Some Forms of Smart Phone Commerce Were Nearly Ubiquitous Last Christmas, Holiday Shopping Season

Smart phones took center stage in the consumer shopping experience during the fourth quarter of 2011, according to NPD Group. Both websites and apps got serious use during the most-recent Christmas and holiday shopping season. 

In December alone, the proportion of U.S. Android smart phone users engaged in shopping websites rose nine percent from November, to almost 80 percent of smart phone users accessing shopping related websites on their devices.

Shopping apps also played an important part of the overall shopping experience, rising five percentage points in December to 59 percent usage.

It would be fair to say that, up to this point, people have been using mobiles for research and sharing with friends. There arguably was less comparison shopping, but that sort of behavior is growing, by all accounts.

Still, such surveys probably overestimate the direct activity related to products users are shopping for, from inside retail locations. And it is applications and behavior on the part of users just before they go to a retail location, and what they do while inside a retail location, that probably has the greatest potential impact on retail sales, for better or worse.

So far, though mobile shopping activities are growing, much of the activity is not too dissimilar from the shopping apps and behavior we have become familiar with on PCs. The big potential changes are how smart phone based commerce behaviors happen while consumers actually are inside stores, shopping.

Source: NPD Connected Intelligence SmartMeter

PayPal Deemphasizing NFC at Point of Sale

PayPal is conducting a major test of ways to integrate PayPal into standard Home Depot point of sale systems. But PayPal continues to believe that near field communications is "too early" in its life cycle to be useful, at least at the moment.

In fact, eBay CEO John Donohue has quipped that "near field communications" stands for "not for commerce." It therefore is not surprising that PayPal appears to be discontinuing, its efforts to supportpmobile payments at the Point of sale using NFC.

PayPal doesn't seem to see enough merchant interest, at least not enough where PayPal is concerned. So far, it appears there is greater retailer interest in adding PayPal payment methods in ways that do not even require use of a mobile device. Merchants bigger on PayPal than NFC

Millennial Males Seem to Like Mobile Ads More than Millennial Women

Among Millennials (some would say that includes people 18 to 29, others would put the range as something more like 18 to 35 or so) men were significantly more likely than women to recall having seen a mobile ad on their mobile phone.

Some 69 percent of Millennial men reported recalling having seen an ad on their mobile devices. 

Less than half of women the same age remembered seeing mobile advertisements. Overall, 59 percent  of smart phone owners of any age or gender reported seeing mobile ads, according to InsightExpress.

Among women ages 18 to 29, just 12 percent said they liked mobile ads at least somewhat, while a plurality were ambivalent. But fully 40 percent of men report actively enjoying mobile advertising, including 20 percent who said they liked it “very much.” 

On average, across all smart phone owners, a quarter liked mobile ads at least somewhat. It isn't clear what the findings indicate. It could be that more attention has been paid to the creative elements for ads aimed at men, or that it is easier to create such elements for advertising aimed at men. 

There could be "respondent bias" of some sort. It is possible that people think they recall specific ads, when they actually do not. It is possible the Millennial women respondents were simply more honest. 

Perhaps the most important finding is that advertising is an enjoyable form of content at all. It appears advertisers are producing more entertaining content. 

LTE Drives Global Network Equipment Spending

Equipment purchased to support mobile networks will reach $398 billion in 2012, up 17 percent from $340.8 billion in 2011, according to an IHS iSuppli.

A substantial portion of the spending is for fourth generation networks, especially based on use of Long Term Evolution. 

Although growth this year is down somewhat from the 32 percent growth rate of 2011, the market is expected to grow at  double-digit rates until about 2015. 

MEF Launches Mobile Backhaul Initiative

The Metro Ethernet Forum has launched a “Mobile Backhaul Initiative for 4G/LTE,” aiming to create standards for backhaul that could provide a potential 25 percent backhaul savings for mobile operators.

The initiative seems to build on support for multiple classes of service (Multi-CoS) contained in the MEF 23.1 Multi-CoS Implementation Agreement.

“Mobile Operators all agree that the industry’s single biggest challenge and operating cost is in delivering the bandwidth needed for 4G/LTE backhaul” says MEF President, Nan Chen.

The “Mobile Backhaul Initiative” will feature an integrated suite consisting of the MEF 22.1 Mobile Backhaul implementation agreement, MEF 23.1 Multi-CoS implementation agreement, and a technical business paper clarifying the urgency and justification of migrating to Multi-CoS.

The program focuses on providing technical guidance on best practices and a new paper on packet-based frequency synchronization as well.

Why Data Consumption Forecasts So Often are Wrong

Bandwidth planning has become a tricky business since data traffic completely displaced voice as the driver of consumption. Not only is demand more variable and uncertain, growth is more dynamic, by an order of magnitude or two.

That raises an obvious question for mobile service providers: how much bandwidth do they need to be ready to supply to customers? The question might be easier to answer if demand were not if end user demand was predictable, but demand is not predictable. Sometimes growth is "only" 40 percent a year; sometimes it is higher.

Some might say, for example, that over the past year, AT&T has revised its own forecasts of bandwidth consumption in significant ways.

In a March 2011 presentation AT&T projected that data volumes would grow by eight to 10 times between the end of 2010 and the end of 2015.

That forecast appears to be based on an expectation that volumes would roughly double in 2011 and then increase by a further 65 percent in 2012.

Consider this 2008 forecast, which presents a not-unusual rate of growth in potential speeds, which has a direct bearing on consumption, since faster speeds tend to be associated with higher consumption.

Keep in mind that access speeds are different from consumed gigabytes. But the former drives the latter. And nobody currently predicts anything but a continual shift to higher potential access speeds on fixed and mobile networks.

Instead, AT&T now seems to be seeing 40 percent annual growth. Now, 40 percent annual growth is significant. It means bandwidth consumption doubles about every two to three years.  But annual bandwidth growth of 50 percent a year would be well within historical ranges, on an aggregate basis, in terms of long-haul bandwidth consumption. But policies and end user behavior can change the demand curve.

The most-recent AT&T forecast would mean that data volumes would increase by five to six times by 2015. Whether that means existing spectrum, and newer methods for handling traffic using that spectrum, are sufficient to handle future growth is debatable. Some might argue additional spectrum is not required.

Others might say the possible growth of between 500 percent and 1,000 percent, in just four years, is challenging enough that additional spectrum is likely to be needed, especially if the higher range of growth turns out to be the case.

Network planners might point out that supplying additional bandwidth takes prodigious amounts of capital and significant time.

Some might speculate that AT&T’s forecasts about data growth have changed because supplier policies and end user behavior have changed.

Perhaps users have become quite sophisticated about offloading their data usage to Wi-Fi, as service providers have been urging them to do.

Or, perhaps the heaviest users, with "prodding" from the carriers, are modifying their own behavior. Why it is so hard to make accurate bandwidth forecasts

Some observers would not be sanguine about moderating rates of bandwidth consumption. It is true that carriers can provide incentives and dis-incentives for consumption. But it also is the case that video consumption keeps growing, and it is video that drives bandwidth demand.

Use a Smart Phone as a Desktop PC?

A sufficiently motivated researcher can, in fact, use a smart phone as a desktop PC. The results might be "sort of" reasonable.

But such experiments simply point out that behavior is, and ought to be, different on devices with different form factors, user interfaces, screen sizes and software loads.

To use an analogy, in the history of media, we always tend to begin using a new medium on the pattern of the older medium. So, when "stage" was the dominant mass performance medium, and the movie business began, what did movies look like?

The experience was pretty much the same as a live performance, only captured on film. In fact, the new medium arguably was less rich, as an experience, since the "audio track" was missing.

In the realm of devices, we likely have a tendency to envision "how to use" a new category of devices  through the prism of older devices we already are familiar with, as well.

The point is not so much that some common experiences (using email or messaging) will be common to most or all of the platforms. Beyond that, we will eventually discover that each device category creates a distinctive "highest and best use," despite the common features.