Apple iPhone, iPad are "Gateways" to Apple Ecosystem

Though in the past the apple iPod was a "gateway" device introducing users to the Apple ecosystem, that role now is played by the iPhone and iPad. About 25 percent of iPad owners say the device is their first Apple product.

According to the NPD Group, 33 percent of U.S. homes, (37 million households) own Apple products. While a majority (69 percent) of these consumers own iPods, ownership of iPads is growing.

“iPad sales are growing much faster than any other Apple product has this soon after launch,” said Ben Arnold, director of industry analysis at NPD. ”In fact, one-in-five Apple owner households has one, nearly equivalent to the number that own an Apple computer."

Historically, the iPod has been the introductory Apple device for consumers, with 82 percent of owners saying it was their first Apple product.

Long Term Evolution Subscribers Doubled in First Quarter, 2012

At the end of the fourth quarter of 2011, the worldwide Long Term Evolution subscriber base nearly doubled quarter over quarter to reach 12 million subscribers worldwide, according to Maravedis-Rethink. The quarter over quarter subscriber increase for LTE and WiMAX was 92 percent and 14 percent, respectively, over that reported at the end of the third quarter of 2011, according to Miravedis-Rethink.

At the end of 2011, 54 operators worldwide had launched LTE commercially, 19 during the quarter alone. An additional 224 major mobile operators had committed to launching the technology in the future, 193 of those with FDD-LTE and 31 with TD-LTE. Miravedis-Rethink anticipates that 469 million LTE subscribers will be active by 2016 of which 25 percent, or 118 million, will be TD-LTE users and the rest (75 percent, or 350 million) will be FDD-LTE.

YouTube Driving Traffic, Globally

YouTube is driving global Internet traffic, a new study by Sandvine indicates. YouTube is the largest source of mobile video traffic in every region examined, accounting for as much as 25 percent of network data and no less than 12 percent, Sandvine says. 


In North America, video and audio streaming make up more than half of mobile data traffic, led by YouTube, Pandora and Netflix. 


In fact, audio and video streaming will exceed 60 percent of North America’s mobile data by late 2014, according to Sandvine. 

2/3of U.S. Mobile Consumers Won’t Pay more than $50/Month for Mobile Data

Some 66 percent of U.S. consumers planning to purchase a smart phone say they are unwilling to pay more than $50 per month for mobile data plans, Parks Associates research finds. The findings are not a surprise. Few consumers often say they are quite willing to pay more for a communications service.


But it once was unusual for most consumers to say they'd pay $30 a month for subscription TV services, as well, given the availability of "no incremental cost" broadcast TV. 


What happened is that a new product, and new product demand was created. That is what mobile service providers are going to have to do, as well. 


"Operators need to create new value propositions for their data services," said Harry Wang, Director, Mobile Research, Parks Associates. Operators need to shift consumers’ perception away from raw data to the experience created by their data services.”

Mobile Banking Customers Love Convenience, Banks Will Struggle with Business Case

An overwhelming majority (94 percent) of U.S. consumers say that banking on their mobile device is easy and more than three quarters (77 percent) feel it is convenient, but only 42 percent cite that it is reliable, according to a new study released today by Infosys. 


The Infosys survey also found that slow speed is a barrier to adoption for 31 percent of respondents. Some 30 percent are deterred by a lack of confidence in the protection of their data. About 26 percent say the experience of mobile banking is inconvenient.

Nearly half (45 percent) of consumers who do not use online banking believe that mobile banking is "experimental" or "dangerous," and more than a third (38 percent) say it is "scary." In fact, non-users are three times as likely to say "scary," and almost four times as likely to say "dangerous" than mobile banking users.

While 60 percent of consumers who do not use mobile banking cite a lack of confidence in the protection of their personal or financial data as a top concern, nearly the same amount (55 percent) share private information when updating their Facebook status on smart phones.

That might not be surprising. People have higher thresholds for security when dealing with their money, than their status update information, pictures and opinions.

Nearly 80 percent of all consumers like the mobile banking benefit of 24-hour access to their account, but only 48 percent are happy with the speed of service and only 46 percent with ease of log in.

The business issue for bankers is that mobile is a new channel to support, but without any obvious incremental revenue to gain.

Apple Earnings: Market Share Matters

There are a couple of classic reasons why market share is deemed to be a good thing. Gross revenue is one advantage. But profit margins are the other advantage leading market share is supposed to confer. Apple seems to be a case in point. 


Telcos struggle to make 20-percent margins. Perhaps software or "Internet" companies could reasonably expect, with market leadership, to have 40-percent profit margins. It is harder, in consumer electronics, in some product lines, to make single-digit margins. Apple is nearing 40-percent margins. Almost unheard of for a consumer electronics manufacturer.

Will Telcos "Think the Unthinkable?"

Are tier-one service provider strategic options that once were "unthinkable" now becoming less improbable? If some possible revenue trends materialize, what might have seemed "impossible" in the past might start looking more palatable.

By 2020, for example, European telcos could see their sales fall by up to 20 percent, while; earnings (EBITDA) could even drop by 40 percent, according to an analysis by Roland Berger Strategy Consultants.

Change of that sort might lead to relatively shocking changes for many service providers, including separation of retail and wholesale units or a switch to “wholesale-only” operations.

To respond, telcos must reduce operating costs, adopt new, sales and service models and tap growth markets, Roland Berger says.

The study suggests European telcos will have to invest up to EUR 600 billion, mostly for optical fiber and Long Term Evolution fourth generation mobile networks, says Alexander Dahlke, Partner at Roland Berger Strategy Consultants. Two or three main strategies are conceivable.