O2 Mobile Network was Swamped by Tweets During Olympic Bike Race

O2's mobile network was to blame for a disruption of timing  reports in the Olynpic cycling race, after a surge in tweets from spectators' smart phones disrupted transmissions from cyclists reporting their positions on the course. 


"There was a capacity issue with Box Hill at the weekend," an O2 spokesperson said. 


The London Organising Committee of the Olympic and Paralympic Games (LOCOG) was picking up race data from location-reporting transmitters on the bikes. This data was then supposed to be sent to the Olympic Broadcasting Service (OBS), using the O2 network. 


But congestion of the data network apparently prevented many of the reports from being sent. 

Growing Interest in Image Capture for Mobile Banking and Payments

Though much legitimate attention now is paid to communications methods such as near field communications or barcode scanning as a way of enabling mobile payments or other financial transactions, image capture might be getting much more attention for a wide range of banking and payment operations.

PayPal, for example, has acquired card.io, a San Francisco-based company that provides technology for developers to capture credit card information by using the camera on a smart phone.


And virtually all the leading U.S. banks now are using or adopting image capture technologies that allow a mobile phone camera to take a picture of a financial record as part of a transaction, says Jim DeBello, Mitek Systems CEO. Depositing a check remotely is one example of how image capture can be used to facilitate a transaction. 


For any consumer, the value is pretty simple and obvious: a check deposit can be made remotely, with no need to go to a physical location, stand in line and wait to make the deposit. 

Insurance companies are interested in image capture for similar reasons of convenience, but perhaps more for creating instant rate quotes for consumers who snap a picture of their driver's license and auto vehicle identification number, and get an automated rate quote, for example. 


Many retailers also may want to use image capture to allow users to make remote payments, as they now use electronic banking services. In other cases, a retailer might want to enable use of image capture for providing an instant quote to a potential customer.


A consumer might be able to take a picture of a current credit card statement and then have a potential new supplier make an automatic quote for switching the account. 


Some 60 million U.S. consumers have a checking account, but use no other banking services, says DeBello. That means it might be possible to encourage those users to adopt new services, or use new products, if doing so were as easy as taking a picture. 


Perhaps a prepaid mobile user could take a picture of an existing prepaid card and add more value to the account. 


For virtually any company that normally has to process large amounts of paper, the image capture capability could streamline transactions of many types. 

"Computers" Hardly Matter for Apple, Anymore

Apple doesn't call itself "Apple Computer" anymore for a very good reason. It makes its money, and profit margin, selling phones, as Wings of Reason illustrates. 

Is "Mobile First" Now Affecting Financial Returns?

Is "mobile first" now affecting application and device provider financial returns? You might argue so. 


 “What we’re seeing is that the non-mobile-centric Four Horsemen, Amazon and Facebook, aren’t seeing the same big profits as the two mobile-centric ones, Apple and Google," says  Yankee Group Research VP Carl Howe.  

Facebook’s overall revenue in the second quarter of 2012 hit U.S.$1.2 billion, up 32 percent and beating estimates, but the company posted a net loss of U.S.$157 million vs. income of U.S.$240 million posted a year earlier. 

Amazon, for its part, announced a 96 percent drop in net income, to U.S.$7 million, primarily due to investments in and subsidies for its best-selling Kindle Fire mobile device, 


But Google and Apple, which you might argue have head starts in terms of their "mobile first" strategies, are doing better, financially. 

In fairness, Amazon does, as a matter of strategy, emphasize big investments that provide strategic value, even if it hits quarterly earnings. You might argue that is simply what happened in the second quarter. 

Facebook frankly admits it has to create a mobile strategy, but has yet to do so in practice. 

Some People Just Don't Want to Buy Cable TV

Would lower prices-even prices 50 percent lower-convince you to buy a product you really did not want? That seems not to be the case for some 33 percent of survey respondents who have abandoned their video entertainment subscriptions, according to TechBargains. 


Prices arguably are getting to be a major irritant for most consumers who buy video entertainment services. But not for all. Some consumers simply do not see value in buying video entertainment services at all, no matter what the price. 

 

Global Handset Shipments Decrease for the Second Consecutive Quarter

As important and as robust as mobile subscriber growth has been over the last decade, it is not invulnerable to economic stress. In fact, on a global basis, mobile handset shipments have declined for two consecutive quarters. 


An economist, tracking any nation's economic performance, would say that set of data marks the beginning of a recession. 


“Handset shipments have not seen a sequential year over year decline since the global economic crisis of 2008-2009," says ABI Research senior analyst Michael Morgan.


Of course, handset purchases often are affected by consumers waiting for hot new models to be released, while some might also note that the second quarter is a seasonally slower quarter.


Apple, for example, experienced a 26 percent quarter over quarter decline in shipments in the second quarter, as consumers withheld purchasing an iPhone in anticipation of the new model to be released in the late third quarter. 


Research in Motion and Nokia experienced 14 percent and 30 percent quarter over quater declines respectively. To some extent, those dips might partially be explained by customers waiting for the next major product families from each of the suppliers, and in part by a shift of demand away from both suppliers. 

North American Mobile Capex to Grow in 2013

North American mobile operators will hike capital investment in 2013 to support fourth generation inetwork construction, ABI Research estimates. But some think 2013 might market a peak of mobile capital investment on a global basis.

Mobile capital investment fluctuates from year to year, based on network upgrade plans, economic conditions and competitive threats, and investment has been building since about 2008, partly because of 4G network constructiion and partly because operators were cautious during the Great Recession that began in 2008.

“North American mobile cellular capital expenditure is expected to hold its ground in 2012 year-on-year, with expenditure of around $10 billion”, says Jake Saunders, VP for forecasting at ABI Research. “In 2013, mobile capital expenditure is likely to surge 4.9 percent to $10.5 billion.

Service providers are in many cases also shifting investment from older networks to 4G. Verizon Wireless, for example, has announced an end to the  expansion and capacity enhancement of its 3G network, in favor of building out its 4G LTE coverage.

Mobile operators, as typically is the case, squeezed capital expenditure during the economic downturn in order to protect cash flows and maintain profits. What normally happens is a catch-up phase where deferred investment gets made.


Wireless Intelligence notes that total global mobile capex peaked at $204 billion in 2008, at the beginning of the financial crisis, accounting for 21 percent of total revenues.

However, capex then fell to $197 billion (19 percent of revenue) by 2010, as operators reacted to the crisis. In developed mobile markets operators reduced capex by eight percent in 2008 and by six percent in 2009, increasing capex again in 2010 as many operators began investing in LTE.

The typical investment slowdown in tougher economic times boosts free cash flow, at least temporarily.

The reductions in capex over the last few years saw operating free cash flow grow to $200 billion (19 percent of revenue) by 2010, up from $133 billion (11 percent of revenue) in 2007.

This means that global operator cash flows are now roughly at the same level as capex. In 2011-12, Wireless Intelligence has predicted operator capex to remain stable at 16 percent of total revenue in developed markets and 23 percent in developing markets. OFCF will account for close to 20 percent of total revenues in both regions.