User Experience on PCs, Tablets, Smart Phones: Huge Latency Issues

Latency is getting to be a bigger deal for mobile user experience. Apps that load quickly on a PC take much longer to load on a smart phone or tablet, Yankee Group reports, using Keynote Systems data.

Also, according to Yankee Group analyst Carl Howe, typical users now carry as many as five different mobile devices. But each of those devices might be optimized in different ways, in terms of latency.

Load times among sites differ because in most cases, content owners are not customizing the content they deliver to the device, says Howe. The majority of the sites Keynote Systems monitored, including major online brands Craigslist and Apple, sent the same content to smart phones and tablets, for example.

Facebook, Bing, Kayak, MSN, Amazon and IMDB all sent significantly more objects and bytes to tablets than to smart phones. These sites detected the larger screens of tablets and sent them more information, says Howe.

The one company that behaves significantly differently is Google, which sent roughly 450 KBytes to smart phones while sending only about 200 KBytes to tablets.

Google chooses to add several location-based options such as “Restaurants” and “Coffee” to smart phone content but doesn’t serve up those features to tablet users, probably because many tablets don’t offer location services by default. As a result, smart phones receive more content from Google than tablets do.

Those findings are interesting for several reasons. Since different devices feature different screen sizes and input and output capabilities, get used in different ways, at different locations, at different times of day, customizing the experience makes sense.

But tailoring a user experience based on what device is used, when it used or where it is used is not so different from tailoring an experience based on what application a user wants to engage with. And that’s where legitimate concerns about unfair business advantage bump up against end user preferences.

When a user wants to watch a video, conduct a video call or play an interactive game, issues such as latency and consistency of bandwidth availability are important performance parameters.

The policy issue is whether users or service providers ought to be able to manage network experience to enhance end user experience. For such reasons, some think “best effort only” access is not optimal.

Microsoft to Pay AT&T Employees to Sell Windows Devices

Microsoft apparently plans to pay AT&T staff $10 to $15 for each Windows Phone handset sold as a direct result of a recommendation to a customer. It isn't illegal. Lots of products get promotional support of one sort or another.

Subsidies Verizon Wireless is paying to entice consumers to buy Apple iPhones might also be penalizing Android devices, some now argue. Though top Android devices cost as much as Apple iPhones, high-end Android devices often sell for prices $100 to $200 higher than the iPhone.

In other words, Verizon is trying to recoup some of its cash flow and operating margin by making Android handset users pay more for their devices than Apple iPhone users.

Verizon is betting that buyers who want the high-end Android phones will pay, so they're marking those models up.

John Hodulik, an analyst at UBS AG has estimated that the iPhone subsidy could be as high as $400 per iPhone customer. If 13 million of the devices get sold in a year that implies a which $5.2 billion hit to earnings. Some argue that devices should not be subsidized, since doing so means consumers have to sign contracts. But iPhone subsidies are quite a big expense for firms such as Verizon Wireless.

From at least one perspective, contracts and subsidies offer value for consumers and service providers, with users getting devices they want at $400 lower prices, while service providers can smooth out recurring service revenues and reduce customer churn.

Apple has set a standard entry price of its newest smartphones at $199, with higher end models available with more storage. This year however, Verizon has set a new contract price for its high end Android phones at $299.

The implications are clear enough. If you like high-end Android devices, do not buy them from Verizon.

Both the Motorola Droid RAZR and the just released Google-branded Samsung Galaxy Nexus are $299 with a two year Verizon contract, and both are listed as costing $649 without a contract.

In contrast, Apple's 16GB iPhone 4S is offered for only $199, even though it costs the same $649 without a contact. Apple is getting a $450 subsidy, compared to just $350 for Android licensees Motorola and Samsung.

Verizon's $199 Android phones, including the Samsung Droid Charge, Motorola Droid 3 and Droid Bionic, cost $499, $459 and $589 respectively without a contract, making their subsidies worth just $300 to $390, or $150 to $60 lower than Apple's, one might note.  

The closest Verizon's phones currently come to an iPhone subsidy appears to be the HTC Thunderbolt, which is being offered for $149, a $420 subsidy compared to its $569 full retail price. However, this involves a special promotional discount of $100, making the "sale" price of Android models still higher than regular price of any of Verizon's iPhones. Verizon Wireless can do what it wants, of course. But consumers should also do what they want.

Apple Makes Enterprise Inroads

Some 21 percent of surveyed enterprise information workers are using one or more Apple products for work, Forrester Research says.

Almost half of enterprises (1000 employees or more) are issuing Macs to at least some employees and they plan a 52 percent increase in the number of Macs they issue in 2012.

Managers and executives are more than twice as likely to use Apple products, suggesting an adoption pattern where the ability to use the device is something of a “perquisite,” much as at one time the ability to use a BlackBerry was a perquisite for enterprise executives.

But younger information workers (IT staffs for example) are twice as likely to use Apple products as older ones. 

Higher income workers are more likely to use Apple products as well, but there is a “younger worker” issue here. Most of the sample of 10,000 global information workers earns less than $50,000 a year, but the adoption rate of Apple products is almost 17 percent even in the bottom quartile of workers who make less than $12,000 per year.

Keep in mind, also, that the survey was global in scope, and Information workers in countries outside North America and Europe were more likely to use Apple products for work. Annual salaries also might tend to be lower in non-European and North American settings.

Wi-Fi Offload Causing Price Hikes?

Wireless service providers have been encouraging users to switch their mobile connections to Wi-Fi networks, when they can, as a way of managing their mobile data plans, and to improve user experience.

As it turns out, users have been heeding that advice to such a degree that AT&T now is raising mobile broadband prices and data caps, to encourage users to rely more on their mobile connections.

The ironic results show the unpredictable effects of operator policies intended to preserve user experience. Wi-Fi alleviates congestion on mobile networks. But Wi-Fi also is a substitute form of access, and AT&T now seems to be signaling that it wants to recapture more of the revenue-generating value of mobile access.

"AT&T said at a recent conference that they are seeing customers walk up to the edge of their tier and then use a lot of Wi-Fi to stay below the tier," Jefferies & Company Inc. equity analyst Thomas Seitz says.

Something similar can be noted elsewhere. Utility or water consumers often are encouraged to "use only what you need," in part to forestall the need to build expensive new generation facilities, dams and so forth.

But as consumers in Denver have found, because they reduced their use of water so much, Denver Water has had to raise rates, to cover fixed costs as revenue (water consumption is the revenue model) has decreased, precisely because conscientious consumers are behaving in a conservation mode.

Something quite similar might be happening in the mobile space. Mobile service providers globally have a vested interest in higher usage of broadband features, since that creates new revenue streams. But the desire to alleviate congestion by offloading traffic to Wi-Fi, also siphons off some usage that might otherwise be monetized by users who buy more-expensive access plans.

Offloading mobile broadband access to Wi-Fi might "help" consumers manage their consumption, as it helps operators alleviate congestion. But such measures can backfire, AT&T seems to be saying. 

Users Unclear About 4G Value

As you might expect, early adopters have clearer expectations about new technology, or at least want to "play" with new technologies, in a way that mainstream consumers do not share.

A recent study by Analysys Mason suggests that is the case for potential smart phone customers.

Many are not sure why they ought to buy and use smart phones, nor are they clear about why "fourth generation" networks have value.


More than six percent of all surveyed
mobile users believe that they lready have a 4G handset, which is obviously not yet true.

More than half of them do not understand mobile network generations or are unsure of the connectivity generation of their phone. The study also suggests that about 28 percent of
iPhone users believe that they have a 4G-capable handset.

Some 46 percent of iPhone 4 users also believe they already have 4G devices, even though no iPhones currently support 4G Long Term Evolution or WiMAX connections.

Also, except for PC dongle users, for whom the clear advantage is speed, and, in some cases, improved latency performance, the specific advantages of 4G are unclear.

That state of affairs is not unusual for broadband networks. Up to this point, the main advantage between one generation of broadband and the next is "speed." People instinctively understand "faster."

But 3G mobile networks did not lead immediately to significantly new uptake of new applications, until quite recently, when, for most users, 3G has meant a better web browsing experience. So far, it is not clear that most users can perceive the advantage of a "better" mobile web experience using 4G, as opposed to 3G, with the salient exception of mobile PC users.

AT&T, Verizon Results: Mobile Grows, Fixed Line Shrinks

It is not news, nor unexpected, that AT&T's traditional wireline business, and Verizon's similar business, are contracting, while mobile is leading growth at both firms.

Revenue for the AT&T fixed network business fell to $14.9 billion from $15.1 billion, year over year. AT&T, Verizon fixed line business contracts


Verizon encountered the same pattern in its most recent quarter. Wireless generated $18 billion worth of revenue, and wired services about $10 billion.

Operating revenue grew in mobile, but declined in fixed line. Basically, all the new FiOS revenue is simply compensating for losses in other legacy services, including voice services and digital subscriber lines.

In the fourth quarter 2011, Verizon Wireless delivered the highest number of retail net additions in three years and strong growth in revenues, driven by increased smartphone penetration andincreased retail postpaid ARPU (average monthly service revenue per user). Fixed line revenues decline

Total wireless revenues grew 13 percent year over year while data revenues grew 19 percent year over year.

Orange will not Match Competitor Prices: Why That Is Smart

France Telecom says it will not match the low-cost mobile offers recently launched by Iliad because such aggressive pricing would be bad for network quality and innovation in the long-run, says France Telecom CEO Stephane Richard. That Orange won't compete on price might strike you as unwise.

Goldman Sachs, for example, forecasts that Iliad's market entry will cause France Telecom to lose a third of its operating profits in its domestic market by 2015. That will obviously encourage thinking about the retail positioning of Orange's (France Telecom) pricing strategies.

Some will argue that Orange has to meet competitor prices. But others will argue that losing share is the wiser strategy.

There are ample precedents for France Telecom to do so, even though the strategy carries risks.

Beyond higher marketing costs as competition escalates, sometimes all an incumbent can do is harvest a business. That, in fact, was AT&T’s strategy when it was a dominant long distance provider facing growing competition from a growing number of competitors, and as prices for its product continually declined.

A similar strategy has been taken by incumbent telephone companies in the face of growing competition from VoIP providers. You might argue that telcos should have jumped into VoIP aggressively, matching competitor lower prices.

The suggestion is that sometimes a particular firm cannot compete in a particular line of business, on price. When that is the case, and when a contestant has very large market share, sometimes it will make better financial sense to harvest the business, and spend more organizational effort "finding something else to do."

It is a variation on the old theme that there always are some customers a particular contestant is better off not having. Incumbent mobile service providers frequently find themselves facing lower-cost competition, and it is not always possible to compete on that basis.