Mobile for the Next Billion Users

Is it possible that simple tools, such as low-cost mobile phones, can have more positive economic and social impact than our typical large-scale government-to-government and typical development aid efforts? The aid establishment might not like the question, or the answers, but MIT NextLab project staff seem to believe the answer is "yes."

“Traditional aid does little for the very poor,” says Jhonatan Rotberg, founder and director of the NextLab program. “Only a fraction of the donated money trickles down to those who need it most."

"But with a mobile phone, poor people can get ahead," he says.

By any measure, recent progress, especially over the past few years, has been quite dramatic: mobile cellular penetration in developing countries has more than doubled since 2005, when it stood at only 23 per cent.

Last year, mobile cellular penetration in developing countries passed the 50 per cent mark, reaching an estimated 57 per 100 inhabitants at the end of 2009. Even though this remains well below the average in developed countries, where penetration exceeds 100 per cent, the rate of progress is remarkable.

Android might be the next big evolution, not that voice and text messaging are propagating. Using Android, devices could be customized for any number of applications that might otherwise be run on a PC, an important development in markets where device cost and access to electricity are issues.

Already, over four billion mobile phones are in use in the world today. The next billion new users, Rotberg says, will be spread out in the developing countries, mainly in Africa and Asia. Android could be important in that regard.

http://www.xconomy.com/boston/2010/03/31/mits-nextlab-designing-technology-for-the-next-billion-mobile-phone-owners/?single_page=true

Is Apple the New and Most-Important Gatekeeper?

Is Apple now more a transformative force in technology-using businesses than Google? Some observers have pointed out that it is possible, perhaps even likely, that Apple's equity value will exceed that of Microsoft in the near future. But Apple now is worth more than Google, with a market capitalization around $214 billion, compared to Google's $159 billion.

To be sure, content companies tend to pay more attention to Apple's moves, while communication companies tend to pay more attention to Google. One might argue that in the communications business, Apple mostly has changed the handset business, and user expectations about what can be done with handsets.

It likely will wind up being more transformative than that. Apple has proven that mobile application stores can be a source of huge end user value in the mobile ecosystem, and potentially a huge driver of revenue and margin in a business that is shifting inexorably towards applications as the driver of communications value overall.

Keep in mind that Apple previously redefined the online music business, if not the whole music business, by some estimates. Apple has had less success in the video arena, but the iPad could signal a potential shift of distribution in the print content business, or at least Apple has been arguing that is its objective.

In the mobile business, virtually everyone agrees that Apple changed end user expectations about what a handset should do, how it should work, and also cracked or broke the historic stranglehood mobile service providers have had over handset features.

In the developing mobile Internet experience, for example, there already are glimmers of a shift of experience from "Web" pages to applications. For a firm such as Google, dependent on search revenues for nearly all of its revenue, that potentially shifts revenue away from search and towards the mobile application as the way people find things.

To the extent that the mobile application, supplied by the application store, becomes the gateway for use of Web-based applications, power and financial success shift towards the app store and the device, and away from the access provider

So the issue that naturally arises is what to make of Apple's influence on the broader technology industry, which generally has moved to an "open" model, where Apple continues to operate on a "partially open" model, closed in terms of operating systems and hardware, but open--with editorial control--for applications.

As attention in the U.S. and some other markets now is turning to "gatekeeper" functions, the implications are that gatekeepers of many sorts now are arising in the Internet ecosystem. Though government regulators typically look at access providers, application providers are emerging as equally-important gatekeepers, as operating systems and browsers have caused concern in the past.

"The iPad is seen by many in the print business as a way of delivering high-value digital content to customers paying real money," notes U.K. technology observer John Naughton. There is a price: Apple will control the distribution channel and take a slice of every transaction.

The iPhone and iPad are really just gateways to the Internet, but are controlled (a better word than "closed") experiences, not the "open" or unfiltered way PCs have been used to access the Internet and its resources.

To the extent that gatekeepers are an issue, we likely will see new concerns about application and experience gatekeepers; nothing so crude as "access" gatekeeping.

Some think Google is the greatest emerging gatekeeper. Perhaps it is Apple.

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Why Buy a Kindle if You Can Use an iPad?

An app to read e-books from Amazon’s Kindle store on the iPad has arrived in iTunes. If that is the case, why buy a Kindle at all? Price, you might correctly note, but wait a couple of years and that problem goes away.

That suggests a major Kindle price cut has to be coming. Historically, many multi-purpose computing devices have sold better than single-purpose devices, when there is a choice. That's why iPhone sales are cannibalizing iPod sales.

With the arrival of the Kindle app, iPad owners will be able to choose whether to read books from Amazon or from Apple. Using the iPad gives users access to all Kindle inventory, with Apple inventory thrown in, as well as color support and the ability to do lots of other things that require Internet access, ranging from email to Web browsing to messaging.

Waiting in Line for iPads...

Lines of people wrapping around the block at the SoHo Apple Store, waiting, presumably, to buy an iPad.

What will be interesting is to see how sales stack up, and I don't mean volume of sales, but whether people decide they want connectivity all the time, like a smartphone, or can live with Wi-Fi access, as iPod touch users now do.

The difference is that the Wi-Fi-only approach makes the iPad more a media consumption device, while full-time connections might make it something else.

What the "something else" might be, remains to be seen. Nobody seems to think it replaces a smartphone. Beyond that, people seem to be unsure about whether it represents an entirely new product category or "just" a new interface for a netbook or laptop.

Google Optimizes Apps For iPad: Which Raises a Question

Google says it has optimized applications for the iPad to take advantage of its large display. Using Gmail on the iPad, for example, users will see a two-pane display that mimics what they are used to seeing on PCs, notebooks or netbooks.

The YouTube and Google Maps apps are preloaded on iPads.

But those features still raise the as-yet-unanswered question: can the iPad uncover significant demand for a new category of device in between a smartphone and a netbook or notebook? Or is the iPad really going to wind up succeeding or failing as a replacement for the netbook or notebook?

Those are quite different outcomes. For me it comes down to the irreducible number of devices I must carry, both locally and when traveling. Around town, the irreducible and desired number is "one." When traveling, because when push comes to shove I use a laptop for work, the irreducible number is "two." Well, actually three, as I carry two mobiles.

Years ago, the irreducible number when traveling briefly floated up to four, when I added the iPod. That turned out to be one item too many, and I no longer travel with it, except when running.

My point is that consumers weighing use of an  iPad will have to decide what it is, before they buy. And that means an identity "crisis" has to be solved before it becomes a huge mass market success. It seems to me to be a very-good media consumption platform, crudely put, an iPod touch on steroids. That will raise the question of the physical need to add more more portable device to the purse or backpack. For some users, that will be a point of friction.

But some people very quickly are going to try seeing whether, in their circumstances, an iPad can displace an existing netbook or notebook. And that could point the way to the iPad becoming a new form of netbook, rather than creating a new category of devices people generally use.

Apple could win, in either scenario, but wins most if it can create a new product category.

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Telcos "Playing Politics" With SEC Reports and Accounting Charges? Are You Kidding?

One of the calumnies heaped upon telecom service providers is that their recent Securities and Exchange Commission notifications of charges caused by the new health care legislation are somehow a political ploy. Some even say that AT&T and Verizon, for example, are doing so as a political act, because they "contribute to Republican candidates."

As often is the case, such claims are uninformed. In its most-recent report, the Federal Elections Commission reported that AT&T gave exactly the same amount of money to Democrats and Republicans, splitting about $1.7 million 50 percent to Democrats and 50 percent to Republicans, the FEC reports.

The truly unbalanced spending was by union political action committees. The Operating Engineers Union gave 89 percent to Democrats, the International Brotherhood of Electrical Workers gave 99 percent to Democrats, the American Federation of State, County and Municipal Employees gave 99 percent to Democrats, the Teamsters 98 percent to Democrats, the International Association of Frie Fighters gave 88 percent to Democrats, the Carpenters and Joiners Union gave 90 percent to Democrats, the Plumbers/Pipefiters Union gave 95 percent to Democrats.

If you take a look at the chart, the largest telecom-affiliated PACs split their giving between Republicans and Democrats. If one correlates the spending with which political party occupies the White House, or controls the Congress, the pattern of giving by telecom PACis clear: more spending for candidates representing the party in power.

Click on the image for a larger view. 




http://www.opensecrets.org/pacs/toppacs.php

Verizon Takes $970 Million Health Care Cost Charge

Verizon will take a one-time, non-cash tax charge of about $970 million in the first quarter 2010 to account for changes to its financial obligations required by the "Patient Protection and Affordable Care Act," which became law on March 23, 2010.

AT&T announced a similar charge of about $1 billion in March. Both firms have high retiree populations, and have been providing subsidized health care benefits to those retirees under Medicare Part D.

Because of the new law, Verizon and AT&T will no longer receive a Federal income tax deduction for those expenses.

Because future anticipated retiree health care liabilities and related subsidies are already reflected in Verizon’s financial statements, this change requires Verizon to reduce the value of the related tax benefits recognized in its financial statements in the period during which the law is enacted.

Going forward, both firms will face either higher operating costs or will reduce or cancel those retiree benefits.

Some observers have questioned whether the restatements are a "political ploy." Apparently those observers are not aware of how Sarbanes-Oxley legislation works. If the chief officers of a corporation, including its CEO and CFO, materially misrepresent a company's financial position--and $1 billion in a quarter is a material fact--those executives can be sent to jail.

Even medium-sized firms can incur costs of about $1 million a year to comply with Sarbanes-Oxley, by the way, imposing a huge financial drag on enterprises across the United States. And one reason many start-up firms say they will not, or cannot "go public" is the cost of Sarbanes-Oxley compliance costs.

Nor does it appear Sabanes-Oxley has prevented even a single case of corporate malfeasance. Our recent financial crisis does not seem to have been impeded one single bit. But it is a measure of how out of touch some observers seem to be that required accounting for financial obligations is considered a political act.