Sprint has introduced a web site called waitless.org that is intended to help you live life at “SprintSpeed.” Although the site has little to do with mobility, they are fun ideas. So, every week I’ll share one.
This one could really come in handy (no, I’m not offering to babysit):
The Law of Mobility talks about value increasing with mobility. The impact of this law is being felt because the barriers to building mobility in are being obliterated week after week. Here are examples of technology advances enabling this to happen:
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Now playing: Not The Joneses – Ashes To Ashes (Single Mix)
Apple made two announcements yesterday that don’t bode well for carriers that have committed to the iPhone.
The big announcement was the introduction of the iPod Touch. This device is basically an iPhone without the phone. It uses WiFi, runs Safari as a web browser, and includes all of the cool music, photo, and video applications that made folks drool for months between the announcement and availability of the iPhone. Since the iPhone currently only supports slow EDGE cellular data connectivity, most folks have used WiFi whenever possible to run these cool apps. The Touch also provides access to iTunes over the air, which was also announced for the iPhone yesterday (but “over the air” for the iPhone means over WiFi, not over EDGE, limiting the mobility value).
What made the iPhone such a highly desired product? It is an incredibly cool iPod. Just like the Touch (although the Touch offers more storage for your tunes). It is a mobility-powered Internet device. Just like the Touch. It features a super-cool multi-touch user interface. Just like the Touch. It is a passable phone with the challenges of a touch-screen-only keypad. The Touch forces you to carry two devices – a great music-player/Internet-device and a great phone.
Those (like my co-workers at Sprint) who couldn’t bring themselves to sign up with the exclusive iPhone carrier but dreamed for the music and Internet capabilities of the iPhone undoubtedly are rejoicing today.
The carriers that have given in to Apple’s unprecedented demands have got to wonder what the Touch means to them. Has the pipeline of customers dying to get off their current carrier just to get an iPhone just dried up? Has Apple confirmed that EDGE really is as bad as critics claim? Time will tell.
The second announcement of note is Apple’s dramatic $200 price cut on the iPhone. Most analysts interpret this as an indication that Apple is worried that they won’t hit their sales targets. Of course, this means that the exclusive iPhone carrier would also be falling behind in hitting it’s sales targets. Again, time will tell.
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Now playing: Echoing Angels – Let Go
More and more, the world around us reflects the growing assumption of the law of mobility. Each week we will track indicators of Mobility’s growing importance in our businesses, our lives, and our society:
Full list here.
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Now playing: Chris Taylor – What Do You Want
Mobility is a wonderful thing. As mobility gets built into all products and services, businesses need to learn how to both capture the power of mobility and manage the dangers introduced through mobility. Here are some examples of how the power of mobility is being applied to create competitive advantage:
Complete list here
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Now playing: Jon Buller – Psalm 150
In order to be winners in the new mobile era, businesses will not only need to capture the power of mobility, but also manage the danger. Highlighted below are recent examples of the danger of mobility and how some firms are beginning to manage it:
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Now playing: Shawn McDonald – Imago
Over the past several weeks, Sramana Mitra has taken a look at the device and carrier competitors that are trying to overcome the advances offered by the iPhone on AT&T’s network. I’ll briefly summarize her conclusions here, but it’s worth reading her complete posts.
The Device Manufacturers
She started with the companies trying to build a more compelling phone than Apple’s.
First up: Research in Motion: “RIM is the king of the converged mobile devices market for the enterprise or prosumers with over 9 million subscriber accounts. … RIM, as I expected, doesn?t seem to be hurting due to the launch of iPhone and it expects revenue in the range of $1.3-$1.365 billion and subscriber account additions in the range of 1.325-1.375 million for Q2 fiscal 2008. … The advantages the iPhone has over BlackBerry are many, the most important of them being the user friendly touch screen and Wi-Fi. … RIM is trying to maintain its lead in the enterprise market by adding media player and Wi-Fi functions in its latest products, Pearl and Curve. … For a while yet, I think RIM has an excellent positioning, and the overall convergence device movement should give them plenty of tailwind.”
Next: Nokia: “It won?t be too far fetched to say that today, Nokia is the Microsoft of the mobile devices industry. … On the other hand, Nokia has proven to be resilient and the experience of 2004 when it lost ground to Motorola?s Razr will help it address the iPhone challenge better. … Nokia has long been selling mobile devices through three business groups, mobile phones (eg: Nokia 6300, Nokia 5200, and Nokia 5300), multimedia (eg: Nseries), and enterprise solutions (eg: Eseries). With iPhone joining the fray, it is the multimedia series that is under maximum threat in the near term. In the longer term, there are question marks around the Symbian OS, which may not be sufficiently elaborate to shoulder the entire convergence device movement. Nokia?s Linux phone strategy, therefore, is something analysts ought to watch carefully.”
On Palm: “The hype around iPhones has put the spotlight on smartphones and Palm seems to have benefited from it as shown by the record high sales in the Q4 2007 of 750,000 units, a 43% increase compared to the previous year. … Overall, I am bullish on the convergence device market, and if Palm can get a couple of Linux based hit products out with Rubenstein?s strong execution orientation, (something Palm has consistently lacked so far), it still has a great brand to market them under. … In a nutshell, I?ve maintained that Palm either needs to come up with something impressive in the enterprise space, or go for a lower-priced emerging market killer app strategy.”
Finally, she closes with Motorola: “In my earlier post on Motorola, I had mentioned their need for a better product mix and a better position in the SmartPhone / Convergence Device segment. There were not many changes in Motorola?s product mix in the second quarter with just upgradings to the RAZR model. This over-dependence on its RAZR model has proved detrimental to the company and it has slipped to the third position in the mobile phone market behind Nokia and Samsung. … Motorola has a great brand and lots of experience to be a key player in the convergence device market which the iPhone has breathed new energy into. It will, most likely, have a CEO change with Ed Zander being replaced by someone more effective. At the moment, the company seems to be waiting for new leadership, and investor should too.”
Interestingly, although she only covered Samsung in her overview of component suppliers to Apple for the iPhone (Samsung provides 30% of the parts that go into the device), in a summary of device competitors, Sramana concludes with this observation: “Samsung is likely to become the iPhone?s most important competitor.”
The Carriers
Next Sramana moved onto AT&T’s competitors and how they are positioning against the iPhone. (Obvious disclaimer: I work for Sprint, an AT&T competitor.)
She started by reviewing how AT&T is doing post-iPhone: “Following the iPhone launch on June 29, AT&T activated 146,000 iPhone subscribers in the second quarter that included less than two days of sales. More than 40% of iPhone subscribers were new subscribers. … If not for the slow speed of its EDGE network, AT&T could expect more customers to line up for the iPhone and could perhaps have a smoother run up.? … The iPhone alignment gives them an opportunity to diversify their customer base from mainly local and long distance, to wireless. Especially with the iPhone, the newly acquired customer segment will be relatively high-end, thus, potentially offering some margin expansion headroom.”
She then moved on to Verizon: “In the quarter, Verizon added 1.3 million wireless customers, less than AT&T?s 1.5 million. The main reason behind this is that Verizon lost about 300,000 wholesale subscribers due to the bankruptcy of its reseller Amp?d Mobile. This is the first time since early 2006 that AT&T has outpaced Verizon. … The one advantage Verizon has over AT&T is its 3G network. Most of its customers would rather wait for an iPhone rival version that is 3G capable rather than shift to the slow EDGE network of AT&T. Verizon is a CDMA shop and there is no chance at least for five years that an iPhone version will hit its network. … With the lowest churn rate in the industry at 1.08%, Verizon would probably not lose a lot of its existing customers. … However, Verizon would need to come with an answer to the iPhone in the near future, as the convergence device movement gains ground. So far, I have not seen a compelling story on that from the Verizon camp, and that is worrisome. The low-end market segment, including rural, is likely to be significantly less profitable than a strong high-end, iPhone equivalent strategy.”
On Sprint: “For Q2 2007, Sprint saw an increase of 373,000 customers and its customer base increased by 5% from a year ago to 54 million. … Sprint has already an answer to the iPhone in the form of the Samsung UpStage, which saw strong sales during the quarter. Sprint might have turned around its customer losses during the second quarter but iPhone is sure to upset its delicate balance. With the iPhone hitting the market at the end of the second quarter, its effect on Sprint would be best measured in the next quarter. … Treading with cautious steps, investors should look into how the convergence device strategy shapes up, and how Samsung?s UpStage performs. As you know, I am very bullish on Samsung?s prospects as a competitor to the iPhone.”
Sramana closed her series with T-Mobile: “For the second quarter of fiscal 2007, T-Mobile USA reported 857,000 net new customer additions taking its total customer count to 27 million. … T-Mobile is quite vulnerable to the effect of the iPhone, with most of it users in the 18-24 age group. The iPhone is bound to be a hit amongst this age group and the new generation and could hit T-Mobile hard. … as is the case with all Apple deals, nothing is official yet, but the report says Apple would be launching the iPhone with T-Mobile in Germany, Orange in France and O{2 }in the UK. With such a deal with Apple, T-Mobile could compensate for its potential loss in the US. … Those carriers that have won key geographies would certainly have a leg up in understanding the convergence device movement, and T-Mobile is one of them.”
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Now playing: Jon Buller – Benediction
Labor Day bonus: GigaOm serves up “Five Facts About Google Phone”
The most convenient way that mobility is getting built into products is through the convergence into the cellphone of capabilities that previously existed as standalone products. That way, those products are now with you and available for your use whenever you need them wherever you go.
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Now playing: Turnbull – livin’ it here
Just a passing observation: This week I found myself, with about a dozen other Sprint executives, in a company location that most of us hadn’t visited before. Making the most of the time before the meeting started, about half the folks in the room had their laptops open on the conference room table, checking e-mail and generally being productive.
At the start of the meeting, our host graciously pointed out important facilities available for his guests. His last comment was to point out that Ethernet connections were available in the conference room. “All of the orange plugs should be active network connections.” At that comment, I noticed a couple of my co-workers glance in the direction he had pointed with obvious disdain for a wired connection.
Every laptop in the room was already well connected with mobile broadband cards.
Obviously, Sprint is ahead of most companies in outfitting it’s employees with EV-DO connectivity, but the transition from being desperate to find an Ethernet port to being completely liberated by mobility has come much more quickly than I ever would have imagined. Just a couple of years ago, I rejected a proposed offsite meeting location for a senior executive planning session solely because the room lacked sufficient network connectivity. Today, such a limitation wouldn’t matter.
Welcome to the revolution!
The Telco 2.0 team is running a new survey on Future Broadband Business Models. Everyone who participates gets a free summary of results. I’m impressed with how these guys are thinking about the future, and they seem to be well connected with the leading thinkers in the industry, so I, for one, am looking forward to hearing what they learn.
Here’s how they describe the survey:
Our Telco 2.0 hypotheses on future business models have grabbed the attention of many people in the TMT sector over the last 6 months or so. We?ve been running workshops and events with all kinds of players around the world to work out what it could mean in practice and what needs to be done to prepare.
Now it?s time to test these hypotheses more thoroughly, using the theory of the ?wisdom of crowds? ? i.e. a mass online survey of practitioners from around the world.
It directly addresses the $1.6 trillion question: Where?s the money in fixed and mobile broadband in the future?
The survey will help identify how money might flow across broadband value chains in 5 and 10 years? time, and how this might differ by region, and by fixed and mobile networks. We are looking to provide greater clarity about:
- How the fixed and mobile broadband industry could be structured in the future?
- What services will consumers value (and pay for) most?
- What will service providers and their partners/suppliers need to do to deliver and extract value from users?
In the survey we use the term ?Broadband Service Providers? (BSPs), by which we mean: any fixed or mobile operator offering high speed packet data services, including Internet access.
The survey mainly comprises multiple choice questions, with some optional open text boxes. You can leave your browser open and come back to it throughout the day if you wish.
There are eight short sections:
- Introduction & Hypothesis
- Your Areas of Expertise
- Prospects for existing ?Broadband Service Provider? business model
- Future of Voice
- Future of Video
- Future distribution models
- Future business models
- Winners and losers
The survey is supported by the GSMA, Broadband Stakeholder Group, Alcatel-Lucent, TelecomTV, and BT who are promoting this survey to their contacts in parallel to our direct efforts. A big thank you to them.
You can start the survey from here.
Background to the survey
Here?s a summary of the in-going hypothesis for those new to Telco 2.0:
Offering just voice, messaging, content, video entertainment and Internet access is not enough for sustainable growth in an IP-based world. In future there will be a wide range of new business and payment models which will assemble devices, applications, content and connectivity in new technical and economic ways. The wholesale markets will evolve greatly to support this.
Just as many distribution systems compete to deliver physical goods to consumers, the same will increasingly be true for online information goods.
A distribution system is the combination of a transport system (e.g. video-on-demand server, or a cellular radio network) as well as a payment system (e.g. IPTV conditional access and billing). Different systems tend to be good at delivering different types of content, be it valuable, time-critical, or bulky.
We believe there will be a fragmentation of the distribution systems for information goods over the next decade. This will have significant impact on business models for all Telco, Media and Technology players. The survey is intended to test these forecasts against the views of practitioners around the world.
You can read more about the thinking behind this research project here.
And, the link to the survey, one last time for those who are too busy to scroll up, is here.
