After 10 Years of Big Bandwidth, Where are the New Apps?

After a decade of fiber-to-the-home access, what do service providers have to show for it? Not as much as you might think, suggests Benoît Felten, Yankee Group principal analyst.

"Surprisingly perhaps, considering the decade’s worth of experience some Asia-Pacific countries have with FTTP, they face many of the same issues surrounding FTTP that have been prevalent in the West," says Felton.

The business model, for example, is no less an issue than in other markets. "Finding a sustainable business model" is as important for private players in the Asia-Pacific markets as you can guess it is for service providers elsewhere. High bandwidth provided at low cost might be great for consumers, but is challenging for providers.

Government subsidies and support in some markets is part of the answer for some providers, though.

Service innovation also is an issue. FTTH provides "more" bandwidth. But does it stimulate new applications and businesses that did not exist before? The answer, so far, seems to be "no." That is not to say broadband is unimportant as an enabler of economic activity.

But it is fair to say even after a decade of having FTTH, there is little to point to except online gaming, in terms of new and widely-used applications. "Even in Japan and South Korea, there aren’t that many disruptive or innovative services available to end-users, with the exception of online gaming," Felton says.

"While there’s been a vibrant development of Internet activities, especially in South Korea, this hasn’t necessarily resulted in the kinds of services that are generally expected, such as health care or connected communities," says Felton.

Sustainability, especially in a market context, remains an issue as well. While things have been slowly improving for early deployers, especially NTT, which announced at the conference that its average revenue per user  for FTTP services has increased from 4,800 yen to 5,590 yen between 2006 and 2009, the revenue from fiber-grade services that actually benefits the telco remains limited.

Regulators, on the other hand, must continually monitor the degree of competition in the access market as well, and Felton notes that NTT has 75 percent market share in the fiber access market, but only 30 percent or so in the digital subscriber line market.

Asia-Pacific is still by far the most advanced region of the world when it comes to fiber to the premises deployment and adoption. Asian FTTP adoption is estimated at 40 million subscribers, compared with just eight million in North America and 3.5 million in Europe.

The Korea Communications Commission and KT have ambitions to upgrade to a national target of 1 Gbps connectivity. That's an important national goal, but such government-lead policies arguably are not replicable in other markets that must rely on normal supply and demand constraints.

In some "state-lead" markets, the advantage for incumbent operators is an easier business case. In Malaysia, the government has decided to co-finance a fifth of the cost of an urban deployment of FTTP. As you would expect, Telecom Malaysia customers are able to buy service that is quite attractive compared to what one would find in a market where such subsidies are not available, says Felton.

In Australia and New Zealand, deployment models involve heavy government intervention, both in funding and investment structure establishment.

The biggest anticipated growth of this second wave is China. The Chinese government itself is not directly involved in the FTTP push, but all of the competing Chinese telcos are state owned, which imposes different constraints on their investment decisions compared to private players.

The somewhat discouraging news is that, after 10 years, FTTH has not produced unambiguously new and lucrative applications. That doesn't mean such applications will not develop, but simply that a private market cost-benefit analysis might suggest it still isn't so smart to charge ahead with a robust FTTH program at all costs.

Gulf Oil Illustrates Bigger Problem: People are Starting to See Govt. as Anti-Business

For over a month, Pres. Barack Obama watched the oil spill spread over the Gulf of Mexico with the same powerless horror as other Americans. Finally, lampooned by his countrymen for his impotence, he was spurred into action. He attacked the only available target—BP—and, to underline the seriousness with which he takes this problem, he gave his first Oval Office address on the subject.

The address got poor reviews; the attack on BP better ones. This week the firm bowed to pressure, and announced that it was, in effect, handing over $20 billion to the government to pay for compensation and clean-up, as well as cancelling the payment of any dividends this year and setting up a fund—of a mere $100m—to compensate unemployed oil workers.

This may do Mr Obama some good. Whether it will benefit America is more doubtful. Businessmen are already gloomy, depressed by the economy and nervous of their president’s attitude towards them. This episode will not encourage them.

American politics and business: Obama v BP | The Economist

FCC Moves Toward "Public Utility" Regulation of Broadband

Public Utilities do some things quite well. But innovation is not one of them. And that's the problem with common carrier regulation: it often results in good quality for basic services, but with high prices and very-low innovation beyond the basic service.

Electricity, water, natural gas, and until recently local telephone and cable services were usually classified as public utilities and regulated by government. Now, however, the Federal Communications Commission wants to classify the decentralized Internet as a public utility, as FCC chair Julius Genachowski tries to get around a Supreme Court ruling blocking his Net Neutrality ambitions.

FCC takes first step towards making the Internet a “public utility”

Wireless Broadband Would Account for More than 1/2 of Losses Under Net Neutrality Rules

Network neutrality rules would reduce the growth rate of the broadband sector by around 15 percent per year, according to an analysis by the Brattle Group. The loss—$5 billion in 2011, growing to $100 billion by 2020—increases over time and represents a 2.5 percent smaller sector in 2011 and a 17.7 percent smaller sector by 2020.

Wireless broadband would bear much of the brunt of the reduction, as mobile broadband is expected to be the driving force for broadband overall starting about 2013, Brattle Group says. The share of revenue from mobile broadband lines grows over the period, overtaking revenue from wireline broadband lines by 2013. The business versus residential split is fixed at its 2008 proportions of 37 percent business and 63 percent residential.

Residential fixed lines continue to grow at eight percent per year rate until they reach 90 percent of households and thereafter grow at two percent per year. The business fixed lines grow at the same rate.

Mobile broadband is expected to be the source of most of the broadband growth over the next decade and consequently would bear the largest share of the economic burden of network neutrality regulations.

In 2008, mobile broadband lines accounted for only about a quarter of all broadband lines, but would likely account for more than half of the economic losses over the coming decade if the proposed network neutrality regulations are put into place.

Link to full analysis

FCC to Allow "Re-Purposing" of 90 MHz of Mobile Satellite Spectrum

The Federal Communications Commission has initiated a proceeding to free up 90 MHz of spectrum
for mobile broadband by removing barriers to flexible use of satellite spectrum allocated for other purposes.

The FCC already has approved the Harbinger-SkyTerra transaction, which will enable Harbinger to
invest billions of dollars in building a 4G wireless network using spectrum that includes spectrum in the mobile satellite service bands that originally were licensed for mobile satellite only. Under new rules, that spectrum can be used for terrestrial fourth-generation mobile use as well.

The FCC had already allowed some terrestrial service over MSS, allowing satellite operators to build ground-based networks over the spectrum to augment the larger satellite network. But the FCC now has lifted the satellite requirement entirely from two other MSS bands, the L-band and the band known as Big-LEO (low earth orbit), where satellite operators like SkyTerra and GlobalStar operate.

The FCC apparently is moving towards allowing satellite operators could lease out their spectrum to terrestrial operators as well, allowing them to augment or build their own mobile broadband networks. Currently, the rules allow MSS-license holders to wholesale capacity on networks they build, but the MSS operators might also be allowed to sell wholesale access to the spectrum itself.

AT&T's New Smartphone Plans Could Send iPhone And BlackBerry Sales Through The Roof

AT&T's cheaper tiers of mobile data subscriptions, especially a $15 a month entry-level plan, could boost smartphone sales by making them more affordable to a much bigger market, which in turn should drive bigger unit sales and activations for Apple, Research In Motion, and other companies that sell smartphones at AT&T.

The new plans mean an iPhone becomes a much more affordable option for kids, lower-end users, and basically anyone who was turned off by the requirement to spend a mandatory $30 per month on data access, whether you used it a lot or a little.

AT&T's New Smartphone Plans Could Send iPhone And BlackBerry Sales Through The Roof

4G/LTE Standards Advance

The International Telecommunication Union is likely to approve two 4G standards.

IMT-Advanced (International Mobile Telecommunications Advanced) is the "real" 4G, whereas current wireless technologies such as LTE and WiMax 802.16e are pre-4G, or proto-4G, technologies.

The two technologies set to make the 4G cut are LTE Advanced, proposed by the 3rd Generation Partnership Project (3GPP) , and the Institute of Electrical and Electronics Engineers Inc. (IEEE) 's 802.16m (also known as WiMax 2.0), both of which have been under consideration since October 2009.

Light Reading Asia - 4G/LTE - CommunicAsia 2010: Two Techs Set for 4G OK - Telecom News Analysis

AT&T's New Data Plans Will Save Most People Money

BillShrink co-founder & CEO Schwark Satyavolu says AT&T's new data pricing plan is a good thing. Customers will now have the option to save hundreds of dollars over the course of their 2-year contract, and it's just an issue of figuring out how much data you use.

Plus, the cheaper plans could send iPhone and BlackBerry sales through the roof.
However, pricing could be an issue in the future if data usage continues to increase at the rate it has been over the past year and a half.

Here's How AT&T's New Data Pricing Plans Will Save Most People Money

Will Reclassification Derail FCC's Broadband Plan?

Some at the top level of the Federal Communications Commission may believe a new legal framework for its authority over broadband services will help keep its ambitious National Broadband Plan afloat, but some cable industry policy pundits wonder if the move might produce the opposite effect.

The FCC's reclassification effort could 'totally sidetrack the Commission from getting some pieces of the broadband plan done,' warned Steve Morris, VP and associate general of the National Cable & Telecommunications Association.

Light Reading Cable - Broadband - Will Reclassification Derail FCC's Broadband Plan? - Telecom News Analysis

Title II: Regulated Dumb Pipe is the Polcy: Consumer Welfare is the Issue

Since the greatest service provider fear is that of being reduced to a "dumb pipe" provider of commodity access service, it is drop dead simple to see why most facilities-based providers will oppose the Federal Communications Commission attempt to regulate broadband access as a common carrier access service with no permissible traffic shaping.

Application providers are right to fear unfair business advantage, which would be the case if ISPs decided to block lawful applications or apply differentiated quality measures to their own Internet traffic, while denying such prioritization and quality measures to business partners or competing applications.

Any number of issues present themselves, ranging from the legal (whether the FCC has authority to proceed as it intends) to the likely impact on investment in new and upgraded access facilities (less investment, not more) to impact on innovation.

Some would say the FCC is attempting to regulate "ex ante," before a problem exists, rather than tackling any issues as they arise. The factual record suggests only two examples of blocking, sufficiently chastening the entire industry into agreeing that indeed, all lawful applications must be allowed.

The big problem is how networks can be managed under conditions of congestion so as to preserve quality of experience, and there the difference between traffic shaping and "blocking" is technically quite difficult to separate. All voice networks, for example, use blocking techniques at times of peak congestion to preserve service quality. Data networks have many more options.

Some types of lower-priority traffic might reasonably be slowed down to allow higher-priority traffic types to get preferential treatment, especially video and voice traffic that are highly suscepitble to delay.

Such measures also are crucial for new services of the sort businesses routinely enjoy, where users can buy features allowing them to set their own priorities for some types of applications. In a regime where absolutely no prioritization is allowed, it would not be legal for an ISP to create and sell a service that provides higher continuity for tele-medicine, video or voice services, for example.

"Dumbing down" access networks by prohibiting any packet prioritization automatically prevents creation of quality-assured services, even if end users want them.

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U.S. Online Spending up 11% in 2010

U.S. online ad spending looks to be up nearly 11 percent from 2009.

Does Anybody Really Believe a "Small" Number of Title II Rules Will Hold, Long Term?

The Federal Communications Commission's press release on opening its notice of inquiry on Title II common carrier classification of broadband access services will leave many service providers a bit queasy. For starters, the rules almost certainly will apply to cable companies, which never have been regulated, in any way, as "common carriers."

Secondly, even if the FCC promises some lighter-touch "third way," once Title II rules are established as the framework, there is no formal barrier to later changes in rules that would apply more than a "small number" of Title II rules. Nobody familiar with government logic and practice will feel safe that the promised forbearance will hold over the long term.

Taxes and rules get instituted in modest ways, for specific purposes, and then never "sunset." Over time, in the case of taxes, amounts keep creeping up. Over time, in the case of administrative or legal requirements, old rules continue to drift out of date with changed circumstances.

Nor will the actual language provide much comfort. The FCC says it wants to fundamentally alter broadband access regulation, but will "forbear," at its own discretion, from applying all the common carrier rules, "other than the small number that are needed to implement fundamental universal service, competition and market entry, and consumer protection policies."

Not many observers think, over the long term, that the number of rules will remain "small." Where else in federal government action have you seen rules become less numerous over time?

Once Title II is the new framework, any number of steps, including price regulation, entry regulation and other rules are possible. In a nutshell, what was best about the old, highly-regulated monopoly system was service quality and universal access. What was worst was high prices and low rates of innovation.

Under competitive conditions the effect of common carrier regulation is mixed. We are likely to see both low prices and low innovation, plus less investment.

Verizon already earns 70 percent of its cash from operations, not wireline, and the balance continually is shifting to wireless. With lower likely return from wired operations, rational operators will simply starve the wired networks and invest more heavily in wireless.

The problem is that wireline service as a whole is becoming less profitable, and providing less revenue. You don't help matters by making it less profitable, and creating less revenue. You only accelerate its decline.

Facebook 2009 Revenue Was Almost $800 Million

Facebook’s revenue in 2009 was nearly $800 million, and the company turned a part of it into a solid net profit, according to Reuters. That's a big deal for a company that, for the longest time, had no obvious long-term revenue model.

The number is significantly higher than earlier estimates of $500 million revenue in 2009, and even the projected $710 million revenue in 2010. Facebook, as usual, declines to comment on any of these numbers, but sometime in 2009. Facebook seems to have became cash-flow positive.

Facebook 2009 Revenue Was Almost $800 Million [REPORT

How Does iPad Affect Smartphone Browsing?

For people who keep track of statistics such as smartphone operating system market share, device behavior and trends, the iPad and other tablets are going to complicate matters. Should these devices be tracked with smartphones, with PCs, or as a separate category.

Some might argue a tablet is like a smartphone, and should be included in smartphone stats, if the same operating systems are used for both the tablet and smartphone devices. Others will argue that will distort the smartphone data.

So far, it seems iPad usage is someplace between PC and smartphone usage, perhaps suggesting it might be a separate category.

"Among the 14 percent of our iPhone client users who use an iPad, their average session length is 12 percent longer than the average iPod Touch or iPhone users," says Kate Sellers Blatt, iPass director. Some other data suggest iPad owners use the Internet more than they do on their smartphones, but still far less than on their PCs.

Morgan Stanley estimates that iPad browsing activity already is greater than BlackBerry or Android smartphone activity, on a global basis.

If casual and anecdotal evidence is any indicator, most people use their iPads quite heavily in indoor environments, on couches, for example. Mobile devices also are used indoors, sometimes as much as half the time. But there are some indications iPad use is indoors as much as 90 percent of the time.

For the moment, I think it is more useful to consider tablets a separate category from smartphones or PCs, at least for tracking purposes.

Quantcast Blog

Google Might Try to Act More Like Apple

Google is reported to be planning a unified user interface that will be imposed across Android products, ending the fragmentation that dogs the system, but also restricting partners' development of their own user experiences. That shift in philosophy would pull Google closer to the way Apple operates.

The top priority for the next Android update, codenamed Gingerbread, reportedly is to homogenize the user experience and address criticisms of fragmentation. This could severely curtail the freedom of licensees to create their own user interface overlays, most famously, Motorola's Motoblur and HTC's Sense.

It's probably a toss up at this point which approach is better. Apple has proven that absolute uniformity of experience is no barrier to wild acceptance. On the other hand, a uniform approach to user interface will tend to dampen the pace of innovation to a degree.

Google does have a big stake in preventing Android fragmentation, which makes it much harder for developers to create applications guaranteed to run on any Android device with a specific version of the operating system. On the other hand, the HTC "Sense" user interface is quite a differentiator, so handset suppliers might not like the restrictions on their freedom of movement.

As with all engineering decisions, there will be trade offs. A uniform UI is better for software developers, but arguably worse for hardware developers. Most consumers seem to indicate by their buying preferences that a standard UI is, if not a "good" thing, then at least no barrier.

In the battle between "open" and "closed" approaches to development, "closed" seems to be getting more traction these days.

Google risks OEM wrath with unified Android UI plan - Rethink Wireless

FCC Power Grab Will Face Huge Legal Challenges

Despite strong bipartisan objections from a majority of congress, the FCC voted to move ahead to take public comments on FCC Chairman Julius Genachowski’s “third way” proposal to reclassify broadband providers under Title II common carrier status.

It’s truly amazing how we got to such a state of affairs. The FCC had gotten everything it wanted from Comcast before it even issued a ruling, and the entire reclassification movement is incoherent because it is based on a myth to begin with.

The whole thing is a manufactured crisis based on irrational hysteria over the DC Circuit ruling on the Comcast-vs-FCC case.

The courts have ruled many times in favor and against the FCC, yet the reclassification movement acts as if the DC Circuit ruling against the FCC was some earth shaking event that permanently strips the FCC of its authority unless the FCC does something extraordinary to counter it. The reality is that an FCC acting brashly to bypass the court’s ruling would likely result in a nasty rebuke from the courts.

The court has been very clear that it would reject any power grab by the FCC that would “free the Commission from its congressional tether”. With 74 congressional Democrats signing a letter opposing reclassification and the majority of Republicans on board, it’s clear that the FCC doesn’t even have the support of congress much less explicit authority. Furthermore, it appears that the FCC may be violating a legal precedent set in the Midwest Video II case.

Digital Society � Blog Archive � FCC third way – Shattering the congressional tether

Not Much Actual Video Cord Cutting Going On, Nielsen Says

Consumers who really have stopped buying multi-channel video and watch online video instead are young and light TV viewers, a new analysis by Nielsen suggests.

Young, emerging households, younger college graduates and  lower to middle income consumers who may not be fully convinced of the need to pay for digital cable represent the core group abandoning their multi-channel video subscriptions and substituting online video.

Nielsen data shows that these individuals are typically light TV viewers who watch 40 percent less TV per day than the national average. And while they stream about twice the average amount of video, they still only stream about 10 minutes per day, hardly an indication of a monumental shift to online-only viewing, Nielsen says.

The number of people per month viewing online video increased six percent year-over-year, the study shows.

Online video streaming still only accounts for less than 2.5 percent of total video consumption across all demographics.

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Tablets Becoming a User's Second PC

Tablets will be used as a second computer, primarily for media consumption, with a laptop becoming their principal computing device, Forrester Research analyst Sarah Epps says.

Tablet computers like Apple's iPad will outsell netbooks by 2012 and surpass desktops by 2015, growing at a 42 percent compound annual growth rate between now and 2015. She estimates there will be about 3.5 million tablets sold in 2010.

By 2015, only laptops will have a greater share of the market, with 42 percent, versus a projected 23 percent market share for tablets.

Big Smartphones, Small Tablets

One wonders how big smartphone screens can get, and small tablet screens can get. The Sprint HTC Evo 4G and Verizon's Motorola Droid X have huge screens of about 4.3 inches and 4.4 inches, respectively.

The Evo 4G measures 4.8 by 2.6 by 0.5 inches and has a 4.3-inch touchscreen. T-Mobile's HD2 phone, also built by HTC, has similar dimensions--4.7 by 2.6 by 0.4 inches--as well as a 4.3-inch display. The Droid X, slated to debut next week, is even bigger than the Evo 4G or HD2, and has a 4.4-inch screen. By comparison, Apple's new iPhone 4 is relative petite with its 3.5-inch LCD.

The Dell Streak, an upcoming tablet device, will feature a 5-inch touchscreen. While the Streak will have 3G broadband and Wi-Fi, as well as a front-facing camera for video chat, it's definitely not a smartphone, according to Dell.

There are boundaries for how big a phone can be, and still be usable, though. One might argue the same thing is true of tablets. There is some point at which they likely are too small to be highly useful. Right now, it's hard to say where the line is, though.

Weight and battery size are other issues. To drive a larger screen you need a bigger battery. That adds both heft and weight to any device, but especially for a phone.

Supersized Smartphones: How Big Can They Get? - PCWorld

FCC Votes to Open Title II Reclassification for Broadband Access

The U.S. Federal Communications Commission has taken the first step toward imposing limited regulations on broadband providers by voting Thursday to launch a notice of inquiry exploring the change.

The commission voted three to two to launch the notice of inquiry, which asks for public comment on a proposal by FCC Chairman Julius Genachowski to reclassify broadband as a common-carrier regulated service. It might be an expensive proposition, if the FCC proceeds.

Proposed regulation of high-speed Internet service as a "common carrier" service could cost the U.S. economy at least $62 billion annually over the next five years--a total of $310 billion--and eliminate 502,000 jobs, according to a study released by the Advanced Communications Law & Policy Institute at New York University Law School.

The report estimates that broadband providers and related industries may cut their investments by 10 percent to 30 percent from 2010 to 2015 in response to additional regulation.

At at 30 percent reduction in investment, the economy might sustain an $80 billion hit, according to Charles Davidson, director of the law school's Advanced Communications Law & Policy Institute.

"There will be follow-on effects in the whole ecosystem," said Bret Swanson, president of technology researcher Entropy Economics in Zionsville, Ind., who co-authored the study with Davidson. "A diminution of investment by the big infrastructure companies will reduce network capacity, new services, and investment by all the ecosystem companies."

These investments would spur capital expenditures by others in the ecosystem. A five-percent incremental increase in capital expenditures by the rest of the  ecosystem companies could boost investment by approximately $18 billion per year between 2010 and 2015--about $90 billion over five years--and yield an additional 450,000 jobs created or sustained.

One might ask whether it makes sense to place further burdens on a business whose revenue steadily is declining as a percentage of total end-user communications spending. It wouldn't be the first time the FCC or Congress has moved to essentially disrupt industry structure in hopes of spurring higher consumer welfare.

In the Telecommunications Act of 1996, voice services were liberalized. What nobody apparently anticipated is that wireline voice would suddenly reach its zenith, and begin a long, steady decline. The background assumption was that the business was a "growth" business, rather than a "declining" business. But common sense suggests that different policies are needed when a business is shrinking, than when it is growing, when a business can grow faster because of more competition and when it will simply decline faster because of new constraints. $310 Billion Economic Loss, Over 5 Years if Title II Rules are Imposed

Is Email Going Away?

Lots of people, including Facebook COO Sheryl Sandberg, think email is fading away as a communiation activity. "Only 11 percent of teens email each day," Facebook COO Sheryl Sandberg says. "Email is probably going away."

Part of that behavior pattern can be explained by the fact that teens are not in the work world in the same way as older users are, and email remains highly important in the work world.

This is good news for Facebook and online advertising in general, she argues.
People are more comfortable seeing ads directed at them in their Facebook "News Feed" than they are in their email inboxes, she argues.

While ads in an inbox are called "spam," Facebook users will even sometimes click "Like" on a brand's Facebook page and volunteer to receive messages directly from advertisers.

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Mobile Advertising Growing, But Revenues Still Modest

Mobile advertising will continue to be a modestly-sized segment of the digital media ecosystem as long as different segments of marketers have alternative media vehicles which better meet their business objectives, say researchers at MagnaGlobal. But mobile commerce and mobile marketing are destined to grow.

Global online advertising will rise by 12.4 percent in constant currency terms during 2010, to $61 billion dollars globally. Accounting for actual and expected changes in currencies over the course of 2009 and 2010, online advertising will grow during 2010 by 13 percent in U.S. dollar terms or by 21 percent in Euros.

Paid Search has quickly become the most important component of online advertising, and in 2010 this segment will account for nearly $30 billion, up by 16.5 percent over 2009 totals on a constant currency basis, and about 49 percent of total revenues.

Google is the global leader in paid search, but in the paid search markets of China and Russia, the leading paid search providers are domestic players Baidu and Yandex.

All other online advertising will account for $31 billion, up by 8.7 percent in constant currency terms.

Advertising networks retain their importance to advertisers given their ability to aggregate and monetize vast quantities of inventory in an inexpensive manner. Social networking sites such as Facebook capture a large and growing share of audience time.

These trends should continue over the next five years, and the report expects online advertising to collectively grow by 11.7 percent in 2011 and by an average rate of 11 percent through 2015. At this time the global industry will generate $103 billion dollars in constant dollars.

The ongoing global economic recovery has contributed some modest uplift to the expectations of growth, but secular factors are the primary cause of this rapid and sustained pace of development. Importantly, says the study, industry growth is not directly caused by increasing numbers of consumers online nor by rising levels of time spent online.

Instead, growth is driven by businesses, many of them small, that find online media to be the single most effective platform to accomplish their business goals.

PC Sales Up by 52% Next Five Years, Forrester Says

Apple CEO Steve Jobs has compared the PC to a farm truck, saying that when America was an agrarian economy, “all cars were trucks because that’s what you needed on the farm."

The analogy is that PCs will be displaced by new devices such as the iPad.

Steve Ballmer, Microsoft CEO, obviously does not agree. “I think people are going to be using PCs in greater and greater numbers for years to come," he said. "The PC as we know it will continue to morph form factor."

Semantics aside, there still is a question: is the iPad something new, a new market, or simply a new PC form factor? Steve Jobs may not view the iPad as a PC, but we do, says Sarah Rotman Epps, Forrester Research analyst.

"Our view is that the consumer PC market in the United States is indeed getting bigger," she says. "Over the next five years, PC unit sales across all form factors will increase by 52 percent."

Desktops are the only type of PC whose numbers will be fewer in 2015 than they are today, she argues.

Growth will come from new form factors like tablets, but laptop sales will increase steadily also.

Tablets will, however, cannibalize netbooks, outselling netbooks starting in 2012.

In 2015, 23 percent of all PCs sold to consumers in the US will be tablets.

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A Contrarian View on iPhone?

It takes a brave constitution to suggest iPhone is losing its "cool" factor, especially given iPhone's success in the very-tough Japanese market, where foreign-made devices tend not to succeed.

Enterprises Will Spend $12.5 Billion on Tablets, Other MIDs in 2015.

Tablet devices such as the iPad are getting most traction in the consumer market, but will get traction in business markets as well, according to ABI Research. The firm predicts worldwide ultra-mobile device adoption will average 55 percent per year as businesses find many uses for such devices.

In addition to tablets, the research company also puts other devices in the UMD category, including netbooks, smartbooks and mobile Internet devices.

“Businesses will be attracted to these devices for the same reasons as consumers – their larger screens, LAN and WWAN connectivity, and most importantly, low cost," says Dan Shey, enterprise practice director. The firm predicts businesses will buy $12.5 billion worth of tablets and other MIDs in 2015.

ABI Research: Enterprise adoption of ultra-mobile devices to hit $12.5 billion by 2015

Why Some AT&T Customers Might Want to Stay Away from "MicroCell"

It appears there are at least two distinct customer segments where it comes to use of AT&T's new femtocell offering.

Users who really cannot get decent macrocell coverage in their homes or offices probably will welcome the "MicroCell."

But users who do not have that problem, and want to offload their data traffic to the in-home network, will be better off avoiding the Microcell.

The reason is that data consumed on its MicroCell femtocell will be included in subscribers' newly capped monthly data allowance.

Any 3G data traffic running over the AT&T MicroCell will count towards a user's monthly data limits, just as making voice calls over the Microcell counts towards a user's monthly bucket of minutes.

It is possible to get unlimited calling on the Microcell for $19.99 per month, but this is only for voice calls, not data.

In contrast, Wi-Fi usage does not count towards a subscriber's monthly data limit, even though both access methods use the customer's own fixed broadband connection. Of course, AT&T has to invest capital to acquire, deploy and support the femtocells, so relying on the customer's own equipment makes sense, where possible.

The 3G MicroCell complements Wi-Fi by providing enhanced in-home voice coverage and reliable data when Wi-Fi may not be available -- but it is primarily intended for voice calls.

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Will Sprint Buy the Rest of Clearwire?

TownHall Investment Research Analyst Gerard Hallaren says Sprint management has made comments that leading some investors to believe the company iss actively considering a bid for the rest of Clearwire.

"As best we can tell, the speculation is based on a perceived desire by Sprint control its own destiny by owning its 4G network and on synergies created by combining the two companies," says Hallaren.

Some people will contest the notion, as it flies directly against the rest of Sprint's recent initiatives to outsource operations that are not directly customer facing, and concentrate on marketing and customer-facing operations. It is worth noting, however, that Sprint has not acted to divest its actual ownership of facilities, with the exception of tower sites.

The Sprint "4G" marketing platform seems to be getting a lift from the HTC Evo launch, and that appears to be prompting the speculation about whether full ownership of Clearwire (Sprint now owns 57 percent) would add value.

Despite some possible strategic logic, namely the ability to use the Clearwire network anyway it wishes to, there would be obstacles.

Given Sprint's weak financial position, a dilutive equity deal would be required. Hallaren suggests a reverse takeover might be considered.

One issue is that the other Clearwire joint venture partners bought most of their stock at far higher levels, around $17, or $10 higher than the current price.

The public owns only 10 percent of Clearwire, while Intel (11 percent) and Comcast (nine percent) are the largest holders after Sprint. Time Warner owns five percent, Google three percent, Brighthouse one percent, Eagle River four percent.

Perhaps the bigger issue is the different business models. Clearwire is mostly a wholesale provider, though it has some retail operations. Sprint really is a retailer with some wholesale operations. It isn't clear how much more Sprint benefits from increasing its 57-percent stake.

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"The World Has Changed," or Has It?

"The world has changed," Orange Business CEO Says

Speaking to an audience of enterprise executives, Orange Business Services CEO
Vivek Badrinath noted that the world has been changed forever as a consequence of the economic crisis.

"The world is not the same as it was two years ago in terms of what's expected in this room," he noted. The logical question is what those new things are that seem to have changed the market so vastly. The answers aren't easy to figure out.

"New collaboration and social networks for customers and employees are emerging and we now need to work around multiple interactions with our end customers," he says. Sure, but hardly a need that was "transformed" because of the economic crisis.

"We have both the obligation to provide Sarbanes-Oxley compatible, efficient, protected environments for our customers and we have to face the challenges of openness," he says. Yes, but that was true before the economic crisis.

"You're asking us to be faster because the world is moving fast," he says. Agreed, but hardly something new.

"Our ambition is to become the leading developer of applications; to establish ourselves as a true integrator of services," he says. That is the more-shocking statement, perhaps.

Specifically, Orange plans to add a new layer of services that would, for example, enable CIOs to manage all BlackBerrys (password management, policy management), no matter what network they are on.

Services underpinned by the core network expertise seem to be the direction Orange wants to go. "Telecom can get commoditized but its the customer experience, with the services and systems we bring, that defines the value that we bring to this market," he says.

All worthy goals. But one suspects Badrinath was engaging in a bit of enthusiastic hyperbole. I see nothing here that speaks to a "world that is not the same."

It is an ambitious, worthy goal to aim to become the leading developer of applications, and to own the customer experience. Badrinath is right to note the huge change this would represent in a new world with many third-party experience providers. It just isn't entirely clear this has changed much because fo the global recession.

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How to Get Rid of the "Buzzing" When Watching the World Cup

 Tired of the "buzzing" sounds fans are making at the World Cup? The vuvuzela is responsible, but the sound of those long horns can be muted if you have access to an equalizer on the device you are using to watch the action.

If you are watching the games on any device with an equalizer you can control, muting four specific frequencies will eliminate the buzzing while leaving the game sounds and commentary alone.

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Global Broadband Access Market Up to $414 Billion by 2020

The global broadband access market, including both fixed and mobile modes, will increase from $274 billion in 2010 to $416 billion in 2020, an increase of 52 percent, according to the Telco 2.0 Initiative and Disruptive Analysis.

More than half the revenue growth will come from wholesale and “two-sided” fees for improved access capacity and quality. This could include fees paid by business partners who want access to network service provider features and services.

By 2020, mobile broadband will be worth $138 billion, or 32 percent of the total broadband access industry revenues.

The analysts predict growth of “bulk wholesale” revenues, where capacity might be purchased by a third party as a component of some other service. Services provided to electrical utilities or other parties with telemetry needs are other examples.

“Comes with data” business models such as used by Amazon Kindle to sell content also will play a bigger role. Here, a product vendor or service provider contracts for data capacity with the broadband provider, and bundles it in a combined offer while the user does not have a subscription or direct relationship with the telco.

“Slice and dice” wholesale is more complex, and more controversial. This involves operators selling data capacity in fine-grained “parcels” to parties other than the user, who is typically also paying for some level of access.

This type of “two-sided” business model could involve deals with consumer electronics vendors for extra high-quality streams over existing broadband lines, or to content or application providers where they pick up the bill for data transmission rather than the end-user.

Any way one looks at the matter, it appears that various wholesale or enterprise revenues are going to be a bigger part of the overall mobile revenue stream in the future.

AT&T: iPhone 4 Pre-Order Sales Were Ten Times Higher Than First Day 3GS Sales

AT&T says sales of the iPhone 4 were 10-times higher than the first day of pre-ordering for the iPhone 3G S last year.

AT&T also said that they are suspending pre-ordering today in order to fulfill the orders they’ve already received.

AT&T: iPhone 4 Pre-Order Sales Were Ten Times Higher Than First Day 3GS Sales

Apple Apologizes For iPhone 4 Pre-Order Failure

Apple on Wednesday said that it saw the largest numbers of iPhone 4 pre-orders the company has ever taken in a single day, with 600,000 devices sold already.

Apple confirmed widespread reports that order and approval systems have failed, faced with the pressure of iPhone 4 demand, and apologized for the technical hiccups. Too much success can do that to a provisioning and ordering system.

Apple Apologizes For iPhone 4 Pre-Order Screw Ups - PCWorld

U.S. Mobile Broadband Will Grow 36% to 2014

According to a new International Data Corporation forecast, the U.S. mobile broadband market will grow from 6.5 million subscribers in 2009 to 30.2 million in 2014, which accounts for a compound annual growth rate (CAGR) of 36.1 percent over the forecast period.

Carrier-subsidized netbooks and tablet devices such as the Apple iPad are driving the trend.

IDC - Press Release - prUS22380410

World Cup: Webmasters Complaining About Less Searches, Traffic

Some webmasters are complaining that they are noticing less traffic to their web sites due to possibly people watching the world cup.

World Cup: Webmasters Complaining About Less Searches, Traffic & Ad Clicks | jatiN mahindrA doT coM

"The Problem With the Internet"

More fun watching this than working, I'll say that.

BlackBerry To Introduce First Touchscreen Devices to Rival iPhone

I loved my BlackBerry when I first began using one years ago. Over time, my business reasons for using a smartphone have changed, with the biggest change being that email is no longer mission critical, but web apps are way more important. As much as I have loved composing text messages on a BlackBerry, the web experience has simply gotten to be painful.

Maybe RIM's new line will fix that. I'm not saying I'd go back, as I am more intrigued by Android devices. I do miss my keyboard, though.

AT&T Issues First Warning About Common Carrier Regulation

The great danger of the Federal Communications Commission's drive to regulate broadband access as a common carrier service is that it will choke off investment that is needed if we are to get the 100-Mbps network the FCC says it wants to see built.

Now AT&T has fired the first warning shot, saying it will reevaluate spending on its broadband access networks if the Federal Communications Commission decides to regulate broadband access as a common carrier service, the Wall Street Journal reports.

The warning can hardly come as a surprise. Both policy advocates and financial analysts already have warned that a capital strike is precisely what will happen if Title II regulations are imposed on broadband access.

"We would expect a profoundly negative impact on capital investment," warns Stanford Bernstein analyst Craig Moffett in a research note to clients.  "The only potential winners are the satellite providers, DirecTV and Dish Network, for whom incremental broadband regulation would dramatically reduce the risk of competitive foreclosure in the video business at the hands of bottleneck broadband providers," he says.

Former FCC Commissioner Harold Furchgott-Roth says the Federal Communications Commission's drive to reclassify broadband access as a common carrier service is "reckless" and "risky," will lead to a dampening of investment in networks, years of legal challenge and replaces an investment climate with a "casino" environment.

Of course, the drive to regulate broadband access as a common carrier service, despite being described as a targeted "third way" between unregulated information services and regulated common carrier services can be no such thing. The service either is an unregulated data service or it is a common carrier service under Title II. There is no permanent middle ground, as the FCC can later apply virtually any Title II common carrier obligations if it so desires, once the change is made.

In fact, the FCC's latest effort is the fourth time the FCC has launched inquiries into the status of information services, concluding three times before (Computer Inquiry I, II and III) that information or enhanced services are in fact to remain unregulated.

"The uncertainty the proposal creates will create a dampening effect on investment in the broadband business,"
says Furchgott-Roth, former FCC commissioner. Companies aren't sure what will happen and will delay
investment until there is certainty, he says.

If the FCC proceeds, and succeeds, "things will be tied up in courts for years an investors will gravitate to areas with greater certainty and opportunity for profit.

"There is a very clear correlation between certainty and investment," says Furchgott-Roth. "Unfortunately, both regulation and uncertainty is where we appear to be headed."

Some policy advocates will dismiss the AT&T threat as bluffing. "If this Title II regulation looks imminent, we have to reevaluate whether we put shovels in the ground," AT&T Chief Executive Randall Stephenson says, according to the Wall Street Journal.

AT&T could cut back spending on its U-Verse home television and Internet service, a move that would damage the FCC's other initiatives to spur more-rapid broadband adoption, at speeds up to 100 Mbps, for 100 million U.S. households.

U-verse service based on AT&T's fiber-to-curb archtiecture now is available to 24 million homes, and AT&T has a target of making it available to 30 million by the end of 2011. But AT&T warns that those plans could grind to a halt if common carrier changes the economics of fiber plant upgrades, which many observers believe is likely.

The reason is simple: common carrier regulation, even if touted as initially having a "light touch," would reverse decades of policymaking in the data services business and give the FCC ability to apply price regulations and wholesale obligations with mandatory pricing. The last time the FCC did that, in the wake of the Telecom Act of 1996, carriers put the brakes on new investment. In fact, Verizon did not begin its aggressive FiOS build until price controls were lifted.

Though the FCC says it won't invoke the most onerous Title II rules, such as regulating pricing, telecom companies worries that posture could be changed easily. And why wouldn't they?

"I'm a 3-2 vote away from the next guy coming in and saying I disagree with that, I take it away," Mr. Stephenson says.

If the FCC is counting on private capital to build the 100-Mbps new networks, and it is, then the drive to impose common carrier regulations virtually everyone expects will dry up investment is an unwise move. Whether the FCC understands this any better than it did in 1996 is questionable.

Users Now Spend 22% of Their Online Time With Social Media

Three of the world’s most popular brands online are social-media related (Facebook, YouTube and Wikipedia) and the world now spends over 110 billion minutes on social networks and blog sites, according to Nielsen.

This equates to 22 percent of all time online or one in every four and half minutes. For the first time ever, social network or blog sites are visited by three quarters of global consumers who go online, after the numbers of people visiting these sites increased by 24 percent over last year.

;The average visitor spends 66 percent more time on these sites than a year ago, almost 6 hours in April 2010 versus 3 hours, 31 minutes last year.

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Digital Content 1/3 of Total by 2014

By 2014, digital spending will make up one-third of total spending, up from 24 percent last year, according to PriceWaterhouseCoopers. The recession, the firm says, only accelerated the shift to digital, with digital spending increasing 10.2 percent and non-digital spending dropping 6.4 percent last year.

But with offline spending still accounting for 66 percent of the total even four years from now, the firm says the industry needs to “embrace digital not as a competitor to traditional analog services, but as a complement."

Google TV Demo

You can draw your own conclusions about the success Google TV will have. But there's little mystery about how it is supposed to work.

Mobile App Store Downloads 7X Bigger by 2014

Mobile app store downloads will increase by a factor of seven between 2009 and 2014, according to Pyramid Research. In 2010 Pyramid Research projects that 36 percent of paid apps will be downloaded through app stores and 86 percent of free downloads will take place through them.

App stores have become an important element in the mobile value chain in part because a wide range of easily accessible apps has quickly become a prerequisite for handset and platform vendors. Vendors also gain a new revenue stream, a powerful customer loyalty tool, an important gateway to additional revenue streams and an attractive resource for potential operator partnerships.

Advertising revenue is expected to play a big role in allowing developers to create revenue streams from free apps.

Developers will be the biggest winners, not only as they gain a higher portion of revenue but also because competition among stores will greatly improve support, payment terms and transparency.

Most third-party stores and aggregators will lose out over time to vendor and operator-sponsored stores, though Getjar might be the salient example of an exception to the rule.

Android Outsells iPhone in First Quarter

Smartphones carrying Google’s Android operating system outsold the iPhone in the first quarter of 2010, say researchers at NPD Group. During the quarter, Android handsets accounted for 28 percent of smartphone sales, beating out iPhone OS and its 21 percent share.

BlackBerry remains the bestselling OS, with its devices capturing 36 percent of the market. NPD attributes the shift to strong sales of the Motorola Droid and Droid Eris.

Strong sales of the Droid, Droid Eris, and Blackberry Curve via these promotions helped keep Verizon Wireless's smartphone sales on par with AT&T in the first quarter. According to NPD, smartphone sales at AT&T comprised nearly a third of the entire smartphone market (32 percent), followed by Verizon Wireless (30 percent), T-Mobile (17 percent) and Sprint (15 percent).

The continued popularity of messaging phones and smartphones resulted in slightly higher prices for all mobile phones, despite an overall drop in the number of mobile phones purchased in the first quarter. The average selling price for all mobile phones in the first quarter reached $88, which is a five percent increase from the first quarter of 2009. Smartphone unit prices, by comparison, averaged $151 in the first quarter of 2010, which is a three percent decrease over the previous year.

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Latest Motorola Droid?

It appears Motorola is getting ready to launch the next version of its "Droid" device, called by some the "X," by others the "Shadow." It reportedly features a metal frame, as the iPhone 4 does. The Droid "Xtreme" supposedly features a 4.3-inch screen, as does the HTC Evo, has "HDMI Out,"  as does the Evo, but will ship with Android 2.1, a new version of Motoblur, and a 750Mhz OMAP processor, unlike the 1-GHz processor the Evo ships with.

You might get an argument about screen size. Some argue the X will have a larger screen than the Evo. It doesn't sound like that will be the case, though (not that a 4.3-inch screen is inadequate by any means). Some think the X will have a larger screen than the Evo, but so far the leaks suggest a same-size screen.

Some worry about the overall size of the device, but I haven't noticed the Evo is a problem in the pocket. Lots of people seem to be more adept at typing on a smaller screen, but I'm not one of them, so the larger screen helps when doing data entry. Others notice the heft of the device, as is true of the Motorola Droid, or Incredible. I also don't find that to be an issue.

But that's the whole point of having lots of devices with different form factors, isn't it? We all get to pick devices that make different design trade-offs.

Online Ads Will Overtake Newspapers by 2014

PriceWaterhouseCoopers says online advertising will become the second-largest advertising medium in the United States, after television, within the next four years, and will increase by over $10 billion in that same time frame.

Online advertising will increase from $24.2 billion in 2009 to $34.4 billion in 2014 to overtake newspapers which will continue to lose ad revenue over the next four years, falling from $24.82 billion in 2009 to $22.3 billion in 2014.

That explains the interest firms such as News Corp. have in e-book readers.

Report predicts online advertising spending will increase by $10 Billion in next 4 years

Free Phones from T-Mobile on June 19

T-Mobile USA plans to give free phones to customers who sign up for group calling plans at its retail stores on Saturday June 19, 2010,  just days before rival At&T will start selling Apple's latest iPhone. Starting at 8 a.m., new customers will be able to get as many as five free handsets of their choice by signing up for a "family plan," which is a calling plan that has at least two users.

Current T-Mobile customers can convert a single-user plan into a family plan by adding at least one user, or adding lines to a family plan they already have. Customers using that option can get up to five free phones with a single family plan, though each will come with a two-year contract.

The promotion includes T-Mobile's newest smart phones running Google Inc.'s Android operating software, such as the HTC myTouch 3G Slide, which usually sells for $180 with a two-year contract and rebate, and Garminfone, which usually costs $200 with a two-year contract and rebate.

U.S. Smartphone Penetration Climbs to 20 Percent

Smartphone penetration in the United States has grown from 11 percent of mobile subscribers in April 2009 to more than 20 percent in April 2010, nearly doubling in just one year. The total number of smartphone subscribers now totals more than 48 million.

The biggest player in the smartphone market remains RIM, with more than 40 percent share of smartphone subscribers. Apple is second with 25 percent share of mobile subscribers, up from 20 percent in April 2009.

Apple’s market share has stabilized at 25 percent in recent months. Google’s Android platform in April 2010 captured 12 percent market share, up from just three percent six months ago. Android is inching closer to the number-three spot currently held by Microsoft at 15 percent, and could overtake Microsoft in a few months.

Americans Get “Smart”: iPhone, Android and the Accelerating Adoption of Smartphones (comScore Voices)

Verizon Wireless LTE Coverage Will Match 3G by 2013

Verizon Wireless says it is on track to complete its fourth-generation wireless network by by 2013, at which point the Long Term Evolution coverage map will match it's current 3G coverage. The company still plans to launch commercially in 25 to 30 markets in 2010, covering 100 million people.

Verizon Wireless: LTE on track and coverage to match 3G by 2013 | LteWorld

Global Broadband and Video Revenue to Grow Robustly

Spending on wired and mobile Internet access will rise from $228 billion in 2009 to $351 billion in 2014, PriceWaterhouseCoopers now predicts, representing growth of about 54 percent. Video subscriptions will grow as well.

The global television subscription and license fee market will increase from $185.9 billion in 2009 to $258.1 billion in 2014, a compount annual growth rate of 6.8 per cent. This will outpace TV advertising, which will grow at a CAGR of 5.7 per cent.

The biggest component of this market is subscription spending and this will increase at 7.5 per cent CAGR to $210.8 billion in 2014. Asia Pacific will be the fastest-growing region with a 10 per cent compund annual increase rising to $47.1 billion in 2014 from $29.2 billion in 2009.

Total global spending on consumer magazines fell by 10.6 percent in 2009, PwC says. The firm projects an additional 2.7 per cent decrease in 2010, a flat market in 2011, and modest growth during 2012–14. As a result, spending will total $74 billion in 2014, up 0.7 percent compounded annually from $71.5 billion in 2009.

Electronic educational books will grow at a CAGR of 36.5 per cent globally throughout the forecast period yet will still only account for less than six per cent of global spend on educational books in 2014.

As a whole, the media and entertainment market will grow by five percent compounded annually for the entire forecast period to 2014 reaching $1.7 trillion, up from $1.3 trillion in 2009. The fastest-growing region throughout the forecast period is Latin America growing at 8.8 per cent compound annual rate during the next five years to $77 billion in 2014.

Asia Pacific is next at 6.4 per cent CAR through to 2014 to US$475 billion. Europe, Middle East and Africa (EMEA) follows at 4.6 per cent to US$581 billion in 2014. The largest, but slowest growing market is North America growing at 3.9 per cent CAR taking it from $460 billion in 2009 to $558 billion in 2014.

Natal Now is Kinect

Kinect, formerly Project Natal, uses a camera for Xbox 360 that tracks a game player in three-dimensional space, tracking 48 points on a body and providing a more-realistic gaming input capability. The infrared camera improves the quality of input to a game program in somewhat the same way that a Wii controller does.

Think of tracking user response to a volleyball lob, for example.

What Is Xbox 360 Kinect?

Android Market Growing Pains

Google probably is learning as much from Android Market feedback as it apparently did in thinking it could sell unlocked Android devices direct to consumers from a website, without the normal retail store and call center support. As it turns out, end users are comfortable with retail store experiences and do expect a fairly robust level of customer support from call centers and retail personnel.

In terms of the Android Market, perhaps Google is learning that it has to communicate better with developers; that throwing up apps to see what happens is just not going to work when dealing with third party developers.

As it turns out, some developers have been complaining that app download counts tracked by the Market have been inaccurate. For any developer that sells apps, that's lost revenue. For developers providing free apps, the apparent loss of downloads can affect ranking, hence the quantity of future downloads, and therefore the size of an end-user base and any upside revenue that might accrue from having a large user base.

Other users have noted that sometimes apps are hard to find when using the Market's own search process. One developer could locate his app when conducting a direct query, but that the app was not visible in search results.

"What disturbs me deeply is that there's really no support system for the Android Market," says Bo Stone of the AndroidGuys. "There's no bug tracking, no support phone or even email or any way to file a problem ticket."

The Android Market does have a help forum, but not many end users or developers are likely to find that a reasonable solution. Developers are customers, and customers have certain expecations about levels of support.

It appears that Android Market does not yet operate as a retail software outlet normally must.

Some developers report that the total number of downloads for their respective applications had in some cases dropped by several thousand, for example. Google will get better at this, but the issues illustrate the growing pains any firm, no matter how accomplished, can experience when moving into a more traditional and direct retail environment.

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Android Guys