iPhone Probably Worth 7 Share Points

About 30 percent of U.S. consumers who purchased Apple’s new iPhone 3G from June through August 2008 switched from other mobile carriers to join AT&T, a new study by NPD Group finds. About 23 percent of consumers, on average, switched carriers between June and August 2008.

By some measures, then, AT&T got a seven-percent share boost from the iPhone.

Nearly half (47 percent) of new AT&T iPhone customers that switched carriers switched from Verizon Wireless, another 24 percent switched from T-Mobile, and 19 percent switched from Sprint.

Before the launch of the iPhone 3G, iPhone sales represented 11 percent of the consumer market for smart phones (January through May 2008); however, after the launch of iPhone 3G, Apple commanded 17 percent of the smartphone market (January through August 2008).

The average price of a subsidized smart phone sold between June and August 2008 was $174, down 26 percent from $236 during the same period last year.

Cox Not Infringing Verizon VoIP Patents, Jury Finds

Verizon Communications has lost its VoIP patent infringement case against Cox Communications Inc, the Wall Street Journal reports. Verizon filed papers in Eastern District Court of Virginia on Jan. 11, 2008 alleging that Cox violated eight patents related to the technology used for completing IP voice calls. The lawsuit came after Verizon had successfully argued that Vonage was infringing its patents. 

Verizon included in the lawsuit claims of infringement of  four patents Vonage was found to have violated in an earlier case. Verizon was awarded $120 million in damages in that case. But the jury in the Eastern District of Virginia ruled that Cox Communications did not infringe on six Verizon patents.

In addtion to Cox Communications, other leading cable operators perhaps most relieved of all, as it might be hard to defend the notion that any of the leading cable providers were innocent, had Cox been found to be infringing. But other indpendent VoIP providers also have to be breathing a little easier as well. 

Had Cox been found to be infringing, it isn't so clear how any other cable company might have escaped litigation, cable or independent VoIP providers alike. 

Verizon apparently has recently reached a deal with Comcast in which both companies agreed not to sue each other over patent issues for five years. A Verizon lawsuit against Charter Communications for VoIP patent infringement is still pending.

Netflix Warns of Slowdown

Netflix says its third quarter revenue and earnings per share will fall within prior guidance but that subscriber numbers will fall “just below” the low end of guidance.

“Net subscriber growth in July was in line with expectations but August was unusually weak”, says CFO Barry McCarthy. 

There could be lots of reasons for a single-month slowdown. It is possible potential new subscribers were distracted by the Olympics or the Presidential election. But some quickly will jump to the conclusion that economic stringency is pinching Netflix the way some expect a sluggish performance for premium cable channels or perhaps video on demand. 

IP Transit Prices Fall

Median monthly IP transit prices for 1,000 Mbps Gigabit Ethernet (GigE) ports in major U.S. and European cities ranged from $10 to $14 per Mbps in the second quarter of 2008, report researchers at TeleGeography. 

IP transit prices in Asia remain far higher than in the United States and Europe, which explains the surge in undersea cable construction across the Pacific Ocean.

Long Tail of Social Networking

Nearly half (46%) of those who use social networks have also visited a social network through a mobile phone, according to ABI Research. Of these, nearly 70% have visited MySpace and another 67% had visited Facebook.

No other social networking site reached 15% adoption mobile adoption. That is what one would expect if the Pareto Principle (80/20 rule or "long tail") holds.

"As in the online social networking space, there is clearly a large gap between the big two (MySpace and Facebook) social networks and the others," says research director Michael Wolf.  "ABI Research believes this is because consumers do not want to recreate entirely new and separate social networks for mobile, but rather want to tap into their existing social network and have it go with them via the mobile phone. For most, this means MySpace, Facebook, or even both."

The biggest features consumers use when accessing a social network on their phone is checking for comments and messages from their friends, with both of these features registering above 50% for mobile social network users.

Posting status updates also has proven popular, with over 45% of mobile social users letting others what they are up to via their phone.

"The social network is increasingly becoming a central hub for communication across online and mobile domains for many consumers," says Wolf. "To a degree, it allows them to centralize messaging, communication and even digital media consumption through a centralized property on various screens."

That is something enterprise social networks might hope to replicate.

Apple Has Done It: 10 Million iPhones Sold

Apple has reached its goal of selling 10 million iPhones by the end of the year, says Seeking Alpha writer Andy Zaky.

Estimates for iPhone sales figures for Apple's fourth quarter (calendar quarter three) were called for sales of four million units. It now appears that Apple has sold at least 7 to 7.5 million iPhones in the quarter, nearly 80 percent above consensus.

Watch for Shift to Social and Digital Media

About 65 percent of chief marketing officers surveyed recently by Epsilon say their ad budgets will decrease because of the troubled economy, but more of their money will go toward digital/interactive marketing than before. About 63 percent of the 175 CMOs and marketing execs surveyed report that their spending on interactive and digital marketing has risen, while 59 percent report a decrease in traditional marketing spending.

Those attitudes typically have been important only for media and content providers in the past. These days, those attitudes are important for telcos and mobile providers as well as potentially millions of smaller content providers as well, since blogs and social marketing are at the top of the list of new media CMOs are shifting attention to. 

At the same time, 94 percent of those surveyed agreed with the statement, “A tough economic period is precisely the time when marketing plays a key role.”

To offset budget cuts, CMOs are shifting to more targeted and measurable marketing strategies. When asked how their firm determines target market for each channel, 50 percent said they use data-driven marketing techniques: 31 percent stated they use modeling tools to analyze existing customer data (behavioral, preference and demographic) and 19 percent said that they analyze past purchase behavior. In contrast, 28 percent said they made “rough estimates based on past experience.”

CMOs have been early adopters of new media with social computing and blogs receiving the most interest, and instant messaging and interactive TV ads least popular.

Social computing (including word of mouth, social networking sites, viral advertising and so forth.) was the most popular emerging channel with 42 percent of marketing executives expressing interest in adding it to their marketing mix.

Blogs were the second-most-popular emerging channel, with 35 percent of marketers expressing desire to use them and 19 percent already using them.

Almost a third of CMOs mentioned podcasting as an area of interest, with 31 percent interested in adding it to their marketing mix and 18 percent already having done so.

Some 29 percent are interested in Mobile Devices (phones/PDAs) and 22 percent have added them to their marketing mix.

About the survey: The survey was conducted in August 2008. Participants included 175 US CMOs and marketing executives of some of the largest brands in the nation. Some 27% of respondents work at companies with $10 billion or more in annual revenues last year.