Could Apple Turn iTunes into a "Bank?"

Could Apple use iTunes to create some sort of banking or payment or lending service? Some think Apple could do so. 

Apple has filed a patent for an "ad hoc cash dispensing network" that allows users to exchange 

The user of a client terminal (an iOS device, presumably) sends a request for cash to the cash-dispensing server. 

Based on location, the cash-dispensing server locates one or more other users that are close to the requesting user and verifies that at least one of these proximate users is willing and able to provide the requested amount of cash. 

Following the transfer of cash between the parties, the requesting user's account is charged for the service while the providing user's account (iTunes, presumably) is credited for the service.

Apple presumably would charge a service fee that’s shared with the lender. 

That actually does not make as much sense to me as if the system became way to refresh or recharge a person's credit or debit card, on a peer to peer basis, especially for moderate amounts of money. 

That way, no actual cash changes hands. The lender gets a credit in his or her iTunes account, plus part of a service fee. The "borrower" gets additional borrowing capability on a credit or debit card. 

Does the U.S. Have a Broadband Problem?

Is U.S. high speed access “a problem” or not? Observers still cannot agree. A new study by the
Information Technology and  Innovation Foundation suggests there isn’t much of a problem, though some will disagree.

Much depends on one’s point of view. When looking only at nominal prices, or typical access speeds, one will tend to think the U.S. situation is not so good, as the United States never ranks among the top countries on such scales.

But the situation looks different when looking at access prices as a percentage of typical household income, as a percentage of disposable income, or some other metrics, such as mobile broadband speeds, or “entry level” pricing, rather than “highest speed” pricing, or pricing within triple-play bundles, or percentage of users with the fastest speeds.

But  “neutral” observers have for some time been pointing out that, in the U.S. market, broadband availability no longer is the key barrier to adoption. Instead, people can buy, but significant numbers of people choose not to buy.

In other words, these days adoption “barriers” are generally encountered because people do not want to buy broadband. That is a different “problem” than broadband access literally being unavailable.

Some would argue the “broadband has value” gap is a problem that naturally resolves itself, much as the “problem” of people not using mobile phones or text messaging likewise resolved itself, once people figured out the value proposition.

Still, some might argue that “quality” or “price” remain big issues. Others might argue that, as a percentage of typical household or personal income, U.S. broadband access prices are among the lowest in the world.

Also, consumers are fully capable of exercising choice, and a significant percentage of consumers seem to prefer mobile broadband as their primary way of using the Internet, not “fixed network” access.

In fact, higher percentages of some U.S. groups prefer mobile access to fixed access. It is a choice, in other words. Such consumers might depress demand for fixed broadband. But that preference for mobile access is not a problem, but a choice.

Apple's Next Big Thing

Apple will definitely try and disrupt another big business soon. That is fair to say. It has been three years since the iPad introduction, and five and a half years since the iPhone launch. 

So one has to expect something. The issue is what market Apple can create or reshape that is big enough to matter. 

"That's how Apple has done it," said Charlie Wolf, a vice president with research firm Needham and Company who has followed Apple since 1985. "But I can't identify any market that Apple can easily enter and disrupt right now -- that's with Steve Jobs, or without Steve Jobs."

Speculation the past few years has been about televisions. But some of us don't see that. Not that Apple wouldn't try. It's just hard to see how changing the interface, or integrating online with broadcast TV, will add enough value to drive Apple success on the level of the iPad or iPhone. 

Wrist computers might seem to be in the same category. But smart phones already have functionally disrupted the camera, clock, radio and navigation device categories. Tablets are disrupting the e-book reader market and the broader content consumption device area (iPods did it to music players earlier). 

It isn't that it it would be fun (necessary for Apple) to see Apple revolutionize something else we aren't thinking about. It's just hard to imagine what that might be. 

41% of "Lifeline" Mobile Service Did Not, Could Not, Prove Eligibility

A review of "Lifeline"mobile service conducted by the Federal Communications Commission showed that 41 percent of their more than six million subscribers either couldn't demonstrate their eligibility or didn't respond to requests for certification.

Intel’s Web TV Service Won't Lower Your Bills

Intel hopes it can create a successful, and sizable new business selling video entertainment delivered "over the top." But don't count on that service saving you money, or "disrupting" the video subscription business. It won't.

As planned, the new service requires that a customer first buy a video subscription service, then pay for the Intel offerings, and use an Intel decoder box as well.  Intel’s web TV service will not offer 
la carte access to channels and networks, either. 

Disruptive? Not really.

Why Tablet, Smart Phone Owners Buy More of Everything

It isn't hard to find a survey "finding" that tablet owners or smart phone owners buy more of some product than non-tablet owners, or non-smart phone users. The reason is not complicated, and probably has nothing to do with tablet or smart phone owners being more "social," more engaged, more aware or more "something else" than the typical person.

Tablet owners and smart phone owners simply have more money to spend, on average, than people who don't own tablets or smart phones. In other words, they are richer. 

To be sure, one might argue that tablet or smart phone owners also have different behavioral patterns and what not. But they spend more because they have more money to spend. 

Amazon, Apple, Google are Among Top-5 Firms with "Best Reputations"

Amazon, Apple and Google are among the top-five firms with the best reputations, according to a new analysis by Harris Interactive. 

The Harris 2013 reputation study also has Disney and Johnson & Johnson among the top five firms with the best reputations among U.S. consumers. 

Amazon Beats Out Apple For The Best Reputation Among U.S. Consumers, Says Harris; Google Comes Fourth | TechCrunch

Spectrum Always Matters

The Intelligent Transportation Society of America doesn’t want the Federal Communications Commission to free up spectrum in the 5.85 GHz to 5.925 GHz range, as part of its wider effort to clear 195 megahertz of 5 gigahertz spectrum band. The ITSA wants those frequencies reserved for in-vehcile communications.

If the ITSA gets its way, those portions of spectrum proposed for Unlicensed-National Information Infrastructure (U-NII) devices would be unavailable for other non-licensed applications.

That ITSA opposes spectrum sharing in the 5.85 GHz to 5.925 GHz band is not unusual. Spectrum access is the foundation for any business model using wireless communications. And spectrum exclusivity, when it can be obtained, also enhances the equity value of such businesses.

The ITSA language, though, is rather “soft,” suggesting ITSA would prefer exclusivity, but is not sure it can prevail, nor does it believe it cannot live with spectrum sharing.

Separately, Dish Network continues to say it will sell its Long Term Evolution spectrum if it does not win control of Clearwire (a prospect many believe is very close to impossible) or if it cannot find a partner to help it build a new national LTE network.

Both developments illustrate the key role regulators play in enabling communications business models and the potential profit from starting such businesses.

ARRIS Motorola Deal Gets DoJ Scrutiny, And it is a Complete Waste of Time

ARRIS, which is buying the Motorola Home business from Google, says it has received a request for
additional information and documentary materials from the Department of Justice, regarding ARRIS' proposed acquisition of the Motorola Home business from Google.

DOJ is reviewing the transaction for antitrust reasons, but some of us might argue the DoJ in this case really seems to be showing it has nothing more important to do, and is wasting its time.

Only two companies ever have mattered in the U.S. cable business, where it comes to the decoders ("set top boxes"). Those companies were Scientific-Atlanta (assets now owned by Cisco) and General Instrument (Jerrold, originially), whose assets are owned by Motorola.

In 30 years, no supplier other than S-A or GI ever supplied a significant number of set-top boxes to the U.S. cable industry.

No matter which firm owns those assets, nobody else matters. The S-A and GI franchises roughly split the market, and have for decades. There is no danger that one or the other will suddenly swoop in and dominate the business because the buyers (cable operators) have deliberate policies to keep both firms in business, each as a check on the other. That hasn't changed for decades, either.

Nor does it matter, strategically. The importance of the decoder, in a market that is both highly competitive and shifting in the direction of IP network delivery, is declining. Sure, cable operators use them as a conditional access gateway. But there will be other simpler ways of providing such admission control in an IP environment.

Some antitrust reviews are just dumb.

"App Economy" Really Only Driven by a Few Ecosystems, and "Telco" Isn't One of Them

The "app economy," Apple CEO Tim Cook  says, is going to be "two or three players." You can probably guess that Apple and Google are two of them. You can argue about who the third provider might be. 

But nobody would think a "telco" platform or ecosystem actually has a shot at reaching the top tier of application ecosystems. 

And that has implications for the growing emphasis telcos seem to be putting on application development or partnerships. Few would argue that is a misplaced effort. 

But few also would argue that an unrestricted and aggressive approach is warranted, either. as there are just limits to what a telco can achieve in that area.  
To be sure, most of the promising areas are related to the core network and access service assets mobile service providers possess. That is why mobile wallets, mobile commerce, mobile advertising or machine-to-machine apps, especially for vehicles, now are getting attention. 

For the most part, that is probably the sort of app development that telcos actually can profit from, to some extent. Significant success in the broader consumer app space seems extremely unlikely.

Is Apple Getting Ready to Play a "Price Game?"

"Apple Is Not A Hardware Company," Apple CEO Tim Cook says. What precisely that means is not drop dead clear. Cook probably is not just referring casually to the fact that these days, all "hardware" products are driven by "software" features. 

In fact, it is highly unlikely anything Cook says in a public forum is "casual." So what Cook might be laying the groundwork for, is the issue. One can think of somewhat exotic answers. Apple never before has licensed its operating system, so is Cook slowly laying the groundwork for a change of thinking on that score? Though possible, it seems less likely than other explanations.

Compare Amazon and Apple, in terms of their business models. Amazon does manufacture and sell hardware--namely tablets. But Amazon only does so to create a distribution platform for sales of its "software," or content. 

Apple has the opposite strategy: Apple sells valuable content at low margins so it can create more demand for its hardware products.

In other words, Amazon merchandises hardware to sell content and other products. Apple merchandises content to sell hardware. 

So Cook could be obliquely suggesting that Apple's revenue model might, in some cases, rely less on hardware gross revenue and margins, and make up for any shortfalls by sales of content or other products. 

"You could go in and accept a lower margin at any time, for strategic reasons," Tim Cook said. " Or maybe Cook is just laying the groundwork for introduction of lower-priced Apple iPhones, even though Apple denies any such thing is planned. 

With or without a big change in revenue model, Cook might be opening the door for "strategic" pricing changes, perhaps to compete with other devices in developing markets. 

Some of us think Apple must do so. 

Broadband "Stimulus" Disbursements Halted; Waste and Fraud are the Issues

The Broadband Opportunities Program, part of the "stimulus" supposedly aimed at helping the United States climb out of the 2008 recession, now has had disbursements halted, at least for parts of the program, due to allegations of waste and fraud.

Some $594 million in spending has been temporarily or permanently halted, representing 14 percent of the overall program.

The Commerce Department’s inspector general has raised questions about the program’s ability to adequately monitor spending occurring as part of 230 grants. 

Mobile Commerce Becoming Mainstream Faster than E-Commerce Did

“The mobile platform is maturing much faster than the PC platform," says Larry Freed, ForeSee CEO. "We see it in the rate of consumer adoption, and fortunately we are seeing it in how well the top retailers are adapting to multichannel consumers." 

That should not be too surprising, as the mobile commerce experience builds on user familiarity and comfort with the older PC-based online shopping experience. 

A new study also suggests showrooming —the practice of examining merchandise in a traditional brick-and-mortar retail store only to shop online for the same item, often at a lower price--is more complex than sometimes is thought.

While nearly 70 percent of surveyed shoppers reported using a mobile phone while in a retail store during the 2012 holiday season, most of those consumers (62 percent) accessed that store’s site or app. In other words, they stayed within the retailer's domain. 

On the other hand, some 37 percent also reported accessing a competitor’s site or app. So the showrooming danger remains quite high. 

Google Now, Now

Google Now is Google's intelligent personal assistant app and framework, and is part of the Google search experience. It was first available on Android 4.1 ("Jelly bean"). I just had the 4.2 update pushed to one of my devices and the app now is learning my preferences. The voice interface is remarkably accurate. 

"Heterogenous" is the Nature of All Modern Networks

It has been common in recent years for observers to note that fixed networks have revenue issues related in real ways to the inability to mimic what can be done to provide value and experience in the mobile realm.

Only in the mobile domain do users have emotional affiliation with their devices. Only in the mobile domain can it be said that the experience is personalized. And most of the developing new applications and business models in the global communications business are available only in the mobile realm. 

But it is starting to become clearer that a substantial part of the value and experience of "mobile" service actually is supplied by the device, not the network. To be sure, there are times when communication "on the move" is really valuable, and that is the exclusive province of a mobile network.

But most communication does not happen when people are truly "on the go." Still less does content consumption mostly happen when people are moving from place to place. In fact, "mobile" devices more frequently are used in a "network agnostic" way. Only the device and device experience remains constant.

By some estimates, 68 percent of mobile Internet access actually takes place in the home, according to research conducted by AOL and BBDO in October 2012. Other studies suggest that as much as 80 percent to 90 percent of smart phone connect time uses Wi-Fi. 

So one might argue that, increasingly, it is the mobile or untethered device that people see as the embodiment of the value of the networks. In one sense, that is a huge change, as in the past it would not have made sense to argue about which fixed network devices evoke the most end user affection. 

The fixed network was about utility, not fashion; function, not personality. These days, the device is what defines the experience. The network, once again, is starting to become a utility. 

Heterogeneous is the way mobile network executives now describe the use of multiple network technologies to support mobile users. One might well argue that heterogeneous also is the way devices use all networks.