Starbucks Mobile Payment Demonstration

The Starbucks mobile payment system might accurately be described as consumer experience and loyalty program, more than a technology breakthrough. It uses a minimum of new in-store or consumer technology and an initially-simple way of replacing a credit card swipe with a bar code reading.

 The 2D barcode in the Starbucks Mobile Card app, which is no longer a QR code in the latest version, currently appears to encode only the card account number, effectively acting as a replacement for the magnetic stripe, notes FaceCash CEO Aaron Greenspan.

"Right now from the POS viewpoint only encoding the account number works well because it doesn't require any additional POS customization," says Greenspan. The advantage is speed: the transaction is fast because it's treated effectively the same as a card swipe, which is already pretty fast.

Global Tablet Shipments to Grow 12x by 2015

Global shipments of tablets will grow to 242.3 million units in 2015, up by a factor of more than 12 from 2010, a new IHS iSuppli report says.

Media tablet shipments will grow to more than 202 million units in 2015, up from 17.4 million in 2010. Shipments of PC-type tablets—i.e., tablets that have full PC functionality implemented via PC operating systems—will climb to 39.3 million units in 2015, up from 2.3 million in 2010.

Total shipments of tablets will amount to 242.3 million units in 2015, up from the newly finalized IHS iSuppli estimate of 19.7 million in 2010.

Global Tablet Shipments to Rise by Factor of 12 by 2015

"Do Not Track" Implications

To be sure, a web version of the "do not call" list " is likely to get fairly broad consumer support. But "do not track," which will allow consumers to block detection of their website visits. Like many regulations, the notion is logical, but will have unintended consequences. For developers, application providers and many content sites, it means a more difficult revenue-generating challenge, since behavioral targeting would be impossible for the percentage of web users who opted into the the "do not track" program.

Some consumers will appreciate the privacy, of course. But the trade-off will likely be exposure to non-targeted or poorly targeted advertising, rather than ads that more-closely align with each consumer's actual interests and needs.

A "Do Not Track" law would also make it difficult for agencies to accurately report return-on-investment to clients, others will note.

The same sort of conundrum occurs because of network neutrality rules that forbid packet priorities for consumer broadband access services. While some will point to the competition-enhancing aspect (applications and services owned by ISPs cannot be favored over independent apps and services of the same type), there is a trade-off. Consumers cannot set their own priorities for apps and services.

Though it is possible to design an access service to give top priority for bandwidth, and other performance-enhancing measures, to apps the consumer designates as "the most important right now," network neutrality rules allow businesses, but not consumers, to make such stipulations.

A consumer might like to create and enforce rules that give top priority to VoIP sessions and videoconferencing. during business hours. During evenings, those settings might switch to give entertainment video top priority. Software updates might always be given the lowest priority, with email and web surfing in between.

"Do not track" rules are likely to have the same sort of predictable consequences. Some apps and features of value to consumers will be sacrificed. And there will be some negative consequences for some in the content delivery ecosystem, as well.

An ad roadblock at the browser - Crain's New York Business:

Analog Dollars, Digital Dimes

Over the years I have on occasion likened the competitive telecom industry's structural issues to those of the airline industry, with one overriding main conclusion: there are some businesses that seem to be structurally incapable of making money; and that the airline industry seems to be one of those instances. I have never found the analogy to be so apt that the same conclusion could be reached about the communications business.

First, it is historically untrue that the communications business "cannot" make a profit. It has, and does. The question many have, though, is whether that will always be true, or the extent to which it will prove to be true if the industry changes rather significantly.

The other analogy that has made sense when looking at broadband and voice products sold in a "digital" context is media. Content owners starting with music and print, and now video, have had to grapple with some clear revenue implications of the Internet and the web. The notion of exchanging "analog dollars for digital dimes" captures the dilemma. As a rule, digital versions of print products cannot garner the same advertising rates as analog products once did.

As the Super Bowl ad rate suggests, there now are so many different media channels that each discrete channel is "devalued" in terms of ability to command a premium price.

"Let’s assume the Washington Post decides to put up a paywall and assume it has a meter such that once a reader reaches a predefined limit on articles per month the reader needs to subscribe," says Scout Analytics. " As a result, only fans of the newspaper will purchase an online subscription."

"Our studies have shown fans make up about five percent of the audience," Scout Analytics says. For the Washington Post, they would have had 1.19M fans in 2009. Assuming the paywall has the same rate as the print product $280 per year and a 50 percent of fans convert to a subscription, the revenue from the paywall would be $167 million, which would require $229 million in ad support. But ad support would come to about $70 million, leaving a shortfall would be $159 million.

Some will note, as does Scout Analytics, that these revenue assumptions are likely too generous. The point is that it remains difficult to achieve the same level of gross revenue and profit margin with digital versions of analog products.

Some of you instinctively will think of VoIP, global capacity pricing, mobile voice, text or broadband pricing, and even consumer broadband access services as examples that illustrate the same process at work in communications.

Digital Equilibrium – Finding the balance between average revenue per user and total number of users Do Newspaper Paywalls Solve the Online Revenue Issue for Shareholders?

Millennials: 50% of Workforce by 2014

By 2014, 50 percent of all employed people will be Millennials. Little wonder they are setting the pace in music, fashion, technology, education, philanthropy, movies and entertainment.

Millennials: “We R Who We R” | Millennial Marketing

Motorola to Replicate 1984 Apple Ad During Super Bowl?

Many, perhaps most of you, will not remember the 1984 iconic Apple ad touting Apple's "be different" ethos. Motorola seems to be aiming for that sort of feeling with its planned 60-second Super Bowl ad.

Enterprise Adoption of Consumer Tools Has Increased

Since 2008, all consumer tools, with the exception of blogs and online travel services, have experienced an increase in enterprise employee usage, according to the Yankee Group. The largest increases in workplace usage include:

Social networking, which tripled from 10 percent to 31 percent, and consumer instant messaging, which almost doubled from 25 percent to 47 percent.

Consumer email usage by enterprises increased from 43 percent to 52 percent, while consumer-grade VoIP doubled from 7 percent to 16 percent.

Use of web-based productivity apps rose from 17 percent to 25 percent. Mobile picture and photo messaging rose from 15 percent to 27 percent.

Yankee Group :: Research Report

Mobile Banking for the "Unbanked" in South Africa

Mobile Banking in Kenya

Heaviest Users on Verizon Wireless Network Might be Throttled at Times of Peak Congestion

That's one way to reconcile "unlimited service" plans and very-heavy usage by some consumers.

You may remember the "Negroponte Switch," the notion that broadband services formerly provided "over the air" are moving to fixed network delivery, while narrowband services formerly provided by fixed networks are moving to wireless delivery.

The idea is over a decade old, but still resonates, with the added observation that video and broadband services also are moving to virtually all devices connected to the network.

See http://en.wikipedia.org/wiki/Negroponte_switch for background on the idea.

Still, some of the major business implications are becoming clear enough for some startling new predictions. PRTM, for example, now argues that, over the next decade, mobile networks will become the providers of "universal service," while fixed networks become specialist providers of video and broadband services, much as the Negroponte Switch" a decade ago would have predicted.

There are all sorts of implications. Fixed-line providers are going to have to work hard to ensure a significant role for themselves in the fixed-line broadband ecosystem, since so many broadband-based applications can be delivered "over the top."

:Read more here..

Submarine Cable Refresh Cycle Approaches

With the caveat that "where" a fiber or cable is makes a huge difference, we are approaching a couple-year period where existing cables laid 10 to 12 years ago will reach 50 percent of capacity.

That will be a trigger for laying replacement cables.

If you assume a 20-year useful life for new optical fibers put into service, then irrespective of loading, service providers would have to begin thinking about replacement as a matter of course.

Some suppliers will argue they can enhance the useful life of such fibers. Susan Vandament, XK director of business development, for example, says her firm has tested older fibers and found its gear could boost performance above what one might expect. If that proves to be the case for older cables, submarine cable network providers might squeeze a bit more life out of existing cables.

read more here

SuperBowl Ad Strategy Still Works, Groupon Finds

Produce an ad you are fairly certain to be rejected. Get word of mouth about the rejected ad. Get views. Don't pay $2.5 million to $2.8 million. In this case, Groupon itself says it "rejected" the ad. It's the same concept.

Nexus X Tablet Boot-Up Screen

Not a suggestion you buy a tablet device for the boot-up screen. But it won't hurt, either. And here's a bit more detail on the new Android tablet operating system, "Honeycomb."

Starbucks Mobile Payment System Didn't Use NFC for a Reason

Technology decisions ought to be dictated by business requirements, and so should the timing of technology investments. Generally speaking, if a business can wait for the "next generation" of technology, it often should do so. If it cannot wait, and has an immediate business need, it should buy the existing solutions, especially if there is an upgrade path.

The Starbucks mobile-payment app, now available for iPhones, the iPod Touch and several BlackBerry models, is based on the coffee chain’s popular prepaid Starbucks Card, and is an example of that sort of process. You might wonder why Starbucks would deploy a 2D bar code solution now, when it could wait 18 months to two years and possibly use a new system based on one or more near field communications platforms.

The answer is that Starbucks did not think it could afford to wait. Nor, in one respect, is the Starbucks mobile payment system primarily about "payment." It is about loyalty, especially the Starbucks card.

Customers use the private-label card for one in five transactions at Starbucks coffee shops and last year loaded $1.5 billion in their card accounts, up more than 20 percent from 2009, said the company. Since the mobile payment app is linked to the Starbucks card, and since the Starbucks card itself if more about loyalty than "payment" as such, Starbucks is betting that the chance to extend its loyalty program to the mobile handset is worth doing right away.

Not unimportant is the fact that 2D bar codes can be used by a wide range of handsets, while near field communications is only now starting to be introduced. In a scale business, the advantage of large installed base is obvious. So is the fact that the terminal upgrades at roughly 8,000 locations are modest.

With the app, after the customer scans the 2-D bar code at the point of sale, Starbucks deducts the amount of the purchase from his Starbucks Card account over the network.

The physical implementation might not be the most elegant imaginable (one has to have a physical Starbucks card first, and you have to obtain one physically, at a store), but that was not apparently the most-important consideration. Speed to market, low cost and ubiquity seem to have been the overriding considerations.

Starbucks’ Bar-Code Embrace Unlikely to Slow NFC