Users Unclear About 4G Value

As you might expect, early adopters have clearer expectations about new technology, or at least want to "play" with new technologies, in a way that mainstream consumers do not share.

A recent study by Analysys Mason suggests that is the case for potential smart phone customers.

Many are not sure why they ought to buy and use smart phones, nor are they clear about why "fourth generation" networks have value.


More than six percent of all surveyed
mobile users believe that they lready have a 4G handset, which is obviously not yet true.

More than half of them do not understand mobile network generations or are unsure of the connectivity generation of their phone. The study also suggests that about 28 percent of
iPhone users believe that they have a 4G-capable handset.

Some 46 percent of iPhone 4 users also believe they already have 4G devices, even though no iPhones currently support 4G Long Term Evolution or WiMAX connections.

Also, except for PC dongle users, for whom the clear advantage is speed, and, in some cases, improved latency performance, the specific advantages of 4G are unclear.

That state of affairs is not unusual for broadband networks. Up to this point, the main advantage between one generation of broadband and the next is "speed." People instinctively understand "faster."

But 3G mobile networks did not lead immediately to significantly new uptake of new applications, until quite recently, when, for most users, 3G has meant a better web browsing experience. So far, it is not clear that most users can perceive the advantage of a "better" mobile web experience using 4G, as opposed to 3G, with the salient exception of mobile PC users.

AT&T, Verizon Results: Mobile Grows, Fixed Line Shrinks

It is not news, nor unexpected, that AT&T's traditional wireline business, and Verizon's similar business, are contracting, while mobile is leading growth at both firms.

Revenue for the AT&T fixed network business fell to $14.9 billion from $15.1 billion, year over year. AT&T, Verizon fixed line business contracts


Verizon encountered the same pattern in its most recent quarter. Wireless generated $18 billion worth of revenue, and wired services about $10 billion.

Operating revenue grew in mobile, but declined in fixed line. Basically, all the new FiOS revenue is simply compensating for losses in other legacy services, including voice services and digital subscriber lines.

In the fourth quarter 2011, Verizon Wireless delivered the highest number of retail net additions in three years and strong growth in revenues, driven by increased smartphone penetration andincreased retail postpaid ARPU (average monthly service revenue per user). Fixed line revenues decline

Total wireless revenues grew 13 percent year over year while data revenues grew 19 percent year over year.

Orange will not Match Competitor Prices: Why That Is Smart

France Telecom says it will not match the low-cost mobile offers recently launched by Iliad because such aggressive pricing would be bad for network quality and innovation in the long-run, says France Telecom CEO Stephane Richard. That Orange won't compete on price might strike you as unwise.

Goldman Sachs, for example, forecasts that Iliad's market entry will cause France Telecom to lose a third of its operating profits in its domestic market by 2015. That will obviously encourage thinking about the retail positioning of Orange's (France Telecom) pricing strategies.

Some will argue that Orange has to meet competitor prices. But others will argue that losing share is the wiser strategy.

There are ample precedents for France Telecom to do so, even though the strategy carries risks.

Beyond higher marketing costs as competition escalates, sometimes all an incumbent can do is harvest a business. That, in fact, was AT&T’s strategy when it was a dominant long distance provider facing growing competition from a growing number of competitors, and as prices for its product continually declined.

A similar strategy has been taken by incumbent telephone companies in the face of growing competition from VoIP providers. You might argue that telcos should have jumped into VoIP aggressively, matching competitor lower prices.

The suggestion is that sometimes a particular firm cannot compete in a particular line of business, on price. When that is the case, and when a contestant has very large market share, sometimes it will make better financial sense to harvest the business, and spend more organizational effort "finding something else to do."

It is a variation on the old theme that there always are some customers a particular contestant is better off not having. Incumbent mobile service providers frequently find themselves facing lower-cost competition, and it is not always possible to compete on that basis.

Dish Eyeing LightSquared Business Model?

Dish Network recently stirred speculation about whether it now wants to expedite its construction of a national Long Term Evolution network, simply by indicating in a yet-private communication to the Federal Communications Commission that Dish wants to "revise" its plans. Revised plan?

Some have speculated that the request is to accelerate the proposed construction timetable, but that isn't clear. It might make sense, if Dish believes it now has a chance to supplant LightSquared as a major wholesale partner.

Dish Network needs an FCC waiver to use its satellite communications frequencies to support a terrestrial mobile network, as LightSquared also requires.

LightSquared has run into a wall because of interference with the Global Positioning System.  Dish's proposal is seen as less problematic, as the frequencies it acquired last year from bankrupt satellite operators TerreStar and DBSD North America are further away from the spectrum used by GPS systems. Dish the successor to LightSquared?

Some now speculate that Dish might seen an opening, if, as some speculate, LightSquared fails to gain approval to use its spectrum to support a terrestrial Long Term Evolution network. Up to this point, Dish Network has suggested it would use its spectrum to build and operate a retail network.

There is no reason in principle why Dish could not operate both as a wholesale provider and a retailer, but there always is channel conflict when firms do so. 

On the other hand, since LightSquared already has identified more than 30 wholesale customers, a Dish Network move to offer wholesale services would give Dish an immediate customer base and potential revenue, even if it decides there are retail branded operations it also wishes to support.

U.S. Mobile Advertising Grows Faster than Expected

The U.S. mobile advertising market is growing far faster than expected, driven by the rapid ascension of Google’s mobile search advertising business, advertisers’ growing attraction to display inventory on tablet and smartphone devices, and the growing roster of mobile ad networks such as Google’s AdMob, Apple’s iAd, and Millennial Media, eMarketer says.



Mobile advertising spending in the US reached $1.45 billion in 2011, up 89 percent from $769.6 billion in 2010. 


This year, US mobile ad spending will grow 80 percent to $2.61 billion.



The most significant adjustment in this forecast comes as a result of “Google’s exceptional mobile advertising performance,” which has propelled mobile search advertising far faster than previously expected, eMarketer says.



eMarketer estimates Google’s share of overall U.S. mobile ad revenues reached 51.7 percent, or about $750 million, in 2011. Mobile advertising grows faster than expected.


The firm previously forecast U.S. mobile ad spending would grow 47 percent  to $1.8 billion in 2012, up from $1.2 billion last year.

Apple Sets Sales Records, Has $97 Billion in Cash

Apple first quarter results show record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion.


The company sold 37.04 million iPhones in the quarter, 15.43 million iPads and 5.2 million Macs. Apple also has an astounding $97 billion in cash. Any "normal" company would face unbearable pressure to distribute that cash to shareholders. Apple Reports First Quarter Results 

• Revenue: $46.33 Billion versus $38.76 billion expected

• EPS: $13.87 versus $10.07 expected

• iPhone units: 37.04 million versus 30.2 million expected 

• iPad units: 15.4 million 13.2 million expected 

• Mac units: 5.2 million versus 5 million expected 

• iPod: 15.4 million versus 13.9 million expected, according to Bloomberg

• Gross Margin: 44.7% versus 41.8% expected

• March quarter revenue: $32.5 billion versus $31.9 billion expected

• March quarter EPS: $8.50 versus $8.00 expected

• Apple now has $97 billion in cash, short term, and long term securities

• The iPhone's average selling price is up to $660

17% of Global Workers Telecommute

About 17 percent of workers around the globe, particularly employees in the Middle East, Latin America and Asia, telecommute frequently, and nearly 10 percent work from home every day, according to a new Ipsos poll sponsored by Reuters. About one in five workers worldwide telecommute

Ipsos surveyed a total of 11,383 online connected employees from 24 countries. 

Telecommuting is primarily taking place in emerging markets: those working in the Middle East and Africa (27 percent), Latin America (25 percent) and Asia-Pacific (24 percent) are considerably more likely than those in North America (nine percent) and Europe (nine percent) to telecommute ‘on a frequent basis.’

More specifically, employees in of India (56 percent), Indonesia (34 percent), Mexico (30 percent), Argentina (29 percent), South Africa (28 percent) and Turkey (27 percent) are most likely to be pursuing this form of employment.

On the other end, those in Hungary (three percent), Germany (five percent), Sweden (sixc percent), France (seven percent), Italy (seven percent) and Canada (eight percent) are least like to telecommute ‘on a frequent basis.’

Those with a high level of education are most likely to telecommute on a frequent basis (25 percent) followed by those under the age of 35 (20 percent) and those with a high household income (20 percent).