Small Businesses Turning to Apps

Businesses now are using mobile apps software for a variety of business processes. The market for these apps was $3.21 billion last year and is expected to nearly double to $6.12 billion by 2014, according to research firm Compass Intelligence, and reported by the Wall Street Journal.

"Apps are no longer exotic," says Abhi Ingle, an AT&T Inc. executive who deals with small-business applications.

One might speculate that the trend will continue, increasingly offering many ecosystem participants an ability to sell business software where it would have been prohibitive in the past, not the least because of sales staff training issues.

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Google to Raise More Cash?

Google has filed a required shelf registration (Form S-3) with the Securities and Exchange Commission that authorizes the potential sale of stock or borrowing.

Google doesn't have to do so, but the filing gives it the ability to do so if it chooses. There is some speculation Google might want to borrow as much as $3 billion, rather than issue new shares. Firms sometimes take on new lines of credit simply because they can do so at favorable rates, not necessarily because the cash has some immediate and obvious purpose beyond increasing liquidity.

Google has about $25 billion cash on hand, already.

Form S-3ASR

"Dumb Pipe" Makes the New York Times

It is not news to communications industry professionals, but the New York Times writes about the issues for mobile service providers as "eventually, everything migrates to a data channel,” as Brian Higgins, an executive at Verizon Wireless, says.

"Much of the value in communication now sits above basic connectivity,” says Charles S. Golvin, Forrester Research analyst. Applications such as instant messaging, video calling and web conferencing can be delivered to consumers by companies like Google, Apple and Cisco, not just the carriers, he notes.

The problem is that the enduring service of the future is "access" to the web and Internet. Everything else at the application level is going to be competitive. Anyway you look at it, the unique role for a mobile service provider is access. On top of that service providers obviously sell voice apps, text messaging and other apps as well.

In that sense, the argument about "dumb pipe" is a bit misleading. A mobile service provider cannot fail to offer "access" or it no longer is a mobile service provider. But up to this point, that access always has come bundled directly with applications. The new challenges exists in that applications and access increasingly are loosely coupled in the data world. As voice and other applications become apps delivered over a data connection, the terrain upon which apps and access are loosely associated will continue to grow.

Data Networks Force Wireless to Find New Income - NYTimes.com

South African mobile banking Up 17% Since 2010

Mobile banking in South Africa now is used by 44 percent of urban mobile phone users, up from 27 percent in 2010, according to a study by World Wide Worx.

In smaller towns, 27 percent now use cellphone banking, suggesting that rural areas lag urban users by about a year in take-up of these services. In total, 37 percent of South Africans in urban and rural areas aged 16 and above now use mobile banking.

The vast majority of mobile banking customers still use the basic services, such as balance enquiries (78 percent) and notifications (58 percent).

However, transactional services are for the first time major components of use, with half of respondents buying airtime, 24 percent paying accounts, and 17 percent transferring funds between accounts. Some 12 percent of users sendmoney to other individuals and 11 percent make purchases using their mobile phones.

Cellphone banking surges | World Wide Worx

Shopkick Illustates Online Plus Offline Trend

Shopkick’s location-aware smart phone app allows shoppers use their smartphones not just to shop online, but also to interact with stores in the real world. That's an illustration of the big trend that includes mobile payments, namely the effort to span the space between "online" and "physical" shopping and commerce.

Shopkick (iPhone, Android, Free) gives users points (called “kickbucks”) when they walk into participating stores (partners include Macys, Crate & Barrel, Best Buy, Macy’s, American Eagle and Target), pick up merchandise by scanning the barcodes with their smartphone cameras and make purchases. Kickbucks can then be redeemed for rewards like gift cards and merchandise.

Shopkick - location based service which bridges the worlds of mobile and physical retail

Mobile Advertising Hits Inflection Point

Mobile advertising remains a small part of overall spending on online advertising or advertising in general. But it is noteworthy that the Interactive Advertising Bureau now has started to track and report mobile advertising sales volume.

That is an indicator that mobile advertising has reached an inflection point.

One might argue that mobile advertising is just about 10 years behind online advertising in its development.

Mobile Advertising Hits Inflection Point

Mobile advertising remains a small part of overall spending on online advertising or advertising in general. But it is noteworthy that the Interactive Advertising Bureau now has started to track and report mobile advertising sales volume.

That is an indicator that mobile advertising has reached an inflection point.

One might argue that mobile advertising is just about 10 years behind online advertising in its development.

What Has Changed in Media, Entertainment Since 1975?

Since 1975, there have really been only three immediately significant changes in U.S. end user "time spent with media," clearly evident in this chart from Veronis Suhler Stevenson.

Though it now seems "everybody" plays video games, consumers actually spend far less time playing video games than they did in 1975.

The big gainer, in terms of time, is cable, satellite and telco TV, which shows a steadily growing time commitment.

Radio listening has been significant since 1975, but now is in a decline. Aside from those three media, most of the others have trended within a relatively finite range since 1975.

All of that might suggest one clear implication: any media that makes dramatic gains in the coming years will probably do so by taking time away from multichannel television services, radio and video games. That doesn't mean the alternatives have to mimic the value of the displaced services, simply that the rising services will have to become more compelling, compared to radio, multichannel TV services and video games.

PayPal Now 39% of eBay Revenue

PayPal now represents 39 percent of eBay’s total revenue, and nearly made $1 billion in revenue for the company in the first quarter of 2011, up 23 percent from the same quarter in the previous year.

Marketplaces brought in $1.5 billion, up 12 percent from the same quarter in 2010.

That would explain why eBay is interested both in mobile payments and local (offline) commerce: that's where the growth might be.

Connecting The Dots On eBay’s Local Shopping Strategy

Dodd-Frank hurts mobile payments business model

Unintended consequences always occur when any major piece of national legislation gets passed by the U.S. Congress. If you choose to believe it was a major issue (some will suggest other plausible alternative explanations), AT&T says the Dodd-Frank financial reform law, with the Durbin Amendment," makes transaction fees for debit card transactions a much less attractive business model.

AT&T, Verizon Wireless and T-Mobile USA launched Isis in November 2010, with a transaction fees revenue model. John Stankey, AT&T's head of business solutions, says the Durbin Amendment, expected to cut annual debit processing fee revenues to about $10 billion from $23 billion. To be sure, a sudden reduction in addressable revenue opportunity of $13 billion is not trifling.

But Isis had all sorts of other reasons to change course, including the time it would take to create a new retail brand for payments, at a time when activity is moving faster across the entire mobile payments front.

Dodd-Frank hurt mobile payment system plans

DVD Revenues Plunge 44 Percent

Retail purchases of DVDs fell 44 percent in 2010, despite growth of movie box office sales, which might suggest the shift to video on demand and online streaming services such as Netflix is heating up. But the data also suggests that people simply are not buying DVDs to own as they once did a decade ago.

A contributing issue is that it appears people might not be renting as many DVDs, either, since the DVD rental services buy discs to support those rental efforts. It also is true the studios are focusing their efforts on Blu-ray and VOD, instead of DVD sales revenue.

Unfortunately for studios, revenue from VOD has not yet offset the resulting drop in DVD sale revenue, which was their top earner for more than a decade now.

DVD revenues fell from $7.97 billion to $4.47 billion in 2010. It sometimes is the case that lower DVD activity is the result of a poor year, in terms of popular blockbuster movie hits. Less popular theatrical releases virtually always translates into lower levels of follow on activity throughout the downstream portions of the market.

That does not appear to be the case in either 2009 or 2010, when the box office revenue hit records.

The average wholesale price was relatively flat when compared with 2009, but there were significantly fewer units shipped, down 44 percent.

On average, films shipped 545,000 units and made $10.8 million in wholesale revenue, off 52 percent from the $22.6 million average in 2009. Over the past five years, average wholesale revenue posted a negative 13.7 percent compound annual growth rate.

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Apple In-App Purchase Policy Has Business Model Implications

On one hand, Apple's policy on in-app purchasing gives developers a new way to create revenue, by selling things inside the app. On the other hand, Apple's 30-percent share of the revenue will be high enough to discourage some sales altogether.

The policy does create the ability to sell subscriptions, and in some cases will make it easier for developers to create sales opportunities inside their apps. But the policy is not "all upside" for all participants in the ecosystem. Some developers might find the 30-percent revenue share for in-app purchases greater than the entire profit margin for some products.

Apple obviously wants to keep in-app sales channeled through its own payment processes. App suppliers sometimes will benefit, sometimes will be hurt. But the policies are consequential.

Apple In-App Purchase Policy Has Consequences

Importance of Mobile Payments: It Blurs the Line Between Online, Offline

With the arrival of mobile payments, the mobile ecosystem becomes more than just content and apps in a digital world. "By integrating offline purchase data into this ecosystem, the line between digital behaviors and purchases in the physical world begins to blur, especially when core smartphone services such as location are integrated with purchase data," says Ryan Garner, GfK associate director.

In a broad sense, it is "a quick response code on steroids."

http://www.gfknop.com/imperia/md/content/gfk_nop/newsandpressinformation/global_mobile_payments_report_110511_final.pdf

Tigo Rwanda launches mobile money payment service

Tigo Rwanda, a telecom brand owned by Millicom Cellular International, has launched mobile money services in Rwanda, targeted at subscribers with limited or no access to banking services. Tigo has similar services in Ghana and Tanzania.

Tigo Rwanda is the second mobile company to launch such a service after South Africa-based MTN's local unit launched its mobile money product in February 2010, acquiring about 260,000 subscribers by March this year.

Rwanda's rural areas have limited access to financial services, with the central bank saying only 1.7 million deposit accounts had been registered by December 2010 out of a population of 9 million.

With about 3.3 million mobile subscribers shared between MTN and Tigo as of January this year, Rwandan mobile users can utilise the technology to deposit and withdraw money and can pay electricity bills and school fees via text messages.

Tigo Rwanda launches mobile money payment service | Reuters

More NFC Options, Still Much Confusion

Visa's recent investment in mobile payments enabler Square, coupled with the recent Isis decision to back off creating a brand-new retail payments infrastructure, suggests the market is moving faster now, so much faster than Isis cannot afford to spend years, and lots of money, to create a new mass market payments brand.

Square also suggests the ways much mobile payments innovation will happen: extending payments functionality into retail segments where it has been difficult and expensive to take the existing approaches.

Charge Anywhere has taking a similar tack, supporting payments using iPhone, BlackBerry and Android devices to process credit card payments with their phones and a dedicated reader to swipe the cards.

But the latest version to the software can turn a near field communications device into a full mobile payment terminal without the use of an external dongle. The solution requires an existing merchant payment account.

The new capability allows NFC-equipped credit or debit cards to communicate directly with the Charge Anywhere-equipped mobile device without any need to "swipe" a card.

The larger issue, though, is whether the NFC payments infrastructure can grow fast enough to take market share before other communication methods get traction. Square seems to be doing just fine using the old "swipe" method.

App turns Google Nexus phone into payment tool | Android Atlas - CNET Reviews