Auto Vertical Illustrates Key Few Mobile Opportunities

Consumers express strong support for automobile communications features, Accenture found when it surveyed 7,000 drivers in seven countries.

When asked about future technologies, 83 percent of respondents would like to have in-vehicle technologies that can automatically contact a vehicle recovery organization when their vehicle breaks down, and 75 percent want a system that automatically calls the nearest emergency center if a crash were to occur. Auto M2M

Why is that important? It illustrates the potentially-important role that machine-to-machine communications could play as a significant revenue driver for mobile service providers.

Virtually every executive, at every communications service provider organization, is at some level constantly thinking about significant-sized new lines of business that can offset declining voice, texting, video or other revenues.

But the opportunities a small rural telco or competitive local exchange carrier or ISP might consider are vastly different from the types of opportunities a major global telco can consider. Revenue scale and asset base are key constraints.

An organization that earns $100 million year can look at an incremental $50 million a year opportunity and it is a big deal.
An organization earning a billion a year can look at an initiative that generates $500 million, and that is a big deal. A major global telco cannot bother with incremental revenue at those sorts of levels.

In fact, there actually are a relatively small number of initiatives that a large global telco actually can consider, when looking to affect its top-line revenue in a significant way.

“Needle-moving” new lines of business generally have to represent fairly-large areas of activity with substantial revenue.

Put another way, “C” title executives at global telco organizations cannot, and arguably should not, be bothering with any proposed growth initiatives that are incapable of providing $1 billion a year in new revenue.

Not $1 billion of potential revenue for all providers in the market; $1 billion for each actor. An opportunity “has to be big to be interesting,” notes Amobee CEO Trevor Healey.  Tier-one opportunities

As you might guess, thinking naturally runs to ways to leverage the existing networks business in some way. You would be hard pressed to find any proposed new initiatives of any size that do not build on the customer base, assets and network services capabilities telcos and mobile service providers already possess.

hat does not, by the way, mean that the new businesses necessarily will be run by “telco people” who do not have the background. In all likelihood, the new initiatives will succeed only when professionals with skill sets and perspective in the proposed new businesses are running them, and when telco executives do not handicap those professionals.

Consider the range of initiatives you often hear about. Broadly speaking these are financial services (mobile payments is part of this), machine-to-machine services, mobile advertising or specialized services provided to some business verticals, such as health care or security, for example.

That's about it. In the near term, most of the revenue will come fairly directly from “things service providers already do.”  One thinks of efforts to create new services for some industry verticals or ways to generate more revenue from business partners. Cloud computing probably falls within this basket of initiatives, building on what telcos already do.  

Other initiatives, such as mobile banking and payments, will take a while to reach the serious level of revenue contribution. Mobile advertising likely is that sort of investment as well.

That is not to say that all sorts of experiments get conducted, all the time, at various other levels within a service provider organization. But it typically is true that unless any of those experiments can suggest why they can generate $1 billion of incremental revenue every year, they won't become part of the strategic discussion.

The Accenture study reinforces the fact that consumers are currently focused on IVI safety-driven technologies.

However, it also shows that in the future, they would like their cars to be equipped with more communication- and information-related capabilities – creating the ‘connected vehicle’.

For example, the survey shows that nine out of 12 technologies consumers would most like to have in their vehicles are safety-related.

Specifically, 83 percent would like anti-lock breaking systems, while 74 percent and 72 percent, respectively, would favor having night vision and reversing sensors.  

The survey also shows that in the future, 63 percent of the respondents would like to use car-to-car communications, and 59 percent would be interested in having Smartphone controls on their steering wheel.  

Moreover, 58 percent of consumers would like to be able to read and dictate e-mails while in their vehicle, and 57 percent would be interested in having a windshield that acts as a visual monitor, showing the driver’s vehicle speed, for example, as well as what is happening on the road ahead.

To be sure, such auto vertical apps are but one vertical that could benefit from machine-to-machine communications. Health applications, utility operations and other sensor applications also frequently are mentioned as lead M2M opportunities.

Social Networks are "Over-Valued?"

As Facebook prepares for a much-expected initial public offering, it might be worthwhile to review the difference between value and "valuation." If you follow the history of technology innovation, a good general principle is that observers, including market researchers, tend to over-estimate the near term impact and growth, and under-estimate the longer-term growth.

Another way of putting matters is to note that important new technologies take longer to achieve dominance than people expect. Important mass market technologies take longer to hit critical mass than most expect, but then seem to hit an inflection point and accelerate suddenly. It's an "S" curve.

Market valuation, though, also seem to under-estimate value in the early phases, than over-estimate after the inflection point. In other words, sentiment is too frothy, once a new technology has clearly gotten traction, and is on the way to mass adoption. At some point, overly optimistic expectations come back down to align with underlying value.

If it happens on a widespread scale, you get an investment "bubble." So some would say there is a danger now of a valuation overshoot, to be followed by a correction, in the "social" software business.

ESPN Commentator on Why He Believes in Tim Tebow

I believe in Tim Tebow

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By Rick Reilly
ESPN.com
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Tim Tebow FoundationTim Tebow with Jacob Rainey, one of the many people dealing with health problems Tebow hosted at Broncos games this season.

Every week, Tebow picks out someone who is suffering, or who is dying, or who is injured. He flies these people and their families to the Broncos game, rents them a car, puts them up in a nice hotel, buys them dinner (usually at a Dave & Buster's), gets them and their families pregame passes, visits with them just before kickoff (!), gets them 30-yard-line tickets down low, visits with them after the game (sometimes for an hour), has them walk him to his car, and sends them off with a basket of gifts.

Home or road, win or lose, hero or goat.

His story is here.

Broadband, in all Forms, Grows in 2011, Mobile Broadband Grows Fastest

By some estimates, 2011 was the year when mobile broadband subscriptions surpassed fixed broadband connections globally for the first time, according to Ericsson.

Others would say mobile broadband subscribers surpassed wireline broadband subscribers in 2010 (558 million in June 2010, compared to  500 million in 2009).

In 2016, Pyramid Research forecasts there will be 592 million LTE subscriptions in service, equivalent to 7.3 percent of all cellular subscriptions at that time, and almost certainly surpassing the world’s total of fixed-line broadband connections.

The largest LTE device segment will be dongles used to connect PCs, through 2014. But after 2014, the PC segment will be replaced by smart phone connections. LTE forecast

To date, 35 mobile operators have launched commercial LTE networks, a range of 197 devices have become available and the technology is maturing since the first network became live in late 2009.

Still, three out of five device models (60 percent) are discrete modems, either routers or PC add-on devices. 
The initial focus of all operators is mobile broadband access for PCs, Pyramid Research points out, and these subscriptions represent around 80 percent of all mobile data traffic, even though they account for fewer than four percent of mobile subscriptions.

Also, a  total of 17.4 million broadband lines were added globally during the third quarter of  2011.
Fiber to home, building or cabinet connections grew by 19 million lines during the third quarter.

Broadband Forum says that now fiber technologies account for 16 percent of total broadband market share and will soon catch up to cable, which stands at 19.5 percent. Broadband growth

Kindle Dominates E-Reader Category

Some will not consider e-readers "tablets." But there now is little question about which device leads the e-reader category. Over the last two years, Amazon's Kindle has dominated the category. That has implications for e-reader manufacturers, content distributors and publishers. Amazon leads category

From a communications service provider perspective, e-readers and tablets constitute a major new potential market for "connected device" mobile broadband subscriptions, both indirectly, in the case of Wi-Fi devices,  and directly, in the case of devices that can connect directly to either 3G or 4G mobile networks.

Nor is the trend necessarily restricted to e-readers or tablets. Since  Amazon's Kindle reader software can be used on a variety of devices, including smart phones and PCs of various types, the potential change in consumer behavior exceeds what one might assume from sales figures for e-readers.

In fact, the growing base of Wi-Fi-only tablets and e-readers creates a new market for personal hotspot devices and features to support user tablets and e-readers. In that sense, even the adoption of "Wi-Fi-only" devices contributes directly to demand for mobile broadband subscriptions.

When Will Mobile Payments Hype Hit the "Disillusionment" Phase?

For U.S. or other service providers hoping that mobile payments and mobile banking will become lucrative revenue streams, some now argue, and more likely will argue, that the effort is doomed, difficult or destined to failure.

The reasons are numerous, ranging from organizational culture issues to consumer resistance, lack of retailer incentives, insufficient base of end user or retailer terminals, uncertain or insufficient revenue models, lack of end user demand, or technology uncertainty and user interface issues. All of those are valid objections at the moment.

If a report published recently by Lightspeed is indicative of the mood of the American public, the vast majority really don’t care much about mobile payments, some would say.  Too much hype?

Lightspeed foundthat only about a third of bank customers were actually using smart phones, for example.

Of those smart phone users, only eight  percent thought mobile banking was very important and another 13 percent thought it was somewhat important.

When asked about mobile payments less than five percent thought it very important, and 11 percent somewhat important. All of those are typical, at the moment, just as it is conceivable to generate more optimistic expectations in some polls that show much-higher interest.

But it would be helpful to keep in mind that hype cycles are normal for consumer or business technology innovations. Some people would probably say “mobile payments” has not yet reached the peak of its hype cycle. Others might say it already has, but some of us would say the degree of “negativity” isn’t high enough, yet, to warrant that view.

But that will happen.But when it does, you are going to hear quite a lot of negative sentiment. It has happened with virutally every new and important application or technology, and there is no reason to believe mobile payments will escape the cycle of expectations.  Be ready for the skepticism.

But Steve Jobs was able to avoid hype cycles, if you think about it. Not all Apple products have succeeded (Newton and Lisa, for example). But that might be because Apple, virtually alone among successful big consumer products companies, does not “take surveys” to try and figure out what products to create, on the well-founded theory that consumers cannot give you accurate assessments of products they never have seen.

In fact, as some would note, had Apple ever taken a survey on consumer demand for an “easy to use” PC, it would not have built the Apple computer.

Also, the coming value of mobile payments, wallets and mobile commerce will proceed on many different fronts, on a pace that end users will dictate by their behavior, as well as the complexity of the ecosystems that must be created.

Beyond the eventual “trough of disillustionment,” the real business will be built.

Massive Defections from BlackBerry?

Only 25 percent of BlackBerry owners have another BlackBerry on their smart phone wish list, Drippler apparently believes.


The other 75 percent want out of the RIM ecosystem and most of them want either an Android device or iPhone. Massive unhappiness

That might not be especially surprising, given the growth of consumer preferences for either Apple or Android devices. Smart phone forecast

Microsoft devices now are the wild card, though.