Monday, August 9, 2010

Is Mobile Phone Market Bifurcating?

One feature of market structure in many highly-competitive markets is a bifurcated distribution of firms, measured by size (revenue, typically).

What one has tended to see in retailing and communications is a concentration of firms that are very large, a squeezing of the number of phones in the middle ranges, and then relatively lots of firms that are small.

Analysts at Deutsche Bank think that is happening in the mobile phone business as well, favoring devices that are high-end smartphones or low end devices.

In part, the new competitive pressures are the result of Apple's entry into the market, Deutsche Bank says.

"Hardware has become a commodity with heavy pressure on margins" while "software is the only way for vendors to differentiate their products." At the moment, that is favoring Apple and Android. 

The result is that the best software platforms at the high end are taking share from smartphones. The other trend is that "feature phones" in the middle are losing share to smartphones. The result might be called a barbell, with high volumes at the low end of the market and high end, but little in between.

One might also note a Pareto distribution, where a few market-leading firms are able to get the majority of share or profits. Deutsche Bank analysts note that Apple and RIM sell 10 percent of devices, but get 66 percent of the profit.

Sunday, August 8, 2010

Amazon Web Services a $2.5 Billion Business by 2014?

UBS Investment Research analysts Brian Pitz and Brian Fitzgerald estimate that in 2010, Amazon Web Services will generate about $500 million in revenues and will grow to $750 million by 2011. By 2014, it would bring in close to $2.54 billion in revenues.

Researchers at IDC estimate the 2014 global market for cloud computing services of as much as $55 billion.

UBS thinks revenue and profit from Amazon Web Services could have a material impact on Amazon as soon as the latter quarters of 2010.

Click on the image for a larger view. You may have to click once again once the separate image appears.


Saturday, August 7, 2010

Netflix for Android

Netflix is working on a streaming video application for smartphones running Google’s Android operating system, a Netflix employee and online job listing have each confirmed.

Netflix has posted two job listings on its website so far this summer, both seeking Android developers. The current listing is titled “Android Video Playback Expert,” and begins, “Netflix is looking for a great engineer to help us build Instant Streaming client implementations on Android devices.

Is Video the Killer App for 4G?

One can argue that access to  web applications has turned out to be the "killer app" for 3G.

One might also speculate that video might be the killer app for 4G.

Click the image for a larger view that shows the various channels consumers now use for video.

Clearwire LTE Plans Won't Be Long In Coming

Clearwire and Sprint Nextel have been dropping clear hints that Clearwire could adopt Long Term Evolution as an air interface, either alongside its existing WiMAX network or as an eventual replacement.

Since the U.S. wireless industry has been through technology transitions before, it isn't hard to suggest how it might happen, and when. Companies have had to make transitions from one air interface to another within a single generation of technology, as well as migrating customers from an older generation to a new generation.

Where one air interface is switched out in favor of another within a technology generation, the trick is to add all new customers to the new interface while allowing the legacy base of customers to dwindle through attrition. At some point, the old network then can be shut down without undue disruption.

Where an older generation network is replaced by a next-generation network, additional spectrum also is required. If Clearwire wants to shift air interfaces within the fourth generation, it would maintain current customers on WiMAX, while creating a new LTE network alongside WiMAX, signing up new customers on LTE, and allowing WiMAX customers to gradually shrink through attritiion.

That suggests Clearwire will not want to wait too long, as it will want to limit the number of WiMAX customers it has to support while the LTE network is populated with customers.

As an operational matter--and there are other issues to consider--moving sooner is better than moving later, especially given the larger number of customers now coming onboard on the WiMAX network because of the popularity of the Evo.

On the other hand, abrupt action is not required, or even preferable, as the practical details of interworking between LTE and WiMAX, in the core of the network, will have to be proven, in a full deployment mode.

Handset suppliers will also need some time to ready suitable handsets that interwork, as devices now can use either the 2G and 3G networks, or 3G and 4G networks. Alternatively, Clearwire could encourage single-network devices.

With most consumers on two-year contracts, and a natural handset replacement cycle that runs two to three years, customers can be moved to LTE as they replace their current WiMAX devices.

The point is that Clearwire has plenty of spectrum, and industry executives have lots of experience with technology transitions. It will take some planning, and some time, but it is a normal and expected part of the business that air interfaces and networks are changed, at least every 10 years, and sometimes sooner, for other business reasons.

Google CEO Talks Up Synergy Between Mobile, Local, Social Networking

It doesn't take much insight to predict that Google will, sometime relatively soon, be making new moves in the location based services area.

Google already has made major and successful investments in mapping, local search, mobility, geo-location and navigation, for example. It also has made investments in location-based services that haven't gotten traction.

CEO Eric Schmidt recently has been talking up the synergies between mobility, local search and social networking.

“Foursquare and Gowalla are pretty impressive," says Google CEO Eric Schmidt. "They show you the power of mobile,social and local,” Schmidt said.

“Google will play in that market in a lot of ways,” Schmidt added.

http://www.mobilemarketingwatch.com/lbs-roundup-foursquare-improves-its-looks-google-hints-at-gowalla-acquisition-8289/

Friday, August 6, 2010

Video Mashup About Google Verizon Net Neutrality Talks


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DIY and Licensed GenAI Patterns Will Continue

As always with software, firms are going to opt for a mix of "do it yourself" owned technology and licensed third party offerings....