Amazon CEO Jeff Bezos recently confirmed Amazon's hardware strategy, namely that it sells devices at "no profit" in expectations it will create new revenue streams based on the sale of content.
"We sell the hardware at our cost, so it is break-even on the hardware," Bezos said. Apple does the reverse, selling content at minimal or low profit as a way of selling more devices, where it makes its money.
Friday, October 12, 2012
Amazon CEO Jeff Bezos Confirms Strategy: No Profit on Kindles, Money From Content
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Softbank in Advanced Talks to Acquire Sprint Nextel
Sprint Nextel Corp. hopes a majority investment by Japan's Softbank will help resolve Sprint's debt issues and provide liquidity to finance additional acquisitions in the U.S. mobile market. The deal could flounder if issues related to Clearwire are not resolved, though, as Softbank appears to want control of Clearwire as well.
And there are the regulatory clearances to sort through as well. Despite regulator concern that the U.S. mobile market already is overly concentrated, it is about to become more concentrated, albeit mostly as relates to the shares of market held by T-Mobile USA, which gobbled up MetroPCS, and possibly now a Sprint "sale" to Softbank.
The big question is whether regulators would eventually allow Sprint and T-Mobile USA to be merged. Some think the concentration analysis used by the Department of Justice and Federal Communications Commission would prohibit even a merger between Sprint and T-Mobile USA, even though that would create a number-three supplier with nearly equivalent subscriber share.
Many would argue that three carriers is a sustainable number of leading carriers in the U.S. market, and have argued that for years. An analysis by economists at the Phoenix Center argues that the effective use of any available amount of spectrum is more efficient, for example, when there are fewer providers.
And there are the regulatory clearances to sort through as well. Despite regulator concern that the U.S. mobile market already is overly concentrated, it is about to become more concentrated, albeit mostly as relates to the shares of market held by T-Mobile USA, which gobbled up MetroPCS, and possibly now a Sprint "sale" to Softbank.
The big question is whether regulators would eventually allow Sprint and T-Mobile USA to be merged. Some think the concentration analysis used by the Department of Justice and Federal Communications Commission would prohibit even a merger between Sprint and T-Mobile USA, even though that would create a number-three supplier with nearly equivalent subscriber share.
Many would argue that three carriers is a sustainable number of leading carriers in the U.S. market, and have argued that for years. An analysis by economists at the Phoenix Center argues that the effective use of any available amount of spectrum is more efficient, for example, when there are fewer providers.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Thursday, October 11, 2012
Mobile Revenue is Slowing in Western Europe, But Why?
There are growing signs that the mobile service provider business is facing a structural slowdown in Western Europe. Researchers at Analysys Mason, for example, say Western Europe's fixed network and mobile service providers now see declining revenue.
Consumers also are allocating a smaller percentage of their incomes to communications services.
Separately, STL Partners reports that the mobile industry’s combined revenues from voice, messaging and data services in the United Kingdom, France, Germany, Spain and Italy will drop by nearly 20 billion Euros, or four percent per year, in the next five years, and by 30 billion Euros by 2020. says.
There is a reason to suspect that use of over the top applications for voice and messaging have something to do with the declines. That is at least partly true.
More than 45 percent of customers with a smart phone use some form of instant messaging or over-the-top (OTT) messaging app in addition to (and in some cases instead of) traditional text messaging (SMS), according to Analysys Mason. The data was collected from more than 1000 smartphone users in France, Germany, Spain, the United Kingdom and the United States.
In addition, 20 percent of consumers use a VoIP app, and 20 percent of those consumers use it more than traditional voice services.
About 20 percent of the respondents ussed the “WhatsApp Messenger” at some point over the 60 days of usage that were tracked as part of the story.
But it would appear that many users make very light use of over the top voice or messaging, and very few consumers have abandoned carrier voice and messaging completely. Just 1.7 percent of the panel used IM or OTT messaging without using carrier text messaging at all.
And Analysys Mason says that only 16 percent of all panelists in the study use VoIP apps at all. The perhaps unwelcome implication is not that carrier services are suffering from a shift of demand to rival services, but that a possibly more worrisome trend is developing, namely that people are simply choosing to use mobile services less than they have in the past.
Consumers also are allocating a smaller percentage of their incomes to communications services.
Separately, STL Partners reports that the mobile industry’s combined revenues from voice, messaging and data services in the United Kingdom, France, Germany, Spain and Italy will drop by nearly 20 billion Euros, or four percent per year, in the next five years, and by 30 billion Euros by 2020. says.
There is a reason to suspect that use of over the top applications for voice and messaging have something to do with the declines. That is at least partly true.
More than 45 percent of customers with a smart phone use some form of instant messaging or over-the-top (OTT) messaging app in addition to (and in some cases instead of) traditional text messaging (SMS), according to Analysys Mason. The data was collected from more than 1000 smartphone users in France, Germany, Spain, the United Kingdom and the United States.
In addition, 20 percent of consumers use a VoIP app, and 20 percent of those consumers use it more than traditional voice services.
About 20 percent of the respondents ussed the “WhatsApp Messenger” at some point over the 60 days of usage that were tracked as part of the story.
But it would appear that many users make very light use of over the top voice or messaging, and very few consumers have abandoned carrier voice and messaging completely. Just 1.7 percent of the panel used IM or OTT messaging without using carrier text messaging at all.
And Analysys Mason says that only 16 percent of all panelists in the study use VoIP apps at all. The perhaps unwelcome implication is not that carrier services are suffering from a shift of demand to rival services, but that a possibly more worrisome trend is developing, namely that people are simply choosing to use mobile services less than they have in the past.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
10 Telco Myths
Telco 2.0's "10 misleading myths" in telecom.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Western Europe Fixed and Mobile Service Revenue is Dropping
Researchers at Analysys Mason say Western Europe's fixed network and mobile service providers now see declining revenue. Consumers also are allocating a smaller percentage of their incomes to communications services.
Retail spend per capita per month by service type, USA and Western Europe, 2010 and 2011 [Source: Analysys Mason, 2012]
Retail spend per capita per month by service type, USA and Western Europe, 2010 and 2011 [Source: Analysys Mason, 2012]
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Verizon Wireless to Turn of Its 2G and 3G Networks by 2021
Verizon Wireless plans to decommission its 2G and 3G networks by 2021, says Aparna Khurjekar, Verizon vice president of global strategy for M2M.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Western Europe Mobile Revenue Will Drop 4% Per Year to 2020
The mobile industry’s combined revenues from voice, messaging and data services in the United Kingdom, France, Germany, Spain and Italy will drop by nearly 20 billion Euros, or 4% per year, in the next five years, and by 30 billion Euros by 2020, says STL Partners.
You can call that an example of the product life cycle. You can point to the impact of competition. But at that rate, those mobile service providers will lose half their current revenue within a decade.
Forecast Mobile Telco Revenues in Euro 5 Economies
You can call that an example of the product life cycle. You can point to the impact of competition. But at that rate, those mobile service providers will lose half their current revenue within a decade.
Forecast Mobile Telco Revenues in Euro 5 Economies
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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