobile Ecosystems, Intel
2. Subba Rao, CEO, Tata DoCoMo
3. Len Barlik, VP, Sprint Nextel
4. Jeff Giard, Director, Clearwire
5. Paul Palmieri, CEO, Millennial Media
6. Matt Oommen, CTO, Sprint Nextel
7. Paul Struthers, Head of Regional Marketing, Amdocs
The final ranking of the papers was as follows:
1. UWB Based on Multi-Band MC-CDMA and Magnetic Near-Field – Lun Huang, Electrical and Computer Engineering, Illinois Institute of Technology, US
2. Ubiquitous Peer Proximity Awareness in Mobile Environments – Smruti Parichha, Dept of Computer Science and Engineering, University of California, Riverside, US
3. Ubiquitous Augmented Reality – Anna Maria Ksiezopolska, Institute of System Level Integration – iSLI, University of Edinburgh, UK
4. Mobile Communications & Accessibility for Blind Users – M Kazi M. Yakoob, Chan Naseeb, and Hafiz Qasim, Politecnico di Milano, Italy
5. Mobile Future – Free CPU Everywhere – Ren C. Luo and CJ Chi, Intelligent Robot and Automation Lab, EE Dept, National Taiwan University, Taiwan
6. Serving the Poor Farmers by Mobile Agricultural Information: Quality of Service Assessment to Empower Rural Bangladesh – Mohammed Upal, Graduate School of Management, International University of Japan, Japan
Lun Huang and Smruti Parichha are being invited to meet with the senior executives in the mobile industry and attend the Mobile Future Forward conference. Rest of the authors in the top 6 will receive a book on mobile computing.
Abstracts of the winning papers are:
UWB Based on Multi-Band MC-CDMA and Magnetic Near-Field – Lun Huang, Electrical and Computer Engineering, Illinois Institute of Technology, US
Since the FCC opened up the spectrum for Ultra Wide Band (UWB) operation in the 3.1 to 10.6 GHz range, several standards have been proposed to realize moderate and high rate short-range communication systems. Under the WiMedia and Wireless Personal Area Networks (WPANs) umbrella [1][2], industry incorporated UWB as the technology to achieve high data rates up to 480Mbps for certain applications, such as wireless USB v2.0 and Laptop to HDTV audio/video extenders. In this paper, a novel UWB based on Affine Orthogonal Transform MC-CDMA and Magnetic near-field is introduced. The proposed new scheme is capable of improving the spectrum and power efficiency while provide good wireless link quality.
Ubiquitous Peer Proximity Awareness in Mobile Environments – Smruti Parichha, Dept of Computer Science and Engineering, University of California, Riverside, US
This paper proposes the idea of enabling all WiFi capable consumer devices with the knowledge of the locations of peer devices in their network neighborhood. We will use the term “peer-proximity awareness” to describe the ability to discover locations of peers and update this knowledge with changes in the network neighborhood. GPS functionality enables a device to locate its own coordinates in outdoor environments. Peer-proximity awareness is meant to provide knowledge of the location of peer devices with respect to itself in indoor environments, where mobile wireless devices are extensively used, but GPS capability is of little help. The accuracy in peer-proximity awareness is intended to be a few meters, or even sub-meter level, depending on the application. We will focus on extremely interesting applications that can leverage peer proximity awareness and show that it has great potential in the future of the mobile market.
Congrats to the winners and everyone who contributed to the process.
Thanks to all the students and their academic institutions for participating. I am sure our paths will cross again.
Best wishes for their successful academic and professional careers.
US Mobile Data Market Update Q2 2010 August 10, 2010
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Enterprise Mobility, European Wireless Market, IP Strategy, Indian Wireless Market, Location Based Services, M&A, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile Wallet, Music Player, Networks, Speaking Engagements, Speech Recognition, US Wireless Market, Unified Messaging, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 commentsUS Mobile Data Market Update Q2 2010
http://chetansharma.com/usmarketupdateq22010.htm
Executive Summary
The US wireless data market grew 6% Q/Q and 22% Y/Y to exceed $13.2B in mobile data service revenues in Q2 2010 - on track so far to meet our initial estimate of $54B for the year.
Having narrowly edged NTT DoCoMo last quarter for the first time, Verizon Wireless maintained its number one ranking for the 1H 2010 in terms of the operator with the most mobile data revenues (though the difference was thinner than the amoeba membrane). The total wireless connections for Verizon were almost 100M with 92.1M being the traditional subscriber base. Rest of the 3 top US operators also maintained leading positions amongst the top 10 global mobile data operators.
Sprint had the first positive netadd quarter in 3 years and has been slowly and steadily turning the ship around. T-Mobile did better on the postpaid netadds but overall additions declined again. The larger question for the market is if 4 large players can stay competitive. Generally, the answer is no. But these are different times and there are a number of permutations and combinations that are possible.
The US subscription penetration crossed 95% at the end of Q2 2010. If we take out the demographics of 5 yrs and younger, the mobile penetration is now past 100%. While the traditional net-adds have been slowing, the “connected device” segment is picking up so much that both AT&T and Verizon added more connected devices than postpaid subs in Q2 2010. Given the slow postpaid growth, operators are fiercely competing in prepaid, enterprise, connected devices, and M2M segments.
Data traffic continued to increase across all networks. By 1H 2010, the average US consumer was consuming approximately 230 MB/mo up 50% in 6 months. US has become ground zero for mobile broadband consumption and data traffic management evolution. While it lags Japan and Korea in 3G penetration by a distance, due to higher penetration of smartphones and datacards, the consumption is much higher than its Asian counterparts. Given that it is also becoming the largest deployment base for HSPA+ and LTE, most of the cutting edge research in areas of data management and experimentation with policy, regulations, strategy, and business models is taking place in the networks of the US operators and keenly watched by players across the global ecosystem.
As we had forecasted, the tiered pricing structure for mobile broadband touched the US shores with AT&T becoming the first major operator to change its pricing plan based on consumer consumption. We will see the pricing evolve over the next 2-4 quarters as the US mobile ecosystem adjusts to the new realities and strategies for mobile data consumption.
In the connected device category, iPad like its flashy cousin dominated the headlines, the sales numbers, and the industry profits. The device sent every slate maker back to the drawing board, many projects were cancelled and strategies are still being formulated to capture a new burgeoning space and Apple again has a massive lead of mindshare and pocketbook.
Kids of the now generation are growing with connected electronics that is fundamentally altering the behaviors and expectations of interaction, communication, consumption, and monetization.
All this has setup an absolutely fascinating period in the communication/computing industry. Convergence is everywhere and is leading to fundamental reset of the value chains and ecosystems. We are going to be discussing the ins and outs of how the industry is going to evolve in the next decade in our Sept 8th event – Mobile Future Forward which is bringing exceptional industry thought-leaders, inventors, and doers to brainstorm, discuss, and debate what’s next. Hope you can join the discussion.
What to expect in the coming months?
31% of the US subscription base is now smartphones.
The pace of product introduction is accelerating with each quarter. Devices of all shapes and sizes are coming into the market literally every week. Players are having to re-evaluate their businesses and long-term strategies. Several new impressive devices got introduced during the course of 1H of 2010 including the iPad and EVO.
There are several players whose future is at stake (to put it mildly). The competition has grown fierce and companies are finding it hard to take ideas from R&D to products in market in a short amount of time.
Microsoft announced its comeback with the W7 commercial launch imminent. The change in UI was refreshing and the expectations are quite high. W7 v2 is likely around the corner to update on the flaws of v1. HP acquired Palm in an attempt to become relevant again in the mobile device space. It has been an action packed 1H 2010 and we can expect more of the same for the remainder of the year.
2010 has also been active on the regulatory front as the national broadband plan was unveiled in March and the subsequent debate over the course of nations broadband future kept the spectrum, net-neutrality, and exclusivity issues at the forefront.
To start planning for 4G, 5G, and beyond, US should think about rolling a 50 year broadband plan. While more spectrum is always helpful, will we have all the spectrum we need in 2050? or do we need to invent new technologies and business models that use spectrum more wisely? This topic will keep the industry occupied for some time to come. (We will be going in-depth into this subject at our Sept event with some very senior and experienced executives)
2010 is also the year of network rollouts. T-Mobile has been rolling out HSPA+ at an impressive rate, Clearwire announced its intention to move to LTE, Verizon is betting big on LTE and looking for competitive marketing advantage over the course of the next 12 months. AT&T has been adding backhaul, upgrading to HSPA+ and planning for LTE all at once. Even the smaller carriers like MetroPCS are looking for competitive advantage with quicker LTE launch and beat others by carrying the first LTE smartphone. (We will be releasing the next edition of our “State of the “Mobile” Broadband Nation” paper later this year)
As we had mentioned last year, the mobile data traffic kept on growing disproportional to the revenues. A series of solutions have come into the market from players big and small. We released the second edition of our in-depth research paper on data growth - "Managing Growth and Profits in the Yottabyte Era" last quarter.
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 Q2 2010 US wireless data market is:
Service Revenues (Slides 7, 16)
- The US Wireless data service revenues grew 6% Q/Q to $13.2B in Q210. Compared to Q209, the mobile data service revenues grew 22%.
- Verizon and AT&T accounted for 75% of the increase in data revenues in Q2 2010.
- T-Mobile’s 3G drive is starting to pay off. While the net-adds were still in the red, its data growth is starting to match with its peers. The 20% 3G smartphone base definitely helps.
- Verizon Wireless again nudged past NTT DoCoMo in overall mobile data revenues by a whisker. By the end of the year, China Mobile and AT&T are also likely to cross their Japanese counterpart in quarterly mobile data service revenues.
- AT&T and Verizon now account for 70% of the market data services revenues and 62% of the subscription base.
ARPU (Slides 8-11)
- The Overall ARPU increased by $0.46 reversing the declining trend of the past three quarters. Average voice ARPU declined by $0.13 while the average data ARPU grew by $0.58 or 4% Q/Q.
- The average industry percentage contribution of data to overall ARPU is now 31% in Q210.
- Verizon led in data ARPU with $17.37 followed by AT&T and Sprint. In terms of % contribution, all the top three operators exceeded the 30% mark. T-Mobile ended the quarter with approximately 25% of its revenue coming from data services.
Subscribers (Slides 12-14)
- Overall netadds stayed stable at just over 3M with AT&T gaining the lion-share (though their count now includes the connected devices while other operators don’t specifically include that in the calculations).
- The texting see-saw between US and Philippines continued in Q210. US averaged around 639 messages/user/mo marginally behind Philippines.
- For the third straight quarter, AT&T reported more net-adds from connected devices than postpaid subs. Connected devices are now 7% of AT&T’s subscription base.
- Sprint got back into the positive net-adds territory again after 3 years. T-Mobile’s net-adds continued to decline. T-Mobile’s 20% and Sprint’s 23% subscriber base is now prepaid. The national prepaid penetration is touching 20%.
Applications and Services
- Non-messaging services continues to grab 60-65% of the data revenues for the US carriers.
- There is a significant shift taking place in terms of app revenues. In 2010, there will be more revenues generated (globally) from off-deck than on-deck for the first time and while the on-deck revenues are in billions, the decline trend looks irreversible. In the US, this shift will occur next year. (We released our mobile apps economy research paper earlier this year)
- The usage and data consumption trends are enabling carriers to accelerate their 3.5G/4G plans and develop long-term business and technical strategies.
Handsets
- Nokia sold 111M units in Q2 2010 amounting for 36% of the market share. Samsung again had a solid quarter with 64M devices sold with the share at 21%. LG Electronics at 10%, Sony Ericsson and RIM at 3.6% rounded up the top 5.
- Apple shipped 8.4M iPhones in Q2 but the criticism over the antenna design took some shine out from yet another home run.
- Smartphone penetration increased to 31% in the US market
Data Traffic (Slide 15)
· As we noted in our last update, the data traffic is now significantly more than the voice traffic. By 1H 2010, the average US consumer was consuming approximately 230 MB/mo up 50% in 6 months. The good news is that there are several solutions available and are being invented that will help manage the data growth starting with the tiered pricing plans.
To discuss all these trends and more, we are putting together a unique Mobile Future Forward Executive Summit and are fortunate to have the company of some of the sharpest minds in the industry, folks who both have the vision to shape the evolution and the authority to invest billions of dollars this decade to make things happen. Hope to see you in Seattle on Sept 8th.
Abhi Ingle, VP, AT&T; Amir Mashkoori, CEO, Kovio; Anand Chandrasekhar, SVP & GM, Intel; Bob Azzi, SVP - Network, Sprint Nextel; Christopher Dean, Chief Strategy Officer, Skype; Danny Bowman, President, Sprint Nextel; David Weiden, General Partner, Khosla Ventures; Dr. Boris Nikolic, Sr. Program Officer, Global Health & Discovery, Bill & Melinda Gates Foundation; Dr. Genevieve Bell, Intel Fellow & Director, User Experience, Intel; Dr. Greg Brandenberg, CEO, Columbia Basin Health Association; Dr. Sailesh Chutani, CEO, Mobisante; Dr. Suzanne Clough, Chief Medical Officer, WellDoc; Erick Tseng, Head of Mobile, Facebook; Glenn Lurie, President, AT&T; Hank Skorny, SVP, Media Mobile Cloud Computing, Real Networks; Jack Kennedy, EVP, News Corp; Joe Sims, Lead Partner - Digital Convergence , Booz & Company; Jon Stross, VP & GM - Babycenter, Johnson & Johnson; Ken Denman, CEO, Openwave; Krishna Vedati, SVP & GM - Mobile, AT&T Interactive; Lirong Shi, President, ZTE; Louis Gump, VP Mobile, CNN; Mario Queiroz, VP - Product Management - Android, Google; Mark Selby, VP, Nokia; Matt Bross, CTO and Vice Chairman, Huawei; Michael Sievert, Chief Commercial Officer, Clearwire; Neville Ray, Chief Network Officer, T-Mobile ; Omar Javaid, CEO, BBDO; Paul Palmieri, Founder and CEO, Millennial Media; Rob Glaser, Chairman, Real Networks and Partner, Accel; Sean Cai, VP - Advanced Technology, ZTE; Stephen David, Former CIO, Proctor & Gamble; Subba Rao, CEO, TataDoCoMo; Takayuki Hoshuyama, CEO D2 Communications; Tim Chang, Partner, NVP;Tony Lewis, VP, Verizon; Wim Sweldens, President, Alcatel-Lucent
Each panel discussion will involve luminaries/experts on specific topics, for e.g.
Opportunities in Mobile
Mike Sievert, CCO, Clearwire
Dr. Genevieve Bell, Fellow, Intel
Shi Lirong, President, ZTE
Subba Rao, CEO, Tata DoCoMo
Evolution of Communication/ Engagement
Christopher Dean, Chief Strategy Officer, Skype
Erick Tseng, Head of Mobile, Facebook
Mario Queiroz, VP, Google
David Weiden, General Partner, Khosla Ventures
The size of the panel will be small and the time duration long so we can delve deep into the issues and questions. For more panel, speaker, sponsor, and program details, please visithttp://www.mobilefutureforward.com
Your feedback is always welcome.
Thanks.
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 Nov 2010. The next Global Wireless Data Market update will be issued in Sept 2010.
Disclaimer: Some of the companies mentioned in this paper are our clients.
Mobile Industry 1H 2010 Assessment July 8, 2010
Posted by chetan in : 3G, 4G, AORTA, BRIC, CTIA, Carnival of Mobilists, Carriers, Enterprise Mobility, European Wireless Market, Gaming, Indian Wireless Market, Japan Wireless Market, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Partnership, Smart Phones, Speaking Engagements, Strategy, US Wireless Market, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 commentsMobile Industry 1H 2010 Assessment
http://chetansharma.com/1H10mobileassessment.htm
As the mobile world approaches the 5 billion subscription landmark, it is time to do a half yearly assessment of 2010. We will have our official Q2 2010 analysis for the US market in Aug and the global analysis for 1H 2010 in Sept after all the numbers are in. In the meantime, it might be worthwhile to take a stock of the first 6 months, the ensuing trends and what they mean for the long-term.
Mobile Ecosystem has become much more complex
In case you didn’t notice, the competitive landscape has changed significantly over the last 6-12 months. The fine line between partners and competitors can get obliterated in a quarter. Apple is competing with Cisco, Comcast is going after AT&T’s business, Visa and Verizon want to be the payment channel of choice, Amazon is gunning for Microsoft’s enterprise business, Kodak is competing with Yahoo, so on and so forth. One product launch, one acquisition, can change the game in an instant. And this is only the beginning.
Network evolution: more capacity, more bandwidth, tremendous usage
We have covered this topic in detail in our paper - Managing growth and profits in the Yottabyte era. As we had predicted, the tiering of pricing plan has started in the US which is actually a good thing. It will force some discipline and technology innovation to solve the longer-term problem of network congestion. While AT&T got things in motion, market forces will take care of the right pricing and GB levels in the coming months. Data consumption on TeliaSonera and Clearwire’s network is a good indicator of what’s to come with 3-4x the usage compared to its counterparts.
New sources of revenue: mobile advertising, commerce, and more
Regular readers know that we have been bullish on the mobile advertising space for a long time. Over the last 6 months or so, some of the pieces are coming together though significant amount of work remains. Sergio Zyman, former CMO of Coca Cola once said “There is only one rule: advertising must sell.” And nothing will sell better than mobile. Period. While North America and Western Europe have been slow to wake up to the mobile commerce opportunities, in Japan, it is already a multi-billion dollar industry. Several trials are underway that are going to help open up the western market in the next 12 months for significant opportunities. In fact, the pie for the mobile services will keep on growing bigger but so will the number of players who want a piece of it. This will set up an interesting tug-of-war for the next couple of years
It’s the iPhone, dude!
Just when the competitors think they are all caught up with Apple, Steve Jobs and co. releases a new product that raises the bar further. Google, Samsung, HTC, LG, Motorola have done well in emulating Apple while Microsoft and Nokia have fallen behind. The embarrassing launch and demise of KIN is a example of how confused things are for some of the players. While both Microsoft and Nokia are capable for mounting good comebacks, it will take more than an org change and a sprinkle of holy water. Android will easily outsell iPhone just by the law of arithmetic but Apple’s secret weapon is iTunes. With over 150M billing relationships, it has fostered a great apps ecosystem that others will find hard to replicate entirely. While some point to Apple’s tiny marketshare, wall street looks at the fat margins - rewarding Apple by making it the most valuable technology company surpassing Microsoft in a major tech tremor. Google has run the mobile chess game with great acumen so far. Despite the Nexus experiment, the explosion of the superphone category has gone according to the plan. Overall, most of the western operators are selling smartphones at 50%+ levels each quarter.
Always On Real-Time Access
The always-connected vision of the late Mark Weiser is finally approaching some realization. Mobile is so perfectly suited for cloud computing. The younger generation is growing with the expectation that they can get access to any content from any device anywhere. The constraints and friction that doesn’t allow them to do that is just not acceptable. As such, the mobile industry is scrambling to provide tools and technologies that help the digerati access content at will. All this has to be designed and developed against the current network, content, and device constraints and evolution paths. Whether it is access to music or movies for a 15 year old or availability of the entire corporate knowledgebase, information will need to be available at a touch of a button. Companies big and small are investing in the infrastructure and software tools to make this happen. We are likely to see some interesting launches in the next 12 months.
Battle for the analytical mind - data, context and intelligence drives everything
Many people don’t realize that the battle for the consumer of 2015-2020 has already begun. The company that has the best understanding about the most consumers will have a pole position in the mobile ecosystem. Players like Google, Apple, Amazon, Mastercard, Microsoft, Facebook, Twitter, China Mobile, Disney, AT&T, Vodafone, Motorola, and others are amassing a lot of information on individuals. Besides Google and Apple, Facebook has quietly become one of the most important players in the mobile ecosystem with its phenomenal reach across many countries, tremendous stickiness of the app, and innovative onboarding process of the carriers. Of course, data is a double edged sword - it can provide enormous benefits to consumers in terms of intelligence, experience, and engagement and can also prove to be problematic when privacy and data breaches happen. In fact, that will be one of the tightest ropes many including the regulators will have to walk this decade - figuring out what they call in Swedish - logam - the right balance.
Apps vs. the Web
Recently, the ecosystem has been more enamored with the apps vs. the web debate than the early departure of Brazil and Argentina from the world cup. It is rather a silly debate. As we mentioned in our apps economy paper, both worlds will coexist for a long time. What matters for the developers is the “reach” of a certain platform or technology and the “cost” and “potential” of that reach. For the user, the only thing that matters is what’s available on “their” device. Obviously, the capabilities of the mobile browser will grow over time and it will make more sense to build certain category of applications for the web vs. on the native platforms but developers live and die in the present.
Internet of Things
Nokia took the leadership stance of announcing that all of their smartphones by the next year will have NFC. You can expect pretty much all major OEMs following the same trend which means that hundreds of millions of devices will be equipped with a chipset that will enable new experiences, applications and services. Though we still need to do a lot of work to complete the end-to-end ecosystem, we are getting close. Further, all major carriers have created separate units to address the M2M and emerging devices opportunity. iPad showed what’s possible - it fundamentally created a new leisure computing category. Also, iPad (and similar form factor devices) will find good usage in the enterprise as well. Pretty soon, it will be hard to imagine a computing device without the communication capability. Operators will have to release pricing plans to accommodate such an evolution.
Nurturing ecosystems - fight for the developer mindshare
It is good to be a developer in 2010. The success of many players goes through developersville. The love fest won’t last forever though, it will depend on how vibrant the various ecosystems become and how profitable individual developer shops are over the course of time. One thing Microsoft did very well with the windows empire was to create a web of partners and developers who were incented to use the tools and develop for the platform. In a more fragmented world of mobile, things are a bit complicated. Developers don’t have time or the energy to go after the newest, shiniest toy, what matters in the end is the “cost” to develop, “reach/distribution” of the platform, and “potential” of the reach. Players who don’t consciously make an effort to make developers thrive in their ecosystem will see their developer efforts collapse like house of cards. While the media attention is squarely on iOS and Android, we are not heading down the duopoly path as the dynamics of the mobile ecosystem are significantly different from that of the PC. RIM, Nokia, Samsung and others will do well, the fight is over the relative rankings in the pecking order.
Shifts in the revenue sand dunes
By the end of 2010, the global ondeck revenues will be overtaken by the offdeck revenues. As the smartphone penetration grows, it is less likely that the user will purchase VAS from the operator. While the carrier gets a healthy access revenue of $15-40 or more/month, the VAS business is shrinking for many. Some operators are trying to extract some value but are likely to follow T-Mobile’s path and give up on the smartphone appstore eventually. On the featurephones and probably low-tier smartphones, operator do have a role to play but perhaps some of it can be outsourced to other appstore providers so that they can focus on higher-margin services. We are going to see a readjusting of the appstores again in the next 12-24 months with the weaker ones whittling away from the landscape.
New experiences - display, interaction and commerce
The man-machine interaction took a significant leap with the introduction of the iPhone. Now the touch-interface is embedded in our evolutionary genes. There is significant work going into accomplishing more with less friction with the help of new interfaces and experiences that can like trying out a new outfit in front of a mirror - at home or in the store and with a flick of finger - choose the color, purchase it, and get it shipped. The amount of time it takes to “accomplish any given task” is going to reduce dramatically. With the help of contextual sensors, extreme personalization, and brainiac software, we will take automation to a new level. This will lead to new experiences that will enable more commerce, social interaction and participation, and general awareness and intelligence about every day things. Examples like Kinect, Augmented Reality, Projection displays are just the start of the decade when the display and interaction paradigms will be fundamentally redefined.
Reallocation of revenues - winners and losers are decided in reallocation
If we take a look at the spending habits of the US consumers on “access and communication services” which includes the spending on Telephone, Cable, Internet, and Cell phones, the total “access” spending over the course of last decade has been consistently around 4% of the total personal income per capita. However, the share of each of the services has been changing steadily. Telephone used to have 65% share of the spending but is going to be below 30% by end of 2010. Others have been climbing at the expense of telephone revenues, especially the cellphones which since 2007 command the highest share. So, the overall spending has stayed constant while there has been significant reallocation of spending. Similarly, within cell phone services, data has gone from being less than 1% of the overall revenues to over 35% in 2010 and is going to be more than 50% of the overall revenue mix by early 2013. Mobile operators will need to figure out how to manage these reallocation undercurrents and maintain the overall life time value of the customer. It will come from re-architecting of the business and technology practices as well through the introduction of new services.
Mobile takes off in Verticals
Mobile has become a full-fledged computing platform and other industries are taking notice. There is significant work going on in the mHealth, mRetail, mCommerce, mEducation, mEnergy, and others to keep things busy for the next few years. There are some really innovative startups focused on making use of the computing power that the device affords and turn them into full-fledged medical instruments. Add the communication bit and you can see the revolution happening in front of your eyes. The impact on saving lives and quality of health care will be tremendous - worldwide. The regulators and the legacy players will need to keep up. As we mentioned before, the NFC wave is coming and if all goes well, it will change the retail experience. Stay tuned.
(Mobile) World is flat
There is a significant readjusting of players going on right now with some of the Asian players flexing their muscles for dominant share of the market. Competition is driving more M&A, the gravity of the mobile data world is slowly shifting from Japan and Korea to the US with Verizon overtaking the long time leader NTT DoCoMo in terms of quarterly mobile data revenues. India’s Bharti became the number 5 operator after completing the acquisition of Zain. On the device front, Samsung and LG have been ferocious in their pursuit of marketshare and have been rewarded well by their performance esp. in the North American market. HTC has undergone metamorphosis and has become a serious competitor. Many non-traditional brands like Dell, Garmin, HP, Cisco are also flexing their muscles in the space that has become the computing battleground. On the infrastructure front, ZTE and Huawei are going to make life difficult for some of the players. We can expect the big “M&As” to continue as the industry consolidates around the top 3 players in different markets and sectors. The local skirmishes will spill into the global arena. North American operators have been curiously silent on the global front. Being the most lucrative mobile market probably has something to do with it but we can expect some of the bigger players to go shopping in the coming days.
Regulatory Excursions
The much-awaited national broadband plan was finally unveiled earlier this year. The current FCC has done a good job of engaging the industry and informing the citizens, better than its predecessors. It is also taking a deeper interest in setting up guidelines for the industry. The Comcast ruling was a setback but FCC is moving ahead with its plans. It will be interesting to see the execution details and how things pan out over the course of this decade. Similarly, regulatory agencies in other nations are acutely aware of the role broadband plays in nations economy and competitiveness and what they need to do keep their country on track. The mad scramble for more spectrum is underway. FTC is also keeping a close eye on the mobile industry for privacy related violations. If someone has any doubts of how much regulators are likely to get involved in this matter should read through the settlement between the FTC and Twitter.
Scenario Analysis - more changes in the next 10 years than in the previous 100
Despite all the commotion, the excitement, and the turbulence in the ecosystem, the trajectory of the winners and losers is not set. Like the Chaos theory, a lot depends on how the dynamic elements of the mobile universe effect and react to changes. Players will do well to have strategies in place per scenario so they can adapt quickly and keep the mother ship in the right direction. We can expect more changes in the next 10 years than in the previous 100. The triggers for various scenarios will vary - regulatory, competitive, technology, business model, consumer adoption, economic - each of these can have an impact on how a trend becomes the fact of life.
To discuss all these trends and more, we are putting together a unique Mobile Future Forward Executive Summit and are fortunate to have the company of some of the sharpest minds in the industry, folks who both have the vision to shape the evolution and the authority to invest billions of dollars this decade to make things happen. Hope to see you in Seattle on Sept 8th.
First 25 readers to use the discount code FUTBOL get $200 off the regular price.
Abhi Ingle, VP, AT&T; Amir Mashkoori, CEO, Kovio; Anand Chandrasekhar, SVP & GM, Intel; Bob Azzi, SVP - Network, Sprint Nextel; Chamath Palihapitiya, VP - Growth, Mobile, Intl, Facebook; Christopher Dean, Chief Strategy Officer, Skype; Danny Bowman,President, Sprint Nextel; David Weiden, General Partner, Khosla Ventures; Dr. Boris Nikolic, Sr. Program Officer, Global Health & Discovery, Bill & Melinda Gates Foundation; Dr. Genevieve Bell, Intel Fellow & Director, User Experience, Intel; Dr. Greg Brandenberg,CEO, Columbia Basin Health Association; Dr. Sailesh Chutani, CEO, Mobisante; Dr. Suzanne Clough, Chief Medical Officer, WellDoc; Glenn Lurie, President, AT&T; Hank Skorny, SVP, Media Mobile Cloud Computing, Real Networks; Jack Kennedy, EVP, News Corp; Joe Sims, Lead Partner - Digital Convergence , Booz & Company; Jon Stross, VP & GM - Babycenter, Johnson & Johnson; Ken Denman, CEO, Openwave; Krishna Vedati, SVP & GM - Mobile, AT&T Interactive; Lirong Shi, President, ZTE; Louis Gump, VP Mobile, CNN; Mario Queiroz, VP - Product Management - Android, Google; Mark Selby, VP, Nokia; Matt Bross,CTO and Vice Chairman, Huawei; Michael Sievert, Chief Commercial Officer, Clearwire;Neville Ray, Chief Network Officer, T-Mobile ; Omar Javaid, CEO, BBDO; Paul Palmieri, Founder and CEO, Millennial Media; Rob Glaser, Chairman, Real Networks and Partner, Accel;Sean Cai, VP - Advanced Technology, ZTE; Stephen David, Former CIO, Proctor & Gamble;Subba Rao, CEO, TataDoCoMo; Takayuki Hoshuyama, CEO D2 Communications; Tony Lewis, VP, Verizon; Wim Sweldens, President, Alcatel-Lucent
Each panel discussion will involve luminaries/experts on specific topics, for e.g.
M2M/Internet of Things
Danny Bowman, President, Sprint
Amir Mashkoori, CEO, Kovio
Tony Lewis, VP, Verizon Wireless
Mark Selby, VP, Nokia
Evolution of Communication/ Engagement
Christopher Dean, Chief Strategy Officer, Skype
Chamath Palihapitiya, VP - Mobile, Facebook
Mario Queiroz, VP - Android, Google
David Weiden, General Partner, Khosla Ventures
The size of the panel will be small and the time duration long so we can delve deep into the issues and questions. For more details, please visit http://www.mobilefutureforward.com
Your feedback is always welcome.
Thanks.
Chetan Sharma
Disclaimer: Some of the companies mentioned in this paper are our clients.
Announcing Mobile Future Forward Executive Summit June 14, 2010
Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Event, Mobile Future, Mobile Future Forward, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Speaking Engagements, Speech Recognition, Strategy, US Wireless Market, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far
You have seen some hints of the project that we have been working on for sometime. We are proud to announce “Mobile Future Forward” Executive summit to be held in Seattle on Sept 8th, 2010.
Registration is Open Now. Early Bird expires June 30th 2010.
MFF is a gathering of some of the most brilliant minds in the mobile industry. The goal is to look at how mobile is likely to evolve over the course of this decade. We couldn’t have done this without the tremendous support of our excellent sponsors who are paving the way in their respective segments.
The speaker list includes the who’s who of the mobile industry:
Glenn Lurie, President, AT&T
Subba Rao, CEO, TataDoCoMo,
Mike Sievert, Chief Commercial Officer, Clearwire
Louis Gump, VP Mobile, CNN,
Paul Palmieri, Founder and CEO, Millennial Media
Dr. Sailesh Chutani, CEO, Mobisante
Abhi Ingle, VP, AT&T Wireless
Ken Denman, CEO, Openwave
Amir Mashkoori, CEO, Kovio
Stephen David, Former CIO, Proctor & Gamble
Dr. Genevieve Bell, Intel Fellow, User Experience, Intel
Hank Skorny, SVP, Real Networks
Jon Stross, VP & GM - Babycenter, Johnson & Johnson
Dr. Suzanne Sysko, Chief Medical Officer, WellDoc
Dr. Boris Nikolic, Sr. Program Officer, Bill & Melinda Gates Foundation
Krishna Vedati, SVP & GM - Mobile, AT&T Interactive
Christopher Dean, Chief Strategy Officer, Skype
Russ McGuire, VP, Sprint Nextel
Jack Kennedy, EVP, News Corp
David Weiden, General Partner, Khosla Ventures
Anand Chandrasekhar, SVP and GM, Intel
Chamath Palihapitiya, VP Growth/Mobile, Facebook
Rob Glaser, Chairman, Real Networks
Wim Sweldens, President – Wireless Division, Alcatel Lucent
Takayuki Hoshuyama, CEO, D2 Communications
Neville Ray, SVP, T-Mobile
Bob Azzi, SVP—Networks, Sprint Nextel
Mario Queiroz, VP—Android, Google
Matt Bross, Global CTO, Huawei
We will be covering the following topics in detail:
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Emerging Devices
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Internet of Things
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Network Evolution
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Content, Media, and Entertainment
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New sources of Revenue and Business Models
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Evolution of Communication and Interaction
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Mobile Cloud Computing
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Globalization and Competition
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Mobile Anthropology
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Mobile as a platform
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The economics and politics of consumer data and privacy
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Nurturing Developer Ecosystems
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Shifts in the Ecosystem
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Mobile Health and Implications
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Mobile Retail
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Japanese Mobile Industry
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Innovations at each level of the value chain
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Mobile Social and Commerce
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Managing network growth
You can read more about what you can expect at the executive summit in the following whitepaper.
I hope to see you there.
Chetan Sharma
Chief Curator
Mobile Future Forward
Mobile Breakfast Series – Startup Nation Roundup June 11, 2010
Posted by chetan in : 3G, 4G, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Privacy, Smart Phones, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , 1 comment so farWith the fourth Mobile Breakfast Series event yesterday, we completed one full year of hosting the popular quarterly event and each one has been sold out. Thanks to the outstanding speakers and an engaged audience, the program has grown since its inception last Sept. Thanks also to our wonderful sponsors - Motricity, OpenMarket, Openwave, WDSGlobal, and Clearwire for supporting the program throughout the year.
Also, thanks to our attendees. Proud of the quality of attendees we are able to attract. Over 250 companies have attended the event over the past one year.
The 4th MBS event was held at Columbia Club in Seattle which offers one of the best views in the country.
Our focus for this event was Startups in the Mobile Industry. We wanted to take a pulse of the innovation, competition, turbulence, opportunities in the mobile ecosystem through the eyes of 8 brilliant CEOs who are focused on different segments of the value chain and different segments and business models.
The startup DNA is quite unique to the US. While great ideas and technologies can come from anywhere, no country celebrates the risk-taking, failures, and successes of startups like the US. The entrepreneurial spirit burns bright and that’s what keeps the pace of innovation in the mobile industry at an all time high. I have witnessed that first hand in working with startup executives from the inception of the idea at the back of a napkin to multi-million dollar exits to shattering of dreams due to changing dynamics or strategic errors or just dumb luck. What’s most fascinating and inspiring is that these guys just get up and keep going. Obviously, not everyone is cut out to be an entrepreneur, some folks just can’t take the sensation of a plunge and the unknown. The event was to highlight and celebrate the successes of these startup companies.
The one thing that trips most of the startups is how do you “scale” in terms of transactions, users, or revenues. The startups at MBS have a keen understanding of that. They are ambitious, focused, and disruptive.
The participants were:
Mike McSherry – CEO, Swype
Swpe is reinventing how consumers interact with mobile devices. Founded by Cliff Kushler, the inventor of T9 that has ended in billions of devices, the company is looking to repeat the success by getting onto billions of devices over the course of next few years. Quite an astonishing feat if they are able to pull it off. They have had good success with the OEMs who have also become strategic investors. The management team has navigated the waters very well w/o raising any VC money.
Paul Palmieri – CEO Millennial Media
Millennial Media is known for its mobile ad network which is the biggest independent ad network. MM deals with billions of ad impressions across devices and Paul has grown the company from the early days in 2006 by keeping the focus on technology, the team, advertisers, and publishers. They seem to be well positioned to take advantage of the current turbulence in the mobile advertising market. Will have more on it at a later date.
Dr. Sailesh Chutani – CEO Mobisante
Many people don’t realize that “mobile devices” represent a computing platform that can start to do amazing things. Mobisante is trying to take advantage of that by using the platform to provide a cheap ultrasound solution. This can be enormously disruptive and beneficial. Hundreds of people die every day because they don’t get diagnosed properly or on time. With a device like what Mobisante is developing, can you imagine the number of lives saved, the improvement in the quality of life, and the health care cost savings.
Paul Griff – CEO Root Wireless
Root Wireless has a unique value proposition – collecting network and device data to help consumers make informed decisions. “True” network data is really not available to the consumers, Root Wireless is changing that by turning the data on its head and making it useful to the consumers.
Kevin Foreman, CEO, PointInside
Location is red-hot, it has become an integral layer over which all content/transactions reside. While most of location players have justifiably focused on the outdoor position location, indoor location is still a challenge esp. in malls and airports, one has to still rely on kiosks and paper maps. PointInside is try to change that by providing a framework to create an indoor location platform that can be licensed and used to create transaction opportunities While SMS has been around for a generation, in the US, it really took off since the American Idol debuted. But have we done all we can with SMS?
Derek Spratt, CEO, Mobidia
Mobile data network issues have dominated the headlines for the last 18 months. We have discussed the topic in detail in our Yottabyte paper. I was intrigued by Mobidia’s approach to managing congestion, the technology can be used in all forms of network and allows operators to free capacity. Mobidia and Derek demonstrate their resilience as a startup in the infrastructure business which is very capital intensive and the sales cycles are measured in years but once you get cemented into the core, you are good to go. The journey is clearly not for the faint hearted. Derek has been shepherding the turbulent waters well.
Scott Kveton, CEO, Urbanairship
Urbanairship is exploited the push messaging phenomenon on startphones with over 470M notifications to 27M devices and 500K storefront transactions. They are also doing some clever rich media messaging and the model is transaction based so it can scale really well
John Lauer, CEO, Zipwhip
Zipwhip has an interesting application that sends SMS to both the device as well as the desktop so you can txt directly from the desktop. They have already gotten traction with some key carrier customers. There is no reason SMS has to be constrained to the device.
This group of brilliant entrepreneurs was ably supported by Bill Bryant, Managing Partner, DFJ and a well known investor in pacific northwest, Jeff Giard who has been a key supporter for us throughout the year and is Director at Clearwire, and Peter Wilson who has had successful stints at Accenture, Microsoft, and Google and now is on the entrepreneurial road himself.
The first panel was moderated by Olga Kharif, Senior writer at Businessweek who through her incisive questioning gets to the heart of the story. The panel touched on various aspects of the mobile ecosystem. Swype is focused on working the carriers and OEMs while Millennial sees diminished role for the operators. Out of the 10 billion impressions, around 100 million are from ondeck. The role of operators in the US with respect to media and content has slipped away as more smartphones came into the market, something we wrote about it in Mobile Advertising book in 2007. The situation is generally not black or white. There are areas for operators to innovate and be dominant while in others it is just hard to compete due to the changing circumstances and the entry of new players. Root Wireless was surprised by the open approach operators have taken to their offering by participating and collaborating in data analysis that can benefit all in the ecosystem.
One of the areas of exploration was – how do startups survive in the turbulent waters – by adapting as fast as they can to the changing dynamics and by having solid IP and unique value proposition. Swype has been developing the technology since 2001 and has multiple patents. Millennial devised a key server side technology to differentiate. Mobisante while new is tapping into a specific vertical and Root Wireless is trying out a new approach to measurement and performance analysis.
One of the other issue that startups face is that of expansion, which markets should they go after. Kevin mentioned that they are turning down six figure checks to keep the focus on their business – a very hard thing to do as a startup (turning down money that is). Millennial is more focused on the western markets because that’s where the advertising money is. Mobisante is likely to go after the rural market first because the need for their offering is the most in those areas.
On the hot topic of privacy, Paul from Root noted that there is a generational gap. He has been astonished how little the younger demographics care about privacy. They are easily willing to trade value for privacy. In terms of how the ecosystem is shaking up Paul from MM expected RIM and Amazon to come up with some interesting offerings in the coming days.
I hope this gives you a flavor of the event. You can also read Tricia Duryee’s column at moconews.
My thanks to all who attended, esp the speakers.
Our next event is Mobile Future Forward which has a stellar roster of speakers. If the future of mobile keeps you up at night, you wouldn’t want to miss this event. These guys personally are responsible for managing billions of dollars worth of investment and operations and their insights will be valuable. We will have more on that in the near future.
Be sure to check it out and register early as the Early bird expires on June 30th and 30% of the spots are already taken.
The quarterly event will resume in Dec 2010.
