On Oct. 31, 2013, a consortium of Google rivals, including Microsoft, Apple, RIM, Ericsson, and Sony, filed 15 lawsuits against Samsung, Huawei, HTC, LG Electronics and other manufacturers that make Android smartphones, using a trove of patents the complanies acquired from the bankrupt Nortel.
Enough already. Intellectual property protection is a good thing. But such "patent trolling," sometimes aptly called "privateering," might aptly be called extortion of a new sort.
In 2011 and 2012, the number of lawsuits brought by patent trolls has nearly tripled, and account for 62 percent of all patent lawsuits in America, according to a study on patent trolls.
The victims of patent trolls paid $29 billion in 2011, a 400 percent increase from 2005.
Intellectual property protection is one thing. An out of control patents system, and the new use of litigation as a weapon of business competition, has to stop. It is going to damage innovation.
Between $15 billion and $20 billion was spent on patent litigation and patent purchases in the smart phone industry from 2010 to 2012.
In 2011, spending by Apple and Google on patent litigation and patent acquisitions exceeded spending on research and development of new products.
Google’s $12.5 billion purchase of Motorola, according to its own statements, was undertaken in large part to prevent patent suits from competitors.
If you have ever read patent applications, you know that some "patented processes" seem to defy logic. Where patents once were intended to protect the specific implementation of a process or device, now people and companies try to patent, in an overly-broad way, entire processes. It's dumb. It should not be allowed.
Friday, November 1, 2013
Patent War Erupts Again: Time to Stop It
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Thursday, October 31, 2013
"Coverage" Limits Telco TV Gains
In fact, coverage limitations are the biggest barrier to telcos taking more market share from cable operators.
Cable TV companies operate in virtually every city and town in the United States.
Satellite providers likewise cover nearly 100 percent of the surface area of the entire country.
Telco TV providers do not yet have ubiquitous coverage, though where they do operate, providers such Verizon have gotten about 35 percent market share, where the cable provider might get 39 percent or 40 percent share, with satellite providers getting the balance of accounts of homes that do buy video entertainment.
To be sure, AT&T and Verizon are now the fifth and sixth biggest subscription video entertainment providers in the United States, trailing Comcast, Time Warner Cable, DirecTV and Dish Network.
Still, because telco TV is not ubiquitously offered, U.S. phone companies have about 10 percent market share, where cable TV companies have about 55 percent share, and satellite firms have close to 30 percent share.
You might think the telcos have issues with content, marketing or retail packaging. That isn’t the case. The issue is coverage. By 2015, AT&T, for example, will be able to market to only about 33 million locations.
Verizon’s FiOS covers about 17.8 million homes, so the two telcos will pass about 51 million U.S. homes, by 2015, out of perhaps 145 million U.S. homes by 2015. That implies coverage of about 35 percent of U.S. homes. Other telcos will sell telco TV as well, but collectively could only theoretically reach about 14.5 million homes, or so, by 2015, best case.
Even under the best of circumstances, it is unlikely U.S. telcos will be able to pass even 45 percent of U.S. homes by 2015.
That is one reason why some observers believe either AT&T or Verizon might eventually buy either DirecTV or Dish Network, or a combined entity, should the two satellite firms wind up merging with each other.
That is the only way, aside from launching robust streaming video services offering virtually all the standard channels sold as part of a standard cable TV, satellite TV or telco TV offering, that a telco could achieve full national coverage.
But changing customer habits and eventual content owner preferences are a wild card. Some might argue that today’s subscription video business is past its prime, and that streaming delivery is the future.
If so, a distributor could achieve national distribution by using an over the top approach. And that might ultimately be viewed by a few telcos as the best way to proceed.
Doing so would mean national coverage without the need to build access facilities, for example.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Netflix is Bigger than HBO and Comcast, on One Measure
With the important caveat that average revenue per account and profit margins are disparate, Netflix is, by at least one or two measures, bigger than HBO , and also is bigger than Comcast on one measure.
Netflix is bigger than Comcast when measured by paying subscribers, and Netflix is bigger than HBO in terms of gross revenue and subscribers.
Comcast is far bigger than Netflix in terms of average revenue per user, while HBO is vastly more profitable, in terms of profit margin.
HBO probably has margins in the 33 percent range, while Netflix margin is in the five percent range. Also, Comcast has average account revenue above $80 a month. Netflix has average revenue per user of about $10 a month.
Comcast third-quarter 2013 results showed the firm lost 129,000 video subscribers, ending the period with more than 21.6 million video customers. Netflix has about 30 million U.S. subscribers.
Comcast also lost 348,000 video subscribers through the first nine months of 2013, as well.
Comcast now has almost as many high-speed Internet subscribers (20.2 million) as video (21.6 million), and that business still is growing. Comcast gained nearly 300,000 broadband subs in the quarter.
Some think the growing popularity of Netflix is one reason Comcast recently launched an antenna basic plus HBO package that offers consumers a low price and access to HBO, seen by some as a competitor to Netflix, in many ways.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Netflix on Comcast X1 Platform "Not a High Priority," Comcast Says
Comcast EVP Neil Smit says getting Netflix onboard its X1 platform, making Netflix an app on the set top box, "is not a high priority" for Comcast.
"Our customers can receive Netflix in a number of ways, so it’s not really a high priority for us," said Smit. "We’re open to putting apps on our X1 platform. We have, for example, Facebook and Pandora there now."
But at this point, Netflix does not seem likely to get such treatment from Comcast. Some might speculate that Comcast has designs for a streaming video service of its own, at some point, so that might explain some of the apparent reticience.
Nor does Comcast want to use the Netflix content delivery network, either, said to be a condition for Netflix doing such deals.
"Our customers can receive Netflix in a number of ways, so it’s not really a high priority for us," said Smit. "We’re open to putting apps on our X1 platform. We have, for example, Facebook and Pandora there now."
But at this point, Netflix does not seem likely to get such treatment from Comcast. Some might speculate that Comcast has designs for a streaming video service of its own, at some point, so that might explain some of the apparent reticience.
Nor does Comcast want to use the Netflix content delivery network, either, said to be a condition for Netflix doing such deals.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
AT&T to Bid for Vodafone?
If you think regulatory scrutiny of AT&T’s effort to buy T-Mobile US was contentious, just wait until AT&T tries to buy either Vodafone Group or EE in the United Kingdom, a move that reports suggest is under active consideration at AT&T.
AT&T reportedly also considered a purchase of Telefonica, but Spanish regulators quickly moved to signal disapproval.
In recent days Mexico’s America Movil encountered opposition by an independent KPN shareholder group to its bid to buy the remainder of KPN it did not already own.
Both America Movil and partner AT&T were rebuffed in 2007 in an effort to buy Telecom Italia, as well.
Opposition could arise from national regulators, company poison pill defenses or independent foundations set up to ward off unwanted takeovers.
Combined, Vodafone and AT&T would be the largest telecom firm on the planet, with a market capitalization exceeding $250 billion and large-scale operations in the U.S. and across Europe.
That level of scale might be important to the firm as it explores new lines of business where scale is important, ranging from advertising to video entertainment, and probably also would help the carrier when negotiating with handset suppliers and other suppliers of infrastructure.
Though AT&T might wind up not making a bid, it could not move before the closing of the Vodafone sale of its Verizon Wireless stake, expected in early 2014.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Will Access Networks Lose Value in Mobile Business?
Two decades is a very long time in the communications and application ecosystem. That is long enough to make a transition from “no Internet” to “dial up Internet.” A couple decades is enough time for Internet access to move from dial up to broadband, or from video-constrained to video-capable.
Two decades is long enough for new business models to be created, as from “streaming is very difficult” to “streaming is commonplace or dominant.”
Two decades also is sufficient time for value in the networks ecosystem to undergo huge change. Precisely what changes might occur remains to be seen. But it is not unreasonable for some to suggest that the relative value of core and access networks could change.
Historically, both access and core networks were scarce. In the 1980s, core networks became less scarce, as firms such as MCI, Sprint and others built their own long haul networks.
In the 1990s, access networks become less scarce. as mobile networks became more commonly-used assets. In the first decade of the 21st century, fixed networks became more common, and less scarce, as cable TV networks became communications networks and specialized metro fiber networks proliferated.
In another couple of decades, might the value of access and core networks change again? Almost certainly, “yes.” The only issue is which changes will be most crucial for service provider business cases.
What will the network of 2030 look like? More outsourced, more virtualized, more reliant on the value of spectrum as a “core competence” or source of value.
At the same time, say analysts at iGR, it might be possible for competitors to pick and choose their underlying network resources choices further. Perhaps mobile virtual network operators will own their own core networks (long haul assets and application servers) while “renting” radio access.
Think Google, Apple, Amazon or others with their own data centers, long haul transport and app servers. Each could rent radio access from a third party to provide the “last mile connection” to device users. That would something of a reversal of historic patterns, where many service providers owned their access facilities, and leased long haul facilities.
That approach--owning the core network and leasing radio access, might also have other implications. As voice service providers often select termination facilities based on “best quality now” or “best cost now,” the future network could well employ dynamic access selection.
When one radio access network gets congested, new style mobile virtual network operators might automatically shift traffic to different terminating networks, based on cost or quality parameters, much as long distance voice providers often do.
In such a scenario, the “scarcity value” of an access network is lessened, with more value shifting the core network provider. The reason, in part, is further outsourcing of the actual radio network, not simply the tower sites, where mobile access becomes a purchased service, not an owned part of a network.
That of course will prove financially beneficial for service providers of all types, but might be especially attractive to brands with core network capabilities that could be leveraged to create a new mobile service capability by renting wholesale access, especially on a dynamic basis.
The extent to which that is possible will hinge on the degree of wholesale access to spectrum. Where today mobile virtual network operators rent “complete circuits and capabilities” from underlying network owners, in the future other possibilities might arise.
Where today an MVNO might buy turnkey capabilities (voice, messaging, Internet access as complete wholesale offers) from an underlying carrier, in the future, it is possible that more virtualized networks would allow some brands with their own data centers, feature servers, billing and networks could simply buy radio access to create a full end to end service.
Conceivably, that would allow a tier-one mobile service provider in one country to create a new network in another country by purchasing radio access services from a third party. Likewise, some firms with popular brands, end user scale and data center and backbone network assets (think Google, Apple, Microsoft, Ford, Mercedes, Amazon) also could become MVNOs in a new way.wi
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
When Customers Like Your Service Less, the More They Use It
For reasons that probably are intuitive, customer satisfaction tends to increase as the length of customer relationship with a particular product or service provider increases. Unhappy customers will leave, and therefore no longer register "unhappy" responses about a customer service operation.
Also, the longer a customer remains with a particular supplier, the more likely it is that the customer will have learned how to use a product, and will have fewer questions about value, billing or "how to use the product."
That is not to say the relationship between customer satisfaction and customer loyalty is especially direct. In many industries, even satisfied customers can churn at significant rates. That especially can be the case when the leading suppliers all offer comparable experience and value for money offers.
In such cases, satisfied customers might well change suppliers for a relatively modest price advantage, for example.
That is one "hard to quantify" advantage of customer loyalty. Customers with longer tenure tend to cost less to serve, aside from the likelihood that such customers also spend more than newer customers.
The bad news for travel suppliers is that the reverse pattern tends to occur. Customers who have two years experience tend to rank customer service lower than when they were "new" customers.
One might suggest there are reasons for those findings as well. There are relatively fewer things a travel experience supplier can do to make a customer interaction more satisfying, when the chief source of customer service inquiries have to do with something that went wrong.
Clearly, seat comfort, meals and baggage fees also are issues. People are not generally too happy about those attributes of the travel experience, so the odds of unhappiness with customer service systems is likely to be weighted in a negative direction.
So the caveat for service providers might be that experience with your product should, with longer customer tenure, lead to higher satisfaction with your customer service. That is, unless the core experience is not so good.
In those cases, customer service satisfaction might drop over time, a reflection of general dissatisfaction with the primary experience of the product.
A disproportionate share of customer contacts will be about cancelled flights, late flights, flight delays, lost reward program credits, redeeming reward program credits and billing issues, for example. There is a high probability that consumers will be interacting under conditions where they are unhappy.
That is one reason why airlines tend to fare worse than other segments of the travel industry.
Also, the longer a customer remains with a particular supplier, the more likely it is that the customer will have learned how to use a product, and will have fewer questions about value, billing or "how to use the product."
That is not to say the relationship between customer satisfaction and customer loyalty is especially direct. In many industries, even satisfied customers can churn at significant rates. That especially can be the case when the leading suppliers all offer comparable experience and value for money offers.
In such cases, satisfied customers might well change suppliers for a relatively modest price advantage, for example.
That is one "hard to quantify" advantage of customer loyalty. Customers with longer tenure tend to cost less to serve, aside from the likelihood that such customers also spend more than newer customers.
The bad news for travel suppliers is that the reverse pattern tends to occur. Customers who have two years experience tend to rank customer service lower than when they were "new" customers.
One might suggest there are reasons for those findings as well. There are relatively fewer things a travel experience supplier can do to make a customer interaction more satisfying, when the chief source of customer service inquiries have to do with something that went wrong.
Clearly, seat comfort, meals and baggage fees also are issues. People are not generally too happy about those attributes of the travel experience, so the odds of unhappiness with customer service systems is likely to be weighted in a negative direction.
So the caveat for service providers might be that experience with your product should, with longer customer tenure, lead to higher satisfaction with your customer service. That is, unless the core experience is not so good.
In those cases, customer service satisfaction might drop over time, a reflection of general dissatisfaction with the primary experience of the product.
A disproportionate share of customer contacts will be about cancelled flights, late flights, flight delays, lost reward program credits, redeeming reward program credits and billing issues, for example. There is a high probability that consumers will be interacting under conditions where they are unhappy.
That is one reason why airlines tend to fare worse than other segments of the travel industry.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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