Why Tablet, Smart Phone Owners Buy More of Everything

It isn't hard to find a survey "finding" that tablet owners or smart phone owners buy more of some product than non-tablet owners, or non-smart phone users. The reason is not complicated, and probably has nothing to do with tablet or smart phone owners being more "social," more engaged, more aware or more "something else" than the typical person.

Tablet owners and smart phone owners simply have more money to spend, on average, than people who don't own tablets or smart phones. In other words, they are richer. 

To be sure, one might argue that tablet or smart phone owners also have different behavioral patterns and what not. But they spend more because they have more money to spend. 

Amazon, Apple, Google are Among Top-5 Firms with "Best Reputations"

Amazon, Apple and Google are among the top-five firms with the best reputations, according to a new analysis by Harris Interactive. 

The Harris 2013 reputation study also has Disney and Johnson & Johnson among the top five firms with the best reputations among U.S. consumers. 

Amazon Beats Out Apple For The Best Reputation Among U.S. Consumers, Says Harris; Google Comes Fourth | TechCrunch

Spectrum Always Matters

The Intelligent Transportation Society of America doesn’t want the Federal Communications Commission to free up spectrum in the 5.85 GHz to 5.925 GHz range, as part of its wider effort to clear 195 megahertz of 5 gigahertz spectrum band. The ITSA wants those frequencies reserved for in-vehcile communications.

If the ITSA gets its way, those portions of spectrum proposed for Unlicensed-National Information Infrastructure (U-NII) devices would be unavailable for other non-licensed applications.

That ITSA opposes spectrum sharing in the 5.85 GHz to 5.925 GHz band is not unusual. Spectrum access is the foundation for any business model using wireless communications. And spectrum exclusivity, when it can be obtained, also enhances the equity value of such businesses.

The ITSA language, though, is rather “soft,” suggesting ITSA would prefer exclusivity, but is not sure it can prevail, nor does it believe it cannot live with spectrum sharing.

Separately, Dish Network continues to say it will sell its Long Term Evolution spectrum if it does not win control of Clearwire (a prospect many believe is very close to impossible) or if it cannot find a partner to help it build a new national LTE network.

Both developments illustrate the key role regulators play in enabling communications business models and the potential profit from starting such businesses.

ARRIS Motorola Deal Gets DoJ Scrutiny, And it is a Complete Waste of Time

ARRIS, which is buying the Motorola Home business from Google, says it has received a request for
additional information and documentary materials from the Department of Justice, regarding ARRIS' proposed acquisition of the Motorola Home business from Google.

DOJ is reviewing the transaction for antitrust reasons, but some of us might argue the DoJ in this case really seems to be showing it has nothing more important to do, and is wasting its time.

Only two companies ever have mattered in the U.S. cable business, where it comes to the decoders ("set top boxes"). Those companies were Scientific-Atlanta (assets now owned by Cisco) and General Instrument (Jerrold, originially), whose assets are owned by Motorola.

In 30 years, no supplier other than S-A or GI ever supplied a significant number of set-top boxes to the U.S. cable industry.

No matter which firm owns those assets, nobody else matters. The S-A and GI franchises roughly split the market, and have for decades. There is no danger that one or the other will suddenly swoop in and dominate the business because the buyers (cable operators) have deliberate policies to keep both firms in business, each as a check on the other. That hasn't changed for decades, either.

Nor does it matter, strategically. The importance of the decoder, in a market that is both highly competitive and shifting in the direction of IP network delivery, is declining. Sure, cable operators use them as a conditional access gateway. But there will be other simpler ways of providing such admission control in an IP environment.

Some antitrust reviews are just dumb.

"App Economy" Really Only Driven by a Few Ecosystems, and "Telco" Isn't One of Them

The "app economy," Apple CEO Tim Cook  says, is going to be "two or three players." You can probably guess that Apple and Google are two of them. You can argue about who the third provider might be. 

But nobody would think a "telco" platform or ecosystem actually has a shot at reaching the top tier of application ecosystems. 

And that has implications for the growing emphasis telcos seem to be putting on application development or partnerships. Few would argue that is a misplaced effort. 

But few also would argue that an unrestricted and aggressive approach is warranted, either. as there are just limits to what a telco can achieve in that area.  
To be sure, most of the promising areas are related to the core network and access service assets mobile service providers possess. That is why mobile wallets, mobile commerce, mobile advertising or machine-to-machine apps, especially for vehicles, now are getting attention. 

For the most part, that is probably the sort of app development that telcos actually can profit from, to some extent. Significant success in the broader consumer app space seems extremely unlikely.

Is Apple Getting Ready to Play a "Price Game?"

"Apple Is Not A Hardware Company," Apple CEO Tim Cook says. What precisely that means is not drop dead clear. Cook probably is not just referring casually to the fact that these days, all "hardware" products are driven by "software" features. 

In fact, it is highly unlikely anything Cook says in a public forum is "casual." So what Cook might be laying the groundwork for, is the issue. One can think of somewhat exotic answers. Apple never before has licensed its operating system, so is Cook slowly laying the groundwork for a change of thinking on that score? Though possible, it seems less likely than other explanations.

Compare Amazon and Apple, in terms of their business models. Amazon does manufacture and sell hardware--namely tablets. But Amazon only does so to create a distribution platform for sales of its "software," or content. 

Apple has the opposite strategy: Apple sells valuable content at low margins so it can create more demand for its hardware products.

In other words, Amazon merchandises hardware to sell content and other products. Apple merchandises content to sell hardware. 

So Cook could be obliquely suggesting that Apple's revenue model might, in some cases, rely less on hardware gross revenue and margins, and make up for any shortfalls by sales of content or other products. 

"You could go in and accept a lower margin at any time, for strategic reasons," Tim Cook said. " Or maybe Cook is just laying the groundwork for introduction of lower-priced Apple iPhones, even though Apple denies any such thing is planned. 

With or without a big change in revenue model, Cook might be opening the door for "strategic" pricing changes, perhaps to compete with other devices in developing markets. 

Some of us think Apple must do so. 

Broadband "Stimulus" Disbursements Halted; Waste and Fraud are the Issues

The Broadband Opportunities Program, part of the "stimulus" supposedly aimed at helping the United States climb out of the 2008 recession, now has had disbursements halted, at least for parts of the program, due to allegations of waste and fraud.

Some $594 million in spending has been temporarily or permanently halted, representing 14 percent of the overall program.

The Commerce Department’s inspector general has raised questions about the program’s ability to adequately monitor spending occurring as part of 230 grants.