Has the Recession Ended?

ADP’s jobs data is showing an expected jobs decrease of some 532,000 for the month of May. The data for April from ADP also showed that the job losses were revised down to 545,000.

If the Bureau of Labor Statistics data confirms the trend on June 5, 2009, it will add to other data suggesting the recession has ended. Unemployment claims are a lagging economic indicator and a rule of thumb is that recessions later are determined to have ended about 30 days after the peak rate of new claims.

The SurePayroll Hiring Index rose 26 points to 11,430 in May, up from 11,404 at the end of April. The uptick was 0.2 percent from the prior month, suggesting that on average small businesses were hiring.

Year-to-date, the Hiring Index is up 1.4 percent, which puts small business hiring on track to increase 3.3 percent for calendar year 2009.

The results suggest that the U.S. economy is in much better shape these days than many may realize, SurePayroll says. Small businesses often lead economic recovery, so it is good to see that small businesses are continuing to add new employees, the firm notes.

It might seem odd to call the end of a recession when the nation still is losing a half a million jobs a month. But if the trend is confirmed, the economy's direction has changed.

Apple Could Boost iPhone Sales 100%

Apple could boost sales of iPhones 100 percent by ending its exclusivity arrangement with AT&T and signing up Verizon Communications as an additional distributor. But Bernstein Research analysts Craig Moffett and Toni Sacconaghi  think the move also would cut handset revenue between $100 and $200 on each unit sold.

The issue is hot now because AT&T's exclusivity deal is set to expire in 2010 and AT&T wants to extend the exclusive deal until 2011.

A non-exclusive deal would reduce the value of the phone to AT&T and likely result in a reduction in the subsidy per phone from an estimated $450 to around $250 to $350.

More than 10 percent of AT&T’s post-paid subs already are using an iPhone, and Verizon is the largest U.S. mobile provider. Verizon Wireless now 86.6 million customers, compared to AT&T's 78.2 million.

Though Apple ultimately will abandon the exclusive relationship with AT&T, in the near term it might do what it must to maximize revenue, and that means negotiating for the highest-possible per-unit payments from the carriers, possibly even at the expense of faster unit growth.

Could AT&T keep the exclusive and drive penetration further? Yes, Moffett and Sacconaghi say.

Apple could add a lower-end phone or provide healthier hardware discounts, reduce service plan prices or launch a new device such as a tablet-based unit.

But Apple might wait to see the market response to Sprint's introduction of the Pre, intended to mimic the iPhone's user experience. If it takes off, Verizon will offer the Pre as well, within six months of its Sprint introduction.

http://blogs.barrons.com/techtraderdaily/2009/06/01/apple-a-verizon-deal-could-double-iphone-sales/#mod=yahoobarrons

22 percent of Generation Y consumers are using Twitter

About 22 percent of Generation Y consumers are using Twitter, according to a new study by the Participatory Marketing Network, an organization that helps marketers transition from push and permission marketing to participatory marketing.

In February the largest age group on Twitter was the 35 to 49 age demographic, representing almost 42 percent of the site’s audience, according to Nielsen Online. So much for the general rule that the younger demographics drive most of the use for new technologies.

When asked about social network usage, however, 99 percent of this same group reports having an active profile on at least one social networking site.

The May 2009 survey of 200 PMN panel members and consumers between the ages of 18-24 also found growing use of mobile social networking.

About 38 percent of respondents have an iPhone or iPod Touch. Some 53 percent play games, 35 percent use entertainment apps and 31 percent use lifestyle apps.

About 28 percent say they use free financial apps while seven percent use paid financial apps.

http://thepmn.org/pressreleases/060109

"All You Can Eat" is Dysfunctional, Phoenix Center Says

"All you can eat" broadband access plans are unsustainable and should be replaced by more-flexible plans that allow users to match what they pay with what they use, though a strict "per byte" metering would be a disaster, says Lawrence J. Spiwak, Phoenix Center for Advanced Legal and Economic Public Policy Studies president.

Indeed, if the old long distance and dial-up Internet models are any indication, a strict “pay by the byte” pricing scheme would scare many low-income and low-volume users to overcompensate and change their usage habits, or even to drop their service all together, Spivak says.

Telling carriers to just “invest their way out” of the congestion problem is also a naïve solution, he says. "The network is a shared resource, and this approach would cause the price for all users of the network to rise," says Spivak.

And, as the price for everyone rises, some households won’t be able to afford broadband at all, he says. Publicly available studies show that these costs could potentially reach several hundred dollars per month, which would certainly put broadband out of the reach of many Americans.

The best, and most economically efficient, option is to let carriers develop plans that allow consumers to pick and chose the approach that best suits their needs and, just as important, let consumers be responsible for their choices.

In the end, efforts to prevent carriers from experimenting with different pricing plans for multi-product offerings is nothing more than a thinly veiled attempt to tax the many to subsidize the few who spend their lives online, Spivak argues.

However, in this case, the “few” are not the poor and disenfranchised who work hard to just to pay for their own broadband, but the Internet glutton next door, he notes.

When there is a congestion problem, there is actually a pricing problem, he says. "All you can eat" works when there are few users. It doesn't work when most people use a resource, and the usage pattern is highly disparate.

Like it or not, constructing broadband networks (wireline and wireless) is extremely expensive. Payback is difficult. But lighter users should not be asked to subsidize consumption by unusually high consumers.

The needs of the few are now often outweighing the needs of the many, Spivak says.

http://foxforum.blogs.foxnews.com/2009/06/02/spiwak_broadband_congress

Cisco In, GM Out

Cisco on June 8 will be part of the Dow Jones Industrial Average, General Motors will not. It sort of tells you something about what "industrial" now means.

I think Apple was a sentimental favorite for some, but congratulations to Cisco. Perhaps the thinking is that digital "infrastructure" makes more sense at the moment than "applications." One wonders how much longer that distinction will be important.

BT Says Wholesale Rates Threaten Broadband Upgrades

BT says new price caps on wholesale services provided to competitors could hamper its ability to invest in the next generation of super-fast broadband networks.

Normally, when competitors squawk about wholesale prices, it is because they have determined those prices are too high to allow making of a profit. When the wholesaler complains, it normally means the facilities provider doesn't think it can make enough money. If both buyers and sellers complain, regulators probably have got the prices just about right.

Some observers will say that such a response by an incumbent is nothing more than typical posturing to get a better deal. That's an apt observation. Still, some note that there are unusual stresses.

Ofcom is refusing to allow the company to include costs of funding its Openreach pension obligations in the rate base. Openreach is the entity that provides wholesale voice and broadband access to competitors.

BT has to contribute an annual £525m into its pension fund over the next three years, one way or the other.

Last year BT announced plans to spend £1.5bn putting a fibre-optic network capable of delivering broadband at almost five times the speed of BT's copper network within the reach of 10m homes by 2012. Since then, not only has the economy hit a wall, but BT Global Services also has suffered significant losses, leading to major layoffs.

Some think that means the broadband upgrade will be slowed, in the absence of a rethinking of wholesale rates.

http://www.guardian.co.uk/business/2009/may/22/ofcom-british-telecom-warning

Why 2013 is an Important Year for Market Forecasts

Ever wonder why so many market forecasts you read these days are for where a particular market will be in 2013?

The rapidly mobile M2M (machine-to-machine) market, for example, suffered a setback in 2008 with growth in cellular module shipments stalling overall compared with 2007, according to Beecham Research.

The decline was caused by projects being cancelled or postponed, particularly in the second half of 2008, Beecham says.

Nevertheless, Beecham sees growth returning by 2010 and reaching annual module sales of over $2 billion by 2013.

The reason is that five years is about as far as any rational forecaster dares see into the future. And the last year for which full-year data are available is 2008. Go out five years and you reach 2013.

Next year you'll be reading about where markets for specific products and services will be in 2014. Same reason.