Just a Reminder About Where AT&T Makes its Money

Wireless drives fully half of all revenue. More than a quarter comes from data services of various types. Fixed network voice is 19 percent. 

Apple Doesn't Compete With Anybody Else, Really

In some genuine sense, Apple doesn't really compete with other suppliers. It competes against itself. That is one reason Apple, as a matter of business practice, destroys markets for existing products it already successfully sells, with new and "better" products. 


To be sure, "every" company claims to be an innovator. "Every" company claims to have products that are substitutes for Apple products. There is truth to some of those claims. But no firm of Apple's size and influence actually behaves the way it does, even if other firms claim they do the same.


Apple does not build products its surveys, and other market research, indicates people want. I can't think of another large firm that really operates that way, with a possible exception of 3M. Apple dreams up what it thinks people need, and never asks people whether they "need it."


Most other firms identify markets and then create products to serve those markets. Apple creates markets. 


Sure, Apple sells smart phones, tablets and MP3 players. A research firm tracking market share has to include Apple and other competitors in such studies. In that sense, Apple has competitors. 


But Apple really is different. I buy smart phones. I prefer Android, HTC and Samsung. My children buy iPhones, not smart phones. 


But I own three iPods, zero MP3 players. I wouldn't buy any brand other than Apple, if that was the product I was buying. In that sense, Apple is different. 

Gnashing Teeth Numbers

If you run a business, work for a business, or want to work for a business, these are tooth-gnashing numbers. The blue is actual economic growth. The red line is our debt burden. You know what it means. 


Consumption, spending and therefore growth will be choked for decades as debt repayments pinch back spending on every level. To get that red line back to where it needs to be, the blue line will continue to struggle, as we "spend" our money on debt service and principal reduction, instead of "buying stuff" that suppliers can sell. 


Getting the blue line growing faster than the red line is the key to generating enough surplus to pay off the debt. But paying off the debt will slow growth. That isn't to say every type of spending by businesses and consumers "has" to decline equally.


You can make the argument that some segments, such as consumer appliances, could do better than other segments. We do love our gadgets. But even then, there must be trade-offs made elsewhere. 


Gnash, gnash, gnash. 




If you subtract the added debt from GDP, this is what really is happening:

Microsoft Branded Smart Phone on the Way?

Though Microsoft naturally insists the release of its own line of branded tablets does not pose any risk of channel conflict with its traditional partners, that might not be the case. Nomura analyst Rick Sherlund says he has learned that Pegatron is also working on a handset for Microsoft. 


The project isn’t likely to be completed until 2013, but will contradict Microsoft's assertions that it is not competing with its customers. Google has faced the same issue with its ownership of Motorola Mobility.


The Microsoft move would emphasize for all third party device manufacturers that the mobile phone world is changing. Microsoft now will supply operating systems for third parties, but also will compete with its own branded devices, as Microsoft has signaled it will do in tablets.


Given Apple's highly-developed content ecosystem, the Android application community and now Microsoft's own move into tablets and, presumably, smart phones, third party suppliers who do not own their own operating system and content communities will find themselves at a serious disadvantage. 

Tablets Will Drive Personal Hotspot Adoption

Mobile modem sales will see a 16 percent compound annual growth rate to 2017, says Strategy Analytics.


Where 150 million units will be sold globally in 2012, 312 million will be sold in 2017, according to Strategy Analytics. 


By 2017, over 35 percent of stand-alone modems will be mobile hotspot routers, driven by growth in consumer electronics devices such as eBook readers, tablets and ultrabooks. 


In 2012, cellular modem sales will grow fastest in North America, at 69 percent year on year growth, followed by Asia Pacific at 34 percent;


The mobile broadband device installed base of USB modems, PC cards and embedded notebooks and netbooks will grow from 266 million units in 2012 to 688 million by 2017 and LTE will comprise 48 percent of all cellular modem shipments by 2017, Strategy Analytics says. 

Spanish Mobile Churn Hits Record Levels

Spanish mobile phone operators lost a record number of clients in April 2012, with some 70 percent of defections occurring at Telefonica and Vodafone, as they stopped subsiding smartphones for cash-strapped customers, CNBC reports. 


Observers will quickly speculate on why the historically-high rate of churn is happening. Some obvious explanations include the economic crisis, or perhaps the end of device subsidies, which might reduce demand for new phones. 


Around 380,000 customers ditched their mobile phone lines in April, marking the third straight month of decline in the overall customer base in austerity-crippled Spain, where one in four people is unemployed, the Spanish regulatory body says. 


"This crash for mobile phone operators has been especially notable in the prepay sector, which lost 297,984 clients," regulator Comision del Mercado de Telecomunicaciones says. 

Will U.S. Fixed Network Voice Connections Continue to Drop?

The latest report on U.S. fixed network voice connections by the Federal Communications Commission suggests that voice connections declined three percent between June 2010 and June 2011. That raises an obvious question: will number of fixed voice connections continue to drop, without end, to zero?


Some of us would argue that there is some stable number of connections, a non-zero number, that ultimately will be reached. How to encourage people to buy fixed network voice connections is the issue. "Value" is part of the equation. But some of us might argue that retail packaging is more important. 


Verizon Wireless "Share Everything" plans provide a key answer. Voice and text messaging are purchased as a basic part of the access service. No voice, no smart phone service. When you buy an automobile, you don't buy parts, you buy a car. Share Everything is the same sort of idea.