Sprint Unlimited Strategy Shows One Way "Disruption" Can Play Out

Facing larger and more powerful competitors, contestants in just about any market will cast about for strategies that allow them to survive, and hopefully narrow the gap with the dominant providers.

Attackers frequently employ the "same features, lower price" strategy. It's an easy thing for consumers to understand. Network services providers often try the "get more, pay less" strategy in ways that take advantage of unused capacity (evening hours and weekends for voice, for example). Service providers can offer "unlimited calling" at times when the network has ample surplus capacity, and the incremental cost of such operations is quite low.

Bandwidth providers, whether in the local access markets or in the global undersea business, often will instinctively offer "same features, lower price" products because they can. If your network is brand new, has lots of capacity but you have few customers, that is a rational strategy.

Not all disruption comes from smaller, attacking firms, though. As Apple has shown, sometimes disruption happens best when a strong, financially well-heeled firm decides to disrupt a market. Still, smaller firms in highly-competitive markets, who have lots of capacity but few or fewer paying customers, often can be expected to try the "get more for your money" strategies. Sprint is doing so.

Young Dominate "Cell Mostly" Web Use

Younger adults, minorities, and lower income earners who own smart phones are likeliest to mostly use them to access the Internet, according to a July 2011 survey from the Pew Research Center Internet & American Life Project.

Some 42 percent of 18-to-29-year-old smart phone owners mostly use them for web access, double the 21 percent of 30-to-49-year-olds who do so and more than four times the 10 percent of smartphone owners 50 and older.

The obvious implication might be that users with less disposable income are likely to rely more heavily on mobile broadband, which they often must purchase in order to use the devices they prefer. The other possible explanation is that, for many users, mobile broadband is the most valuable and therefore the most-used form of access.

Young, Minorities Dominate ‘Cell Mostly’ Web Use

Microsoft's "can't lose" mobile strategy

Microsoft’s deal with Nokia should increase the company's position in the smart phone operating system market. The number of smart phones now being sold with Windows Mobile or the newer Windows Phone 7 is pretty small, perhaps less than five percent of all sales, representing licensing fees of perhaps $10 to $15 license fee per phone. Some argue Microsoft can make more money by licensing other parts of its intellectual property portfolio.

Microsoft is now seeking to get royalties from all Android handsets sold It is quite likely that Microsoft will be able to extract licensing fees (eventually) from all the manufacturers. And at $5 per handset produced, that is a substantial revenue stream.

No disrespect, as a business model is a good thing to have. At the same time, in a market seemingly driven by the likes of Apple and Google, one has to ask the question: when was that last time Microsoft actually did something "enchanting" in the mobile market?

Microsoft's "can't lose" mobile strategy

Google accounts for 92% of UK searches

Experian Hitwise data shows that Google in June 2011 had a 92 percent market share of all searches carried out by U.K. Web users, up 1.5 percent on the previous month and 0.2 percent higher than the same period in 2010.

Microsoft, Yahoo! and Ask Sites accounted for seven percent of searches, with ‘Other’ accounting for the remaining one percent.

Google accounts for 92% of UK searches

Follow any Google+ Account using RSS

While Google is yet to provide an official application programming interface for Google+, "PlusFeed" is a service that provides an "real simple syndication" (RSS) feed of any Google user’s public posts. Simply find the unique number at the end of their profile URL, and then add it to the PlusFeeds URL. So, for example, the URL of The Next Web’s Google RSS feed is: http://plusfeed.appspot.com/103907806627406122152.

Follow any Google account using RSS

Price Transparency Causing More Brand Advertising?

Oddly enough, as knowledge about pricing rapidly shifts in favor of consumers equipped with smart phones, there's trouble ahead for retailers who cannot offer the lowest prices, but opportunity for a renaissance of brand advertising, argues Gian Fulgoni, comScore chairman.

Advertising's role in this new world becomes not just a demand driver but also a counter-balancing force to price as the main determinant of consumer choice.

Ad spending trends support this conclusion, he argues. TV ad sales rose nine percent in the first quarter of 2011, while the Interactive Advertising Bureau just reported a 23 percent growth in online advertising. Tellingly, in 2010, display advertising grew faster than search, for the first time since the IAB began reporting its data, driven by a 35 percent increase in spending on video ads, Fulgoni says.

The numbers indicate a new-found focus on branding advertising at the expense of direct response or price or promotion communications, he argues. Others might not be quite so sure. Advertising is rebounding from rather deep reductions caused by the great recession of 2008.

Get Ready for a Renaissance in Advertising

87% of Google+ Users are Male

Mobile Apps and Network Performance Now are Data Centric

Text messaging now is the preferred and most-used communications mode for 55 percent of Western European mobile customers polled in May and June 2011 by the Yankee Group.

The survey of almost 5,000 European consumers in France, Germany, Italy, Spain and the United Kingdom also found that 54 percent preferred voice calls, and used voice on a daily basis. About 27 percent preferred email and 22 percent preferred instant messaging. That is as stark a reminder as one could get that "communications" these days is about all sorts of media, channels and devices.

The Yankee Group researchers predict that as smart phone adoption increases, so will the use of instant messaging. The other important insight is not so much that text messaging is displacing voice to some extent, or that other channels likewise are competing with voice, but that users want to be able to use multiple channels in different settings, depending in part on the people or communities to be communicated with.

The survey also suggests, as you would guess, that touch screen interfaces are important. In fact, a touch screen is the single most important feature for a new device, at 30 percent of responses, outstripping even "Internet access," the most important feature for about 14 percent of respondents.

Overall, the survey suggests, "data-centric" features now are top of mind for consumers, and drive their thinking about what to buy. In terms of network quality attributes, it is clear that data service performance is more important than voice service performance. Aside from consistency, "higher Internet access speed" was the second most important attribute of network service. About nine percent indicated that " fewer dropped calls" were the top network service issue.

Capacity Wholesalers Expect Revenue Growth

The providers of global capacity expect revenue growth over the next two years, a finding that cannot surprise many observers, given the perpetual growth of Internet capacity demands, now seemingly driven by mobile network upgrades, growing smart phone Internet usage and content.

Even given price declines on a per-bit basis, when capacity requirements grow roughly 60 percent a year, nominal revenue growth is virtually inevitable.

Still, just 44 percent of respondents to a Yankee Group survey think revenue growth over the next two years will be "significant."

Verizon has 33% U.S. iPhone Share

A little less than five months after Verizon Wireless began selling Apple’s (NASDAQ:AAPL) iPhone 4, the carrier has claimed 32 percent of the U.S. iPhone 4 market, according to Localytics. Read more here.

While the report noted that AT&T Mobility (NYSE:T) still commands 68 percent of the iPhone 4 market, Verizon’s share has been steadily growing since the February launch of the Verizon iPhone, despite Verizon launching the phone eight months after AT&T did.

Moreover, according to Localytics, the growth has been accelerating, with Verizon capturing seven percent of the market in May and June 2011 alone. Verizon’s share started at around 20 percent in February and grew to 25 percent in April and around 26 percent in May.

Verizon commands one-third of U.S. iPhone 4 market share

Netflix to Restructure Pricing

Netflix is changing its retail service plans, launching separate "rent DVD" and "streaming" plans. Among the new plans are "DVD only" plans, offering the lowest prices ever for unlimited DVD rentals and priced at $7.99 a month for the "one DVD out at-a-time" plan and $11.99 a month for the "two DVDs out at-a-time" plan.

Netflix also is  separating "unlimited DVDs by mail" and "unlimited streaming" plans, allowing users to choose a streaming-only or a DVD-only package, or subscribe to both.

At the same time, Netflix is ending its current plans that offer both unlimited streaming and unlimited DVDs by mail.

The current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans, plan one offering unlimited streaming (no DVDs) for $7.99 a month, and Plan two offering unlimited DVDs, one out at-a-time (no streaming), for $7.99 a month.

The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). For new members, these changes are effective immediately; for existing members, the new pricing will start for charges on or after September 1, 2011.

Netflix says the plans reflect a new understanding that some subscribers want DVD-only access, while others want streaming-only or mixed access. Most significantly, DVD-only customers seem to be a significant percentage of the customer base.

"Reflecting our confidence that DVDs by mail is a long-term business for us, we are also establishing a separate and distinct management team solely focused on DVDs by mail, led by Andy Rendich, our Chief Service and Operations Officer and an 11 year veteran of Netflix," the company says.

People generally are not happy about the change, but you could have guessed that reaction. Some 1800 comments so far on the post, here: http://blog.netflix.com/.

The issue is whether the changes have any noticeable effect on subscriber acquisition or retention.

Deutsche Telekom, Vivendi Argue for New Business Models

European telecom companies should be free to develop new business models, including charging online content providers for delivering their material to consumers, a new report by the chief executives of Deutshe Telekom, Vivendi and Alcatel-Lucent will suggest, the Financial Times reports.

The position paper comes as the European Commission is looking into broadband investment policies in the EC, with some suggesting investment will lag because of inadequate profit potential from “commodity” Internet access.

The ability to create and sell various flavors of broadband access, not simply plans differentiated by price and usage allowance, is seen by many as a necessary precondition for continued investment in higher-capacity access services.

It also is viewed as a requirement for “quality of service” as more users in the future pay for Web-delivered entertainment video, for example.

The outcome of the EC rule-making could have implications for policy in other regions as well. The U.S. Federal Communications Commission has been intent on imposing “network neutrality” rules that prohibit Internet access providers from prioritizing some traffic over others, allowing “best effort only” access by fixed-line providers, with so far indeterminate rules for mobile providers.

A decision by the EC to allow priority features or services would prove a challenge to U.S. rule-makers, as the arguments about investment and revenue to support investment are the same in the EC and the United States.

Rent Movies, Buy Books on Android Market

Google has released a new version of Android Market (Android 2.2 and higher) supporting movie rentals and book purchases. In the U.S. market, consumers will be able to rent thousands of movies, starting at $1.99, right from Android Market on their phones, using the "Video" app.

Users sign into Android Market with their Google account, and can rent movies from anywhere--the web, Android phone or tablet--and start watching instantly. Users also can download movies for offline viewing.

U.S. users also can now purchase books from Android Market on their phones. Like movie rentals, books are linked to your Google account, so they’re instantly available across all of your devices – computer, phone, or tablet – without the need for wires or downloads.

A new Android Market for phones, with books and movies - Official Google Mobile Blog:

More than Half of Users 18 to 29 Own Smart Phones

Smart phone penetration has reached more than half (52 percent) of 18-to-29-year-old U.S. adults, according to a July 2011 study from the Pew Research Center Internet & American Life Project.

The study also reveals that 45 percent of 30-to-49-year-olds own smart phones, and this figure then drops by almost half to 24 percent among 50-to-64-year-olds.

More than Half of 18-29-Yr-Olds Own Smartphones

Google Estimated To Surge Past 10 Million Users

It’s only been two weeks since the launch of Google+ , but already there are “millions” of users, according to chairman Eric Schmidt. Beyond that ballpark figure, Google has not disclosed any user or usage numbers.

But Ancestry.com founder Paul Allen has been publishing his own estimates of the growth of Google+. His latest estimate is that Google will surpass 10 million users on July 12, 2011. That estimate is up from 4.5 million on July 9, 2011 and 1.7 million on July 4, 2011.

Google Estimated To Surge Past 10 Million Users (Chart) | TechCrunch

Collaboration Myths

All those collaboration tools that have been developed over the years may not make your team more effective, Gartner argues. Gartner has said that collaboration initiatives often fail because people hold some basic misconceptions about the collaborative process.

Among the myths are the notion that "the right tools will make us collaborative." It really is not about tools. Tools help people do things they want to do. Some organizations might not really "want" to practice collaboration.

Another myth is that "collaboration is inherently good." That is true sometimes, but not always, Gartner argues. Without quantifiable goals, initiatives easily can fail.

Unmasking the collaboration myth

Disturbing Findings on Start-Up Job Creation

New businesses contribute a disproportionate share of new job creation in the United States. So it is disturbing that new research released today by the Ewing Marion Kauffman Foundation suggests that the country faces a far more fundamental employment challenge that pre-dates the recession by many years.

Researchers call the problem a slow jobs "leak." Put simply, new businesses are adding workers at a lower rate than historically has been the case.

The report shows that since the middle of the last decade and perhaps longer, new businesses have been generating fewer and fewer new jobs. The cohort of new firms that started in 2009, for example, is on course to contribute one million fewer jobs in the next decade than historical averages would suggest.

Read more here.

"While the recession certainly deepened the jobs deficit, the U.S. economy stopped producing enough new jobs well before the downturn," said Robert Litan, Kauffman Foundation vice president of research and policy and study co-author. "Historically, startups are the key to long-term employment growth, and they have been hiring fewer people for the last several years. We won’t fix our core unemployment problem in the United States until young businesses get back on track."

Citing data from the U.S. Census Bureau, the study found that the number of new employer businesses has fallen 27 percent since 2006. When including new employer businesses and newly self-employed workers, the level of start-ups has held steady or even edged up since the recession, according to the Kauffman Index of Entrepreneurial Activity.

But that encouraging sign is somewhat misleading because firms that support only the self-employed owner do not scale to generate the new jobs needed to support overall economic growth.

Historically, new firms in the United States have generated about three million new jobs every year, but that recent cohorts have performed much worse, creating only 2.3 million jobs in 2009.

At the level of individual businesses, one data series (BLS establishment data) showed that in the 1990s new establishments opened their doors with about 7.5 jobs on average, compared to 4.9 jobs today.

The study also found that as a group, recent cohorts of new businesses have been adding jobs at a slower pace than earlier cohorts even when they do well and grow, but that growth hasn't made up for lower employment levels at inception.

"Not only are these businesses starting out smaller than their predecessors, they are staying smaller," said E.J. Reedy, Kauffman Research Fellow and study co-author. Thus, falling contributions of jobs at new businesses will be felt in the U.S. economy for years."

The researchers said that rather than focusing on discrete events such as the opening of a new manufacturing plant or relocation of a large business to a local community, policymakers must recognize that the long-term jobs outlook will be driven by the collective decisions of young and small businesses whose changing employment patterns are hard to identify or influence.

They also warned against the false hope that growth in the number of self-employed workers can resolve the U.S. employment shortfall.

PayPal Has to be In Retail Payments

PayPal believes that by 2015, digital currency will be accepted everywhere in the United States, from local businesses to large chains. By "digital currency," PayPal means a viable currency alternative to credit cards, debit cards and cash. Already a leader in online payments, PayPal believes the next, and largest opportunity, is retail payments at physical locations.

Supporting Payments In The Physical World Is Critical For PayPal

Mapping Twitter and Flickr Geo-Location

Geolocation data for Flickr and Twitter posts. Flickr data is shown in orange and Twitter data is displayed in blue. Not every tweet or Flickr post has geo-location data attached, but it is becoming a more-common practice, it seems.

Mapping Twitter and Flickr Geo-Location

Windows Phone 7 OS Market Share Gains Still A Ways Off

A growing number of analysts may be forecasting that Windows Phone 7 could overtake every mobile platform except Android within a few years, but Microsoft is "managing expectations." CEO Steve Ballmer admitted to the firm's Worldwide Partner Conference that the new operating system has had limited impact so far. 'In a year, we've gone from very small to …. very small."

Many think the Nokia deal, replacing Symbian with Windows Phone 7, will change all that, and in dramatic fashion, giving the WP7 operating system a huge boost in sales volume. Pyramid Research even believes WP7 will overtake Android, on the strength of Nokia's sales volume.

Of course, Microsoft's coziness with Nokia is likely to lead other traditional licensees to back off a bit, as it appears Nokia will have unusual rights to modify the way WP7 operates, compared to other licensees.

Wisely, or fortuitously, Microsoft did not decide to strike the Nokia deal with Research in Motion, as many had been suggesting for years. RIM has been losing market share since 2008, in large part because of perceived weakness in the broader smart phone area, despite the historic strength in business-focused messaging devices.

WP7 is "very small", admits Ballmer - Rethink Wireless: