63% of Australian Samsung Phone Owners Mulling Switch to iPhone 5

A new survey from MobilePhoneFinder.com.au suggests that 62.9 percent of current Samsung phone owners are planning to buy Apple’s latest handset.

Among the close to 1,400 Australians surveyed, 80.6 percent of them said they were planning to purchase the iPhone 5, the study suggests.

The report noted that 64 percent of respondents said they would buy the iPhone 5 on a plan and 59.4 percent indicated they would switch carriers.

U.S. CLEC Business Hasn't Turned Out as Expected

The U.S. competitive local exchange carrier (CLEC) business has not worked out as many had expected. Initially, the stand-alone long distance carriers thought the way had been cleared for a re-emergence in the local access business from which they had been barred in 1984, with the divestiture by AT&T of its local facilities, leading to the creation of the Baby Bells. 

For a time, that seemed to be happening. At one time, the two contestants with a majority of market share were AT&T and MCI Communications. 

A 2004 report by Frost and Sullivan noted that a "majority of ILECs' retail access line loss is attributable to two consumer-focused CLECs, AT&T and MCI." You might argue that a subsequent change in wholesale pricing rules then destroyed that business strategy.

Neither firm exists in its former form, as MCI assets now are part of Verizon and AT&T was bought by the former SBC. 

Hundreds of billions of investment capital then flowed to lots of independent competitive firms run by telecom industry executives were seen as the logical beneficiaries. Nearly all of that capital ultimately was lost. 

Cable companies were not widely thought to be the logical winners in the business. 

These days, one might reasonably note that most consumer "CLEC" customers are served by U.S. cable companies, while a number of entities in a fragmented market serve most of the CLEC small business customers, with cable now turning its attention to the small business segment. 


Similar sorts of trends have developed in the broadband access area, where 23 percent of all broadband connections were supplied by cable operators. DSL supplied about 15 percent of total connections. Fiber to the home represented about three percent of lines, while mobile wireless supplied 58 percent of connections, according to the Federal Communications Commission.

Basically, that means cable operators supply about a quarter of broadband connections and mobile service providers almost 60 percent. In other words, broadband access competition comes largely from wireless and cable. 


Of the 146 million U.S. wireline retail local telephone service connections in service in June 2011, about 38 percent were provided by incumbent local exchange carriers, about 26 percent were  ILEC business customers, while 20 percent of lines were supplied by non-ILEC residential service providers, while 16 percent were supplied by non-ILEC business service providers. 

In addition to the cable companies, local telcos also have emerged as significant suppliers in the CLEC business, especially in business customer segments. 


Revenues for U.S. CLECs were forecast to grow at a compound annual growth rate of 26.9 percent to reach $61.1 billion by 2006, Atlantic-ACM forecast in 2001. 

In 2003, The Brattle Group estimated that U.S. CLECs held more than seven percent of the U.S. business market, and nearly 10 percent of the U.S. consumer market. 

Neither of those figures has proven incorrect. A substantial amount of market share and revenue has indeed shifted to new providers. The Federal Communications Commission reported there were more than 206 million broadband access connections in service in mid-2011. 

Assume an average revenue for each of those connections of $40 each (a blended rate assuming $35 for a mobile connection and $50 for a fixed connection, and including both higher-priced business connections and consumer connections). About 81 percent of those connections were supplied by cable or wireless providers. For the sake of argument, assume that every wireless line is functionally a competitor to an incumbent broadband line. 

So 81 percent of 206 million connections would be 166.86 million accounts. At $40 a month, each of those lines might represent $480 a year worth of revenue. That would represent about $80 billion in annual revenue. 

To be more strict, assume only cable modem and a quarter of "ILEC" broadband accounts are counted as "CLEC" revenue, for purposes of estimating CLEC broadband access revenue, eliminating all wireless lines. 

That implies 27 percent of all fixed network broadband lines were supplied by "CLECs." 

Of the 206 million broadband connections, 23 percent are supplied by cable operators and 18 percent are supplied using DSL or fiber to home technologies. That implies 37 million CLEC lines using telco platforms and 47.4 million cable high speed lines. 

Assume 100 percent of the cable modem lines properly are counted as  "CLEC" revenue, at an average of $50 a month. Assume that 20 percent of the DSL or FTTH lines are sold by CLECs at $80 a month. 

That in turn suggests cable CLEC revenue of $28.4 billion and telco platform CLEC revenues of about $35.5 billion annually, for a total of about $35.5 billion in "CLEC" broadband access revenues. 


Assume that the 36 percent of fixed voice lines represent $45 a month in revenue (a conservative estimate including both consumer and business lines). That implies $540 a year in revenue for each line in service.

The FCC says there were 146 million fixed voice lines in service in mid-2011. That would imply 52.6 million "CLEC" lines in service, or $28.4 billion in end user revenues, not including access or other carrier revenues. 

So the "CLEC" revenue stream might be as little as $64 billion a year, or as much as $108.4 billion a year. 

The point is that the overall "CLEC" business is reasonably estimated as being as large as it was earlier seen as becoming. The big difference is the role played by cable operators. 

Smart Phones Influence 6% of Retail Sales?

Almost half of U.K. smart phone owners have used their device to research product information before or during a shopping trip, according to new research from Deloitte Digital.

Those results might suggest that six percent of in-store retail sales are being influenced by smart phone use. That would be almost double the value of direct purchases made through mobiles, which are estimated at about £8 billion in 2012.

By 2016, more than 80 percent of consumers are expected to own a smart phone and Deloitte estimates that between 15 percent and 18 percent of in-store sales will be smart phone-influenced, equivalent to £35 billion to  £ 43 billion.

Smart phone usage also appears to increase the conversion rates for retailers. Some 74 percent of shoppers that visited a retailer’s mobile website or app during their most recent shopping trip made a purchase.

Some might suggest that the results are "soft," since any number of shopping influences contribute to any retail purchase, and it always is wrong to attribute 100 percent of the influence to just the final input, or most visible input, or most easily measured possible input to any decision.

Mobile is particularly popular in the electronics sector, influencing 10 percent of U.K. store sales and is predicted to increase to 30 percent of sales by 2016.  

Convenience stores and supermarkets are less affected, with only 2.9 percent and 3.8 percent of sales influenced, respectively.  

There is a dramatic difference between use of mobile for bill payments, though, compared to retail, in-store payments, as you might suspect would be the case at an early stage of mobile payments development in retail settings.

Some 64 percent of smart phone owners have used their device to make a bank payment or pay a bill, but just one percent have used their phone to make an in-store payment, Deloitte Digital says.

These figures are mirrored by similar conducted by Deloitte’s retail practice in the United States.  The Deloitte U.S. data suggests that mobiles influence about five percent of retail sales. Deloitte forecasts that by 2016, smart phones are likely to influence between 17 percent and 21 percent of U.S. retail purchases, equating to $628 billion to $782 billion in sales.

Europe Cloud Adoption Not Following Classic Pattern

Technology diffusion often follows a pattern. In the past, innovations were born in university computer labs, then commercialized for large enterprises, before migrating into the mid-market, and finally small business.

At some point innovations would move into the consumer market. 

That pattern has been upended. These days, innovations still tend to be born in universities, but then tend to be commercialized first in the consumer market, before being adopted by business users. 

There also are geography patterns in technology diffusion, as well.  In the past, early tech adopters in Europe tended to cluster in the United Kingdom and the Scandinavian countries, with innovations then moving to other countries. 

But cloud computing seems not to be following that pattern. “Normally the path leads from the UK to the Nordic countries and then goes south to the Mediterranean countries,” said IDC Research Director Mette Ahorlu. “That’s not clear in cloud."

Southern Europe is struggling economically but we see some indication that they see cloud as a way to catch up,” she said. 

In other cases, the lower investment hurdles might be driving the interest. Given the financial and economic troubles in Spain, Greece and Italy, for example, users might prefer the lower  cost profile for cloud solutions that obviate the need for capital investments. Geographically, the United States will remain the largest public cloud services market, followed by Western Europe and Asia/Pacific (excluding Japan),IDCsays.

But the fastest growth in public IT services spending will be in the emerging markets, which will see its collective share nearly double by 2016 when it will account for almost 30 percent of net new public IT cloud services spending growth.

Perhaps something of the same trend is at work in those regions, where access to high-end computing services, without the need to invest capital, is proving attractive. 

Tablet Shipments Up 56% by End of 2012

Booming tablet shipments of devices in several form factors will drive a robust 56 percent annual increase in shipments for the tablet display market in 2012, according to  IHS iSuppli.

Shipments of tablet displays in 2012 are projected to reach 126.6 million units, up from 82.1 million units in 2011. 

U.S. Fixed Network Broadband Adoption is 90%

New consumer research from Leichtman Research Group suggests that nearly 90 percent of U.S. households that use a laptop or desktop computer at home currently subscribe to a broadband Internet service.

Five years ago, 65 percent of households with a computer subscribed to a broadband service. That is a functionally reasonable indication that the fixed network broadband access business is saturated.

Some 91 percent of all households with annual incomes over $50,000 subscribe to a broadband service at home, compared to 68 percent of households with incomes of $30,000-$50,000, and 47 percent of households with incomes under $30,000.

The obvious implication for many will be that lower-income households want, but cannot afford, fixed network broadband. That is only partially true.

Keep in mind that 41 percent of households with annual incomes under $30,000 do not have use computer at home, compared to just three percent of households with incomes over $50,000. In other words, many lower income households simply do not use computers, so naturally demand for fixed network broadband is lower than it is for higher-income households. 

Annual Household Income	Use a Computer at Home	Internet at Home	Broadband at Home
Under $30,000	59%	52%	47%
$30,000-$50,000	84%	78%	68%
Over $50,000	97%	97%	91%

Is Mobile Payment Window of Opportunity Closing? If so, Where?

Some might argue that mobile service providers in emerging markets could relatively easily capture much of the the $120 billion to $130 billion mobile payments opportunity.

There is legitimate reason to believe the potential is there. In many emerging markets, where the banking infrastructure is undeveloped, the ability to use a mobile device as a virtual “branch bank” location is a winning and obvious proposition.

According to Gartner, the total value of mobile payments transactions will reach $600 billion by 2016, up from $170 billion in 2012.

Delta Partners argues that the market potential is about $12 trillion. Total fee revenue, some believe, could reach $250 billion, but banks and payment networks will capture most of it, Delta Partners argues.

“We estimate the global revenue that all mobile payments service providers can achieve is approximately $120-130 billion,” Delta Partners argues.

But 90 percent of this revenue will be generated in sophisticated and developed markets. That implies a developing market opportunity for mobile operatorsof about $40 billion to 50 billion, which is equivalent to four percent to five percent of total mobile operators’ revenues.

The point is that the window of opportunity for most mobile service providers is either closed or closing fast. Banks, Visa and MasterCard now are driving electronic payments growth across the world, Delta Partners argues.

While emerging markets operators may consider bypassing the banks, the developed and sophisticated markets operators need to build partnerships with financial-sector players in order to offer the full value proposition and to comply with commercial banking regulatory requirements.

“Sophisticated markets”  account for close to one billion people, Delta Partners says. The key value in such markets is replacing the traditional wallet.

“Developed markets” have a population of around four billion. Cash is still the main means of payment although payment card penetration is increasing. There the opportunity to drive electronic payments becomes a key objective for M-Payments providers. This cluster is represented by sizeable nations such as Brazil, Russia, India, China, South Africa, South Korea, Turkey, Poland, Malaysia, Indonesia, Thailand, Kazakhstan, Colombia and Saudi Arabia. These countries have 1.4 billion adults with bank accounts, 0.25 billion credit card owners and more than 1 billion Internet users.

“Emerging markets” have a population of around two billion. In these markets, less than 40 percent of adults have bank accounts. There are 0.4 billion people with bank accounts, less than 0.1 billion with credit cards and 0.4 billion Internet users.

Actual cash transfers are the big oportunity is markets such as Mozambique, Tanzania, Kenya, Uganda, Ghana, Nigeria, Angola, DRC, Pakistan, Ethiopia, Sudan, Syria, Iraq, Iran, Bangladesh, Mexico and Philippines.