Questions about Zer01, Buzzirk

Nancy Gohring , a reporter fror IDG News Service, has raised some uncomfortable and so far unanswered questions about Zer01, the new prepaid mobile service launched by United Technologies Group and sold by channel partners including Buzzirk. The service promises unlimited voice and data for $70 a month, with no contract.

But Gohring says "what little information is available about the services is vague, technically inconsistent, and doesn't match up with public records."

And that's the least of the issues. Anybody thinking about becoming a distributor probably should read this as part of their due diligence. It's a heck of a piece of reporting and research.

http://www.networkworld.com/news/2009/072009-zer01s-mobile-offer-may-be.html?page=1

Ad Market Recovery in 2010?

Perhaps we all are anticipating too much "normalcy" from the current recession and recovery. But PricewaterhouseCoopers (PwC) expects a 2010 recovery.

PwC says worldwide advertising spending will reach $421 billion 2009.

The bad news is that figure is down 12.1% from 2008, which saw $479 billion in spending.

Fortunately, PwC expects the online and mobile (which it treats as one category) and video game ad spaces to rebound in 2010 with five-year compound annual growth rates of 7.7% and 13.8%, respectively.

PwC expects all global media markets to see a rise in spending by 2012. Recovery will not be evenly spread around the world, however. Total ad spending in North America compounded annually will decrease by 1.6% from 2009 to 2013.

Online, mobile and video game advertising will see 6.4% and 13% compound annual growth rates, respectively, over the five-year period.

Online and mobile advertising spending, down in 2009, will rebound in 2010. North America will see overall advertising spending rise in 2011.

Ninety-four percent of North American advertising spending will come from the United States.

No Inflection Point for Interactive Media, Yet

Nothing is going to replace search advertising as the top interactive category, just as nothing appears able to dislodge display advertising, between now and 2014 or so.

And though interactive advertising is growing, it will not displace offline alternatives, either.

By 2014, all interactive channels together will account for about 21 percent of total ad spend.

That is not to say greater changes are unlikely. One of the enduring lessons of "disruptive" change is that there is a sometimes long gestation period before an inflection point is hit. Then the change goes non-linear and vast changes can occur very quickly.

Nobody knows yet if that is what lies ahead for advertising. But it bears watching, as 2009 seems to have marked something of a watershed for print media, for example.

U.S. Internet Growth 3% to 2013

The total number of people online will grow by over 45 percent to 2.2 billion users — with much of that growth occurring in Asia — over the next five years, according to Forrester Research.

Asia remains the biggest global Internet growth engine: 43 percent of the world's online population will reside in Asia by 2013, with 17 percent of the global online population in China.

Growth rates in the US, Western Europe, and the major industrialized nations in Asia Pacific such as Australia, Japan, and South Korea will slow to between one percent and three percent.

That is a significant finding, as it suggests most people who want to use the Internet already do so.

Online penetration in the United States will rise from 73 percent to 82 percent over the next five years, representing about a three percent annual growth rate.

By 2013, U.S. online penetration will be on par with the most highly penetrated markets of Europe and Asia, such as the Netherlands, the UK, Japan, and South Korea.

By about 2013, if not before, there also will not be any material difference between people using the Internet and people using broadband, other analysts project. That should lead policymakers to take a harder look at the costs and benefits of any programs designed to "increase" use of broadband access.

The United States is about at the point where non-use of broadband is directly linked to non-use of broadband.

http://www.forrester.com/ER/Press/Release/0,1769,1296,00.html

Mobile Marketing Second Only to Web Among Top Ad Agency Execs

Though mobile marketing spending lags far behind combined Web advertising, mobile marketing has become quite interesting to many advertising excutives recently.

Where a third of executives say Web channels are most popular, mobile campaigns are second, at 15 percent.

That is interesting as mobile campaign spending is perhaps one percent the size of search advertising, for example.

Traditional methods, including TV, print and direct mail, are in single digits.

To the extent that spending ultimately follows interest, mobile campaigns should skyrocket, despite the currently limited amount of spending in the category.

Search Still Will Lead 2014 Interactive Marketing Channels

Search will remain the single largest interactive marketing channel in 2014, and online display will keep its second-place status among marketers.

But social media marketing will show the highest growth rate, passing email marketing.

Mobile marketing also will grow by an order of magnitude.

What Are New Satellite Phone Operators Up To?

New satellite communications operators TerreStar Networks and SkyTerra Communications plan to offer dual-mode (satellite and cellular) services in North America to dual-mode smart phones aimed at a niche market of public safety, law enforcement and government users.

Based on past experience, one might wonder whether that market opportunity is big enough to support much of a business for both providers.

ABI Research, for example, suggests three million satellite-capable LTE smartphones will be shipped in North America in 2012. But there might be something more going on here.

The Federal Communications Commission allows satellite operators to offer simultaneous satellite and cellular services over their licensed satellite spectrum. That suggests a possible play as a fourth-generation access play in rural markets where it is very expensive to supply such capability.

“We believe that the greenfield satellite companies’ plan is to forge short-term roaming partnerships with AT&T and other cellular operators and then, when LTE services are deployed, position themselves to be acquired by these major players, including their prized spectrum," says ABI Research practice director Kevin Burden.

Danger for Service Providers If Confidence Doesn't Climb

Led by a dramatic decline in the expectations of U.S. consumers for the near future of the U.S. economy, the most recent results of the Royal Bank of Canada Consumer Attitudes and Spending by Household Index show a marked downward shift for July 2009, continuing the slide begun last month.

"Consumer confidence is resetting to the levels seen earlier this year and is likely to remain there until there is concrete evidence of a turnaround, "says RBC Capital Markets Managing Director Larry Miller.

Should those trends continue, service providers will have to worry anew that relative stability in communications and entertainment servcies markets will take a hit more pronounced than what they have seen to date.

So far, there seems to be minor damage to broadband access revenues and a growing trend to substitute prepaid for postpaid mobility. Some surveys suggest only a few percent of broadband subscribers say they actually have cut off service. A recent Strategy Analytics survey suggests 10 percent would consider reducing broadband if they had to cut somewhere.

As many as 19 percent say they would consider abandoning mobile service, though there is little if any evidence users actually have done so, at that level. Most other surveys show little if any actual termination behavior.

About 19 percent of respondents to the Strategy Analytics poll say they would consider dropping their multi-channel entertainment service, but again, actual behavior does not support moves of that scale.

Still, a prolonged "scrape along the bottom would increase pressure on consumers to move more aggressively. And the RBC survey suggests that might just be the case.

After four consecutive months of rising hopes that the economy would turn around in the next six months, the longest such increase in expectations since the launch of the index in 2002, many Americans are coming to grips with the idea that it may still be some time before things get better, Miller says.

Apple iPhone, BlackBerry are Most-Profitable Mobile Devices

Just two mobile devices account for the overwhelming share of global handset profits, says Deutsche Bank analyst Brian Modoff. Between them, the two devices account for 35 percent of global mobile operating profits despite representing just three percent of global market share.

In 2009, the two devices will move up to five percent market share but claim 58 percent of

total operating profits.

Smart phones hold only about 13 percent of total cellphone sales globally, but are growing, despite a drop in the broader cellphone market in the first quarter.

The iPhone, which is exclusive to AT&T, draws the fattest subsidy at about $400 a phone, Modoff said. BlackBerries draw subsidies averaging $200 from U.S. operators. Basic cell phones get a $100 subsidy. Manufacturers of basic phones make next to nothing, unless they have enormous scale.

Nokia, the industry leader, manufactured 46 percent of the units sold last year but earned 55 percent of the profits, Modoff estimates.

5% of U.S. Universities, Colleges Have Deployed Unified Communications Campus-Wide

About five percent of U.S. university and college campuses already have deployed unified communications campus-wide, according to a recent survey by the Association for information Communications Technology Professionals in Higher Education. Another four percent of respondents say they have extensive deployments, but to a limited number of people.

About 44 percent report having limited deployments or trials underway. About 26 percent are in planning stages. About 20 percent have no UC projects or planning underway.

The survey featured responses from 103 institutions.

24% of U.S. Mobile Users Possibly Are No Longer Voice Centric

About 13 percent of U.S. mobile phone owners say they "never" make calls on their devices. Altogether, about 24 percent make calls once a week or less, according to Lightspeed Research. That's a shocking statistic for devices known as "mobile phones."

One might draw several conclusions from the results. It is possible that, for many users, the mobile is helpful, but not something that adds value on a daily basis. The other likely conclusion to be drawn is that text communications are, for many users, a preferred or reasonable substitute for voice, as email has displaced a huge amount of voice communications.

If so, the findings indicate the clear emergence of usage patterns centered around texting or mobile Internet activities rather than voice, and the importance for mobile service providers of migrating revenue models to primary reliance on data-related services and applications.

In many cases, it would seem to make sense to lead with data plans and features, and then add on voice only afterwards. It also would seem to make sense to plans and devices specifically optimized for text and Web applications.

That would be a reversal of historic practice, where voice plans lead and text plans or data plans are an add on.

But the practice would not be without precedent. Most BlackBerry users likely are more interested in mobile email than mobile voice. They want the voice feature, as many users buy primarily for voice, but want the texting feature. Most iPhone users likely value mobile Web access as much as voice or text messaging.

The point is that mobility has become a multi-product business, with lots of different ways to create devices and service plans that appeal to different user populations.

Will Skype and Google Voice Dominate Mobile VoIP?

Skype, the global leader in PC-based VoIP, has been preparing for mobile-based VoIP as well, but Google Voice might wind up being the market leader in mobile VoIP, says Jeffrey Lindsay, Sanford A. Bernstein analyst.

"It's probably the biggest current threat to Skype," says Lindsay. Ultimately, Google might grab as much as 60 percent market share in the mobile VoIP space, he predicts.

40% U.S. Mobile Broadband Adoption

To the extent that U.S. consumers are not using mobile broadband, availability is not the problem.

Well over 90 percent of locations now are 3G enabled.

ComScore says the United States caught up with Western Europe in the adoption of 3G in June 2008, with 28.4 percent of American mobile subscribers having 3G devices versus 28.3 percent in the largest countries in Europe.

U.S. 3G penetration went past 40 percent in the first quarter of 2009, says wireless data analyst Chetan Sharma.

Enterprise C Suites Now are "Digital"

A generational shift is occurring in U.S. enterprise "C" title ranks, but one trend already is clear: the Internet has become the top information resource. Some 81 percent of respondents 50 or younger are on the Internet daily while 62 percent of executives older than that did so.

Also, most C-title executives at firms making more than $1 billion in annual revenue have shifted their information-gthering strategies away from traditional media and to Internet-based media.

When consuming "traditional media" at work, 70 percent of respondents say they get that information online. When consuming "traditional broadcast media" at work, 69 percent use the Internet.

C-suite executives do their own searches. That is a sharp break from the way most such executives probably worked decades ago, when "middle managers" gathered information and passed it up to the C suites. These days, the C suite knows it can get information directly, and does so.

Also, video and social communities are growing in importance, the survey reveals. About 33 percent of 50-and-under executives view work-related videos "daily," while 31 percent use a Web-enabled mobile device to search for information related to business.

The mean age of all executives taking this survey was 46.7 years. But there remains one glaring exception to the trend: only one percent of those over the age of 50 provide daily contributions to a work-related blog. Another four percent in this age group say they contribute several times a week, the Forbes Insights study found.

In contrast, 35 percent of executives ages 40 to 49 say they maintain a work-related blog daily. That figure increases to 56 percent of the executives under the age of 40.

That probably matches what you would have guessed: younger and "middle-aged" people have gotten comfortable with the new technologies while older people tend to resist. That same pattern was found for computer use, Internet use or email in the ealier days as well.

Overall, about three percent of surveyed executives over 50 participate in Twitter or another microblog. In contrast, 34 percent of the executives ages 40 to 49 participate. Among users under the age of 40, 56 percent of the executives under 40 participate.

The top three research topics that C-level executives seek are competitor analysis (53 percent), customer trends (41 percent), and corporate developments (39 percent).

Of those executives in sales and marketing, 76 percent say they seek customer trends. Of those executives in finance, 63 percent said they seek competitor analysis. Of those executives in IT, 59 percent seek technology trends.

The study, "The Rise of the Digital C-Suite," is based on a survey of 354 executives at U.S. companies with annual sales in excess of $1 billion. It also included one-on-interviews. Nearly half held C-level titles, such as CEO, CMO, and CIO; the others held senior-level titles, such as EVP, VP, and director. A total of 12 percent identified themselves as working in sales and marketing.

http://www.forbes.com/forbesinsights/digital_csuite/index.html

U.S. Will Leap Over Europe in Mobile Advertising Within 2 Years

Alex Moukas, CEO of Velti, the top European mobile ad company, said he fully expects the U.S. to leap ahead of Europe in mobile advertising within two years. That would be a switch, as U.S. practitioners have lagged their European counterparts up to this point.

So far this year, mobile advertising is the second most-popular marketing channel, following the Web.

Campaigns sending traffic to site increased 10.46 percent in June, says Millenial Media. The study also found that the average number of monthly page views per user was 99 page views.