Earlier, Verizon Wireless also ended its "New Every Two" program, which offered customers a credit of $30 to $100 towards a new phone. So will those carriers suffer customer churn? IDC doesn't think so.
Monday, January 31, 2011
Who wins and who loses when carriers tweak loyalty programs
Sprint announced it will change its Premier loyalty program starting April 1, 2011. In the past, loyal customers of ten years or more, or customers who paid at least $69.99 on an individual plan or $99.99 on a family plan each month were offered the ability to upgrade their handsets every 12 months, as well as other benefits and discounts.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Kindle Content Sales Top Book Sales
"After selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com," says Jeff Bezos, founder and CEO of Amazon.com.
None of that stops some analysts from worrying. A study by market-research firm iSuppli last year estimated the total cost of materials for the 3G Kindle at $155.56, about $33 less than the $189 selling price for the device.
"Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected, and it's on top of continued growth in paperback sales."
None of that stops some analysts from worrying. A study by market-research firm iSuppli last year estimated the total cost of materials for the 3G Kindle at $155.56, about $33 less than the $189 selling price for the device.
Since iSuppli’s estimates do not include the cost of software, licensing, royalties, manufacturing expenses (Amazon outsources production of the Kindle) and a cut for the wireless carriers, and well are marketing expense, analysts suspect Amazon likely sells the Kindle at a slight loss.
Many analysts assume the Kindle operates on a razor-razorblade model, which is the tactic of selling one good (like razors) at a discount, and a second good that it dependent on it (like razorblades) at a higher price. For Amazon, this would mean selling the Kindle at a discount in order to make money on e-book sales.
Many analysts assume the Kindle operates on a razor-razorblade model, which is the tactic of selling one good (like razors) at a discount, and a second good that it dependent on it (like razorblades) at a higher price. For Amazon, this would mean selling the Kindle at a discount in order to make money on e-book sales.
Amazon therefore uses the reverse of the model employed by Apple. Apple sells content only so it can boost sales of its devices; Amazon sells hardware only to boost sales of content.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Sunday, January 30, 2011
Nearly Half of Mobile App Users Report Clicking on Mobile Ads by Mistake
According to a new survey conducted online by Harris Interactive on behalf of Pontiflex in December 2010, 47 percent of mobile app users say they click/tap on mobile ads more often by mistake than they do on purpose.
Given that mobile advertising models typically charge advertisers for clicks, the survey findings indicate that a large portion of mobile ad dollars are wasted.
In a related December 2010 survey, 71 percent of mobile app users stated that they prefer ads that keep them within the app they are using, instead of ads that take them out of the app to a mobile web browser, further reinforcing the need for mobile advertising to move away from a model based on clicks.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Social Media Marketing by the Numbers
Social media marketing now represents about $1.7 billion in expenditures. Facebook gets 53 percent of that. Twitter gets only about three percent. But I'd watch Twitter.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Forrester Research Expects Digital Experience to Lead to Market Disruption
"Longstanding structural barriers to innovation are about to collapse," says Forrester Research analyst James L. McQuivey. That belief flows from a conviction that economic assets might now, at least in part, because the cumulative impact of new digital technologies have made a world in which it is much easier for attackers to disrupt existing businesses, including even those with substantial barriers to such disruption.
That is the reason video industry executives are so worried about Netflix, for example. But something more than that is at play. Increasingly, the best products in many industries will build a digital relationship into the experience. In some ways, that is a linear extrapolation from what has been happening for at least a decade, namely that physical products have been incorporating more software as key parts of the overall product value. The typical way we say this is that "all companies are becoming 'experience' companies."
The relationships are probably easiest to see in products with some existing "content" component. That's why Sony began investing in content assets. But the iPod builds on iTunes as smartphones and tablets now build on app stores.
What is harder to see, but will become increasingly more obvious, is that most products, even those without a "content" component, will start to use content more frequently. Most companies create brochures, white papers, data sheets, press releases, websites, videos, podcasts and webcasts. Some create mobile apps and games. All of that is "content." What will change, over time, is the prominent use of other types of content as a routine part of the branding and relationship-building activities conducted by companies.
That is the reason video industry executives are so worried about Netflix, for example. But something more than that is at play. Increasingly, the best products in many industries will build a digital relationship into the experience. In some ways, that is a linear extrapolation from what has been happening for at least a decade, namely that physical products have been incorporating more software as key parts of the overall product value. The typical way we say this is that "all companies are becoming 'experience' companies."
The relationships are probably easiest to see in products with some existing "content" component. That's why Sony began investing in content assets. But the iPod builds on iTunes as smartphones and tablets now build on app stores.
What is harder to see, but will become increasingly more obvious, is that most products, even those without a "content" component, will start to use content more frequently. Most companies create brochures, white papers, data sheets, press releases, websites, videos, podcasts and webcasts. Some create mobile apps and games. All of that is "content." What will change, over time, is the prominent use of other types of content as a routine part of the branding and relationship-building activities conducted by companies.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Retailer Video, Music Services: Means to an End
Observers might wonder about whether Amazon or Apple can catch Netflix in the online video space. Others, including major retailers, seem be in a second tier, despite their other assets. Sears Holdings Corp. became the latest traditional retailer to get into streaming and downloads on Dec. 28, 2010, when it launched movie service Alphaline Entertainment.
That followed Best Buy Co.'s launch last year of rental and purchase site CinemaNow and Wal-Mart Stores Inc.'s acquisition of streaming service Vudu last February for roughly $100 million.
The retailers say the ventures not only help them gain a foothold in the fast-growing digital entertainment business, but also give them an edge in selling Internet-connected televisions and movie players in their stores.
The retailers say the ventures not only help them gain a foothold in the fast-growing digital entertainment business, but also give them an edge in selling Internet-connected televisions and movie players in their stores.
As with some other players, online video is a means to an end.
Retailers' Video, Music Services Spin Wheels - WSJ.com (subscription required)
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
India Mobile Banking Gets Boost from Bharti Airtel and Vodafone
“Mobile payments will be the next step for delivering financial services to hundreds of millions of 'underbanked' people or those who are under-served currently, both urban and rural customers, especially in emerging economies," says Gerhard Romen, Director, Mobile Financial Services, Nokia.
Recently, mobile banking got a huge boost with Bharti Airtel and Vodafone announcing separate partnerships with State Bank of India and ICICI Bank, respectively. While Bharti Airtel and SBI have formed an exclusive joint venture, Vodafone has agreed to become a "business correspondent" for ICICI Bank.
There's money in the mobile
Recently, mobile banking got a huge boost with Bharti Airtel and Vodafone announcing separate partnerships with State Bank of India and ICICI Bank, respectively. While Bharti Airtel and SBI have formed an exclusive joint venture, Vodafone has agreed to become a "business correspondent" for ICICI Bank.
While Vodafone manages over 1.5 million retail points for acquiring customers and servicing them, Airtel is present across 5,101 towns and more than 5,00,000 villages. That's a big deal considering that 51.4 percent of 89.3 million farmer households do not have access to any credit from institutional or non-institutional sources.
Only 27 per cent of farm households are indebted to formal sources. Only 13 per cent are availing loans from the banks in the income bracket of less than Rs 50,000.
There's money in the mobile
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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