4Q Handset Roundup in the U.S.

Smart MobilecomScore reported 4th quarter handset results. During the fourth quarter 129.4 million subscribers owned smartphones representing 55% market penetration. The OEM results were a bit surprising to me. Apple was up 3.5% while the top smartphone OEMs (Samsung, HTC, Motorola, LG) were down ~0.9%. From an OS pov, Google still leads with 52.3% market share while Apple is second with 37.8%. Overall, Apple was the only OS that gained market share (~3.5%) while the others saw slight negative declines in share. Here is a summary of the data for the fourth quarter from comScore:

4th Quarter Top Smartphones OEMs

 

4th Quarter Top Smartphones OSs

 

Dan Frommer (Splat F) posted the following associated graphs based on the ComScore data:

Handset Marketshare

The graph puts the mobile OS market share into perspective over the years. What about PCs and tablets versus smartphones? IDC recently published data covering the connected smart devices.

Smart Devices

 

The future is mobile and tablets while we will see a decline in PCs. The market is prime now for applications that take advantage of the mobile smartphone as a platform and the tablet as the “next generation” PC. Laptops will represent the majority of PC sales but will not drive the innovation or revenue growth as mobile and tablet devices will.

 

 

 

Survey is in: Users Don’t Want a Facebook Phone

FB PhoneI have heard many times over the last few years: Facebook is going to launch a new device – The Facebook phone. I use Facebook daily and most of my posts are from my mobile device(s). However, I never really understood why Facebook would launch their own device (given the logistics alone) and more important – why would users want a Facebook phone. Apparently I am not alone. I believe Facebook users are very satisfied using the app on their phone and leveraging deeper integration within the device – in the case of iOS (and soon via Home on Android). Last week the Business Insider posted survey results from an online survey from Retrevo.

Facebook Phone Interest

Not sure how scientific the results are, but I would suspect they would not be different in other surveys. I don’t think a Facebook branded phone would necessarily extend itself into what users associate with a desired mobile device. Users are focused on the Facebook service and the various information sources driven by user content and augmented by an embedded advertising platform.

The great thing for Facebook is users continue to pour their time into Facebook providing more data, as comScore and data J.P. Morgan analyst Doug Anmuth found (via Business Insider):

Facebook Time

So how much time spent on social networking (Facebook plus other services)? Flurry Analysts surveyed users and analyzed between smartphone and tablet use:

untitled-25

However, the overall footprint growth is slowing down across the board which could stall business for social networks within a few years.

Social Networking Use by Age

To keep the existing footprint and potential grow, Facebook (and others) will have to better understand how their users interact with Facebook. The Business Insider published IDC stats on the usage of Facebook across daily use:

Facebook Usage

Interesting to see the newsfeed was the must used feature during the course of the day. Playing games / find apps was a close second (not surprising wrt games as typical users are promoted to play by other users). In fact, the features that fall under “used several times a day” are highly interactive within the Facebook community. Which brings me back to the topic of this post – why would users really want a Facebook device? They don’t. They want the services first. However anything on the device that makes the interaction easier to use Facebook is very much welcome. This was evident with iOS 6 and the Facebook / Twitter integration. It really made a difference in posting and easily posting content (i.e., pictures and videos).

This is why I think Facebook’s Home is the right approach (as opposed to a Facebook device). In case you missed it you can read about it from this Cellular News article. Also here is an advertisment for home:

Basically Home is an overlay to the Android OS that replaces the home screen of the device with Facebook’s own feed. It will also integrate with other services such as SMS. More expansive than the iOS integration, it certainly provides a great new level of integration to promote Facebook services. Something I think is better than having a Facebook phone.

The Impact of the Device

64184_10151436746558124_2053200927_nHow times have changed. Just less than ten years ago the mobile ecosystem was tightly controlled by the mobile operators and their network and device partners. The handset industry had a caretaker in Nokia and Ericsson flexed its might and politically drove standards through the 3GPP. Today everything has changed. The Network Equipment Providers (NEPs) such as Ericsson, Alcatel Lucent, NSN, Huawei and others are struggling overall pushing the status queue. The handset industry has been taking over by the likes of Apple and Google shifting the device strategy away from mobile operators. Even more, everyday the mobile device is becoming more of a computing device that is a platform for applications. The majority of which are proprietary apps (80%) and not web (e.g., HTML 5) as recently reported in Venture Beat (The mobile war is over and the app has won: 80% of mobile time spent in apps). The following chart is from the article:

Apps vs. Non-Web Apps

The growth of smartphones has propelled mobile applications and it looks like that will continue. This happened because the control of the device moved from the mobile operator (via Nokia) to the device OS providers – in particular Apple and Google. In the U.S. the device shift is staggering as depicted in the following ComScore graphic.

comscore-us-smartphones

As the control shifts away form Operators it actually provides an opportunity. Specifically it’s Operator OTT for Wireline and Wireless Operators. It provides an opportunity to extend services globally without the penalties defined in the current go-to-market models that are used today. This means extending services across competitors subsidized handsets and even provide services beyond the traditional handset itself to other platforms such as PCs and Tablets.

For the Enterprise, OTT services crate an opportunity to leverage the mobile device to mobilize the PBX through an application such as (our) Bria application for iOS and Android. Basically Bria puts the PBX in your pocket. For the first time Enterprises (and SMBs) can easily connect to their PBX and Messaging services no matter where they are – without other server based products or technical work arounds.

So in some ways even though the ecosystem as changed within the Telecommunications Sector it paves the way for OTT opportunities for Operators and Enterprises. However, the only way for both to take full advantage or worse be crushed by the new ecosystem, they need to evolve their models and policies.

For Operators this means: (1) Realizing the pressure of Internet OTT players and other island technologies will continue to put pressure on Voice and Messaging revenue, (2) understanding that their customer demographics are changing rapidly in terms of what services they want and how they communicate and (3) taking into account that the mobile phone is now a mobile computer – compounding issues 1 and 2.

For Enterprises this means: (1) Taking adavaatge of the mobile device as a computing device to enable PBX and messaging applications outside of the Enterprise and (2) embracing BYOD as an economic advantage by increasing productivity and reducing communications costs over a device the Enterprise does not subsidize.

I am seeing both of the above growing out of the traditional telco models of yesterday (i.e., charging customers for telephone services) and bridging into the new era of application oriented communications. We are in-between these two extremes and OTT services is the bridge.

Cartoon: Vintage Social Networking

Social NetworkingI came across an entertaining cartoon that links the old and new worlds of social networking. It relates social networks to tools / items of the past. There is a bit of good artistic interruption by artist John Atkinson, but it does show how we socialized in the past (well, at least as close as possible to what we had). As I looked at the graphic, I noticed I used the associated social networking service as much as I did it’s former analogical reference. Here is the graphic as posted on Wrong Hands (what do you think?):

vintage-social-networking-685x548

Yes, Apple is Becoming a Service Provider

Evil Apple
It’s funny how things catch up to us or even worse blind side us. In the course of one of my travels I met a MNO (Mobile Network Operator) executive on the plane and described what CounterPath does. I started with we help WNOs (Wireline Network Operator) and MNOs compete against Internet OTT competitors by enabling an Operator OTT solution. I referenced what we had done for AT&T, Rogers, BT, Altibox, DT, Mobilkom Austria, Network Norway, Verizon and others. I further detailed what I thought the strategies of Internet OTT providers were (as described in my previous posts). He understood that Skype, Viber, etc. were competitors but he did not consider Apple as one. I thought this was a bit strange. His position is that Apple was a good thing for the various Operators that offered the device due to the customer attraction to the iPhone. Knowing where he was coming from I explained the following.

Apple is using the iPhone to get their services to customers that strengthens their product sales – the Apple Halo. Apple has always had the strategy to leverage software to sell their hardware. Now they are looking to the cloud to do the same. FaceTime and iMessage are ways that Apple strengthens the position of the iPhone (and other Apple Hardware). Giving the services away for free and making it available across multiple devices (albeit Apple only devices) makes Apple an Internet OTT provider. I actually don’t think they care so much about being an Internet OTT operator as much as they simply want to sell more hardware (iPhones, Tablets and Macs). FaceTime – which is based on SIP – is nicely integrated into the OS making video calling very easy. iMessage is similar. Both of these services makes the Operator little (only on data usage) to zero (i.e., on Wi-Fi) revenue. Further Apple makes it very difficult for developers to hook into the OS to do anything similar. On the same note, this is why Apple is not supporting WebRTC with open arms. Why would they? What’s in it for them? They want to keep as much control as possible and having competitive services on the device that they directly support just does not make sense for them.

I did also share my view with the exec that Operators can compete with their own OTT services. My view of Apple and other Internet OTT positioning can be summarized here:

MNO-WNO Compare to Internet OTT(click to enlarge graphic)

This is only one man’s opinion, but seems like it is how things are paying out with Apple (and others). I look forward to iOS 7 to see what else Apple has in store to keep “control”.

WebRTC Is Here to Stay But Will Not Take Over The World

Presentation1There is a lot of hype around WebRTC currently. I also hear how WebRTC will be the end of all other endpoints-something you can imagine I might have an opinion on. I personally think WebRTC is fantastic for users and certainly will have an impact on the Telecommunications sector. However, I do not think it will crush everything else in its wake. I am reminded of when SIP first surfaced. It was promised that SIP was going to take over the world and become the only IP signaling protocol used for multimedia and even make POTS lines a thing of the past. Years later SIP has made significant progress but there are still other protocols in use and the traditional telephone network is still the most used for most voice communications. Considering how new WebRTC is I am impressed with the momentum created – thanks to the marketing and financial muscle of Google and others. Of course it will take some time to sort out the issues of standardization and interoperability but it will come same day as it did for SIP. Thinking back to SIP, it took years to go through the standardization and initial interop process. I am certain WebRTC will move quicker but it will take time. However, having said that I do think the major challenges are around the E2E ecosystem supporting WebRTC fully. Today Google’s Chrome and Firefox’s Aurora. Opera does not fully support and it’s unclear if Apple’s Safari and Microsoft’s IE will support WebRTC. At the Enterprise Connect breakout WebRTC event Microsoft certainly made it clear they are not current supporting as reported by Fierce in their Will WebRTC be delayed by Microsoft? article. Although many will say this will be solved over time it’s difficult to really get a good sense of the timing of a resolution. Politics are in full swing and without ubiquitous browser support it will be a challenge.

Of particular internet for me will be what happens around mobile. There have already been demos of mobile web-based calls. However it will be interesting to see how WebRTC will manifest itself across the various mobile OSs, devices, and web browsers. I should mention that Dean Bubley of Disruptive Analysis has his views on WebRTC and has developed a comprehensive report covering WebRTC that you can find here.

I noticed that Dialogic had a wedinar covering WebRTC. During the Webinar a question was asked: “Which of the following WebRTC use cases will be most important over the next 2 years?” Here are the results:

Which of the following WebRTC use cases will be most important over the next 2 years?

Source: Dialogic

Granted the above is not a scientific survey, I tend to agree with the majority of use cases. However, I do not buy into the use of WebRTC for Standalone VoIP / Video Calling outside the context of an app – well, outside of demos (web or otherwise). In my opinion, initially the majority of the use cases will be around the infusion of voice, video into an existing game, service or other similar applications or services. As an example my daughter uses FaceTime with her friends as she plays Minecraft. It’s an awkward experience as she needs to prop up the iPod while playing the game. A better experience would be to leverage WebRTC to add voice within Minecraft.

From a market pov, I do believe we are in a shift away from “phone booth” voice services to voice as an application – in particular embedded within other applications or services. I see the same happening with messaging and video service over time. I will not go as far to say that voice, video and messaging services are dead but they are certainly under pressure (for more on “Voice as an app” check out this post by C. Enrique Ortiz). However this will take time and as TeleGeography points out overall traffic is growing (for voice) but being driving by Internet OTT services:

Source: TeleGeography

Digressing a bit, the issue in front of Operators is that they have increased competition from global led, local delivered Internet OTT players. This is crushing Operator revenues across core services. WebRTC does not really help this and in my opinion adds to the revenue risk as WebRTC opens up a general Operator services subscription platform that will traverse Broadband service offerings (i.e., accelerate Operators turning into bit pipes). Some Operators such as AT&T obviously disagree as you can see from this Razorsight post. I am not saying it’s bad that AT&T leverages the web browser to make money — that is great. However, WebRTC is open for everyone including AT&T’s competitors. The Razorsight post is a good read and covers the pros / cons of Operators supporting WebRTC. The net-net point of the post is it’s really a “if you can’t beat them, then join them strategy”. I still believe Operators can beat the Internet OTT players at their own game if they mashup their legacy network with the same technologies Internet OTT providers use.

Back to WebRTC. Here is my take on my WebRTC is here to stay:

  • Meets Google’s modus operandi to implement technologies that better help it understand it’s users to sell advertising.
  • WebRTC is perfect for applications that need to incorporate voice into web-based applications (e.g., games, B2C websites)
  • It’s free

Here is my take on the challenges as they relate to force fitting WebRTC into communications today:

  • Interoperability with the traditional phone network. WebRTC is it’s own island that leverages the web to interconnect people. There is no inherent thought for PSTN termination of WebRTC based traffic (AFAIK). However this is not a showstopper and there are GWs that can be used to interconnect but it does provide for a road bump. Interconnecting to the world’s largest voice terming network is important in my point of view.
  • Codec support is limited specifically not supporting G.729 (used for narrow band situations) and only having VP8 for video (not as popular  as H.264). G.729 and H.264 are both codecs that are frequently used in deployments and will be missed from WebRTC. WebRTC is betting the farm on VP8 for video which leaves little choice for video applications.
  • The lack of Microsoft and Safari will be an issue for ubiquitous usage of WebRTC. As pointed out above Microsoft has dug in with regard to  their position and Apple is at best ignoring WebRTC at this point. For any Web based service it simply is not good enough to say “not compatible with your browser”.
  • Lack of defined signaling. Many don’t see this as an issue. I see it has a significant blocker to ubiquitous servers and overall usage. And on one hand it is not-You can use any signaling protocol with WebRTC. However, the issue comes when you try to communicate with disparate services that use a different signaling protocol. This leads to fragmentation which defeats the purpose of WebRTC.

The net-net for me is WebRTC has a place in communications and is here to stay. However it is not going to resurface the landscape of telecom as the hype machine wants us to believe. No technology, service or offering enjoys 100% of the market – WebRTC is no different.

 

 

Never Lose Your Keys Again: Hone for iPhone

Gone
I am an investor of sorts in a cool new device that helps find your lost keys. A while ago I gave money to be first in line to get my hands on a Bluetooth based gadget called Hone. I did this through the website Kickstarter. If you are not familiar with Kickstarter, it’s a site that allows entrepreneurs to put up an idea and solicit money for investment and / or first purchases of new products. According to the website they have raised more that $545M via 3.7M people for over 38,000 projects – not bad.

Now back to Hone. I stumbled across Hone which is led by Geoffrey Litwack. They have 1,132 backers and received pledges of over $85K (goal was $40K). You can see the Hone Kickstarter page here. What is Hone? It’s a small fab that you attach to your keychain. Hone leverages a battery powered Bluetooth enabled tracking system so that you can use their iPhone app to locate your keys. The battery lasts 6 months and the device has a range of 150 feet. Also it’s not dependent of being on a Wi-Fi network so no matter where you are you can find your keys within 150 feet.

Here is a quick video on the product:

 

The iPhone app is simple to use and a very straight forward interface:

 Hone App

 

You simply click on “Find” and the Hone device will play a beeping tone. If you are like me and never can find your keys easily especially when you are short on time – the Hone is for you. I hope they will add other mobile / tablet devices and a web interface (similar to Nest).

 

U.S. Mobile Market Overview

comScore published (February 2013) a report on the U.S. Mobile market that had updated stats. I also stumbled upon CTIA’s Semi-Annual Wireless Industry Survey (June 2012) which also had a few interesting stats as well. This post is dedicated to outlining a few of the interesting stats.  Enjoy.

With 322 million mobile subscribers, which exceeds the US population, the market in United States is one of the jewels for the Telecommunications sector. the U.S. market now supports 125 million smartphones and over 50 million tablets.

Smartphone and Tablet Adoption

Source: comScore

What is also interesting is how we use the multiple devices we do have during the course of the day. comScore conducted a survey of users who owned a mobile, tablet and PC and asked when they use those devices during the day:

 

Device Usage During the Day

Source: comScore

The top three mobile network operators own 68% of the market in the U.S. The remaining range from 2%-8% share.

MNO Market Share

Source: comScore

On the 4G side on the equation. Android baed devices had the leadership position starting late 2011 due to hardware support. Apple paced their support with network availability. Apple initially support HSPA and then moved to LTE in the iPhone 5. The following chart illustrates current implementation of 4G by OS.

4g Penetration by OS

Source: comScore

Device usage across Wi-Fi and Tablets differ as well as Android vs. iOS smartphones.

Wi-Fi vs. Mobile Access

 

comScore also looked at the age distribution against smartphone and tablet users.

Age Distribution of Smartphone and Tablet Users

Source: comScore

In 2012 smartphones passed the 50% penetration mark in the U.S. There are more than 125 million smartphone users repenting a 29% increase from 2011 and a 99% increase from 2010. Further, 72% of new phones purchased are smartphones.

Smartphone Penetration in the U.S.

Source: comScore

Android has surpassed iOS as the number one OS in the U.S. with 53% market share. Apple holds 36% share.

U.S. OS Marketshare

Source: comScore

The following chart is a vivid illustration of the changing of the guard of the handset ecosystem.

Long Term Smartphone Platform Market Share Trend

Source: comScore

In terms of Tablets, OS and Android are the  clear leaders.

Unique Tablets (000) by Platform

Source: comScore

The following chart shows the percentage of tablet users by platform who use smartphone platforms.

Percentage of Tablet Users by Platform Who Use Smartphone Platforms

 Source: comScore

Other regions / countries hav taken on smartphones more aggressively than the U.S. (i.e., Japan).

Smartphone Platform Market Share

 Source: comScore

According to the CTIA, Mobile subscriptions have tapered off in recent years.

Mobile Subscriptions

Source: CTIA

The number of cell sites have increased as well.

Cell Sites

Source: CTIA

Even with the growth mobile ARPU has gone done, but settled.

U.S. Mobile ARPU

Source: CTIA

And services are not growing well given revenue contribution.

 

 

 

Minutes and Messages Usage

 

 

 

What I Hate About the Cloud (from 30K feet pov)

rainy-cloudI love the cloud. Well except when I am not connected to the net or have poor connectivity (plane, remote areas, rush hour on the train). After all I have been using the cloud since I used Centrex services while growing up in California. Now we have all adopted the cloud in some way and in most cases it has been a great additive to our daily lives. However there are problems. Sometimes I find myself defending the hybrid world of cloud and personal storage of content and service creation. As an example, I am in a constant debate with my Google developer friend about the cloud. He thinks the cloud is the only way – and I mean the only way to work, play and live. I totally disagree. There are many cases where the cloud fails me and sometimes in makes a significant impact in reducing my productivity.

Examples (mostly from the 30K feet pov):

  • Media: Having all media in the cloud does nothing for me when I am 30k feet in the air and can’t access it.
  • Files: Dropbox recently updated their app for my MacBook Pro. Typically I can access my local Dropbox folder from the menu bar (whether connected to the service or not). However the new update now fails because it “can’t connect” and does not allow me to access the local Dropbox folder. Note that before I could access my local Dropbox folder from the same menu. But now it needs to access the net before it lets me do this. Here is a screen cap of the frustrating “Stating / Connecting” message:

  • Waiting for the SYNC: Even if I can sync the cloud with my MacBook Pro I find that sometimes I don’t have enough time to let it sync and end up leaving files behind in the cloud when I am on the go or on the plane.

I should point out that I do like having a hybrid approach where I have data on my MacBook Pro and the cloud – totally synchronized. Everything should be synchronized on this hybrid theme: Files, content, messaging, communications, voice mail, video messages, pictures, home movies, etc.

There is a killer business idea there…

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