For Smart Phones, Bigger Screens are Significant

Phones with bigger screens are becoming noticeably more popular, a study by Kantar Worldpanel ComTech sugests. About 29 percent of the Android devices sold in the past 12 weeks have a screen size of over 4.5 inches, Kantar Worldpanel says.

Also, smart phones with bigger screens seem to correlate with different end user behavior.
For example, only 19 percent of consumers with a screen smaller than three inches download or watch videos, compared to 65 percent  when the screen is five inches or more in size.

ComTech data shows that the more engaged consumers are with their device, the more likely they are to stay loyal to an operating system or brand when they upgrade, the Kantar Worldpanel data suggests.

The latest smart phone sales data also shows that Android continues to gain share across Europe, now holding over two thirds of the market. In the United States and United Kingdom, the Apple iPhone is more popular.

Android has increased  its market share in Europe by 20.2 percent in the past year.

It’s hard to say whether bigger screens, service provider marketing priorities and pricing or end user preferences account for the differences in consumer choices about devices.

In Post-PC Era, Content Matters

The argument that device marketplace success hinges on software, or that software is an increasingly key part of any "hardware" experience, is not a novel argument. The refrain has been growing, for obvious reasons, for decades.

In the music and video business, for example, the business "is" software (content). For that reason, Sony decades ago concluded that content was an essential component of its video appliance strategy, however poorly one might argue that strategy has been executed. 

Content clearly is what made the Apple iPod so dominant, and how Amazon hopes to achieve success with the Kindle Fire. The app store now is viewed as a crucial element for sales of smart phones and tablets overall, as well. 

In the PC business, software likewise has made a difference. At a retail level, spreadsheets were the reason PCs were adopted first by financial personnel. Microsoft productivity suites likewise have been considered a necessary application for consumer PCs. 

Looking only at equity performance, one might well conclude that software and content now are key features of "winners" in the post-PC era of computing appliances, as well. 

"Untethered" Hasn't Displaced "Mobile," But is Growing

The living room and the bedroom are the most popular places Europeans use their tablets, CCS Insights reports. 

At least so far, tablet users are using tablets in place of laptops and netbooks around the home.

Almost 80 percent of  4,500 respondents to a survey said they're using their tablets in the living room. In the UK and France, nearly seven in ten use it in the bedroom, while almost four in 10 Europeans log-on in the kitchen.

If you add in the use of mobile phones on at-home or at-work Wi-Fi networks, it is obvious that "untethered" use of devices, applications and networks is becoming a bigger percentage of total usage.  

How Does Google Fiber Compare, as an "Overbuilder?"

It is difficult to say what level of customer success Google will have to achieve, overall, in Kansas City, Kan. and Kansas City, Mo. to make Google Fiber a sustainable proposition. The difficulty lies partly in the service suite, partly in the pricing and partly in end user behavior and competitor response.

Many overbuilders offer a triple-play package of voice, Internet access and video entertainment. Google Fiber sells only broadband access and video entertainment. So where some overbuilders have three potential revenue items, Google Fiber will rely on just two.

Also, Google Fiber is offering a "free" access service in addition to the for-fee 1 Gbps service, and it remains unclear how the balance of "subscribers" will work out. Other overbuilders count only paying subscribers, but Google will have some as yet undetermined number of non-paying customers as well.

Also, Google Fiber will likely earn less gross revenue from its video services than most overbuilders, simply because it has elected to offer a more-affordable package that costs less than the typical video entertainment service. 

Other overbuilders arguably might expect to achieve 10 percent to 15 percent video penetration, and perhaps 10 percent to 15 percent broadband access penetration, plus some additional share of voice service customers. The new math consists in getting a high enough sale of service "units" to boost revenue into the $100 a month range, on average. 

Granted, some overbuilders have done better than that. But it is pretty tough these days, with established telco, cable and satellite competitors, to do much better. 

Google clearly will be able to hit such minimum thresholds if a customer buys the 1 Gbps access service plus video. But not all customers will do so, and Google also has the operating cost of providing free broadband to some percentage of homes. 

For its part, Google likewise is trying a different tack to its actual construction activities, essentially trying to use a pre-registration program to estimate where initial take rates will be the highest. 

Basically, Google has residents "voting" for Google Fiber by pre-registering and making a payment of $10. 

Each of of the potential "fiberhoods" then has a minimum threshold of pre-registrations that qualify the fiberhood for construction. Until the threshold is reached, construction is not contemplated. 

Google has had to create different thresholds for different fiberhoods, and now has tweaked the algorithm just a bit to account for some inaccuracies in the databases Google built from a variety of sources about the actual number of potential residences in a fiberhood. 

So Google now adjusts the "potential homes passed" part of the algorithm to deduct vacant lots, abandoned homes and also adjust for large apartment buildings, as distinct from single-family homes.

The changes slightly affect 73 fiberhoods, boosting the percentage of sign-ups in some of the fiberhoods and therefore slightly increasing the likelihood that some fiberhoods will qualify for actual construction. 

Some 40 out of 74 fiberhoods now qualify. In Kansas City, Missouri while  75 out of 128 fiberhoods have now reached their goals as well. 

Depending on neighborhood, it appears that between 20 percent and 35 percent of homes passed is the goal Google is pursuing. If all those pre-registrants actually wind up buying a paid  service, then Google would quickly achieve an impressive penetration level for an overbuilder. 

Illiad “Free” Disrupts French Mobile Market; Can it Work Elsewhere?

It is no mean feat for a new competitor to muscle its way into a market dominated by three large providers, or to do so quickly. To the consternation of France’s leading mobile service providers, that is what Illiad’s “Free Mobile” service has done.

In about six months, Free Mobile has garnered about 3.6 million customers, and has gotten
5.4 percent of France’s roughly 67 million mobile subscribers, in less than six months. One would expect the rate of growth of slow, but that’s a singular achievement.

Free Mobile now is the fourth-largest mobile service provider in the French market, after Orange, SFR and Bouygues Telecom. To be sure, Free Mobile still is about a third the size of
Bouygues Telecom, which has 11 million subscribers.

Almost by definition, what Free Mobile has achieved qualifies as a market disruption: Free Mobile has, in six months, altered the market dynamics of a business that has been relatively stable for quite some time.

As often is the case, Free Mobile chose to attack the market using a “same service, lower price” model, offering service plans of €2 per month, or a plan with mobile data service at €20 per month, that set off a price war in the French mobile market, the Wall Street Journal reports.


Free Mobile relies on a “bring your own device” or “buy your own device at full retail price” to offer lower-cost plans without contract, since it does not have to subsidize handsets. That approach isn’t new. Most smaller mobile mobile virtual network operators that lease capacity from other carriers also do so.

What is quite different is the dramatic and sudden market share Free Mobile has gained, essentially equalling the share held by all other French MVNOs, combined, in less than six months.

The issue, perhaps, is whether the Free Mobile approach is exportable to other mobile markets in developed countries. To be sure, Free Mobile is losing money on its mobile operation at the moment, and plans to plow effort into rapidly gaining more market share, before it turns its attention to profitability.

Wi-Fi might plahy a role. Free Mobile parent Illiad operates a fixed network business as well. And Illiad now has a “potential network” of about four million consumer Wi-Fi hotspots available to offload mobile data traffic.

The Wi-Fi hotspots are embedded in the “Freebox” Internet gateways of its DSL and fiber-to-the-home customers throughout France.  Up to this point, the “shared” Illiad Wi-Fi hotspot network has promised sharing of broadband access with other Iliad customers.

Now, Free Mobile customers with one of its standard plans will be able to configure their phones to automatically connect to any Wi-Fi hotspot in the Freebox community, gaining unlimited data access and VoIP calling. That could potentially help Free Mobile in the area of operating costs.

The issue, though, is whether it is possible to replicate Free Mobile’s approach in other developed markets. In the U.S.l market, Clearwire might have done so, but didn’t succeed.  Dish Network might try.

In the Spanish mobile market, where market leaders moved to a “no handset subsidy” approach, customer losses have compelled at least a momentary retreat back to the older pattern. At least so far, it appears the Free Mobile approach requires a consistent “no handset subsidies” approach, as well as a deep-rooted structuring of operating costs to compete at disruptive retail prices.


French mobile market share, late 2010

Google Tweaks its "Build by Demand" Algorithm

Google has a famously "data driven" culture, so it was not terribly surprising that Google is using a "build by demand" approach to its construction effort. Basically, Google has residents "voting" for Google Fiber by pre-registering and making a payment of $10. 

Each of of the potential "fiberhoods" then has a minimum threshold of pre-registrations that qualify the fiberhood for construction. 

Google has had to create different thresholds for different fiberhoods, and now has tweaked the algorithm just a bit to account for some inaccuracies in the databases Google built from a variety of sources about the actual number of potential residences in a fiberhood. 

So Google now adjusts the "potential homes passed" part of the algorithm to deduct vacant lots, abandoned homes and also adjust for large apartment buildings, as distinct from single-family homes.

The changes slightly affect 73 fiberhoods, boosting the percentage of sign-ups in some of the fiberhoods and therefore slightly increasing the likelihood that some fiberhoods will qualify for actual construction. 

Some 40 out of 74 fiberhoods now qualify. In Kansas City, Missouri while  75 out of 128 fiberhoods have now reached their goals as well. 

"Not Much Happening" in U.S. Broadband? Really?

The National Broadband Plan, which was released two years ago, says that there should be a minimum level of service of at least 4Mbps for all Americans. "Since then, not much has happened," some would say. 

But the Federal Communications Commission says "we found that the average speed tier that consumers were  subscribing to increased from 11.1 Megabits per second (Mbps) to 14.3 Mbps, an almost 30 percent  increase in just one year," in its Measuring Broadband America report. "The actual increase in experienced speeds by consumers was even greater than advertised speed, from 10.6 Mbps to 14.6 Mbps, representing an almost 38 percent improvement over the one year period."

You can make your own assessments of whether anything has happened in the last two years.