Zynga, Pandora and Groupon are "Mobile Mostly"

You hear much talk these days of "mobile first," the strategy of building applications with a priority for mobile access, rather than "desktop."

But Zynga, Pandora and Groupon have achieved something virtually none of the other apps have done, and that is become "mobile mostly" apps whose usage is "normally" mobile. In fact, mobile use of Zynga and Groupon is at least double that of desktop usage. 

Media Metrix Multi-Platform Top 50 Properties February 2013 Total U.S. (Age 18+ on iOS & Android platforms for Mobile) Source: comScore Media Metrix Multi-Platform
		Unique Visitors/Viewers (000)
		Total Digital Population	Desktop*	Mobile**	Mobile-Only	Mobile Audience Incremental % to Desktop
	Total Internet : Total Audience	235,855	221,379	127,106	14,475	7%
1	Google Sites	228,084	196,782	107,604	31,302	16%
2	Yahoo! Sites	210,603	186,596	88,876	24,007	13%
3	Microsoft Sites	175,902	166,346	48,867	9,556	6%
4	Facebook	174,800	145,306	99,698	29,494	20%
5	Amazon Sites	147,031	115,363	74,122	31,668	27%
6	AOL, Inc.	130,619	115,202	54,010	15,417	13%
7	Glam Media	126,117	104,517	48,016	21,600	21%
8	Apple Inc.	115,920	75,358	62,104	40,562	54%
9	Wikimedia Foundation Sites	109,523	85,856	49,296	23,667	28%
10	CBS Interactive	100,772	85,783	34,029	14,989	17%
11	Turner Digital	98,311	81,501	38,424	16,810	21%
12	Demand Media	97,250	78,512	35,800	18,738	24%
13	eBay	84,677	65,764	41,355	18,913	29%
14	About	83,743	64,782	30,000	18,962	29%
15	Ask Network	81,430	69,355	20,933	12,075	17%
16	Comcast NBCUniversal	81,275	67,183	32,193	14,092	21%
17	Viacom Digital	79,966	70,446	20,194	9,520	14%
18	The Weather Company	76,642	56,120	37,368	20,522	37%
19	Pandora.com	65,142	23,035	51,977	42,107	183%
20	Gannett Sites	63,055	47,611	27,023	15,445	32%
21	Answers.com Sites	60,861	47,738	17,832	13,123	27%
22	VEVO	58,010	55,953	4,586	2,057	4%
23	Yelp.com	55,641	36,775	27,569	18,866	51%
24	Twitter.com	55,540	35,963	31,372	19,577	54%
25	craigslist, inc.	55,520	46,380	18,839	9,140	20%
26	Adobe Sites	54,840	40,984	19,810	13,856	34%
27	Federated Media Publishing	54,607	39,577	24,297	15,030	38%
28	Hearst Corporation	54,498	41,514	20,967	12,984	31%
29	Linkedin	54,071	45,699	14,978	8,371	18%
30	Wal-Mart	52,857	38,854	22,397	14,004	36%
31	WebMD Health	50,841	32,641	27,614	18,200	56%
32	NDN	46,262	46,260	N/A	N/A	N/A
33	Meredith Women's Network	45,533	32,253	19,771	13,280	41%
34	ESPN	44,759	30,348	27,735	14,411	47%
35	Tribune Interactive	44,618	32,991	17,982	11,627	35%
36	New York Times Digital	44,206	33,175	19,869	11,031	33%
37	YP Local Media Network	43,191	30,112	17,539	13,079	43%
38	Pinterest.com	41,210	26,972	22,994	14,238	53%
39	Disney Online	39,551	27,621	18,022	11,930	43%
40	Netflix.com	38,987	29,205	21,480	9,782	33%
41	Everyday Health	38,720	27,143	16,141	11,577	43%
42	Intuit	38,029	29,091	15,105	8,938	31%
43	Discovery Digital Media Sites	37,590	30,504	10,622	7,085	23%
44	Zynga	37,459	12,051	29,936	25,408	211%
45	Fox News Digital Network	37,340	29,829	15,276	7,512	25%
46	Scripps Networks Interactive Inc.	37,050	26,514	15,469	10,536	40%
47	Groupon	36,924	11,421	28,722	25,503	223%
48	Wordpress.com	36,846	27,964	11,976	8,882	32%
49	Target Corporation	36,061	23,043	18,028	13,018	56%
50	Time Warner (Excl. Turner/WB)	35,142	25,729	13,693	9,413	37%

*Note: Desktop includes audience reached via video and will therefore differ from standard Media Metrix rankings
**Mobile includes smartphone and tablet platforms

Will Move Away from Subsidies Really Help T-Mobile USA, or You?

Will consumers really care if the out of pocket monthly payments for T-Mobile USA service are marginally lower, in the case of services without subsidies but with an installment plan?

Put another way, will consumers actually even save money on T-Mobile USA's new "no contract" plans?

The answer might well be that most consumers will not save much money, if any money.  

In fact, some consumers might even wind up paying less, out of pocket, with a contract plan. 

If one assumes most consumers still are going to opt for device installment plans rather than buying their devices outright, the savings are relatively slight, on a recurring basis, for purchases involving high-end devices.

T-Mobile USA has a $60-a-month 2.5 gigabyte data plan is more than $300 cheaper over two years than an AT&T plan that offers 3 gigabytes and 450 minutes of talk time with the same device. For a user who opts for the installment plan, that works out to about $12.50 a month lower bills than for the rival AT&T plan.

There is an argument that T-Mobile USA plans will save more, compared to service from Verizon Wireless. A user buying that same T-Mobile USA plan, and using the installment plan, would save perhaps $20.83 a month, over two years, compared to a single-user Verizon Wireless plan with 2 gigabytes of data (though the Verizon Wireless plan also would offer unlimited talking and text messaging. 

Still unknown is whether bring your own device trends will get a boost, in addition to a possible shift of end user demand to installment plans or lower-priced devices. 

Vodafone has had unpleasant experience with a shift to "no device subsides" in Spain, leading the firm to reverse course. 

So if you are expecting T-Mobile USA to "disrupt" the U.S. market, you are most likely in a for a let-down. Many of us think the real potential disruption could come from a Softbank-lead Sprint, one way or the other.

Do you really think a "Google" mobile service would fail to be disruptive?

FCC Thinks Mobile Business is "Not Competitive"

The Federal Communications Commission does not, in its latest report on mobile competition in the U.S. mobile industry, find the business “competitive,” despite the observation that  “82 percent of the U.S. population has a choice of at least four mobile broadband providers and approximately 92 percent of Americans are served by at least four mobile providers of voice and text messaging services.

And prices are dropping. Mobile wireless prices declined overall in 2010 and 2011, the

FCC mobile competition report says, and are down since 2006.

Oddly, outgoing FCC Chairman Julius Genachowski argues that among the most important achievements of the Commission under his leadership is that the United States leads the world in “advanced wireless networks, devices, applications.

Genachowski notes that the United States is the first country deploying 4G LTE networks at scale, and in late 2012 the U.S. had as many LTE subscribers as the rest of the world combined, making the United States the global test bed for LTE apps and services.

The FCC report also notes that Long Term coverage has grown rapidly since 2010, when virtually no customers could buy LTE, from nothing in mid-2010 to 86 percent of the U.S. population as of October 2012.

Annual investment in U.S. wireless networks grew more than 40 percent between 2009 and 2012, from $21 billion to $30 billion, while investment in European wireless networks has been flat since 2009, and wireless investment in Asia, including China, is up only four percent during that time.

Genachowski notes that more than 90 percent of smart phones sold globally in 2012 run operating systems developed by U.S. companies, up from 25 percent three years ago.

Also, notes Genachowski, the new mobile apps economy is a “made in the U.S.A.” phenomenon as well.

It is reasonable to look at competition as it exists in rural areas, which always are more difficult for service providers to serve, compared to urban areas.

At the moment, at least 65.4 percent of the rural population can buy mobile broadband service from at least three different providers, and increasingly, people will be able to buy a 4G service.

In addition, 63.6 percent of rural square miles and 87.3 percent of rural road miles in the U.S. were covered by at least one mobile broadband provider, while 90.9 percent of non-rural square miles and 98.7 percent of non-rural road miles were covered by at least one mobile broadband providers, the FCC says.

Based on October 2012 Mosaik data, 97 percent of the U.S. rural population has coverage by at least one mobile wireless broadband provider, up from 92 percent in November 2009.

In contrast, 99.9 percent of the non-rural population is covered by at least one mobile broadband provider.

While rural mobile broadband coverage has improved, 1.3 million people in rural areas have no mobile broadband access.

While 97.7 percent of the population in non-rural areas was covered by two or more mobile broadband providers, only 89.7 percent of the rural population was covered by two or more providers as of October 2012, up from 69.1 percent as of August 2010, according to the FCC.

Furthermore, 65.4 percent of the rural population was covered by at least three providers and 37.4 percent by at least four providers, compared to 97.7 percent and 92.4 percent, respectively, for the non-rural population as of October 2012.

This represents an increase in coverage to the rural population since August 2010 when only 38.1 percent of the rural population was covered by three or more providers and only 17.1 percent was covered by four or more providers, according to the FCC.

With regard to rural road miles, 87.3 percent are covered by at least one mobile broadband provider, compared to 98.7 percent of non-rural road miles.

In addition, while only 67.7 percent of rural road miles are covered by at least two mobile broadband providers, 95.8 percent of non-rural road miles are covered by at least two mobile broadband providers.

In addition, only 35.7 percent of rural road miles are covered by at least three mobile broadband providers and only 14.2 percent by four mobile broadband providers compared to 86.6 and 71.8 percent, respectively, of non-rural road miles.

There are other potential implications as well, namely the growing likelihood that AT&T and Verizon, among others, will use LTE as ways to provide new broadband access alternatives to fixed networks in rural areas.

“Mobile wireless Internet access service could provide an alternative to wireline service for consumers who are willing to trade speed for mobility, as well as consumers who are relatively indifferent with regard to the attributes, performance, and pricing of mobile and fixed platforms,” the FCC says.

in 2010, Verizon Wireless launched the “LTE in Rural America Program” to expand LTE coverage in rural areas.

Under this program, Verizon Wireless leases portions of its 700 MHz Upper C Block spectrum licenses to facilities-based mobile wireless service providers in rural areas where Verizon Wireless currently lacks coverage and does not intend to build out.

The rural partners also gain reciprocal roaming rights on Verizon Wireless’s nationwide LTE network, while Verizon Wireless’s customers can roam on the rural providers’ LTE networks when traveling in such areas.

As of September 2012, the program included 18 small, rural providers that planned to launch LTE to areas covering 2.7 million people across 14 states.1207 In April 2012,

Are Net Neutrality Rules Stifling Fixed Network Investment?

There's really no way to say for certain whether U.S. network neutrality rules have shifted investment decisions. A rational actor, owning both mobile and fixed assets, might well conclude that higher investment returns are gotten from deploying capital to support the mobile networks, rather than the fixed networks. 

But departing Federal Communications Commission member Robert McDowell speculates that mandating "best effort only" policies for the fixed network, while allowing mobile networks to potentially provide quality of service features could have something to do with investment decisions. 

To be sure, telco and cable TV operator capital investment is down substantially from late 1990s levels. But those reductions predate the net neutrality rules.