Google’s Mobile Payments Strategy Ready?

Google apparently is ready to articulate its mobile-payments strategy, and is reportedly going to unveil a service with Sprint and several major retailers, including Macy’s and Subway, on May 26, 2011.

The service will let consumers with Google’s Android operating system and near field communications (the Nexus S) pay for goods and redeem coupons with their handsets.

Sprint has said it was working with a variety of handset makers and technology companies on NFC payment systems. Google has said it plans to introduce the service in five cities, including New York, San Francisco, Los Angeles, Chicago and Washington, D.C.

Google does not appear to be banking on transaction fees as part of its revenue model. Instead, Google is looking at ways the service could boost its digital advertising business. The planned payment system would allow Google to offer retailers more data about their customers and help the retailers target ads and discount offers to mobile-device users near their stores.

Significantly, that makes Google a partner to the card issuers, Visa and MasterCard, not a competitor.


Google earlier had been said to be using hardware and software from companies including VeriFone Systems and ViVOtech as part of the service.

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Friend Recommendations Drive Local Business Visits

Social shopping can be hard to understand, but the point of mobile-enhanced shopping is that it builds on the ways people who buy things locally decide to do so. Fully 52 percent of consumers surveyed by CityGrid, for example, say that the primary reason they would try a local business is a friend’s recommendation. That far outstrips any other type of channel by at least 500 percent.

The revenue model for any mobile service provider or mobile-based app also is sometimes hard to envision, but it is, in large part, as simple as shifting a portion of today's spending on local advertising, for starters.

Word of mouth, in other words, drives lots of traffic. The whole idea of mobile-enhanced shopping apps is to build on that natural activity in a more systematic and structured way.

On the other hand, there also is quite a bit of evidence that consumers rely heavily on search when looking for a local business to patronize. Data from local search engine optimization firm BrightLocal shows that the top two traffic sources to local businesses were Google Places and Google search. Facebook provided only two percent of visits to local business websites.

Overall, BrightLocal found that 59 percent of Internet users search on Google at least once a month to find a good local business.

Friend Recommendations Drive Local Business Visits

Square Aims to Replace POS Terminals

Square has been growing fast, but now is launching "Square Register," a replacement point of sale terminal for retailers. Some will point out that "replace the merchant terminal" strategies are inherently difficult, as merchants generally have proven highly resistant to payment schemes that require them to change out their POS terminals.

Still, Square's approach aims at "adding more value," particularly by enhancing a retailer's relationship with paying customers. The approach might not get traction, but it illustrates an important element of the evolving mobile payments space, namely that the actual transaction is only part of the total value proposition.

Historically, Square’s readers always stored every purchaser’s receipt for merchants and allowed merchant’s to send a copy of the receipt to the purchaser via SMS and email. It was fairly simple.

Now, using Square Register, merchants can access Google Analytics style data with an inventory angle, such as how many units of a certain type of product were sold, and to which types of customers.

Square’s Disruptive New iPad Payments Service Will Replace Cash Registers

5% of Tablet Usage is "at Meetings or Class"

Lots of tablets are being sold to business users. Still, perhaps five percent of tablet usage, in terms of time, occurs when "at meetings," a Nielsen survey suggests.

But 24 percent of tablet owners say they use the devices at meetings, about the same percentage who say they use their smart phones at meetings.

Tablets can be used in business, no question. But most tablet usage seems to be entertainment related.

Smart phone owners say that 20 percent of the time they use their smart phones is while watching TV, compared to 11 percent lying in bed.

eReader owners indicated only 15 percent of their eReader time was spent watching TV, though they spent a 37 percent of their device usage time in bed.

Tablet owners said 30 percent of their time spent with their device was while watching TV compared to 21 percent lying in bed.

In the U.S., Tablets are TV Buddies while eReaders Make Great Bedfellows | Nielsen Wire

Half a Million Apple Apps, and Angry Birds is at Top of Download List

Latest FCC Global Broadband Report Nuanced, Careful, Sure to Disappoint Some Observers

The latest Federal Communications Commission report on global broadband suggests the United States ranks about ninth for mobile broadband adoption among Organization for Economic Co-operation and Development member countries and 12th for fixed (DSL or cable) broadband on a per-household basis.

But assessing broadband availability is more complicated than it used to be, in large measure because of mobile broadband, an area where the United States is forecast to lead, at least in terms of fourth generation Long Term Evolution deployments.

Also, using only the OECD data, which FCC report authors say is the best overall, the United States ranks first out of 28 in cable modem coverage, sixth out of 16 for fiber-to-the-home coverage and eighth out of 29 in 3G mobile wireless coverage.

Some would argue that, for any number of reasons, including population density and continental size, the United States will not typically, if ever, rank at the very top of any global measure of tele-density.

Where did the United States currently rank on per-capita measures of broadband penetration in early 2010? 15th, as it turns out; precisely where it has long ranked in terms of fixed-line voice line penetration. If that seems unremarkable, consider that a 15th-place ranking is sufficient for observers to see few problems with voice service availability. In other words, the "problem of voice access" is solved even when the United States ranks only 15th globally on common measures of tele-density.

None of that is to suggest there are not real or potential issues in rural areas, issues with the price of the faster services or issues with adoption. But based on historical comparisons, the data is entirely consistent with the realities of service in a continent-sized nation with lower population density than many other nations, and regulatory policies in some areas that support government-lead or supported network investment more aggressively than is possible in the U.S. market.

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Moore's Law, Cooper's Law, Zoning Law

Spectrum efficiency typically doubles about every 30 months, where Moore's Law suggests computing or storage capacity doubles about every 18 months.

Ability to place new cell towers does not double every 30 months, according to a rule of thumb called Cooper's Law.

For reasons of zoning rules, neighborhood objections and money, the ability to build new towers to increase capacity without additional spectrum is limited.

There is no Moore's Law for steel towers or electricity or construction costs. Some estimate that the cost to each national mobile provider of additional capacity, gained by shrinking cell sizes, without adding spectrum, is as much as $40 billion.

To be sure, spectrum costs money, and new towers would have to build at some locations, even with new spectrum allocations (networks operating at different frequencies require different topologies, all other things being equal). So there is no way to avoid additional investment.

All that explains why the Federal Communications Commission believes it is imperative to license new spectrum, and why AT&T thinks it has to move now to acquire T-Mobile. It's a real estate deal, more than anything else.