Just a Couple of Compliments....

I have taken some ribbing this week at the IT Expo (nice job, Rich) on account of my tanned complexion, earned at the Pacific Telecommunications Council and while giving a couple of keynotes for the Alaska Telecommunications Association meeting (Well, most of the ribbing came from Andy Abramson, I'd have to say...some people just thought I looked relaxed...)

I will say a couple of things about our Telco 2.0 panel at PTC, where I shared a stage with Network IP (Jaduka), MetaSwitch and IntelePeer.

First, I have maintained for some time (and reiterated from the stage) that Network IP is the most underestimated company in the IP communications space. As far as vision, they get it. As far as company effort to make that vision a reality, they are doing more than is apparent on the surface. I like "old time" telephone industry companies that grew up on voice and now are trying really hard to make sure voice is even more relevant in the future.

I believe Network IP/Jaduka will startle some people, soon.

I got a chance to work with IntelePeer again at the IT Expo, and likewise continue to be impressed with how much thought the company has given to "a la carte" approaches to voice and communications applications. If you knew the company five years ago, you might not recognize it today. But more important is the thinking behind ways new applications using voice can be created in non-monolithic ways.

Finally, at least one or two people might have been surprised to see MetaSwitch on the Telco 2.0 plenary panel. But, likewise, I have known this company for a while. It is among the firms firmly established in the "old" business that are working really hard to be even more relevant in the "new" business. I believe we will see further signs of that effort this year.

There are some people who continue to say that old legacy telco companies will not survive the world that is coming, or should not. Well, that remains to be seen. But I suspect some people underestimate their ability to change.

Human creativity and grit are not to be found only among the ranks of the bleeding edge "Web" companies out there. Lots of people in the old "legacy" business are quite capable of leading a transformation and transition to something that will look quite different.

I also will say that my time with the ATA members points out just how demanding this sort of work is. One has to adapt to the advanced technologies, while at the same time gearing those tools to be used by service providers and their customers who might not care a whit for the coolness and cleverness demonstrated at the leading edge.

Silliyo.com

Those of you who are technical, check this out, when you finally can. Courtesy of Thomas Howe. For those of you who don't think you can start a new company like the one you just left, in 48 hours.

BlackBerry and iPhone: Winning Hearts and Minds

There's good news and bad news about user affinity for BlackBerry, iPhone or other devices. The good news is that such devices have made an intangible product--communications--quite tangible. 

To the extent that users "love" their preferred devices, there is a real bond, of sorts, with the experiences that in turn drive revenue for service and application providers.

It might be better, from a service or app provider perspective, if the emotional bond were more directly related to the "service" itself. But I doubt few human beings are emotionally attached to the provider of their "bit stream." 

So far, mobile devices are the closest thing the communications industry ever has developed to fragrances, clothing brands, auto brands, golf club brands, or just about any other item for which there is an important and compelling human attachment. 

It is an important breakthrough, which service and app providers then must surround with additional features that make the experience even more entertaining, fun, useful or easy to use. There is some distance to go, to be sure. 

But one should not discount the importance of the breakthrough: for the first time, there is a personal, tangible, "fun" and engaging expression of the value of the communications service. 

People use telephones and PCs. But they now "love" particular devices. This is a huge and important change.  As furntiture, street addresses, certifications, degrees, customer references and other tangible elements are proxies for what a potential buyer can expect in terms of "quality," so now devices are becoming proxies for what users can expect in terms of "personal" communications. The difference? Getting beyond "utility" and approaching "brand affinity." 

There are revenue and margin implications, as there always are when a brand can establish itself as representing some key value. 

Most Important Consumer Technologies: Not PCs or Mobiles

Though we sometimes forget it, the devices we rely on most are not mobile phones and PCs, but cars, clothes washers and dryers, air conditioning and other mundane things we don't even typically think about as "technology."

Someday, though, mobile phones and PCs probably will  be in the category of things we use everyday but don't necessarily consider to be "technology."

Right now, even air conditioning in one's automobile and TV sets rank higher on technology "needs" than PCs or mobile phones, though. 

What iPhone Has Done for AT&T

If surveys of ChangeWave Research members are any indication, the Apple iPhone has paid big dividends for AT&T, essentially allowing it to overcome a perceived “satisfaction” and “dropped calls” gap compared to Verizon Wireless.

But there also are signs the “Apple effect” might be waning, as stated buyer intentions are trending back in Verizon’s favor, possibly suggesting a saturation of the obvious iPhone market as Verizon brings functional substitutes to market. 

The December 9-15, 2008 survey of 3,800 respondents shows a very-close market share between AT&T, with 31-percent share, and Veizon with 30-percent share. As you might expect, Sprint Nextel has not yet fully solved its churn problem, showing a 10-percent share decline since the last survey, with T-Mobile unchanged at 10-percent share.

But Verizon handily leads all the others in customer satisfaction. Some 49 percent of Verizon customers say they are very satisfied with their provider. About 30 percent say they are very satisfied with AT&T. About 27 percent of T-Mobile customers say they are “very satisfied.” About 25 percent of Sprint Nextel customers say they are very satisfied. 

But there seems to be some movement in the churn area. Verizon had been the clear leader among users who indicated they were going to switch providers, and were thinking Verizon was the carrier they would defect to, at least until the introduction of the iPhone.

Since news of the iPhone introduction, the roles have reversed and it is AT&T that has had the upper hand in the race to win defecting users. But Verizon seems to be gaining momentum again. 

About 27 percent of respondents still identify AT&T as the firm to which users are thinking they will move. But intention to switch to AT&T is down four percentage points  from September 2008. 

At the same time Verizon, reported by 22 percent of respondents as the carrier to which they are inclined to move, has gained three percentage points since September 2008, a net swing of seven percentage points. 

There is encouraging news for Sprint Nextel on the churn front, as five percent of respondents indicated they were inclined to switch to Sprint Nextel, a gain of two percentage points since the last similar survey. 

T-Mobile, though, seems to battling a headwind, as five percent of respondents indicated they were leaning to switching to T-Mobile, down two percentage points from the last survey.

Mobile Revenue Sources Shift to Data

Mobile data revenues are becoming a significant portion of overall service provider gross revenues, an important measure of diversification as voice continues to lose its status as revenue driver for the global mobility industry.

For a typical European operator, text messaging accounted for up to 80 percent of non-voice revenues in previous years, say researchers at Informa Telecoms & Media. But other data services are starting to show as a more-signficant revenue source. Operators such as Vodafone are seeing non-SMS services generating up to half of non-voice revenues, for example, Informa says.

Non-voice revenues totaled $157 billion in 2007, according to Informa Telecoms & Media, up from $116 billion in 2006. In the second quarter 2008 non-voice revenues surpassed $50 billion for the first time in any quarter. For 2008 as a whole they are expected to exceed $200 billion.

Revenues are heavily skewed toward emerging markets. Asia Pacific captured 39 percent of global data revenues in the second quarter, but the region is dominated by China, along with Japan and South Korea.
Europe was the second-largest region, with 25 percent of global revenues, followed by North America at 19 percent Other regions contributed just 17 percent of global revenues.

The United States, though, tops the world in mobile data average revenue per user. In the second quarter, data ARPU was $10 a month in North America, compared with a global average of just under $5.

More PC Entrants in Smart Phone Business?

What's the difference between a smart phone and a standard PC? Not much, more PC vendors are hoping. Computer makers Acer and Dell are said to be developing high-end mobile phones to complement their successful laptop and desktop computer portfolios. Such a move would not only help to sustain growth during the recession, but also put them in a better position to counter the growing threat of rival Apple.

As successful as they have been, a move into the smart phone arena will be challenging, as other suppliers have found when entering the mobile device business for the first time. Not many "PC" suppliers have found the success Apple has had in the MP3 music player and smart phone markets. In fact, failure is more common than success.

Dell and Acer may be bolstered by the reasonable success Hewlett Packard has had with its iPAQ smart phone for reassurance. And Microsoft is an almost-perennial candidate for doing so.

They likely are more emboldened by HTC's success, though that firm has had the easier task of producing devices under its own retail brand, not making the leap into the mobile device area for the first time.

It seems that Dell has already produced prototype devices, based on the Windows Mobile and Android platforms, as part of a scheme to commercialize an iPhone-type device, complete with touch screen.