The Long Tail of Mobile App Purchases

It looks as though there is a "long tail" or Pareto distribution to mobile app purchases. According to a U.S. consumer survey conducted by ABI Research​, about two thirds of app users have spent money on an application on at least one occasion. Among these paying users, the mean spend was $14 per month. 


“The median amount among the consumers who spend money on apps is much lower than the average, just $7.50 per month," says Aapo Markkanen, ABI Research senior analyst . 


"The highest-spending three percent of all app users account for nearly 20 percent of the total spend, while over 70 percent spends either nothing or very little,” he says. 

PwC Data Shows Why Verizon Wireless Pricing Moves Make Sense

The new Verizon Wireless pricing plans, which make U.S. domestic voice and text messaging unlimited and a part of the basic subscription, while shifting the variable cost of service entirely to the mobile data plan, make sense. 


Consumer spending on broadband access is climbing at a robust 15-percent annual rate. With a continuing shift to consumption of video, the rate of consumption could increase even faster. So it makes sense that Verizon Wireless would want to shift pricing to a mode where data usage is variable, as that is where the additional costs of providing service will grow.

How Significant is Retina Display?

It is easy to be seduced by Apple. Its Retina display does offer higher resolution than older displays. But how much difference will it really make? For most people, who won't be buying a Retina-equipped MacBook Pro, there will be no difference.


But even some users who do buy a MacBook Pro might be hard pressed to tell the difference. 


As one review says, "you can, however, only really tell the difference when you put the Retina MacBook Pro next to an identically sized MacBook Pro from the previous generation." If that is the case, its hard to see the value. 


"It’s hard to convey the difference between the two displays via normal photos, so we went for the extreme close-up by taking pictures of key icons and details with a magnifying glass."


If you need a magnifying glass, I'm not sure the value is obvious enough. 

In Europe, Fixed Network Voice-over-Broadband Grows 400%

In the fourth quarter of 2011, voice over broadband apps accounted for 52 percent of all fixed access traffic, compared to 47 percent in the fourth quarter of 2010, Analysys Mason says.


The growth has been triggered, in large part, by tariff reductions for mobile calls, according to  Analysys Mason. The consequence is that the volume of fixed network calls made to mobile devices has skyrocketed. 

So at least in Europe, voice usage on the fixed networks are, in many cases, lead by broadband voice, not use of the public switched telephone network. That appears not to be the case in other regions, though. 

U.S. Launches Antitrust Probe of Cable and Online Video Practices

It is perhaps not a surprise that the Department of Justice is "investigating" whether there are antitrust implications to cable TV operator retail packaging policies, as they might pertain to restraint of trade. Those questions are bound to emerge.

Lots of people might ask whether a cable operator can create an extension of a video subscription service that includes some of the content a customer already has paid for, and make it available on other screens, then exempt the Internet usage from the consumer's bandwidth cap. Some might say it is obvious a retailer can do so. Others would say it stifles rival streaming services.

Some might ask whether it should be lawful for a service provider to require a "sell through" purchase at all, where cable TV service has to be purchased before some or all of that content can be purchased for Internet delivery. Again, some would say this is done for all manner of products, all the time, and that it is not, in and of itself, restraint of trade.

But I find this one passage, in a Wall Street Journal story about the antitrust probe, one of the most-ironic passages I've ever read in the Wall Street Journal: "Having invested billions of dollars building their networks, some pay-TV companies have shown little inclination to get out of the business of packaging television channels and become mere conduits for other companies' data. Some major entertainment companies also have an interest in preserving the current model of television viewing because they want cable companies to take bundles of their channels, rather than just cherry-picking the most popular ones."

What I find so ironic about the story is the blinding "duh" element. Of course cable operators, having invested billions and decades building their businesses, do not want to voluntarily relinquish that business to become low-value "dumb pipes."

Of course content owners do not want to change a lucrative distribution model that creates advertising value and helps them launch new channels.

Let me be clear: as a consumer I would prefer to have a choice, either to keep buying video subscription services they way they are, or to buy only some channels, or to buy only some programs and have them delivered over the Internet.

But that doesn't mean I expect those entities to voluntarily, and without compensation, agree to have those businesses destroyed. The Wall Street Journal passage reads like something written by people who have no idea about how business operates, or worse, written by people who actually think it is unusual for a business or industry to want to hang onto a successful revenue model.

Market Capitalization Isn't Everything, But Neither is it Meaningless

Market capitalization of a public company is not the only way to measure influence in a market, or even current revenue (Instagram comes to mind). But such comparisons sometimes are instructive when trying to understand where a market could be headed.

As a means to illustrate what Amazon has done to the retail market, consider that Amazon, generally considered the world’s largest e-commerce company, has a market cap of $100 billion.

That is more than the market cap of Macy’s, J. C. Penny, Nordstrom, Gap, Abercrombie & Fitch, Costco, Dillard’s, Barnes & Noble and Sears, altogether.

Amazon's market capitalization does tell you how dominant it is in the online e-commerce business, though.

Sprint "Touch" Might Feature McDonald's, Barnes and Noble, Macy's, Target, Best Buy

McDonald's, Barnes and Noble, Macy's, Target and Best Buy are said to be among retailers who will work with Sprint's rumored new mobile wallet, "Touch."