PayPal Goes "Mobile First"

PayPal has decided to consolidate all PayPal product groups into one global product organization led by Hill Ferguson, who was previously in charge of the mobile organization. "Mobile is simpler by definition," says David Marcus, PayPal president.


Some of us would say PayPal is only the latest application provider to go "mobile first" in its product strategy. That's sound thinking.


Consider that many mobile users prefer mobile Internet access and apps to fixed network usage. Hispanics in the United States, for example, "over-index" for mobile application usage. Almost 50  percent of U.S. Hispanic Internet traffic is driven by mobile devices, for example, according to Troy Brown, one50one founder and president. 


According to industry research firm Nielsen, in the US, Hispanics on average spend 20 percent more time on streaming video over mobile than the rest of the population (four hours and 20 minutes per month versus three hours and 37 minutes).

Research from Google indicates that African-Americans over-index versus other segments in accessing video-sharing websites via their smart phones (49 percent versus 43 percent).

Anecdotally, we at one50one see a much higher percentage of African-American and Hispanic audiences watching live performances on their mobile devices, says Brown.

Smart Phone Sales Could Drop $40 Billion by 2016 if People Use Their Own Phones at Work

Paradoxically, what is good for enterprises and small businesses might not be so good for mobile handset providers or mobile service providers.


The growing number of workers that bring their own smart phones into the mobile workplace means enterprises and other businesses do not have to buy devices for their workers. And if employers reimburse workers for service charges related to their personal devices, employers do not have buy additional mobile subscriptions.


So ARCchart estimates smart phone sales could drop by $40 billion by 2016. The ARCchart study shows the complex impact of people using their own devices for personal use and work, instead of using one device for work and another for personal use. 

17% of Mobile Owners Do "Most" of Their Online Activities on the Mobile

About 17 percent of mobile phone owners do most of their online browsing on their phone, rather than a computer or other device, the Pew Center Internet & American Life Project reports.


Most do so for convenience, but for some their phone is their only option for online access. That has obvious implications for the evolution of the broadband access business in the United States. What might now be only a convenience could later change into a preferred behavior, particularly for some users who have access to fourth generation networks and do not watch much online video. 


Some 88 percent of U.S. adults own a cell phone of some kind as of April 2012, and more than half of these cell owners (55 percent) use their phone to go online. That, the researchers say,  represents a notable increase from the 31 percent of mobile device owners who said that they used their phone to go online as recently as April 2009.


Also, 31 percent of these current cell internet users say that they mostly go online using their cell phone, and not using some other device such as a desktop or laptop computer. That is a significant number, since adoption of most products and services often assumes a faster adoption curve once 10 percent of users are reached. 

Virgin Mobile USA to Offer iPhone on June 29, 2012

Virgin Mobile USA announced today it will offer iPhone to its prepaid customers beginning Friday, June 29. Virgin Mobile USA will offer iPhone 4 and iPhone 4S with its "Beyond Talk" unlimited data and messaging plans as low as $30 per month on the Sprint Nationwide Network.

Here's why the move is important. Up to this point, the "prepaid" mobile service providers have been unable to sell the Apple iPhone, with some obvious implications for customer attraction and retention. Since Virgin and MetroPCS now sell the iPhone, some of that disadvantage is removed.

To be sure, consumers at Virgin Mobile USA and MetroPCS will have to pay full retail for their devices, but as some will note, at $50 a month, a consumer sort of "breaks even" after six months of service.

The more-important implication, though, will be seen in consumer willingness and ability to pay full retail for devices, getting service providers out of the device subsidy game. Virtually all global mobile carriers would prefer to be in that situation, and we might now get a true test of consumer willingness to pay full retail for their coveted devices.

The iPhone will be available without a contract and with no fees for activation or roaming. New and existing customers can purchase iPhone atwww.virginmobileusa.com, RadioShack, Best Buy and select local retailers.

Gaming Revenues Shifting Away from Consoles

U.S. video game sales totaled $24.75 million in 2011, mostly on traditional content to be played on dedicated gaming consoles, NPD Group data indicates. 

But spending is slowly migrating from console games to non-traditional and more-casual game formats, according to eMarketer.

Between 2009 and 2011, revenues for computer and console games shrank from $10.6 billion to $9.3 billion, for example. 

Games delivered by mobile apps, social networks, downloads and other channels were the newer formats. 

DirecTV, DishGetting Justice Department Scrutiny Over Programming Contracts?

DirecTV  and Dish Network Corp. have received requests from the U.S. Justice Department about pricing contracts with television networks, part of a broader probe into whether subscription TV distributors are preventing the emergence of  Internet-based competitors, according to Bloomberg. 


Ultimately, many of us would argue, the older subscription TV paradigm cannot be challenged unless content owner contracts allow competitors access to the professionally-produced programming consumers are used to getting from their subscription TV providers.


Just as obviously, neither content owners nor distributors will do anything to jeopardize the existing economics of the business. So the wild card is government intervention to force change. 


The Justice Department sent civil investigative demands, which are similar to subpoenas, to DirecTV and Dish, the two largest U.S. satellite-TV providers. 


The government wants information about "most- favored-nation" provisions, which give distributors companies favorable pricing and terms. Those contracts also restrict Internet delivery rights. 


Regulators are concerned that the conditions are preventing smaller startups and Internet-video distributors from obtaining programming rights. If DoJ finds the most-favored nation clauses are anti-competitive, and bars them, there is at least a chance of disruption in the video market. 

Global Video Business Will Be More Fragmented in 2016

Granted, it often is tough to glean much of value from global and aggregate figures, for business prospects in any particular country. 


The global subscription video market, which has been shared between cable and satellite providers, will see a significant amount of share taken by telcos by 2016.


Video services revenue on a global basis was $261 billion in 2011 and is forecast to grow to $371 billion by 2016, Infonetics Research estimates. 


Globally, the top 20 subscription-TV revenue leaders accounted for 50 percent of the revenue, while the top 20 subscriber leaders represented just 30 percent of subscribers. 


In the U.S. market, satellite share has been relatively stable at about 32 percent to 33 percent, while telco market share is growing. 


Whether "telco" share continues to creep up, or is transformed, remains a question. Many observers long have anticipated that, one day, U.S. telcos would simply both U.S. providers. In essence, telco share could, in that scenario, rise to more than 40 percent of the U.S. market.