Mobile Execs See Mobile Payments as "Breakthrough Category" in 2012

Mobile industry executives surveyed by analyst Chetan Sharma think mobile payments will be the breakthrough category for 2012. 

The next breakthrough category is seen to be mobile commerce. 

Survey respondents tend to believe financial sector participants will be  the leaders in mobile payments, specifically firms such as Visa and MasterCard that run huge branded payment networks. 

Missing from the list of options, though, are "banks" and other participants that provide the credit or debit card functions. 

Perhaps of note, since 2011, respondents have boosted their opinions of the established payment networks, lowered their view of prospects for Isis, and now take a higher view of start-ups, Amazon and Apple. 

PayPal is viewed less favorably than in 2011, which some observers might find just the opposite of what might happen in 2012. 

Mobile Internet Usage Doubles

Global internet usage on mobile devices, exclusive of tablets,  has almost doubled to 8.5 percent in January 2012, up  from 4.3 percent in 2010,  according to StatCounter.

The other important observation is that mobile broadband already has passed fixed network broadband, in terms of number of users or subscribers. 

StatCounter Global Stats data also suggest mobile access to the Internet has been doubling every year since 2009. Other studies confirm the trend.

Nokia leads worldwide, most probably driven by its dominance in India, while Apple is second globally but leads the U.S. and U.K. markets.

Global use of mobile devices to access internet
(excludes tablets)

Jan 2009: 0.7%
Jan 2010: 1.6%
Jan 2011: 4.3%
Jan 2012: 8.5%

Mobile phones and PC dongles have been  the main drivers of mobile broadband usage, so far. The big question is how much of a role tablets will play in the future.

"Everybody" Multi-tasks When Watching TV

Multi-tasking between TV and internet connected devices is now the norm for consumers, globally.

In fact, according to GlobalWebIndex, fewer than 20 percent of respondents survey had not multi-tasked, while watching TV, in the last month. 

While laptops lead, with nearly 50 percent of respondents having used them in tandem with watching TV in the last month,  40 percent having used a mobile and 10 percent used a tablet while watching TV. 

Which of the following devices have you used while watching TV?

It is not entirely clear that mobile phones are used exclusively or primarily for content consumption while watching TV. People might be answering the phone or placing a call, sending or reading text messages or email, for example. 

Still, the findings do reinforce the notion that "mobile" devices often are used in un-tethered but not mobile contexts, while TV consumption is less an experience that always demands full attention by viewers. 

There are lots of implications for "interactive TV." Some decades ago, there was more thinking about how to change the TV experience from a "passive" to an "active" experience. It now appears that is less important to people.

TV remains largely a passive experience. What is "active" is people doing other things while TV is "on." 

Top 3 U.S. Smart Phones are Apple, Apple, Apple

Some 68 percent of mobile phones sold during the fourth quarter of 2011 were smart phones, according to NPD Group. And the top five best-selling mobile phone handsets in the fourth quarter were built by Apple. In terms of sales volume, the top devices were:

1. Apple iPhone 4S
2. Apple iPhone 4
3. Apple iPhone 3GS
4. Samsung GALAXY S II
5. Samsung GALAXY S 

The NPD Group study mirrors other studies that suggest Apple and Samsung are the two most-profitable device manufacturers. Apple, Samsung are the growing volume leaders globally, as well. 

Profitability, more than anything else, now is shaping the global smart phone business, one might argue after considering the latest estimate by Strategy Analytics of market share in the global handset business.

Globally, Apple and Samsung have, over the last 12 months, surged to the top of the charts in terms of smart phone sales volume. In the past, the “smart phone” category has not been significant, as all devices were feature phones or basic phones.

As the market begins to shift to a smart phone buyer pattern, differences in firm strategy and execution have lead to a rapid change in market leadership.

Global smart phone shipments grew 54 percent annually to reach a record 155 million units in the fourth quarter of  2011, according to Alex Spektor, Strategy Analytics associate director. That apparently has proven to be a decisive change.

In the past, Nokia has been the global share leader, but Nokia has not been able to translate that prior success into smart phone success, where Apple has changed the game and Samsung apparently has been able to keep pace.

Apple overtook Samsung to become the world’s largest smartphone vendor by volume with 24 percent market share. Apple’s global smartphone shipments surged 128 percent annually to 37.0 million units, as distribution of the iPhone family expanded across numerous countries, dozens of operators and multiple price points.”

Apple took the top spot for share on a quarterly basis, but Samsung became the market leader in annual terms for the first time with 20 percent global share during 2011. With global smartphone shipments nearing half a billion units in 2011, Samsung is now well positioned alongside Apple in a two-horse race at the forefront of one of the world’s largest and most valuable consumer electronics markets, Strategy Analytics says.

In contrast, Nokia’s smart phone market share was cut in half from 2011 to 2011, dropping from 33 percent in 2010 to 16 percent in 2011.

That is one reason there has been so much focus on the Nokia partnership with Microsoft, as many would argue the Windows Mobile operating system represents the best shot Nokia will have to avoid collapse.

The other observation of note would be that profitability might now be emerging as the key differentiator, even though design and consumer demand clearly are driving the market overall.

Samsung’s most-recent quarterly earnings also set records. Samsung Electronics Co declared $4.7 billion in quarterly operating profit. jumping 76 percent year over year.

Between them, Apple and Samsung earned fully 81 percent of all profits in the mobile handset business.



Apple in the fourth quarter of 2011 shipped 37 million smart phones worldwide, up 117 percent from 17 million in the second quarter. This represented the strongest sequential quarterly growth among the top-five smart phone brands, according to IHS ISuppli.

“Samsung advanced in 2011 because of its strategy of offering a complete line of smartphone products, spanning a variety of price points, features and operating systems,” says Wayne Lam, IHS senior analyst.

On the other hand, the market share battle between Apple and Samsung reflects the competition between the two leading smartphone operating systems and ecosystems: Apple's iOS and Google's Android, says Lam.

“The relatively small growth of Sony Ericsson and Motorola may indicate that the Android smart phone market is becoming too crowded as the various licensees compete for limited consumer mind share and shelf space,” Lam says.  

Verizon begins testing new mobile payment solution

Vantiv (formerly Fifth Third Processing Solutions), a payment processor, is conducting a field trial of a new mobile payment solution developed in collaboration with Verizon. 


The new solution features end-to-end, secure point-of-sale payment capability and business applications using Verizon’s "Private Application Store for Business."


Vantiv customers can tailor point-of-sale applications using the solution. 



Vantiv's Mobile Business Solution from Vantiv on Vimeo.

Google Testing In-Home Wireless Device

Google appears to be developing a wireless in-home entertainment device that requires testing outside the laboratory environment, and has asked the U.S. Federal Communications Commission for permission to conduct such testing in the homes of several employees.


The device is in the prototyping phase, Google says. Apparently Google wants to test the throughput and stability of home Wi-Fi networks using the entertainment device. 


The device will use both Wi-Fi and Bluetooth. The planned testing is not directed at evaluating the radio frequency characteristics of the module (which are known), but rather at the throughput and stability of the home Wi-Fi networks that will support the device, as well as the basic functionality of the device.  Google in-home wireless test

Some Mobile Networks Must Raise Prices, Cut Costs, Manage Demand or Accept Congestion

With mobile data traffic growing and revenue per gigabyte falling, mobile service providers in Western Europe need to reduce network carriage costs by 50 percent  or they will face an eight-fold increase in the costs of radio access network (RAN) equipment, according to a new report from Analysys Mason.

That analysis suggests that if operators in Western Europe simply try to meet the growing demand for data traffic by deploying more base stations, RAN costs could rise to $40 billion per year by 2016.

This compares with $5 billion per year in 2011, Analysys Mason says.

“Operators can’t afford to spend that sort of money,” says Terry Norman, Analysys Mason lead analyst. “Therefore, operators will either accept network congestion or use pricing to control demand.”

Or, as many now believe, mobile service providers will have to overlay much cheaper infrastructure, such as small cells, as well as greater use of in-building and outdoor Wi-Fi, Norman says.

One potential issue is whether small cell deployment will be a substitute for fourth generation networks in Western Europe.

“The costs of indoor and outdoor Wi-Fi are both significantly lower than those of upgrading to 4G,” Norman says. “In Western Europe, operators need to save $30 billion in mobile access network costs between now and 2016.”

Wi-Fi would go a long way towards making up that deficit because it costs only about 20 percent of an equivalent macro deployment, Norman says. Access network costs too high

“The number one challenge is how to make data profitable,” says Norman. “To do this, operators really only have two choices: they can increase the price of data, or they can decrease the cost of delivery.”

“Increasing the price of data will be extremely difficult for operators because consumers expect data to become ever-cheaper,” Norman says. Reducing the cost of operating the network is one way out of the conundrum.