AOL Pushes the Gas Pedal on Mobile

AOL at one time said it was going to help consumer-users adopt the mobile Internet in the same way it helped get millions online on the PC. The company bought mobile ad network Third Screen Media in 2007 and had an ambitious mobile "platform" initiative. But the seismic shifts at the company over the past two years, the personnel changes and the spin out of TimeWarner caused most of AOL's mobile momentum to slow or stop entirely.

Third Screen was rolled into AOL's Platform A and largely disappeared. So did the platform effort. But there are now a number of signs that AOL is building momentum in mobile again. The most recent of these was yesterday's announcement of the acquisition of mobile development shop Rally Up. Characterized by the Associated Press as "a location-based social networking service," the acquisition is less about any of the specific mobile applications the nine-person startup has built than acquiring the talent and expertise they will bring to AOL.

It also marks the beginning of a new "mobile first" approach that will build products exclusively for the mobile market:

Mobile-first marks a new approach to the mobile market at AOL. For the first time, AOL mobile applications will consist not only of mobile versions of its popular desktop and web offerings, but also will include all-new products that launch first on mobile devices. The infusion of mobile product development talent provided by the Rally Up team will provide AOL with an additional spark to ignite its mobile-first initiatives.

Major portals and publishers online will absolutely need to extend their products to mobile as many are now doing. But mobile is a unique medium that demands specific attention and simply "mobilizing" portal or publisher content won't always work.

Apple's 'On the Grid' Highlights LBS Apps

Apple has collected about a dozen location-based apps in a new featured iTunes area called "On the Grid." While there are many more apps that offer location as a central element of the experience -- yellow pages apps for example or various cityguides -- the bias appears to be  toward check-in style apps.

Apple should recognize that location and check-ins are not entirely synonymous.  And I would expect the selection to grow over time. Here's what's there now:

Third party sites that monitor the app store recently indicated that it now exceeds 250,000 apps from more than 50,000 developers. Here's the distribution of apps from 148Apps.biz. Somewhat surprisingly books has taken the top spot from games.

Intuit GoPayment Adds Smartphone Credit Card Swiping

Mobile consumer payment solutions are starting to emerge and proliferate. The flip side of that development is small business smartphone-based credit card acceptance and processing. Many people are familiar with Square and its smarpthone credit-card swiping hardware. This enables anyone -- SMB or consumer -- to easily accept a credit card on the spot with a smartphone.

Intuit has a small business payments platform (GoPayment) that integrates with QuickBooks. It's really a PayPal competitor. The product has been in the market for a year. Fees are $12.95 a month, plus a 1.7% to 3.7% commission and $0.30 to $0.34 per transaction fee. Now Intuit has teamed up with Mophie to offer an intelligent case (and software) that enables the iPhone -- like Square -- to swipe a credit card. (Previously credit card numbers were manually keyed in.)

Per the release:

The speedy new Intuit Merchant Account application process is designed to let small business owners easily and quickly apply and be approved to start processing credit cards. A user can apply from the GoPayment App, online or by calling Intuit right from their iPhone.

By adding the sleek, clip-on mophie marketplace card reader, merchants can save time by securely swiping credit cards instead of entering numbers by hand. After swiping the card, data is immediately encrypted using Intuit’s industry-standard security methods.

Customers authorize the payment by signing their name on the iPhone touch screen. The merchant can then send them an e-mail or text receipt. GoPayment processes the credit card within seconds and funds are deposited into the businesses’ bank account.

Square doesn't require monthly fees but takes a higher percentage of the transaction than Intuit GoPayment. The decision of which system to use will be driven by the volume of credit cards being processed and the average transaction values. QuickBooks integration may also be determinative for some. 

TappLocal: Another New Local-Mobile Ad Network

The sleepless bloggers at TechCrunch profile TappLocal, a new LBS entrant that reportedly wants to build a local-mobile ad network. It's partly or largely directed at SMBs and it sounds a little like Foursquare meets Placecast:

TappLocal uses their backend to create a geofence around certain partner venues. When a user crosses that boundary and happens to be using one of the partner apps, a deal indicator will pop-up. A quick click on this area will open a larger area explaining exactly what the deal is. Simply click one more time to verify you wish to use the deal, show it to the store that it’s valid at, and you’re good to go.

The company has two "franchises": nearby, proximity marketing and time-sensitive deals:

Hyperlocal means in closer proximity than just local. Generally this is measured on a more granular basis such as a neighborhood, intersection, or even meters. TappLocal uses advanced GPS technologies, mobile smartphones, and a network of mobile applications to target users as closes as +/- 3 meters* to visit your business. 

This platform allows you to instantly notify users, in real-time, of a sale to move perishable items, or to instantly get customers in your door. Imagine being able to put a time-sensitive deal, selling unsold pastries for half off 2 hours before closing, or half off drinks to fill your business with customers from 3:00-5:00pm. Our network would send an alert to all users in the metro-region alerting them that for the next 2 hours they can get your pastries half off, or from 3:00-5:00pm they can get drinks half off. Furthermore, you have complete control over the offer, so it can be whatever you like.

To the extent that TappLocal is trying to attract SMBs it will encounter the familiar -- or perhaps not so familiar to them -- challenges of educating the market and then signing up advertisers. 

There are a range of other local ad networks online and/or in mobile. Here is a partial list:

• Chitika (LAX)
• CityGrid (IAC/Citysearch)
• Google
• Groupon/LivingSocial/daily deals
• Local Ad Xchange 
• Marchex (calls)
• Where 

All the major mobile networks offer geo-targeted ads as well.

My guess is that TappLocal will "backfill" with inventory from these networks as it tries to build its own inventory. But again, it will encounter major challenges in acquiring small business advertisers.

Report: GMail to Soon Offer VoIP Calls

We've been waiting for Google to implement its Gizmo5 acquistion and turn Google Voice into a true VoIP solution and Skype competitor. However CNET is reporting that Google may be about to offer direct calls (to phones) through GMail:

Google could be ready to turn Gmail into a communications hub by adding the ability to make phone calls from the Google Chat interface.

CNET has learned that Google is testing a Web-based service within Gmail that will allow users to place phone calls from their in-boxes. It's launched from the Google Chat window on the lower left-hand side of a Gmail page and allows users to place and receive calls from within their contacts through a user interface that strongly resembles the one used in Google Voice.

At some point (apparently pretty soon), whether through GMail or Google Voice, Google will make it possible to place and receive calls directly rather than having to rely on an underlying phone number (landline or wireless). That's the moment when Google becomes a carrier/telco. Right now Google Voice is effectively a call-connection service.

(credit: CNET)

The image above suggests the system might allow free calls to landlines and mobile phones. Quality is always an issue with VoIP but I would imagine this would become an immediately popular service.

It would also allow all kinds of connected non-phone devices to become phones, in the way that Skype does too. 

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Update: Google announced this feature this morning: 

Calls to the U.S. and Canada will be free for at least the rest of the year and calls to other countries will be billed at our very low rates. We worked hard to make these rates really cheap (see comparison table) with calls to the U.K., France, Germany, China, Japan—and many more countries—for as little as $0.02 per minute.

Dialing a phone number works just like a normal phone. Just click “Call phone” at the top of your chat list and dial a number or enter a contact’s name.

Google will also be promoting Google Voice calls via UK-style red telephone kioks at various sites around the country. 

Consumer Reports Publisher Warns on Mobile Payments

Perhaps as more confirmation that the era of mobile payments is finally upon us the publisher of Consumer Reports is offering warnings and best practices to consumers. The publisher, Consumers Union, says that people should link mobile payments to 1) credit cards, 2) debit cards and 3) carrier bills or pre-paid cards in that order for maximum protection and recourse should there be any fraud or disputes.

As Consumers Union explains, credit cards offer consumers the most legal protection, while carrier billing is the most risky: 

[W]hile mobile payment technologies may offer a convenient new way to pay for goods and services, consumers could be at risk of losing money when mistakes are made by merchants and processors or as a result of fraud, according to Consumers Union, the nonprofit publisher of Consumer Reports . . . 

Federal law protects consumers in the event that their credit card or debit card is lost, stolen or misused. But current protections are badly fragmented and don't apply to all new types of payments . . .

If mobile payment transactions are backed by a credit card and appear on the credit card bill, then consumers are entitled to all available protections.  If the transaction amount is deducted from the consumer's deposit account with a financial institution like with a debit card, it should receive the same protections as any other electronic fund transfer.  This means consumers receive a legal right to get back money for errors and theft, but not for a dispute with a merchant about the goods and services.

However, if the transaction is funded by a prepaid card, even the protections for unauthorized use may be missing, and there also will be no legal guarantee of protection in the event of a dispute with a merchant.  If the payment service is provided directly by the mobile carrier . . . the product might escape consumer protections entirely.  If the cell phone company asks the consumer to make a prepaid deposit to the phone company to cover future charges, protections also will be missing unless the contract provides them.

Depending on how the forthcoming mobile carrier payments systems are structured this type of warning to consumers -- if widely publicized -- could harm or even doom their competitive chances vs. traditional credit card issuers, PayPal (if tied to a credit card) and iTunes. 

Era of Mobile Payments Almost Here

After many years of discussion it appears that mobile payments will finally break through in the US in 2011. The SF Chronicle offers a nice roundup of some of the mobile payments initiatives going on, focusing on near-field communications and a company called Bling Nation:

Bling Nation, a Palo Alto startup founded in 2007, is among the furthest along in this emerging field, with more than 1,000 retailers nationwide accepting its payment system. The company provides so-called Bling tags, or small stickers, that affix to the back of a mobile phone and transmit data using a wireless standard known as Near Field Communication.

When users tap the tag on a proprietary reader at participating retailers, it pulls money from their PayPal account. For security, users have to enter a personal identification number for purchases over a certain amount, or when transactions occur at an unusual frequency or location.

Here are the major existing and potential mobile payments contenders in the US market:

• Visa (and Mastercard)
• PayPal (eBay)
• Apple/iTunes
• Verizon, AT&T & Discover (carriers + payments processor)
• Others: Boku, Zong, Square, Bling Nation, Amazon potentially 

As the article explains Bling Nation's appeal to merchants is lower fees vs. traditional banks/cards. It then hopes that merchants will proselytize and evangelize the system to consumers. Companies in Bling Nation's position typically face the proverbial "chicken and egg problem." Smaller players must often build merchant and consumer acceptance for their service at the same time, like Tabbed out or Square. Bling itself has reportedly built some of that scale with merchants. 

Successful smaller companies, as measured by relative scale, will be acquired in the near term. Mobile payments will be a kind of "clash of the titans" ultimately, where size and scale will matter significantly. There can be three or maybe four major players that can co-exist and succeed in the market. However Visa and the carriers are unlikely to offer anything truly innovative in terms of user experience or merchant discounting. So it's up to Apple, PayPal and the startups to innovate around the merchant and/or user experience.  

And where's Google in all this? The company will definitely want to be part of mobile payments. Google's payments platform, Checkout, has largely failed to catch on because of tepid consumer promotion. Google could try and reinvigorate it and/or acquire one of the smaller companies in the space. Watch for a payments acquisition by Google I predict.

Geodelic Does White Label Deal with Clear Channel

Clear Channel Airports, a division of Clear Channel Outdoor, has partnered with Geodelic to create a co-branded airport-centric local search app called FLYsmart. It offers fairly comprehensive information about services, flights, transportation, as well as places to eat and shop within and nearby the user's airport of choice.

Presumably Clear Channel will be extending its ads into the app, appropriate to the location and airport in question.

I found it to be a nicely done application, with a number of ways to view desired information (carousel view, list or map view). I'm not a fan of the Geodelic carousel. According to the press release:

FLYsmart is available now for free download for the iPhone smart phones, with an Android version expected to be released soon. A BlackBerry version is slated for release in early Fall. The app will initially be launched in ten of North America's largest airports including Atlanta, Boston, Chicago O'Hare, Dallas Fort Worth, Denver, Detroit, Philadelphia, Phoenix, San Francisco and Seattle. New airports, of all sizes, will be added each week.

Dedicated to airport advertising for more than 30 years, CCA is the premier innovator of contemporary display concepts that currently handles more than 200 airport programs across the globe. CCA has a presence in 32 of the top 50 U.S. markets with major airports.

Geodelic has done co-branded projects in the past, with T-Mobile initially and then Universal Studios. In each case users get the Geodelic-branded app as part of the partner app (T-Mobile offered a branded version of Geodelic). The same is true with FLYsmart; Geodelic is one of the options (screen far right). 

The company will likely pursue a dual course, doing more partner deals like Clear Channel while continuing to try and build its consumer brand and usage -- a much more challenging proposition. But the co-branded download also provides Geodelic with a kind of backdoor into consumer usage.  

Verizon Pad Coming Soon, How Cheap Will It Be?

There's a report out this morning that Verizon will be launching an iPad competitor in the form of an HTC built Android Tablet on November 26 in the US market. It will likely be the first genuine iPad competitor to hit.

As with Android (vs. iPhone) in general it will likely not be as polished as the iPad -- though here Flash availability may be a differentiator -- but it will likely be pretty strong or "good enough" for many people -- especially if it's cheap. 

The key issue will be cost. Here's what we said not long ago about the question of iPad challengers and pricing:

There is unlikely to be any single Android tablet that "wins" in terms of overall user experience and quality vs. the iPad -- though flash may play a larger differentiating role on tablets than it has one smartphones.

But price will be a significant factor in buying behavior, as it always is.

The market has been established by the iPad, now it's "safe" for competitors to ape the iPad but at lower price points. And if those devices are "good enough" the lower prices will be persuasive to many consumers who don't want to pay more than $500 for a device that isn't a full computer replacement. 

Verizon might totally subsidize it in exchange for a two-year data agreement or there might be a couple of price points tied to memory and/or the existence of a data contract. But you can bet that the price will seek to undercut the iPad by a significant margin. 

Related: Verizon is going to make FIOS TV available via the iPad . . . and presumably this Android tablet. 

ShopKick, MyTown and Mobile Loyalty

Coupons and mobile loyalty marketing have emerged as a huge area for brands, retailers and potentially small businesses alike. A potentially significant player in that market, ShopKick, formally launches on the iPhone today. Android is coming later.

ShopKick is like a marriage of Foursquare and Placecast's ShopAlerts. I previously posted about ShopKick on Screenwerk:

• ShopKick, ShopLocal and ‘Social Retail’
• Shopkick: Fourquare for Retail

In a nutshell ShopKick offers coupons and rewards for entering stores and checking in (this extends to store departments in some cases). Users can also scan products for information and additional offers. Points ("Kickbucks") are accumulated toward rewards that include gift cards and promotional products. Inaugural retailers are BestBuy, American Eagle Outfitters, Macy's and Sports Authority.

ShopKick will also show nearby offers and potential rewards to lure people into stores in addition to rewarding them for "walking in."

Separately but in a related vein, Booyah's MyTown is seeking to differentiate itself from competitors Foursquare and Gowalla by offering product check-ins. The company claimed "over 350,000 Product Check-ins a week by our players!" during a test period. 

Product check-ins on MyTown are not necessarily store specific. Users scan products with their phone's camera (iPhone) and get rewards or enter to win contests, etc. Inaugural brands in this program were H&M stores and Pantene haircare products. 

There a few things significant about these developments: 

• Traditional loyalty programs are mobilizing (see also, CardStar) and morphing into games
• Mobile users can receive push messages about offers near stores
• The mobile angle allows new types of on-site analytics (based on foot traffic, time of day, etc.)
• These services can also be promoted through and integrated into traditional media (e.g., print, TV, DOOH)

Related: There's a lengthy article in the NYTimes about ShopKick. And Barcode Hero is another app that ties rewards to product scanning.

iPay: Will iTunes Become a Payments Platform?

For the longest time Apple has been the "sleeping giant" of mobile payments with its more than 100 million registered iTunes users (credit cards on file). PayPal reportedly has about 75 million by comparison. 

A new Apple hire reported in NFC World and by the NY Times suggests that Apple may be waking up to mobile payments and seek to turn iTunes into iWallet. It's a very logical step for the company to take.

Beyond PayPal Apple would have competition directly from Visa and AT&T and Verizon, potentially. Smaller companies such as Zong and Boku offer carrier billing. There are a range of other m-payments companies such as Bango and Obopay. Nokia is in there as well, though its current solution is focused on the developing world. 

Like most segments the market doesn't have room for more than a few large competitors. If Apple does enter the space it's sure to be one of them (in the US). Apple's brand credibility could also dramatically accelerate the adoption of mobile wallets/payments in the way that iAd has help to do with mobile advertising. 

Google Checkout should be one of these payment giants but the company so far has blown the opportunity with consumers, though it has been trying to reinvigorate Checkout of late. If PayPal hadn't already been bought by eBay you can be sure that Google would be buying it now.

Will Google now pick up one of the smaller players in mobile payments even though it has checkout? My guess is yes and that it will either be Boku or Zong. 

Would a Verizon iPhone Slow Android's Rise?

The answer is yes and no. First Android is available across major carriers and so has diverisified distribution. But there is sufficient empricial reason to believe that some number of would-be Droid buyers would opt for a Verizon iPhone instead.

As many have already reported, a July survey of 1,000 US mobile users from Morpace found that 51% of current Verizon customers would consider buying an iPhone if/when it comes to Verizon (now speculated to be January, 2011).

That's a very significant number considering Verizon has more than 80 million subscribers in the US. The survey also reports that some number of AT&T subscribers would switch to Verizon if the iPhone were available there. 

Previous ChangeWave data showed a somewhat lower percentage of Verizon mobile subscribers with pent-up demand for the iPhone:

 

On the subject of current Android users that are interested in potentially switching to the iPhone, Nielsen previously found that about 30% of Android users were interested in an alternative handset (either iPhone or another type):

• It would provide for access to millions more mobile users for the iPhone and its apps
• It would stop Verizon from funding Droid brand building anti-iPhone bashing media campaigns

The value of the latter should not be underestimated either. Before Verizon there was no "Droid" and Verizon has spent millions promoting the platform as a worthy alternative to AT&T and the iPhone. We'll see if the Verizon iPhone actually happens in January. If it does I suspect it would be a "material" development for the US market. Given Android's momentum (see below), Apple should be interested in getting the iPhone to as many carriers as possible:

As a final note, one interesting question to ask of Android buyers is: what phone are you not buying because you bought an Android handset (iPhone, RIM, WinMo)?  In my case it's the iPhone.

Is Apples iAd a Success or a Flop?

We get competing views of Apple's iAds from the Wall Street Journal and blog Business Insider. First the WSJ, which discusses the slow rollout and bottlenecks, as well as some developer disappointments:

Since launching its iAd mobile advertising service on July 1, Apple has been slow to roll it out. Of the 17 launch partners Apple named for iAd, only Unilever PLC and Nissan Co. had iAd campaigns for much of July. Of the remaining 17, Citigroup Inc., Walt Disney Co. and J.C. Penney Co.—which tied its campaign to the back-to-school-season—have since launched iAd campaigns and other companies are planning iAd efforts.

Part of the reason some marketers are experiencing delays in getting their iAds to market is that Apple has kept tight control on the creative aspects of ad-making, something advertisers aren't used to, according to several ad executives involved with creating iAds.

But then an almost totally opposite report (based on a single case) from Business Insider:

[T]he ads themselves look really good, publishers and advertisers seem happy so far, and users are actually playing with the ads . . .

Dictionary.com president Shravan Goli [reported] . . . 

--iAd eCPMs, or effective cost per 1,000 impressions, are more than $10.
--iAd eCPMs are 2X to 3X the eCPMs he's seen from some other mobile ad networks.
--iPhone eCPMs in general (iAd + others) are 5X to 6X those of other mobile platforms.
--iAd fill rates are around 70%-80% now that Apple has started letting app-makers advertise for cheap in other apps.

USAToday has a similar article based on early developer feedback. There are other critical articles about Apple's creative control and low fill rates. However I would argue that iAds have succeeded whether or not Apple or the initial developers specifically make money off them. Here's why:

• They've brought credibility to mobile advertising that it previously lacked
• They've accelerated mobile ad investments among brands
• They've raised the creative bar and put pressure on others to offer more engaging mobile ads

In short, iAd has helped jumpstart mobile advertising across the board and will result in better more creatively engaging ads for all. In that regard it's a success despite all the criticism of Apple and its slow roll out.

The Americanization of Nokia

An article in today's NY Times discusses three how three Americans are now in key positions at Nokia: Mary T. McDowell, Jo Harlow and Richard Green. In particular the piece focuses on McDowell, Nokia's "chief development officer." The idea is that these and perhaps other Americans to come will help revive Nokia's high-end smartphone business especially in the US.

Nokia is still by far the dominant OEM globally but has a declining share in the US market. Along those lines, here's a statement in the piece, attributed to McDowell, that's not entirely accurate in my opinion:

She added that Nokia’s problems in the United States stemmed from its failure to work closely with U.S. mobile operators to tailor devices to their needs, rather than from any shortcomings in the phones themselves. 

Nokia's failure to work with carriers is perhaps one of the critical explanatory variables behind its current US predicament. However the user experience is definitely part of the challenge Nokia faces in the US.

Unless the company makes super-affordable, "good enough" smartphones and/or dramatically improves its user experience overall Nokia won't see any gains in the US. Around the world, especially in developing countries, it's a very different story; Nokia dominates.

Yet Android poses a serious threat to Nokia in those developing markets over time. Nokia has been almost exclusively focused on finding an "answer to the iPhone." But as I've argued before it's really Android that Nokia should worry about globally. 

I would argue that the US market is an important market to Nokia not because of revenues but because it's now the smartphone leader and much of the "coverage" is driven by what's happening here. There's more symbolic value here for Nokia in succeeding or failing.

Nokia's failures in the US may also reveal "cultural" issues within the company that need to be addressed. It may be something of a useful mirror that Nokia should use to diagnose those internal questions and problems. I'm not sure that simply having Americans in key positions is the answer. 

After all, Microsoft, which faces its own significant hurdles in the mobile market, is an American company. 

Nokia Builds Mobile Craigslist for Developing Countries

There have been other mobile classifieds marketplaces but none with the potential heft of Nokia. Craigslist has many associated third party apps on the iPhone that mobilize its listings content; eBay of course has had great success in mobile, to name two big names. 

Nokia has now created Listings, a sales and services marketplace aimed right now at the developing world. It's only available in India during the beta test. 

The downloadable app features several categories of information:

• Buy & Sell – Find or post items for sale
• Jobs – Find or post a job
• Local Services – Access or advertise services such as auto repairs, driver services, plumbers, etc.

The success of such a service is all about penetration and inventory. If lots of people use the service it could become quite successful and potentially generate meaningful revenue on a global basis. User experience is key but more important is getting the listings content into the system so that users show up.

The service is also more likely to succeed in countries where there aren't already established online marketplaces, which means developing nations primarily. Yet if the content is there and the UX is good enough it could potentially compete elsewhere in world, in Europe perhaps.

Carrier Get out of My Way

The mobile carrier's "worst fear" was that it would one day be reduced to the same "dumb pipe" status that characterizes its fixed-line kin. But the situation has passed beyond dumb pipe; the carrier is rapidly becoming an obstacle to be avoided or circumvented.

As carriers in the US (e.g., AT&T) move to usage-based pricing, introducing more complexity and uncertainty into the system, and seek in other ways to "nickle and dime" consumers that will become even more true. 

Skype, Vonage, Truphone, Google Voice (though not quite yet) and other VoIP providers hint at a future where carrier voice plans are unnecessary and calls can be made with only a data connection -- the quality isn't quite "there" yet however. In addition, personal hotspots like the one just released by Clear (pictured), the iSpot, or the Clear home + mobile plans similarly promise simplified, ubiquitous connectivity for mutiple devices for less. 

Hypothetically if you lived in a Clear city, such as Seattle, you could pay a single price ($55) for Internet access, as well as access for a range of mobile devices, at home and on the go. That's significantly cheaper than paying for unlimited carrier voice and data, as well as an ISP at home and potentially a dongle for $30 per month for a laptop. Those charges, not counting family plans, could easily run $200 or more on a monthly basis. 

We're also seeing data indicating that argues mobile users are increasingly tapping WiFi networks for faster speeds or to avoid using carrier networks for other reasons. For example, Kineto Wireless recently published data (n=330 US smartphone users) indicating that people were looking to WiFi for better speeds and to save money:

• 90 percent of survey respondents who own smartphones with Wi-Fi capabilities use Wi-Fi weekly.  
• 43 percent of people who own smartphones with Wi-Fi capabilities use the Wi-Fi every day.
• 45 percent of those people use Wi-Fi because it provides easy access to the Internet, and 43 percent use it because it is faster than the cellular network.
• 24 percent say Wi-Fi on their smartphones is annoying because it only works in some locations, reflecting a desire to use Wi-Fi more broadly.
• 30 percent of respondents own a Research in Motion (RIM) smartphone; 27 percent own an Apple iPhone.
• 48 percent use AT&T as their mobile operator; 11 percent are T-Mobile customers. 

What these and other data indicate is that smartphone and mobile device users are seeking out WiFi networks for improved performance and/or to avoid using minutes or incurring data charges. There may come a time in the next five years when people can reduce their overall costs and have broad connectivity for their devices at home and on the go -- all without a traditional mobile carrier relationship. 

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See also: Vonage App Calls Facebook Friends Free

Report: Deeper Mobile Internet Penetration in China

Nielsen offers some very interesting data on China's mobile market, based on almost 5,000 face-to-face consumer interviews, and compares it to mobile behavior in the US. The finding: a higher percentage of Chinese subscribers use the mobile Internet than their US counterparts. 

Just over 37% of China's 755 million mobile phone subscribers in China access the Internet on their handsets. That represents roughly 279 million people overall. In the US there are 77 million mobile Internet users, representing about 27% of subscribers, according to the most recent Nielsen estimates.

The size of the Chinese market is currently about three times larger than the US market. However there's much more growth potential in China vs. the US, which is already a mature market in terms of subscriber penetration. By contrast just over half of China's population has a mobile phone. And China is one of those developing markets where primary Internet access is very quickly likely to be via mobile vs. a PC. 

The mobile market in China is almost equally split between men and women and different age groups. Almost 90% (87%) are pre-paid subscribers. Below is the breakdown of mobile activities by category and then a comparison with US mobile user behavior. 

New Torch Illustrates BlackBerry Keyboard and Brand Dilemma

To me the new BlackBerry Torch looks something like the Palm Pre, with its portrait-slider design. It offers a physical keyboard and an a touch-screen keypad as well. I see the dual-keypad design as a metaphor for the dilemma RIM faces around issues of brand identity, the physical keyboard and user loyalty.

By all accounts the touch-screen only BlackBerry Storm was a flop in terms of design and sales. The absence of a physical keyboard is part of the story of why the device failed. The dual-keypad Torch, by contrast, has received largely positive mentions, including a mostly positive review from the Wall Street Journal's Walt Mossberg today:

I’ve been testing the new Torch with BlackBerry 6, and I view it as a big improvement over earlier, stodgy BlackBerry models. It might help stem the urge to switch to iPhone and Android, and even steal some users from those and other platforms, especially as the company brings out additional models that use the new software. And it shows that, contrary to some recent speculation, RIM is hardly dead or dying. In fact, the new phone and software are just the start of its plan to revitalize the BlackBerry franchise.

The Torch is not likely to win tons of new BlackBerry users but it may preserve loyalty in the face of growing Android and iPhone interest among BlackBerry users. Recent Nielsen survey data (confirmed by other, similar surveys) shows BlackBerry user loyalty (42%) far below that of the iPhone (89%) and Android devices (72%). 

A critical article in CNN anecdotally identifies the chief source of the BlackBerry franchise and appeal -- its keyboard:

Despite the fact that the BlackBerry isn't hip, high-tech or cheaper than its main competitors, the phones are still the most popular (or at least the most common) in the U.S. market, and they're growing internationally.

So why do so many people still tolerate these phones?

It turns out, according to a handful of interviews with BlackBerry users, there are three basic reasons: People are addicted to the click-clacking keyboard; they love the blinking red light on the top, which alerts users to new messages; and many just happen to have the phone because it's required for work.

The article continues: 

The details of how the BlackBerry keyboard feels are what make it addictive, said Nan Palmero, a writer for another fan site, BlackBerryCool.com.

"They really go to great lengths to raise plastic in certain ways on the keys," he said of the tactile keyboard's design. "They kind of describe it as guitar frets: Your hand naturally knows where to go and where to be."

The corporate bias in favor of RIM devices will fade over time; it already is as the iPhone gains Fourtune 500 acceptance. The intrinsic appeal of the BlackBerry lies in the keyboard; that's the brand. Accordingly, to the extent that RIM builds touch-screen only devices (like the Storm) it's likely to fail or see lackluster sales. But it must equally address the touch-screen trend promoted by its chief rivals.

It has done that with the dual-keypad approach seen in the Torch. 

Another wrinkle is that RIM devices typically have a "portrait" orientation. While the Storm could be rotated to landscape mode that's the only RIM handset that did, though the Torch may as well. Thus the physical keyboard and, to a lesser degree, the portrait orientation represent challenges or design constraints that RIM must contend with as it competes in an increasingly fierce smartphone handset market. 

Of course RIM could come out with a new breakthrough device that renders all this meaningless but that's not likely in the immediate future.