Mobile Commerce is Getting Bigger, Perhaps On Small Transactions

Some 29 percent of U.S. mobile users already have used their smart phones to make a purchase, according to Business Insider. 

You might argue that most of those purchases are relatively small transactions, and you would be right. 

But that might be the point. Lots of small transactions, conducted by lots of people, wind up representing large amounts of transaction value. 

Bank of America predicts $67.1 billion in revenue from smart phone and tablet retail purchasing by European and U.S. shoppers in 2015.

Galaxy Mega Will Have a 6-Inch Screen: Is There a Market?

The Samsung Galaxy Mega reportedly will have a 5.8” screen, with a second device sporting a 6.3-inch screen. Still, some surveys would suggest there is no market for "phablets." 

A recent analysis by Flurry suggests 16 percent of devices used by consumers have screen sizes that are 3.5 inches or fewer in diagonal length. 69 percent of devices are between 3.5 inches and 4.9 inches. About seven percent of the devices are full sized tablets such as the iPad. 

The study suggests 

phablets are a "fad," since only about two percent of users carry them. One might suggest that is not the only way to look at the adoption pattern. One might as well argue that the persistent overall trend for phones is toward larger screen sizes, and that it will take some time for a greater percentage of users to switch to phablet-sized displays.

Saudis to Regulate Skype?

The government of Saudi Arabia is seeking to regulate local use of Internet-based voice and messaging services such as Skype and Whatsapp.

Such moves are not unheard of. In fact, outright blocking of VoIP has happened in numerous countries, at numerous times.  Skype in the past has been blocked in the United Arab Emirates. Even Sweden's Telia has said it might block use of Skype on mobile devices. 

But blocking is only one problem faced by over the top voice applications, In other cases, over the top voice apps face regulation as providers of traditional voice services, moves which in most cases would destroy or vastly impair the over the top VoIP value proposition. 

Over time, the effectiveness of over the top VoIP blocking is questionable. But that never seems to stop some regulators or service providers from trying. 

Vodafone Once Tried to Buy AT&T. Will AT&T Now Buy Vodafone?

Verizon Communications denies the rumor, but reportedly had been considering a deal of as much as $245 billion to buy all of Vodafone. 

That deal, which Verizon would make with AT&T, would then have Verizon getting the U.S. assets, while AT&T got the rest of Vodafone's global assets.

That rumored deal would allow Verizon Wireless to fully own its own business, but might have even bigger implications for AT&T.

Vodafone is the second-largest global mobile communications company, with approximately 403 million customers in its controlled and jointly controlled markets.

Vodafone currently has equity interests in over 30 countries across five continents and more than 50 partner networks worldwide.

So even after losing the Verizon Wireless customers and assets, AT&T would still stand to expand in a major way as a global carrier. Any sale of Vodafone to the U.S. mobile giants would end speculation about “who will buy whom,” and not just for Verizon and Vodafone.

In September 1999, Vodafone Airtouch announced a $70-billion joint venture with Bell Atlantic Corp., which gave rise to Verizon Wireless. That partnership has been troubling for both partners, in some ways. leading to periodic rumors about one or the other partners buying out the other.

AT&T also figures into the story, though. In 2004, Vodafone made a bid for the entirety of AT&T Wireless when that company was for sale.

Had that bid been successful, Vodafone presumably wouldhave sold its stake in Verizon Wireless, and then rebranded the former AT&T Wireless business as Vodafone.

Cingular Wireless, at the time a joint venture of SBC Communications and BellSouth ultimately outbid Vodafone and took control of AT&T Wireless, which now is known as AT&T Mobility.  

So in an odd turn of events, Vodafone, which tried to buy AT&T Wireless, would then be acquired by its former target.

Earlier rumors (2012 and 2013) had Verizon Communications weighing a smaller deal to acquire more of Verizon Wireless equity, or buying out Vodafone’s stake.

The latest rumor has the two U.S. giants buying all of Vodafone, with Verizon essentially acquiring the remainder of Verizon Wireless, while AT&T gets the rest of Vodafone’s global assets.

Such a blockbuster deal would give the two U.S. mobile service providers a pathway to growth. For Verizon Communications, owning all of its mobile business would immediately boost earnings. For AT&T, the Vodafone deal would catapult AT&T into the global market in a new way.

Despite denials, it appears Verizon and Vodafone recently held full merger talks that apparently did not result in accord on matters such as leadership structure or where the corporate headquarters would be located. That is a common issue for mergers “of equals.”

So the recent rumor that AT&T and Verizon would instead simply buy all of Vodafone is a way around the impasse.

Strategically, the AT&T interest in Vodafone’s global assets is a clear sign that AT&T sees future growth in the U.S. market as problematic. Verizon first has to consolidate its U.S. business before it can consider looking overseas for future growth.

Ironically, any such deal would tend to confirm the belief of European mobile service providers that major consolidation is needed in the European Union markets if the surviving mobile service providers are to achieve economies of scale.

But the deal also would indicate that when government entities limit the amount of growth any single company can have in its home market, typically by mandating market share limits, those firms look offshore for future growth.

Ironically, by limiting domestic market share to preserve competition, regulators also create incentives for domestic providers to shift capital overseas.

Facebook's Plans an Android "Skin," Not a "Fork"

According to Josh Constine at TechCrunch, Facebook plans a "skin" over Android, not a "fork" as Amazon.com did for its Kindle. By "skinning," rather than "forking," Facebook simply provides a new layer of functionality over the top of Android, without making "custom" modifications to Android.

That probably gives Facebook what it wants--a deeper integration of Facebook on an Android device--without the hassle of a deeper modification of the Android operating system.

Will Aereo Redefine Video Service Provider Content Costs?

Aereo, the Web television venture that captures over the air broadcast TV signals and then makes them available as an Internet video stream, is a test case of whether service providers who do so are obligated to pay carriage fees to the broadcasters.

So it is no surprise that Aereo has discussed partnerships with major Internet service providers and video service providers. In principle, video distributors could make carriage deals with Aereo instead of each TV broadcaster in a local market, which might mean lower service provider content fees.

The other issue is that if Aereo can amalgamate a relative handful of additional channels, Aereo might emerge as a supplier of a new sort of low-cost tier of service, positioned somewhere between "antenna service" (broadcast channels only) and "basic cable" (broadcast channels plus 40 or so additional channels).

Video distributors therefore have an interest in seeing whether Aereo survives legal challenge. A new Aereo tier might appeal to some consumers who think a "full" expanded basic tier costs too much.

Will Aereo Redefine Video Service Provider Content Costs?

Aereo, the Web television venture that captures over the air broadcast TV signals and then makes them available as an Internet video stream, is a test case of whether service providers who do so are obligated to pay carriage fees to the broadcasters.

So it is no surprise that Aereo has discussed partnerships with major Internet service providers and video service providers. In principle, video distributors could make carriage deals with Aereo instead of each TV broadcaster in a local market, which might mean lower service provider content fees.

The other issue is that if Aereo can amalgamate a relative handful of additional channels, Aereo might emerge as a supplier of a new sort of low-cost tier of service, positioned somewhere between "antenna service" (broadcast channels only) and "basic cable" (broadcast channels plus 40 or so additional channels).

Video distributors therefore have an interest in seeing whether Aereo survives legal challenge. A new Aereo tier might appeal to some consumers who think a "full" expanded basic tier costs too much.