Tuesday, January 31, 2006

Dean Bubley: Per-megabyte rip-off in the UK

Dean Bubley complains about the outrageous cost of mobile data usage in the U.K. at the Disruptive Wireless blog. He finds the pricing is "ludicrous" and U.K. network carriers are "building up a future base of potential churn candidates like you wouldn't believe."

Bubley is looking for a new mobile data plan that will allow browsing outside the carrier's walled garden, and doesn't like what he has found. First, he had a hard time finding the rate plans (must be a carrier thing, because in the U.S. it's just as difficult). Regarding pricing, he says, "they are somewhere between 10x and 1000x reasonable figures." He looks into the high costs of the various network operators and then into the higher costs for international data roaming.

Bubley ends up not a happy camper, and concludes with:

I'm also wondering whether any of this could possibly be classed as "anticompetitive" and worthy of investigation by regulators. Any combative lawyers out there fancy pitching this to Ofcom or the European Commission?
I guess I can't complain too much about mobile data pricing here in the U.S. At $15 a month, Sprint's all-you-can-eat EV-DO bundle is a steal...

Bear Stearns: Sprint To Sell Palm Treo 700w Sooner Than Expected

The Consumer Electronics Stock Blog posts that "Bear Stearns analysts Andrew Neff, Bill Hand and Ted Chung sent a note to clients regarding Palm’s launch with Sprint of the much-anticipated Treo 700w." According to the note, Sprint will offer the "Treo 700w ahead of schedule as early as end of February." Bear Stearns writes:

Based on our channel checks, it appears that Sprint is likely to offer the latest PALM Treo 700w (Windows version) as early as end of February, which would be ahead of schedule (following its launch with Verizon on 1/5) — Sprint version of Treo 700 was not expected until end of March at the earliest based on the historical length of the exclusivity agreements with carriers (i.e., 3-6 months). Sprint is likely to price Treo 700w at $449, at parity with Verizon and a $50 premium to Treo 650. Sprint will offer both models.
I hope this will put added pressure on Verizon (and Cingular for their 3G data plans as well) to drop their data rates for all-you-can-eat EV-DO from the current $45 a month down closer to Sprint's $15 a month. If not then the savings alone from just using Sprint's Power Vision plan will cover the purchase cost of the Treo 700w in a litle over a year's time....

Rob Enderle: RIM Shut Down Likely

Rob Enderle assesses the Research In Motion situation at Technology Pundits. Enderle challenges the fundamental assumption "that NTP won't shut down RIM because it isn’t in their best interest to do so."

Enderle offers up some background from the case via an article in the Globe and Mail, and points out that:

NTP, while a patent holding company, was founded by the guy that wrote the patents in question and was blown off by RIM when he first brought their infringement to their attention. Also, many don’t realize that RIM was caught cheating in the trial which is what led to a more severe judgment. Finally, the owner of the NTP intellectual property, Mr. Campana, died during the trial process and his wish was to shut RIM down as he took what they did to him personally.
The article and Enderle's take are both interesting reads and Enderle concludes with:
I believe now that this is clearly trending towards a RIM shut down and place the odds more in favor of then against. More important though, I think this should be reviewed as a case by anyone with Intellectual Property responsibility because this clearly is now a case of what not to do and suggests that RIM was either getting bad advice or not following the advice they were getting (and most probably was simply not asking the right questions timely).

Slvr seeks to build on Razr's edge

The Chicago Tribune reports that Motorola will launch the "Slvr L7, a phone featuring the Razr's blade-like styling and the Rokr's link to the iTunes music service," on Cingular Wireless shortly. Roger Entner at Ovum said, "The Slvr is redefining the candy bar in the same way that the Razr redefined the flip phone."

John Jackson at Yankee Group added, "You want to carry forward the design language that made the Razr so popular. Extending design leadership goes hand-in-hand with cementing the brand as a style and technology leader." While demand for the Razr is still strong, its product lifecycle is on a downward slope. "You can only milk these things for so long," Jackson said.

Pointing out the growing competition from Razr look-alies, Ed Snyder at Charter Equity Research said, "Razr's success wasn't lost on other phonemakers."

Regarding the Slvr being very different to the maligned Rokr iTunes phone, Entner at Ovum siad, "This phone makes a statement. This is the phone they should have come out with (initially) if they wanted to make an impact in the market."

Rumor is the Slvr will have the same 100-song storage capacity as the Rokr, which Snyder thought was a liability noting "competing music-playing phones hold more songs, especially models that include a slot for media cards that can hold up to 1 gigabyte of storage--roughly 250 songs." Snyder said, "If they make it just 100 songs, you can forget about it."

Microsoft Rumored To Be Working on a Portable-Media Player

TopTechNews covers the Microsoft rumor last week that the company is working on a portable media device. Nitin Gupta at Yankee Group commented that "unlike previous unsuccessful efforts from Sony and other device manufacturers, Microsoft's efforts might create a viable alternative to the iPod, but the company will have to overcome challenges that Apple was able to conquer with its integrated iTunes software."

Gupta explained Apple has an integrated solution that consists of the device, software, and online service that others have not been able to replicate. Gupta said, "Most people using these devices are not technical experts. They don't want to try to guess what device works with what online service. That's an integration issue -- just making it work. The other issue is marketing."

Mukul Krishna at Frost & Sullivan added, "Microsoft needs some sort of differentiation in terms of the content they offer and device capabilities. There are so many MP3 players out there right now, but, on the street, if you don't have an iPod you're just not happening. Microsoft is quite late getting into the market; they have to include Xbox."

Krishna continued, "Microsoft will have to think very long and hard about this. If they started working on it seriously, it will be at least holiday 2007 before we see a device. It's a big risk, but if they were able to do it, they would get a leg up on Sony, if not Apple."

Krishna thought a PSP like device might work. He said, "The question is whether they can make it hip. It has to be more than just a portable Xbox and has to take it to the next design level, and that will take a lot of dollars."

Strategy Analytics: Trouble Brewing For iTunes As Verizon Launches Microsoft-Based Music Service

Strategy Analytics has issued new research that "estimates that sales of digital music (online music plus mobile music and ring tones) within Western Europe and North America accounted for 13.9 percent of total consumer spending on music last year," and "projects that by 2010 more than $8.2 billion worth of music will be delivered via digital platforms in the same regions, accounting for almost 30 percent of total music sales."

Strategy Analytics also predicts "Apple's dominance of the online music space will come under increasing pressure as competitors target the shortcomings of Apple's iTunes Music Store."

Martin Olausson at Strategy Analytics said, "As a strategy to bring it into mobile, Apple's partnership with Motorola has failed. Its lack of a subscription payment model as well as the fact that it is currently limited to iPod music players, will increasingly put Apple at a disadvantage to services such as V Cast Music. The speed with which sales of music player enabled mobile phones will overtake dedicated music players will accelerate this trend."

Philip Taylor at Strategy Analytics added, "We believe that Apple's experience with Motorola rules out any quick launch of an iPod with built in cellular radio, and that Apple will continue to build resources towards bringing a wireless enabled product to market in 24 to 36 months. As a result, Microsoft will gain strength as the most viable immediate alternative for manufacturers and service providers seeking to gain share for themselves."

I don't expect Apple to maintain its stranglehold over the mobile music market, but I think positioning Verizon's V Cast Music as a threat is going a bit too far. Strategy Analytics, while pointing out Apple's weaknesses, fails to mention that V Cast Music is expensive (monthly service fee plus cost of downloads), available only on a couple of handsets, and most of all limited to Verizon's customer base.

The music on cellphone market is still in its infancy and whether it ever grows to surpass the standalone player market remains to be seen. Greedy carriers and music industry alike are not helping the situation by pricing services and OTA full music downloads too high.

Yes, there is an opportunity for someone to take control of the market, but it seems like no one has learned why and how Apple got to where it is now as the undisputed leader. Maybe Apple is missing a golden mobile opportunity, but I don't see anyone else stepping forward to claim market leadership in their place....

But Is Everybody Growing?

After the news last week that the top Top U.S. network operators added more users than expected, Unstrung asks if everybody is growing as the industry awaits the latest results from Sprint Nextel.

Roger Entner at Ovum said, "They’re the 800-pound gorilla. It’d be like predicting computer sales without Dell." Jack Gold at J.Gold Associates added, "Sprint seems to have the most momentum and has consolidated a number of enterprise offerings into a single package… including the Nextel assets."

Regarding Verizon, Gold remarked, "Verizon still has the largest installed base of enterprise users, but haven’t done a great job with their enterprise offerings, which are still a conglomeration, rather than a packaged solution." As for T-Mobile, he added, "T-Mobile has some potential, but their biggest stumbling block is their poor coverage in many areas."

Thumb-typists on edge

A couple of more articles on the RIM and NTP saga and how BlackBerry users are dealing with the possibility that their service might be shut off in the U.S. Over at the San Jose Mercury News, Gartner analyst Todd Kort said, "There are companies I talk with that are absolutely livid." Kort believed RIM would settle with NTP, but until then the artilce looks at some of its competitors and what they are doing to gain from RIM's pain.

Computerworld writes about the planning efforts of enterprises in case Blackberry service goes dark. Gartner analyst Ken Dulaney said, "in the end, I think that many companies are just going to wait it out because there are so many uncertainties no matter which path you follow."wjsthdal

A lot of companies have RIM to thank for all this stress. Instead of being productive driving their business forward, they are spinning cycles in case they have to act. Even if RIM comes out of this unscathed, do you really think their customers will blindly trust their business with them? Methinks a lot of companies will look at what other options are available to them...

Monday, January 30, 2006

JupiterResearch: France Football Mobile Rights - Part 2

Thomas Husson at JupiterResearch posts that the "LFP (French Professional Football League) announced the results of the RFP for the French mobile rights ...and the winner is...Orange."

Husson notes that "Orange previously owned the "Ligue 1" rights but only paid 8M euros." The deal for the next two seasons is 29M euros, whcih caught Husson by surprise. He writes:

Looking at the number of mobile video phone owners, the return on investment is not obvious. According to Orange itself, the number may well reach 5M during 2006-2007 and 10M during 2007-2008. It simply means the objective is wider : enhancing the brand and gaining incremental market share. According to Emmanuel Vacher, Marketing Multimedia Director at Orange France, it will help to gain 3 to 5% in mobile broadband market share. The amount paid is less expensive than in the UK (47,6M euros for one season and not on an exclusive basis) or than in Italy (52 M euros) and not really significant for the France Telecom Group.
Husson points out the implications for the market:
  • Content is increasingly seen as a source of differentiation
  • Large operators are ready to reduce margins to acquire new customers using this content differentiation
  • Telcos are increasingly competing with broadcasters and producers in this field
  • The difference will not only come from the platform (TV, Internet, Mobile) but increasingly from the notion of live versus pre-recorded broadcast. Indeed, Orange paid 24M euros for almost live content vs 5M euros for the wrap-up of matches.
Given the recent findings from M:Metrics that ESPN Sports News is currently the most popular mobile news brand in the U.S., maybe sports content is the key differentiator and will be the primary driver for bringing mobile multimedia content mainstream.

In many ways it makes a lot of sense since people seem more apt to check scores and highlights when they are out than just reading the news. Next to email, if my NY Mets or NY Giants are playing or a big track meet is being held, then the next thing I look for on my handset are results. If I can get highlights or even live footage then I might be willing to pay as well. Of course, the SlingBox is starting to look more attractive since I already subscribe to DirecTV satellite television and have a Tivo to boot. Content is important but cheap/free is even better..

Companies to test balloons for cellular service

The San Jose Mercury News picks up an Associated Press article about a plan in North Dakota to "loft wireless network repeaters on balloons high above the state to fill gaps in cellular coverage."

According to the article, "Extend America and Space Data Corp. are developing the technology, which is believed to be the first to use disposable balloons to provide cellular coverage."

Former North Dakota Governor and now CEO Extend America, Ed Schafer, claimed that "To cover every square mile of North Dakota, it would take 1,100 cell towers. We can do the whole state with three balloons."

Weston Henderek at Current Analysis said, "It's difficult to say whether it's a pie-in-the-sky idea or if it will actually work. It's one of those cutting-edge type of things that people are starting to look at. It will be interesting to see how the testing pans out."

M:Metrics: In Battle of Portals Yahoo! Has Early Lead in Mobile Domain

New research from M:Metrics finds that "Yahoo! is the most popular mobile content brand. During the quarter ended December 2005 12.8 million U.S. mobile subscribers accessed Yahoo's services in an average month - 4 million more than second-place AOL. MSN and Google follow, with about 7 million subscribers accessing their mobile offerings each month during the fourth quarter."

Mark Donovan at M:Metrics said, "AOL owes its strong position in the mobile domain to its ability to provide seamless access to AIM buddy lists on handsets through an elegantly designed service and its strong relationships with mobile carriers. Its challenge is to demonstrate that it can use AIM as the foundation to engage users with a broader base of services, much as it is seeking to do on the desktop by opening access to its portal and e-mail services and linking these with AIM."

Mobile Content Brand Reach
Weather Brand Subscribers (000s)
The Weather Channel/Weather.com 4,127
Yahoo! 2,813
Google 1,513
Accuweather 1,300
Weatherbug 1,161

News Brand Subscribers (000s)
ESPN Sports News 4,934
Yahoo! 4,599
CNN/cnn.com 4,514
Fox Sports 2,462
ABCNews.com 2,189

Search Brand Subscribers (000s)
Google 4,538
Yahoo! 3,975
MSN Mobile/MSNBC 1,324
AOL Mobile 1,039
Don't Know 582

Map/Directory Service Brand Subscribers (000s)
Yahoo! 3,793
Mapquest 3,048
Google 3,03
Yellow Pages 2,128
Moviefone 1,907

Source: M:Metrics, Inc. Copyright 2006. Three-month moving average ending December 31, 2005, n=35,056.

Donovan added, "Although these are early days in mobile media, the aggressive efforts in mobile by Yahoo! and AOL are paying off. But it is a close race, and as traditional media brands put more muscle into their mobile businesses, we expect that the market will shift."

US Mobile Subscriber Monthly Consumption of Content and Applications
M:Metrics Benchmark Survey: December 2005
Activity Projected Monthly
Reach (000s)
Percent US
Mobile Subscribers
Sent or Received Text Message 60,983 33.32% 4.6%
Retrieved News and Information Via Browser 18,572 10.15% 0.1%
Purchased Ringtone 17,675 9.66% 7.3%
Used Photo Messaging 17,005 9.29% 9.4%
Used Personal E-mail 13,454 7.35% 9.4%
Used Mobile Instant Messenger 11,568 6.32% 10.5%
Used Work E-mail 7,886 4.31% 12.8%
Purchased Wallpaper or Screensaver 7,176 3.92% 8.5%
Downloaded Mobile Game 6,052 3.31% 6.5%
Source: M:Metrics, Inc., Copyright 2006. Survey of U.S. mobile subscribers. Data based on three-month moving average for period ending December 31, 2005, n= 35,056.

Very interesting data indeed. I wonder how much of the content is via the carrier portals...

In-Stat: Carriers Beware! About 80% of In-Stat’s Survey Respondents Would Consider Buying Service from an MVNO

According to new research from In-Stat,
"the recent growth of strongly branded Mobile Virtual Network Operators (MNVOs) is creating a new way to compete for current subscribers and offering opportunities for significantly increased Average Revenue Per User (ARPU)." This is creating an even more competitive market "with more than two-thirds of US residents current cellular subscribers, and more than 20 MVNOs in operation and many in the planning stages."

An In-Stat survey of 1,017 present cellular users and those with plans to obtain service within 12 months found that:

  • About 80% of both planned and current cellular subscribers would consider buying service from an MVNO.
  • Compared to other providers, customers of the smaller US national carriers are likely to churn and represent potential prospects for MVNO services.
  • Most wireless purchasing decisions are based on three main factors; coverage, service quality and price.
  • Consumers considering wireless usage may be swayed by payment flexibility and cash payment options.
  • Respondents who are not yet wireless customers will likely talk less than current subscribers; however, they offer a greater potential for usage of data services.
  • Consumers considering wireless usage believe they will purchase ring tones and games more than current wireless users.
  • Consumers considering subscribing to wireless services will want to see camera phone/MMS services, in particular, as well as SMS/instant messaging and PIM services as part of the offering. Both current and planned wireless users express the most interest in subscribing to wireless services offered by major consumer electronics brands and non-wireless telecommunications companies.
  • Psychographic factor analysis found five distinct psychographic profiles including hard-charging commuters, sports fans, music fanatics, city dwellers and young professionals.
Interesting how handsets and their features, speeds and feeds that gadget geeks like myself drool over don't seem to be a factor in this survey. Just another sign that the mainstream consumer is very different from the early adopter crowd here in the U.S. Will the U.S. market ever reach a point where consumers choose the handset first and then the network operator as in other countries?

Dean Bubley: Predictions - FMC launches in 2006?

Dean Bubley posts at Disruptive Wireless about the FMC Congress he attended, and the predictions the FMCA chairman made for new FMC services to be launched in 2006 (he counted "already launched" ones as KT's OnePhone, BT Fusion). He predicted:

  • 2-4 based on Bluetooth Cordless Telephony Profile (CTP) - [ie similar to KT's services]. This isn't something I've really tracked, but I guess SKT and LGT in Korea have to be fair bets to be among these prospective operators.
  • 4-5 more based UMA - my guesses are Cingular, T-Mobile US, France Telecom and Telstra, with an option on TeliaSonera
  • 2-3 based on WiFi SIP - my guesses would be neufCegetel's BeautifulPhone (in trial) and T-Com in Germany.

On the mobile broadband wagon

HeraldNet writes about the growing use of broadbandlike 3G wireless networks in the U.S. As data speeds increase, so do the number of services the network operators try to sell their customers.

Independent telecommunications industry analyst Jeff Kagan said, "Wireless phones are becoming the third screen. You've got the television, the computer and now the cell phone. In a few years, everybody's going to be doing it."

Lewis Ward at IDC believed new "multimedia services will create decent profits for the wireless carriers if they do it right." He said, "If you can find these kind of lifestyle things that resonate with people and provide good service, I think people will be interested."

Regarding the current pricing of services, Kagan said, "Right now, the pricing of a lot of these things are not at bargain levels." He expected that to change "as more people use their phones to download, rock out and watch TV instead of just talking."

Sunday, January 29, 2006

Dean Bubley: Make money out of your friends' incessant chatter.... or spammers... 3 WePay

Following JupiterResearch analyst Thomas Husson's post on 3 UK's WePay plan, Dean Bubley chimes in with his thoughts at Disruptive Wireless. Bubley loves "the possibilities of 3 UK's new WePay tariff." As a fan of the "only the facts" quick phone calls, he jokes:

I do have quite a lot of friends who would rather have their entire conversation on the phone, rather than talking in a civilised fashion an hour later, over a pint. Maybe knowing they were effectively buying me a drink before we got to the bar would make them change their behaviour....
He also thinks it might be great idea for dealing with SMS spam by having a separate mobile number when filling out forms that might"generate marketing guff." Bubley concludes with:
Actually, this is the first manifestation of something I've wanted and expected for ages - making the "marketing industry" pay for the privilege of marketing at me. Want to send me a piece of junk mail? You pay. Want my personal details in your database? You pay. Want to phone up and try and sell me stuff? You pay. Maybe if you've got a product & you're not wasting my time, I'll give you a refund against my future purchase. You're on commission selling me stuff? Share it.
Now only if I could get paid for all the stupid questions I get then life would be perfect...

Saturday, January 28, 2006

Weekly Roundup

A roundup of mobile analysts in the news for the week ending January 28:

  • Julie Ask at Jupiter Research via Techworld.com about first mobile WiMax chipsets ready
  • Thomas Husson at JupiterResearch via BBC NEWS about 3 to pay people to talk and text
  • Gartner analyst Ken Dulaney and Craig Mathias at Farpoint Group via NewsFactor Network about wireless Options Force I.T. To Be Flexible
  • Christopher King at Stifel, Nicolaus & Company and Edward Snyder, at Charter Equity Research via the New York Times about 2 Largest U.S. Wireless Carriers Add Many Subscribers
  • Tim Bajarin at Creative Strategies via Technology Pundits about Disney Buying Pixar
  • NPD analyst Stephen Baker via InformationWeek about flat-Panel TVs, Portable Music Players Rocked in 2005
  • Julie Ask at JupiterResearch and David Chamberlain at In-Stat via the Pittsburgh Post-Gazette about Strip District start-up lands big bet on new mobile TV network
  • Michael Gartenberg at JupiterResearch via BusinessWeek about Microsoft mulling its own digital device
  • Dean Bubley at Disruptive Wireless about hosted mobile PBXs
  • Michael Gartenberg at JupiterResearch via BetaNews about Microsoft's rumored portable device

Friday, January 27, 2006

Profiting on mobile kids?

Kansas City Star writes about industry efforts to profit from the "more than 20 million 8- to 12-year-old youngsters who make up the “tween” market." The article looks at the efforts by the various carriers to address this new opportunity.

Yankee Group estimates that "the 5.3 million 8- to 12-year-old wireless phone users today are expected to swell to 10.5 million in four years." Marina Amoroso at Yankee Group believes the companies that can better tailor offerings to tweens and their families will benefit.

So far handsets targeting this market look more like toys than phones. Amoroso said, "Kids are expecting a certain amount of coolness. If they are trying to sell to kids, it doesn’t mean they can’t make the product better."

If a tween already has a DS or PSP and/or iPod then there is no way they are going to want a kiddie phone from Firefly or Migo...

3G Retains Its Buzz, But Potential Is Still Unclear

Cellular-News picks up a Dow Jones article that writes while 3G was the "buzz phrase for every major telecom company that's reported results so far this month," it still "remains unclear whether its implementation will ratchet up revenue significantly in 2006." The article looks at the 3G efforts by the major U.S. carriers.

According to Ovum, "U.S. data revenue is expected to grow 45% to $12.6 billion in 2006 from a year ago. In comparison, total wireless revenue is expected to grow 10% to $135.86 billion this year."

Network operators are trying to counter declining voice revenues and Ovum analyst Roger Entner said, "Wireless high-speed data is their one shot to stem the precipitous decline in voice (average revenue per user), which they need to make up with really compelling features."

iTunes TV sales incremental, not cannibalistic

iLounge reports that TV shows on iTunes "will generate more revenue per consumer for content providers than is possible with the traditional on-screen advertising model." According to JPMorgan Chase analyst Spencer Wang, "shows such as “Desperate Housewives” and “Lost” command about $440,000 per 30-second spot, with one episode generating about $12 million in ad revenue. By comparison, “even in the worst-case scenario” with 20% of viewers opting to download from iTunes, the digital episodes can generate about $15 million in revenue."

Wang said, "The main reason is that the $1.44 in download revenue per user (or 70% of the $1.99 per download) is greater than the estimated 57 cents in advertising revenue per user generated under the current model."

Josh Bernoff at Forrester Research concurred that "a popular series can generate significantly more gross revenue for a TV network from a downloading model." He estimated "an episode generates $1.20 per user, compared with 45 cents per episode per viewer generated by advertising sales."

Bernoff recently wrote, "Even if 20% of the audience shifts its viewing from broadcast to iTunes (iPod) downloads and ad revenue drop as a result, ABC makes an incremental $1.8 million."

ESA: 35% Of U.S. Parents Play Video Games

I'm usually a bit skeptical of surveys of this type, especialy when the organization commissioning it has a vested interest. With that said, Gamasutra has published some interesting results of a survey commissioned by the video game trade body Entertainment Software Association (ESA) that found "Thirty-five percent of American parents say they play computer and video games. The ESA defines "'gamer parents' as those who play computer and video games, but do not solely play desktop card or children’s games).

Here are some of the interesting figures:

  • the typical 'gamer parent' is 37 years old, and almost half of this group (47%) are women
  • parent gamers most often play card games (34%), followed by puzzle, board and “game show” games (26%), sports games (25%) action games (20%), strategy games (20%) and downloadable games (18%)
  • the typical “gamer parent” has been playing games for an average of 13 years, with one-third reporting having played for 20 years or more.
  • Thirty-six percent of gamer parents introduced their children to games, while a quarter (23 percent) of gamer parents began playing because their children were playing. Twenty-seven percent of parents and children starting playing games around the same time.
  • 60% of parents agree that it is not the role of government to regulate game sales in an attempt to protect kids from exposure to violent and/or sexual video game content.
As a "gamer parent" of ten year-old and eight year-old gamers, who has wasted plenty of time playing video and PC games over the past 20+ years, none of these numbers are very surprising. I would expect these numbers to continue to grow as the average age of gamers gets older.

What I would have loved to see is how much time parents spend researching and selecting the games their kids rent and/or buy. Just going by anecdotal evidence, I would guess these numbers aren't very high. Just being present at the point of sale and looking at the rating on the box is not enough. Parent have to make a greater effort to learn more about what their kids are playing. You can't expect the government to do that for you...

Nintendo to release slimmer DS handheld

CNET News.com reports that Nintendo "plans to release a slimmer, lighter version of its hit Nintendo DS handheld video game system, the Nintendo DS Lite," which is expected to hit Japan in March. Rumored retail price will be $145.

David Cole at DFC Intelligence noted the "move fits with Nintendo's recent history of releasing smaller and smaller versions of its handheld players," such as the Game Boy Advance and then the Game Boy Advance SP.

Cole also pointed out that the "company has traditionally lowered the price of the original devices upon the release of the smaller systems," suggesting the "original Nintendo DS would likely continue to be sold even after the launch of the Lite version, and would probably have its price slashed."

Cole even imagined Sony offering a smaller version of the Sony PSP. Cole said of the Nintendo move, "I think it's definitely a good idea. That's just the way the portable market goes. You look at cell phones and iPods...people are buying multiple versions of the system."

As long as they only reduce the size I won't be too miffed my daughter just got the original DS. However, if they make other improvements and add new features...

Photo via Joystiq

Dean Bubley: We're all subsidising the truly-mobile users.....

Dean Bubley posts at Disruptive Wireless that in a talk from Swisscom it was "mentioned the fact that their average mobile customer generates 70% of their calls (and revenue) from just 3 network cells." Bubley guesses that one is "at home, one at work/school, and presumably another one at their local pub / shop / town centre."

Based on this observation, Bubley wonders if "the really "clever" (and expensive) bits of the network, like cell-to-cell handover for example, aren't actually used that much."

He goes on to state that "essentially, the 90% of people using their mobiles on the sofa at home are subsidising the 10% who are actually driving down the motorway or sitting on a train."

Bubley concludes that "up to 20% of a 3G phone's sales price goes in patent royalties, I wonder just how much of that costly IPR only gets used once in a blue moon. Never mind patents being based on "how important they are to a standard", how about pricing them on "how often they're actually used""

An interesting thought. I wonder who's is subsidizing my usage in my out of the way neck of the woods....

Thursday, January 26, 2006

JupiterResearch: 3's WePay

Thomas Husson posts at the Jupiter Analyst Weblogs about 3 UK's (a mobile operator, owned by Hutchinson) "WePay" scheme that "offers to reward pay-as-you-go customers with a cash credit of 5p for every minute of a voice call and 2p for every text." Referring to some skepticism in the press, Husson notes "there are risks indeed." He states:

it is interesting to look at the Italian market where "Tre" has launched the same kind of offer (form of discount or credit bonus for incoming off-net traffic). As far as I know Vodafone and Telecom Italia would love to have the same ARPU than 3. That being said, the Italian market is specific in the sense that in Italy, many customers are equipped with multiple SIMs from multiple providers and operators facing the issue of maintaining leadership in terms of active service usage. So it encourages customers to advertise their new 3 number with familiy and friends so that 3 becomes thier main service provider.
Husson finds that it is "pretty clever all the more as 3 will also benefit from interconnection revenues for calls terminating in the 3 network," but will wait and see if it takes hold in the UK market.

Mobile phone boom set to continue in 2006

The battle for the mobile handset market numbers have commenced. IDC estimated 825.5 million units were sold in 2005 and now Reuters.com writes that "global shipments of mobile phones soared in 2005 and will continue to grow in 2006 on the back of strong demand from emerging economies, which snapped up half of all handsets last year."

Citing research from Strategy Analytics, "mobile phone shipments grew 19 percent to 810 million units in 2005 and are expected to rise by 15 percent to 930 million units in 2006."

Neil Mawston at Strategy Analytics said, "Booming demand in the southern hemisphere, in India and Africa, drove global mobile phone sales."

Nokia "ended the year with a 34.2 percent market share in the fourth quarter, up slightly from the 33.6 percent in the year-ago quarter."

Motorola "closed the gap with Nokia somewhat, taking a larger 18.3 percent market share in the fourth quarter versus 16.2 percent the year before on the back of its thin RAZR phone, which made up one in every three of its phone sales."

Samsung Electronics's "market share rose slightly to 11.1 percent from 10.7 percent. Its fellow South Korean handset maker, LG Electronics was marginally ahead of Sony Ericsson with both firms at 6.6 percent global market share.

IDC: Strong Fourth Quarter Sends Worldwide Mobile Phone Shipments over 800 Million Units for 2005

IDC has released its latest mobile handset market share figures and found that "a combination of marketing efforts, large volumes of new devices introduced earlier in the year, well-stocked channels, and enticing plans from carriers factored heavily into shipment activity during the quarter. For the full year 2005, worldwide mobile phone shipments totaled 825.5 million units, a 16.7% increase over the 707.3 million shipments in 2004. Shipments of converged mobile devices reached 55.6 million units for 2005, an increase of 165.3% over 2004."

Ryan Reith at IDC said, "Historically, the fourth quarter produces the highest mobile phone shipments of the year due to the numerous promotions driven by carriers to clear the channels during the holiday rush. Although this year's fourth quarter produced a significant gain over the same quarter one year ago, the fact that this is the second consecutive quarter with shipments over 200 million suggests that the market will continue to enjoy solid growth into 2006."

"The worldwide mobile phone market has become populated with numerous devices that are focused on utilizing the high speed networks springing up around the world. The evolution in technology advances has allowed vendors to release devices that are capable of working on networks like EV-DO and UMTS. In the fourth quarter we saw phones that offered on-demand music services, mobile TV, and downloadable video clips from all of the major vendors," Reith added.

Javier Hernandez-Marquez at IDC Mexico noted the boom "has benefited the shipment activity to developing markets." He said, "Within Latin America, shipments are expected to reach record levels, pushing full year shipments to 105.3 million units, a 33.7% increase from 2004 shipments. The combination of entry-level handsets with prepaid plans has allowed for a tremendous influx of shipments into Latin America, making wireless communication an attractive and economically manageable option to potential consumers. With the added features of color screens and embedded cameras, consumers have found additional utility beyond telephony. The market for mid-range and high-end handsets featuring digital music, Bluetooth, and multi-mega-pixel digital image capture has likewise grown in popularity in Latin America, particularly as upgrade options. Unlike most entry-level phones, these handsets are combined with regular plans, and have been increasing."

Here are some vendor highlights:

  • Nokia consolidated its position as the leading global mobile phone vendor in the final quarter of 2005 with record shipments of 83.7 million units representing a sequential increase of 25.7% and year on year growth of 26.6%. The S60 platform continued to gain significant traction in high end consumer segments, buoyed by the launch of the N70 whilst its comprehensive portfolio ensured a strong presence across low to high end segments in global markets.
  • With a record number of shipments in the fourth quarter, Motorola once again solidified its position as number two in worldwide mobile phone shipments, showing a 15.5% increase over 3Q05 and a 40.6% increase over the same quarter a year ago. Still buoyed by the success of its RAZR platform, the company has expanded its flagship product to include models for EV-DO, and UMTS networks along with new colors and form factor modifications.
  • With shipments increasing only 1.5% over 3Q05 but 28.9% year-over-year, Samsung maintained the 3rd position in global mobile phone shipments. Samsung bulked up its portfolio of music capable phones, devices with streaming video, and a global converged mobile device in the i830. Accounting for much of the company's high-end sales was the D600, and EDGE-based slider phone launched in multiple regions.
  • LG reported 16.2 million mobile phones shipped in the fourth quarter, gaining a slight edge over Sony Ericsson for the 4th position in global shipments. This was a 4.3% increase from 3Q05 and a 16.5% increase in shipments year-over-year. LG announced the release of its ‘Black Label’ line focusing on the personal expression of the user. These, along with its lineup of 3G devices, boosted shipment levels for the company.
  • Sony Ericsson capped off a record year of shipments with 16.1 million units shipped in the fourth quarter, marking a 27.8% year-over-year increase and a 15.8% gain over the previous quarter. In addition, Sony Ericsson further closed the gap against LG, going from 1.6 million units last quarter to just 100,000 units this quarter. The company continued to see success with its lineup of Walkman branded phones, and its offerings toward the middle and entry-level tiers likewise improved.
(Unit shipments are in millions)

Top 5 Vendors, Worldwide Mobile Phone Shipments and Market Share






Market Share




Market Share

























LG Electronics







Sony Ericsson


















Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 26, 2006

(Unit shipments are in millions)

Top 5 Vendors 2005, Worldwide Mobile Phone Shipments and Market Share






Market Share




Market Share

























LG Electronics







Sony Ericsson


















Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 26, 2006

Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.