The Rise of the Gigabyte Phone

It might not seem obvious today, but we might soon be consuming nearly one gigabyte of data every month on our smartphones. That isn't much by wireline standards. But it is a pretty steep increase for smartphone users who have been consuming 200 megabytes a month or less.

Nor is it so much data compared to mobile broadband dongle usage, which might range about 2 Gbytes a month or so.

This is a similar growth pattern we saw on wired broadband networks; the faster the speeds, the more data we consumed.

The Rise of the Gigabyte Phone: Tech News

The Times U.K. Lost 4 Million Readers to Its Paywall

Whether a content provider decides to put up a "paywall" or not is a business decision any company can make. Whether that is a good thing or not remains to be seen.

According to comScore, the Times UK website saw its online readership decline by four million unique visitors a month worldwide to 2.4 million, or a 62 percent drop.

Pageviews fell off an even steeper cliff, plummeting 90 percent from an estimated 41 million in May, 2010 to four million in September, 2010.

People did what you’d expect them to do when faced with a paywall at a news site. They said, “No, thanks” and clicked away to another site.

That doesn't necessarily mean the decision is wrong. The Times might be willing to trade higher subscriber revenues for lower potential ad revenue. But it has been a wrenching decision so far.

The Times U.K. Lost 4 Million Readers to Its Paywall -- Seeking Alpha

Smartphone Data Will Grow 700% Over 5 Years

Smartphone users are generating two thirds of total mobile cellular traffic worldwide despite the fact that only 13 percent of mobile subscribers use smartphones, according to Informa Telecoms & Media.

And as these smartphone users spend more time on the Internet, the traffic that each one generates (Informa calls it "average traffic per user") will increase by 700 percent over the next five years.

Informa Telecoms & Media estimates that average traffic per smartphone currently averages 85 MBytes per month.

InformaTM :: Press Releases

Typical U.S. Mobile Ad Campaign is 2-3 Times Bigger than Similar European Campaigns

The United States is the second largest mobile advertising market in the world, behind Japan, Nick Lane, mobileSQUARED chief analyst says. In 2010, the US mobile advertising market will be worth $797.6 million, rising to $5.04 billion in 2015.

As with other forms of online advertising, most users exposed to ads do not actually "click" on mobile ads. (Click on image for a larger view of the data)

In and of itself, that is not a particular problem, as nearly all forms of advertising involve much "waste" (users are exposed who are not actually "prospects").

Because of the country’s vast population, the average mobile campaign spend is significantly larger than anything witnessed in Europe, for example. In the United States, the average mobile advertising campaign spend is between $75,000-100,000.

On average, creatives receive 10 percent to 15 percent of the budget which could total $15,000, for example.  In the UK for instance, the average creative budget would be approximately $5,000 maximum.

In the United States, this equates to a little under 8,000 mobile advertising campaigns, and an average of 21.8 new campaigns each day.

According to ZenithOptimedia, part of the Publicis Groupe, the US is set for a 2.4 percent increase in advertising spend to $151.5 billion in 2010, with global ad spend for 2010 expected to be worth $449.5 billion. For the U.S. advertising industry, mobile represents one percent of total spend.

Is "Times of London" Paywall a Success?

News Corp. says it has gotten 105,000 paying customers to the digital versions of "The Times" and "The Sunday Times of London" since it started charging for access to their Web sites in June 2010. Of course, the paper's website used to get three million unique viewers a month.

The company said “around half” of these were regular, active subscribers to the newspapers’ Web sites, iPad application or Amazon Kindle edition. The rest are occasional purchasers. Another 100,000 readers have activated free digital accounts that are included in print subscriptions to the papers, News Corp. said.

When it switched to a paid model, News Corp. estimated that the number of visitors to The Times and Sunday Times Web sites would drop by 90 percent.

In fact, traffic appears to have fallen by somewhat less. Nielsen, the media audience measurement agency, said last week that the average number of monthly unique visitors to the newspapers’ Web sites from Britain had fallen by 42 percent, to 1.78 million, in the third quarter, after the pay wall went up.

You have to draw your own conclusions about which model--paywall or not--makes more sense for a content provider. To the extent that News Corp. expected a 90-percent drop of visitors, the 42-percent drop is better than expected. But News Corp. also has an advantage: it publishes media such as the Wall Street Journal that arguably have high value and a readership for whom subscription prices are not generally an issue. That will not be case for most other print media.

Roughly 50,000 web-only paid subscription readers might be considered a success, or not, depending on how highly a media firm values reach and readership that create ad revenue, compared to direct subscription revenues that could come at the expense of ad potential.

Times of London Reports More Than 100,000 Paying Customers for Web Site - NYTimes.com

Tablet Market Share: iPad Dominates

Apple's iPad has jumpstarted the market and rapidly captured 95 percent global share during the third quarter of 2010.

However, Apple's huge lead will be shortlived, as a wave of Android models is set to flood the market in the fourth quarter, says Strategy Analytics analyst Neil Mawston.

There might once have been some doubt about whether tablet devices would succeed as a distinct product category, or as a segment of the notebook PC market, or something else. Perhaps the most important conclusion so far is that consumers like the devices, and that there does seem to be demand, whether as a substitute for existing products or as a brand new product category.

If that is the case, rival suppliers are not going to sit around and watch Apple grab 90 percent global share, as it has done in the MP3 player market, or significant share, as it has done in the smartphone market.

Global Tablet Vendor Market Share

Enterprises Dominate Mobile Ad Spending

More than a third of interactive marketers have implemented or plan to pilot mobile search and display advertising in the next year, according to Forrester Research analyst Melissa Parrish. And just about everyone believes such spending will grow.

For that reason, Forrester Research expects that interactive marketer spending on mobile search and display will grow at a 28 percent compound annual growth rate over the next five years.

Forrester expects that mobile Internet usage will increase at a compound annual rate of 12.7 percent, with 117 million people — 36 percent of the US population — searching and browsing while using their mobile devices by 2015, Parrish says.

Mobile marketing opportunities will grow as more people use the mobile Internet, of course. At the end of 2007, only 10 percent of U.S. adult subscribers used the mobile Internet. In 2010, mobile Internet usage is up to 27 percent of mobile subscribers, representing 64 million consumers in the
United States market.

Mobile Internet users also are learning to use their mobiles to make purchases. And they aren’t just looking for the nearest coffee house; they’re buying airline tickets, researching cars, and receiving coupons for products like coffee or detergent.

Forrester forecasts that mobile search and display dollars will grow to $2.8 billion by 2015, at a
28 percent CAGR.

But critical mass still is lacking. Though mobile Internet usage is increasing rapidly, marketers still can’t get enough eyeballs on content to justify spending big bucks in the space, says Parrish.

Currently, 78 percent of the US population access the Internet at least monthly while only 21 percent access the mobile Internet. By 2015, mobile Internet usage is expected to reach 43 percent of total desktop Internet usage, making the mobile medium a much more viable channel.

Inability to track performance against spend. More than half of interactive marketers feel they have no capability to measure the ROI or brand impact of their mobile marketing campaigns.

Interactive marketers prefer performance-based campaigns and are willing to pay more for these metrics. Vendors like Google and Bing offer cost-per-click pricing for click-to-call and click-to-get-directions type activities, but mobile display is still largely based on potential impressions, an unsatisfactory metric to most marketers.

Additionally, the holy grail of mobile is location-based marketing, but it’s still unclear how the connection between location-marketing efforts and in-store purchases will occur. Vendors must develop the tools for marketers to track performance and then help marketers understand the value and how to use these new tools.

·Spending by small and mid-sized business is not having too much impact, says Parrish. Forrester’s data suggests that fully 95 percent of mobile advertising dollars currently come from companies with more than $100 million in revenue.

Though the value of mobile advertising is highly relevant to small and mid-sized businesses, which benefit greatly from local and location-specific advertising, smaller budgets and less marketing
expertise will make the percentage of overall spend from SMBs consistently less than eight percent of total mobile spend.

Concerns over privacy, specifically location and carrier information, could provoke a backlash among consumers, leading to some caution as well. Consumers consider mobile phones personal devices to a greater extent than PCs and, for that reason, might continue to expect greater privacy in a mobile context, Parrish suggests.

Faster Upstream Cable Speeds Arriving In 2011

The first incarnation of the cable broadband DOCSIS 3.0 standard is theoretically capable of 160 Mbps downstream, and 100 Mbps upstream, on a shared basis. But upstream channel bonding has been hard to perfect, some would note.

For that reason, cable broadband tiers like 50 Mbps down and 5 Mbps upstream, or even in some cases 100 Mbps downstream and just 2 Mbps upstream. Such problems tend to get resolved over time, and new gear might be part of the solution.

Faster Upstream Cable Speeds Arriving In 2011

Will Streaming Displace More Radio Listening?

A new study of 12 to 24 year-old Americans reports Internet usage of two hours and fifty-two minutes per day, roughly triple this age group's reported usage from 2000 (59 minutes).

Radio continues to be the medium most often used for music discovery, with 51 percent of those 12 to 24 reporting that they frequently find out about new music by listening to the radio. 

Other significant sources include friends (46 percent), YouTube (31 percent) and social networking sites (16 percent). Some 20 percent of users 12 to 24 have listened to streaming radio provider Pandora in the last month, with 13 percent indicating usage in the past week. 

By comparison, six percent of those 12 to 24  indicate they have listened to online streams from terrestrial AM or FM stations in the past week.

It is difficult to predict how overall radio listening might change as these users grow older, since much U.S. radio consumption occurs while people are in their cars commuting to and from work. 

The American Youth Study 2010 - Radio's Future

Apple Looking at Mobile Payments?

Apple is among companies just about anybody might argue is in position to make mobile payments more mainstream. Apple already handles payments through iTunes, which boasts 160 million active credit card accounts. PayPal only has 90 million, by way of example.

Of course, such micropayments for online goods are not the same thing as use of a mobile for retail transactions in place of a credit or debit card. But online micropayments could create an important habit that prepares the way for use of an Apple mobile device for other types of transactions.

Apple’s Next Big Strategic Opportunity Could Be Mobile Payments

IBM Looks at The Social Workplace

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As you would expect, younger workers have different expectations about social networking in the workplace.

What Cable Will Do if Online Video Takes Off

Consumers should have the freedom to buy over-the-top video if content owners want to sell it. But one should not expect distributors to stand by and watch their current businesses be damaged as that happens. Neil Smit, president of Comcast's cable division, says that if over-the-top video starts to displace some amount of traditional cable TV viewing, Comcast is more than happy to change its product offerings to accommodate those demands.

"We feel very good about our capacity," says Smit.

Obviously, if a significant percentage of today's subscribers to multichannel video entertainment start to drop those services in favor of online offerings, providers are going to change. But some already are taking steps to protect their legacy businesses while adapting to online video.

To encourage consumers not to abandon cable TV, for example, Comcast has introduced Xfinity, which allows Comcast video subscribers to watch some of that content online. Should that effort succeed, there could be a more gradual shift of viewing and content packaging, as end user value simply is enhanced by the addition of new capabilities that encourage consumers to keep their subscriptions.

If the initiatives don't work, and customers start to abandon even the Xfinity style offers, though, cable and other distributors will confront declining revenues for the base business, which might cause distributors to weigh retail price increases, a shift of programming to emphasize networks that still offer a robust revenue model, price increases for the remaining customers, or renegotiated contracts with programming suppliers to account for the new economic realities.

Of course, the increased over-the-top consumption will drive higher usage of broadband access connections. Under those conditions, it is reasonable to expect that access providers will move towards more reliance on usage-based charging for use of broadband access services.

"People should not think of cable companies as media companies," said Craig Moffett, a senior analyst at Wall Street equities research firm Sanford C. Bernstein. "They are infrastructure companies."

Rather than raising prices on cable broadband across the board, it is logical to expect tiered pricing that reflects usage. That actually makes sense, if one assumes broadband access increasingly might be a differentiated product, offering different buckets of "best effort" usage, as well as services that might be optimized for real-time services. Beyond that, cable operators and telcos have other ways to repackage triple-play or quadruple-play services in ways that optimize value and pricing for multiple products.

Broadly stated, distributors can tweak traditional video subscription prices, terms and conditions in ways that compensate for higher broadband access consumption, and perhaps equally importantly, reward customers for using bandwidth "efficiently."

With Internet TV, cable wins even if it loses

Ethernet Will Dominate Mobile Backhaul by 2014

By 2014, more than half of North American mobile backhaul will support Long Term Evolution networks, says In-Stat.

“Nearly every major mobile operator is, or will shortly be, at capacity,” says Chris Kissel, In-State analyst.

Total expenditures for last mile backhaul (including line leasing, new equipment spending, and spectrum acquisitions) will reach nearly $117 billion by 2014, a 41 percent increase over 2009 expenditures of $83 billion.

Wireless last mile backhaul capacity in Western Europe will more than triple between 2010 and 2014, to nearly 60,000 Gbps. Also, by 2014, Ethernet will be the dominant carrier technology with 85 percent usage in base stations.

In-Stat - Press Releases

The NPD Group: Android Extends its Smartphone Market Share in the Third Quarter of 2010

The Android smartphone operating system significantly grew its lead in the U.S. consumer smartphone market in the third quarter of 2010, according to The NPD Group.

Android’s OS was installed in 44 percent of all smartphones purchased in the third quarter, an increase of 11 percentage points since the second quarter.

The Apple iOS held relatively steady versus last quarter, rising one percentage point to 23 percent. The RIM OS fell to third position, declining from 28 percent to 22 percent.

The NPD Group: Android Extends its Smartphone Market Share in the Third Quarter of 2010

T-Mobile Adds Tethering for Some Devices for $15 a Month

T-Mobile USA apparently is offering a new tethering that allows some of its smartphones to function as wireless modems for connecting devices such as laptops, tablets and netbooks to the Internet through the T-Mobile network. At the moment you will not find that information on the T-Mobile USA website, as nearly as I can determine.

Customers who buy the unlimited data access plan will be able to add the "Tethering and Wi-Fi Sharing" plan for an additional $14.99 per month.

Tethering is available for some devices offered by Verizon Wireless and Sprint Nextel as well, for about $30 a month. Some consumers won't see the logic here, the thought being that they've already bought unlimited mobile data access and should be able to share that bandwidth with a PC they also use.

Service providers of course make substantial money selling mobile data connections on a "per device" basis, so their resistance to the notion is probably predictable. Sooner or later, though, as more mobile devices become Internet-capable, pressure is bound to mount for the broadband equivalent of family plans. In a sense, a fixed broadband connection already operates that way: users can attach as many devices as they like to a single fixed broadband connection.

At some point, mobile providers will start offering those sorts of data plans as well, allowing a single account to attach multiple mobile devices and pay one price for shared access.

T-Mobile New Low-Cost Data Service Plans