Do Smart Phones and Tablet Change Demand for "Remote Management of Home" Services

Though consumers often indicate they will do something, and then do not, or say they will not do something, and then do, it is possible that widespread adoption of smart phones and tablets, plus more sophisticated and Web-accessible management tools, could change the perception of home security and remote monitoring services, a study by Strategy Analytics suggests. .

The survey of broadband households in France, Germany, Italy, the United Kingdom and United States found that more than 50 percent of broadband households without security are willing to pay for professionally monitored services, if combined with monitoring and control capabilities.

The key change there probably are the remote control features, not the security as such.

The study also revealed significant willingness to pay for remote healthcare and energy management services if the services are priced right. Potential adoption of smart home services is highest in the United States, United Kingdom, Germany and Italy and less so in France.

Remote healthcare services have the greatest potential in Italy if recurring fees are kept under $10 per month.

"The percentage of broadband households with both the interest in and willingness to pay for selected connected home solutions is higher than expected," said Bill Ablondi, Strategy Analytics director.

The study might suggest a combination of smart phone and tablet usage, plus easier to use Web tools, could be changing customer appetite for new home management services, such as controlling heating and cooling systems or other appliances within the home, for example.
Percentage of Broadband Households Willing to Pay for Selected Smart Home Capabilities in the US and Major Western European Countries

	Percentage Willing to Pay
Self-monitored Security	55 percent
Professionally Monitored Security	54 percent
Remote Monitoring and Control	47 percent
Remote Healthcare Services	32 percent
Remote Energy Management	30 percent

Source: Strategy Analytics, Inc.

Small Cell "As a Service?"

European service provider Colt is among service providers who believe a wholesale approach to small cell infrastructure makes sense. Virgin Business Media also is among service providers who believe creating a network of small cells and then selling use of that network to other mobile service providers, is a business opportunity.

There are any number of reasons why some mobile service providers might find the “buy rather than build” approach attractive. The cost of backhaul for a small cell will be a challenging exercise.

Whichever technology is used to backhaul small cells, it has to be cheap, "it has to be massively cheap," said Andy Sutton, Everything Everywhere principal architect, access transport. "We have a financial envelope for small cells and it's challenging."

Cost is so important because small cells will have relatively low usage compared to a macrocell and there will be lots of sites to support. Compared with macrocells, small cells quite frequently will cover distances of about 50 square meters or 538 square feet. That's an area about 23 feet by 23 feet.

One way to look at matters is that this is an area smaller than the range of a consumer's home Wi-Fi router. In other cases service providers might need to support coverage of 2 kilometers down to 200 meters. Traditional backhaul might well make sense where a small cell covers an area of 2 kilometers radius.

It will be substantially more challenging for cells covering 200 meters or less. Cells covering areas smaller than that will be much more challenged, in terms of how much a service provider can afford to invest, in terms of radio and associated facilities, or the recurring cost of leased bandwidth.  

Backhaul cost therefore becomes a key operating cost issue. A network services provider that owns lots of metro fiber, a cable operator or a telco might well be able to supply the affordable connections such small cells will require.

Entities that do not own such assets will find the cost of leasing backhaul, not to mention the costs of radios and site infrastructure, to be quite challenging as well.

For all those reasons, a well-developed wholesale small cell network could well make sense, especially for mobile service providers without extensive fixed network assets in an area.

Some will be unable to resist calling such services "small cell infrastructure as a service." Of course, historically, virtually all telecommunications offerings have been "services." So the term means almost nothing. The classic case of "communications as a product" are business phone systems.

Some speak of "communications as a service," which, when you think about it, is nonsensical. Communications always has been a service (with the exception of business phone systems). It is "communications as an app," or "communications as a feature," that is new.

In that sense, there is clear logic for small cell wholesale, in many cases. We just shouldn't get caught up in nonsensical nomenclature games.

U.S. Mobile Payments in 2017 Equally Split Between Retail an Remote Payments

The volume of U.S. mobile payments will reach $90 billion in 2017, a 48 percent compound annual growth rate rom the $12.8 billion worth of mobile purchases in 2012, according to Forrester Research analyst Denée Carrington.

Mobile proximity payments (retail transactions) are currently the smallest category within mobile payments, but Carrington expects it to be the fastest growing category. Proximity payments will reach $41 billion by 2017, making up nearly half of all mobile payments in 2017.

Cross-border remittances using peer-to-peer networks either for bill payment or sending money to other people, will exceed $4 billion in remittance value over the next five years but will fail to achieve the scale of mobile proximity payments or mobile commerce, Carrington forecasts.

Mobile remote payments, which Forrester Research calls “mobile commerce,” represent 90 percent of the mobile payments category and will continue to be the most-dominant category, representing about $45 billion in transaction volume. 



Analysts at Gartner in 2012 had a similar range of forecasts.

If E-Commerce is So Disruptive, How Come More Retailers Have Not Failed?

Apparently, attendance is up smartly at the National Retail Federation meeting this year, with about a 60 percent increase in attendance by retailers looking for technology to improve competitiveness in the face of online and mobile challenges. 

But there is a lesson here. Firms such Amazon have been in business since 1994. Everybody seems aware of e-commerce. A growing amount of retail sales volume passes through Internet retailer channels. And yet, it is hard to point to major retailer disruption, in the form of firms going out of business. 

“If e-business is so disruptive, how come nobody died?” Gartner analyst Mark Raskino recalls thinking, back in 2000. The answer might be, as it often seems to be, that big trends in complex ecosystems take some time to take root, and then hit an inflection point.

It is quite possible that U.S. retailers sense an inflection point coming, where mobile commerce or e-commerce will cease to be an irritant, and start to be extremely disruptive, dramatically reshaping revenue patterns. 

If and when that happens, the feared wave of bankruptcies will happen. The fact that nothing quite unusual seems to have happened, on that score, is simply the period of ecosystem change that precedes the disruption, one might argue. 

Mobile Internet Users in China are 75% of Total

At the end of December 2012, there were about 564 million Internet users in China. There were about  420 million mobile Internet users, representing about 74.5 percent of all Internet users, according to the China Internet Development report.

If you want to know why, sooner or later, Apple will have to create a lower-cost iPhone, that's the reason. Right now, three quarters of Internet users in China use mobile. And, right, now, most of those users own an Android device. 

It isn't any more complicated than that. Apple has done quite well, globally, in dominating the high end portion of the smart phone market. 

But to put it colloquially, Apple now is running out of high end customers. Most of the rest of the market will be more mainstream. So unless Apple wants to settle for low growth, it has to extend its product line, as it has with MP3 players and tablets, to reach a more mainstream user who does not want to buy, or cannot afford to buy, Apple's top of the line device. 

Google, Apple, Facebook, Twitter, Yahoo Sliding into "Personal Assistant" Function, Business

For years, it has  been difficult to "classify" Google. Google says it is a technology company, and with its expanding role in smart phones, tablets, operating systems, its core search business, mobile commerce, navigation and browsers, that certainly is true. 

On the other hand, Google is the paramount example of a big, influential technology company whose revenue stream is based on advertising services. That always throws a monkey wrench into the taxonomy, since historically, "media" firms had that revenue model. 

For other firms, such as Facebook or Twitter, the taxonomy is not quite so difficult. The content those firms "create" might be contributed by users, but there is a reason firms such as Facebook and Twitter are known as "social media." 

They are more recognizably "media."


These days, it also is noted that Apple's Siri, use of mobile devices overall, Twitter and Facebook are "threats" to Google because they are alternate ways for people to "discover or find things." 

In other words, Twitter, Facebook and other apps are challengers to Google as rival ways for people to discover, find or locate content and information that is highly relevant to them.

“When there is too much information, there high value in search, navigation and discovery,” said venture capitalitst Bill Tai. 

Mobile highlights the changing context of "search," though. As it turns out, what people "search for," in a mobile context, already shows a bias towards commerce: places to go, things to do, places to shop or buy products. That drives local search and mobile commerce. 

But maybe something else is happening to search as well. Voice search might be more than just "another input option." Maybe it is something more like a "digital personal assistant," allowing people to quickly find answers to questions. 

Yes, that means people use the feature to find things, which is a search or discovery process. But one might argue it is more: a move by a variety of apps, tools and approaches towards a personalized "digital assistant for your life" approach that some have called the "remote control for your life."

In that sense, it would be easier to categorize firms with ad-based revenue models. They all are in the evolving "personal digital assistant" business.

"Year of the Phablet?"

One informal rule of thumb that works pretty well is to assume that whenever an analyst dubs the coming year the "year of," it will not be. That doesn't mean the trend is wrong. Typically, there is a fair chance a trend, or potential trend, is at work.

The issue is just that a big trend takes a while to get established, and analysts typically are, for professional reasons, too eager to declare that a new trend not only will begin, but will be consequential, in the next 12-month period. 

"Phablets" now have been pronounced the subject of such a "year of" prediction for 2013. By contrarian thinking, that might suggest 2013, in fact, will not be as consequential as predicted. 

The Asia-Pacific is, and will remain, the world's biggest market for phablets, says Joshua Flood, ABI Research senior analyst. 

Last year, the Asia-Pacific region absorbed 42 percent of global shipments, a proportion that will expand steadily over the next few years to account for over 50 percent of shipments by 2017, according to ABI Research.

But some analysts continue to think the problem is that phablets are "too big for a smart phone, and too small for a tablet." The key is ergonomics, some would argue. At some point, a smart phone has to be held in one hand. 

But is it a phone? The point is not whether the device can make and receive calls, or send and receive text messages. In fact, most communicating appliances can do such things. The issue is whether the lead app for a smart phone will always be "making calls." 

These days, most users probably spend more time using a smart phone as an Internet device, for browsing, playing games, sending text messages or consuming media.

It is a reasonable objection that most people would find a phablet a less convenient operation than using a smaller smart phone. But for many users, "making a call" might be only the fourth or fifth most frequent use of the device. 

We will find out, eventually. We probably won't find out in 2013, though.