The most excellent German blog Mobile Zeitgeist alerted me (in German) to a little battle that illustrates the pitfalls of creating the seamless user experience: Nokia appears to being in a tussle with (at least) the German arms of Vodafone and T-Mobile over the pre-installation of Skype clients on some of its forthcoming handset models (including the long-awaited iPhone competitor, N97).
Vodafone and T-Mobile Germany (who have a combined subscriber base of close to 80m) have now publicly stated that they will not include any Nokia models into their catalogues, which will have Skype installed. Now, there’s a market gone dead then… For other models, look to 3 in the UK (and my post on the Skypephone
that they “would not let their business be destroyed” by this. Their terms and conditions prohibited VoIP clients already but the carriers did anecdotally turn a blind eye towards this in the past. Nokia’s push however now is apparently too much for the carriers who fear network issues. Interestingly, this surfaces on the same day where, in anther part of the world, some queried
the sustainability of free data plans for the iPhone (namely the Wall Street Journal on AT&T’s policies in respect of the iPhone). Predictably, Skype lambasted the move as “unfair practice”.
The name of the game is – of course – the pipe (not new: see e.g. here
): the WSJ quotes from an Alcatel-Lucent analysis of North American networks during the midday hour of one day, which apparently shows that web browsing consumed 32% of data-related airtime but 69% of bandwidth whereas e-mail used 30% of data airtime but only 4% of bandwidth. The reasoning goes that increased data traffic impacts the networks’ capex whilst remaining – at best – ARPU-neutral (AT&T ponders to drop its data plan for the iPhone by $10), cutting down margins and hurting the carrier more than is healthy. Voice and SMS services are – on a bit for bit basis – very, very profitable as they use very little bandwidth.
To conclude though – as the WSJ does – that unlimited data plans should be abandoned “in the short term”, pours the baby out with the bathwater: smartphones are paving the way into the wireless future (20% of US households are completely wirefree
already!) and it is a space where the carriers have great gains to make; maybe not on the sumptuous margins they were used to but healthy and viable nonetheless. To do as the WSJ asks would be as if one would have asked ISPs to please stop flat-rate plans for Internet access; and look what has become of the Internet!
Accordingly, other voices
argue that a) slowing voice ARPU is at least being part set-off by increasing data ARPU (which grew
a healthy 32% year-on-year in Q1 and saw more than $10bn in wireless data plans being sold in the US for the first time), and b) that the carriers actually know this for a while now and, accordingly, upgrade their networks to better cope with higher bandwidth demands in order to make the move to data pipes; the fight is arguably now “only” about whether these would be dumb or smart: with app stores, VAS and business-to-business (and machine-to-machine) solutions opening up vast new segments that have been completely unexploited to date, one should think that there is room for the smart pipe operator. So fear not!
Here’s an interesting one: we will soon all be Cupertino-loving black turle-neck fashionistas whilst going on about our cold-nosed business. This is at least what this article ponders (following Apple’s announcement to add “business features”; could it really get push-e-mail?) .
The article has some interesting facts to offer: user satisfaction for Apple‘s iPhone is dramatically better than for anyone else (a distant first at 59% “very satisfied” users). And, somewhat noteworthy, the Blackberry had a drop of 8% in “very satisfied” users (47%) according to a recent survey — the first decline in its history. Nokia follows with 40% with the others behind.
Apple has only 5% of the smartphone market but, given it is only out on one carrier per country and only launched some 9 months ago, that is rather honourable. And user satisfaction is absolute key to business phones though: price is, for corporate IT buyers, less an issue than for the consumer. And no IT manager thrives on the thought of a mad manager breathing down their necks over an IT or phone glitch. So user satisfaction might in fact be an important lever to push it higher in the business smartphone sector, which is a sweet one with very high ARPU. The article concludes that there is “anecdotal evidence that Apple’s market share is growing. FTN Midwest analyst Bill Fearnley Jr. said that according to his checks, iPhone sales were helped in February by the introduction of a corporate iPhone plan that allows AT&T to bill employers directly.”
So an interesting battle at hand. It is also interesting (and may send shivers down open-source spines) as the two leaders in user satisfaction both run on rather contained software ecosystems. But it does show that it helps when things indeed work (comparatively) seamlessly and painlessly on a device.
I am yearning to see Gordon Brown and Angela Merkel in black turtlenecks wielding an iPhone (Sarko and Obama [do I even need a link for him?] are a given of course). Oh brave new world…
I mean, it’s nothing new as us mobilists knew it all along but now, alas, someone put their finger in the air and quantified it. So here goes: as early as next year, wireless phone users will outnumber landline users by 3 to 1. Impressive, huh?
Some more somewhat obvious findings are: rich nations are running out of non-users, and in some emerging markets, where rising personal incomes have made wireless affordable, that gap closes quickly, too. Even so, only half the world’s population uses mobile phones now. Most subscriber growth over the next five years will quite naturally come from India, China, parts of Asia, and Africa. I think the author might have forgotten Brazil…
And now, dear content lovers, comes the candy: the analysts say that “[f]irms must boost their average monthly revenue per user, or ARPU. Text-messaging has been the biggest moneymaker, along with ring tones and games. Music and video downloads are starting to catch on”. By 2011, U.S. carriers will garner 35% of service revenue from data products, more than twice the 2007 share, says the Telecommunications Industry Association.
But in emerging markets, non-voice services are growing, too: “Wireless companies need to evolve their business models because of the changing nature of the industry, not just penetration levels,” said Sureyya Ciliv, chief executive of Turkcell. “Communication and information technologies are converging globally.
Now, this should be welcome news to the mobile content folks: more than $30 ARPU on data consumption vs the industry average $6.74 (which is what IDC reported), and more than half of that are from content (more than double the industry average).
These are the figures MVNO Amp’d has released. Some juicy mobile content stuff in there:
- 5% of original content sees 30% of all downloads.
- The niche lives: ultimate fighting and super-cross see a lot of traction.
- Amp’d subscribers download more full music tracks than ringtones (which nicely confirms my explanation of that trend set out a few days ago here).