Mobile Broadband Subscriptions for Tablets: $15 Billion Incremental Revenue in 2017

Consumers will add 150 million new data subscriptions for their tablet devices in the next five years, creating a new data access market representing $15 billion in revenue by the end of 2017, when tablet subscriptions will reach 172 million worldwide, Strategy Analytics says.

"Less than 13 percent of the global tablet installed base will have active mobile broadband service in 2012, yet in the US, both AT&T and Verizon Wireless saw tablets play a key role in net subscriber additions in the second quarter this year," says Susan Welsh de Grimaldo, Director, Mobile Broadband Opportunities (MBO) at Strategy Analytics.

Long Term Evolution will become the access technology of choice for mobile network connections, accounting for nearly 68 percent of mobile broadband tablet subscriptions by the end of 2017, Strategy Analytics says.

Tablet Users Don't "Work" on Tablets

There will be nearly 70 million tablet users in the United States by the end of 2012, an increase of more than 100 percent over 2011, eMarketer estimates.  Aside from representing the fastest-adopted digital device ever, tablet usage also shows the way digital device activities have changed since the advent of the "PC" era.

Of the top 10 or 11 categories of things people report doing on a tablet, only using email is arguably something that could sometimes be called a "work activity," most of the time.

And that also is something not specific to a tablet, as more people can use email on their smart phones, as well.

Granted, we all have been at meetings where an attendee looked something up using a browser and search engine. But those things also are done by other attendees on smart phones or PCs. The point is that PCs, smart phones and tablets all are multiple-function devices. But the lead functions of each device are distinct.

For many observers, that suggests tablets are not a "replacement" for a PC so much as an indicator of the ways digital appliances now have become content consumption vehicles. True, tablets are smarter than TVs, radios, DVRs or some older MP3 players. But they are content consumption or media players as much as anything.

For all tablet owners under age 50, playing games was the most common activity. For the youngest tablet owners, ages 18 to 29, this was followed by shopping, reading books and email.

Email had a much greater importance among 30- to 49-year-olds, who were about twice as likely to use their tablets for email purposes than were their younger counterparts.

For 50- to 64-year-olds, email was the most common tablet activity overall.

Apple Co-Founder Wozniak Thinks Cloud is a Huge Problem

"I really worry about everything going to the cloud," he said. "I think it's going to be horrendous. I think there are going to be a lot of horrible problems in the next five years," says Steve Wozniak, Apple co-founder. 

The reason is not that the cloud won't work. Instead, he worries about content ownership.  "With the cloud, you don't own anything," he says. "You already signed it away" through the legalistic terms of service with a cloud provider that computer users must agree to."

iOS and Android Tablets Capturing Different Consumer Segments

Clear customer segments emerged from a comScore analysis of tablet purchasing, and the findings might strike you as entirely believable. 

Apple iPad owners skewed male (52.9 percent), slightly younger (44.5 percent under the age of 35) and wealthier (46.3 percent residing in households with income of $100k or greater) compared to an average tablet user during the three-month average period ending June 2012. That over-indexing for younger and richer users has been a notable characteristic of iPad adopters since the product first launched. 

In comparison, Kindle Fire owners saw their audience skew female with 56.6 percent of its audience base represented by females. 

Both Android and Kindle Fire users saw household income below that of iPad owners, aligning more closely with household income reported by smart phone owners. 

Demographic Profile: Tablet* and Smartphone Audience 3 month avg. ending June 2012  Total U.S. Tablet Owners and Smartphone Subscribers, Age 13+ Source: comScore TabLens and comScore MobiLens
	Total Smartphone	Total Tablet	iPad	Android** Tablet	Kindle Fire
Gender
Male	51.9%	50.0%	52.9%	50.9%	43.4%
Female	48.1%	50.0%	47.1%	49.1%	56.6%
Age
13-17	6.0%	5.5%	4.7%	6.2%	5.5%
18-24	17.5%	13.0%	14.0%	12.9%	12.2%
25-34	24.6%	24.2%	25.8%	22.5%	24.7%
35-44	21.0%	20.6%	21.4%	20.1%	20.5%
45-54	16.7%	18.1%	16.8%	19.7%	16.9%
55-64	9.0%	11.0%	9.7%	10.8%	12.5%
65+	5.3%	7.6%	7.5%	7.8%	7.6%
Household Income
<$25k	12.0%	7.8%	5.5%	11.7%	7.0%
$25k to <$50k	19.6%	18.1%	14.4%	20.4%	20.9%
$50k to <$75k	19.3%	19.1%	17.2%	20.0%	21.3%
$75k to <$100k	15.6%	16.7%	16.6%	15.3%	17.5%
$100k+	33.5%	38.4%	46.3%	32.5%	33.3%

Does Mobile Commerce Make More Sense Than Mobile Advertising?

If you are a tier-one mobile service provider exploring large potential future opportunities, it matters greatly how big each potential new business might be. Though most such firms will place lots of bets, and wait to see what develops, tier one service providers cannot waste time on "small" opportunities. 

Typically, services such as mobile advertising, mobile payments or mobile commerce, machine to machine communications or enterprise-oriented services are on the list of such possibilities. So how big might "advertising" be, compared to "commerce?" 

It's a hard question to answer, in part because "mobile advertising" and "mobile commerce" clearly overlap, while mobile commerce overlaps with mobile payments and banking. 

Google Wallet or Isis, for example, both envision their mobile wallets becoming a hub or intermediary for all sorts of deals, offers, coupons and loyalty and reward programs, even though mobile wallets are seen as intimately related to mobile payments. 

In fact, it might be the case that the interest in "mobile advertising" now should better be described as an interest in mobile commerce, anchored initially by mobile wallet efforts. 

At least in part, mobile commerce also makes sense because research from Nielsen in 2011 already was showing that 29 percent of smart phone owners use their phone for shopping-related activities. 

But at least so far, few of the top activities conducted by mobile shoppers are extremely conducive to direct mobile service provider participation. Some 38 percent of respondents conduct in-store price comparisons (38 percent of mobile shoppers), about 38 percent browse products through their mobile Web or apps while 32 percent report reading online product reviews.

The opportunity for mobile service providers to create value and a role in those activities and ecosystems is largely unclear. Mobile wallets, on the other hand, could represent a much more logical role for a mobile service provider. 

Mobile advertising, for example, might represent $2.6 billion in 2012 revenue, and little of that flows to mobile service providers. Mobile commerce includes sales of mobile content, purchasing of services and products, mobile offers and deals, for example. That activity, even exclusive of sales of ring tone, mobile video or games, shows, already had reached 




   



 Apps, which account for the majority of mobile phone time in the U.S., may be the key to shifting consumers from browsing products on their phone to making purchases, some would argue.

There also is a relationship to mobile payments as well. Although only nine percent of mobile shoppers have used their phone to pay for a purchase at a retail point of service terminal, 71 percent of app downloaders would be interested in an app that allows them to use their phone as a credit card. 

Even those preliminary figures suggest the potential, from a mobile service provider perspective, of pursing mobile commerce, wallet and payment initiatives, compared to mobile "advertising," in a narrow sense.

Loyalty, offers and other revenue streams related directly to mobile wallets are feasible and logical, but might more logically be seen as mobile commerce rather than mobile advertising revenue streams. 

Where Providers Can Make Money In Cloud Services, Now

If you agree with the notion of product life cycles, then you might also agree that new technologies have adoption cycles, and "hype cycles," as well. 


The Gartner notion of how technologies develop incorporates the notion that a period of high expectations normally is followed by period where those initial hopes are dashed, eventually followed by a period where innovations are well understood and adopted.


You might argue that most of the money will be made once that occurs. If so, you might expect that email has been mainstream and throwing off substantial revenues for a while, and is maturing. 


Cloud-based advertising (think Google) and cloud-based sales force automation (think Salesforce.com) and other software as a service apps are in the full deployment stage. 


Infrastructure as a service is getting close to full deployment and acceptance. Public cloud storage has a ways to go before it will reach full deployment, though. 

Mars Rover Curiosity Beats Odds

Almost 70 percent of previous missions to Mars had ended in failure, which explains the significance of Mars Rover "Curiosity" making a safe landing on the red planet. 


A heat shield had to slow the spacecraft from 13,000 mph to about 800 mph. Then a giant supersonic parachute unfurled to slow the rover further to about 200 mph. 


Then onboard radar has to detect the surface, and rocket engines aboard a kind of jet pack have to fire, slowing Curiosity to a crawl. Finally, a bridle had to lower the rover from the jet pack to the surface. 




The landing sequence, dubbed “seven minutes of terror,” required the largest supersonic parachute ever deployed in space, and 76 pyrotechnic explosions. If any one of those explosions had not occurred, Curiosity would have crashed.