Mobile Shoppers: Some Prefer Apps, Some Mobile Web

Even though half of all mobile phone owners are mobile shoppers, they are not all equal. A very small group are actually driving the majority of mobile shopping. In fact, that group – dubbed “heavy mobile users”-- generate ten times more shopping than “light users.” See Retail's BIG Blog | Three tips for marketing to the mobile shopper

Heavy shoppers tend to do things like check store hours and addresses, use shopping apps weekly, and experiment with new mobile marketing technology in greater numbers and more frequently than other shoppers. They also skew younger, male and toward using the iPhone.

Light shoppers, by contrast, skew female and are more likely to use other devices such as Android and BlackBerry phones, according to an Arc Worldwide survey.

UK Telco O2 Will Become a "Bank"

Telefonica O2 UK plans to launch a number of mobile-wallet services in the second half of 2011, among the most significant a move to become a "bank" of sorts, or perhaps the equivalent of a credit card or debit card issuer.

Among the wallet services O2 plans to offer will be contact-less payment that could include one or more payment applications the telco issues itself. But O2, one of the United Kingdom’s largest mobile operators with more than 20 million subscribers, plans a number of other services, including mobile browsing and product search, mobile-money transfers between subscribers and bill payments.

UK Telco O2 Prepares For Bigger Push into Payments Business | NFC Times – Near Field Communication and all contactless technology

AT&T Points to "Talk and Surf" Features of its iPhones

Citi relies on multiple mobile channels for customer engagement

Citigroup Inc.’s Citibank is placing mobile at the center of its customer engagement strategy, with cost-cutting and revenue-generation significant fringe benefits, says Mobile Commerce Daily.

The financial services giant has applications for Google’s Android and Apple’s iPhone and iPod touch, a mobile Web site that is optimized for smartphones and Citi text banking, which lets customers check their account balances, view recent activity and see credit card statements via SMS. In addition, Citi is integrating social media into its mobile platforms.

Citi relies on multiple mobile channels for customer engagement

Mobile banking apps pose security concerns

Despite the rapidly increasing levels of smartphone use among American consumers, and the consequent opportunity to consolidate consumer loyalty in banking and other industries, mobile software used to access bank websites often does not yet meet most security standards, according to a report from American Banker.

The magazine said testing performed by Chicago-based computer security firm viaForensics had found critical security loopholes - enabling researchers to access transaction data, usernames, and passwords - in well over three quarters of the mobile banking applications tested, running on both Android-based smartphones and Apple's iPhone.

Trust is crucial for banking and virtually all other economic transactions, so such concerns will have to be addressed before wider adoption is possible, especially since the banking infrastructure in the United States is highly developed, unlike the situation in other parts of the world, especially sub-Saharan Africa, for example.

Right now, mobile banking is a "nice to have" sort of feature, while in Africa mobile often can function as the banking system itself.

Report: Mobile phone applications for banking websites still pose security concerns

Net Neutrality is a Regulatory ‘Trojan Horse'

"The Federal Communications Commission’s net-neutrality decision opens the FCC to “boundless authority to regulate the internet for whatever it sees fit,” the Electronic Frontier Foundation says.

The EFF favors net neutrality but worries whether the means justify the ends.

“We’re wholly in favor of net neutrality in practice, but a finding of ancillary jurisdiction here would give the FCC pretty much boundless authority to regulate the internet for whatever it sees fit," EFF says.

FCC Net Neutrality is a Regulatory ‘Trojan Horse,’ EFF Says Wired.com:

Corning Expects High Demand for Tablet, Smartphone Glass

Corning expects its annual sales to grow more than 50 percent to $10 billion by 2014, driven by surging demand for ultra-thin glass used in television monitors, smart phones and touch-screen tablets.

The world's biggest maker of liquid-crystal-display glass predicts the global appetite for flat-panel LCD TVs, computers and mobile devices will drive up industry volume to around 5 billion square feet in 2014 from 3.1 billion square feet now.

Corning estimates that tablet computer sales could grow from roughly 20 million units last year to almost 180 million by 2014.

Corning Expects High Demand for TV Glass - NYTimes.com

Verizon iPhone Might Get Lots of AT&T Customers, Survey Suggests

 It is clear that Verizon Wireless ran out of Apple iPhones on the first day they were made available. What remains unclear is how many of those switchers were already Verizon Wireless customers, and how many were switchers who had been using another provider.

A new uSamp survey suggested 47 percent of current AT&T iPhone customers were“very unlikely” to switch to Verizon Wireless right away. About 12 percent said it is “somewhat unlikely.”

Still, about 26 percent of AT&T customers say they are “very likely” (eight percent) or “somewhat likely” (18 percent) to switch to Verizon’s iPhone on the first day it is available.

The top two reasons Verizon’s current smartphone users do not plan to give up their androids or BlackBerrys in favor of the iphone: conversion costs (46 percent) and the keyboard (34 percent).  other reasons not
to switch included functions such as e-mail and messaging (23 percent), maps and GPS (23 percent), customization and widgets (20 percent), web browser (19 percent) and, for BlackBerry users, BlackBerry messenger (28 percent).

By contrast, a majority of Verizon’s current Android and BlackBerry users say they intend to head to Apple as soon as the iPhone hits the shelves. Some 54 percent are very likely (25 percent) or somewhat likely (29 percent) to
go iPhone as soon as the device is available.

About 66 percent of BlackBerry users indicated they are "very" or "somewhat likely" to switch to the iPhone immediately, as are nearly half of its android users (44 percent).

Current iPhone users on AT&T's network indicate that dropped calls are the chief driver of change. About 48 percent suggested they were going to switch to Verizon because of dropped calls. But  carrier coverage (25 percent) or product features (22 percent) also were mentioned as reasons for switching.

The survey by uSamp included more than 700 smartphone users.

read more here

Apple iPhone From AT&T or Verizon?

Walt Mossberg takes a look at the devices and the networks.

The Way "Disrupters" Think

I recently had an instructive conversation with a colleague I hadn't actually seen for more than a year, that amply illustrates how would-be "market disrupters" think. Keep in mind that "disruptors" have different business objectives than traditional executives might. A conventional approach might have companies N+1 and N+2 entering a market lead by company N because N+1 and N+2 believe they can take significant market share away from N.

Venture capitalists might fund company N+1 because the firm has technology that is 10 times better than that of company N that leads the market.

But here's another way of looking at the matter. There is an existing market worth 100x revenue and 300y usage. Disruptor firm N+1 has a business plan aimed at boosting usage to 400y but shrinking revenue to 10x. N+1 will do well because it will get a share of the 10x where N+1 now has no revenue.

N+1 knows it does not have to take share in the traditional way to disrupt the market, any more than Skype had to take away much existing international long distance to affect pricing across the entire market.  N+1 simply has to gain enough recognition as a viable supplier, with dramatically-lower retail pricing, in the customer base.

The difference is in the notion of "growing" a market compared to "destroying" a market.

"End of Profit" for Mobile Service Providers in 4 Years?

Mobile service providers in developed regions of North America, Asia, Pacific and Western Europe markets could face they are no longer profitable in about four years, according to a new study by Tellabs.

Researchers looked at mobile service provider financial performance across the globe, and the fact that the study is called "The End of Profit" should tell you most of what you need to know about the fundamental trend.

See a summary here..

The study shows that widely-held industry beliefs about rising costs and falling revenues are correct. If the trends assumed in the model do not change significantly, if the assumptions are correct, and if service providers do not change, carriers in each region can expect to see an end of profit within a four year window.

That bears repeating. In the absence of relatively significant changes, mobile service provides, arguably in a better position than fixed-line providers to capture growth, will cease to be profitable within four years. The median expectation is that U.S. mobile service providers will reach "zero profitability" by the fourth quarter of 2013.

Service providers in developed nations in the Asia and Pacific region could reach zero profitability by the third quarter of 2014.

In certain regions, this point could be reached much sooner, Tellabs believes. It is clear that carriers are facing significant challenges in balancing cost and revenue. Mobile service providers in Western Europe could reach zero profitability by the first quarter of 2015.

Western operators should position mobile broadband as a complement to fixed broadband, not a substitute, says Analysys Mason - Press releases - News | Analysys Mason

Attempts to sell mobile broadband as an alternative to fixed broadband are likely to fail in European and U.S. markets because there is a strong, and correct, perception among consumers that mobile broadband is slower, less reliable and more expensive than fixed broadband, say researchers at Analysys Mason.

Where consumers have a choice between fixed and mobile broadband, mobile broadband should not be sold as the primary means of access, but as a complement. This is based on the findings of the Connected Consumer survey 2, a study of the telecoms and media activities of 6000 consumers across Europe and the United States.

More than 70 percent of respondents who expressed an opinion agreed with statements that mobile broadband was slower, less reliable and more expensive than fixed broadband.

Customers are also becoming increasingly happy with their fixed broadband service. Of respondents who said they were not interested in mobile broadband, 72 percent said it was because they are happy with their fixed service (up from 65 percent last year).

Western operators should position mobile broadband as a complement to fixed broadband, not a substitute, says Analysys Mason - Press releases - News | Analysys Mason

Consumers Will Pay for Quality-Enhanced Service: Too Bad U.S. Consumers Can't Buy It

More than 60 percent of 2,000 consumers polled n the United Kingdom, France, Germany and United States are now ready and willing to pay for a higher quality of experience. About 74 percent of respondents who are willing to pay for a higher QoE said that they are prepared to spend more money for faster download speeds as well. Oddly enough, U.S. consumers might not be able to buy those sorts of features, though it appears consumers in most other countries will be able to.

The reason is the Federal Communications Commissions "network neutrality" rules, which forbid such services outright on fixed connections, and are for the moment more lenient about mobile features, but which ultimately are likely to be harmonized with the fixed network rules.

The survey was sponsored by Comptel Corporation, a provider of operations support system software. Read more here..

About 61 percent of respondents indicated that they want their communications service providers to offer service and price plans that are based on their individual broadband consumption habits. At the same time, consumers want these plans to be simpler; more than 80 percent of respondents prefer to have just one bill or data plan that covers all of their broadband access needs, across networks and devices.

"Eighty-seven percent of consumers see QoE as the driver that will influence their allegiance to their CSP, and the majority of them would not only move but also pay more money for faster and personalized services," said Ms. Arnhild Schia, senior vice president, global alliances and strategic marketing, Comptel. "This consumer-driven demand for a better mobile broadband experience is a tremendous revenue opportunity for CSPs. Policy and charging control can help them optimise QoE-smoothing data usage more evenly across their networks, while dynamically adapting and simplifying service bundles based on individual customers' wants or needs, and introducing progressive pricing strategies that monetise this consumer demand."

About 66 percent of the consumers surveyed in the U.K., France and U.S. reported accessing the Internet most frequently from smartphones.  An exception was Germany, where laptop dongles were the most popular mobile broadband-enabled device, with 56 percent of consumers utilising them.

About 58 percent of respondents already have two or more broadband connections, and of those, four percent have four or more connections.

Consistency in terms of quality of service, more flexible service and price options and unlimited data download plans are bigger issues in the U.K., France and Germany, respectively, than anywhere else. Almost a third of U.S. respondents said that improvements were needed all round.

Given access to unlimited broadband, regardless of location and cost, more than half of respondents would use the extra bandwidth to watch more online TV, especially in France. In the U.S., respondents reported a preference to staying more connected to family and friends.

T-Mobile USA to Buy Clearwire Spectrum?

Deutsche Telekom AG’s T-Mobile USA unit, which badly needs new spectrum to build its own Long Term Evolution network, may be close to a deal to buy wireless spectrum from Clearwire Corp., Businessweek reports.

T-Mobile USA is the only potential bidder and the sale of the spectrum could happen by the end of the first quarter, Businessweek says. That there is only one bidder speaks to the lack of demand for the excess spectrum Clearwire wants to auction off.

Also, T-Mobile USA has just activated an HSPA+ network that actually will run as fast, and in some cases faster, than other 4G networks. T-Mobile USA doesn't need the spectrum "immediately."

Deutsche Telekom Said to Be Closer to Clearwire Deal - Businessweek

Video Cord Cutting Now a Global Phenomenon

Video cord-cutting now is a global phenomenon, according to Informa Telecoms & Media. But U.S. consumers are disproportionately represented, 36 percent of all global video cord cutters are in the United States. But the revenue impact so far has been quite limited, and the total numbers are small in relation to the base of video subscribers.

Informa estimates that there were 1.2 million "cord-cutters" who have canceled their multichannel video subscriptions in favor of over-the-top video alternatives  in 2010, equivalent to just 0.18% of the multichannel video subscriber base. See more detail here.

"While the impact of cord-cutting on pay TV has been extremely limited to date, this will change as OTT services will continue to improve and become increasingly attractive," said Adam Thomas,  Informa Telecoms & Media senior analyst.

The number of cord cutters will grow to 16.1 million in 2015, the firm says. That's about two percent of the total pay TV subscriber base," said Thomas.

There are about 426,000) video cord cutters in the United States, about 395,000 in Europe, 251,000 in the Asia and Pacific region and 113,000 in the rest of the world. It is possible that less developed markets could ultimately be most vulnerable to the allure of OTT, as several of these markets are characterized by higher broadband penetration than that of multichannel video service penetration.

"We are already seeing significant numbers of cord-cutters in China, as households are attracted away from cable and IPTV by OTT services such as Tudou and Youku," said Thomas.

Overall, Informa does not seem to expect a massive disruption of the linear video business anytime soon, despite the growing expectation in many quarters that this will be the case.