Do People Expect Too Much from Nexus One?

The Nexus One launch has not gone flawlessly, that is clear enough. Users report their devices are randomly switching between the T-Mobile USA 3G and the EDGE network. Early Apple iPhone devices had the same problem, some niote.

Others are disappointed Google wasn't "more disruptive" of the retail pricing regime, or the lack of multi-touch support for the screen (an input capability using input from two fingers, used to enlarge a section of the screen image by pinching or sweeping the touch points apart or together.

Despite the "earned media buzz," Nexus One's first-week sales appear to fall far short of sales of the Apple iPhone, for example. Flurry estimates the iPhone sold more than a million units in three days when first introduced, and 1.6 million units in its first full week,  while the Nexus One might have sold only 20,000 units.

The Verizon Droid sold 250,000 units the first week it was available, while the HTC "myTouch" sold 60,000 units in its first week of availability.

To be sure, Nexus One, myTouch and Droid all are available on just a single network in a single coutnry. The iPhone initially was available in eight countries and eight carriers.

That's no coincidence. After the iPhone hype, it is proving more difficult for each competing device to illustrate how it is similarly "revolutionary." There's just no way to get around the fact that the iPhone was revolutionary, and so far, the other devices, though unique in many wasy, simply are following in the general mode.

Apple might have seized such a mindshare lead that there simply is no way any other device can "challenge" iPhone. That isn't to say many other touchscreen smartphones will fail to be built and marketed, but simply that the "buzz" hasn't been matched by the same sort of enthusiastic consumer resposne as the iPhone received, simply because no subsequent device, so far, as proven to be such an advance over the earlier generation of devices.

So far, all the other models are "like the iPhone." So far, that hasn't been enough. That's one reason why at least a few of us might think the challenge for all the other devices is to create a unique identity in the market, not to "be the next iPhone." That probably cannot be done at this point.

What device promoters can do is what Research in Motion achieved with th BlackBerry. RIM created an email-optimized device that syncs seamlessly with key Microsoft applications such as "Outlook," in additiion to handling email, capturing a specific segment of the mobile device market and end user base (business users).

But there's more to it than just that. The mobile is a mass market retail business, where marketing, distribution and customer support all matter. As much earned media attention as Nexus One has gotten, it is nothing like what Verizon was apparently able to do with a huge marketing and advertising blitz for its "Droid," or what Apple was able to do, not just with its own earned media campaign, but with a follow-on marketing campaign and network of highly-trafficked retail locations.

The Nexus One is being sold through a Web site, with only earned media support. Verizon launched a $100 million on marketing blitz, including the key Christmas selling season. Suffice it to say many many millions more people know the name "Droid" than "Nexus One."

T-Mobile, whose currernt role in the Nexus One ecosysem is largely indirect, does not appear to have supported the Nexus One launch with its own marketing funds, though it did for the myTouch.

Also, with a few new Android devices now competing for attention, there may be some fragmentation of the message. There's just one iPhone; there are several Android smartphones.

Also, Google might not have priced the device at levels that would drive more volume, though it also is battling the known resistance most end users have to paying $500 or more for an "unlocked" smartphone that only works on one U.S. network (with full access to all the frequency bands) anyway. What does "unlocked" mean to most consumers when the device can only be used on one network?

Beyond that, there is the simple fact that device hype likely outstrips ability to deliver, at this point. Everybody is looking for the first true "iPhone competitor." That might be asking too much.

http://blog.flurry.com/bid/29658/Flurry-Special-Report-Google-Nexus-One-Launch-Week-Sales

Next Broadband Round Will Be Heavy on Middle Mile Projects

The National Telecommunications & Information Association and the Department of Agriculture's Rural Utilities Service have announced the second round of bidding, as well as a specialized third round specifically for satellite projects. These rounds will dispense about $4.8 billion in grants and loans  to expand broadband access and adoption.                    

NTIA’s program allocates $2.6 billion in this funding round of which approximately $2.35 billion will be made available for infrastructure projects. In this round, NTIA is adopting a “comprehensive communities” approach as its top priority in awarding infrastructure grants, focusing on middle mile broadband projects that connect key community anchor institutions – such as libraries, hospitals, community colleges, universities, and public safety institutions.

That is a significant development. NTIA projects, which have been seen as aimed more at metro areas than the Rural Utilities Service program, which exclusively aims to support rural projects, seems to have concluded that actual upgraded access projects are less valuable than middle-mile trunking services.

In other words, much of the spending in both the first and second rounds will go not to any new broadband access facilities, but to intermediate trunking networks that later can be used to provide actual broadband access.

The other interesting change is the new emphasis on a "third round" that specifically will accept satellite projects for the most-isolated locations.

In addition, NTIA plans to award at least $150 million of the funding for Public Computer Center projects, which will expand access to broadband service and enhance broadband capacity at public libraries, community colleges, and other institutions that service the general public.

NTIA also plans to award at least $100 million for Sustainable Broadband Adoption projects, which include projects to provide broadband education, training, and equipment, particularly to vulnerable population groups where broadband technology has traditionally been underutilized.

The separate Rural Utilities Service program will allocate $2.2 billion in this funding round. A second funding window will open later which will provide grants for satellite service for premises that remain unserved after all other Recovery Act broadband funding is awarded.

That round also will award grants for regional economic development projects using broadband, as well as make grants to rural libraries.

RUS will focus its round on last mile projects, which are anticipated to receive the vast majority of funding.

RUS will also fund middle mile projects involving current RUS program participants. RUS has decided to use a 75 percent grant, /25 percent loan model for all projects.

The application window opens Feb. 16 and closes March 15, 2010.

AT&T Announces New Pricing for Unlimited Mobile Plans

AT&T has announced new unlimited plans across all of its devices. The new plans, available beginning Jan. 18, 2010, feature an unlimited voice plan for $70 a month. "Family Talk" customers (two lines) will be available for $120  a month.

Texting plans remain unchanged at $20 for unlimited plans for individuals and $30 for Family Talk plans.

"Quick Messaging Device" (feature phone) customers can buy unlimited talk plans for $70 a month and Family Talk customers can buy unlimited talk plans for $120 per month (two lines).

These plans also require a minimum of $20 per month for individual plans and $30 per month for Family Talk plans for texting or Web browsing packages for new and upgrading customers.

All smartphone customers, including iPhone customers, may now buy unlimited voice and data for $100 a month.

For smartphone customers on Family Talk plans (first two smartphones), unlimited voice and data is now available for $180 a month. Texting plans remain unchanged at $20 for unlimited plans for individuals, $30 for Family Talk Plans.

Beginning Jan. 18, 2010, existing AT&T customers can change to any of the new plans without penalty or contract extension

Is Nexus One A Particular Threat to Service Providers?

Does Google's Nexus One launch mean anything in particular for mobile service providers? That might be a matter of some debate at the moment. Some observers were expecting something "more disruptive." Perhaps an ad-supported voice service; maybe a completely unlocked device able to work on any carrier's network; maybe a business model that clearly delineates a new role for the handset provider.

That didn't happen. Some observers think the bigger innovation is the way Google is selling from a
Web site. Some might see too much difference there, either. Selling from a Web site isn't too unusual these days, and Apple's retail stores and existing carrier Web sites.already provide models for handset distribution aside from the branded mobile carrier stores.

To be sure, an "unlocked handset" strategy always will be tough in the U.S. market until such time as most carriers are using one single air interface and handsets are equipped with enough frequency agility to adapt to whatever network si providing access. An unlocked handset today means a choice of no more than one or two major carriers (one WiMAX, two CDMA and two GSM).

The other angle is that U.S. consumers have not yet shown any desire to pay full retail price for a handset, when they can get a subsidized device at the price of a two-year contract. People might gripe about the existence of contracts, but they have choices. They can pay full retail for their devices and avoid the contracts. Not many make that choice.

The more interesting observation is about what various Android devices really are. A BlackBerry is an email device; an iPhone is a Web surfing device. Many feature phones are texting devices. Some models are social networking devices, or at least highly optimized for that purpose. Some devices are optimized for navigation.

Could a new niche be developing for a "search" device? Is "finding stuff" a sufficiently robust need that at least one of the Android devices becomes recognized as the single best device for finding things? That seems to me the most interesting question about what the Nexus One or broader family of Android devices might raise.

Matters always can change, but at least for the moment, it does not appear the Nexus One is especially disruptive of the existing mobile business model or standard practices, either.

http://connectedplanetonline.com/mobile-apps/news/googles-nexus-effects-0115/?imw=Y

Real Estate Advertising Trends: Newspapers Will Gain, Online Will Not

It might be true, at a strategic level, that newspapers are a declining medium while the Web is a growing medium. At a tactical level, that does not automatically mean ad spending always, inexorably is shifting from print to online.

The newspaper business, for example, might see a 16 percent increase in real estate advertising in 2010 while online real estate advertising actuall drops about four percent, more than it declined in 2009.

Ironically, media segments that have generally been perceived as weak, including newspapers and broadcasting, are set to do better. Conversely, those that have been otherwise least affected by the economic downturn, cable and online, are poised to do worse.

Real estate spending on broadcast TV will surge 39 percent in 2010 after declining 44 percent last year. Cable TV will drop 16 percent this year. In 2009, cable TV real estate ad revenue fell just two percent.

Part of the reason for the disparity among the major media segments is that local real estate advertisers have been increasing their spending, while national, out-of-market realtors are decreasing their spend.

The other angle is that so much money has shifted to online formats that there isn't a much room to grow, when other alternatives are more affordable.

About three of every five online ad dollars are currently spent by real estate agents and brokers. Not 60 percent of real estate advertising; 60 percent of all online advertising.

Another reason for the decline in online spending by realtors and brokers also is the result of a tactical shift. More money is being spent on less-costly paid search programs, less on display ads.

Sometimes the conventional wisdom can be wrong. It appears it certainly will be wrong about real estate ad spending in 2010. Newspapers and broadcasting will get more growth; cable and online less.

New Verizon Wireless Pricing Shows Growth Strategy

Verizon Wireless today announced that it is introducing new data, prepaid, and voice plans on January 18, 2010. The single biggest change is a new mandatory data plan requirement for all 3G multimedia devices. For "feature" phones, that will mean a $10 a month charge for use of up to 15 Mbytes. 

Smartphone packages remain at $30 a month. 

But Verizon also introduced new unlimited postpaid plans for voice ($70 a month) and unlimited talk and text for $90 a month. Prepaid unlimited plans sell for $75 a month for voice, and $95 a month for unlimited voice and texting.

"Nationwide Unlimited Talk Family SharePlans" will be $120 a month while "Nationwide Unlimited Talk & Text Family SharePlans" will cost $150 a month.

All Family SharePlan pricing includes the first two lines of service. The new plans do not apply to existing customers, though any current customer can change to any of the new plans without a penalty or contract extension.

So heree's the strategy background. Verizon wants to build the biggest-possible data customer base before it launches its new fourth-generation Long Term Evolution network. That's an essential part of getting a financial return on the 4G investment, and also reflects the growing importance of smartphones as a percentage of total devices sold and the importance of data service revenues.

Verizon also wants to protect its base of "high-value" customers by simplifying pricing plans, providing more value and encouraging uptake of higher-end plans. Verizon expects to see higher data penetration, higher average revenue per user and less churn, with lower-end customers moving up to unlimited plans in greater numbers. 

Verizon believes the moves to unlimited plans also will reduce operatinal costs. Since a large percentage of customer service costs are driven by consumers concerned about their usage and overages, unlimited plans will blunt the volume and cost of handling such requests. 

Strategically, the data plan moves also are a reflection of the vanishing voice revenues business, and the absolute centrality of data revenues as the mainstay of Verizon Wireless revenue. 

Are Emerging Market Consumers Different?

A new study by Accenture suggests that, in a globalized world, consumer demand for a wide range of technology products is remarkably similar, at least among those emerging market buyers with disposable income.

In fact, consumers in emerging markets are twice as likely as those in developed markets to purchase and use consumer technology in the next year and are more willing to pay a premium for “environmentally friendly” consumer electronics products, says Accenture.

The Accenture survey of 16,000 consumers in four “mature” countries (the United States, Germany, France and Japan) and four “emerging” countries (China, India, Malaysia, and Singapore) suggests current and future spending and usage patterns for 19 different consumer technologies, including smartphones, high-definition TVs and computers, is remarkably similar in developed and emerging markets, with one exception: developing market consumers are more likely to buy smartphones, PCs and other devices over the next year.

Compared with consumers in mature countries, consumers in emerging countries are more than two and a half times as likely to buy a smartphone during the next year (52 percent  compared to 20 percent).

Emerging market consumers also are more than twice as likely to have bought a smartphone in the past year (67 percent compared to 32 percent).

Twice as many emerging market consumers are likely to have bought a computer in the past year (40 percent vs. 20 percent). They also are more than twice as likely to have at least occasionally played video games on handheld devices (58 percent compared to 28 percent).

Do they use social networking? Yes, at about a 69 percent rate, compared to 38 percent in the developed markets.

Emerging market consumers also are significantly more likely to pay a premium for consumer products marketed as being environmentally friendly (84 percent compared to  50 percent).

“One of the reasons for this emerging-country growth is the rapid expansion of the middle class with its substantial disposable income,” says Jean-Laurent Poitou, managing director of Accenture’s Electronics & High Tech industry group.

“Furthermore, our research shows that the increased demand for smart connected wireless devices such as smartphones is being driven by social-networking applications.

“Emerging-country consumers use mobile devices more than they do computers to access Internet-enabled applications and services, and consumers in mature countries are also headed in that direction.”

Are Social Networks More Like Email or Google?

Social networks already have become a lead application for mobile devices. A new study by Accenture finds that “increased demand for smart connected wireless devices such as smartphones is being driven by social-networking applications," in both developed and developing economies.

But you likely still can get a good argument about whether social networking is a "feature" or a business model. Email for the most part remains a "feature." Early in the development of the dial-up business, email was so important it actually drove adoption of Internet access. These days, with the advent of Web mail and business and organization email, it simply is a feature, but not a direct revenue model (except for providers of email hardware and software).

Google and other Web mail providers have started building an advertising revenue stream, but it largely is ancillary.

The same sort of argument can be made about social networking applications. Skeptics point to Twitter, Facebook, MySpace,  Bebo and Geocities, which either are struggling to create a business model, or have been shut down.

Optimists might say that although many attempts will fail, a normal situation for the Internet applications business, one or two of the players will discover a sustainable business model and possibly even achieve "Google" style success.

Most believe advertising will be significant, and skeptics say social networks are not conducive to most types of display advertising, for example.

That would explain why no social networking company has yet emerged as a public company: there is not yet a viable business model.

It is possible that some new model will be discovered in time. Twitter, for example, is nearly at breakeven as a result of a search results deals with Google and Bing. That's not a complete answer, but it helps.

It is not yet possible to determine the final outcome. It is conceivable that some social networks will drive so much engagement and value that some will be acquired by larger firms able to leverage the networks to deepen and extend their other existing business models. In that scenario social networking winds up more like email than Google.

Right now, it likely is a coin toss which model is most believed.

Brands ARE Media These Days

Brands are media companies these days, many marketers would argue. That's a huge shift in thinking from an older world where third parties did "media," and then brands simply advertised in those media.

These days, more and more companies are becoming publishers or content providers in their own right, bypassing "media" outlets.

"The fundamentals of media business are toppling as their 20th century foundations crumble," says Mark Mulligan, Forrester Research VP. "Consumers are falling out of love with paying for media and striking up illicit affairs with free content, not just because it is free, but also because it is on their terms."

This is great news for consumers but terrible news for media businesses that have spent years building revenues upon near-monopolistic control of supply of content, says Mulligan.

"Why all this matters to brands is because the tectonic shifts in media value chains are creating exciting new opportunities for non-media companies to become media companies themselves," Mulligan says.

Just as Apple transformed from hardware company to media services company with the launch of the iTunes Store, so too are brands such as Procter and Gamble with BeingGirl.com, Tommy Hilfiger with Tommy TV and Audi with its UK TV channel.

Why are brands such as these choosing to become media companies? Because they can. Blogs, Web publishing, smartphones, tablets, e-book readers, netbooks and other tools providing access to the Internet allow firms to create media sites as easily as old-line publishers can.

It takes a Web site, but every firm has one these days. It takes an ability to create or aggregate content, but that's easier these days as well, with real simple syndication and other news feeds. But brands also are simply creating their own writing staffs as well.

And the logic of doing so likely makes more sense as well, as audiences fragment. If specialized audiences are what you want to reach, Web publishing makes lots of sense. Instead of creating and placing advertisements that might or might not hit the target audience, brands can create their own content sites, producing their own "media" and then placing messages and interacting in other ways with their intended audiences.

In the new world, the dividing line between "media" and "brand" is more fuzzy.

Skype "Dial Tone" No Threat to Mobiles, Fixed Lines

About 21.5 million Skype users were logged in simultaneously on January 11, 2010, which likely is a record.

Some refer to this as "Skype dial tone."

To give you some idea of how far Skype would have to go to be a credible alternative to other forms of consumer voice, consider that in March 2009 there were 4.1 billion mobile subscriptions in service, according to the International Telecommunications Uniion. The ITU also estimates there are about 1.3 trillion fixed lines in service globally.

So make that 5.4 billion devices that have "dial tone," compared to a third of a percent of Skype accounts, at peak. To the extent communications really does depend on network effects, Skype has quite some ways to go.

Business Prepaid Wireless Heats Up

Business customers have not been big users of prepaid mobile services. But that could be changing. Compass Intelligence expects growth of about 10 percent over each of the next three years.

Estimated to represent approximately five million of the 57 million prepaid subscribers by the end of 2010, prepaid business users make up a small part of the prepaid market at the moment, and is a recent trend.

About 60 percent of of decision-makers offering employees prepaid devices say they have done so far one year or more,” says Kneko Burney, Chief Strategist of Compass Intelligence.

One would be tempted to suggest that a new frugality caused by the recession is the reason business prepaid is picking up, and that likely is part of the explanation. But one might also suggest that more businesses are trying to control fast-growing mobile expenses. Shifting to prepaid is one way to do so.

“The real finding here is that the 'corporate liable' segment of the overall wireless market (representing roughly 14 percent of all wireless subscribers) is expected to change as a result this increase in business prepaid," ays Burney. Contracts will need to become more flexible and carriers will be wise to find a way to accommodate business needs for “prepaid-like” options in contracts, particularly for mobile broadband and possibly even push-to-talk.”

Decision-makers are most likely to provide prepaid devices to “sales people,” executives, business owners, IT or telecom staffs.

For many, the primary reason that prepaid is attractive is because it is “less of a hassle compared to a monthly contract.”

Prepaid mobile broadband also is getting traction. Many respondents to the Compass Intelligence survey say they will be buying nearly as many prepaid mobile broadband devices as prepaid mobile phones in 2010.

Despite the Noise, Broadband Subscribers are Highly Satisfied

Judging by some commentary one hears on the Internet and blogosphere, customers are very unhappy with their broadband access services.

After all, isn't the United States woefully behind other nations in speeds?

A new study by Parks Associates shows the opposite. The overwhelming percentage of U.S. broadband customers, across every single platform are "highly satisfied."

There is, to be sure, a small percentage of users on every type of access network who say they are "highly dissatisfied" with their service. The shock might be how few actually are really unhappy.

Granted, continual improvement is a good thing. But the Parks Associates study suggests providers need to keep improving a service that provides overwhelming "high" satisfaction, rather than scrambling to update services that basically are seen as somehow inadequate.

Rural-Urban Broadband Customers Not so Different

Are rural broadband customers all that different from suburban or urban customers? Not so much, a new analysis by Parks Associations suggests.

The percentages of rural broadband households who are very satisfied and very dissatisfied with their broadband services are within the margin of error for all U.S. broadband households, Parks Asociates notes. In other words, they are no more inclined to be pleased or upset with their service and service provider.

Rural broadband consumers desire value-added services on par with all U.S. broadband households, with premium technical support services and online backup as the top-two desired value-added services.

And the overwhelming percentage of U.S. broadband consumers are highly satisfied with their access services, despite a small percentage that say they are highly dissatisfied.

Overall, the rural status of a household has little impact on level of satisfaction with its broadband service. The type of access service does seem to have some bearing on high and low satisfaction.

Households with fiber broadband services report high satisfaction ratings in larger numbers, and households receiving satellite and wireless broadband services exhibit lower satisfaction ratings. But there is an important caveat. Customers who buy bundles of service are happier than customers who do not buy bundles. So the key variable seems to be the ability to buy a bundle, more than the type fo access.

The business implications would seem to be clear enough. Bundles create higher satisfaction and higher satisfaction reduces churn.  A highly satisfied broadband subscriber is 46 percent less likely to churn from a current provider, whereas a highly dissatisfied customer is 384 percent more likely to leave a current broadband provider.

A subscriber to a triple play of access services (broadband, television, and home telephone)
 is 15 percent more likely to be a highly satisfied broadband customer.

More than 70 percent of cable broadband households subscribe to a bundle, about 25 percent of which buy a triple play. But most, about 66 percent, buy a dual-play bundle of video and broadband access.

DSL providers have 58 percent bundle penetration, with 25 percent of customers opting for a dual-play package of  broadband and video while 17 percent buy a triple-play bundle.

Fiber broadband providers have 78 percent bundle penetration, with 64 percent buying a dual-play broadband and video bundle and 49 percent buying a triple-play package.

Rural broadband customers are 10 percent to 20 percent less likely than broadband subscribers on a national level to subscribe to the most-common broadband bundles. One would therefore expect lower satisfaction in rural areas, since satisfaction and bundles seem to be directly related.

To Solve the "Broadband Access" Problem, You Have to Know What Causes It

Solving the problem "people who don't use broadband access at home" hinges on the actual barrier to usage. Some people don't use the Internet; some don't use computers; some are unwillingness to pay current subscription prices while others would buy but literally have no physical access at their remote locations.

All too often the problem is viewed uni-dimensionally, as though lack of supply is the key problem. But there is increasingly acknowledgement that there are other barriers to surmount, such as users who would like to use the Internet, and could afford it, but who do not own PCs, and are unlikely to buy one.

The U.K. government believes "lack of PCs" is among the barriers, and now plans to give away
270,000 low-income families with free laptops and broadband access, as part of its £300 million broadband stimulation program.

Since the fall of 2008 U.K. officials have been training "well off" families about the value of broadband for users who can afford to buy broadband, but do not see the value.

The new inititiative aims to address a different problem: people who would use the Internet and see its value, but cannot afford the PC or recurring cost of a connection.

The program is to be included in the Children, Schools and Families Bill for 2009/2010, which is yet to be debated in the House of Commons. The legislation aims to ensure that all families with children aged between seven and 14 will be able to apply for a grant to buy a computer and broadband connection.

Loosely-Coupled Nexus One Mobile Ecosystem Creates Problems

Some problems are predictable; some aren't. It was predictable that as owners of unlocked Nexus One devices began to experience problems, they'd have to run the gauntlet of fingerpointing one often sees when ecosystems are loosely coupled.

Reporting connectivity issues, some users have been told by T-Mobile USA that it is "an HTC problem," while some users communicating with HTC have been told "it's a T-Mobile problem."

Other problems are echoes of what has been seen in the recent and immediate past, namely complaints about the quality of the 3G networks. Some users complain that 3G coverage is weak or non-existent. Some report that their devices are switching from 3G to 2G networks. Again, it might be a handset issue, but switching from a 3G to a 2G network is what happens when a 3G network gets congested.

In other cases, the error modes suggest there is a software or hardware problem. At least some users say an active HTC device, when sitting right next to a Nexus One, gets great signal while the Nexus One gets a weak signal. It's hard to blame that particular circumstance on network issues.

All that is known right now is that there is some problem using the Nexus One on the T-Mobile network.

The loosely-coupled ecosystem (open devices sold independently of service) is bound to create customer service issues, irrespective of the merits of either a network or handset.