Mobile Data Revenue Mismatch is Getting Worse

It isn’t news that mobile service providers face bandwidth demands that threaten to outrun revenue while boosting capital spending and operating expense as well.

In Germany, Solon expects a 15-fold increase in data demand over the next five years. The additional network capacity required would almost double network operating expense from 12 percent of revenues in 2011 to 23 percent of revenues in 2016, not to mention the capital investment.

So bandwidth demand is growing much faster than revenue earned from supplying that bandwidth. That's a problem.

Where Do Service Providers Actually Make Their Profits?

One of the truths about virtually every business is that 80 percent of the profits will tend to come from about 20 percent of the activities people at those businesses conduct. In the communications business, profit historically was generated by business customers, who provided the surplus required to run the money-losing rural parts of the business, and later the break-even suburban residential business.

Those realities are changing with the advent of mobile service and broadband.

"Phablets" Will Surpass 208 Million Shipments Annually in 2015

You might have noticed, recently, that there is plenty of experimentation around form factors in both the tablet and smart phone markets, with each category containing devices that are migrating in a direction in the middle, namely smart phones with bigger screens and tablets with smaller screens.

Though cost reduction and portability might be reasons for creating seven-inch tablets, better content consumption experience might be the reason for crafting smart phones with screens in the five-inch range.

More than 208 million "phablets," a hybrid device that is larger than a smartphone but smaller than a tablet, like the Samsung Galaxy Note, will be shipped globally in 2015, says ABI Research.

Despite the slow start for phablet smart phones in 2011, HTC, LG, and Huawei each will introduce phablet smart phones in 2012, joining the ranks of Samsung’s Galaxy Note and Nexus. Additionally, another phablet smartphone was released earlier this month, the Samsung Galaxy S3, according to ABI Research.

“One of the chief drivers for phablets is the amount of time people use their smartphones for web browsing, reading articles and newspapers on the go, or simply navigating their journeys,” says ABI Research senior analyst Joshua Flood. “The larger screen sizes make a significant difference to the user’s experience when compared to conventional-sized touchscreens between 3.5 to 4 inches.”

Sale of all of T-Mobile USA "Unlikely"

Deutsche Telekom AG considers a complete sale of its troubled U.S. wireless unit T-Mobile USA as "unlikely,"  Chief Executive Rene Obermann says.

"We continue to look for a long-term solution to improve earnings in our U.S. business," Obermann  told shareholders at Deutsche Telekom's annual general meeting. "However, a complete sale like the one to AT&T is considered unlikely."

Among the options some believe T-Mobile USA could consider is a spin out of the asset to shareholders or a merger with a smaller regional provider. Few seem to believe T-Mobile USA realistically can grow its way to greater scale on an organic basis.

The problem is that Deutsche Telekom itself says it must increase its return on capital or reduce its capital investment in the U.S. market. That will be tough as T-Mobile USA continues to bleed its most-profitable customers and lags the other leading U.S. mobile firms in creating Long Term Evolution fourth generation networks. 

Android- and iOS-Powered Smart Phones Gain More Share

Smart phones powered by the Android and iOS mobile operating systems accounted for more than eight out of ten smartphones shipped in the first quarter of 2012, according to IDC.

Android had 59 percent market share, while iOS had 23 percent share of the 152.3 million smart phones shipped in the first quarter of 2012. Those statistics do not exactly related to "sales," though.

During the first quarter of 2011, the two operating systems held a combined installed base of 54.4 percent. IDC notes that  Android and iOS have grown their share over Symbian and BlackBerry, Linux and Windows Phone 7/Windows Mobile.

                                   Top Six Smart Phone Share, 2012 Q1 (Units in Millions) 

Mobile Operating System	1Q12 Unit Shipments	1Q12 Market Share	1Q11 Unit Shipments	1Q11 Market Share	Year-over-Year Change
Android	89.9	59.0%	36.7	36.1%	145.0%
iOS	35.1	23.0%	18.6	18.3%	88.7%
Symbian	10.4	6.8%	26.4	26.0%	-60.6%
BlackBerry OS	9.7	6.4%	13.8	13.6%	-29.7%
Linux	3.5	2.3%	3.2	3.1%	9.4%
Windows Phone 7/Windows Mobile	3.3	2.2%	2.6	2.6%	26.9%
Other	0.4	0.3%	0.3	0.3%	33.3%
Total	152.3	100.0%	101.6	100.0%	49.9%

Google Launching Knowledge Graph

Google has begun to introduce "Knowledge Graph" to U.S. English users. It also will be available on mobile devices. 


The Knowledge Graph allows users to search for things, people or places that Google knows about and then filters that information for relevance to a particular query. This is a critical first step towards building the next generation of search, which taps into the collective intelligence of the web and understands the world a bit more like people do.

Google’s Knowledge Graph builds on Freebase, Wikipedia and the CIA World Factbook but is augmented by facts Google already has amassed, as well as the relationships between these different objects. It also is tuned based on what people search for on the Web.

Tablet Growth Changing Ad Market

Non-phone mobile devices, especially tablets, accounted for 20 percent of all mobile advertising impressions on the Millennial Media platform during the first quarter of 2012, compared to 15 percent in the first quarter of 2011, showing the growing importance of tablets in the portable device universe and mobile advertising business.

Android remained the top overall operating system on the Millennial Media platform in Q1 2012, with a 49 percent share of impressions, and Apple remained the leading individual mobile device manufacturer, Millennial Media says.

The Apple iPad, Samsung Galaxy Tab and Amazon Kindle Fire were the top tablets in the first quarter of 2012, and all three were among the top 20 mobile devices.



Though the common observation is that tablets are displacing PCs for content consumption, tablets also are becoming a more-important platform for mobile content consumption as well.


IDC has forecast 2015 sales of 535 million PCs. That would imply tablet shipments about 60 percent of the PC level, heavily weighted towards developing regions of the world, the Guardian reports.


Apple will have just under 50 percent of the market of 326 million devices by about 2015, Gartner says. The Gartner forecast suggests tablet sales to end users will total 118.9 million units in 2012, a 98 percent increase from 2011 sales of 60 million units.

Apple's iOS continues to be the dominant media tablet operating system, as it is projected to account for 61.4 percent of worldwide media tablet sales to end users in 2012. Despite the arrival of Microsoft-based devices to this market, and the expected international rollout of the Kindle Fire, Apple will continue to be the market leader through the forecast period, Gartner argues.