Tuesday, January 11, 2011
Verizon to Sell 3G Apple IPad
Verizon Wireless will sell a version of Apple Inc.’s iPad tablet computer that can connect directly to its 3G network, according to Francis Shammo, Verizon Communications CFO, but the availability of that device is not yet announced.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Verizon iPhone Either 'No Danger' to AT&T or 'Big Trouble'
At this point, nobody knows what impact the Verizon Wireless offering of the Apple iPhone will have on Verizon itself or AT&T. The sanguine view is that there will be some loss of iPhone customers on AT&T's network, but that such defections will not amount to more than 20 percent of the current iPhone base on AT&T. You can decide for yourself whether that is a significant problem or not.
Piper Jaffray analyst Christopher Larsen is among those who say the impact on AT&T will be manageable. For starters, most customers who want iPhones and are customers of AT&T already own them, so the incremental level of demand for AT&T already was somewhat limited. Of course, the argument is that there is a significant level of pent-up demand on the part of Verizon customers, but the iPhone impact there will be mostly about retention and a bit of incremental data services revenue.
But Hudson Square Research analyst Todd Rethemeier thinks the business impact on AT&T could be bigger. In 2010, AT&T had 11.1 million postpaid gross adds, with 8.6 million disconnects, resulting in 2.5 million net adds. About 37 percent of those gross adds, or 4.1 million, were on the iPhone, Rethemeier said.
If one assumes that AT&T loses 50 percent of the iPhone gross adds (AT&T and Verizon split the new iPhone sales evenly), this means that AT&T’s gross adds will drop by about 2.05 million (50 percent of the 4.1 million). That would suggest AT&T’s overall postpaid gross adds dip to nine million (11.1 million less the 2.05 million).
Piper Jaffray analyst Christopher Larsen is among those who say the impact on AT&T will be manageable. For starters, most customers who want iPhones and are customers of AT&T already own them, so the incremental level of demand for AT&T already was somewhat limited. Of course, the argument is that there is a significant level of pent-up demand on the part of Verizon customers, but the iPhone impact there will be mostly about retention and a bit of incremental data services revenue.
But Hudson Square Research analyst Todd Rethemeier thinks the business impact on AT&T could be bigger. In 2010, AT&T had 11.1 million postpaid gross adds, with 8.6 million disconnects, resulting in 2.5 million net adds. About 37 percent of those gross adds, or 4.1 million, were on the iPhone, Rethemeier said.
If one assumes that AT&T loses 50 percent of the iPhone gross adds (AT&T and Verizon split the new iPhone sales evenly), this means that AT&T’s gross adds will drop by about 2.05 million (50 percent of the 4.1 million). That would suggest AT&T’s overall postpaid gross adds dip to nine million (11.1 million less the 2.05 million).
But it is net adds where the pain could come. The important number is the net adds figure. Rethemeier thinks net adds could drop to 400,000, down from 2.5 million. That is a big deal.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Physical Delivery Still Trumps Online Video Delivery
The U.S. home video entertainment market, consisting of the rental and sale of movies and television shows either on physical media or using networks, amounted to $18.5 billion in 2010, Screen Digest’s preliminary forecast indicates. Network-delivered rentals and sales via the Internet and subscription TV systems accounted for $2.3 billion of this revenue, representing 12.2 percent of the total market.
Growth in network sales and rentals was dwarfed by the growth in the sales and rentals of Blue-ray titles. Revenue from all types of network delivery rose by 21.9 percent for the year, while Blue-ray retail sales soared 64.2 percent and rentals boomed by 105.5 percent.
“With consumers continuing to be very cautious in their spending habits, the popularity of the rental model reasserted itself in 2010,” said Tom Adams, principal analyst and director, U.S. Media, for Screen Digest. “This consumer mindset sent Blu-ray rentals soaring and could be seen on the Internet too, where video-on-demand (VOD) rentals jumped 55.7 percent. In contrast electronic sell-through (EST) on networks grew by just 27 percent."
Growth in network sales and rentals was dwarfed by the growth in the sales and rentals of Blue-ray titles. Revenue from all types of network delivery rose by 21.9 percent for the year, while Blue-ray retail sales soared 64.2 percent and rentals boomed by 105.5 percent.
“With consumers continuing to be very cautious in their spending habits, the popularity of the rental model reasserted itself in 2010,” said Tom Adams, principal analyst and director, U.S. Media, for Screen Digest. “This consumer mindset sent Blu-ray rentals soaring and could be seen on the Internet too, where video-on-demand (VOD) rentals jumped 55.7 percent. In contrast electronic sell-through (EST) on networks grew by just 27 percent."
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Apple is the Big Winner: iPhone Shipments Will Grow 25%
The Verizon Wireless announcement that it will offer the iPhone to its subscribers will accelerate worldwide shipments of the code division multiple access (CDMA) version of Apple Inc.’s smart phone, helping boost sales of the device by about 25 percent this year, according to new IHS iSuppli research.
IHS iSuppli forecasts Apple will ship 12.1 million CDMA iPhones through Verizon and other global CDMA wireless carriers in 2011. This will increase global iPhone shipments to 61.2 million units for the year, up 24.5 percent from the 49.1 million high-speed downlink packet access (HSPDA) and high-speed uplink packet access (HSUPA) phones offered by AT&T in the United States and other carriers worldwide.
The CDMA model will play a critical role in sustaining the growth of iPhone shipments this year, with total iPhone shipments expected to rise by 33.3 percent for 2011. Excluding CDMA, shipments would climb by only seven percent.
IHS iSuppli forecasts Apple will ship 12.1 million CDMA iPhones through Verizon and other global CDMA wireless carriers in 2011. This will increase global iPhone shipments to 61.2 million units for the year, up 24.5 percent from the 49.1 million high-speed downlink packet access (HSPDA) and high-speed uplink packet access (HSUPA) phones offered by AT&T in the United States and other carriers worldwide.
The CDMA model will play a critical role in sustaining the growth of iPhone shipments this year, with total iPhone shipments expected to rise by 33.3 percent for 2011. Excluding CDMA, shipments would climb by only seven percent.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Verizon Launches iPhone: Video
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
"Speed" Not an Issue for Verizon Wireless iPhone
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Verizon turns your iPhone into a WiFi hotspot
Verizon says users will be able to turn their phones into five-person hot spots, though pricing does not yet seem to be available.
The feature turns the IPhone into a MiFi device. Depending on how the feature is priced, at least some users might find that that hotspot feature becomes the most-used feature of the device.
The feature turns the IPhone into a MiFi device. Depending on how the feature is priced, at least some users might find that that hotspot feature becomes the most-used feature of the device.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Comparing AT&T iPhone and Verizon Wireless iPhone
AT&T | Verizon |
| Price (on contract) | $199 16GB, $299 32GB | $199 16GB, $299 32GB |
| Data plan1 | $15 / 200MB $25 / 2GB $45 / 2GB with tethering | $15 / 150MB? $29.99 / unlimited? $49.99 / unlimited with 2GB tethering? |
| Early upgrades available at launch | Yes | No |
| Global roaming capability | Yes | No |
| Simultaneous voice / data on 3G | Yes | No |
| WiFi mobile hotspot option | No | Yes |
| 4G data (HSPA+ / LTE) | No | No |
| Rated talk time | 2G voice: 14 hours 3G voice: 7 hours 3G web: 6 hours WiFi web: 10 hours | 2G voice: Not available 3G voice: 7 hours 3G web: 6 hours WiFi web: 10 hours |
| 1Verizon hasn't announced iPhone plan pricing yet, so current smartphone pricing is used here for comparison. |
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Internet-Connected TVs Could Change Multichannel Video Business Models
It would have been hard to miss the 'Internet-connected TV' theme at the recent Consumer Eletronics Show, any more than the tablet, smartphone or '3D' TV angles. The 2011 version of the Consumer Electronics Show highlighted many Internet-connected TVs, Blu-ray players and other devices.
That leads some observers to argue that TV manufacturers now own the relationship with the customer. That probably overstates matters too much.
It might be more accurate to say that the application and service providers featured as part of TV menus will increasingly be in position to try and do so, but that it is not the TV manufacturer but the application providers that will be able to contend for viewer loyalties. But most of that potential shift of gatekeeper control lies in the future, so long as the Internet apps featured on connected-TV menus provide much less than the variety of popular programs normally associated with cable TV, telco TV or satellite TV.
That noted, the growing installed base of Internet-capable devices, ranging from TVs and Blu-ray players to game consoles and even smartphones and tablets, increases the likelihood that content owners will someday come to financial terms with one or more distributors able to substantially replace the expected lost revenue from other distribution channels.
That leads some observers to argue that TV manufacturers now own the relationship with the customer. That probably overstates matters too much.
It might be more accurate to say that the application and service providers featured as part of TV menus will increasingly be in position to try and do so, but that it is not the TV manufacturer but the application providers that will be able to contend for viewer loyalties. But most of that potential shift of gatekeeper control lies in the future, so long as the Internet apps featured on connected-TV menus provide much less than the variety of popular programs normally associated with cable TV, telco TV or satellite TV.
That noted, the growing installed base of Internet-capable devices, ranging from TVs and Blu-ray players to game consoles and even smartphones and tablets, increases the likelihood that content owners will someday come to financial terms with one or more distributors able to substantially replace the expected lost revenue from other distribution channels.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Why Verizon's Big iPhone Deal Has Risk, Not Just Reward
It's official: Verizon Wireless is going to be selling the Apple iPhone 4. Nothing has been said so far about rights to sell the iPad, though.
It's easy to see the upside for Verizon Wireless as it now can sell and support the Apple iPhone. The iPhone is an iconic device and the inability to sell it obviously hurts any mobile provider that doesn't offer the device. Beyond that, the iPhone exclusivity arguably has allowed AT&T to gain some customers Verizon Wireless was not able to compete for, including, doubtless, many former Verizon Wireless customers.
But there are challenges, as well. Verizon Wireless might have to spend $3 billion to $5 billion to subsidize customer purchases of the device in 2011 alone, based on the expected $400 per iPhone subsidy Verizon will absorb. That will hit profit margins, a concern analysts have had about AT&T as well.
It's easy to see the upside for Verizon Wireless as it now can sell and support the Apple iPhone. The iPhone is an iconic device and the inability to sell it obviously hurts any mobile provider that doesn't offer the device. Beyond that, the iPhone exclusivity arguably has allowed AT&T to gain some customers Verizon Wireless was not able to compete for, including, doubtless, many former Verizon Wireless customers.
But there are challenges, as well. Verizon Wireless might have to spend $3 billion to $5 billion to subsidize customer purchases of the device in 2011 alone, based on the expected $400 per iPhone subsidy Verizon will absorb. That will hit profit margins, a concern analysts have had about AT&T as well.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
Verizon Gets Apple iPhone, Now the Questions Begin
How many AT&T customers using iPhones will depart for Verizon, and at what rate? How many current Verizon Wireless customers will switch to iPhone, and what will the retention impact be? Will Verizon Wireless get the right to sell the iPad, with native 3G connections?
Will Verizon Wireless get the right to sell a 4G version of the iPhone, and when? Same question for the iPad on the 4G network.
http://www.verizonwireless.com/b2c/splash/iphone.jsp
Will Verizon Wireless get the right to sell a 4G version of the iPhone, and when? Same question for the iPad on the 4G network.
http://www.verizonwireless.com/b2c/splash/iphone.jsp
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
How Will Verizon's Network Handle the iPhone?
Expect a spate of commercials and ads claiming that the iPhone works better on either AT&T's network, or Verizon's network. I suspect few consumers are going to be swayed, one way or the other, by such ads.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
eBay Introduces "Try It On Before You Buy" iPhone App
For clothing, the augmented reality feature is called “Outfit Builder.” Users can designate favorite pieces of clothing with the eBay app and store them in their “Personalized Closet.” Then, they use “Outfit Builder” to mix and match items in the closet. To try the items on, the user can similarly overlay the clothes on a white canvas or a saved photo or live image (by pointing the camera toward a friend or a mirror).
Once an outfit is created, it can be saved for future reference or shared via email.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
NFC Explosion Sets Stage for Mobile Payments Growth
Technology by itself does not always enable creation of new markets. But technology often is required for such new markets to form. If so, then the growth of near field communications capability in mobile phones is going to create the underpinning for a new mobile payments business, though many would not be at all surprised if mobile advertising, promotion and marketing emerged as a key driver of the value proposition for users.
Worldwide shipments of cell phones with built-in NFC capability will rise to 220.1 million units in 2014, up by a factor of four from 52.6 million in 2010. In 2014, 13 percent of cell phones shipped will integrate NFC, up from 4.1 percent in 2010, according to researchers at iSuppli
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
There's Money in Virtual Goods
Virtual goods might be a viable revenue model for games developers. Tapjoy began testing out a freemium model for one of its mobile games "Tap Defense" a year ago and found that within a week, it was making six times more money going freemium than paid, based on revenue earned from sales of virtual goods or premium digital goods.
Eventually, the game was making 10 times what it was before. The market for freemium mobile apps went from about 20 a year ago to about 2,500 today, of which he said 90 percent use Tapjoy.
Tapjoy provides monetization, distribution and publishing services for social games, mobile applications, virtual worlds and other social publishers.
The Tapjoy platform includes a turnkey software library that enables mobile developers to embed fully functional virtual goods storefronts with the ability to process microtransactions. The library also comes with a built-in "pay-per-install" user acquisition program, an ad optimization layer and application analytics.
The Tapjoy platform includes a turnkey software library that enables mobile developers to embed fully functional virtual goods storefronts with the ability to process microtransactions. The library also comes with a built-in "pay-per-install" user acquisition program, an ad optimization layer and application analytics.
Gary Kim was cited as a global "Power Mobile Influencer" by Forbes, ranked second in the world for coverage of the mobile business, and as a "top 10" telecom analyst. He is a member of Mensa, the international organization for people with IQs in the top two percent.
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