Is Tip Jar a Business Model?

Piper Jaffray analyst Gene Munster chatted with 20 Apple developers recently and found as many as 71 percent of new iPhone apps might be offered to users for free.

To be sure, people sometimes write apps for no reason other than the recognition. But is there a business model here?

One might ask whether the tip jar is a business model. For street musicians, it is, if not a terribly good business model.

So is the "freemium" model any better? " Should developers give away an app or service for free, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing and then offer premium priced value added services or an enhanced version of your service to your customer base? Lots of people have, and will continue to try.

The typical business model for a "freemium" approach is ad support for the "free" services and then subscriptions for the enhanced services. The eternal issue is perhaps how much to offer free and how much to offer for fee. And to the objection that users might be put off when advertising finally is possible, that's just a risk that must be taken. One has to create a user base before advertising is possible.

Of course, it is conceivable that most iPhone apps developers are working on are widgets of some sort. So it is entirely possible no direct business model is envisioned, other than reputation enhancement that ultimately could have some commercial benefit. We'll have to wait and see.

So far, subscriptions and advertising are the direct ways to create a business model. I suppose donations have to be included in the direct model as well. "Enhance your reputation so you can sell something else" is the leading indirect model.

2% Android Handset Penetration by December 2008?

Strategy Analytics analysts predict that Android, backed by an alliance of more than 30 mobile phone operators, handset makers, software firms and component manufacturers, will be installed on two per cent of smart phones by December 2008.

That might be an aggressive forecast. At mid-year, it is overstating matters to say even a trickle of devices even are being shown in prototype form.

British chipmaker ARM, for example, has unveiled a prototype mobile phone that will use the operating system Android, launched by Google in November 2007.

The prototype features a Web browser, map software, multimedia applications, text messaging, calendar functions, email and other mobile phone functions.

Designed, obviously, to rival Apple's iPhone, ARM's prototype uses Google as its Web browser home page, Google Mail as its email application, and Google Maps for navigation.

Although the Android project is at a relatively early stage, the first Android-based mobile phones are expected to be launched in the market later this year, reports the Telegraph.

It's hard to see how two percent penetration is possible with such a late launch, even considering the Christmas holiday push that might be possible.

59% Willing to Cut the Cord?

A new poll conducted by Los Angeles Business found 59 percent saying it was indeed an option.

The other 41 percent said that it was not an option, and might be considered "hard core" wireless substitution resisters.

That's not especially good news for providers of landline voice service, if respondents are at all serious.

Verizon Introducing Wireless-Broadband, Wireless-TV Bundles

Verizon Communications is introducing new dual-play packages based on wireless and broadband service, or wireless plus TV service. If a customer is eligible for FiOS TV, a triple play package can be built.

The Flex Double Play bundle will provide discounts ranging from $8 to $12 a month for those who combine a Verizon Wireless plan with broadband or FiOS TV. Adding FiOS TV, Verizon's cable-TV service, on top of wireless and broadband yields another $8 a month in savings.

The move is a step beyond the old requirement that customers buy a landline voice line to get the best price on a DSL service.

The discount applies to DSL service with downloads at 3 Mbps or 20 Mbps FiOS service.
The package is not available for the 7 Mbps DSL or the 50 Mbps FiOS services, though.

Verizon Growth Profile Has Changed

The business climate for tier one providers is quite a bit better than it was just several years ago, when some analysts feared the best tier one telcos could do was hold steady in terms of revenue and profit. "In the past 18 months, we talked a lot about growth for Verizon," says Greg Miller, Deutsche Bank Securities analyst.

"Only two to three years ago, it was something that many people didn't think was going to happen, considering what was going on with the competitive dynamic in cable."

"Clearly, we've started to see some fairly significant growth within the business," he says. Also, the growth is "not just confined to one segment in the business."

Global Facebook Traffic Catches MySpace

April 2008 was the first time Facebook traffic officially caught up to MySpace in terms of unique monthly worldwide visitors, according to data released by Comscore. Both services are attracting around 115 million people to their respective sites each month.

But there are clear regional differences. It looks like MySpace continues to hold a steady lead over Facebook in the U.S. market. That being the case, most of Facebook’s growth has come in international markets.

Facebook added 75 million monthly uniques over the last twelve month, but just 13 million of those visitors are located in the United States.

7.8 Million Business VoIP Lines by 2012

Business VoIP lines to Total 7.8 million by 2012, say analysts at Pike & Fischer. If one assumes there are something on the order of 110 million business lines now in service, that's about seven percent. Some of us think business VoIP "lines" will be higher, but disguised in the form of IP trunks. It will be very hard to count them, since no regulatory agency records such things. Nor is it clear many IP trunking providers will release figures relating to "lines" rather than "IP trunks" in service.

If you ask me, 7.8 million is a low forecast.