Telcos and Cable are Not "Platforms"

The fight over the TV is really a fight over the next massive consumer platform that is coming up for grabs. Of platforms there are few: Google owns search, Amazon owns digital retail, Facebook owns social, and Apple owns consumer devices. Microsoft owns, well, nothing at the moment, despite its handsome revenue stream from Windows and Office, argues James McQuivey of Forrester Research.

But Microsoft’s Xbox 360 is already the most-watched net-connected TV device in the United States and soon, the world. With more than 70 million consoles in households worldwide, as many as half of them connected to the Internet, depending on the country, Microsoft can rapidly drive new video services into tens of millions of households, McQuivey argues.

Significantly missing from those lists of platforms are cable or telco access service providers. At least for the moment, telcos and cable operators are not "platforms."

88% of All Mobile Apps are Part of Android or iOS Ecosystems

Some 12 months ago, fewer than 40 percent of mobile subscribers in the United States had smart phones. In early 2012, that percentage has grown to at least 50 percent. That, in turn, is going to have implications for use of mobile apps and bandwidth consumption, at the very least. 

Much of the activity will continue to be driven by the Android and iOS ecosystems.

Of smart phone owners who have downloaded an app at any point in the last 30 days,  88 percent are part of either the iOS or Android ecosystems, Nielsen reports. 

In just a year, the average number of apps per smartphone has grown 28 percent, from 32 apps  per user to 41 apps per user. 

In addition, mobile app users are spending more time with apps than browser experiences, some 10 percent more than last year, Nielsen says. 

Some things haven’t changed, however. The top five apps continue to be Facebook, YouTube, Android Market, Google Search, and Gmail. 

Apple's iPhone screen to grow to 4 or 5 inches?

As much as many people love their iPhones, the screen size has come to seem a bit cramped as other manufacturers have introduced larger-screen models. Apple has in the past said there are reasons larger screens haven't been offered. 


The form factor for Apple's "retina display" has been among the arguments for the 3.5-inch screen. 


A new device could use a 1024 x 768 panel which is the same resolution as the company’s first two iPads and works out to 320 pixels per inch. 


That would allow a 4-inch iPhone to natively run all of the existing iPad applications that aren’t optimized for the new iPad, which is double the resolution in both directions. 


So larger screens might be coming in the next version of the iPhone, the Wall Street Journal reports. 


The new displays are said to measure four inches in diagonal, up from the 3.5 inches on previous versions of the iPhone, sources say. 


Apple has in the past defended the screen size as necessary for a good "one-handed" user experience. Those of you already using four-inch screens know navigation with a single thumb can be harder on a bigger screen. 


That might be true, but smart phones these days function as content consumption devices, not just "phones," and there, a bigger screen is better.

Smart Phones for Medical Diagnosis

Some industry verticals tend to be lead adopters of new technology, while others tend to lag. Historically, the financial sector has lead adoption of most new technologies. Medical segments tend to lag. But smart phones, sensor and apps might change that.

And that is one reason e-health tends to get attention from communications service providers. Use of a standard smart phone as a medical sensor could dramatically change the adoption profile.

That’s the vision of a team of researchers at the California Institute of Technology. Led by Nate Lewis, a chemist, the team is developing an e-nose that can sense chemical vapors and enable diagnosis, says Technology Reports.

Android Fragmentation: 682,000 Different Devices

"Fragmentation" matters to the entire Android community: users, developers, OEMs, brands and networks. Fragmentation is a primary reason why Google is changing the way it issues operating system updates. 


Fragmentation isn't always a "problem." In many ways, it offers users and developers a chance to experience great choice and variety.


The proliferation of devices with their associated screen sizes, internal hardware and custom ROMs creates some difficulties, though, as when a particular app doesn't work at all, or works poorly, on particular devices and operating system versions. 


OpenSignalMaps, for example, has identified 681,900 of discrete Android devices, and looked at models, brands, API levels (the version of Android) and screen sizes. And yes, you could say there is a great deal of fragmentation. 

As Targeted Advertising is Possible, "You" are the Business

Rethinking Personal Data: Strengthening Trust, a new report by the World Economic Forum, illustrates the growing tension between ad-supported apps and business models and end-user privacy. 


The problem, of course, is that for any ad-supported business model, end user data is the business model. "You are the business" is one way of illustrating that fact. More to the point, knowledge about your values, preferences, friends, shopping and behavior is what provides the value for advertisers and marketers. 

Nokia Browser Features Data Compression

Research in Motion long has compressed its data "in the cloud" to improve user experience. The same technique is used by some browsers, including the "Nokia Browser."


In some cases, the advantage simply is better end user experience. In other cases, the objective is to reduce end user device data consumption, which in many cases means lower mobile broadband bills.


That might be especially important in developing regions. 


The Nokia Browser compression means end users consume less data by up to 90 percent, Nokia says. 


"Today's mobile phone users want a quick internet experience but without being held back by high data costs," said Mary T. McDowell, executive vice president, Mobile Phones, Nokia.


source: Yankee Group

Google "Story of Send" Tracks Email Journey

How does an email travel from your computer to your friend’s smartphone across the country or around the world?

The Story of Send a new site that provides a behind-the-scenes look into how an email moves through the "Google" networki.  Along the way, you’ll discover everything from where Google filters for spam and scans for viruses to how Google minimizes  impact on the environment through energy efficiency and renewable power.

  

How Often Do Start-Ups Get a "Billion Dollar Valuation?"

With the impending Facebook initial public offering in the headlines, and an application merger and acquisition market that some would say it at least frothy, if not an actual "bubble," a bit of perspective probably is worth keeping.

Over the history of the institutional venture capital business (the past 40 years) the number of companies started every year that turn out to be worth billions sustainably is in the tens not the hundreds, according to venture capitalist Fred Wilson, of Union Square Ventures.

The phrase one sometimes hears is that many start-ups have "features," not potentially important "companies." Also the odds of great success when a firm is the fourth company in a space is arguably quite small.

It's hard to provide an order of magnitude better user experience or value in any market. It might be almost impossible in a new segment with multiple contestants. But soemthing like an order of magnitude "better" user experience is probably what wild success requires.

Intuit Expects $5.5 Trillion in Retail Mobile Payments Volume by about 2017

According to Intuit, the percentage of people who use mobile payments are expected to grow from 6.8 percent in 2009 to 21.3 percent in 2012. By 2016 or 2017, Intuit believes retail mobile payment volume could rise to about $5.5 trillion.

But it isn't at all clear who the provider "winners" will be. Mobile service providers, banks, payment networks, retailers, application providers and handset manufacturers are among the potential suppliers.


Intuit

Is Text Messaging Revenue About to Fall Off a Cliff?

Over the top messaging alternatives have been a growing concern in most European markets for some time. The issue is whether 2012 might now prove to be a watershed year, when use of text messaging went into a permanent reversal.

Consider that Telefonica's revenue from European operations during the first quarter of 2012 was down 6.6 percent, following a dip of seven percent in the fourth quarter of 2011.

The bright spots came in Telefonica's Latin American operations and mobile data services. But there are indicators of trouble, even there.

Telefonica’s first quarter 2012 report might indicate that even mobile services are not immune from economic troubles, and might also indicate a significant current impact from over the top messaging alternatives,  according to a report in Forbes.

Spain’s economy is contracting sharply, with consumer spending falling by double digits. That seems to be putting pressure on uptake of mobile broadband services and could be leading consumers to abandon carrier-provided text messaging services as well.

WhatsApp Messenger, for example, is the number-one paid app downloaded by consumers in scores of countries. In fact, some might speculate that 2012 will be a watershed year, an inflection point for consumer use of carrier-provided messaging in many countries.

Spanish mobile revenue declined by -10.7 percent year over year. That might be a signal as well. To be sure, the severe and apparently growing economic and financial crisis in Spain arguably is a huge driver of consumer behavior, but the shift in text messaging behavior might be something more.


To be sure, it is a virtual certainty that mobile voice and mobile messaging revenues are products like any other. That is to say, they will have a product life cycle featuring growth, maturity and then decline. 


The only issue is when the decline might begin. In Europe, we might find out soon. 

Search Goes "Mobile First"

Mobile local search volume will surpass desktop local search for the first time in 2015, according to BIA/Kelsey.

By 2016, the firm expects mobile local search to exceed desktop local search by more than 27 billion annual queries.

That matters for companies including Google whose business models rely on search advertising revenue.

Canadian Mobile Ops Plan Summer 2012 Mobile Payments Launch

Rogers, Bell Canada and Telus Corp. are reported to be in final talks to adopt a mobile payment platform, using the moniker EnStream, working with banks, by about mid-2012. The payment platform will ensure that retailers and banks have one unified system to work with, not three separate mobile systems.  

Canada’s banking industry seems poised to adopt new voluntary guidelines agreed upon by the banking industry, to work with Enstream. Those standards were agreed upon by the country’s largest banks at a meeting of the Canadian Bankers Association, and will set out rules for “how banks will operate in this new world,” The Globe and Mail reports. 


The voluntary guidelines, technically known as the "Mobile Reference Model," will serve as a blueprint for how mobile payment capabilities can be offered in the Canadian market, including guidelines around how information is exchanged among various parties to a transaction including financial institutions, payment card companies, telecommunications companies and merchants. 


While voluntary, the financial institutions that developed the guidelines are committed to these principles in the mobile market, and these guidelines are intended to create a path to help all market participants move forward in developing mobile payment solutions. 



Canada already has more mobile-ready contactless readers per capita than anywhere else in the world, with this type of reader installed in between 12 and 15 percent of all retail outlets, according to Almis Ledas, chief operating officer of EnStream.



The proposed business model will entail payment of flat annual fees to banks, allowing them to load a consumer's financial credentials on the subscriber information module inside a device enabled with near field communications.



That would allow the phone to replace a debit or credit card, but would not offer the phone company a cut of any transaction made using smart phones.

Is Apple TV Yet Ready to Revolutionize the Category?

Some doubt Apple is yet ready to create a revolutionary TV experience, as most observers think significant amounts of high-value bundled content would be necessary to recast and reshape the consumer television experience as much as Apple tends to prefer, whenever it enters a market.

One can tinker with the user interface, add cameras, make streaming content easier to integrate with other content sources (over the air, cable, satellite or telco TV). Perhaps Apple also can change the visual appeal of the device itself, as by turning the display into something that looks quite different.

A transparent screen would look very different. Still, many believe a truly-big change would have to involve content, the way iTunes drove the appeal of the iPod, or the App Store helps drive the appeal of the iPhone and iPad.

In the case of the iPad, one might argue Apple was able to see the changed nature of an untethered  computing device, optimized for content consumption and building on the touch interface. Earlier thinking about tablets had focused on "work" applications.

"Gesture" operations analogous to that used for video games also would be helpful. But all that taken together might not constitute the sort of breakthrough Apple typically seeks. That would require a new way to purchase content, not simply a new way to navigate or integrate sources.

LTE User Experience Depends on How Often You Default to 3G, if Only Episodically

Tests by Root Metrics illustrate potential end user experience of their Long Term Evolution device and network, and the real-world experience when accounting for the times the 4G network will default back to the 3G network. In a pure LTE comparison between AT&T and Verizon Wireless, AT&T had a slight edge in LTE throughput.

After including defaults back to 3G, Verizon Wireless had the better average performance.



Measured performance, when both LTE and default back to 3G was measured, gave an edge to Verizon Wireless in the 15 cities studied, Root Metrics Root Metrics reports.

3% of App Buyers Represent 20% of Spending

About 66 percent of app users have spent money on an application, but just three percent of buyers represent 20 percent of total spending, according to a U.S. consumer survey conducted by ABI Research. About 70 percent spend nothing or very little, the study suggests.

Among these paying users, the mean spend was $14 per month. But "averages" don't always represent the best and most accurate way to represent the data.

“The median amount among the consumers who spend money on apps is much lower than the average, just $7.50 per month," says ABI Research Senior Analyst Aapo Markkanen.

The obvious implication might be that most apps will not make money.

Showrooming a Bigger Problem for Best Buy than Target, Grocery and Department Stores

Consumers use their smart phones for shopping in different ways, depending on the type of store they are in, a Nielsen survey suggests. 

Mobile couponing (either using or requesting a coupon) is most popular at grocery stores (41 percent of mobile shoppers reported using coupons there), department stores (41 percent), and clothing stores (39 percent). 

Larger purchases, or more complex products additionally tend to drive research and comparison pricing behavior. 

At electronics stores, the vast majority of smartphone shoppers read reviews (73 percent), compare prices with other retail outlets (71 percent) and scan QR codes to get more product details (57 percent).

That might suggest that Target's concern about "showrooming," where consumers investigate products inside a retail store, but then compare prices and buy online, is less a concern for Target than for Best Buy, for example. 

The survey suggests that consumers will do a bit of work to get a coupon for an item that is easy to understand, probably has a lower retail price and might be a repeat or frequent purchase. Consumers are likely to do much more research, and compare prices, for more-expensive, more-complex and higher-priced items. 

Samsung Galaxy S III Battery Life Could be a Major Attraction

Battery life might be a major attraction for the new Samsungt Galaxy S III. In at least one recent battery test, the Samsung Galaxy S III worked for just over 10 hours for video and voice, rivaling some tablets.

Web browsing provided battery life a bit over five hours. Many claim an iPhone 4S can work for seven hours in a Web surfing mode.

Why Facebook Also has to go "Mobile First"

BTIG analyst Rich Greenfield notes that the biggest problem with Facebook is uncertainty about Facebook prospects in the area of mobile advertising, where Facebook has virtually zero market share at the moment.

To keep matters in perspective, the U.S. mobile advertising market is growing far faster than expected, but remains a smallish part of overall online advertising, or advertising in general. 

eMarketer estimates mobile advertising spending in the United States reached $1.45 billion in 2011, up 89 percent from $769.6 million in 2010. U.S. mobile ad spending probably will grow on the order of 80 percent to $2.61 billion in 2012.

But that remains a smallish number, compared to total U.S. advertising spend.

V.Me and PayPass Value, According to Visa and MasterCard

You can debate the different approaches now being taken by MasterCard and Visa in the mobile wallet area. What is less unclear is how each company sees value being delivered. A key emerging new factor is the role of the tablet, even though the smart phone will continue to be viewed as the primary retail payment device.

Is There a Mobile Broadband "Divide" That Cannot be Fixed Rapidly by the Market?

Policymakers, it might be argued, should try to solve real problems, not imagined problems.

Likewise, policymakers and regulators sometimes should be encouraged to avoid mucking about when key problems already are being resolved.

Sometimes, "doing nothing," or perhaps "not getting in the way" is the right course of action. That would seem to be the case for global mobile broadband services, despite the
contention of some International Telecommunication Union researchers that a big problem exists.

“As the broadband revolution unfolds, large segments of the world’s population are being left
behind,” the International Telecommunications Union argues. 


Oddly, other ITU data suggests that mobile broadband adoption is growing rapidly.



The ITU rightly suggests that “over five billion people have never experienced the Internet or have only experienced it through public or shared access, let alone experienced the Internet through broadband access.”



But the ITU also has said that a third of the world’s seven billion people now use the Internet. Over the last five years (2006 to 2011), developing countries have increased their share of the world’s total number of Internet users from 44 percent in 2006 to 62 percent in 2011.


The logical and natural implication is that as Internet usage gradually shifts to broadband modes, users in all markets also will shift their usage in the same direction.


In fact, mobile voice adoption accomplished in less than a decade what policymakers had fretted over for many decades, namely the issue of how to provide phone service to human beings in the developed world. That no longer is a significant issue, and the problem was solved with minimal action by global regulators.



The ITU notes that there are 5.9 billion mobile subscriptions now in use, representing mobile penetration of 87 percent overall and 79 percent in the developing world. The next issue will be broadband service, but the previous success with voice suggests the broadband problem is anything but insurmountable.



Mobile broadband subscriptions have grown 45 percent annually over the last four years and today there are twice as many mobile broadband as fixed broadband subscriptions. Though much of that activity occurs in the developed world, there is no particular reason to believe broadband will not be adopted rapidly in developing regions as well.



So the notion that people anywhere in the world “are being left behind” completely misses the rapid adoption of mobile services by all users, everywhere, at a pace regulators might have found “impossible.”



To be sure, broadband adoption has not yet reached the levels of mobile use. But few believe there is any fundamental reason why that will not continue to evolve at a rapid rate, everywhere.



It is one matter to note that, at the moment, “there is a wide disparity in broadband access around the world, both within countries and between countries.” It is quite another matter to make the argument that structural barriers are so significant that consumer demand and supplier cleverness cannot fill the gap quickly.


Without diminishing some important role for regulators in the telecommunications business, once again it seems regulators are far behind the curve.

How Strong is Demand for Mobile Wallets?

According to March 2012 panel-based research by marketing solutions agency Catapult, just one-quarter of U.S. consumers were at least somewhat interested in using a mobile wallet for in-store purchases.

A clear majority of 58 percent were not interested, including 41percent who reported a complete lack of interest, according to eMarketer.

None of that might mean too much. Interest as high as 25 percent, for a service few consumers actually an use, might be considered "strong" demand, early in a new product's emergence.

More important, people cannot evaluate any new product they have no experience with, one might argue. Only after a clear value proposition is understood can consumers "buy," which validates the market.

Many of us would argue early surveys do not tell us much of anything about the ultimate level of interest.

Why Service Providers, Like Other Marketers, Want "Younger" Customers

It long has been a staple of consumer marketing that it is important to gain young consumers because those purchasing habits will carry over as each demographic group naturally ages. Auto manufacturers, for example, have tried to work with a sort of transmission belt, where initial purchase of an affordable brand naturally progresses to more-profitable brands as those buyers grow older.

Whether or not the tactic works as well as it once did, there remain reasons why marketers still orient their campaigns and products around younger users. In the important global markets, the average age of a human being is lower than in developed regions.

That means the critical mass of current customers are younger, so it makes sense to focus on products that appeal to  younger consumers.  Outside of North America and Western Europe, the average population age is under 30 and in some cases under 25.

What Drives Mobile Banking and Payments?

Across the globe, one segment of consumers, called "smartphonatics" by researchers at Aite Group, is driving the demand for mobile payments and banking.

The differences in mobile payments and banking behavior between Smartphonatics and other consumers are significant.

In 2012, 70 percent of "smartphonatics" worldwide have used their mobile device to make a payment, and 80 percent have used their device for banking purposes.

In contrast, less than a quarter of other consumers have made a mobile payment, and only a third have completed mobile banking transactions.

But the relationship here is correlative, not causal, Aite Group suggests."The smart phone is simply an enabler, not a driver, of changing behavior," Aite Group researchers say. In other words, heavy mobile payment and mobile banking behavior is not "caused" by smart phone ownership.

Rather, some people who own smart phones are more inclined to find value in doing so. The notion of "early adopters" is relevant here, as well as the notion of customer segments and value. Where banking is difficult, and a smart phone enables convenient banking, smart phone users will adopt at high levels.

Where banking infrastructure is highly developed, smart phone users do not have as much incentive to use mobile banking or payments products.

What Drives Mobile Banking and Payments?

Across the globe, one segment of consumers, called "smartphonatics" by researchers at Aite Group, is driving the demand for mobile payments and banking.

The differences in mobile payments and banking behavior between Smartphonatics and other consumers are significant.

In 2012, 70 percent of "smartphonatics" worldwide have used their mobile device to make a payment, and 80 percent have used their device for banking purposes.

In contrast, less than a quarter of other consumers have made a mobile payment, and only a third have completed mobile banking transactions.

But the relationship here is correlative, not causal, Aite Group suggests."The smart phone is simply an enabler, not a driver, of changing behavior," Aite Group researchers say. In other words, heavy mobile payment and mobile banking behavior is not "caused" by smart phone ownership.

Rather, some people who own smart phones are more inclined to find value in doing so. The notion of "early adopters" is relevant here, as well as the notion of customer segments and value. Where banking is difficult, and a smart phone enables convenient banking, smart phone users will adopt at high levels.

Where banking infrastructure is highly developed, smart phone users do not have as much incentive to use mobile banking or payments products.

U.S. Android Version of Google Maps Adds "Offers"

"Selling things" and "helping retailers sell things" have been the underlying rationale for location-based services for some time. Google Play Google Play now has a Google Maps  6.7 release that integrates "offers" into the app.

In the U.S. market, users can tap on “Maps” to open the dropdown menu and then tap on “Offers."  Google Maps also has added indoor walking directions in the U.S. and Japan, plus 360-degree interior photos of businesses.

In U.S, Market, Prepaid Pressure Grows

Most larger mobile service providers are not especially fond of prepaid retail plans, for the simple reason that postpaid average revenue per user is higher. On the other hand, many mobile service providers who have targeted cost-conscious customers, and most mobile virtual network operators, tend to rely on prepaid packaging.

In fact, AT&T Mobility and Consumer Markets President CEO Ralph de la Vega has said the growth opportunity in this country is in postpaid data, not in prepaid voice. AT&T's revenue growth of over $1.2 billion in 2010 for example, was more than twice the revenue growth for the entire U.S. prepaid industry. 

But consumer demand for prepaid continues to grow. In the U.S. wireless market, mobile service providers appear to have lost subscribers from contract-based plans for the first time in the first quarter of 2012.

That doesn't mean demand for mobile service is declining, only that demand is shifting towards prepaid plans.

The seven largest U.S. phone companies, representing more than 95 percent of the market, lost a combined 52,000 subscribers from contract-based plans in the January to March period, according to a tally by the Associated Press Associated Press.

According to The NPD Group, prepaid now is a major reason even smart phones are gaining traction.

Top U.S. Smartphone Manufacturers	Q1'12
Apple	29%
Samsung	24%
HTC	15%
Motorola	10%
LG	7%
RIM Blackberry	5%

The rise of the pre-paid market contributed to Samsung’s growth in the first quarter of 2012. Android devices accounted for 79 percent of the prepaid smartphone market in the first quarter of 2012, for example.

In Africa, Mobiles are Banks

A new survey of global financial habits by the Gates Foundation, the World Bank and Gallup World Poll found 20 countries in which more than 10% of adults say they used mobile money at some point in 2011, the Economist reports.

Of those, 15 are African. In Kenya, Sudan and Gabon half or more of adults used mobile money.

In contrast, in countries with more developed financial systems, the share of adults who use mobile money is tiny, such as in Brazil and Argentina, where use of mobile money is only about one percent of adults.

Screen Size Seems to Dramatically Affect E-Commerce Behavior

Before the iPad came out, very few shoppers at OneKingsLane came from the iPhone or any mobile device, according to Doug Mack, CEO of OneKingsLane.

After the iPad came out, mobile sales shot up, he says, and now account for more than 20 percent of OneKingsLane's revenue.

The obvious question is "why" shopping volume changed. Some would argue that screen size is the big change, and then there is a follow-on or "halo" effect. The argument is that little e-commerce was mobile originated from mobiles because screens weren't big enough to navigate, and too small to allow the appealing visual presentation that drives interest.

The tablet changes all that. And since the iPad has been the dominant device in the tablet segment, and since it is likely most iPad owners also own iPhones, there likely has been a pull-through from the iPad to the iPhone. A reasonable theory, you might say.

Confusing Correlation with Causation

When conducting any type of analysis, it is important to distinguish between activities that are correlated, with activities that are causally related. For example, it remains difficult to say for certain whether widespread use of broadband access "causes" economic activity, or whether places where there is a lot of economic activity drive use of broadband.

That can matter quite a lot whenever businesses or policymakers have to allocate capital for the purposes of stimulating economic growth, for example.

ABI Research has found, for example, that mobile users who download a retailer-branded app said the app caused them to visit the store more (45.8 percent), buy more of the store/brand’s products and services (40.4 percent), tell a friend about their store shopping experience (35.8 percent), and encourage friends to visit the store (30.8 percent), according to ABI Research.

The issue is whether those respondents already were patrons of stores who provided an app. It might be that the greatest benefit of a particular retail app to a particular shopper is the fact that the shopper already was spending significant money at a retail outlet.

In that case, the app does not cause shopping behavior, but only increases engagement with a retailer that already had high significance for the user. But a reasonable conclusion would be that a mobile app can increase spending and engagement, under some conditions, when a relationship already exists.

When Should You Post on a Social Network?

Each major social network seems to have a distinct pattern where it comes to maximizing user traffi, an analysis by Bitly suggests. 


For Twitter, posting in the afternoon earlier in the week is your best chance at achieving a high click count (1-3pm Eastern Time, Monday through Thursday). Posting after 8pm should be avoided. Specifically, don’t bother posting after 3pm on a Friday since, as far as being a gateway to drive traffic to your content, it appears that Twitter doesn’t work on weekends.

The peak traffic times for Twitter are 9am through 3pm, Monday through Thursday, bitly suggests. 

Facebook has a different pattern. Links posted from 1pm to 4pm EST result in the highest average click throughs. The peak time of the week was on Wednesday at 3pm. Links posted after 8pm and before 8am will have more difficulty achieving high amounts of attention. As with Twitter, avoid posting on the weekends.

Facebook traffic peeks mid-week, 1 to 3pm. While traffic starts to increase around 9am, one would be wise to wait to post until 11am. Traffic from Facebook fades after 4pm. Despite similar traffic counts at 8pm and 7pm, posting at 7pm will result in more clicks on average than posting at 8pm.

Tumblr also shows a drastically different pattern of usage from Facebook and Twitter. One should wait until at least 4pm to post. Also postings after 7pm on average receive more clicks over 24 hours than content posted mid-day during the week. Friday evening, a no-man’s land on other platforms, is an optimal time to post on Tumblr.

How Big are the Opportunities in Mobile Payments?

Observers sometimes are not quite aware of why there now is so much activity and hype about mobile payments, mobile commerce or mobile wallets. As always, the reason for all that activity and speculation is that some rather-large revenue streams now are poised for potential disruption, precisely at the point that many large entities are casting about for brand-new fields to conquer, because their own legacy revenues are declining, or are about to decline.

Consider the revenue streams potentially in play. Interchange fees, the transaction fees paid by merchants to process a credit card or debit card transaction at a retail location, typically are in the range of tow percent of the transaction for credit cards, less for debit cards and a bit more for many new mobile payment services.

Typically paid by merchants, interchange amounts to tens of billions of dollars across purchase volume of nearly $2 trillion worldwide, according to Caribou Honig, QED Investors partner.

There also are fee elements. Credit card issuers essentially make $600 billion in loans. A mobile payment platform could capture some of the interest and fees currently charged by the credit card banks, though there is at present much less interest in this revenue stream, compared to interchange.  The reason is simply the risk of holding those payment obligations.

Google, of course, eschews any interest in interchange or the lending function, and clearly is interested in the advertising and loyalty business. Total ad spending in the U.S. market alone exceeds $150 billion.

Apple, on the other hand, will likely want to figure out how any mobile commerce, payment or wallet operations allow it to create big new device revenue streams.

In other regions of the world, transaction fees also are the primary revenue driver. Globally, for example,  the World Bank forecasts remittances in developing countries was about $349 billion in 2011. The issue for mobile operators and other application providers is how much of that could be shifted to mobile means. 

The reason that matters is the revenue associated with transaction fees to send money from one person to another, in country or across borders, using the mobile device.


In India, for example. remitting money using India Post costs five percent of the amount sent, and then many respondents reported another one percent in addition for bribes, tips and other indirect costs. Other remittance channels also represent out of pocket costs. 

What Might Apple do in Mobile Wallet, Mobile Payments or Commerce?

Apple is in some ways the contestant in mobile payments or mobile commerce that probably would strike many as the most likely to take an unusual path. Whether Apple thinks it is important to do so probably is the bigger question.

Up to this point, Apple has shaken up device markets. Unless Apple changes tack for the first time, it is likely to approach the whole subject of payments and commerce as a feature that drives sales of more devices.

That arguably means Apple faces more challenges than PayPal, Intuit or Square, for whom transactions directly drive business models built on transaction fees, or Isis and Google, which see advertising and marketing as the revenue model.

For PayPal, Intuit and Square, the revenue upside is immediate, and tangible. When merchants use their mobile card readers in conjunction with their own smart phones or tablets, PayPal earns a fee of 2.7 percent of the purchase price for all types of credit and debit cards  Square earns 2.75 percent of the transaction amount.

For Isis and Google, which eschew such fees, the revenue model has to be created on something else, hopefully advertising and promotion revenues in the form of loyalty offers, targeted advertising or other marketing services provided to third parties. Isis partners and Google sell devices, to be sure, but the revenue model is built on services or advertising enabled by the use of those devices. Mobile transactions create the opportunity for those revenue streams, but transactions, as such, are not the revenue model.

Apple always has taken a different approach, namely creating services and selling content so it can sell more devices. That indirect monetization approach is more akin to what Isis and Google hope to accomplish, and far harder to create, in some ways.

The volume of all types of mobile payments will top $200 billion by 2015, up from $16 billion in 2010, according to research and advisory firm Aite Group. So the direct, transaction fee approach is highly quantifiable.

The aggressive response by MasterCard, Visa and American Express in the mobile wallet and mobile payments businesses is is the latter case an effort to protect existing revenue from market share losses to PayPal, Intuit and Square, and in the former case an effort to build a new advertising or marketing business, an angle that tends to be overlooked.

Like many other big, established businesses, transaction processors face significant gross revenue and profit margin challenges, partly from regulatory action and partly from growing competition.

So there is a defensive angle to their mobile payments efforts, but also an offensive element to their mobile wallet gambits.

Apple has to figure out how any move into either mobile payments or mobile wallet helps it sell more devices, or create new markets for devices it can sell. As always, Apple will try to figure out how existing processes can be revolutionized, but it also has to figure out how changing the experience of “paying” for things and “buying” things also helps it create new markets for  devices.

To be sure, iTunes and the App Store already have Apple involved in payment operations related to mobile devices that help it sell devices. What Apple has to do is figure out whether some broader approach to mobile payments and commerce could create a significant new product category, or allow Apple to take significant share in some existing product category.

The iPod and iPad essentially created new categories, while the iPhone and earlier Apple and Macintosh devices essentially reshaped an existing category of devices.

It isn’t yet clear whether Apple has a clear vision, yet, of what big opportunities exist, or whether the approach is to create a new category of devices, or reshape an existing category.

Sometimes Apple has created a brand new category, and at other times has reshaped an existing category. Apple’s continually-rumored interest in TVs is another example of “reshaping” an existing category, for example.

If Apple stays true to form, it will try to understand what is “broken” about e-commerce, mobile shopping and payments, and work from there on a solution. In fact, broader e-commerce might be the approach, rather than “mobile payments” in a direct sense.

Mobile Banking Has Passed the Inflection Point

Sometimes one can almost predict an explosion of buzz about certain topics. Over the last couple of years, awareness of the building momentum in mobile banking, mobile payments and mobile commerce has been building steadily. One of the indicators is increasing use of the mobile banking channel by financial institutions.

So we now can predict the next stage. There will lots of hype about mobile banking, and then people will hit a point where the inevitable "has it failed" stories begin to be written, with the angle that the impact has not been great.

That already has happened with "near field communications" as a communication channel for mobile payments, which is conceptually distinct from mobile banking. The current tenor of stories about NFC generally concerns "how slow and how hard" adoption has become. That always was going to happen, as huge new infrastructures have to be built before NFC as a communications channel can drive significant transaction volume.

Mobile banking, and then mobile commerce, will have their own hype waves, the intermediate term disillusionment, and finally mass adoption. But it will take time.

There is a significant difference between developed and developing regions, though.

In developed markets mobile banking primarily is a customer service and convenience tool, with scant opportunity for incremental revenues. But mobile banking is important because consumers increasingly want it, and lack of such features could drive customers to other competitors if it is lacking.

For the most part, mobile banking in developed markets is designed around information access, such as the ability to check accounts, as well as simple transactions, such as the ability to move money between accounts or deposit a check or make a payment.

In developing markets the upside is greater. In regions where the banking infrastructure is undeveloped, the mobile device itself becomes a combination automated teller machine and banking location, allowing users to send and receive money. Typically, at the moment, this involves the use of basic test messaging and third-party retail locations where money is physically deposited and withdrawn, with the information about a payment being sent by text message.

Has U.S. Mobile Business Reached Saturation?

The seven largest U.S. mobile providers, representing more than 95 percent of the market, lost a combined 52,000 subscribers from contract-based plans in the January 2012 to March 2012 period, according to a tally by the Associated Press. The companies have a combined 220 million devices on such plans, accounting for about two-thirds of the total number of devices, according to the Associated Press. 


In a sense, that isn't a surprise. Mobile service providers now bank on mobile data plans to drive growth. But many mobile subscribers also are choosing more-affordable no-contract and prepaid plans.


In the first quarter, some two million consumers bought no-contract servivce. That figure, however, is down from more than five million in the same quarter a year ago.

Location-Based Services Used by 74% of Smart Phone Users

Some 74 percent of smart phone owners get real-time location-based information on their phones as of February 2012, up from 55 percent in May 2011, according to the Pew Internet & American Life Project.

This increase coincides with a rise in smart phone ownership overall (from 35 percent of adults in 2011 to 46 percent  in 2012, which means that the overall proportion of U.S. adults who get location-based information has almost doubled over that time period, from 23 percent  in May 2011 to 41 percent  in February 2012, Pew says.

Is "Toll-free" Video Streaming a Net Neutrality Violation, or Just Retail Packaging?

Verizon Communications CTO Tony Melone now has floated the idea of "toll free" data access. "There is room for an 1-800-type of service where certain destinations could offset the cost of the network to get customers to those destinations," he said. AT&T also has talked about the concept.

Basically, the offering would work as toll-free calling now does, where a third party pays for calling charges. In principle, the idea, as applied to video content, would be that a content provider would subsidize the bandwidth charges incurred by an end user, rather than having the consumption count against that user's bandwidth cap.

In principle, that is simply a retail charging mechanism; one of many service providers might embrace. The rub, of course, is that such practices strike some as violations of network neutrality, even if the deals might be offered to all video streaming providers, without exception.

The argument requires a bit of stretching. The proposed "toll free" plans would not necessarily require any packet prioritization at all. The only innovation here is that a video provider could ensure that use of a particular video service did not count against a user's normal bandwidth cap.

Verizon has not said it would offer packet prioritization, only that video suppliers would defray the usage on behalf of their customers.

Comcast has stirred similar concerns by considering a similar plan whereby customers of its video subscription services also could view some of that same content using streaming, without likewise having that usage applied to the customer's bandwidth cap. The issue is whether the methods used to identify such streaming usage are, in and of themselves, a violation of network neutrality, if in fact Comcast does not provide any prioritization on those packets, but only identifies them for charging purposes.

Current network neutrality rules prohibit the use of packet prioritization for consumer broadband access services. But Comcast and Verizon do not seem to be proposing to do so, only to identify packets for purposes of charging.

Nor would network neutrality rules prohibit any lawful charging mechanisms modeled on "toll free" principles, or even advertising-supported principles.

How Much Demand for Superfast Broadband?

BT's "Openreach" fiber to the home network now has reached about ten million premises across the United Kingdom, ahead of schedule. This is some months ahead of the original deadline for this figure that was the end of 2012. The FTTH network is expected to enable access speeds up to about 80 Mbps.

By some estimates, there have been 570,000 sales so far, both by BT and all wholesale partners, representing penetration of 5.8 percent. Of course, early in the deployment of any new fixed network, sales efforts necessarily are circumscribed as most of the work goes into physical construction.

To be sure, some will argue that BT and others have not moved fast enough. 


But making "superfast" broadband available is only part of the adoption story. There has to be demand, at prices consumers think are "fair," and that suppliers can afford to offer.


Only about 14 percent of respondents to a survey currently see a need for speeds of 50 Mbps or higher, about five percent of the total 3,000 customer sample, and would imply a total nine percent penetration of super-fast broadband when added to the four percent who already have speeds over 50 Mbps, the Marketing Directors says.

Among the 35 percent who want a higher broadband speed, there was only a modest willingness to pay more. Around 42 percent of those who want a faster speed would not be prepared to pay more for it. 


Another 25 percent would be prepared to pay up to €5 a month for their desired faster speed. About 15 percent would be prepared to pay over €15 a month for their desired faster speed. 

Only about 35 percent of broadband owners currently see a need for faster broadband speeds, and only 20 percent are prepared to pay more for it.  Of the 35 percent who do want faster speeds, about half would like to see their broadband speed double within two years.


Keep in mind "doubling" would generally be from about 7 Mbps, a typical capability for many customers. 


Only 15 percent of respondents said they were dissatisfied with their current broadband speed, as well. That doesn't mean expectations will not change in the future. Almost nothing is more certain than a gradual increase in bandwidth consumption over time. Perhaps it is certain that users will demand more access bandwidth over time, as well. 


The point is that the market now appears to be more of a supply push than an end user pull.