Thursday, December 29, 2005

Roger Kay: The World According to Endpoint

Roger Kay at Endpoint Technologies Associates offers up his 2006 predictions at Technology Pundits. Here are his mobile-related ones:

  • Blackberries will have more competition
Research in Motion's legal problems will have a lasting long-term effect in that users have become aware of the vulnerability of single-source supply and have begun to examine — and in some cases turn to — alternatives.

With Microsoft and others gunning for the high-value mobile email market, competition is likely to intensify with a concomitant pricing benefit to end users.

  • Global Positioning Systems (GPS) will Begin to go Mainstream
An increasing number of GPS modules are being built into various devices. No one seems yet to have the holy grail in terms of which combination is right, and there may not be any such combination, but the elements include portable entertainment, gaming, navigation, and cell phone capabilities. The "right" combination could be simply a matter of preference. But with the advent of location-specific services, GPS capabilities are likely to turn up in more and more devices. Google, with a healthy database of geographic service data already in place, is likely to be a major player in this new market.

  • Small Video Players and Related Services will gain Traction
Portable Media Players (PMPs) and Video iPods will lead a new generation of devices that offer entertainment on the go. While us old fogies are unlikely targets for these players, younger people already used to Gameboys and similar small systems that occupy the eyes, ears, and hands simultaneously represent a ready market for such toys.

A corollary to the rise of video devices will be a related growth in the availability of entertainment content. Hollywood will begin, slowly at first and then with increasing fervor, to release more premium content for users who want to download it and enjoy it on their own schedules.

Razr Gives Motorola A Christmas Edge

Investor's Business Daily reports that as the holiday season comes to an end, "Motorola looks like a winner." The big hit again driving Motorola's lead was the Razr due to "its sleek design and deep price cuts."

According to Piper Jaffray, it "expects 11 million Razr phones will be sold worldwide in the fourth quarter." American Technology Research analyst Albert Lin noted that some stores he has visited "are offering the Razr for free with two-year service contracts," and using the handset as an enticement to lure "people to switch carriers midcontract." He said, "With all the incentives (offered by T-Mobile and Cingular), the Razr has practically become free."

Lin wondered if the "Razr could be a double-edged sword for Motorola." He added, "Part of the (Razr's) appeal is its uniqueness. But Motorola's strategy is that this phone is going to become mainstream — or obsolete."

Switched On: The Switchies

Ross Rubin at NPD Group posts his final "Switched On" column for 2005 at Engadget by awarding "the year’s most innovative hardware products" with Switchies. Here are his mobile-related winners for the year:

The “Taking the Urgency out of Convergence” Award goes to Sony for the PlayStation Portable. In terms of pure processing prowess, the PSP represented the most impressive balance of portability, style, and functionality seen this year. However, Sony’s positioning of the PSP as a portable convergence device has come in three not-so-easy pieces. A large Memory Stick Duo card is a separate purchase as is Sony’s nicely executed but late to arrive media management software.

The “Beatles for Beetles” Award goes to PodGear for the PocketParty Shuffle. Lots of docks are available for most flavors of iPod, but few capture the essence of their intended music player better than the minimalist PocketParty Shuffle. Consisting of little more than a pair of tiny speakers, battery compartment and a jack to connect to the iPod Shuffle’s audio out jack, the bug-sized boombox lets you air your tunes practically anywhere.

The “Betamax Booyah” Award goes to Hasbro for the VuGo. Its low video resolution will keep it far from the short list of any adult portable media player purchase decision, but the VuGo extends Hasbro’s lead in the “kideo” wars by offering an inexpensive flash player that can directly record analog audio and video sources. Forward-looking Hasbro deserves kudos for not only providing an alternative to video clips it sells online, but to the DVDesque Personal Video Discs that include episodes of Spongebob Squarepants, The Fairly Oddparents, and other video crack for kids.

Jupiter: TV Land Sitdown Comedy is now a Podcast

Michael Gartenberg posts at the Jupiter Analyst Weblogs that "TV Land is offering full length episodes of their show, Sitdown Comedy with David Steinberg." He notes both video or audio is available (video for the iPod of course but also will work with the PSP). He notices that "there's an RSS link and a direct click to iTunes. That should tell you something about how iTunes is being viewed by the market as a podcast/videocast directory."

Wednesday, December 28, 2005

Tim Bajarin: Predictions for the New Year

Tim Bajarin at Creative Strategies pens his predictions for 2006 at Technology Pundits. Below are his mobile-related ones:

  • There will be a Stronger Focus on the “Connected Consumer
In last year’s predictions column, I suggested that there would be a strong emphasis on the digital living room, and as you know, this has been a big issue over the last 12 months. All of the big PC and CE players have taken aim at the home and especially the digital living room and the cable and telecom companies have also made this a major battlefront in their quest to deliver new products and services for the networked home of the future. However, I now see a bit of a shift in thinking from all of the major players in these key industries from the digital home to instead, the connected digital consumer. Don’t get me wrong here. The battle for control of the digital living room is far from over, but it has dawned on a lot of the players that perhaps the biggest prize is not the ownership of the digital living room but instead, ownership of the “connected consumer."

Apple already has a major position here and ironically, will use this “connected consumer” via the iPod to give them a solid place in the living room at some point.
But 2006 will see a real move towards exploring what it means when a consumer can be connected at all times to information, services and personal content and we will begin seeing a lot of discussion around this issue heat up in 2006.

  • Smart Phones gain larger percent of market
One trend in 2006 is that even low cost cell phones will get smarter. However, I also believe that what we define as true smart phones will become a larger part of the market for cell phones in the next few years. In fact, my recent forecast is that by 2010, 15-17% of all cell phones sold WW will be what is defined as smart phones. I realize that a smart phone definition today is all over the map, but in my description, these are phones that have at least a 2 inch screen and can handle email, full web browsing and have an OS included that supports third party software and applications. Although plain cell phones that strictly do voice, pictures and perhaps even simple instant messaging will have the lion’s share of this market, I believe demand for products like Palm’s Treo, Rim’s Blackberry and Microsoft Windows Mobile platform, as well as smart phones that will be Linux and Symbian based will become a larger mix of phones sold over the next five years.

  • Podcasts and Audio Blogs add Video
I have become a real fan of audio blogs or podcasts and next year video blogs will gain some strength. Of course, it took Apple’s addition of Podcasts to iTunes to really kick start audio blogs and this has enticed many to create not only audio but video blogs as well. Of the few video blogs available today, Rocketboom and HIT stand out as being well done, but I have seen some semi-professional VLOGS that are in the works and they should debut in Q 1 of 2006. I also expect to see some of these audio and video blogs move to a subscription model to help defray costs and some may even get advertisers to back them as well. But expect 2006 to see a plethora of VLOGS coming to iTunes and other music stores and gain some serious followers in the coming year.

  • Mobile and Wireless
This is an area that will see continued growth in 2006. New innovative mobile phones are headed for the market and more and more people around the world will buy cell phones. Current estimates are that 800 million cell phones will be sold next year and well over 1 billion will be sold by 2010. And laptop sales will continue to be strong. By late 2004, laptops surpassed desktops in total YTY sales and we see this trend continuing. The addition of new dual core laptops will help fuel even stronger growth in portable computers in 2006 and although ultralights represent the smallest category of laptops sold, new wide screen ultraportables with DVD drives in them could push demand for these smaller and lighter mobile computers in the coming year.

  • The Tech Economy Stays Hot
2006 should be a very good year for the Tech Economy. With Vista pushing demand for more powerful systems and laptops gaining more popularity, PC sales should see at least 7-9% growth in the New Year. At the same time, we see strong demand for digital cameras, HD televisions, VOIP related products and mobile audio/video players. Altogether, they should keep the tech economy humming in 2006.

  • Apple Starts Official Trek towards Becoming a Powerful Consumer Electronic Company
Although Apple is still a computer company, their success of the iPod has shown that they can be potentially stronger as a CE vendor. But they have an interesting dynamic that will make them the only PC Company who I think can transition into a powerful CE company as well. Apple’s edge is that they not only have PC and CE devices, but they also have the content tied directly to these products and in essence are creating a total ecosystem where all are linked together easily and seamlessly into a single solution. I fully expect Apple to extend their reach into the living room at some time in 2006 and by the end of the New Year we should have a real strong understanding of how Apple plans to “own” the digital home of the future. My best guess is that Apple will lay out a more detailed plan for their approach to the digital home at their next developer’s conference mid year.

Jupiter: iPod is the worst player on the market except...

Michael Gartenberg posts at the Jupiter Analyst Weblogs about some recent debate by other bloggers "about the merits of the iPod and iTunes." Gartenberg points to recent posts from Dave Winer, Paul Thurrott and Les Posen that discuss the iTunes experience, metadata and the loss of data. Gartenberg notes that despite all the talk, both positive and negative, from tech, early adopter types:

The market, clearly is voting with Apple though. I tend to agree (at the risk of sounding like an Apple apologist). I've used many different MP3 players, those that were on the market long before Apple and those that came on the scene post iPod. I've waited for Sony and others to challenge Cupertino and I've seen some good efforts extending functionality into video but when it comes to music as a primary feature, I have to paraphrase Winston Churchill. The iPod is the worst player on the market except all those other players I have tried over the years. I'd love to see someone create a better music player than the iPod. I'd also like a better OS than Windows or OS X and a better search engine than Google.

There's no doubt though, this debate is not going away. At CES, Apple will once again likely be the focus of many companies as the industry tries to wrestle control from Apple. Then Steve Jobs will once again have the stage all to himself the week after at Macworld, with a few surprises of his own I'm sure. It's going to be a fun two weeks.
Knock on wood, but I've never had a problem using iTunes or losing data. My 10 year-old son can navigate it pretty easily so it has to be user friendly to some extent. Then again, my teenager niece has had issues several times so I guess it's just YMMV (your mileage may vary).....

Sprint Mobility professional services launched

Computerworld writes about Sprint's recently launched "professional services subsidiary focused on mobility applications, including wireless voice and data technologies," which demonstrates the growing importance of the enterprise for network operators. Roger Entner at Ovum said, "There's quite a bit going on in this area, and it will get bigger."

Gene Signorini at Yankee Group added, "Sprint anticipates mobility solutions growing phenomenally over the next two years, and they see nobody else fulfilling the need for advanced mobility solutions."

According to both analysts, the challenge for Sprint "will be to convince customers that it is not consulting to sell Sprint services and products." Signorini said, "A big question mark is how closely tied is the new entity to Sprint products and services? If they are hawking Sprint services, they lose credibility."

Entner added, "What they are doing is a good idea, but to pull it off, they have to be agnostic about the technology and even the carriers they recommend."

Tuesday, December 27, 2005

M:Metrics: The Right Device Can Drive Mobile Content Usage

The latest research from M:Metrics finds that owners of the Sanyo SCP-8200 and Motorola RAZR handsets "are out-consuming subscribers of all other devices. The portion of owners of these devices that are used to access mobile applications or downloaded mobile content is more than double that of the market overall."

Seamus McAteer at M:Metrics said, "There are several contributing factors that make one device more compelling than another for mobile content consumption. The Sanyo SCP-8200 has the highest conversion rate in the industry thanks to Sprint's clean implementation of browser-based services, and the RAZR's large, bright LCD promotes use of browser-based services and game downloading. Furthermore, given the cache of the RAZR as a stylish handset, RAZR owners are more likely to accentuate the statement they make with their handset with the latest tones."

Top 10 U.S. Handsets used to Access Mobile Content and Applications

Mobile Data
OEM Model Users Conversion Rate
Motorola i730 1,107,033 31.0%
Motorola V551 888,465 34.1%
Motorola V3 RAZR 876,114 47.7%
Motorola V220 787,101 26.5%
LG VX6100 769,202 26.8%
Motorola V180 768,407 20.8%
Samsung SCH-a670 740,039 26.3%
Sanyo SCP-8200 696,095 49.9%
Nokia 6010 650,686 15.4%
Samsung SPH-a660 563,973 23.2%

Source: M:Metrics, Inc. Copyright 2005. Survey of U.S. mobile
Subscribers. Data based on the quarter ending November 30, 2005.
n=37,329 U.S. mobile subscribers. Data services usage excludes the use
of SMS or photo messaging.
According to M:Metrics most recent monthly survey, "Motorola has a healthy market share lead of 28.3 percent among 13 to 24 year olds, the age group representing the heaviest users of data services. Samsung ranked second with a share of 18.8 percent, followed by LG, which accounted for 16.2 percent. Nokia ranked fourth in this demographic group with a share of 15.5 percent."
U.S. Mobile Subscriber Monthly Consumption of Content and Applications
M:Metrics Benchmark Survey: November 2005

Activity Projected Percent U.S.
Monthly Reach Mobile
(000s) Subscribers
Used Text Messaging 58,307 32.2%
Retrieved News or Information via Browser 18,552 10.2%
Purchased Ringtone 16,467 9.1%
Used Photo Messaging 15,550 8.6%
Used Personal E-Mail 12,298 6.8%
Used Mobile Instant Messaging 10,468 5.8%
Used Work E-Mail 6,991 3.9%
Purchased Wallpaper or Screensaver 6,616 3.7%
Downloaded Mobile Game 5,683 3.1%

Source: M:Metrics, Inc., Copyright 2005. Survey of U.S. mobile
subscribers. Data based on the quarter ending November 30, 2005,
n=37,329 U.S. mobile subscribers.

A message to BlackBerry?

The Chicago Tribune offers up another article that writes about the increased competition Research in Motion faces from Palm, Nokia, Motorola, while it battles patent infringement lawsuits as well.

Regarding the legal issues and possibility of a court injunction to shut down RIM's Blackberry service, Brian Modoff at Deutsche Bank Securities said, "It's giving competitors an instant foot in the door."

As Benjamin Bollin at FTN Midwest Securities noted, RIM "was the first to market with a turnkey solution. It's kind of a one-stop shop." Gene Signorini at Yankee Group added, "The service and the device work extraordinarily well together. The whole user experience is kind of seamless."

Signorini likened the BlackBerry to Apple's iPod, which "became a huge force partly by packaging a device with a service: Apple's iTunes Music Store, where songs can be downloaded for 99 cents." According to the article, "analysts estimate that RIM has 70 percent to 80 percent of the mobile e-mail market."

Bollin said, "This is a market a lot of people want to be in." Including Microsoft. However, Deutsche Bank's Modoff remarked for enterprises, performance is critical. He said, "It's not just how it looks, it's how it works." And so far RIM has been doing just fine....

Roger Kay: CES Trends

Roger Kay at Endpoint Technologies Associates ruminates about the upcoming CES at Technology Pundits. Some of the trends that Kay sees are:

  • Digital entertainment has brought the PC and CE companies into direct competition.
  • Portable navigation and location-aware devices are rising in prominence.
  • Convergence in the small mobile device area will show up as every possible combination of phone, personal information manager, global positioning system, music player, video player, and gaming capabilities.
  • Supporters of various communications standards — Bluetooth, UWB, WiMAX, 802.11, powerline, satellite, and others — will be arguing their points.
  • Both flash- and hard drive-based entertainment and navigation systems will be on display.
  • There will be lots of add-ons, peripherals, and docks for iPods and other portable devices.
  • Despite a faltering market at yearend 2005, gaming devices will be big.
  • Vendors will be displaying cheap 8 megapixel digital cameras along with improved photo editing software.

Music player as fashion plate catching on fast

Chicago Tribune writes that luxury stores and brands, such as Neiman Marcus and Coach, are cashing in on the popular Apple iPod craze "by offering designer covers costing as much as $840." For example, Nieman Marcus offers a Valentino Swarovski crystal-studded cover that "is more than double the $399 price tag for the most expensive version of the iPod."

Stephen Baker at NPD Group said, "The portable digital-player accessory market is exploding and it's not going to stop. Sales for the fourth quarter of 2005 are expected to exceed the total volume generated so far this year. With momentum like that, the industry is poised to approach $1 billion for 2005."

According to NPD, "cases and bags were the second-biggest category after speaker systems and accounted for 18 percent of the dollar volume."

Monday, December 26, 2005

A new wave of small tech stars seen on the horizon

Investor's Business Daily reports on some small technology companies that are finding "growth in some obvious yet overlooked places." One area highlighted in the article is "technology that allows carriers to add coverage to rural areas without spending on more expensive, third-generation network upgrades."

Albert Lin at American Technology Research said, "Many handset manufacturers bet against it, notably Samsung and LG. Now, many of the U.S.-based and European wireless carriers are behind it. They're building hybrid networks, using 3G networks in urban areas and using Edge in rural areas."

Lin pointed out companies like "RF Microdevices Inc. (RFMD) and Freescale Semiconductor Inc. (FSL) among the chip specialists that are taking the lead in developing Edge components."

RIM has challenges outside the courtroom

Investor's Business Daily writes that Research in Motion's troubles are not confined to the courtroom. The company is still experience strong profit and sales growth, but recently "cut its subscriber growth forecast for the current quarter" the fourth time in three quarters.

Noting the entry of players, such as Nokia and Motorola into the market, Neil Strother at NPD Group said, "There will be a lot more competition in smart phones next year."However, RIM should be well-postioned due to new and expanded deals, Strother added. "The pie will get bigger, and they'll benefit from that."

As more handsets enter the market that work on standard Windows servers, Strother stated, "It's a question we just don't know the answer to: when will RIM suffer for its proprietary approach?"

Saturday, December 24, 2005

Weekly Roundup

A holiday roundup of mobile analysts in the news for the week ending December 24:

  • Rob Enderle at Technology Pundits takes a look ahead at CES
  • Stephen Baker at NPD Group and Rob Enderle via the Associated Press about Americans need high-tech gadgets
  • Piper Jaffray analyst Gene Munster via about Apple iPod inventories during the holidays
  • Roger Entner at Ovum via the San Jose Mercury News about cell phone films

KDDI Partners with Qualcomm on MediaFLO

The San Diego Union-Tribune reports that Qualcomm and KDDI "are teaming up to explore broadcasting television programs to cell phones" using Qualcomm's MediaFLO technology. KDDI will own 80 percent of the joint venture. "Earlier this month, Verizon Wireless became the first U.S. carrier to agree to offer the MediaFLO broadcasts."

Michael King at Gartner said, "The deal proves there's a market for MediaFLO. If we're speculating, this could be important because it shows that MediaFLO has a market outside the United States, and secondly, Qualcomm becomes a digital video player above and beyond their home market."

The partnership "will look at licensing the broadcast spectrum that would be needed to build a MediaFLO network in Japan."

Friday, December 23, 2005

Does mobile Linux really have legs?

NewsForge writes a comprehensive article about the market potential and opportunities for Linux on mobile phones. Yankee Group analyst John Jackson said, "I think that Linux is of tremendous interest to the mobile supply-side handset vendors, platform vendors, et cetera. There exist stable, scalable Linux operating systems in the marketplace.

The issue with Linux is Linux wasn't built to do anything. It needs to be optimized, and optimization is significantly expensive. It has tremendous upside, but the caveat is you have to make a significant investment in making it work, and that can't be underestimated."

Gartner analyst Ken Dulaney said, "[Linux] is going to be a player, but the more popular choice is one of the proprietary operating systems,. Once you get one of these tuned for wireless, you don't want to muck with it because it's hard to do."

Ovum analyst Tony Cripps "agreed that customization was becoming prohibitively expensive, but viewed it as an opportunity for Linux." He said, "My belief is that Linux could become a highly significant platform for mobile phones, but that it is more likely to show its greatest value in mass-market handsets rather than in so-called smart phones. The biggest problem for handset manufacturers is not smart phones. These are high-end, expensive devices representing a small part of the overall market and which are already well catered for by established operating systems/platforms such as Symbian, Windows Mobile, BlackBerry, and to a lesser extent Palm OS, as well as Linux-based platforms such as Qtopia from Trolltech."

A "bigger problem for handset makers is adapting the often proprietary operating systems they use for their mass market phones to today's handset requirements." Cripps added, "Each must essentially be custom-built for each new handset model, and this is becoming prohibitively expensive and time consuming."

More opportunity might exist in the mid-range. Cripps said, "[Windows and Symbian] remain expensive and will not deeply impact the mass market for some time. Linux's real potential appears to lie in its potential to replace proprietary OSs for mid-range handsets, where keeping the so-called software bill of materials (BOM) to a minimum is crucial. Linux's open source credentials, even in its mobile form, and the resulting adaptability to different hardware that comes from the efforts of the open source community will potentially deliver both the low cost and flexibility that handset manufacturers need to replace their increasingly expensive proprietary OSs."

Gartner's Dulaney said "It's a modern operating system, but in many aspects it's like DOS in the early '90s. The incompatibility from vendor to vendor makes it harder on developers. It's highly variable from manufacturer to manufacturer, and it does not resemble Symbian, or Microsoft, or anything. The problem with Linux is people tend to think it's one thing. It's not."

Ovum's Cripps noted "the biggest obstacle to more mobile Linux is its origins on the desktop and server, where computing and electrical power are readily available." He said, "Mobile phones put far more of a premium on things such as memory, battery life, and real-time performance. OSDL, in particular, is clear on this point and does not consider mobile Linux to yet be ready for mass market phones in terms of power management and response latency for real-time events, even in the most highly developed mobile Linuxes. Bodies such as OSDL are important to the development of mobile Linux both in terms of raising the profile of the technology and in terms of focusing the efforts of the community in achieving some well specified goals. OSDL's focus on mobile Linux kernel issues and hardware integration is well complemented by the efforts of the newly announced LiPS Forum, which is concentrating on higher layers of the Linux software stack. These include common application and service enablers -- this work is intended to be applicable across both fixed and mobile phones. Third-party application developers should then, in theory, be able to create differentiated applications around common foundations."

Cripps thinks a major handset manufacturer needs to get behind Linux to spur adoption. He concluded, "Motorola has stated plans that will possibly see it across its entire handset range, but it's not rushing to make this happen," he said. "NEC and Panasonic have built a few Linux-powered handsets for NTT DoCoMo in Japan as well, but perhaps the strongest near-term potential may lie in the Chinese market, where equipment companies like Datang see handsets, and especially ones with low BOM and little outside control with operators, as offering much higher margins than switches; and where operators like China Unicom are taking a great interest in handsets in their own right, much for the same reasons."

Convergence Theme Prevalent in Today's Telecom Marketplace

There has been a lot written lately about convergence and the "quad play", which combines video, telephony, broadband internet and wireless into single package. Technology News writes about this in relation to the recent partnership between Sprint and Comcast , Time Warner Cable, Cox Communications and Advance/Newhouse Communications. Michael Paxtonat In-Stat said, "The cable companies have been talking about getting into the wireless market for about three years and now think that they have a business model that makes sense for them."

The article looks at the various factors coming together to make this convergence apossibility. One reason is "simpler billing." As Bob Egan at The Tower Group mention from his own personal experience after switching his home telecom and cable television services to a bundled system, "The bundle cut my monthly communications charges by about 20 percent."

On the recent Sprint/Cable consortium, Jeff Kagan said, "Cable companies wanted to get into the wireless space but the other major network providers are already affiliated with wired telecommunications services providers, while Sprint is independent."

In-Stat's Paxton said, "The cable companies are in trail mode now and should have their wireless services operating by the end of 2006." Kagan added, "Sprint has been moving more into the wholesale side of the wireless market and the agreements mean at the very least, more traffic will flow over its network."

Paxton pointed out that "Right now, cable companies have about 4 million telecommunications customers, which is a significant base, but there are 115 million telecommunications users in the U.S."

Paxton noted that the battle between "telecommunications and cable companies to broaden their services ranges has begun, and the latter seems to have jumped out to an early lead." He said, "Because they do not have to put all of the network infrastructure in place, the cable companies should be able to roll out wireless services faster than the telcos can deliver video services."

ABI Research: Video Downloads an Ideal Audition for Television

ABI Research predicts that "the emerging video download industry based on portable video players will be a perfect test bed for full-length television shows." Vamsi Sistla at ABI Research believes full-length episodes of hit television shows won't be "downloaded to portable devices in 2006." He thinks "short-form video" such as trailers, promos, and mini-episodes are a big opportunity.

Sistla said, "The mainstream broadcast model is an extraordinarily expensive way to trial new concepts and shows. Over 70% of all new shows don't survive the first season. The logic of trying short versions on emerging platforms at relatively low cost before committing to the expense of hour-long TV productions will soon be apparent to content owners."

2005 has been a chance for the industry to test the waters. Sistla added, "So far they seem pretty happy with what the portable and mobile telephony industries can provide them. But a network can save much more on upfront program development costs than it will make by selling short clips for $1.99 each."

Thursday, December 22, 2005

Ovum: Carphone Warehouse emerges as a leading consolidator

Mike Cansfield at Ovum writes about Carphone Warehouse, which recently announced " that it has completed its acquisition of the Swedish reseller Tele2 for £8.5 million" and "has reached an agreement with Centrica to buy OneTel for £132 million." Cansfield asks why is Carphone Warehouse "buying two businesses that operate in the declining voice market, when all the growth is elsewhere, i.e. in broadband."

Cansfield answers because "in telecoms size matters." He then goes on to analyze why it makes sense for Carphone Warehouse and the strategic reasons for these acquisitions for getting into broadband and taking on BT. While it may be dismissed as "mere bravado" Cansfield notes that:

this is not as outlandishly optimistic as it may seem. Carphone Warehouse is strong in the high street, where (as we know from consumer mobile) customers are prepared to buy telecoms services. In contrast, BT is weak in this area. If Carphone Warehouse can leverage this strength and play on BT's weakness, the idea is not as fanciful as it seems.

RIM Patent Ruling To Stop 'Frivolous' Lawsuits?

Mobile Pipeline writes that the "rejection of five NTP mobile e-mail patents by the U.S. Patent and Trademark Office (USPTO) discourages frivolous patent lawsuits and will foster "wide-open competition" in the wireless e-mail market."

According to Carmi Levy at Info-Tech Research Group, "That's a good thing. The USPTO announcement sends two strong messages to the wireless market. The first is that predictions of BlackBerry's imminent demise were highly premature and unnecessarily inflammatory. The second is that life will get tougher on companies whose business model consists of using patents to sue successful vendors instead of competing for clients and markets."

Levy added that the USPTO ruling "pulls the rug out from under NTP's court case. If the original NTP/RIM lawsuit is ultimately tossed out of court, other cases that were riding on NTP's coattails will have less chance of success. The end of litigious frivolity could be upon us."

I'm not sure RIM's final appeal is riding on the rulings from the USPTO so stay tuned...

Verizon plans to offer mobile music downloads

CNET has gotten wind of Verizon's plans "to introduce a music download service next month that will let subscribers purchase music wirelessly over their mobile phones and transfer songs between their phones and Windows PCs."

Reportedly, the service will be called V Cast Music, and will be "available on Jan. 16 at Circuit City, Verizon Wireless stores and Verizon's Web site." More details are expected at a CES press conference on January 5 with Verizon Chief Executive Denny Strigl, and Microsoft Chief Executive Steve Ballmer supposedly attending. The new service claims the unique ability to transfer songs between PC and handset based on the Microsoft partnership.

Of course, the big question still remains over whether consumers actually want to download music to their cell phones. GartnerG2 analyst Mike McGuire pointed out that "research data hasn't shown a groundswell in demand for full iTunes-like capabilities on the phones." He said, "We've seen a lot of interest in listening to music, but not necessarily in downloading it over the air."

Pricing will be critical. If consumers have to pay significantly more than the iTunes 99 cents per song model then the "convenience" of OTA full music downloads won't really matter....

Switched On: The Year of the Switch

NPD Group's Ross Rubin writes his regular "Switched On" column at Engadget tht serves as a year in review. Rubin writes that "more than any year in at least the past decade, 2005 stood out as a time when far more than just the iPod got shuffled. Sacred cows were tipped as companies embraced major technological and sometimes philosophical switches in order to court new markets or move in new directions."

Of the companies that Rubin points out for taking the biggest left turns (i.e Apple and Intel and IBM and Lenovo), Rubin writes the following about Palm:

The announcement of the Treo 700w marked the first Palm-branded device to use Windows Mobile. The move struck an emotional chord with many Palm devotees who had long embraced Palm’s tight integration with its now drifting operating system. Palm, in fact, has reiterated its support to the PalmSource operating system, doing more than its new owner Access to assure its future viability. The adoption of Windows Mobile will surely help sell Treos to the enterprise, but Palm will have to broaden its smartphone appeal to compensate for the shrinking PDA market.

In addition, Rubin notes some other, less dramatic shifts such as:
  • Sony took a step toward embracing popular standards by adoptingd native MP3 support in the PSP and portable music players.
  • After years of criticizing portable video, Apple stealthily entered the market by providing video playback “free” with the fifth-generation iPod and creating a new TV show distribution channel overnight.
  • Former iPod vendor HP dumped the portable music juggernaut once it realized it couldn’t differentiate its iPod offerings from Apple’s.
  • Finally, oft a naysayer of the value of online gaming, Nintendo switched gears in a big way with its Nintendo DS, embracing multiplayer gaming through a free Wi-Fi initiative.
Rubin concludes with the following:
Change, as Michael Jordan once commercially reminded us regarding underwear, is good, and some switches have already proved themselves some smart moves. For those that aren't, the next 12 months should help validate which are natural matches for 2006, the Year of the Dog.

Researcher Plays Grinch, Says Mobile Failures Loom

Mobile Pipeline reports on some predictions made by ABI Research for technology in 2006, saying satellite radio to mobile video won't materialize successfuly next year.

According to ABI, "satellite radio industry will not launch a successful video product." The report said, "Bandwidth will limit the satellite radio providers to just a handful of low quality channels, while cellular operators offer larger content libraries on-demand, and Apple Computer continue it's foray into video podcasting."

ABI also predicted broadcast mobile video wouldn't be widespread due to the majority of network operators using unicast methods, which ABI "believes is an inefficient delivery method that uses valuable cellular bandwidth. Multicast networks are required to support this delivery."

ABI predicted that the "two competing multicast networks....from MediaFLO, and Crown Castle Mobile Media, could solve this problem. But they won't become available until late 2006 in at least 30 of the top U.S. markets." ABI also questioned whether compatible "handsets for the multicast network will be available in 2006."

Wednesday, December 21, 2005

Jupiter: EMEA 3G Reality

Thomas Husson posts his state of the 3G union address at the Jupiter Analyst Weblogs. Husson cites stats from the GSA – the Global mobile Suppliers Association - that "the total number of 3G/UMTS networks passed the 100m mark (in 42 countries)" and is fuelled by WCDMA networks.

According to Husson, "JupiterResearch estimates Western Europe at the end of June 2005 had 12 million 3G phone owners, which represents less than four percent of the total European mobile population." He then notes that "Western Europe represents roughly 40 percent of the WCDMA market, and 20 percent of the worldwide 3G market."

Husson compares this with the uptake in Japan which has "33 million 3G phone owners, a significant 37 percent of its mobile population." However, Husson points out that 3G networks were introduced in Japan in 2001 and opines that "it will take some time before critical mass is reached in Europe."

Leading the way in Europe is 3, which alone represents 66 percent of the European 3G market, and Vodafone. The two companies combined "have an 80 percent market share!" Husson states that the "migration to 3G is accelerating" with network operators probably benefiting from the year-end period. He concludes:

More interestingly, several operators have released figures on their average revenue per user (ARPU). For example, Vodafone live!'s ARPU is 24 percent greater for a 3G customer than it is for a 2.5G customer. Now the question is to how large will the inevitable dilution effect be as 3G penetration moves beyond the early-adopter market.
Good question. Over here on this side of the pond, Sprint has already lowered price barriers for their EVDO network with its $15 a month all you can eat data plan. Hard to see how Verizon and Cingular will be able to keep their plans at $45+ a month for long. Has the cost for high-speed 3G data networks already been commoditized?

Flash Burnout writes that the Flash market is heating up and some companies are getting burned out of the market. First to go is Renesas Technology, which "announced earlier this month that it intends to stop development of new NAND products, effectively signaling that its days of competing in this hot, $11 billion market segment are over."

Jim Handy at Semico Research said, "The NAND market has claimed its first victim. The only way to compete in the NAND market is to put the pedal to the metal."

The NAND flash market has taken off the past few years, first due "to the wide-scale adoption of digital cameras, and now due to portable music players, especially some Apple Computer iPod models."

The drive for lower prices, higher capacities and growing supply to meet rising consumer demand for Flash-enabled consumer electronics will only serve to make market conditions tougher. Joseph Unsworth at Gartner said, "NAND flash is very cut-throat and ultracompetitive, and I think it will become more commoditized than DRAM. Renesas is not suited to compete in a commodity memory business."

Semico's Handy thought overcapacity might hit the NAND market "as early as the second half of 2006, with manufacturers losing money in 2007." He also predicted "another round of losses occurring only two years after that."

Gartner's Unsworth predicted that "NAND revenue will increase at a declining rate through the end of the decade, with the 70% and 53% growth rates of 2004 and 2005, respectively, giving way to 37% growth in 2006, and a compound annual growth rate of 17% spanning 2004 to 2010."

The article cites Gartner figures that finds last year "the average price of a 512-MB flash chip was $6.84. This year the price dropped to under $3, next year it's seen falling to $1.50. By 2010, it's anticipated the chip will cost 18 cents." I'm not sure if this is a typo and whether it should be 512 Mb for megabits, which equals 64 MB or megabytes.

Unsworth anticipated the "NAND market losing steam in 2007 due to "massive supply" and the "maturation of several new [factories], which will overwhelm healthy demand." He added, "No one knows what new applications will come from this technology," hnoting that "knowing ahead of time or gauging the success of Apple's NAND-based iPods wasn't possible."

Guessing Apple's newest products

With CES and MacWorld around the corner in January, it's that time of year again to start wildly hypothesizing about what will Apple introduce next. CNN/Money polls some Apple watchers on their thoughts and in addition to the growing rumors of Intel-based Macs, Steve Lidberg at Pacific Crest Securities thought Apple would "announce new versions of the iPod Shuffle" instead of re-stocking the sold-out 1 GB Shuffle in January.

On the content side of the house, Lidberg said, "I don't know why you would see hesitancy on the part of content providers given the initial success" of video sales via the iTunes music store. "An expanded relationship with Disney as well as NBC would make a lot of sense also," he said.

Lidberg wasn't as bullish on the possibility of an Apple iPhone. He noted it "might make sense for Apple to start" a MVNO, it "probably will not happen for at least 12-18 months."

Jupiter: Best Portable Media Player – 2005

After selecting his top cell phone for 2005, Michael Gartenberg sets his sights on the best portable media player of the year at the Jupiter Analyst Weblogs. In the end it was a two Apple race with Gartenberg giving the iPod Nano the nod over the video iPod. On the plus side, he states:

Both models are very thin (the 30gb especially so) and the added video capability and the new video content on the iTunes music store, both in terms of commercial and podcast formats give users something to fill them up with. The nano continues to amaze everyone who sees it and almost everyone who sees it and holds it wants one. Few products manage to evoke the notion of caressability like the nano does. It's also a spectacular music player and battery life is excellent too. Since it's 4gb, it fits well within the size of the average consumer music collection. In short, we said this one was going to be a hit and we were right.
Gartenberg also points out some minuses, such as he surfaces easily scratch and the "lack of support for more video and audio formats and the proprietary nature of music purchased online from Apple." However, he does point out that consumers are voting with their wallets and concludes:
On the other hand more than 75% of consumers don't seem to care and Apple remains the company to beat in this space. Could it be done better? Possibly, but at the moment, no one is even close.

IC Insights: IC Content in Cellular Phones to Surge

IC Insights has issued a report that forecasts by 2009, 80 percent of cell phone handset sales will be replacement sales, and will "tend to be "full-featured" and relatively expensive."

Based on this assumption, IC Insights predicts "the IC dollar content per cellular phone is expected to increase from $38.54 in 2005 to $44.73 in 2009. As a result, the IC content percentage of the total handset price is forecast to rise from 28% in 2004 to 37% in 2009."

According to IC Insights, "higher levels of IC integration have also served to incorporate some of the handset functions typically performed by passives and discrete devices. This movement from passive and discrete devices to ICs, coupled with handset price declines, is forecast to help boost the IC percentage content of a handset through 2009."

IC Insights finds "there is almost a 3:1 difference in IC content in a high-end cellular phone (including a camera) as compared to a "basic" model. The use of a camera chip, Bluetooth module, and multimedia processor in a 2.5G-phone means more than four times the memory device cost. Also, many high-end phones require significantly more DRAM in addition to flash memory."

Tuesday, December 20, 2005

Google Brings Gmail to Mobile Phones

NewsFactor Network reports on Google's launch of Gmail Mobile, the wirelesss version of Gmail that allows users to "send and receive e-mail messages through a mobile phone." It is only available in the U.S. and supposedly only works with certain web-enabled handsets at this time, but the list is expected to expand.

IDC analyst David linsalata said, "Generally speaking, I think that this is a good move for Google and the industry as well. One key for future growth in the mobile market will be the integration of mobile services with preexisting services in other markets, for example the PC. The move also has the industry benefit of encouraging data use on mobile phones and introducing more consumers to the power of their mobile phone."

Linsalata pointed out the service doesn't solve the problem of writing long messages on a cell phone. He said, "Even though this service improves the display and connectivity issues, writing an entire e-mail on a standard keypad still a difficult endeavor and one area that needs to be improved as the industry moves forward."

The service works on my Audiovox SMT-5600 and looks pretty good. Now I can at least check Mobile Analyst Watch email while I'm out and about...

Jupiter: Resisting the urge to comment

Michael Gartenberg finally gets the urge to comment on the MTV/Microsoft partnership at the Jupiter Analyst Weblogs. After withholding comment for a few days, he adds his two cents regarding the lack of info on devices for the service.

He writes that "we know more consumers are interested in listening to their music on their stereo or on a portable device rather than directly on their PC. There's still no simple way to get music from the PC to the stero for most folks and when it comes to portable devices, the market has already voted on the most popular player and this service doesn't work with it. iPods drove people to the iTunes music store, not the other way around."

Gartenberg still likes the subscription model as "it's one of the last ways for other folks to set themselves apart from Apple and the iPod." He thinks there is a market, but "what's missing is a clear articulation of the benefits of this type of service to consumers who up until now are used to dealing with only one of two models for music." He concludes:

If this effort is going to make some inroads, someone has to explain the benefits of the subscription model to consumers. That also means making sure you can get your music from the PC to the stero and have a good portable solution as well.
My biggest complaint about the subscription model is I don't own the content, and more importantly the high cost. Paying $10-15 a month to rent music does not interest me in the least. If it drops down to the cost of my Tivo service for DirecTV at $5 a month then that's a different story....

Mobile Enterprise Weblog: RIM: The Pro Forma Mistake

Didn't know Dan Taylor was a former Aberdeen analyst, but it helps explain his excellent analyses of the NTP/RIM situation. In his latest post at the Mobile Enterprise Weblog, Taylor writes another very thorough commentary on how many things in the IT industry has become pro forma. Given the current situation, he believes:

RIM is making a huge mistake with customers and partners alike. When leading analysts like Gene Signorini (Yankee) and Ken Dulaney (Gartner) are recommending against RIM, enterprise IT is bound to take them seriously. Those recommendations, coupled with a sufficient line of B.S. from RIM is enough to create the doubt that will undermine BlackBerry's market leadership. It's a classic Pro Forma Mistake.
Taylor provides his thoughts on these recommendations, and pointedly questions RIM's arrogant approach to being so secretive about it's supposed "work-around" if the Blackberry service is turned off. Taylor then goes on to disagree with a statement by RIM co-CEO Jim Balsillie in his Wall Street Journal op-ed that said:
We have always fought this situation in the best interests of our customers and industry and we don't like spending money on bogus patents, but we recognize the practicality of a settlement here. It just has to be practical.
I'm with Taylor on this one. It's hard to believe they are looking out for their customers' best interests, when they are making them jump through hoops just to find out if a work-around exists. Doesn't sound like the customer comes first at RIM.

As a mobile enterprise evangelist, Taylor finds this whole episode embarrassing, saying "We don't need the mobility industry to fall apart because of RIM. We don't need for companies to think twice about mobile e-mail because RIM doesn't own their own intellectual property." He concludes with the following:
Enterprise mobility is a story that the industry has been training for years to tell, and it's high time we stopped talking about lawsuits and started talking about the future.
Hopefully, RIM's actions won't be a major stumbling block...

Latest phones let users dial in style

St. Paul Pioneer Press writes about how style and design is driving the handset market. Leading the charge is the hot-selling Motorola Razr, which is now offered in neon pink too.

Avi Greengart at Current Analysis said of the Razr, "This is not a hit. This is a smash hit. It's been extraordinarily popular with women. They'd line up around the block and say, 'I have to have one of those!'"

Greengart noted the handset as fashion accessory are for those who would "think nothing of spending $500 for a Prada bag and want a comparable phone to drop into it."

Roger Entner at Ovum estimated that "maybe 1 percent of the handsets in use fit the "high fashion" category," which also happens to be high margin. Another area being targeted are handsets that can change their look or "skin", such as the Sidekick from T-Mobile.

According to Entner said, the "market for accessorizing your cell phone is between $5 billion and $6 billion a year and has grown annually at a rate of 10 percent to 15 percent for the past three years."

Monday, December 19, 2005

Sony on track to double PSP sales

Reuters reports that Sony "is on track to double the number of PlayStation Portable video game players sold in North America to around 6 million at the end of its first holiday season this year." Good numbers but as Janco Partners analyst Mike Hickey said, "Clearly there is not the intoxication or hysteria that there is with the iPod."

Schelley Olhava at IDC said, "The PSP is for an older audience, the content is definitely for an older market." She also noted that "The market is limited because the price is so high."

Could Sony sell a lot more PSPs if pricing was lower, more compelling content was available, and the company in general was more customer friendly? You betcha, but this is just the early stages. The next holiday season will be a better gauge on whether the PSP ends up to be multimedia jewel or just a high-priced wireless lump of coal...

Jupiter: Are you sunbathing ? No I am just watching a movie...

Thomas Husson posts about mobile video glasses at the Jupiter Analyst Weblogs.

It turns out the future is getting here a lot sooner than we think.

Husson points out you can "now buy mobile video glasses with Orange France." The goggles are only available with the Samsung D600E for 299 euros.

Equip those suckers with a Bluetooth headset and you'll be all set the next time the Star Trek convention rolls into town...

Analyst raises iPod shipment estimates

BusinessWeek blogs that Piper Jaffrey analyst Gene Munster has upped his prediction that Apple will sell 11 miillion iPods this quarter from his original 9 million estimate. "This is based primarily on what he says is better-than-expected availability from Apple, both through its online store and in its retail stores."

According to the post, Munster reached this new number by looking "at historical market data from market researcher NPD Group that shows that that in the past two years, Apple sold 34% of all MP3 players in the months of October and November, and 66% of the total sold in December."

Munster thinks Apple will hit 45% share this December, based "on the belief that 66% is just too big a number given the huge volumes at play." Too conservative? According to a survey by Morgan Stanley's Rebecca Runkle, only "4% of iPod shoppers plan to go with another make."

So if your looking for the iPod this season and can't find it in stock, do you buy another brand or wait? Personally, I'd wait because another couple of weeks won't kill me, but WWMAD (what would mainstream America do)?

In-Stat: Sluggish Asia Wireless Location Services Market on Verge of Taking Off

In-Stat has issued a new report that predicts "location-based services (LBS) may finally realize its potential in the Asia/Pacific region in the upcoming five years."

Bryan Wang at In-Stat said, “Slower-than-expected implementation of more accurate location determination technologies (LDTs), consumer privacy concerns, and operators focused on the deployment of other proven mobile data services have hampered LBS in the region. One factor that is not lacking, however, is consumer interest in LBS.”

Key findings include:

  • In 2004, Asia registered LBS revenue of US$353.0 million, and the market is expected to reach US$771.9 million by 2010.
  • A recent In-Stat survey found that 88.5% out of 916 Japanese wireless users, and 99.5% out of 940 South Korea wireless users, are interested in one or more LBS application.
  • Japan and South Korea are the most advanced regional markets, with almost all categories of LBS applications available now.

Rob Enderle: Visto Sues Microsoft

Rob Enderle posts at Technology Pundits about Visto's patent suit against Microsoft. Enderle notes that "the defense large companies like Microsoft has is akin to mutually assured destruction because these firms have deep patent portfolios they can use to go after the operating firms that go after them and it is likely Visto will find they are in violation of one or more of Microsoft’s patents."

Enderle does add that "this defense only works if the plaintiff is an operating company, if it is an IP company (a firm that simply owns patents that it licenses out) the mutually assured destruction defense doesn’t work and we are seeing something like that in the NTP vs. Rim litigation."

Enderle wonders whether Visto is moving towards an IP portfolio company considering that "Visto has historically burned through cash at an incredible rate and are known more for their ability to get additional cash infusions rather then anything approaching a successful business model."

Enderle concludes:

One thing is clear and that is that IP is increasingly becoming a problem for a lot of companies both big and small. However the large companies have the resources to lobby and force into law protections that could limit some of these activities particularly IP Trolling. As a result this little case could turn out to have broader long term implications than otherwise.

Tim Bajarin: Overview of CES 2006

Tim Bajarin previews the upcoming CES 2006 at Technology Pundits. It's pretty extensive, like the event itself, since "the digital consumer market is the next major battleground for vendors in the PC, Semiconductor, CE, cable and communications companies who realize that bringing digital technology to the masses represents the next major growth for all of these industries." Here are the key mobile-related trends from Bajarin:

Mobile and wireless

As in the past, the newest and hottest cell phones and smart phones will be on display with hundreds of new models to choose from. Samsung, Motorola, Sony Ericsson, Nokia and many more will use CES to showcase their latest wares. Pay attention to not only the new features, such as higher pixel cameras and new form factors, but also at the screens and displays. As cell phones and smart phones are used to display more content such as digital images, games, TV content and Web Browsing, the sharpness and fast refresh rate of these screens become important. We should see some good phones this year with OLED screens that, in my opinion, represent the future displays for all cell phones since they deliver a much brighter and sharper image and use less power then today's screens. There will also be many products that try and bring TV to mobile devices. Everything from Crown Castles new broadcast system and Sprint and Verizon's emphasis on their mobile video solutions to dedicated services like Mobi TV, Orb Networks and even the Slingbox, which can be viewed on Windows Mobile devices, the area of video or TV on mobile will be another hot topic at the show.
Mobile Entertainment Devices
Check out the new audio/video systems in the cars at the show. TV's and DVD play back devices built into automobiles is big and we should see a lot of new examples of this in my favorite section of the show. This is the show area where autos blare zillion megawatt sound systems through giant speakers in customized cars and I often just sit in the drivers seat of one of these cars cad crank up the audio until I come close to bursting an ear drum. I especially like the fact that you can feel the base reverberate in your bones and teeth! An experience not to be missed.
Portable Media Players will also be big this year. Of course, at this moment, Apple rules this space and their iPod with Video already gives them the dominant position in portable media players even though Microsoft and their partners have had PMP's on the market for years. But new versions of portable media players with an even better UI and transfer method is around the corner and we should see some of the newest models at CES this year.
Hot Products to look for:
I predict that one of the hottest products at the show and one that will cause a lot of buzz, will be an un-named product coming from some ex-Apple employees who created an elegant way to turn existing iPods into a serious portable media device. Although I can't name the company, I have seen this and it is an elegant and clever way to make iPods into really serious portable media players.
DualCor cPC
This is a new handheld PC that is one of the best designed in this category so far. OQO blazed a trail with their Windows XP handheld but this new DualCor version adds an interesting twist to the concept. While it can of course run Windows XP, it also has Windows CE loaded so it can be usable instantly when opened up. The idea is to let a user have a fully loaded Windows XP hand held device so they can run any XP application but also allow them to also use it in Windows CE mode to at any time, access email, calendar, contacts and smaller CE based apps and just load XP when they need the full power of the XP OS. This cuts down on battery use and gives people a rather versatile hand held computer. Although this is clearly a business tool that sells for $1500 and targeted at vertical markets, it is being introduced at CES.

The plot thickens

The Boston Globe writes about the expanding availability of TV-related programming and content into different medium, including cell phones. One example is Verizon's recent deal with CBS to "offer cellphone users previews and original behind-the-scenes material."

According to Linda Barrabee at Yankee Group said, "It's still pretty early in the adoption of these kinds of service on a phone. Of the 194 million cell subscribers in the country under a million are actually watching video on a phone."

Barrabee noted the potential for getting news and sports on handsets. She said, "That's what resonates first." Personalization is also improtant. "My phone is about me, so I should be able to get what I want on my phone," Barrabee added.

Wave of New Multimedia Apps in Store for Mobile Phones

Technology News covers a recent forecast from Mobile Ecosystem that predicts "wireless carriers in 2006 will be launching a new "wave" of multimedia and entertainment applications on new, 3G networks."

Mark Lowenstein at Mobile Ecosystem said, "As a broad theme, I am officially proclaiming 2006 to be 'The Experiment Year'. Carriers will be launching and testing a wave of multimedia and new entertainment-centric applications as 3G networks become more broadly available. We will learn a lot about what kinds of services, at what prices, are attractive to the consumer."

Lowenstein added, "Google will be a player. There's a huge amount of content out there and we've got to find more effective ways to discover it." Make the handsets easier to use will aslo be critical. "There's a broad recognition that the navigation and presentation model has not kept up with the new capabilities of wireless networks. Look for some breakout ideas in context, personalization, and interface navigation on the device," he added.

Lowenstein said, "The battle for the home has two fronts. In voice, wireless coverage in the majority of homes remains inadequate. So we will either start leveraging the broadband network, or we will finally see relatively small, inexpensive home base station products that boost RF coverage."

Sunday, December 18, 2005

Nokia Readies Update to Internet Appliance

NewsFactor Network reports that Nokia is planning "an update of its 770 Internet Tablet early next year, adding instant messaging and internet telephony to the device that started shipping last November." The company didn't "disclose which applications it plans to bundle."

Michael Gartenberg at JupiterResearch noted there "while there is a real risk of confusing the internet tablet for a traditional PDA," he believed Nokia was "on to something here." Gartenberg added, "Nokia needs to carefully craft its marketing strategy to make sure that potential buyers understand what the tablet does. Nokia needs to make sure that the market hears its message."

Young, Urban African Americans Talk Up Profits For Wireless Companies

Black Enterprise writes that "African American consumers are making wireless communication so hot that companies of all sizes are jumping into the market with offerings from ring tones to cell phone content trying to get their share of the industry."

The article outlines some of the business efforts taking place to target the audinence, including Black Entertainment Television's (BET) recent partnership with "Motricity, to provide popular ring tones, graphics, games, alerts and networking features."

Linda Barrabee at Yankee Group wasn't surprised more companies were jumping into wireless noting it was "huge with the 25 year and younger market." She said, "They are early adopters in general and ringtones in particular are a motivation to personalize the phone experience. Music makes a personal statement. What's been popular definitely tracks to more the urban, hip-hop market.

According to the Yankee Group, "about 88% of the 24-year-old and younger crowd would be willing to spend more money or up to $13 a month on ring tones, text messaging, picture/video messaging, streamed music, and full-track music downloads."

Saturday, December 17, 2005

Weekly Roundup

A roundup of mobile analysts in the news for the week ending December 17:

  • Mike McGuire at Gartner via The Boston Globe about the $300 million iPod accesory market
  • Joseph Unsworth at Gartner via The New York Times about the booming market for NAND Flash memory
  • Yankee Group analyst Linda Barrabee via USA TODAY.about the potential for getting a rise from pornography on the cellphone in the U.S.
  • Ken Dulaney at Gartner via The Washington Post about BlackBerry users remaining in the dark
  • Tim Bajarin at Creative Strategies via the San Francisco Chronicle about Silicon Valley start ups target mobile markets
  • IDC analyst Lewis Ward via Top Tech News about the MTV/Microsoft deal and the ringtone market
  • Ken Dulaney at Gartner via the National Post about Visto's patent suit against Microsoft
  • David Card at JupiterResearch about the URGE
  • David Chamberlain at In-Stat via Scripps Howard News Service about mobile phone coupons

Jupiter: Odd That Few Made the Amp'd-URGE Connection

David Card wonders aloud at the Jupiter Analyst Weblogs whether URGE's non-mentioned device strategy just might be linked to MTV's alliance with newly launched MVNO Amp'd Mobile. After citing from the press release, Card remarks:

Amp'd is a youth-targeted MVNO using Verizon's advanced network. Wire reports say it was a $50 million investment. Still, a mobile phone isn't an iPod.

Friday, December 16, 2005

Jupiter Microsoft Monitor: The URGE to Listen?

JupiterResearch analyst Joe Wilcox posts at the Microsoft Monitor his thoughts on what he calls the "nebulous MTV music service announcement," because "Microsoft and MTV didn't release a whole lot of details about the new URGE music service."

Wilcox wonders what was the point of making some noise now when they were "to give out more details at the Consumer Electronics Show." Regarding devices (i.e. iPods), Wilcox argues that the Ipod is not as closed as folks claim. He states:

CDs are overwhelming purchased compared to digital downloads. Besides, Apple had iPod long before iTunes Music Store. The device drives sales back to the store, not the other way around. It's true Apple has one kind of closed loop between iTunes content and iPod. But as long as Apple products support MP3 format, iPod is plenty open. Windows Media is its own closed loop. Microsoft touts choice, but that choice exists because a number of online stores and music devices support Windows Media technologies. WMA DRM requires Windows and its supporting technologies. If iTunes/iPod is a closed loop, then so is Windows Media.
He also notes that there doesn't seem to be a MTV branded player at this time, but won't know for sure until CES. He thinks:
A MTV branded music player, with Apple's ease of use, could go somewhere, especially if it had the capability to play music and music videos, including subscription content. How far it could go would depend on lots of factors, such as device-to-computer synchronization and device design. But going somewhere is better than going nowhere, considering how far behind Apple are Microsoft and its partners.
Wilcox thinks this is a big deal for Microsoft since "association with another strong brand [MTV] is just what Microsoft needs right now to push out Windows Media adoption and gain some, any, traction against iTunes/iPod and the proliferation of Apple's Fairplay-DRM audio format."

For MTV, Wilcox think the key advantage is their brand and sister enteertainment and online properties, including Comedy Central, MTV2, Nickelodeon,VH1 and NeoPets He sees the "potential to "cross-promote its music service across these properties, including advertising and freebees. It's around marketing that MTV has the tremendous muscle capable of making URGE into a highly successful Windows Media-based music service.The number of opportunities are mind boggling."

Wilcox dreams up some potential marketing ideas in conclusion:
I love verbs for marketing. A sign of Google's success is the brand's use as a verb. MTV chose to start out with one. I like it. The URGE to listen. The URGE to compete (battle of the bands). How about "A Real World" music show, "The Real URGE" about up-and-coming musicians. The mind boggles the marketing possibilities.
Well it's all the buzz right now and I'm helping to contribute to the noise. MTV and Apple could have been a killer combo. We'll just have to wait a little longer to see what they can do with Microsoft instead....

Parks Associates: Online Gaming Revenues toTriple by 2009

Parks Associates looks at the U.S. online gaming market and predicts it "will increase from $1.1 billion in 2005 to more than $3.5 billion in 2009." According to their new report, "networked gaming services, including online console gaming, massively multiplayer online gaming (MMOG), multiplayer Internet gaming, and mobile multiplayer gaming, will account for almost 50% of online gaming revenues in 2009, followed by digital downloads at 23%."

Yuanzhe (Michael) Cai at Parks Associates said, "The two primary drivers for online gaming are networked gaming services and digital distribution. Over the next four years, the gaming industry will no longer depend solely on retail sales and instead will see more balanced and diversified business models.”

He added, “The gaming industry is definitely learning valuable lessons from the video industry – syndicated game networks such as GameTap can extend a game’s release window and in-game advertising can lead to innovative business models such as free MMOG. Furthermore, we believe more game publishers and service providers will find ways to monetize the in-game economy, instead of fighting against it."

I'm a big fan of online gaming so I'm interested in seeing where mobile multiplayer gaming is heading. Right now from a cellphone perspective, the slow adoption of high-speed data networks and lack of storage on handsets will hold back the market. In the handheld gaming space, Sony is taking a hands off approach, leaving online gaming efforts in the hands of game developers, while Nintendo seems to be developing a coherent strategy for the DS given its recent initiative to offer free Wi-fi access at McDonald's and other places. Might have to get my hands on th DS afterall...

Start-up merges cell phone and PC into a handheld

CNET writes that startup DualCor Technologies plans to unveil next month "the cPC, a full-fledged handheld Windows XP computer that also comes with a built-in smart phone that runs Windows Mobile 5.0." According to the company, the "cPC is 6.5 inches long, 3.3 inches wide, 1.2 inches thick and has a 5-inch diagonal screen." Reportedly, "the cPC's battery lasts long enough to let users run applications simultaneously for eight hours or more, uses Windows XP Tablet operating system, a 1.5GHz C7-M processor from Via Technologies and 1GB of DDR 2 memory. The cell phone aspect of the device has Windows Mobile 5.0 Pocket PC phone edition, a PXA communications processor from Intel, 128MB of DRAM and 1GB of flash memory. Both the computer and cell phone share a 40GB hard drive.

Packed with a lot of features, the device will cost $1,500 which could be a problem according to Roger Kay at Endpoint Technologies. He said, "There are a lot of subsidies out there in the BlackBerry world, so people aren't used to paying a lot of money for them. Notebooks are going down in price. I don't know where the magic number is, but it is somewhere in the mid-hundreds."

Kay added, "It pushes the envelope on what devices can do. It will certainly get a lot of raised eyebrows."

I'm personally having a hard time imagining what this monstrosity looks like. Sounds like overkill, but I'm sure it will attract a lot of attention among the early adopter gadget geek crowd....

Strategy Analytics: Voice Competition Puts Squeeze On US Wireless Market

Strategy Anlytics has issued a new report that finds "increasing signs of weakness in the US wireless voice market, with average revenues per user (ARPUs) for voice services dropping 8 percent year on year and data services failing to make up the gap."

Phil Kendall at Strategy Analytics said, "The last two quarters have seen US wireless voice metrics move to a new rate of decline. The decline in per-minute voice revenues continues, with rates slipping from 14-18 percent in 2003 to a new low of 22-24%. Voice ARPUs are declining even faster, falling from 3-5 percent in 2003 to 8 percent today. For a long time the US was a shining example in how to increase wireless subscribers while still growing average revenues and margins; that climate is now starting to change."

David Kerr at Strategy Analytics added, "Data just cannot make up this shortfall at present. While most other regions are seeing data ARPUs struggle to grow, the US is at least posting annual growth here in excess of 50 percent. But even this growth rate is down significantly from recent quarters. The carriers will need to work hard to reverse these trends and avoid falling into the same trap as Western Europe where margins have faltered over the last 18 months."

The question that is left unanswered is whether the move to 3G networks and services will be able to drive data usage and most importantly ARPU for the network operators...

Getting the Gift of Gab – and More

Wireless Week writes about the holiday gift-giving season and the hopes of network operators that cellphones will make it to top of wishlists. However, according to research by NPD Group "only a small percentage of consumers actually plan to purchase a wireless phone as a gift this holiday season."

NPD found that "only 3 percent of consumers say they are going to give a cellular phone as a gift." Clint Wheelock at NPD said, "Cell phones were at the bottom of the list in terms of things people plan to give as gifts. Yet we know there's a huge spike in volume of cell phone purchases."

Wheelock attributed this phenomenon to the increase number of carrier promotions and advertising during the holiday season, which prompts "many consumers to upgrade their own phones, but not necessarily to give phones to others."

The articles looks at the top selling phones and carrier promotions this holiday season. According to U.S. research firm Compete, the Razr GSM version is number one on the "Top 10 handsets consumers are shopping for online." Miro Kazakoff at Competecompiled said, "Unique phones with distinct branding can draw consumer attention among the sea of the letters and numbers that usually identify phones."

Compete's research also noted that "three of the top 10 handsets have music capabilities – the Nokia 6101 and Nokia 6102 are equipped with an FM radio. The LG VX9800 has a built-in MP3 player."

Popular Phones (most viewed handsets offered online from the Big 5 carriers. (Oct. 16 – Nov. 12)

1. Motorola RAZR (Cingular, T-Mobile)
2. Nokia 6102 (Cingular)
3. Samsung X497 (Cingular)
4. LG C1500 (Cingular)
5. Audiovox 8910 (Verizon Wireless)
6. Danger's Sidekick II (T-Mobile)
7. Nokia 6101 (T-Mobile)
8. Samsung e335 (T-Mobile)
9. LG C2000 (Cingular)
10. LG VX9800 (Verizon Wireless)

Source: Compete

Thursday, December 15, 2005

Ovum: Dramatic merger proposed by NTL and Virgin Mobile

Maybe I caught this late or they are just late providing commentary, but Julian Hewett at Ovum posts his analyis of the deal being discussed between Virgin Mobile and NTL to create the UK's first quad-play offering.

Hewett opines that the "deal, if it comes off, represents an exceptional opportunity for Richard Branson to extend his Virgin brand into the heart of the UK's television and entertainment market. At the same time, the Virgin brand will have a lot more customer appeal than the NTL or Telewest brands, both of which have suffered from customer service problems. However, Virgin Mobile mostly has low-spending pre-pay customers, which are not well suited to conversion to a quad-play contract."

Hewett notes NTL is already in the midst of a merger with Telewest to "create a single unified cable operator in the UK," and "is struggling to improve its digital TV offering, raising broadband speeds and pushing into the business market." Throw in Virgin Mobile and he warns NTL better not lose focus because "remember what happened to AOL and Time Warner."

Hewett points the bigger challenge delivering a quad-play is "to generate value from actual convergence between the services. TV and video on mobiles has yet to be proven in the market." He concludes that

if this deal goes through it will define the shape of the UK consumer telecoms/entertainment landscape for the next decade: BSkyB versus Virgin versus BT, with the global Internet portals (Google, Yahoo! et al) as wild cards.

Jupiter: Mobile Marketing - Experimental Still, but Evolving Quickly

Julie Ask at JupiterResearch blogs about her experience at at iHollywood's Mobile Impact Forum. Ask observed that a lot of mobile marketing campaigns "seemed to be centered around "physical" goods rather than digital ones - or more specifically digital ones that can be consumed on a cell phone." Other common factors/key success factors mentioned included:

  • Most campaigns targeted niche markets of mobile users with high adoption rates of mobile data
  • Every campaign was opt-in and user-initiated
  • Growing number of campaigns were cross-media in that they were advertised in magazines, on bill boards, on TV, etc. In Britain, there seems to be a very high level of cross-promotion from TV to cell phones that we are only beginning to see here in the US with early entrants such as MTV.