Thank You Mobile Future Forward Sponsors September 8, 2013
Posted by chetan in : US Wireless Market , add a commentThe day is finally here. It takes a lot of work, a lot of preparation and planning but on this eve of the 4th Mobile Future Forward, I wanted to just take some time and thank our excellent partners, our sponsors who have supported us from the start. We couldn’t have come this far without them.
So, a big THANK YOU.
and look forward to seeing every one tomorrow and day after.
Mobile Future Forward: Final Agenda. Last Call - Registration closes this week September 5, 2013
Posted by chetan in : US Wireless Market , add a commentMy fellow mobilists,
Never a dull moment in the industry, is there? Mobile Future Forward is less than a week away and we will be discussing all the twists and turns of the past few days + much more. Speakers are prepared, moderators have their pencils sharpened, and everyone is doing their homework. Time magazine did a nice preview of what you can expect to see and hear at the summit next week.
Registration. Last few seats left. Registration closes this week.
Updated Agenda Below
8:10am
Introduction – The Golden Age of Mobile
Chetan Sharma, President, Chetan Sharma Consulting
8:30am
Keynote Fireside – The Shift towards Services
Ralph de la Vega, President and CEO, AT&T Mobility
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
9:15am
Fireside – Retail and Commerce
Marianne Marck, SVP – Consumer Facing Technology, Starbucks
Stephen David, Former CIO P&G
Dave Sprosty, CEO, The Sprosty Network (moderator)
10:30am
Fireside - Rule of 3
Steve Elfman, President – Network Operations and Wholesale, Sprint
Thom Gruhler, CMO - OS, Microsoft
Hank Skorny, VP/GM – Software Services Group, Intel (moderator)
11:15am
Fireside – Future of Devices, Computing and Consumer Services
Kevin Packingham, Chief Product Officer, Samsung
Yung Kim, President and Chief Strategy Officer, Korea Telecom
Nick Wingfield, Technology Reporter, NY Times (moderator)
1:30pm
Operators and 4th Wave
Glenn Lurie, President, AT&T
Fay Arjomandi, Global Lead, Vodafone Xone
Tracy Isacke, Director of Investments, Telefonica Digital
David Small, Chief Platform Officer, Verizon
Julie Woods-Moss, CEO – NextGen Business, CMO, Tata Communications
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Health and Wellness
Raj Toleti, CTO, PatientPoint
Ed Cantwell, Executive Director, Center for Medical Interoperability
Jef Holove, CEO, Basis
Cameron Coursey, VP – Products, AT&T
Karim Marrouche, Cofounder and CEO, Cardiac Designs
Russell Benaroya, CEO, Everymove (moderator)
2:30pm
Building Blocks of the 4th wave
Tom Nagel, SVP and GM – Wireless Services, Comcast Communications
Vince Spinelli, Managing Director, Mobility Solutions Group, Juniper Networks
Chris Koopmans, VP and GM – Service Provider Platforms – Cloud Networking , Citrix
Doug Suriano, VP – Products, Oracle Communications
Jamie Finn, VP – Strategic Initiatives, Telefonica Digital
Geoff Hollingworth, Ericsson Head of AT&T Foundry Initiative, Ericsson (moderator)
Travel and Tourism
Drew Patterson, CEO, Room77
Joost Schreve, VP – Mobile, Tripadvisor
Curtis Kopf, VP, Alaska Airlines
Sam Shank, CEO, Hotels Tonight
Jeff Warren, VP – Mobile Expedia (moderator)
4:00pm
Media and Entertainment
Andrew Stalbow, Former EVP, Rovio
Manish Jha, GM – Mobile, NFL
Danny Bowman, Chief Sales Officer, Samsung
Michael Fisher, Director, Twitter
Ujjal Kohli, CEO, Rhythm New Media (moderator)
Man, Machine, and Data
Matt Carter, President, Sprint
Biju Nair, Chief Strategy Officer, Synchronoss
Rowland Shaw, VP - Strategy, Ericsson
Michael Castleman, President – KCD Brands, Sears Holdings
Joe DiFonzo, CTO, Syniverse
Rod Randall, Partner, Siris Capital (moderator)
5:00pm
Solving the biggest problems in computing/communications
Dr. Henning Schulzrinne, CTO, FCC
Dr. Avideh Zakhor, Professor EECE, UC Berkeley
Mark Anderson, CEO, SNS
Ariel Garton, CEO, InterXon
Jason Hoffman, CEO, Joyent
Wim Sweldens, Former President, Alcatel-Lucent Wireless (moderator)
6-8pm - Reception
Agenda subject to change
Why was Vodafone eager to get the deal done? September 2, 2013
Posted by chetan in : US Wireless Market , add a commentOne of the biggest mobile deals in recent memory consummated this morning with Verizon buying back its 45% stake for a cool $130 Billion. Verizon has been wanting to do this for a long time so why now? The simple lies in the figure below
As we explained in our 4th wave paper earlier this month, Without having a robust 4th Wave strategy, many operators will simply become targets of take over as they won’t be able to compete effectively. Vodafone is the second largest operator in the world and operates in 21 countries across Europe, Asia, Middle East, and Africa (in addition to sizable investment in Verizon Wireless). It is one of the progressive operators but is facing some revenue curve headwinds. It is instructive to study is 2012-13 financials to see the widespread impact on tradition growth curves and why the investment in the 4th curve is not only desired but essential for survival. Figure above plots the YOY of all the major markets Vodafone operates in segmented by the three revenue streams of voice, messaging, and access (data revenue). There was a decline in voice and messaging net-revenue in each of the markets. The data revenue stream saw growth in all but the Italian market.
However, what was more disturbing was that the increase in access revenue didn’t negate decline in voice and messaging revenues in any market. The net-revenue declined in every single market no matter which geography it belonged to. The net-effect was that the overall revenue declined by 9% despite access revenue growing by 8% because overall voice and messaging revenue streams suffered double digit losses. Once the access revenue start to decline (and it is already happening to some of the operators), to attain growth, these companies will have to take drastic actions. The investment and a clear strategy on the 4th wave becomes even more urgent.
Vodafone core markets were suffering and unless it acted, it would have struggled to stay relevant. With the infusion of cash, it will shore up its assets and is likely to go on a buying spree.
From the Archives–Mobile Operators–Succeeding on the 4th Wave August 28, 2013
Posted by chetan in : US Wireless Market , add a commentThis is from my fireside chat with Glenn and Steve last year. Both are coming back to provide their insights on how things have evolved and where are they going.
Fireside - Mobile Operators: Succeeding on the 4th Curve 
Steve Elfman, President, Sprint
Glenn Lurie, President, AT&T Wireless
Chetan Sharma, President, Chetan Sharma Consulting
Steve and Glenn play a very important role at their respective organizations especially looking at the new revenue opportunities. As our Operator’s Dilemma paper discussed, operators need to invest in new areas of revenue that will help them grow in the next decade. AT&T has done really well with its Emerging Devices and Enterprises organization under Glenn (it is already a billion dollar business). Sprint has the New Ventures group investing in such opportunities as well. It is early in the S-curve but the growth is happening. Just like mobile data grew from nothing to now going to 50%, the 4th curve will be game-changing in due-course. The areas of investment to growth are: Digital Life, Home Security, M2M, Automotive, Analytics, Health, Commerce and Advertising. It is forcing operators to view and organize themselves differently – like software and internet service provider rather than a traditional telco and work with larger ecosystem of VCs, startups, and other partners. One of the key success factors has been the independence of the new group from their parent and the flexibility to execute and move as fast as the nimble startups. Both Glenn and Steve were both quite bullish on windows 8 (especially tablet) and Microsoft’s ability to deliver a 3rd viable ecosystem. Once developers embrace the platform, we will see the signs of success. As we are launching new services and devices, the industry needs to keep an eye on “user experience” else we might scare off consumers. We need to integrate experiences e.g. commerce and advertising, health and wellness, security and monitoring, etc. There are significant opportunities (cloud, security, application suite) in the enterprise and that’s where Microsoft might have an edge.
Time: Welcome to the Golden Age of Mobile August 27, 2013
Posted by chetan in : US Wireless Market , 1 comment so farI did an interview with Tim Bajarin who writes for the Time Magazine about our upcoming Mobile Future Forward Summit, the changing wireless industry, and the Golden Age of Mobile. Excerpts below. You can read the whole column here.
One of the smartest guys I know covering the world of mobile is Chetan Sharma, head of Chetan Sharma Consulting. I had a chance to speak at an event with him a few years ago and was highly impressed with his knowledge and perspective on all things mobile.
I recently received a promotional note from him about his Mobile Future Forward event, which will be held on September 10 in Seattle. I have not had a chance to attend these conferences in the past but have heard from others that it is one of the best and most important conferences on mobile, covering all types of key issues and opportunities in mobility, which clearly is driving the next major technology boom around the world.
In his opening note to potential attendees, Chetan made a statement that pretty much sums up the future of mobile: He said, “It is very clear to us that we are entering the ‘Connected Intelligence’ era. These two operative words are going to define the next phase of human evolution and are going to dramatically change every industry vertical from the ground up. Welcome to the Golden Age of Mobile.”
Chetan is right on the money with this perspective. Connected intelligence in mobile devices will be the next major force behind mobile innovation, and it appears that the mobile industry sees this vision and is preparing to drive it in this direction. Chetan believes that technology evolves in 50-year cycles. In a call with him last week, he pointed out that these cycles can be seen when it comes to steam engines, electricity, cars and more. During those 50-year cycles, the core technology is established and innovative products are created while the underling technology becomes the backbone for even more innovation as the years go by.
He says that the PC innovation part started in the mid-1970s and that we are approaching the 42nd year of this cycle. During that time, PCs, tablets and smartphones have been created and the backbone technology has been laid to drive even greater innovation. He expects that the next big wave will come with connected intelligence devices using IP networks and new wireless technologies that will, in context, drive a whole new ranges of products and services. He also pointed out that “we could be entering a new space that takes advantage of the technology from the last cycle and drives great smart mobile applications and new innovations for the next 10 years.”
One other key point he made during our conversation is that while connectivity is a key element, he says that “intelligence that emanates from the data that can be programmed is what is different now.” This gives new meaning to connectivity, and “connectivity with intelligence will define the next wave of computing.”
NEW BOOK: Mobile 4th Wave: Mining the Trillion Dollar Opportunity August 26, 2013
Posted by chetan in : Chetan Sharma Consulting, Mobile Future Forward , 10 comments
I am pleased to announce that our Mobile Future Forward Book for 2013 will be published and become available exclusively to Mobile Future Forward participants on Sept 10th. As is the tradition, the book has some brilliant essays and interviews from our speakers – the thought leaders and mobile industry senior executives, on trends, opportunities, innovations, and user experiences. More importantly, these thought-pieces highlight how some of the leading companies are gearing themselves to execute on the 4th wave. The book provides a perfect platform for our day long brainstorm about what the next 5 years in mobile will look like. We have extraordinary speakers and am really looking forward to the discussions throughout the day.
The essays are:
1. Mobile 4th Wave: Evolution of the Next Trillion Dollars – Chetan Sharma, President, Chetan Sharma Consulting
2. One-on-one with Ralph de la Vega, President and CEO, AT&T Mobility
3. Connected Car: Building a New Industry – Pavan Mathew, Head of Connected Car, Telefónica Digital
4. HTML5: Big Hurdles Exist, but Economics Will Always Win – Hank Skorny, Vice President/GM, Intel
5. Being Open: New Markets, New Opportunities – Tracy Isacke, Head of Americas, Telefónica Digital
6. Video is Not Data (or Voice) – Chris Koopsman, Vice President/GM, Citrix ByteMobile
7. The Cloud and its Omnipresent Impact – Biju Nair, Chief Strategy Officer, Synchronoss
8. Digital Lifestyle Services: Winning ‘Life Share’ of Customers – Doug Suriano, Vice President, Oracle
9. Mobile Apps Privacy Framework for Consumer Transparency and Control – Sarla Sharma, Vice President, Chetan Sharma Consulting
10. The Internet of Things is Changing the Order of Things (and of Conversations) – Matt Carter, President, Sprint
11. Remaining Relevant and Sustainable in the Age of Smartphones – Stephen David, Former CIO, P&G
12. Building a New Business Within a Big Company: Keys to Success – Kevin Petersen, President, AT&T Digital Life
13. The Future of Mobile Healthcare – Raj Toleti, Chief Technology Officer, Patient Point
14. What Really Drives Mobile Devices Market Performance? – Chetan Sharma, President, Chetan Sharma Consulting
15. SDN – The Platform for Mobile Service Innovation – Steve Shaw, Director, Juniper Networks
The goal of the Mobile Future Forward Summit is to explore the future of the mobile industry, to create new connections, to openly discuss and debate new ideas. By bringing together a really diverse group of individual leaders – both speakers and audience, we are able to create an environment for constructive dialogue that will hopefully help in formulating your own strategies and product plans.
My thanks to all the authors and their respective organizations for making this year’s book possible.
Chetan Sharma
Mobile 4th Wave: Evolution of the Next Trillion Dollars August 25, 2013
Posted by chetan in : Chetan Sharma Consulting, Mobile Future Forward , add a commentMobile 4th Wave: Evolution of the Next Trillion Dollars
- A Mobile Future Forward Research Paper
http://www.chetansharma.com/4thwaveandthenexttrillion.htm
This paper is the second in series of the Mobile 4th Wave research papers. It is a required reading for Mobile Future Forward participants.
Introduction
Mobile is the most dynamic and exciting industry in the world today. It is playing a central role in driving the global economy across multiple dimensions. The speed with which the break-neck innovations are being introduced will make Captain Kirk and crew proud. We are on the verge of reaching an incredible milestone – when there be more cellular subscriptions than humans on earth. We are already beyond 10 billion connections worldwide and mobile is driving the business and human case for the rapid evolution and adoption.
Mobile has become the most critical tool to enhance productivity and drive human ingenuity and technological growth.
Indeed, we are entering the golden age of mobile.
Amidst the change, the ecosystem itself is undergoing a significant transition. As the tectonic plates shift, the revenue opportunities are shifting from voice, messaging, and access to the 4th revenue curve of mobile opportunities. The shift towards this curve is expanding the base of players who are going to participate, connect with the consumers, and vies for their pocketbook. While the progress of the past 20 years has been phenomenal, the “connect and mobilize everything” characteristic of the next revenue curve is going to define the industry itself while determining the new winners and losers for consumer’s mindshare.
The revenue generated on the fourth curve is going to be massive but much more distributed than previous curve. It will end up being a multi-trillion dollar market in a matter of a decade – growing much faster and scaling much higher heights than previous revenue curves.
This paper is the continuation of the discussion we started with our first in the series of the 4th curve papers – “Operator’s dilemma (and opportunity): The Fourth Curve.” In this paper, we will take a look how various players are adapting to the opportunity curve, how the overall value chains and ecosystems are being aligned and who are the early leaders and contenders to become the “Digital Lifestyle Solution Providers.”
The first paper looked at the emergence and the impact of the 4th curve from an operator viewpoint. In this paper, we expand the discussion to the broader ecosystem and how some of the leading Internet players and startups are participating in the 4th revenue wave of mobile. We will also look at how some of the leading operators have positioned themselves as leaders and contenders.
It is very clear that mobile will continue to have a tremendous impact on the global GDP, vertical industries, and consumers’ expectations of how communication takes place. Mobile is already a $1.6 trillion industry. The past growth has been dominated by mostly voice but as we move into the next decade, the digital services will take the lion share of the industry revenues. The shift will cause a lot of disruption and unpredictable growth for many players. Players who are better prepared and can adapt quickly will be able to successfully participate in the evolution of the next trillion dollars.
This paper attempts to define the space that is fast evolving and will have a lasting impact for years to come.
Download paper (2MB, 40 pages)
Your feedback is always welcome.
Thanks
Chetan
We will be discussing a number of issues raised in this research paper at our annual mobile executive thought-leadership summit – Mobile Future Forward on Sept 10th in Seattle. In fact, this is the first event of its kind focused on the changing dynamics of the ecosystem.
Mobile Future Forward–Preliminary Agenda August 21, 2013
Posted by chetan in : Chetan Sharma Consulting, Mobile Future Forward , add a commentGreetings,
Mobile Future Forward is three weeks away and am pleased to announce our preliminary agenda. We have endeavored to gather our community to talk about the next phase of the industry growth. To paraphrase the legendary Wayne Gretzky, we ought to look at where the mobile puck is going. That’s what Mobile Future Forward Executive Summit is all about. By looking at what will generate the next trillions, we can start to put the pieces together to have a better grasp of the challenges and the opportunities.
We are expected to sell out so grab your seats today.
Introduction – The Golden Age of Mobile
It is very clear to us that we are entering the “Connected Intelligence Era.” These two operative words are going to define the next phase of human evolution and is going to dramatically change every industry vertical from the ground up. Welcome to the Golden Age of Mobile.
Chetan Sharma, President, Chetan Sharma Consulting
Keynote Fireside – The Shift towards Services
AT&T is one of the leaders in the mobile market. In fact, it is amongst the top three global players in terms of revenues from mobile data services. Under the deft stewardship of Ralph de la Vega, President and CEO of AT&T Mobility since 2007, AT&T has continued to pioneer new business models and revenue streams. He has led AT&T to become an undisputed leader in mobile broadband and smartphone adoption. Starting from the industry defining iPhone launch in 2007 to the launch of digital solutions in 2013, Ralph has been ahead of the curve. Ralph and his team saw the coming shift to solutions and services and mobilized the resources by focusing on some key vertical areas such as Home Security, Commerce, and Connected Auto. We will kick things off by getting the pulse of the industry and see opportunities through Ralph’s prism.
Ralph de la Vega, President and CEO, AT&T Mobility
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Keynote Fireside – Retail and Commerce
Marianne Marck, SVP – Consumer Facing Technology, Starbucks
Jude Buckley, President, BestBuy
Stephen David, former CIO P&G (moderator)
Break
Keynote Fireside - Rule of 3
Thom Gruhler, CMO - OS, Microsoft
Steve Elfman, President – Network Operations and Wholesale, Sprint
Hank Skorny, VP/GM – Software Services Group, Intel (moderator)
Keynote Fireside – Future of Devices, Computing and Consumer Services
Kevin Packingham, Chief Product Officer, Samsung
Rick Osterloh, SVP – Products, Motorola Mobility
Yung Kim, President and Chief Strategy Officer, Korea Telecom
Nick Wingfield, Technology Reporter, NY Times (moderator)
Lunch
Operators and 4th Wave
Glenn Lurie, President, AT&T
Fay Arjomandi, Global Lead, Vodafone Xone
Tracy Isacke, Director of Investments, Telefonica Digital
David Small, Chief Platform Officer, Verizon
Julie Woods-Moss, CEO – NextGen Business, CMO, Tata Communications
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
Health and Wellness
Dr. Geeta Nayyar, CMIO, AT&T
Raj Toleti, CTO, Patient Point
Jef Holove, CEO, Basis
Madhu Nutakki, VP – Digital, Kaiser Permanente
Russell Benaroya, CEO, Everymove (moderator)
Building Blocks of the 4th wave
Tom Nagle, SVP and GM – Wireless Services, Comcast Communications
Vince Spinelli, Managing Director, Mobility Solutions Group, Juniper Networks
Chris Koopmans, VP and GM – Cloud, Citrix
Doug Suriano, VP – Products, Oracle Communications
Travel and Tourism
Drew Patterson, CEO, Room77
Joost Schreve, VP – Mobile, Tripadvisor
Curtis Kopf, VP, Alaska Airlines
Jeff Warren, VP – Mobile Expedia (moderator)
Media and Entertainment
Andrew Stalbow, Former EVP, Rovio
Manish Jha, GM – Mobile, NFL
Danny Bowman, Chief Sales Officer, Samsung
Ujjal Kohli, CEO, Rhythm New Media (moderator)
Man, Machine, and Data
Matt Carter, President, Sprint
Biju Nair, Chief Strategy Officer, Synchronoss
Rowland Shaw, VP - Strategy, Ericsson
Michael Castleman, President – KCD Brands, Sears Holdings
Rod Randall, Partner, Siris Capital (moderator)
Solving the biggest problems in computing/communications
Dr. Henning Schulzrinne, CTO, FCC
Dr. Avideh Zakhor, Professor EECS, UC Berkeley
Mark Anderson, CEO, SNS
Ariel Garton, CEO, InterXon
Wim Sweldens, Former President, Alcatel-Lucent Wireless (moderator)
US Wireless Market Update Q2 2013 August 13, 2013
Posted by chetan in : 4th Wave, ARPU, Chetan Sharma Consulting, Mobile Applications, Mobile Cloud Computing, Mobile Future Forward, Smart Phones, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Mobile Market Update Q2 2013
http://www.chetansharma.com/usmarketupdateq22013.htm
Summary
The US mobile data market grew 4% Q/Q and 14% Y/Y to reach $21 billion in mobile data revenues. Data is now 46% of the US mobile industry service revenues and as we had forecasted a few years back, the cross-over point of 50% might occur later this year. For the year 2013, we are expecting $90 Billion in mobile data service revenues for the US market.
For the quarter, the market added a paltry 139K new connections, a decline of 95% from Q2 2012. It was the lowest net-adds quarter in the US mobile history (barring the early days of tepid growth). The biggest reason was the sun setting of the Nextel brand which was finally laid to rest after the grand experiment of 2004 went wrong.
However, the story of the quarter was the resurgence of T-Mobile which roared back with an industry leading net-add quarter, something it did last when George Bush was still the president. Not only that, the growth was on the back of postpaid net-adds, something it hasn’t done in 12 quarters. The merger with Metro has helped boost the subscriber count and the revenue numbers. However, the growth came at a cost with shrinking margins and lower overall ARPU.
AT&T sold more iPhones but Verizon sold more smartphones. Given the lack of new devices from Apple and some good ones from competitors, Android edged past iOS for the US smartphone market share for the quarter primarily coming from the Samsung success with the Galaxy brand. Nokia launched some new devices focused on cameras, Motorola/Google made its first foray into the smartphone world after the merger with MotoX. However, the market awaits the next iPhone which is going to be released next month.
The Sprint-Softbank-Dish drama finally ended and as expected Softbank got a hold of both Sprint and Clearwire though at a higher price which was the plan all along. With this merger behind, all eyes are squarely focused on T-Mobile as to who makes the bid for 4th ranked operator in the next 6-12 months.
Smartphones are now past the 60% mark in the US and continue to sell at a brisk pace accounting for almost 87% of the devices sold in Q2 2013. Apple led the smartphone sales amongst the top 4 operators with 42% share for the quarter. While the US penetration of smartphones is 60%, the 60% of the sub base is concentrated in only 35% of the households thus leaving plenty of growth in the marketplace.
Is the smartphone growth over?
There has been some speculation in the market that the smartphone growth in the US market is over. In the US, roughly 240M subscribers have 335M mobile subscriptions. Out of those 240 subs, roughly 145M have smartphones (many of them have two or more). These days newborns get an iPhone on their arrival as a welcome gift, but if we take out the 0-5 age group, we are left with 293M potential subs. This means the potential market for smartphones at this point in time is 148M subs who don’t have a smartphone (obviously, there will always be folks who just don’t want any wireless phone – smartphone or otherwise but the size of that group is shrinking). Add to the upgrade cycle which averages between 18-20 months in the US, the market for smartphone growth remains pretty healthy.
The global market is even more fertile. The emerging markets are quite price sensitive and the low-cost Android devices are rushing to fill the void. If Apple cares about market share, it will have to figure out a strategy to address the void in its portfolio.
The success factor of mobile devices and OEMs is not determined just by product but several other factors as outlined in our recent paper “What Really Drives Mobile Device Performance?” As I mentioned to the New York Times, it is no longer good enough to have a great product, an OEM needs to perform well across multiple variables. CNBC also referenced the research in one of their segments.
Predictably, Microsoft’s Surface RT made a dismal impact on the market. The fundamental strategy was flawed and it was surprising that so many OEMs fell for it.
Blackberry, Nokia, HTC, each once proud leader of the smartphone ecosystem is struggling. Can they come back? In this market, you don’t get too many chances and too many years to turn the ship around. Once the customer loyalty is lost, it is very hard to get it back because there are hungry competitors ready to take your spot. Blackberry and Nokia are a perfect case study for management schools. The cycle of complacency spares no one.
A more likely scenario for some of these players might be some form of M&A transaction. As we alluded to in our paper, Lenovo is the dark horse of mobile and while there are others like HP and Sony who are looking to, reenergize the market, and Huawei and ZTE inching-up every quarter, Lenovo seems better positioned to make an acquisition and make a run for the top 3 spot. But, it will have to make a decisive move and go global with its strategy quickly else as we know the mobile market doesn’t wait for no one.
In terms of Q/Q growth, Connected Devices segment grew 13%, Wholesale 1%, Postpaid 2%, and Prepaid 1%.
The disappearing Tier-2s
In our previous update, we suggested that the market for tier-2s in the US is practically over. The reason was pretty simple – there is no growth left for them. Given the postpaid saturation, the big guys are also focusing heavily on the prepaid segment leaving the tier-2s vulnerable. MetroPCS was first to go followed by Leap (acquired by AT&T, transaction is not complete yet). The next big shakeup in the industry will be the acquisition or the merger with T-Mobile. Like we suggested in our paper “Competition and the Evolution of Mobile Markets” in 2011, rule of 3 will ultimately prevail in the US market. We will be discussing the subject in the more detail at our Mobile Future Forward Summit next month.
The Fourth Wave and the shift towards services
It is evident that there is a subtle shift from devices/access to services/solutions. In our paper on the topic “Operator’s Dilemma (and opportunity): The Fourth Wave”, I proposed that we need a new framework to think about the next generation of revenue opportunities. The fourth curve opportunities are massive but require a different skill set and strategic approach than the past three curves. As predicted, we are starting to see the impact of the 4th wave on a global scale and some operators have started to break out the 4th wave revenues in their financials. Operators with better balance sheets will also look for global expansion especially in Europe where economic impact on the telcom operators has been severe, however the M&A efforts will be complicated by respective governments desire to keep control of the national infrastructure provider.
The incumbent operators in Canada are getting really nervous about the potential entry of Verizon into the market that hasn’t seen any “real” competition in years.
We will be discussing fourth wave in much more detail at our annual thought-leadership summit – Mobile Future Forward with the incredible leaders who are making billion dollar decisions every day.
OTT impact on legacy businesses and models
We will see the same impact of IP and mobility on the various verticals like Retail, Energy, Education, Entertainment, Travel, etc. Some operators have been preparing for this shift and going outside their traditional products and services to launch services like AT&T’s Digital Life to address opportunities in the home, Verizon’s efforts in health and public safety and Sprint’s steps in mobile advertising and analytics. Overseas operators such as Telefonica, Vodafone, Tata, and others are looking to make inroads into the US mobile 4th wave market.
What to expect in the coming months?
All this has setup an absolutely fascinating 2013 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems. Players who firmly attach themselves to the 4th wave will reap benefits while the ones who miss it will see their fortunes dwindle. We are gearing up for our annual Mobile Brainstorm Summit – Mobile Future Forward on Sept 10th, 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 Q2 2013 US wireless data market is:
Service Revenues
- The US Wireless data service revenues grew 4% Q/Q and 14% Y/Y to over $21.7B in Q2 2013. For the year 2013, we are forecasting that mobile data revenues in the US market will reach $90 billion.
- Verizon and AT&T dominated the quarter accounting for 71% of the mobile data services revenue and had 65% of the subscription base.
- Verizon and AT&T maintained its #1 & #2 mobile data revenue ranking in Q2 2013. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile operators.
ARPU
- The Overall ARPU declined by $0.57. Average voice ARPU declined by $1.17 while the average data ARPU grew by $0.61 or 3% Q/Q.
- The average industry percentage contribution of data to overall ARPU is now at the 46% mark in Q2 2013 and is likely to exceed the 50% in 2013. All the top four top US operators are over the 40% mark. (For reference, all three major Japanese operators are now close to the 70% mark).
Subscribers
- The US operators added only 139K net-adds to the ecosystem, its lowest in the history of the US wireless industry.
- T-Mobile’s postpaid saw positive growth for the first time in 12 quarters. It added 688K postpaid subs ahead of all but Verizon.
- For the first time in six years, T-Mobile led in net-adds, just edging out Verizon.
- Sprint finally laid the Nextel brand to rest but it came at the expense of the churn rate which climbed and as a result the net-decline was over 2M subs.
- AT&T continued to lead the connected device segment with 48% market share.
Shared Data Plans
· Shared data plans launched by Verizon and AT&T saw positive results. The tablet and other device attachment rate has gone up by 60%.
· Shared data plans are working so well for AT&T that most of its postpaid growth is coming from tablets. In the last 4 quarters, postpaid tablets accounted for over 72% of the net-adds.
· Shared data plans moved tablet session based consumers to postpaid tablet plans with more predictable revenue stream. The $10 surcharge for every device is still an inhibitor for many consumers. Over time, we expect this fee to go away to bring in many more consumers experience data services across devices other than their smartphones.
Applications and Services
· The market is seeing a lot of activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education. We will be discussing how mobile is changing all the vertical industries at our fall summit Mobile Future Forward where industry leaders in each of these vertical segments will convene to share their experiences and expectations.
- The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.
OTT and the impact on legacy services
· In the last 12 months, Whatsapp has moved around more messages than all the mobile operators in the US and China combined. Those of you who have read our Fourth Wave paper shouldn’t be surprised by this shift.
Handsets
· Smartphones continued to be sold at a brisk pace accounting to almost 87% of the devices sold in Q2 2013.
- Android edged out iOS smartphones in Q2 2013 by a 49%-47% margin. However, iOS is expected to bounce back in Q3 and Q4 which is typical due to the product release cycles.
- At the end of Q2 2013, Samsung continued its lead in unit sale category both on the world stage as well as in the US. However, profits are a different equation where Apple overshadows its rivals like Gulliver on the Lilliput land.
- While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off. It renewed its entry into the battlefield with Windows phone last year but sales have been poor. In Q2 2013, Windows device sales were roughly 0.5 million despite heavy marketing (read our paper to get more insights into why Windows hasn’t been able to make a dent so far).
- Apple’s next set of devices are expected to be unveiled next month.
- Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 31.1M making it the leading LTE operator in the world. AT&T’s and Sprint’s LTE rollouts are gathering steam. T-Mobile is also ramping up its LTE deployment. Expect the “fastest network” marketing to continue for at least another seven quarters. Verizon reported that 60% of its total data traffic is on the LTE network now, clearly the fastest technology transitions we have seen.
- There is always a beauty contest amongst operators as to who sold more iPhones. AT&T again bested its rivals by selling roughly 42% of the iPhones in the US.
4th Wave Solutions
· There were several launches of digital services by the operators but the most prominent has been the Digital Life home security and automation service launched by AT&T.
· There are other instances of companies revving up their mobile revenue base. Facebook is on its way to cross the 50% threshold, Pandora is at 60%, and Twitter is close to 50%. Starbucks and Expedia are doing well in their respective verticals. There are several mobile-only players that are eating up the revenue from traditional players who haven’t been quick to move into mobile.
· Google and Apple are ahead of the pack when it comes to raw revenue. We will have more details on the subject in our upcoming research sequel, “Mobile 4th Wave: The Evolution of the Next Trillion Dollars.”
Your feedback is always welcome.
Chetan Sharma
We will be discussing a number of issues raised in this research update at our annual mobile executive thought-leadership summit – Mobile Future Forward on Sept 10th in Seattle. Thought-leaders include:
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· Ralph de la Vega, President and CEO, AT&T Mobility · Steve Elfman, President, Sprint · Erik Moreno, EVP, Fox Networks · Danny Bowman, Chief Sales and Operating Officer, Samsung · Terry Myerson, EVP – Operating Systems, Microsoft · Julie-Woods Moss, CEO – NextGen Business, CMO, Tata Communications · Jef Holove, CEO, Basis · Geeta Nayyar, Chief Medical Officer, AT&T · Rowland Shaw, VP – Strategy, Ericsson · Andrew Stalbow, EVP, Rovio · Raj Toleti, President, Patient Point · Manish Jha, GM – Mobile, NFL · Drew Patterson, CEO, Room77 · Dr. Avideh Zakhor, Professor, UC Berkeley · Rick Osterloh, SVP – Products, Motorola – Google · Jeff Warren, VP – Mobile, Expedia · Mark Anderson, CEO, SNS · Doug Suriano, VP – Communications, Oracle .. More to come |
· Stephen David, former CIO, P&G · Yung Kim, President and Chief Strategy Officer, Korea Telecom · Glenn Lurie, President, AT&T Mobility · Jude Buckley, President – Mobility, Best Buy · David Small, Chief Platform Officer, Verizon Enterprise Solutions · Tracy Isacke, Head of Americas, Telefonica Digital · Marianne Marck, SVP – Consumer Facing Technology, Starbucks · Henning Schulzrinne, CTO, FCC · Fay Arjomandi, Global Lead, Vodafone Xone · Biju Nair, EVP and CSO, Synchronoss · Hank Skorny, VP/GM – Software Services, Intel · Curtis Kopf, VP – Customer Innovation, Alaska Airlines · Matt Carter, President – Emerging Solutions, Sprint · Joost Schreve, VP – Mobile, Tripadvisor · Rod Randall, Partner, Siris Capital · Chris Koopmans, VP and GM – Cloud, Citrix ByteMobile · Wim Sweldens, former President, Alcatel-Lucent Wireless |
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in November 2013. The next Global Wireless Data Market update will be issued in October 2013.
Disclaimer: Some of the companies mentioned in this research are our clients.
Mobile Future Forward: Ralph de la Vega, CEO of AT&T Mobility to kick-off the summit August 8, 2013
Posted by chetan in : US Wireless Market , add a commentGreetings,
Seattle is having a terrific summer and hope you are too.
In my fourth wave paper last year, I alluded to players who understood the shift to services and have organized themselves to take advantage of the next wave of mobile transformation. AT&T is one of the select few in the world who saw the shift coming and have built the team and the platform to take advantage of the opportunities. Under the deft stewardship of Ralph de la Vega, President and CEO of AT&T Mobility, AT&T has continued to pioneer new business models and revenue streams. He has led AT&T to become an undisputed leader in mobile broadband and smartphone adoption. Starting from the industry defining iPhone launch in 2007 to the launch of digital solutions in 2013, Ralph has been ahead of the curve. Ralph and his team saw the coming shift to solutions and services and mobilized the resources by focusing on some key vertical areas such as Home Security, Commerce, and Connected Auto. He clearly has the pulse of the industry and the future of the mobile ecosystem.
We are thrilled to have him kick off the day talking about the next generation of services and revenue opportunities. He will be joined by Jon Fortt, veteran technology correspondent at CNBC.
I am also delighted to announce that Yung Kim, President and Group Chief Strategy Officer of Korea Telecom will be joining us to a give an invaluable perspective on the future of communications and services on the 4th wave. More on that soon.
Here is an update on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle).
Registration. Limited Seats.
Fireside Keynote:
Ralph de la Vega, CEO and President, AT&T Mobility
Jon Fortt, Technology Correspondent, CNBC
Retail and Commerce Fireside:
Jude Buckley, President, BestBuy
Marianne Marck, SVP – Consumer Facing Technology, Starbucks
Stephen David, former CIO, P&G (moderator)
We will provide regular updates as we add new executives to the program and continue to refine the discussion topics to give you the best learning and networking experience you can find in the mobile industry. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.
We are delighted to be partnering with some of the leading players in the ecosystem: CitrixByteMobile, Ericsson, Intel, Juniper Networks, Oracle, Synchronoss, Tata Communications, and Telefonica.
Some of the outstanding group of executives who are responsible for changing the face of the industry every day will be leading the discussion. Their insights will be invaluable and actionable.
Confirmed Speakers
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· Ralph de la Vega, President and CEO, AT&T Mobility · Steve Elfman, President, Sprint · Erik Moreno, EVP, Fox Networks · Danny Bowman, Chief Sales and Operating Officer, Samsung · Terry Myerson, EVP – Operating Systems, Microsoft · Julie-Woods moss, CMO, Tata Communications · Marios Zenios, VP – Uconnect, Chrysler Group · Jef Holove, CEO, Basis · Geeta Nayyar, Chief Medical Officer, AT&T · Rowland Shaw, VP – Strategy, Ericsson · Andrew Stalbow, EVP, Rovio · Raj Toleti, President, Patient Point · Manish Jha, GM – Mobile, NFL · Drew Patterson, CEO, Room77 · Dr. Avideh Zakhor, Professor, UC Berkeley · Rick Osterloh, SVP – Products, Motorola – Google · Jeff Warren, VP – Mobile, Expedia · Mark Anderson, CEO, SNS · Doug Suriano, VP – Communications, Oracle .. More to come
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· Stephen David, former CIO, P&G · Yung Kim, President and Chief Strategy Officer, Korea Telecom · Glenn Lurie, President, AT&T Mobility · Jude Buckley, President – Mobility, Best Buy · David Small, Chief Platform Officer, Verizon Enterprise Solutions · Tracy Isacke, Head of Americas, Telefonica Digital · Marianne Marck, SVP – Consumer Facing Technology, Starbucks · Henning Schulzrinne, CTO, FCC · Fay Arjomandi, Global Lead, Vodafone Xone · Biju Nair, EVP and CSO, Synchronoss · Hank Skorny, VP/GM – Software Services, Intel · Curtis Kopf, VP – Customer Innovation, Alaska Airlines · Matt Carter, President – Emerging Solutions, Sprint · Joost Schreve, VP – Mobile, Tripadvisor · Rod Randall, Partner, Siris Capital · Chris Koopmans, VP and GM – Cloud, Citrix · Wim Sweldens, former President, Alcatel-Lucent Wireless |
The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.
We hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds.
Thanks and best wishes.
Kind regards,
Chetan Sharma
Mobile Future Forward–Speaker Update July 24, 2013
Posted by chetan in : Mobile Future Forward , add a commentGreetings,
Hope your summer is going well.
As Q2 earnings are coming in, the role of the fourth wave in shaping the mobile ecosystem is becoming apparent. The computing and communications landscape is changing in fundamental ways. Our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle) is designed to explore these changes and opportunities in great detail.
Registration. Standard Saver expires July 31st (next week).
Wanted to provide an update on two important discussion areas –
Future of Computing and Communications
In the post-PC world, computing and communications are changing dramatically. What new device form-factors will evolve and what does that mean to applications, services, consumer interaction, and adoption? We will explore the deep stuff on this panel.
Kevin Packingham, Chief Product Officer, Samsung
Rick Osterloh, Senior Vice President - Product, Motorola, Google
Nick Wingfield, Technology Reporter, New York Times (moderator)
Operators and the 4th Wave
How are the operators taking advantage of the 4th wave and digital offering. We have 5 of the leading global operators to help brainstorm the next 5 years – where will the investments go, what strategies will be pursued, which verticals are ripe for disruption. Our distinguished guests represent practically every inhabited continent so am really looking forward to the global view of the opportunities in front of us.
Glenn Lurie, President – Emerging Enterprises and Partnerships, AT&T Mobility
Tracy Isacke, Head of Americas, Telefonica Digital
David Small, Chief Platform Officer, Verizon
Julie Woods-Moss, Chief Marketing Officer, Tata Communications
Fay Arjomandi, Global Lead, Vodafone Xone
Chetan Sharma, President, Chetan Sharma Consulting (moderator)
We will provide regular updates as we add new executives to the program and continue to refine the discussion topics to give you the best learning and networking experience you can find in the mobile industry. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.
We are delighted to be partnering with some of the leading players in the ecosystem: CitrixByteMobile, Ericsson, Intel, Juniper Networks, Oracle, Synchronoss, Tata Communications, and Telefonica.
Some of the outstanding group of executives who are responsible for changing the face of the industry every day will be leading the discussion. Their insights will be invaluable and actionable.
Lessons from Bhutan July 18, 2013
Posted by chetan in : 4th Wave, Bhutan, Worldwide Wireless Market , add a comment
Lessons from Bhutan
When I started thinking about the Mobile 4th Wave a few years ago, I was initially focused on the western markets as it was logical that the fourth wave will arrive in these markets first. The markets were getting saturated, the voice and messaging revenue waves were in decline, and the access revenue curves were going to be under tremendous margin pressure. The situation was going to be exacerbated by the economic doldrums in Europe as well.
However, one of the pleasant surprises was the speed with which the emerging markets were ramping up on the 4th wave of mobile with new applications and solutions. So, it was a great honor and privilege to work with the ITU/UN on the request of Government of Bhutan to lead a project to help formulate Bhutan’s national mobile apps policy and strategy. There aren’t many nations who think about a national mobile apps strategy. Bhutan is a very young democracy with a progressive regulatory regime (BICMA). The 205 villages in 20 districts are separated by massive mountainous terrain and the most critical national infrastructure is mobile. For government-to-citizen communication, mobile forms the lifeline to remote areas beyond Thimphu, the nation’s capital. It is no surprise that in a matter of few years, the mobile penetration has reached over 75% while fixed penetration languishes below 4% (the Internet penetration is 26%).
We were tasked with identifying the top four most important application areas that will serve the Bhutanese people the most. The team was also to advice on developing a framework where such mobile applications can thrive and prosper. We met with almost all the important ministries in a short amount of time (a similar endeavor in the western world would have taken months) and quickly came to the conclusion that the areas that matter the most to Bhutan and where something tangible can be accomplished are health, finance and banking, agriculture, and emergency and disaster management. Bhutan is the only country that puts Gross National Happiness (GNH) ahead of GDP, so our mobile apps framework needed to satisfy the GNH requirements as well. The chosen application areas satisfied this key criteria for the GNH council. It also needed to fit within the national ICT roadmap
Indeed some of these areas are important to other emerging markets as well and disciplines of health and emergency are important to any nation. In fact, it is surprising that the governments around the world don’t have a comprehensive national mobile apps strategy for health and emergency – something that governments are responsible for. It is not overly burdensome to implement a national emergency plan that has mobile at the center of it for interacting with accurate information can help save lives.
Same goes for healthcare. In fact, Bhutan has already built a mobile based home-grown health emergency system that served the country. This is something that other nations should embrace. My colleague on the project Dr. S.K. Misra, who is a leading global expert in telemedicine having worked on several UN and WHO assignments around the world had already helped set up a telemedicine facility in Bhutan that let the doctors to consult their colleagues in India. Dr. Misra was the author of the mHealth section of the report. Sameer Sharma, Senior Advisor at the ITU based out of Bangkok, provided valuable policy guidance.
As part of the project, we produced “Bhutan Project Report on Emerging Mobile Applications Opportunity,” a report that is serving as a blueprint for the mobile application development in Bhutan. My thanks to the ITU and the Bhutanese government for making the report available last month so that other governments and groups might find it useful.
The 4th wave is about applications, solutions, and services that can not only help create new markets and expand the existing ones to directly contribute to the global GDP. But it is also about solutions that impact day-to-day lives of billions of citizens. It is about building the apps, computing, and communications infrastructure that becomes the backbone of the nation in the new digital economy. The nations who “get” that and are able to navigate the turbulent digital waters are better positioned competitively for the next few decades.
I am heading to Hanoi next week to work with the ITU and meet with the regulators, telecom operators, and developers in South-East Asia to discuss how they should think about the 4th wave of mobile and develop applications that become an essential part of the national commerce and support infrastructure.
We will go into much more detail on how 4th wave is impacting the mobile and economic landscape and the opportunities that are emerging as a result at our annual mobile executive summit – Mobile Future Forward on Sept 10th.
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in August 2013. The next Global Wireless Data Market update will be issued in August 2013.
Disclaimer: Some of the companies mentioned in this research are our clients.
Mobile Future Forward Update July 12, 2013
Posted by chetan in : US Wireless Market , add a commentGreetings,
The first half of the year is behind us and the industry is gearing up for a series of launches especially for Q4. Like a river shapes the mountains and the planet, the fourth wave is shaping the mobile ecosystem with its furious pace and uneven rapids. We are making great progress in shaping our agenda for our upcoming mobile executive summit.
Here is an update on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle).
“I love that there is no fluff and that I am not hearing marketing pitches but real tech and product leader opinions” – SVP, Starbucks
“Where else can you get to the leaders in the mobile world one moment and interfacing with them in an intimate setting the next” – CEO, Rootmetrics
Registration. Summer Saver expires July 12th (Friday).
There are two critical areas to discuss – one is ecosystem shaping by leading technologies and by leading players and the other is the solutions to the tough problems that will help our mobile industry to scale new heights.
Mobile and The Rule of Three
In my research paper “Competition and Evolution of Mobile Markets,” I looked at how Rule of Three influences the mobile market. Sprint, fresh from its Softbank M&A is looking to disrupt the US market as a stronger number three. Microsoft, fresh after its reorg is looking to provide ammunition to its pursuit as a strong third player in the mobile ecosystem. We will talk to two distinguished guests and industry veterans about how they are thinking about reshaping the mobile industry going forward.
Steve Elfman, President, Sprint
Terry Myerson, EVP, Microsoft
Opportunities in solving the biggest problems in computing and communications
At Mobile Future Forward, our focus is firmly on the future of our industry. This panel will assemble some of the leading researchers in the industry to discuss some of the biggest problems in computing and communications that need to be addressed in the next 3 - 5 years. Some are working on technologies that have the potential of fundamentally reshaping the mobile ecosystem in profound ways.
Dr. Henning Schulzrinne, CTO, FCC
Dr. Avideh Zakhor, Professor - EECS, UC Berkeley
We will provide regular updates as we add new executives to the program and continue to refine the discussion topics to give you the best learning and networking experience you can find in the mobile industry. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.
We are delighted to be partnering with some of the leading players in the ecosystem: CitrixByteMobile, Ericsson, Intel, Juniper Networks, Synchronoss, and Telefonica.
Some of the outstanding group of executives who are responsible for changing the face of the industry every day will be leading the discussion. Their insights will be invaluable and actionable.
Confirmed Speakers
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· Ralph de la Vega, President and CEO, AT&T Mobility · Steve Elfman, President, Sprint · Erik Moreno, EVP, Fox Networks · Danny Bowman, Chief Sales and Operating Officer, Samsung · Terry Myerson, EVP – Operating Systems, Microsoft · Marios Zenios, VP – Uconnect, Chrysler Group · Jef Holove, CEO, Basis · Geeta Nayyar, Chief Medical Officer, AT&T · Rowland Shaw, VP – Strategy, Ericsson · Andrew Stalbow, EVP, Rovio · Raj Toleti, President, Patient Point · Manish Jha, GM – Mobile, NFL · Drew Patterson, CEO, Room77 · Dr. Avideh Zakhor, Professor, UC Berkeley .. More to come
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· Stephen David, former CIO, P&G · Glenn Lurie, President, AT&T Mobility · Jude Buckley, President – Mobility, Best Buy · David Small, Chief Platform Officer, Verizon Enterprise Solutions · Marianne Marck, SVP – Consumer Facing Technology, Starbucks · Henning Schulzrinne, CTO, FCC · Fay Arjomandi, Global Lead, Vodafone Xone · Biju Nair, EVP and CSO, Synchronoss · Hank Skorny, VP/GM – Software Services, Intel · Curtis Kopf, VP – Customer Innovation, Alaska Airlines · Matt Carter, President – Emerging Solutions, Sprint · Joost Schreve, VP – Mobile, Tripadvisor |
The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.
Topic Discussions
· The 4th wave – how will the trillions of the dollars generated be divided amongst the players?
· Mobile First to Mobile Only – How consumers and enterprises are being shaped by mobile?
· The fight for developers – Apps, APIs, and Dollars
· Will Security and Privacy get in the way of mobile growth?
· PostPC era – commerce, engagement, and consumption
· Quantified Self. Quantified Enterprise – how to benefit from big data?
· Gamification of Everything – How to reinvent business models and revenue streams
· Mobile Broadband – LTE is here and now. What’s Next?
· Mobile Competitive Policy – Balancing competitiveness, consumer interests, policy, and innovation
· nScreen Connected Consumer – Expectations, Solution roadmap, and Revenue flows
· OTT – Competition, Co-opetition, and the new landscape. Measuring the seismic shifts
· Big (Mobile) Data – Collection, Management and Use of Data
· Mobile Cloud Computing – Innovation, Competition, and Business Models
· Mobile CIO Prism – Disruption in the enterprise. Opportunities for growth and cost reductions
· Managing networking growth in the Yottabyte Era – strategies to tame signaling and data tsunamis
· Mobile Platforms and Ecosystems – The Cycles and the Eternal Debate
· Mobile Security – BYOD, Hacking, Protecting, and Monetization
· Emerging Markets, Emerging Opportunities
· Battle for the Home – Devices, Apps, Networks
· Retail channel transformation – how are we going to shop and who makes money?
I hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds.
Thanks and best wishes.
Kind regards,
Chetan Sharma
Mobile Future Forward Update–Tourism and Entertainment June 28, 2013
Posted by chetan in : US Wireless Market , add a commentGreetings,
As we turn the corner on the first half of the year, the global mobile industry has gone past $700 billion in revenues for the first six months, its highest ever for the time period. As the fourth wave of mobile shapes the various verticals, it is important to understand how mobile is impacting the global GDP.
Here is an update on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle).
Previously, I had updated on the retail, health and the operator fourth wave panels we are working on. Wanted to talk about two more critical segments – Tourism and Entertainment.
Tourism and Entertainment are over $2.5 trillion dollar industries globally and are important part of the global GDP. We have some of the most disruptive companies and leading thinkers in these segments.
Tourism
Curtis Kopf, VP – Customer Innovation, Alaska Airlines
Drew Patterson, CEO, Room77
Joost Schreve, VP – Mobile, Tripadvisor
Entertainment
Erik Moreno, EVP, Fox Networks
Andrew Stalbow, EVP, Rovio Entertainment
Manish Jha, GM – Mobile, NFL
Registration. Summer Saver expires July 14th.
We will provide regular updates as we add new executives to the program and continue to refine the discussion topics to give you the best learning and networking experience you can find in the mobile industry. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.
We are delighted to be partnering with some of the leading players in the ecosystem: CitrixByteMobile, Ericsson, Intel, Synchronoss, and Telefonica.
Some of the outstanding group of executives who are responsible for changing the face of the industry every day will be leading the discussion. Their insights will be invaluable and actionable.
Confirmed Speakers
|
· Ralph de la Vega, President and CEO, AT&T Mobility · Steve Elfman, President, Sprint · Erik Moreno, EVP, Fox Networks · Danny Bowman, Chief Sales and Operating Officer, Samsung · Terry Myerson, Corporate Vice President – Windows Phone, Microsoft · Marios Zenios, VP – Uconnect, Chrysler Group · Jef Holove, CEO, Basis · Geeta Nayyar, Chief Medical Officer, AT&T · Rowland Shaw, VP – Strategy, Ericsson · Andrew Stalbow, EVP, Rovio · Raj Toleti, President, Patient Point · Manish Jha, GM – Mobile, NFL · Drew Patterson, CEO, Room77 .. More to come
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· Stephen David, former CIO, P&G · Glenn Lurie, President, AT&T Mobility · Jude Buckley, President – Mobility, Best Buy · David Small, Chief Platform Officer, Verizon Enterprise Solutions · Marianne Marck, SVP – Consumer Facing Technology, Starbucks · Henning Schulzrinne, CTO, FCC · Fay Arjomandi, Global Lead, Vodafone Xone · Biju Nair, EVP and CSO, Synchronoss · Hank Skorny, VP/GM – Software Services, Intel · Curtis Kopf, VP – Customer Innovation, Alaska Airlines · Matt Carter, President – Emerging Solutions, Sprint · Joost Schreve, VP – Mobile, Tripadvisor |
The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.
I hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds.
Thanks and best wishes.
Kind regards,
Chetan Sharma
Partner Event: Mobilebeat June 25, 2013
Posted by chetan in : US Wireless Market , add a commentOur friends at Venturebeat are putting together their annual Mobilebeat summit next month. Checkout the program. Our readers get 20% off.
US Wireless Market Update Q1 2013 June 20, 2013
Posted by chetan in : 3G, 4G, 4th Wave, AORTA, Chetan Sharma Consulting, Connected Devices, Infrastructure Providers, Mobile Future Forward, Mobile Patents, OTT, Speaking Engagements, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentUS Wireless Market Update Q1 2013
http://chetansharma.com/usmarketupdateq12013.htm
Summary
The US mobile data market grew 2% Q/Q and 14% Y/Y to reach $21 billion in mobile data revenues. Data is now almost 45% of the US mobile industry service revenues and as we had forecasted a few years back, the cross-over point of 50% might occur later this year. For the year 2013, we are expecting $90 Billion in mobile data service revenues for the US market.
For the quarter, the market added a paltry 1.1 million new connections, a decline of 60% from Q1 2012. It was the lowest net-adds Q4 quarter in the US mobile history (barring the early days of tepid growth). The postpaid category added only 200K subs largely on the back of Verizon’s 677K net-adds.
AT&T sold more iPhones but Verizon sold more smartphones. With T-Mobile joining the iPhone bandwagon, iOS lead in the US market is likely to continue.
T-Mobile continued to lose their postpaid subs for the 11th straight quarter. Sprint also lost over half a million postpaid subs primarily due to the Nextel business. Once Nextel is sunsetted mid-2013 for good, we can expect a pick-up of net-postpaid subs at Sprint.
The see-saw battle between Softbank and Dish for Sprint/Clearwire continued as expected but as expected Softbank is likely to prevail when it is all said and done. After completing the Metro acquisition, T-Mobile started to integrate the 8M+ base into the company. We can expect that the next round of M&A will continue once we are done with the Sprint decision.
As we mentioned in our previous updates, smartphones are now past the 50% mark in the US and continue to sell at a brisk pace accounting for almost 85% of the devices sold in Q1 2013. Apple led the smartphone sales amongst the top 4 operators with 50% share for the quarter. While the US penetration of smartphones is over 50%, the 50% of the sub base is concentrated in only 30% of the households thus leaving plenty of growth in the marketplace.
In terms of Q/Q growth, Connected Devices segment grew 17%, Wholesale 5%, Prepaid 4%, and Postpaid was flat.
Verizon and AT&T maintained their top positions in the global rankings by mobile data revenues. A survey of the entire ecosystem shows that the US companies dominate the top 5 rankings of profit share. China Mobile leads the industry with Apple, Verizon, AT&T, and NTT DoCoMo completing the rankings.
What really drives mobile device performance?
Will a 3rd mobile ecosystem emerge this year? Is it necessary? Specifically, what problem does it solve? What factors influence the purchase behavior of the consumer? And can OEMs change their strategy to impact sales? Why have Microsoft and Nokia not been able to make a dent in the trajectory despite having a compelling OS, range of devices, consumer-friendly price-points, better distribution, and increased level of advertising dollars? Will Blackberry be able to recover? Why hasn’t HTC One been able sell in similar numbers as the Galaxy S4 despite being better by most accounts? What will it take for LG to increase share? Can Motorola stay relevant? Can new entrants disrupt the waters? Can ZTE and Huawei come from the bottom and disrupt the top players? Will Apple and Samsung be able to protect their position on the top?
These questions have been a matter of intense debate in the media and in the ecosystem. We try to address these questions in some detail in our recent paper “What Really Drives Mobile Device Performance?” As I mentioned to the New York Times, it is no longer good enough to have a great product, an OEM needs to perform well across multiple variables.
The Fourth Wave and the shift towards services
It is evident that there is a subtle shift from devices/access to services/solutions. In our paper on the topic “Operator’s Dilemma (and opportunity): The Fourth Wave”, I proposed that we need a new framework to think about the next generation of revenue opportunities. The fourth curve opportunities are massive but require a different skill set and strategic approach than the past three curves. It is being widely adopted in the operator community around the world and some operators have started to break out the 4th wave revenues in their financials.
We will be discussing fourth wave in much more detail at our annual thought-leadership summit – Mobile Future Forward with the incredible leaders who are making billion dollar decisions every day.
OTT impact on legacy businesses and models
In the last 12 months, Whatsapp moved around more messages than all the mobile operators combined in any country and that includes US and China. US and China collectively have approximately 1.5 billion subscriptions. Whatsapp with its 200M base has moved more messages in the last 12 months than all the operators in both US and China combined. Ok, let that sink in for a few minutes. For a significantly small fraction of the cost, Whatsapp moves around more messages than every single telecom operator on the planet. Of course, Whatsapp makes a tiny fraction of the revenue compared to the operators. What Whatsapp and similar players lack in ubiquity and interoperability, they make it up by being the commodity utility provider at a low cost to the consumer. The notion of designing by a standards committee above the IP layer is just no longer needed in majority of the cases. Once you have the IP connection, consumers will gravitate towards innovative solutions and be willing to fragment their communication behavior across multiple apps. SMS will stay relevant for the foreseeable future but the growth is in IP communication. We will also see more cooperation between the IP app players and the operators as they find common strategic grounds.
We will see the same impact of IP and mobility on the various verticals like Retail, Energy, Education, Entertainment, Travel, etc. Some operators have been preparing for this shift and going outside their traditional products and services to launch services like AT&T’s Digital Life to address opportunities in the home, Verizon’s efforts in health and public safety and Sprint’s steps in mobile advertising and analytics.
Operator M&A – The Rule of Three Strikes Back
The M&A game continued with intense frenzy in the ecosystem. T-Mobile completed the Metro acquisition which gives it more heft and scale to compete as a value-player. However, the real drama has been going on with the Softbank and Sprint merger with Dish playing the role of the spoiler. Our original thesis has been that Softbank is a better fit than Dish and Dish’s strategic intention might actually be T-Mobile not Sprint. It was a masterful decoy to raise the cost and pain for Softbank and Sprint. It is likely to be all sorted out in the next few weeks.
There have been some interesting twists and turns but as we have stated before, the US market competitive equilibrium will be complete when Sprint and T-Mobile get together at some point down the road. As outlined in our research paper on the subject, market forces find their way to get to 3 dominant operators that compete for attention and revenues, rest becomes noise. While the regulators might scoff at the idea, the inevitable market forces will find their way around.
Operators with better balance sheets will also look for global expansion especially in Europe where economic impact on the telcom operators has been severe, however the M&A efforts will be complicated by respective governments desire to keep control of the national infrastructure provider.
The Patent Battles
In 2012, Samsung had a strong showing not only in the market place but also in the patents area. It edged past Nokia to become the overall mobile patents leader in the industry. IBM and Microsoft also improved their rankings. Nokia, Ericsson, and Alcatel-Lucent slid in rankings. Motorola dropped out of top 10. Not surprisingly, companies who have been around for a while especially in the infrastructure and the platform space lead the overall mobile patents. Samsung has been fiercely building its patent portfolio in both Europe and the US and the efforts have paid off as it has built a significant portfolio and a formidable lead that is likely to serve it well in the coming years.
A more startling observation is the mobile patent grants as a percentage of the total patent grants in a given year have risen significantly for the US market indicating the importance innovators attach to mobile in their business. In the US, one out of every five patent granted in 2012 was related to mobile. Less than a decade ago, this number was less than 10%. The European market has seen lower growth relative to the US market. Roughly one out of every ten patents granted in Europe are mobile related.
Samsung was the leader in the mobile patents granted in 2012 in the US and that propelled the company to the top ranking in overall patents (1996-2013). Samsung was followed by IBM, Sony, Microsoft, RIM, LG, Qualcomm, Ericsson, Panasonic, Alcatel-Lucent, and Nokia for the top 10 companies by mobile patent grants in 2012. The top 5 categories for patents grants in the US for 2012 were Telecommunications, Digital Multiplexing, Digital Processing – Data Transfer, Digital Processing – Financial, and Digital Processing – Databases. The top 5 filers of mobile patents in the US were IBM, Microsoft, Samsung, Qualcomm, and Sony. Apple made it to top 10 for the first time on the strength of its patents filed in the computer graphics processing category.
For more detailed analysis, please refer our research paper on the subject – Mobile Patents Landscape – An In-Depth Quantitative Analysis.
SMB leading indicator of mobile adoption
Small businesses are at the heart of the US economic engine. They represent roughly 45% of the non-farm GDP. Every administration, every president focuses on small business growth and job creation. In our paper “The ABCs of SMB Transformation: Apps, Broadband, and the Cloud,” we explored how mobile is transforming the SMBs. The main conclusions were: a) SMB segment is a leading indicator of technology adoption and we can learn a great deal about the broader trends by understanding how SMBs adopt technology b) there are tangible gains in productivity – on average SMB workers save 40 minutes per worker per day which translates into significant impact on profits and c) there is a tangible impact on computing, enterprise software and services as the business processes are shifting towards iOS and Android.
What to expect in the coming months?
All this has setup an absolutely fascinating 2013 in the communication/computing industry. Convergence is everywhere and is leading to a fundamental reset of the value chains and ecosystems. Players who firmly attach themselves to the 4th wave will reap benefits while the ones who miss it will see their fortunes dwindle. We are gearing up for our annual Mobile Brainstorm Summit – Mobile Future Forward on Sept 10th, 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 2013 US wireless data market is:
Service Revenues
- The US Wireless data service revenues grew 2% Q/Q and 14% Y/Y to over $21B in Q1 2013 thus exceeding $20B for the second straight quarter.. For the year 2013, we are forecasting that mobile data revenues in the US market will reach $90 billion.
- Verizon and AT&T dominated the quarter accounting for 70% of the mobile data services revenue and had 66% of the subscription base.
- Verizon and AT&T maintained its #1 & #2 mobile data revenue ranking in Q1 2013. Sprint and T-Mobile also maintained their rankings in the top 10 global mobile operators.
ARPU
- The Overall ARPU increased $0.35. Average voice ARPU declined by $0.42 while the average data ARPU grew by $0.87 or 3% Q/Q.
- The average industry percentage contribution of data to overall ARPU is now at the 45% mark in Q1 2013 and is likely to exceed the 50% in 2013. All the top three US operators are over the 45% mark. (For reference, all three major Japanese operators are now over the 65% mark).
Subscribers
- The US operators added 200K postpaid subs and approximately 1.2M total.
- T-Mobile’s postpaid woes continued for the 11th straight quarter.
- Verizon led the market with 720K net-adds. It was followed by AT&T at 291K, and T-Mobile at 5K. Verizon and AT&T accounted for 86% of the market’s net-adds Nextel continues to drag Sprint’s postpaid additions. Sprint is expecting the transition from Nextel to Sprint to be complete in the next few months.
- AT&T continued to lead the connected device segment with 48% market share.
Shared Data Plans
- Shared data plans launched by Verizon and AT&T saw positive results. The tablet and other device attachment rate has gone up by 60%.
- Shared data plans moved tablet session based consumers to postpaid tablet plans with more predictable revenue stream. The $10 surcharge for every device is still an inhibitor for many consumers. Over time, we expect this fee to go away to bring in many more consumers experience data services across devices other than their smartphones.
Applications and Services
- The market is seeing a lot of activity in the mobile commerce and payment services as well as in various industry verticals like healthcare, retail, and education. We will be discussing how mobile is changing all the vertical industries at our fall summit Mobile Future Forward where industry leaders in each of these vertical segments will convene to share their experiences and expectations.
- The cloud and security segments have also gained significant traction with incumbents as well as startups launching new initiatives and technologies.
OTT and the impact on legacy services
- In the last 12 months, Whatsapp has moved around more messages than all the mobile operators in the US and China combined. Those of you who have read our Fourth Wave paper shouldn’t be surprised by this shift.
Handsets
- Smartphones continued to be sold at a brisk pace accounting to almost 85% of the devices sold in Q1 2013.
- iPhone dominated smartphone sales for Q1 2013. In Q1, iPhone accounted for 50% of the total smartphone sales at the top four operators.
- At the end of Q1 2013, Samsung continued its lead in unit sale category both on the world stage as well as in the US. However, profits are a different equation where Apple overshadows its rivals like Gulliver on the Lilliput land.
- While it is fairly clear that Windows will acquire the #3 spot behind iOS and Android, the journey to a substantial and competitive market share is still ways off. It renewed its entry into the battlefield with Windows phone last year but sales have been poor. In Q1 2013, Windows device sales were less than 0.5 million despite heavy marketing (read our paper to get more insights into why Windows hasn’t been able to make a dent so far).
- Apple finally launched its iOS 7 update with the hardware unit to be launched later this year.
- Verizon continues to sell more LTE smartphones as its LTE sub tally rose to 27.5M making it the leading LTE operator in the world. AT&T’s and Sprint’s LTE rollouts are gathering steam. T-Mobile is also ramping up its LTE deployment. Expect the “fastest network” marketing to continue for at least another seven quarters. Verizon reported that 50% of its total data traffic is on the LTE network now.
- There is always a beauty contest amongst operators as to who sold more iPhones. AT&T again bested its rivals by selling roughly 47% of the iPhones in the US.
Mobile Data Growth
- The smartphone data consumption at some operators is averaging over 1 GB/mo. Some devices are averaging close to 2-3 GB/mo. As we move into 1GB range along with the family data plans kicking in, you can expect the data tiers to get bigger both in GBs and dollar amount.
- While the spectrum debate rages on, in addition to the network and backhaul upgrades, policy management and data offload have emerged as top two solutions that operators deploying around the world. Signaling management solutions like Diameter routing are also getting good traction. However, a long-term video solution is still elusive. As we have been saying in our Yottabyte series of research papers, a comprehensive solution strategy is needed to effectively manage margins/bit.
Your feedback is always welcome.
Chetan Sharma
We will be discussing a number of issues raised in this research update at our annual mobile executive thought-leadership summit – Mobile Future Forward on Sept 10th in Seattle. Thought-leaders include: Biju Nair, EVP and CSO, Synchronoss; Curtis Kopf, VP – Customer Innovation, Alaska Airlines; Danny Bowman, Chief Sales and Operating Officer, Samsung; David Small, Chief Platform Officer, Verizon Enterprise Solutions; Erik Moreno, EVP, Fox Networks; Fay Arjomandi, CEO - Vodafone Xone, President/Chairman – Vodafone Americas Foundation; Geeta Nayyar, Chief Medical Information Officer, AT&T; Glenn Lurie, President, AT&T Wireless; Hank Skorny, VP and GM – Software Services, Intel; Henning Schulzrinne, CTO, FCC; Jef Holove, CEO, Basis; Jude Buckley, President – Mobility, Best Buy Co; Kevin Packingham, Chief Product Officer, Samsung; Manish Jha, GM – Mobile, NFL; Marianne Marck, SVP – Consumer Products, Starbucks; Marios Zenios, VP – Uconnect, Chrysler Group; Matt Carter, President – Emerging Solutions, Sprint; Raj Toleti, CTO, Patient Point; Ralph de la Vega, CEO, AT&T Wireless; Rowland Shaw, VP - Strategy, Ericsson; Stephen David, former CIO, P&G; Steve Elfman, President, Sprint; Terry Myerson, Corporate Vice President – Mobile, Microsoft; Tracy Isacke, Head, Telefonica Digital Americas
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, articles, and our annual thought-leadership summit – Mobile Future Forward. The next US Wireless Data Market update will be released in August 2013. The next Global Wireless Data Market update will be issued in July 2013.
Disclaimer: Some of the companies mentioned in this research are our clients.
Mobile Future Forward 2013 – Speaker Update June 14, 2013
Posted by chetan in : Fourth Wave, Mobile Future Forward , add a commentHope you are enjoying the last days of spring. Here is an update on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle).
One of the critical segments that the fourth wave of mobile is shaping is that of the operators. Many of the leading operators are investing heavily and are becoming strong digital contenders in the ecosystem. We are assembling what is arguably the best panel ever put together on the subject.
Senior executives from world’s top 5 operators (AT&T, Sprint, Telefonica, Verizon, and Vodafone) are coming together to discuss how they are building their portfolio of digital services. Combined they represent over $350 Billion in mobile revenues, $100 Billion in mobile data revenues, $0.5 Trillion in marketcap, and $15 Billion in mobile digital revenues. Their insights are going to be invaluable.
Glenn Lurie, President, AT&T Mobility
Fay Arjomandi, CEO – Vodafone Xone, President/Chairman – Vodafone Americas Foundation
Steve Elfman, President, Sprint
David Small, Chief Platform Officer, Verizon Enterprise Solutions
Registration. Early bird expires June 14th (Friday).
We will provide regular updates as we add new executives to the program and continue to refine the discussion topics to give you the best learning and networking experience you can find in the mobile industry. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.
We are delighted to be partnering with some of the leading players in the ecosystem: CitrixByteMobile, Ericsson, Intel, Synchronoss, and Telefonica.
Some of the outstanding group of executives who are responsible for changing the face of the industry every day will be leading the discussion. Their insights will be invaluable and actionable.
Hope you can join us.
Mobile Breakfast Series Recap – Mobile Platforms and the future of HTML5 June 12, 2013
Posted by chetan in : 4th Wave, Chetan Sharma Consulting, HTML5, Mobile Breakfast Series, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentWe hosted our 15th Mobile Breakfast Series event yesterday. The topic was – Is HTML5 Really Disruptive?
HTML5 has been talked about for a long time as the most disruptive force for mobile applications since the Apple Appstore was launched 5 years ago. But, can it really change the industry dynamics? How do you solve the reach problem for the developers? Many interesting initiatives in 2013 like Firefox OS but will they make a difference? How do developers view HTML5?
The platform wars are not new, they have been around since computing evolved. The discussion and debate just morphs into the flavor of the day. In the recent past, smartphones and tablets have redefined computing as we know it. The vitality and strength of any ecosystem is determined by the number of app developers developing for a platform and actively monetizing. Right now there are only two sheriffs in town – for units it is Android and for revenue it is iOS. Others play on the fringes. HTML5 has been in the discussion for a while and whether it can stand on its own as a platform has been a matter of great debate amongst the participants of the trade. As usual, we had an outstanding line of speakers which over a 100 years in combined experience in the mobile space, which is just phenomenal. These guys have worked with all the major computing and device companies so the depth of understanding of real issues, challenges, and opportunity really showed. The panelists were:
Hank Skorny – VP/GM – Software Services, Intel. Hank is a veteran of the platform industry with successful stints at Apple, AOL Mobile, Microsoft, Adobe, Infospace Mobile, and now with Intel. He recently acquired Mashery and Aepona to beef up the Open API initiative for enterprises, operators, and developers.
Jeff Warren – VP – Mobile and Online Partner Marketing, Expedia. Jeff previously worked at Motorola and his team has been doing some great work in mobile at Expedia, a real example of how companies are adapting to the 4th wave that I have been talking about.
Asokan Ashok – Director – Content and Services, Samsung. Ashok has worked for Motorola, Nokia, Ericsson, HP, and now with Samsung. You can say, he knows a thing or two about devices.
Sundeep Peechu – Partner, Felicis Ventures. Remember Rovio or rather Angry Birds. Well, he was one of the early believers and investors when it was not fashionable to invest in apps. Now it is a multi-billion dollar industry. Felicis itself is fairly impressive. Just in 6-7 years, they have made 100+ investment with 46 exits.
I kicked off the discussion with an animation of how the market shares have changed in the smartphone space since 2004 from Symbian, Windows and Blackberry to iOS and Android. We do seem to go in cycles. Are we on the tip of another cycle?
Source: © Chetan Sharma Consulting, 2013
Not a complete change but Hank made the case for HTML5 and articulate a well reasoned thesis that HTML5 is not going to be disruptive because it is the web but rather due the economic reasons. Companies are just running out of people they can hire to build apps and HTML5 provides a solution with more trained staff and cheaper cost of development.
Source: © Hank Skorny, Intel, 2013
Source: © Hank Skorny, Intel, 2013
Below is the summary of the discussion:
HTML5 needs a champion
- One of the big themes that emerged from the discussion was that like for any platform and its success over time, HTML5 needs a strong advocate and a champion who can move the industry forward.
- While Mozilla has been making tremendous strides with FireFox OS, HTML5 ecosystem will benefit from a senior statesman taking the stage and the most natural candidate is Google as they have the most to win.
- Apple can easily pivot if the need be but is unlikely to push HTML5.
- Microsoft has a unique opportunity to become HTML5’s biggest cheerleader. In fact, without a strong HTML5 strategy, Windows might not reach its full potential and continue to struggle.
- EA is moving 80% of their games to HTML5 by 2015.
- OEMs should become champions of HTML5 and Open APIs to make their devices stand out and become and important control point in the value chain.
- Panelists didn’t think operators have much role to play irrespective of what happens with HTML5 as they are just slow on working together and have missed out on several opportunities like location, billing, identity and while they can play an important role, they just don’t move fast enough to make an impact (there are exceptions of course).
- Expedia sees 50% of spend on mobile web (vs native) so HTML5 stands a great chance to further its role in the app economy.
Is it the economics, stupid?
- Developers are still going iOS first and Android second as monetization is 3x that of all the other platforms combined.
- Developers don’t like the 30% tax but can live with it
- Some bigger players are circumventing the tax trap and building applications that allow for transactions outside the app store e.g. Amazon, Uber.
- 50% of developer costs are in porting if they chose multiple platforms so for many developers the margin pressure is intense and might not be sustainable.
- While the 30% tax is cumbersome, Apple is primarily interested in selling devices and can easily lower or change the economics if that what helps them keep their competitive advantage. They have given out $10B to developers which means the appstore has generated over $14.3B in revenues thus far. The revenue it makes is barely keeping its servers humming.
- The 30% tax is a false debate as in the larger scheme of things it doesn’t matter and can easily go away if that is what seems critical to the strategy.
- The approach to HTML5 is not straightforward either – there are issues with performance and hence usability, fragmentation, discovery, monetization, and timely access to device APIs.
- 92% of gaming is casual gaming and those game developers are already developing HTML5 based games e.g. Doubledown which is doing $100M in revenues
- Facebook and Linkedin withdrew from HTML5 very publicly in favor of native and that put a lot of pressure on the HTML5 efforts of many corporations who started questioning if they are on the right track. However, the choice of the platform really depends on the overall strategy and the context of your content and offering. The decision can’t be taken in isolation. As Sencha was later able to demonstrate, one can build a better HTML5 app if one just focuses on it (read: get the right developers involved in the project).
Enterprise to lead the way
- The kick to the HTML5 wagon might come from the enterprise who are worried about security and want to leverage their existing development resources (Enterprise software pricing also tends to be higher).
- There is much more money in the enterprise segment than the consumer space and enterprise customers are going to make a concerted effort with HTML5
- The available of open cloud APIs from the likes of Amazon and Intel will accelerate the move towards HTML5.
HTML5 needs to solve
- Payments – a single API that can avoid filling out forms and work as seamlessly as the iTunes checkin which btw has 575 million accounts. Facebook are you listening? Operators can again play a role but getting a uniform API across operators is a herculean task.
- Fragmentation – While fragmentation will never go away, browser vendors need to align themselves to reduce fragmentation for faster adoption
- Device performance – Qualcomm is optimizing chipsets for HTML5. In the future, we could see multicore processors with one or more cores dedicated to HTML5 performance and optimization.
- Faster standards adoption – Standards by nature move at snail’s pace and can’t keep up with the native innovation. The API access is critical for developers and unless HTML5 makes headways in a significant ways, it is an issue for many developers.
- Discovery – while we might resort to web search, the app search environment actually works really well (though it needs to improve a great deal as well). It provides curation by the community which is helpful for discovery besides vanilla search.
- Notifications, DRM, Secure storage, and background processing all need to be at par with the native experience.
The world is not either/or
- In reality, developers decide on their toolset based on the task at hand. Most of the times, the app is a hybrid of native and web. Web is encapsulated by native.
- However, to reduce the development costs, more usage of HTML5 is desired once we get past some of the problems we discussed above.
What do consumers think?
- Consumers are pretty happy w/ iOS and Android and not really clamoring for new platform but competitive forces brings out the best in all. Android keeps iOS on its toes and a third strong platform will ensure the top two don’t get complacent. So, while consumers are not really screaming HTML5, the ecosystem forces of checks and balances necessitate the need for something like HTML5.
All in all, a great discussion. Had insightful questions and comments from the audience as well who are well-plugged into the debate.
Thanks for all those who came and participated. My thanks to the speakers for making the time to share their insights.
Next, our Mobile Future Forward Summit is coming up on Sept 10. The early bird expires this friday so make sure you grab your tickets.
We also released our Mobile Future Forward Research Series Paper -
It goes into details about why some players are successful in the device space and others aren’t. You can download it here.
Thanks and have a great rest of the month.
New Research: What (Really) Drives Mobile Device Market Performance?
Posted by chetan in : Chetan Sharma Consulting, Connected Devices, Devices, Mobile Ecosystem, Mobile Future Forward, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentWhat (Really) Drives Mobile Device Market Performance?
- A Mobile Future Forward Series Research Paper
http://chetansharma.com/What_Drives_Mobile_Device_Market_Performance.htm
Introduction
The computing landscape has drastically changed over the last five years. Consumers are increasingly seeking connected devices with majority of them being mobile. In fact, due to the aggressive buying habits of the US consumer, the overall computing landscape in terms of quarterly sales has unquestionably tilted towards smartphones and tablets. While Apple wasn’t the first one to launch the smartphone, its iPhone completely changed the market dynamics. Google’s Android and Samsung have also ridden the tidal wave perfectly. The US market has been ground zero in the battle of the mobile ecosystems, the war of computing platforms, and quarter-over-quarter sales hand-to-hand combat.
During the 2008-2010 timeframe, it was obvious that the gap between the iPhone and rival offerings was tremendous. The user interface, ease of use, and just the quality of product design won consumers over. Microsoft to its own admission completely misread the shifting landscape and paid dearly. Its once dominant share of computing (95%) was cut into less than half in a matter of four years. The disruption from iOS and Android was so intense that Microsoft had to go back to the drawing board. Microsoft wasn’t alone in being complacent. Once proud leaders of the mobile smartphone era – Nokia and RIM were in denial for a long time of the changing market. They did end up launching pretty credible offerings in 2012-2013 but were clearly late by half-a-decade. LG who once used to go toe-to-toe with Samsung in all major markets just couldn’t keep up with the frantic pace of innovation and product cycles and its weak structural beams gave up under stress. HTC, once the Android darling of the industry, had several mis-steps and hasn’t been able to recover ever since despite launching some great devices.
Given the massive shifts in the computing landscape, it will be instructive to understand “What really drives device market performance?” What factors influence the purchase behavior of the consumer? And can OEMs change their strategy to impact sales? Why have Microsoft and Nokia not been able to make a dent in the trajectory despite having a compelling OS, range of devices, consumer-friendly price-points, better distribution, and increased level of advertising dollars? Will Blackberry be able to recover? Why hasn’t HTC One been able sell in similar numbers as the Galaxy S4 despite being better by most accounts? What will it take for LG to increase share? Can Motorola stay relevant? Can new entrants disrupt the waters? Can ZTE and Huawei come from the bottom and disrupt the top players? Will Apple and Samsung be able to protect their position on the top?
We have tried to address these questions using a framework that looks at the complicated equation of market performance. It is based on subjective assessment but it is informed by data on some of the key variables that impact device sales. The model is applicable to tablet sales as well. It gives us a reference model that can provide an understanding of the shortcomings of certain OEMs relative to others.
By honing in on the model, and with real-time inputs to the model, one can also get a fair assessment of the future device sales. However, sales is just one metric to consider. One has to also look at revenue and profits along with the competitive positioning in the marketplace to truly assess the “market performance” of the player. Having a strong unit share position in the market place is desirable but not a necessary condition to have a strong market performance in a given market. The size of the revenues and profits matter a great deal as well. Similarly, how a company manages and maintains its competitive advantage is very critical. From 2007-2011, Nokia had a dominant unit share but its competitive roadmap looked terrible and the market recognized that. Similarly, Blackberry (then RIM) was the dominant smartphone player of 2008-2009 but it was pretty clear that it is going to end up at a significant disadvantage if it didn’t change its ways in responding to the iPhone.
The mobile market is far from static, it has changed dramatically over the last ten years and it will change again in the next ten. However, the factors that drive market performance are likely to stay consistent.
The paper is primarily focused on the US market; however, model can be adapted for any region or country provided that enough reliable data is available to feed the model. Using the model and our understanding of the industry, we will try to answer the questions raised in this introduction and discuss the most important question of them all – What really drives device market performance?
Download from Mobile Future Forward website
Your feedback is always welcome.
Chetan Sharma
We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in June 2013. The next Global Wireless Data Market update will be issued in July 2013.
Disclaimer: Some of the companies mentioned in this paper are our clients.
Mobile Future Forward – Speaker Update June 4, 2013
Posted by chetan in : US Wireless Market , add a commentGreetings,
I thought I will provide an update on our fall mobile executive summit – Mobile Future Forward (Sept 10th in Seattle).
The mobile industry is entering what I call the “golden period” of its evolution. The fourth wave of mobile is going to generate trillions of dollars over the course of the next decade. The ecosystem will become more diverse, each of the major verticals will get redefined by mobile, and consumers around the globe will benefit tremendously from connections to information, intelligence, objects, and each other. Enterprise productivity and efficiency will increase manifold and the golden period of mobile will help shape human history. But how and by whom? That will be the crux of the summit in September.
The two key verticals that will benefit from the transition are Retail and Health and we have some outstanding speakers to address the opportunities. Best Buy is the biggest electronics retailer and Starbucks is the biggest coffeehouse company in the world. AT&T is probably the first mobile operator to hire a Chief Medical Information Officer (Dr. Geeta Nayyar), Raj is on his 3rd startup in the patient care space that is using mobile very effectively and making a big difference, and Jef is blending the fitness/health space with innovative device and service that goes beyond counting steps.
Retail
Jude Buckley, President – Mobility, Best Buy
Marianne Marck, SVP – Consumer Facing Technology, Starbucks
Health
Dr. Geeta Nayyar, Chief Medical Information Officer, AT&T
Raj Toleti, President/CTO – Coordinated Care Solutions, Patient Point
Jef Holove, CEO, Basis
We will provide regular updates as we add new executives to the program and continue to refine the discussion topics to give you the best learning and networking experience you can find in the mobile industry. As you know, our programs are deep in content and high on participant caliber. Each year we strive to bring together some of the leading thinkers and doers from around the world to brainstorm the future of mobile. As we like to call it – it is a mobile boot camp with the brightest brains in mobile.
We are delighted to be partnering with some of the leading players in the ecosystem: CitrixByteMobile, Ericsson, Intel, Synchronoss, and Telefonica.
Some of the outstanding group of executives who are responsible for changing the face of the industry every day will be leading the discussion. Their insights will be invaluable and actionable.
Confirmed Speakers
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· Ralph de la Vega, President and CEO, AT&T Mobility · Steve Elfman, President, Sprint · Erik Moreno, EVP, Fox Networks · Danny Bowman, Chief Sales and Operating Officer, Samsung · Terry Myerson, Corporate Vice President – Windows Phone, Microsoft · Marios Zenios, VP – Uconnect, Chrysler Group · Jef Holove, CEO, Basis · Geeta Nayyar, Chief Medical Officer, AT&T · Rowland Shaw, VP – Strategy, Ericsson · Raj Toleti, President, Patient Point .. More to come
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· Stephen David, former CIO, P&G · Glenn Lurie, President, AT&T Mobility · Jude Buckley, President – Mobility, Best Buy · Marianne Marck, SVP – Consumer Facing Technology, Starbucks · Henning Schulzrinne, CTO, FCC · Fay Arjomandi, Head Vodafone Xone, Vodafone · Biju Nair, EVP and CSO, Synchronoss · Hank Skorny, VP/GM – Software Services, Intel · Curtis Kopf, VP – Customer Innovation, Alaska Airlines · Matt Carter, President – Emerging Solutions, Sprint |
The Mobile Future Forward team, our esteemed partners, our fantastic speakers and our engaged community are really looking forward to Sept 10th.
I hope you will join us in what is shaping up to be an exceptional gathering of the mobile minds. Registration is open now.
Thanks and best wishes.
Kind regards,
Chetan Sharma
