As Apple Distorts Stock Market Indices, So iPhone Sales Distort Retail Sales Figures

It has been noted that Apple's stock performance  has an outsize impact on the overall U.S. index. 

Now it is clear that sales of Apple iPhones also have an outsized effect on retail sales figures. In October 2011, when the iPhone 4S was launched, about half the increase in retail sales came from computers and software. 

On average, the last three iPhone debuts saw retail-sales growth of 0.81 percent compared to average expectations of 0.1 percent. The bad news is that it is an Apple artifact: it distorts the impact of the rest of the segment. 

Vivendi's SFR Reacts to French Mobile Market Competition

French mobile phone operator SFR, a unit of Vivendi, is in talks with unlisted cable company Numericable, a move many will attribute to an intensely competitive French mobile market, in the wake of the Illiad-owned Free Mobile pricing disruption. 

The move would diversify SFR's revenue base by adding fixed network customers and revenues to its mobile assets. 

Some think it is possible, perhaps likely there will be a similar attempt to disrupt U.S. mobile market pricing, if Softbank is able to complete its planned purchase of Sprint Nextel. The reason is that Softbank did precisely that when it entered the Japanese market.

And it worked. Softbank, within two years of its launch, was winning about 44 percent share of new customers or switchers in the Japanese market. 

Will Softbank-lead Sprint Try to Disrupt U.S. Mobile Pricing?

Is the U.S. mobile market about to be disrupted? Looking at the launch of the FreedomPop service and the coming Softbank purchase of Sprint, you might argue that a price disruption is coming.

Softbank will buy a 70 percent stake in Sprint Nextel Corp.for about $20 billion in the biggest-ever acquisition of a U.S. telecom firm by a Japanese firm. Softbank hopes it can replicate the success it has had in Japan in taking on dominant mobile service providers.

Some predict Softbank will launch a major price war to upend the U.S. market, as it did earlier in the Japanese market. That might lead some observers to speculate about whether the Softbank-owned Sprint will try to become the “Free Mobile” of the U.S. market.

In France, the Illiad-owned “Free Mobile” has disrupted the French mobile market. Already, FreedomPop is trying to disrupt mobile broadband pricing, as the Illiad Free Mobile effort already has done in the French mobile market.

In 2006, when Softbank decided to buy Vodafone KK  assets, it likewise was criticized in some quarters for undertaking a risky gambit.

Some will argue Softbank is taking another huge risk by entering a country where iit has no previous operating experience, and by assuming a huge new debt load, after only recently shedding a similar debt load.

Softbank argues it is a reasonable risk, and that its prior experience taking on NTT Docomo and KDDI show it can compete in a market dominated by larger service providers.

Softbank, many believe, will use the same strategy it used in Japan, which some would describe as providing a large number of complementary features or services to create a “sticky” relationship with the end user.

Others will point to the pricing strategy. In Japan, Softbank’s 2006 acquisition of the Vodafone unit was not universally considered wise. But in just one year, Softbank managed to boost its subscriber base from 700,000 in fiscal 2006 to 2.7 million.

By the beginning of 2008, Softbank had grabbed 44 percent of Japan’s new mobile subscribers, well ahead of KDDI’s 35 percent and NTT-DoCoMo’s 11 percent.

Some think Softbank will be willing to launch a price war.  In Japan, Softbank was willing to sacrifice voice average revenue per unit  to make market share gains.

Back in the 2006 to 2008 period, Softbank was willing to accept a $13 a month ARPU decline to build market share.

Softbank said it would acquire a majority stake in the U.S. carrier by buying $8 billion of shares directly from Sprint and then buying another $12.1 billion of shares in the market, completing the deal in 2013, assuming there are no regulatory snags.

Softbank probably is betting that it can make subscriber gains in the U.S. market by following its earlier Japan market tactics. Also, it likely is betting that the U.S. market is ripe for a bit of disruption, as it is, by some analysis, less competitive than many other markets.

"Revenue-Free" Minutes of Use?

Skype continues to generate a greater share of global cross-border minutes of voice use. Of course, Skype usage is not revenue. Microsoft's revenue from users of its Skype service comes largely from purchases of Skype Out minutes.



For traditional service providers, that means Skype is cannibalizing revenue-producing minutes of use. 

Isis Mobile Wallet Launch Will Require Use of Motorola "Incredible 4G"

The official “Isis ready” device is the DROID Incredible 4G LTE, which illustrates why early tests of virtually any mobile payment system using Near Field Communications will take a while to produce an appreciable amount of usage data. Google has had the same problem, basing adoption on just a few devices.

Additional devices will be made available at a later time, Droid Life reports.

Spectrum Sharing Will Heighten Security Risks

There’s a basic concept in computer network security: If you don’t want A to attack B, make it impossible for A and B to communicate. 

That’s why sensitive military communications systems do not have links to the internet. Experts realize that, even with the best firewalls and filtering, if a connection exists, the system is inherently less secure, according to Peter Rysavy, Rysavy Research president. 

That will have implications for proposals to open up some government spectrum to commercial sharing with mobile service providers. 

Long Term Evolution, iPhone 5 Seem to be Skewing Web Traffic Volume, Already

New data from Chitika suggests that Long Term Evolution, used by the Apple iPhone 5, already is affecting web traffic volume. The Galaxy S III has been available in the U.S. for nearly four months. 

At the time Chitika conducted its study, about 18 days since the release of the iPhone 5, the Apple iPhone 5 accounts for 56 percent of web traffic volume,  according to Chitika Insights. 

Other studies have confirmed the impact of faster networks and higher data consumption. The 4G LTE networks are up to 10 times faster than the older 3G network, and LTE will certainly use far more data than 3G users, says Rootmetrics.