Carriers

Skpe Rising: Online and on the Handset

Consumer inhibitions against using VoIP are falling away rapidly, especially as call quality improves. Google recently acquired Gizmo5 to enable Google Voice to become a Skype-like calling platform. And Skype itself is making a big push (now as an independent company) to grow its paid services. I find myself making more and more calls from my PC via Skype Out.

I got the following email yesterday, encouraging me to use Skype on my mobile device:

Picture 23

Data is more important than voice for younger mobile users and it's becoming more that way across the board. Right now carriers don't have a data-only option and Skype on mobile devices is mostly about cheap international calling. However, if the availability of data only should change Skype might become a viable substitute for a mobile voice plan. Imagine: $15 - $20 per month for data (esp. 4G) and no voice plan. That would remove the need for my $99 unlimited plan.

Do you think the carriers will allow this scenario to come to pass? Um, no. Though I can still hope. 

Alternatively, if WiFi or high speed connectivity becomes nearly ubiquitious (e.g., WiMax or LTE), then I have a Skype account to do mobile calling from all my connected devices: iPod Touch, netbook, eReader or other smart non-phone mobile device.

Verizon and Motorola Bring Google Voice Search to Times Square

Google, Verizon and Motorola have sure developed a flair for the dramatic. According to this post on a site operated by the Android's leading triumvirate, you can use "just your voice" to "search Time Square without touching a single button."

The claim is a bit overblown. What they mean to say is that after pressing 10 buttons to tap out 888-DROID DO (888-376-4336), you'll be able to speak your query terms for interpretation by the speech recognition resources of Google Mobile Search. It's part of an advertising and promotional campaign whereby Verizon will use the digital billboards that light up time square to prompt passers-by to dial the toll-free number "search for practically anything" and then see the results illustrated on those digital billboards rendered in Google Maps.

According to this post in Silicon Valley Insider, the companies launched the service earlier this month to coincide with the general availability of Motorola's Droid in retail stores. They didn't take into account the Yankees' World Series Victory Parade, so it was sparsely attended, making it the perfect shake-down cruise for the service. On November 27 (Black Friday) the billboards will be up and operating at 6 AM and stay active until 3 AM the following morning. While it is touted as a promotion for all things Droid, it amounts to a highly visible showcase for speech-enabled, multimodal mobile search. It embraces spoken input of query terms and visual rendering of results. Now all we have to do is convince the general public that they don't have to book all the digital signage in Time Square to use their voice to get turn-by-turn directions on their mobile phones.

This story is also posted on www.opusresearch.net

___

Postscript: This kind of marketing and promotion is what voice needs to become mainstream. We'll see how sustained this type of promotion is; however, it's a very strong first step to generate word-of-mouth and PR around voice search. 

There's also more detail on the Google Mobile Blog. 

Droid Down to $120 in Dell Promotion

Another terrific promotion, Droid is now selling (with a new Verizon contract) for $120 in the Delll Mobility store, down from $199. This follows Amazon discounting of the Palm Pre and Pixi to $79 and $25 respectively, with new accounts. Best Buy is selling the Android HTC Hero and Android Samsung Moment for $99 with a new account or two-year contract extension.

These prices are quite amazing and will boost smartphone sales in the US in Q4. When the dust settles in January we'll probably see smartphones at near 45%-50% of handset sales in the US (for the quarter, not as a % of the overall market). The fourth quarter in the US market is likely to be a story about the iPhone, Android and RIM, with perhaps modest Palm sales and additional declines for Windows Mobile. 

Picture 45

Pixi on Sale: Do You Care?

Almost as good, though not as fast, as the Pre, the Palm Pixi went on sale this weekend. The device has an exposed keyboard and various skins that will appeal to a younger audience. The Pre has been discounted to $150 so that the Pixi is no longer significantly cheaper than its bigger sibling, as it once was.

The early buzz around the Pre and Palm has been almost totally obscured by Android and the Droid vs. iPhone thread. 

Still the Pixi should appeal to Sprint customers (chiefly women) looking to upgrade to a Web-friendly device from a feature phone. The NYTimes this weekend, to coicide with the Pixi launch offered a long feature on Palm:

A lack of traction could prove important. If the market will have room only for a few smartphone standards, Palm, as the smallest company, could well find itself struggling as the perpetual also-ran.

Jon Rubinstein, Palm’s chief executive who was the top Apple engineer and the first head of its iPod division, said in an interview that Palm does not need to be as big as its rivals to thrive. His former employer, after all, was long able to carve out a lucrative niche in the computer business.

“One of the key things we need to do as a company is to get to scale,” he said. “We need to bring on more carriers and more regions.”

Analysts expect that Palm will sell an upgraded version of the Pre with Verizon early next year and add AT&T later in the year. It sells phones in six countries and is steadily expanding to others in Europe and North America.

After Palm's new devices roll out to a few more carriers in the US and internationally, we'll see if the company is able to remain independent or becomes takeover bait for Microsoft or Nokia. Wall Street thinks that Palm will eventually be taken over. I would tend to agree . . .

SmarterAgent Now on 'All Carriers, All Devices'

As a kind of response to the AdWeek piece below, I would argue that real estate is a vertical that has really taken off in mobile; consumers are using smartphones to find listings and agents are increasingly getting mobile distribution through partners such as Trulia and Zillow.

SmarterAgent, which has been doing mobile for a long time, uses a white-label approach to help brokers and agents market to consumers. This morning the company announced that it has achieved near ubiquity on mobile platforms, devices and carriers:

Smarter Agent, a mobile technology company that provides GPS and MLS search applications to consumers and real estate agents, today announced general availability on all carriers, devices and platforms including key partnerships with Verizon Wireless and an application for the Android platform. Smarter Agent can already be found on wireless carriers Sprint, AT&T and T-Mobile, reaching traditional cell phones as well as the iPhone and BlackBerry devices, making Smarter Agent the only company to have robust downloadable real estate applications on all major carriers for all US cell phones.

Here are some datapoints provided by their PR people:

  • Smarter Agent gets a new user every 1.5 minutes (via download)
  • Users look at 40-50 properties per search session;
  • Users log-in to search 12 times per month;
  • 22% of users who download app hit the call to see button, call goes to Realtor

The idea is that the realtor prompts the user to download an app containing MLS listings that is associated with and branded by that realtor. Then when they "call to see" the desired property the lead goes to that realtor:

Smarter Agent’s mobile phone application allows consumers to view all available MLS listing information on homes for sale around them anytime, anywhere from the convenience of their cell phone, iPhone or BlackBerry. They can search for properties based on their GPS location, address, city, or zip code. The application shows them detailed MLS information, including price, beds/baths, taxes, estimated mortgage, maps and photos! When a consumer is ready to see a property they simply hit the “Call To See” button and they are routed directly to an agent. That agent could be you!

The business model is a monthly licensing fee. 

I asked SmarterAgent President Eric Blumberg whether agents "got" mobile and how the apps and platform were being received. As one might expect he said that both consumers and agents were very enthusiastic about mobile and about the SmarterAgent apps and tools. Although the remarks are self-promotional, I believe him. 

Picture 31

Free DA: the Market That Never Was

It's a mystery in a way that the free DA market simply hasn't materialized as we at one time expected. Logically it should have because these services represent a mass-market form of local mobile search and a seemingly perfect ad platform. But just as PPCall never really developed online (though now there's movement again) the free DA market is weak at best and already stroon with failures.

I was struck by a column from TMPDM's Gregg Stewart in which he exposed some directory assistance calling data (derived from the company's annual study with comScore on the local market). The data were collected in July (US Internet users, n=4,000). Stewart said the survey showed "23 percent of mobile users access directory assistance as part of their local search process." 

In our ealier research the data reflect that 20% of mobile users called DA, so largely consistent (with a smaller sample). In April, we found that the majority of mobile DA users (61%) call DA/411 "a few times a year."

In an 2007 survey Opus conducted, the percentage was basically the same: 61% called DA from a mobile phone "once every three months." Thus, for most, DA calling is relatively infrequent and that's not likely to change. If anything usage and DA calling frequency should decline as voice search and mobile Internet access grow. 

Here's what TMPDM and comScore found in July, 2009 about the distribution of calls from that 23% of the survey respondents who called DA from a mobile phone:

Picture 158

Source: TMPDM-comScore (July, 2009)

Below is the distribution from our most recent survey; note that traditional 411 is not a choice, so it's likley represented in "another 411 service" or "none of these." 

Picture 159

Source: Opus Research/Internet2Go (April, 2009) 

In both charts I don't believe that people are calling "800-Yellowpages" as much as they report. I think they're responding to what seems like a familiar brand. And many of the services (e.g., 411-Metro) in the comScore chart are now defunct. 

The free, ad-supported DA market at one time seemed very logical and held great promise. I had called it "local-mobile search for the rest of us." But the "rest of us" are buying smartphones, which largely emerge as a replacement for such services. Plus the per-use charge of conventional DA is an inhibitor for many, though not all, people. 

Anecdotally marketers I've spoken to have reported good ROI from use of 800-Free-411 but the volumes for any given category and city are low so it can only be seen as a supplement to other digital or mobile marketing efforts. 

In general the carriers seem to be neglecting their services:

  • 800-Yellowpages (AT&T)
  • 800-THE-INFO (Verizon) 

And the search engines (Google, Bing) are maintaining their services but not promoting or continuing to develop them. There is a significant role for "voice search" to play in the mobile world but it doesn't appear the primary locus of activity will be free DA services.

Google Pitches Droid to Homepage Visitors

As it did with the T-Mobile G1 when it launched -- and as it does with other major Google product announcements and introductions -- Google is promoting the Verizon/Motorola Droid. The phone is available today.

One thing that's interesting, in the second screen below, is how much Google is promoting voice search and speech-based navigation as benefits of the phone. Google provides voice search but not everything in terms of the device's speech capabilities. The voice output for the turn-by-turn directions is by a German company SVOX

Picture 57 

Click on the "Learn more" link below the search box and it takes users to this page, which in turn links to Verizon:

Picture 58

US Carriers: Who's on Offense/Defense?

Yesterday T-Mobile USA posted Q3 financial results. The bottom line is that the company lost post-paid customers: "T-Mobile USA served 33.4 million customers at the end of the third quarter of 2009 down slightly from 33.5 million at the end of the second quarter of 2009, but up from 32.1 million at the end of the third quarter of 2008."

Only AT&T and Verizon are doing (relatively) well. Sprint and T-Mobile continue to struggle. However both now have very competitive handset lines. T-Mobile was positioning itself as the Android carrier in the US. However that mantle has just been stolen by Verizon, which just released Motorola's Droid. 

The larger point is that all the Android and other handsets, including BlackBerry, are now widely available and largely neutralize one another. In other words, they're now largely retention tools for carriers. Only the iPhone remains a lure to customers to migrate to AT&T, for as long as exclusivity lasts. 

Then the question becomes: how do carriers compete once users can get almost any handset from any of the carriers? Price and proprietary software/experiences is the answer. However that didn't work so well for T-Mobile with the MySherpa (Geodelic) app. As I wrote earlier this week, Vondafone is trying something interesting with Vodafone 360. And I understand from a reliable source that Verizon has some other interesting things up its sleeve. 

Verizon can compete with its almost-as-good Droid and claims of network superiority. AT&T, for the time being, still has the iPhone. Sprint and T-Mobile must find new competitive stories to tell. For Sprint it appears to be about price, although the company hopes 4G will soon be part of its story. T-Mobile, which has suffered two bad PR episodes of late (lost data, service outage), is in the toughest spot of the majors. The company just lowered prices and may be forced to again to grab attention.

As we move into the holiday shopping season, we're likely to see lots of incentives and deals flowing from the various carriers (e.g., there's a rumor about AT&T offering an 8G iPhone 3GS for $99). Verizon and AT&T are likely to grab most of the attention if the offers aren't sufficiently powerful from Sprint & T-Mobile. If the latter two are unable to gain momentum in Q4, it will put considerable pressure on both to do something even more radical in 2010. 

End of Q3 major carriers US subscriber numbers: 252.3 million

  • Verizon: 89 million
  • AT&T: 81.6 million
  • Sprint: 48.3 million
  • T-Mobile: 33.4 million

Canalys Smartphone Sales and Share Data

Research firm Canalys put out Q3 smartphone sales and share data that tracks handset sales and market share for the major platforms and providers. Here's the top-line from the firm as well as their charts and figures:

Global smart phone shipments in Q3 2009 rose 4% year on year, slower than the 13% annual growth seen last quarter, and held back primarily by a 6% fall in EMEA. Shipments in North America were up 5%, but the APAC region saw a remarkable 26% rise after several flat quarters. 

Nokia retained its worldwide smart phone lead, with a share of 40% – slightly up on its year-ago position, but down almost 5% sequentially. RIM held onto second place with a largely unchanged (compared to Q2) share of 21%, while Apple reached a new high of 18% share in third, significantly up from the 14% it held in Q2 as supply of the iPhone 3GS improved in many countries. HTC retained its fourth-place position with 5% share.

Looking at the market by operating system, Symbian’s overall lead shrank as its share fell to 46%, ahead of RIM and Apple. Microsoft remained in fourth with its share dipping slightly below last quarter’s previous low point of 9%. The proportion of smart phones running Google’s Android OS climbed to almost 4%, from just under 3% in Q2.

Picture 58Picture 57Picture 59

Compare data from:

Is Vodafone 360 a Model for Other Carriers?

In this new era of branded handsets and OEM app stores carriers are having to scramble to figure out how to remain relevant to users and prevent connectivity from becoming a pure priced-based commodity. Several US carriers, Sprint, AT&T and Verizon, have all anounced apps stores and are courting developers. I'm very skeptical that these app stores will be very successful among smartphone users (given the competition from the OEM app stores); however I could be wrong.

I think there is an opportunity for carrier app stores among lower-end phones. (See also Microsoft's OneApp, along these lines.)

In the UK Vodafone, minority owner of Verizon Wireless, has officially launched Vodafone 360, a multifaceted service that offers social networking apps/tools, photo tagging/sharing, online backup and enhanced mapping. Will this turn out to be like "bloatware" on PCs or will it be a valuable suite of services that prove compelling and "sticky" among users?

he group communication aspects of the service could prove to be quite popular. Of course it all depends on how well these things work in practice. 

 Picture 10

Vodafone is very aggressively marketing 360 across London and chiefly emphasizing the social elements of the service. The marketing and "value proposition" are not unlike the social software layer on the Motorola CLIQ/DEXT (through Orange in the UK). 

If the Vodafone 360 service proves to be a hit it could be something of a model for other carriers -- value-added services built around contacts, with a PC tie-in -- which must be creative, even experimental, to now avoid the "dumb pipe scenario."

Smartphones & Carriers: Who Is the Enemy?

The wireless carriers, at least Verizon and AT&T in the US, are making lots of money and growing their already massive subscriber bases. And all of them are racing to put out more and more Android phones. But the one laughing all the way to the bank is Google. 

Benchmark VC Bill Gurley offers an interesting and reverential post on Google's recent introduction of Navigation and its potentially "disruptive" effect on the navigation/GPS market. It's disruptive effect is already is evidence. But tere was what caught my eye and attention in Gurley's post in particular:

Google’s brilliance doesn’t stop there. It is hard not to have been surprised by the rapid rise in recent buzz surrounding the Google Android Smartphone OS. When I asked a mobile industry veteran why carriers were so willing to dance with Google, a company they once feared, he suggested that Google was the “lesser of two evils.” With Blackberry and iPhone grabbing more and more subs, the carriers were losing control of the customer UI, which undoubtedly represents power and future monetization opportunities. With Android, carriers could re-claim their customer “deck.” Additionally, because Google has created an open source version of Android, carriers believe they have an “out” if they part ways with Google in the future.

I then asked my friend, “so why would they ever use the Google (non open source) license version.”  Here was the big punch line – because Google will give you ad splits on search if you use that version!  That’s right; Google will pay you to use their mobile OS. I like to call this the “less than free” business model. This is a remarkable card to play. Because of its dominance in search, Google has ad rates that blow away the competition. To compete at an equally “less than free” price point, Symbian or windows mobile would need to subsidize. Double ouch!!

 Once again:

With Blackberry and iPhone grabbing more and more subs, the carriers were losing control of the customer UI, which undoubtedly represents power and future monetization opportunities. With Android, carriers could re-claim their customer “deck.” 

This carrier perception is simply wrong wrong wrong. Although Android OEMs and carriers don't have to build or sell "Google experience" devices, that's where the competitive value and appeal of Android resides right now. 

All these Android devices put Google front and center and help build Google's brand and mobile search volumes, even as they may be helping companies such as Motorola regain its stability in the device market. 

The carriers have lost control of smartphones, never to regain it, notwithstanding all the hoopla about carrier app stores. Android is no different or a better friend to them than the iPhone or BlackBerry despite the abstract capacity to manipulate the stack and UI. Their relationship to the end user is increasingly about the monthly bill and almost nothing more.

Sprint Still Continues to Feel the Churn

Sprint is in a much better position today than it was a year ago. Agressive pricing and better handsets make the company more competitive than it was when it was losing a million customers a quarter. It continues to lose subscribers but not quite as many. Earlier today US carrier Sprint announced third quarter revenues.

Here are some of the highlights: 

  • The company served 48.3 million customers at the end of the third quarter of 2009, compared to 48.8 million at the end of the second quarter of 2009. 
  • This includes 33.6 million post-paid subscribers (25.0 million on CDMA, 7.8 million on iDEN, and 870,000 Power Source users who utilize both networks), 5.7 million prepaid subscribers (5.2 million on iDEN and 500,000 on CDMA) and 8.9 million wholesale and affiliate subscribers, all of whom utilize our CDMA network.
  • For the quarter, net retail subscribers declined by a total of 135,000 and net wireless customers declined by approximately 545,000, including net losses of 801,000 post- paid customers – comprising 271,000 CDMA and 530,000 iDEN customers (including a net 64,000 customers who transferred from the iDEN network to the CDMA network). The company gained a net 801,000 prepaid iDEN customers, offset by net losses of 135,000 prepaid CDMA customers.  
  • Wireless Churn: Prepaid churn in the third quarter of 2009 was 6.65%, compared to 8.16% in the year-ago period and 6.38% in the second quarter of 2009.  The year-over-year improvement in churn is due to increased subscriber additions related to our national Boost Monthly Unlimited offering. 

Sprint has just over half the number of customers of Verizon. The company is competing on price for unlimited plans and more broadly with its unlimited mobile-to-mobile calling.

Having two Android handsets and the Pre makes it somewhat less vulnerable to consumer handset-related defections. But it will be difficult for Sprint to win post-paid customers going forward given how competitive the handset market has become. It may be possible to gain some customers from T-Mobile, which is increasingly battling with Sprint to be the low-cost 3G carrier. However Sprint's low-cost, pre-paid Boost unit will likely continue to see success among price sensitive consumers and potentially grab subscriber wins from smaller regional rivals. 

Sprint actually has the best 3G network among the major US carriers and should have access to 4G through Clearwire sooner than Verizon and AT&T can offer LTE. However it has failed to successfully market its network as a competitive differentiator. Its brand itself has been tarnished by past micues and previously bad customer service and the weakness of the brand remains a problem. 

Strongest Android Device Yet, Droid Arrives

Coinciding with the launch of Google Navigation, Motorola and Verizon have formally announced the Droid handset -- apparently just the first of many Android based handsets from Verizon under the "Droid" umbrella (all run the 2.0 Android software). The subsidized price is $199, the de facto "ceiling" for smartphones now. From the press release out this morning:

With DROID by Motorola, you can:

  • Zip through the Web: Access the Internet at 3G speeds via the nation’s largest and most reliable 3G network or from any Wi-Fi hotspot.  The multi-window HTML browser with a massive processor delivers the Web the way you expect.
  • See it all in cinema-style: View the Web, e-mail, Google Maps™, videos and more in widescreen on a brilliant 3.7” high-resolution screen.  Boasting a width of 854 pixels to reduce the need for side-to-side panning and more than 400,000 pixels total, DROID has more than twice that of the leading competitor.
  • Run multiple applications at once: Customize your DROID with thousands of applications and hundreds of widgets available on Android Market™.  Toggle back and forth between up to six applications at a time to juggle the universe and your apps.
  • Perform Google Search™ at the speed of sound: Simply tell DROID what you’re looking for using voice-activated search, and it will serve up Google search results based on your location.  If you want more, simply type what you’re looking for into the search bar on the home screen and DROID will also search content on your phone, such as apps and contacts, and the Web. 
  • Capture moments: Snap digital camera-quality photos with a 5 megapixel camera loaded with the works, such as a dual-LED flash, AutoFocus and image stabilization, or capture your friend’s antics in 16 million colors with DVD-quality video capture and playback.  Store it all on the included 16 GB memory card, so you always have it on hand.
  • Multi-task like a master: Keep tabs on all your messages with integrated Gmail™ and Exchange e-mail pushed directly to you, but don’t let them get in your way.  With the handy Android notification panel, go straight to the message or simply ignore it, and get back to the task at hand.  And, a smart dictionary learns as you type and automatically includes your contacts.
  • Get where you need to go with Google Maps Navigation (Beta): DROID is the first device with Google Maps Navigation, providing turn-by-turn voice guidance as a free feature of Google Maps.  It’s powered by Google and connected to the Internet. Use voice shortcuts and simply say “Navigate to [your destination],” and you’ll be on your way.  See live traffic, use Street View or satellite imagery to view your route, and get access to the most recent maps and business information from Google Maps without ever needing to update your device.

Pre-loaded Applications and Enhancements to Google Mobile Services:

  • Google Maps: With layers in Google Maps, view geographic information, such as My Maps, Wikipedia, and transit lines, right on the map.
  • Gmail: Multiple accounts support and undo for common operations.
  • YouTube™: One-touch recording and playback from homescreen widget or app, one-touch sharing with friends, and the ability to view your own uploaded videos and high-resolution videos.
  • Google Talk™: Easily switch between chats, search your chat history, and preview pictures and videos sent by links.
  • Android Market: Browse and download applications created by third-party developers.
  • Calendar: Ability to see who has R.S.V.P.’d to your meeting invitations.
  • Facebook: Syncs Facebook contacts to your address book, and a live widget gives the ability to update status and view latest updates from friends.
  • Amazon MP3 Store: Download the latest tracks over the air.
  • Verizon Wireless Visual Voice Mail: Delete, reply and forward voice mail messages without having to listen to prior messages or voice instructions. 

____

Related: previews/reviews:

Opera: We Save Consumers $8 Billion per Year

Opera has released its monthly State of the Mobile Web report for September. This month's report is focused on the Russian-led Commonwealth of Independent States. The company is also highlighting how its Opera Mini server-side compression of data/sites speeds up the mobile Web and saves consumers money on data charges (unless you're on an unlimited plan of course).

Here are some of the data and findings from the report:

  • In September 2009 more than 35.6 million people used Opera Mini
  • Those 35.6 million people viewed 15 billion pages in September 2009 . . . On an average day, Opera Mini users view 500 million Web pages on their phones.
  • Opera Mini users generated nearly 227 million MB of data for operators worldwide in September 2009 . . . Opera Mini is compressed up to 90%, meaning Opera Mini servers processed up to 2.1 petabytes of data this month.
  • Users in the top 10 countries save up to 672 million USD per month, or over 8.1 billion USD per year.
  • On a monthly basis, users in the United States and the United Kingdom save the most money using Opera Mini, based on their usage and the average cost of browsing (per MB).

 Picture 5Picture 4Picture 6

One thing that's great about the data Opera provides is that it reflects a part of the market that typically isn't captured by all the smartphone focused reports.

Note Yahoo's gains in the UK and US, especially the US. Also in the US most of the top ten handsets are BlackBerry, which offer a generally poor mobile Web experience today. RIM has promised to change that "within a year." We'll see and we'll see how that impacts Opera usage in the US. However in the Windows Mobile smartphone we demo'd (HTC) Opera was pre-installed as was IE. It's probably safe to say that Opera's brand is strong in mobile than on the PC. 

For additional data and information on more countries you can get the full report here

T-Mobile's 'Even More' Aggressive Pricing

Forget the app stores, for carriers it's becoming all about the price and the pipe. Once Android is available across the board and the iPhone cometh to other carriers what will matter is how cheap the plan is and how fast and good the coverage is.

Now that T-Mobile is no longer the exclusive Android carrier how does it compete? It competes by offering very aggressive pricing and flexible plans that will cause some problems for pre-paid carriers and for Sprint. Why not AT&T or Verizon? People love the Verizon network, falsely believing it to be the best in the US, and AT&T is still the only iPhone carrier. But Sprint and T-Mobile, which had once looked at buying the number three operator, are in an intensely competitive battle around price. 

Here are the new T-Mobile plans:

Picture 49

Picture 50

Sprint had been able to claim the lowest-priced unlimited deals vs. AT&T and Verizon. In addition, it also introduced unlimited mobile-to-mobile calling for free, regardless of network. However the T-Mobile plans beat it by at least $20 per month for the unlimited individual offering and by $50 on the unlimited family plan. 

I suspect Verizon and AT&T won't respond to this feeling secure for the moment in their respective competitive positions; however Sprint will be forced to respond.  Good news for US mobile consumers, bad news for operators.

Will 2010 Be the Year of 4G?

With Verizon saying that it will be rolling out LTE to 25 to 30 markets in the US next year, and Clearwire and partners pushing to get more WiMax coverage we're entering a new period of coverage and mobile network speed -- a new network arms race of sorts. Earlier this week Clearwire, Comcast and Sprint announced three additional 2009 cities for 4G deployment:

Clearwire Communications [ ] Comcast [ ] and Sprint [ ] today announced plans to launch their respective 4G mobile Internet services in additional cities in the fourth quarter of 2009. Each of the companies will offer 4G under their own 4G brand.

Clearwire, Comcast and Sprint will each launch commercial 4G service in Philadelphia in the next several weeks with official launch events and retail store openings to follow. In November, Clearwire, Comcast and Sprint will begin sales in Chicago. All three providers will begin selling in Seattle/Tacoma area in early December. Consumers and businesses should expect to see additional network expansions throughout these cities, and a wide-range of independent marketing and advertising initiatives.

The full list of cities to be WiMax-enabled by the end of 2009 under one of the Clear-related brands include:

Atlanta and Milledgeville, GA; Baltimore; Boise; Chicago; Las Vegas; Philadelphia; Charlotte, Raleigh, and Greensboro, NC; Honolulu and Maui, HI; Seattle and Bellingham, Wash; Portland and Salem, Ore; and Dallas/Ft. Worth, San Antonio, Austin, Abilene, Amarillo, Corpus Christi, Killeen/Temple, Lubbock, Midland/Odessa, Waco and Wichita Falls, Texas. 

It's a strategic and PR blunder not to include the SF Bay Area, where much of the tech coverage originates. But beyond that this "arms race" should be good news for consumers, offering greater speed, the promise of one bill for home and "on the go" access and intensifying competition for consumers. 

Available 4G citywide coverage means that, for example, one could use an iPod Touch with a Skype account ($2.95 for unlimited North American calling per month) instead of having a conventional mobile phone plan. It could also mean that all the forthcoming tablets that are compatible with the technology could be potentially be used as access devices (where Web browsing is enabled). 

Hotspot networks may be largely marginalized as 4G coverage spreads, unless they're tapping into the same networks and offer competitive plans. 

Samsung Intrepid Is WinMo-Tellme Integration Device

I was apparently under the incorrect impression that Tellme would be more deeply integrated into Windows Mobile 6.5 across the board. However I was corrected by Tellme that the deeper integration in fact exists but only on a single device: the Samsung Intrepid, which offers a dedicated Tellme button. We haven't tried the phone but PC World was very impressed:

The Sprint Intrepid has a dedicated button for the TellMe feature. Press it, and you can start a text message by saying "text" and the contact's name. Then, you can just dictate your message, and the phone will transcribe it. You are, of course, able to check it before sending the message. The search function is even easier, as you can just say what you're looking for, and in one step the phone initiates a Bing search.

Click on the image below to see a video demo:

Picture 36

It's going to be very difficult to get all WinMo OEMs to put a hardware button like this on the phone, but Microsoft should try. All Android phones have a dedicated search button that launches Google. 

Tellme and the deep, integrated voice control that it offers on this Samsung device is the kind of strategic differentiator that gives Windows Phones something to crow about and promote to end users. It will also boost Bing. Microsoft should "bake" Tellme much more deeply into Window Mobile 7.

We'll see what happens.

___

Related: Microsoft CEO Steve Ballmer deflects Windows Mobile 6.5 criticism (with Gizmodo video):

"At the end of the day, it doesn't really matter what the critics say, it matters what the customers say."

 

Once AT&T Exclusivity Ends, Where Will the iPhone End Up?

I didn't listen to the AT&T earnings call this morning but someone at Fierce Wireless did and had this to say about the potential end next year of AT&T's exclusive iPhone deal in the US:

AT&T Mobility chief Ralph de la Vega implied that may indeed be true. This morning during the company's conference call with analysts, de la Vega said that even if the company loses its exclusivity, he believes AT&T will still have an advantage because the carrier supports an iPhone that uses HSPA 7.2 network technology, which AT&T is in the process of deploying. "The iPhone will work better on our network than on anyone else's network," he said.

Apple's exclusive deals have ended in the UK and Canada. So the US is the only major market (maybe save Germany) where an exclusive carrier relationship still exists. The iPhone has been a mixed success for AT&T; people have switched to get the device but bashed AT&T for poor service and network speeds.

Matt Marshall at VentureBeat sings the praises of the new Verizon-Google-Motorola Droid, a phone he hasn't yet held in his hand, and says goodbye to the iPhone:

A new phone called Droid is about to hit the market at the end of October, and it will likely have the glitz and power to bury the iPhone. So I’m canceling my iPhone contract today.

Methinks Marshall speaks too soon; I could of course be wrong but "iDon't" think the Droid will "bury" the iPhone. I think it will keep people at Verizon and draw some people perhaps away from Sprint or T-Mobile (although I'm not sure about that either given their respective Android handsets). Marshall craves the physical keyboard of his BlackBerry; Droid has a slide out keyboard. This suggests RIM may have some trouble on its hands with Droid competition (in addition to the iPhone).

Certainly from a brand identity perspective, if not also from a user-experience perspective, the iPhone has emerged in a category by itself. The question now is: where in the US will it emerge after the AT&T agreement ends? Sprint? T-Mobile? Verizon? Those are the choices. Will they all have the phone? We'll see what happens but with wider iPhone availability on other carrier networks we're likely to see more, not less, of this:

Picture 86

AT&T Q3: 3.2M iPhones Activated, 53% of Postpaid Subs Now Have Data Plans

US carrier AT&T reported Q3 revenues this morning. A few days ago Apple said that it had sold 7.4 million iPhones in the quarter; AT&T activated 3.2 million of them. AT&T now claims 81.6 million wireless subscribers. Traditional wirelines continue to decline. 

Some highlights from the earnings release:

  • Third-quarter revenues totaled $30.9 billion, net income attributable to AT&T was $3.2 billion
  • 2.0 million increase in total wireless subscribers — highest third-quarter net gain in the company's history — to reach 81.6 million, up 6.7 million over the past year; 1.4 million retail postpaid wireless net adds in the quarter
  • 53% of postpaid subs now have data plans
  • Postpaid wireless subscriber churn of 1.17 percent and record-low total subscriber churn of 1.43 percent 
  • 4.3 million postpaid 3G integrated wireless devices added to AT&T's network, the largest quarterly increase in the company's history; integrated device growth included 3.2 million iPhone activations, also the company's largest quarterly total to date (integrated devices are handsets with QWERTY or virtual keyboards in addition to voice functionality)

Picture 97

Picture 98

Apple Earnings Call: iPhone Comments

The following are excerpted iPhone-related comments from the Apple earnings call transcript (Seeking Alpha). . .

Apple CFO Peter Oppenheimer:

We are thrilled to have sold almost 7.4 million handsets in the September quarter. That’s a new company record and an increase of 7% over the prior September quarter when we increased channel inventory by 2 million handsets following the introduction of the iPhone 3G and the dramatic expansion of geographic distribution. iPhone sell-through in the quarter increased 38% year over year . . .

We are looking forward to selling iPhones in China beginning later this month as this very large market represents a great opportunity to expand iPhone's reach even more broadly. We also plan to expand our carrier relationships in the U.K. and Canada.

The Apps store continues to be an unparalleled success, with over 85,000 apps available and over 2 billion customer downloads to date, including over half a billion downloads in the September quarter. In addition to adding more apps at an amazing pace, we have continue to enhance the Apps Store experience with iPhone OS 3.1 which includes new features such as genius recommendations and a streamlined way to organize apps within iTunes.

Recognized revenue from the iPhone handset sales, accessory sales and carrier payments was $2.3 billion during the quarter compared to $806 million in the year-ago quarter, an increase of 185%. The sales value of iPhones sold during the quarter was $4.5 billion.

Question (multiple carriers, pricing changes):

[If] you start to go to multiple carriers can you talk a little bit about the pricing of the phone when you go from exclusivity to multiple carriers? And obviously, not specific but any sort of color we can have in terms of pricing dynamics change on the phone from you to the carrier?

COO Timothy D. Cook:

Our pricing is confidential . . . so it’s not something I could comment on in detail but generally speaking from markets where we’re already selling I would not expect to see a wholesale price difference as we bring on other carriers. However, the end user price is really set by the carriers themselves so you may or may not see a street price difference.

Question:

So when you go from exclusive to multiple carriers, you wouldn’t necessarily see change in pricing that you are charging the carrier? Is that correct?

COO Timothy D. Cook:

That’s correct.

Question (competition for the iPhone):

There’s a lot of obviously wannabes that are coming to market in the season, particularly Android and many of them are offering touch screens and richer browsing and media and app stores and are being given carrier support. How do you think about maintaining your momentum and differentiation amidst that kind of environment?

COO Timothy D. Cook:

Well, Mike, we feel great about how we ended the fiscal year with selling 7.4 million, as Peter talked about in the preamble. And that put us over 20 million -- almost 21 million for the fiscal year, which was up 78% from before. And so we have significant momentum.

Also when you look at the ecosystem that we’ve got with iTunes and the Apps store with the Apps store having over 85,000 apps, which is a country mile more than anyone else, plus the very strong product pipeline that we have, we feel very, very good about sitting up and competing against anyone.

Frankly I think that people are really just trying to catch up with the first iPhone that was announced two years ago and we’ve long since moved beyond that.

Question (iPhone enterprise performance and Europe):

I have a question on I guess the enterprise business. . .  [On] your iPhone business, any color you can share with us, the break-out between consumer and enterprise? At least qualitatively and how that has been trending?

COO Timothy D. Cook:

The iPhone is either being deployed or being piloted in well over 50% of the Fortune 100 and from an international point of view, if you look at Europe, this is true in about 50% of the Financial Times 100. And so we feel very good with the progress that we've made since the iPhone 3GS was announced.

Also, another very key market for us, that some people call enterprise, is that over 350 higher-ed institutions have approved iPhones for their faculty, staff, and students. And in addition to both of these, we continue to be very happy with our sales in the government arena.