Apple, Google Gain; RIM, Microsoft, Symbian Lose in 2nd Quarter

The U.S. mobile operating system was a tale of two markets in the quarter ended June 2011, as Google's Android ranked as the top smartphone platform with 40.1 percent market share, up 5.4 percentage points. Apple strengthened its #2 position with 26.6 percent of the smartphone market, up 1.1 percentage points from the prior reporting period. Those were the winners.

Research in Motion, Microsoft and Symbian all lost share.

Top Smartphone Platforms 3 Month Avg. Ending Jun. 2011 vs. 3 Month Avg. Ending Mar. 2011 Total U.S. Smartphone Subscribers Ages 13+ Source: comScore MobiLens
	Share (%) of Smartphone Subscribers
	Mar-11	Jun-11	Point Change
Total Smartphone Subscribers	100.0%	100.0%	N/A
Google	34.7%	40.1%	5.4
Apple	25.5%	26.6%	1.1
RIM	27.1%	23.4%	-3.7
Microsoft	7.5%	5.8%	-1.7
Symbian	2.3%	2.0%	-0.3

June 2011 U.S. Mobile Subscriber Market Share

T-Mobile Still Losing Customers

The recent round of quarterly earnings reports for mobile service providers doesn't bear directly on prospects for approval or rejection of the AT&T bid to buy T-Mobile USA, despite the fact that T-Mobile became the fifth smaller carrier to post disappointing results in the last two weeks.

Sprint, MetroPCS, Leap Wireless and Clearwire all reported subscriber losses, as did T-Mobile USA. The reason the quarterly results do not necessarily lend credence to either the argument to approve or deny the transaction is that the results can be seen as support for either position.

Most observers have been expecting consolidation in the market, simply because of the competitive pressures. That might tend to support the argument for a consolidation, even though there will be room for legitimate concern about market structure.

The other argument is that smaller competitors already are finding it difficult to compete with AT&T and Verizon, and that the market is in danger of being dangerously concentrated. That argument will be clearer if (when) Verizon Wireless itself grows by acquiring Sprint.

T-Mobile Still Losing Customers

Facebook Looking at Changes to News Feed

The changes should make it easier for brands to run campaigns on Facebook.

IT Buyers Like White Papers, But Many Want "Local" Content

A survey of 3,217 information technology professionals in 114 territories by IDG Connect suggests that vendor content is a remarkably powerful marketing tool. Worldwide, 72 percent of IT professionals say they find content of this kind “extremely useful” or “useful”. In Africa, Asia and South America, the numbers rise sharply, to encompass nearly all IT professionals.

But IT professionals outside North America say they want localized studies. What they often get are white papers that are heavily influenced by North American perspectives. In Asia, 74 percent of IT professionals say they would prefer localised content, but 79 percent say they “struggle” to find it. In Europe, half of IT professionals prefer to read localised content. Yet 55 percent “struggle” to find it.

The preference for local information is widespread, but runs deepest in South America, Australia and North America. In Europe and the Middle East, the preference for local information is real, but less pronounced. By contrast, Asia, dependent on raw material imports and the export of finished goods, emerges as a stand-out exception. Here, IT professionals find local and global perspectives equally useful.

But white papers might not be the best venue. IT professionals around the world demonstrate a strong appetite for white papers. But how engaged are those potential readers?

We asked IT professionals whether they are “always interested in consuming IT white papers”, or whether they seek them out “when it is relevant to a specific project”. IDG Connect describes these separate groups as “mavens” and “searchers”.

The study found that "mavens" are less plentiful than "searchers." Despite much enthusiasm for white papers in principle, the proportion of mavens dwindles to around a third of respondents in Europe and the Middle East, and to a quarter in South America. In other words, demand for white papers is less robust than often is thought.

Read more here.

Smart Phone, Freemium Games Competing With Console Games?

Shifts of consumer demand always are important, and a shift seems to be happening in the video game arena. Sales of video games fell by 10 percent in June 2011 according to NPD Group, from $1.15 billion in June 2010 to $1.03 billion. The decline is worst among publishers of traditional console games.

The industry currently garners about 75 percent of its revenue from packaged sales, although some industry leaders expect that to drop to just 50 percent within the next five years. Changing user expectations probably play a part, as there is growing evidence gamers think $40 is too much to pay for a single title.

But something else also seems to be happening. Users are spending more time playing simple games on their smart phones and tablets, instead of using dedicated gaming devices.

Even the pre-teen market, the largest for hand-helds, is perfectly happy to play games on an iPhone or other smartphones, NPD says.

Smartphone & Freemium Games Killing Console Competitors?

Google runs 900,000 servers, uses 0.01% of world's electricity

Google runs 900,000 servers that possibly consume u0.01 percent of worldwide electricity, compared to data centers as a whole, which account for up to 1.5 percent of worldwide electricity use, and as much as 2.2 percent of U.S. electricity.

To be sure, those figures represent a "best guess" made by Stanford professor Jonathan Koomey.

Google runs 900,000 servers, uses 0.01% of world's electricity

Windstream Purchase of PAETEC Has Broader Lessons

Windstream Corp.'s acquisition of PAETEC Holding Corp. illustrates one key element of business strategy for most service providers of any size in the U.S. and other global markets. The $2.3 billion deal gives Windstream a bigger profile in business customer services, arguably a more-important revenue source for any fixed-line service provider, given the cable industry's growing success in the consumer services market.

The acquisition also illustrates the generally paltry returns available to most service providers in their legacy geographic footprints. Generally speaking, the largest tier-one telcos, mobile service providers, small rural telcos and competitive local exchange carriers have been able to get significant growth in subscribers and revenue over the last decade largely by growing outside their original service territories. Read more here.

The need to go "out of region" is not just a strategic imperative for tier-one global providers. It applies to small telcos, competitive local exchange carriers and mobile service providers as well.

Few remember it, but Rochester Telephone, an independent telco operating in Rochester, N.Y., once wanted to get into the competitive long distance business badly enough to trade away its local access monopoly, breaking itself up into a "wholesale" infrastructure company and a separate retail entity that bought network service from the wholesale company just like any other competitor in the market.

More recently, SingTel decided to give up its local monopoly in the same way Rochester Tel did, in exchange for freedom to deploy its capital in other international markets. But note the business driver: SingTel cannot achieve the growth it expects and wants if it stays a provider of services in Singapore. Perhaps 90 percent of current revenue already comes from "out of region" operations.

Windstream says the deal provides more opportunity in strategic growth areas for Windstream, including IP-based services, data centers, cloud computing and managed services. A stronger presence in the important business market is key. But the acquisition also gets Windstream into new geographic markets as well.

Mobile Operator Radio Costs to Grow 7 Times to 2016

According to Juniper Research, even after adding more-efficient Long Term Evolution networks, global mobile operator costs to deliver user data could surpass $370 billion annually by 2016, a seven-fold increase on their 2010 level of $53 billion.

That might be a generalized problem for fixed networks as well, on both capital and operating cost fronts.

Mobile Network Operators Face Seven Fold Increase in Data Delivery Costs

Apple Gets 66% of Handset Profits

Apple gets two thirds of total industry profit share in the handset arena, despite getting only about 28 percent share of device sales. Apple share of phone revenues increased to 28%

Read more here as well. 

Low ROI Blunts Mobile Marketing Adoption

A new study conducted by The Relevancy Group in June 2011 and commissioned by Pontiflex, finds that lack of return on investment from mobile advertising is the biggest deterrent for marketers when it comes to increasing mobile ad spending in 2011.

Some 43 percent of marketers who aren't planning to increase their mobile ad spending this year say low ROI from mobile advertising is the top reason that they won't increase spending. The survey also found that 93 percent of marketers said they would increase mobile ad spending if they realized a higher return on their investment.

Other survey results indicate that marketers are dissatisfied with click-based mobile advertising. The Relevancy Group survey found that 56 percent of Fortune 500 marketers are dissatisfied with or don't use click-based mobile advertising.

Low Mobile ROI Deterring Mobile Advertising

Comcast Won't Compete for Over the Top Video Customers Outside its Franchise Areas

Comcast Corp. says it will not offer streaming video services that can be purchased by customers outside its own franchise areas.
The economic hurdle is too great for the operator to consider going over the top with subscription streaming video services that would compete not only with Netflix, but with other cable TV operators, according to As Comcast Chairman and CEO Brian Roberts.

If you know the cable industry, you knew he would say that. Cable companies simply do not compete with each other.

Comcast Won't Go Over the Top

U.S. ISPs Deliver 82% to 114% of Advertised Speeds

In its new report on broadband access performance of 13 Internet service providers representing 86 percent of U.S. subscribers, the Federal Communicartions Commission found that actual download speeds are substantially closer to advertised speeds than was found in data from early 2009. 


On average, during peak periods, digital subscriber line services delivered download speeds that were 82 percent of advertised speeds, cable-based services delivered 93 percent of advertised speeds, and fiber-to-the-home services delivered 114 percent of advertised speeds. Verizon's FiOS average real-world speeds were actually higher than advertised speeds, both over a 24-hour period and during peak surfing hours. Other high-ranking ISPs include Comcast and Cox. 


During peak periods,  speeds decreased from 24-hour average speeds by 0.4 percent for fiber-to-the-home services, 5.5 percent for DSL-based services, and 7.3 percent for cable-based services.


Peak period download speeds varied from a high of 114 percent of advertised speed to a low of 54 percent of advertised speed.


Peak period performance results for upload speeds were similar to or better than those for download speeds. Upload speeds were not significantly affected during peak periods, showing an average decrease of only 0.7 percent from the 24-hour average speed.


On average, DSL-based services delivered 95 percent of advertised upload speeds, cable-based services delivered 108 percent, and fiber-to-the-home services delivered 112 percent.


Upload speeds among ISPs ranged from a low of 85 percent of advertised speed to a high of 125 percent of advertised speed.

The Free Press predictably chose to focus on the gaps.  "While the study indicates some providers are consistently delivering their customers the promised network speeds, it reveals that many providers are falling well short of their advertised claims." ISPs Fail to Deliver Advertised Broadband Speeds

On average, during peak periods, digital subscriber line services delivered download speeds that were 82 percent of advertised speeds, cable-based services delivered 93 percent of advertised speeds, and fiber-to-the-home services delivered 114 percent of advertised speeds.

During peak periods,  speeds decreased from 24-hour average speeds by 0.4 percent for fiber-to-the-home services, 5.5 percent for DSL-based services, and 7.3 percent for cable-based services. Read the report here.

Are Smart Phones, 4G Bad for Smaller Wireless Providers?

It is no secret that the costs of marketing smart phones are higher than was the case for feature phones, and that is true for carriers large and small.

MetroPCS has also seen its costs rise much more steeply than its profits, for example. Its cost per gross addition reached $177.88 in the second quarter, up about eight percent, and its average revenue per user rose to $40.49, up just over 1.6 percent. Read more.

The growing dominance of AT&T and Verizon Wireless in the U.S. market has been said to threaten Sprint, but does nothing to help either MetroPCS or Leap, argues 24/7wallstreet.

A merger of MetroPCS and Leap is likely only to delay their inevitable demise. Both AT&T and Verizon Wireless offer pre-paid phones, and though the pre-paid service is not their preferred business, the two giants could pretty easily eliminate MetroPCS and Leap.

One is reminded of what the advent of broadband did to independent Internet service providers in the dial-up era. Once the broadband shift began, dial-up ISPs found they no longer could compete, as the costs of providing broadband access were higher than dial-up, destroying profit margins.

It might be the case that smart phones and fourth-generation services might have similar impact on many smaller mobile providers, resellers and channel partners.

Are Smart Phones, 4G Harming MetroPCS?

Trans-Pacific Circuit Prices Plunge

Trans-Pacific capacity prices have plummeted over the past two years, says TeleGeography.

Between the second quarter of 2009 and second quarter of 2011, the median monthly lease price for a 10 Gbps wavelength from Los Angeles to Tokyo fell 63 percent, from $98,500 to $36,000.

Prices are tumbling on other trans-Pacific routes as well. Over the past 12 months, median 10 Gbps wavelength prices from Los Angeles to Singapore fell 33 percent, while Hong Kong-Los Angeles 10 Gbps prices declined 39 percent.

Three new cable systems are probably the reason for the sharp price declines. The Asia-America Gateway (2008), Trans-Pacific Express (2009), and Unity (2010) cable systems have increased supply, with the predictable effects on pricing.

Industry executives have been relatively optimistic in public about "rational" pricing behavior in the capacity markets. Some will argue faster price declines are to be expected when new capacity comes online. Generally speaking, price-per-megabit prices drop 20 percent or so each year, so a decline, on a per-megabit basis, is not unusual. The sharper declines on trans-Pacific routes, though, suggest pricing pressure will be more significant than usual, for a while.

Trans-Pacific Circuit Prices Plunge

Data Center Electricity Consumption Grows More Slowly Than Expected

Data center power consumption has grown significantly less than predicted over the past few years, largely due to the 2008 economic crisis, according to a new study.
The study, carried out by Jonathan Koomey, a consulting professor in the civil and environmental engineering department at Stanford University, found that electricity used by data centers worldwide increased by about 56 percent from 2005 to 2010.

Data center electricity use doubled from 2000 to 2005 and a study by the U.S. Environmental Protection Agency predicted power consumption would double again from 2005 to 2010.

Recession Saps Data Centre Power Growth