Carriers have built vast empires and generated piles of cash by doing what ‘it says on the tin’: carrying voice. Not long ago, their services were the only way to carry voice over wired or wireless connections. However, the internet changed the game. With affordable and fast enough data connections, plus the freedom to install their own apps in a growing base of smartphones (at around 35% of total handset shipments in Q4), users can pick-and-mix alternative voice solutions, like Skype, Vonage or Viber.

Early Skype users would have experienced the mode of disruption documented by Clayton Christensen in his book Innovator’s Dilemma. Skype provided a low-cost (free) alternative to incumbent solutions, but with a fairly poor user experience characteristic of a disruptive early-stage technology. Sure, VoIP wasn’t that new, but as a downloadable offering to the masses via an ordinary household internet connection, it was.

From Disturbance to Disruption

As Christensen’s theories predicted, carriers mostly saw Skype as a minor disturbance, insufficient to warrant revision of their strategies.  But it marked a pivotal moment in the evolution of communications, which was the unbundling of voice from the carrier network. In other words, consumers can take their data connections from carrier X and their voice services from provider Y: Skype, Viber, or whomever. The industry refers to these unbundled services as “Over The Top” (OTT) solutions.

However, the minor disturbance has become, well – disturbing – at least to some carriers. The modes of disruption have been aided by several key trends, in no particular order:

1. Open (enough) device operating systems – Android and iOS
2. More afforable data tariffs and speedier internet connections
3. Dramatic lowering of barriers to entry for internet platforms of all kinds
4. Consumer behavioural changes
5. Increase in carrier inertia preventing timely responses to OTT threats

These trends, and more, are covered extensively in my new book “Connected Services,” which, like this blog post, I wrote using my own “notes from the field” in the last 21 years of working in mobile generally, but the last 7 years specifically trying to evangelize Web paradigms to the boards and senior management of various carriers.

Read the article in its entirety here.

Online sales were up 24.3% overall. iPad shoppers were most efficient. Android less so.

Apple (AAPL) devices figured prominently in an IBM (IBM) Smarter Commerce survey issued Saturday that reported double digit increases in online sales Thanksgiving Day (up 39.3% from 2010) and Black Friday (up 24.3%) and a 200% increase in purchases made on mobile devices (from 3.2% in 2010 to 9.8% this year).

In particular: (I quote)

The Apple Shopper: Mobile shopping was led by Apple, with the iPhone and iPad ranking one and two for consumers shopping on mobile devices (5.4% and 4.8% respectively). Android came in third at 4.1%. Collectively iPhone and iPad accounted for 10.2% of all online retail traffic on Black Friday.
The iPad Factor: Shoppers using the iPad led to more retail purchases more often per visit than other mobile devices with conversion rates reaching 4.6% compared to 2.8% for overall mobile devices.
Surgical Shopping Goes Mobile: Mobile shoppers demonstrated a laser focus that surpassed that of other online shoppers with a 41.3% bounce rate on mobile devices versus online shopping rates of 33.1%.

The relatively weak showing by devices running Google's (GOOG) Android, despite a market share that dwarf's Apple's iOS, is consistent with earlier studies that found Android users spending less time online and far less money on apps.

Read the original article here.



According to industry blog Digitimes, Eastern partner manufacturers are expecting an inventory glut in Android-powered tablets after the holiday--exacerbating what may already be an oversupply problem. Insiders are blaming the iPad and the Kindle Fire, and high consumer expectations for Windows 8 tablets arriving in 2012. This sounds like bad news for Google, but things could get worse if rumors of an Amazon smartphone prove true.

You may ponder that Google has dropped the ball for Android on tablets when you read Digitimes' words that "the inventory problem will appear to be significant after the 2011 year-end peak sales period, accoring to Taiwan-based supply chain makers." So many unbought Android tabs may be cluttering the shelves and warehouses in fact that waves of price cuts are predicted in the early New Year. That sounds attractive for potential Android tablet buyers, but it's as bad a sign for Google as HP's earlier price cuts for its then-doomed TouchPad were, and that price cuts for RIM's ailing PlayBook tablet are. 

To blame are two tablets: the iPad, of course, and the new Kindle Fire. Changewave research has just published some statistics that underline how much of a hold these two devices have over the market. Among 3,000 interviewees of those who said they were planning to buy a tablet, 65% said they'd be buying an iPad, and 22% were plumping for the Fire--just 4% said they fancied a Galaxy Tab from Samsung, which is regarded as one of the most successful full-on Android tablets so far. The Fire, on the other hand, completely buries Google's Android UI beneath a custom Amazon user experience that's shaped around all the content that Amazon can supply--books, music, videos, and thanks to its own tightly curated app store, apps too. That all but cuts Google out of every revenue stream from the Fire.

Overall 130% boosts in tablet sales are predicted during the 2011 holiday buying window, and that's a huge success for Apple and Amazon too, which has seemingly bagged the number two tablet slot just weeks after the Fire's launch. Interestingly, Changewave's data suggests that the Fire isn't eating iPad market share--it's displacing other Android tablets, probably because it's clear the Fire isn't as full-featured a machine as Apple's, and yet it delivers a killer combo of low price, Amazon's powerful brand images, and excellent access to Amazon content.

What Google may have messed up on is delivering a rich, high-powered Android version for tablets--and delivering inconsistently for those it has already powered. Articles containing lines like "while there's no word yet in an Ice Cream Sandwich updates, you can bet that Sony's pushing for one" (referring to the latest tablet-friendly Android build, V5.0, in context of Sony's unusual and interesting S-series Android tablets) typify the problem. And with Microsoft's upcoming Windows 8 for tablets expected to allow millions of wannabe tablet users to work within the familiar Windows environment, Android tablets may have a tough sell in 2012. 

Which leaves us looking at Amazon's Kindle Fire tablet. It's selling like hot cakes, and there are already rumors that another manufacturer, Foxconn (Apple's lead tablet and phone partner) is coming on stream with more 7-inch tablets early in 2012. That's a sign that Amazon isn't suffering inventory problems like other tablet makers. And as a different sign that Amazon has bigger plans, there are already swirling rumors that Amazon has plans to bring an 8.9-inch Fire to market in the second quarter of 2012. We can't know, but we can guess that Amazon is planning a similar low price for this machine (which is pitched more squarely against the iPad) and may also bump its internal specs to deal with criticisms about the sometimes jerky performance of the existing Fire. 

All of this is fuel for the rumor fire that Amazon is planning, later in 2012, to take its mobile device experiment one stage further and into smartphones. It's a natural move, because as we've noted the Fire is all about delivering Amazon content to Amazon clients via its 100% Amazon-centric UI. And there's no reason this same model wouldn't work on a smartphone. Using its experience with the Fire and earlier Kindles, Amazon now knows how to produce high-grade hardware that's distinguished by its design and capabilities. Plus there's the almost unchallengable success of Whispersync to remember--a seamless and free way for users to get content for their Kindles, piggybacked on 3G cell phone signals. There's also news Amazon's bought a voice-recognition firm to rival Siri, possibly leveraging its own extensive cloud service servers for the back-end processing. 

If Jeff Bezos' firm chose a mid-range specification for the chips, internal storage, screen, and other hardware of the Kindle phone, it could offer it at an extremely competitive price--along with a full-fledged ecosystem to deliver content and apps that even Google can't rival. Do we see a sniff of desperation in Google's recent moves to get into the MP3-vending game?

An Amazon smartphone like this, priced at a $100 to $199 range and leveraging Amazon's ecosystem and its cloud services and brand would immediately make a splash in the low-mid smartphone market because it'd be hard to find a rival to it among existing Android handsets (and even non-Android ones)--devices which offer only some of the seamless content access Amazon offers, and often a scrappy and unreliable access to apps on the Google app market. Amazon could even offer the phone for less than $100 because it's been suggested the firm is selling Fires at a loss, knowing it can recoup the money--and plenty extra--through ongoing sales from its store. 

Such a phone would be a true innovation in the smartphone market that's become a little stagnant. Android phones have secured a big lead in sales, but Apple's share isn't slipping too fast at the moment--and merchants seem to be selling out of the iPhone 4S as soon as it arrives on its shelves. The entry of a rich-content Amazon phone would shake the market up dramatically, likely stealing big chunks of the low-price market, disrupt the cold war, and may thus even prompt Google and Apple to move ahead with more of their own innovations. That would only benefit consumers the world over.

Read the original article here.

Interesting article on the huge growth of Location Services for Mobile Platforms by Andy Penfold for Mobile Marketing Magazine in the UK.

Global revenues for mobile location platforms will grow to €300m by 2016, according to a new report from Berg Insight.

The report, called LBS Platforms and Technologies, says that demand will primarily be driven by emergency call and lawful intercept mandates. Annual revenues for mobile location platforms, including A-GPS servers and middleware platforms, are projected to grow from about € 150m in 2010 to € 300m in 2016. Ericsson remains the leading vendor in terms of number of contracts for location platforms, ahead of Nokia Siemens Networks and TeleCommunication Systems, according to the report.

Governments and telecom regulators in many parts of the world are introducing stricter emergency call and lawful intercept mandates that require network operators to invest in location platforms, says the report. Network-based location technologies also have superior indoor coverage and reliability. 

"Location-based services have gained mainstream acceptance, enabled by broader adoption of GPS-enabled smartphones," says André Malm, senior analyst at Berg Insight. "All leading handset vendors provide their own assistance services for GPS handsets to ensure a good user experience in case the operator has not yet deployed A-GPS services."

The report says that commercial LBS are not likely to have a similar impact on the market for location platforms because consumer LBS can rely on alternative location sources including GPS in the handsets, WiFi location and third-party Cell-ID databases. 

LBS Platforms and Technologies is available from the Berg website. A paper copy costs €1,000 (around £870). A PDF of the report for up to five users costs €1,500 (around £1,310), while a corporate license costs €3,000 (around £2,620).

For a preview of the report and to download an order form, click here.

Read the original article here.



On an ongoing basis, industry insiders are reminded that wireless operators often follow in each other’s footsteps when it comes to new technology. Tiered pricing is the most recent example. For years, operators, vendors, analysts and industry watchers had been shown, ad nauseam, the graph of data use outstripping revenue gains. Yet it took until 2010 for a U.S carrier, in this case AT&T, to make the move to tiered pricing, although others have since followed suit. One area that has gotten a similar “wait-and-see” treatment in the wireless industry is personalization.

We know that consumers respond better to offers that speak to their personal needs, and slowly companies are responding by moving from a one-size fits all methodology to a more tailored or personalized approach to their services and offers. On-demand movie recommendations, supermarket loyalty discounts and personally customizable group couponing sites are now par for the course. As a result, those same consumers want an equal level of service from their mobile operator, yet U.S.-based carriers in particular have been slow to give it to them. While outlining the benefits is essential to showcasing personalization’s importance, so is the way the wireless industry as a whole views the technology that enables it.

Industry talk often looks to segment technology into “revolutionary” vs. “evolutionary” buckets, with most of the attention going towards the former. Yet revolution carries risk and by definition change cannot always be revolutionary. In fact, the more common mode of change is evolutionary or incremental change, which is more manageable, affordable, achievable and realistic, and often delivers more immediate benefits to service quality and performance.

Read the full article here.

With the IPO market now blown wide-open, and the media completely infatuated with frothy trades in the bubbly late stage private market, it is common to see articles that reference both “valuation” and “revenue” and suggest that there is a correlation between the two. Calculating or qualifying potential valuation using the simplistic and crude tool of a revenue multiple (also known as the price/revenue or price/sales ratio) was quite trendy back during the Internet bubble of the late 1990s. Perhaps it is not peculiar that our good friend the price/revenue ratio is back in vogue. But investors and analysts beware; this is a remarkably dangerous technique, because all revenues are not created equal.

Read the full article here.