Technology | Media | Telecommunications

Thursday, February 28, 2013

Competition for Apple and Google Mobile Ecosystems

At Mobile World Congress this week, new attempts to create competing mobile device software ecosystems were announced. What are they up against? Google Android and Apple iOS, the number one and number two ranked smartphone operating systems (OS) worldwide, combined account for 91.1 percent of all smartphone shipments during the fourth quarter of 2012 (4Q12).

According to the latest market study by International Data Corporation (IDC), Android smartphone vendors and Apple shipped a total of 207.6 million units worldwide during 4Q12 -- that's up by 70.2 percent from the 122.0 million units shipped during 4Q11.

For calendar year 2012, Android and iOS combined for 87.6 percent of the 722.4 million smartphones shipped worldwide -- that's up from 68.1 percent of the 494.5 million units shipped during calendar year 2011.

"The dominance of Android and Apple reached a new watermark in the fourth quarter," said Ramon Llamas, research manager with IDC.

Android boasted a broad selection of smartphones, and an equally deep list of smartphone vendor partners. Finding an Android smartphone for nearly any budget, design preference or screen size was easy during 2012. As a result, Android was rewarded with market-beating growth.

Likewise, demand for iPhone 5 kept iOS in the hands of many Apple smartphone fans. At the same time, lower prices on the iPhone 4 and the iPhone 4S brought iOS within reach of more users and sustained volume success of older models.

The competition between Android and iOS has collectively accounted for more than 50 percent share of the smartphone OS market over the past two years. At the same time, both BlackBerry and Microsoft have been working on competing platforms.

Microsoft launched Windows Phone 8 in 4Q12, and BlackBerry more recently released BB10 in January, marking the first time two new platforms have been introduced to the smartphone space in the past several years.

"With the recent introductions of two new smartphone platforms we expect some ground to be made by the new entrants over the coming years," said Ryan Reith, program manager with IDC. "There is no question the road ahead is uphill for both Microsoft and BlackBerry, but history shows us consumers are open to change. Platform diversity is something not only the consumers have asked for, but also the operators."

Leading Smartphone Operating System Highlights

Google Android continued its overall upward trajectory, reaching triple-digit growth for the year. Samsung was the biggest contributor to Android's success, amassing 42 percent of all Android smartphone shipments during the year.

Following Samsung was a long list of vendors with single digit market share, and an even longer list of vendors with market share less than one percent. The intra-Android competition has not stifled companies from keeping Android as the cornerstone of their respective smartphone strategies, but has upped the ante to innovate proprietary experiences.

Apple iOS posted yet another quarter and year of double-digit growth with strong demand for the iPhone. But what also stands out is how iOS's year-over-year growth has slowed compared to the overall market. The smaller volumes during 2Q12 and to a smaller extent 3Q12 underscore the possibility for a mid-year iPhone release in order to maintain market-beating growth.

Speculation about the release of possible larger-screen and inexpensive models during the middle of 2013 continues to follow Apple, which would help sustain growth. But until any model is formally announced, speculation remains simply that.

Wednesday, February 27, 2013

Why Marketing is Still Problematic for 4G Operators

The development of personal broadband and mobile broadband applications are being enabled by the next generation wireless broadband technologies -- such as WiFi (802.11ac - 802.11ad), LTE and LTE-A (LTE Advanced).

According to the latest market study by Juniper Research, 4G LTE revenues are set to grow rapidly, reaching more than $340 billion by 2017 globally, that's compared to just over $75 billion in 2013.

This latest growth will represent approximately 31 percent of total service revenues from all mobile network services of all generations (2G/3G/4G) at that time, and reflects the continued success of LTE in serving higher value subscribers.

The new market study finds that with LTE gaining momentum over the past 12 months, initially dominated by the enterprise segment, consumer subscribers will begin to adopt services in volume in 2013 and will overtake the enterprise subscriber base in 2015.

Juniper found that with the increased penetration of LTE capable smartphones and other connected devices, Mobile Network Operators (MNOs) will need to develop clear pricing strategies to transition customers to their 4G networks.

"Overall they will have to present customers with innovative services that will meet users’ requirements and, crucially, that users will attach value to. Operators will have to review their tariff structures to balance the need to monetize the greatly increased data throughput, yet still offer attractive packages," said Nitin Bhas, senior analyst at Juniper Research.

Meaning, from this point forward the success or failure of LTE network deployments will be determined by savvy marketing -- or the apparent lack thereof.

For example, in the UK market, EE felt obliged to reduce its initial LTE pricing by approximately 14 percent -- just within weeks of their network launch -- while Three UK has already announced 4G access at no extra cost.

With the twin spectrum issues -- timing of availability and the MNO cost for wireless spectrum -- playing pivotal roles in deciding the speed of network roll-outs, 4G LTE can represent a substantial financial investment that will take several years to recoup.

This capital outlay is viewed by some as a gamble, bearing in mind that at the outset only a comparatively small number of a mobile network service provider subscribers will be LTE-capable.

Furthermore, the vast majority of LTE revenues (almost 70 percent) are forecast to be generated by the North American and Asian markets.

Tuesday, February 26, 2013

Demand for Increased M2M Application Security

The substantial financial upside opportunities associated with nascent M2M services has attracted the attention of mobile network operators globally risks being thwarted by the growing security concerns in M2M applications.

Porous security is exposing vulnerabilities in a large number of use-case scenarios, including SCADA systems, telemedicine, and telemetry.

Most M2M applications are lacking the basic security requirements that have been a defacto standard for information and communication technologies elsewhere.

If not addressed sooner, this weak link could throttle the successful adoption of M2M in healthcare, industrial installations, and consumer homes, according to the findings from the latest market study by ABI Research.

"The markets ability to respond to these security challenges at the application level is still underdeveloped," says Michela Menting, senior analyst in cyber security at ABI Research.

When faced with security requirements, the focus has been to tighten the screws at the network level, often to the detriment of the application, leaving it un-patched and exposed.

However, the horizontal evolution of M2M will require full end-to-end security. Significant efforts need to be invested into M2M application security in order for the M2M market to fully evolve.

Whether this is through open source initiatives or standards development, the demand for increased M2M application security will have to be answered, and sooner rather than later.

A number of M2M vendors have already started putting more emphasis on M2M application security in a bid to anticipate future market opportunities.

While the market is still relatively niche, ABI Research forecasts strong growth over the next five years, with global revenues reaching $198 million by 2018.

ABI's latest report on the topic studied the challenges and the addressable market for M2M Application Security, complementing the analyses tackled in their related report about M2M Network Security.

Monday, February 25, 2013

125.9 Million Americans Now Own a Smartphone

This week, at Mobile World Congress 2013, we can expect numerous announcements that demonstrate the forward-looking trends in the global smartphone marketplace. Are you ready?

Looking back, comScore has released data about the key trends in the U.S. smartphone industry during the three month average period ending December 2012.

From web browsing and app usage to social networking, messaging and multimedia, your audience is going mobile. Your challenge is to translate mobile consumption and consumer behavior into your mobile business strategy.

Apple ranked as the top smartphone manufacturer during the period with 36.3 percent share, while Google Android led as the number one smartphone platform with 53.4 percent share.

125.9 million people in the U.S. owned smartphones -- estimated at 54 percent mobile market penetration -- during the three months ending in December, up 5 percent since September.

Apple ranked as the top OEM with 36.3 percent of U.S. smartphone subscribers -- that's up by 2 percentage points from September.

Samsung ranked second with 21 percent market share (that's up by 2.3 percentage points), followed by HTC with 10.2 percent share, Motorola with 9.1 percent and LG with 7.1 percent (that's up by 0.5 percentage points).

Google Android ranked as the top smartphone platform with 53.4 percent market share (that's up by 0.9 percentage points), while Apple’s share increased 2 percentage points to 36.3 percent.

Blackberry ranked third with 6.4 percent share, followed by Microsoft (2.9 percent) and Symbian (0.6 percent).

The latest comScore market study data is derived from an online survey of a nationally representative sample of mobile subscribers age 13 and older. Data on mobile phone usage refers to a respondent’s primary mobile phone and does not include data related to a respondent’s secondary device.

Saturday, February 23, 2013

Top 3 Revelations at Mobile World Congress 2013

Ovum expects Mobile World Congress (MWC) 2013 to focus on solutions aimed at driving mobile network operator service revenues. Ovum says that they're looking for a sense of reality -- and the acknowledgment that mobile service providers are no longer the sole provider of communications services.

I've selected the three most insightful anticipated revelations that Ovum analysts expect to see from the MWC13 event next week.

The Mobile Ecosystem Prepares for the Internet of Things

"Machine-to-machine communications (M2M) has been a theme of MWC for several years, with multiple showcases from vendors and operators. Increasingly, M2M is being repositioned as the Internet of Things (IoT) as the focus shifts to connecting smart objects to Internet applications," said Jeremy Green, Telco Strategy at Ovum.

Whereas M2M emphasized the business-to-business opportunity, which was conceptualized as vertical silos and niche markets, the IoT suggests a much larger opportunity with many more end points and spectacular growth rates.

Ovum expects that MWC 2013 will see a renewed interest in digital home services, urban infrastructure monitoring, connected car, and consumer electronics management, with operators presenting themselves as the essential partners for enterprises that want to deepen and extend their relationships with their customers.

However, the brave new world of IoT contains a threat as well as an opportunity. The Internet is an enabler of disruptive business models as much in the domain of smart objects as it is for communications and content. Therefore, many hardware manufacturers are looking to bypass service providers.

This can occur in part, as in the case of products in which connectivity is delivered via the mobile network but the operator brand is invisible, or wholly, as in the case of connected home solutions that are provided on a pure over-the-top (OTT) model enabled by the smartphone app store ecosystem.

The Telecom Industry Needs Smarter Innovations

"There will undoubtedly be numerous announcements at MWC 2013 that will be prefaced by the word innovation. While this remains a good thing, the pressures of a struggling global economy demands that the industry come up with smarter ways of serving customers profitably," said Emeka Obiodu, Telco Strategy at Ovum.

However, too many innovations fail to live up to their billing. Whether it is from telcos themselves, the numerous vendors hoping to partner with telcos, or the OTT players that can afford to go it alone, Ovum is keen to see and hear about real innovations that are both technologically and economically noteworthy enough to stand out.

Mobility Consumerization is Maturing Beyond BYOD

"Consumerization is becoming an increasingly important issue for enterprises. In the mobility space, this involves CIOs attempting to address and embrace BYOD. The huge demand for mobility solutions that secure corporate data and improve productivity across multiple mobile platforms has led to considerable growth in the enterprise mobility management (EMM) space over the past two years," said Richard Absalom, Consumer Impact Technology at Ovum.

Ovum expects to see further evidence of the evolution of the market at MWC 2013. All the major EMM vendors will be present and the space is hot enough that new players are still entering all the time.

Among all the demonstrations and new product announcements, we expect that the focus will be on moving the conversation beyond mobile device management to improving productivity through mobile enterprise app deployment.

Friday, February 22, 2013

Mobile Internet Advances Where the Price is Attractive

What can the rest of the developed world learn from mobile network service providers in the emerging markets? Do the savvy marketers in these emerging nations have a better understanding of effective market development strategy?

​India currently offers the lowest priced mobile services plan that includes internet access, according to the latest global market study by ABI Research.

"India’s lowest priced mobile data plans decreased 29.4 percent year-on-year (YoY) compared to Q4-2011, when it ranked fourth," said Marina Lu, research associate at ABI Research.

According to the findings from ABI's survey, in stark contrast to India, UAE currently has the most expensive mobile internet pricing plan at $67.8 for 5GB.

There is considerable fluidity in mobile data tariffs -- just one year ago, Singapore had the least expensive mobile internet tariffs, but it has since reduced its data caps while keeping the tariff pricing the same.

Comparing mobile internet pricing between Q2-2012 and Q4-2012, 73 percent of countries have reduced the effective cost of their 4G tariffs to a significant degree. The effective cost -- i.e. the "Dollar per Gigabyte basis" -- has dropped by 30 percent.

However, in the U.S. market, where there's surprisingly little price competition, most of the carriers took the route of keeping fees the same but have introduced larger data quotas.

In Australia, Sweden, Japan, and Saudi Arabia the operators lowered the monthly fee but have kept data quotas unchanged.

In Norway, Telenor has introduced 4G tariffs that are cheaper than 3G services.

4G is more spectrally efficient and can handle a lot of data, but ABI believes that it's also important for mobile network service providers take advantage of 4G to boost service revenues.

One way this can be done is through multi-device plans. As an example, Verizon's "Share Everything" plans have helped to contribute to a net increase of 2.2 million subscribers in Q4-2012 and boost their in part service revenues by 8.52 percent to $16,393 million.

But, I'm left wondering how many new mobile internet subscribers could be gained if Verizon's basic service pricing were more affordable?

Case in point: I'm a Verizon Wireless customer and I've consistently avoided their smartphone offerings, because the price threshold to convert doesn't seem to be worth the incremental cost to me. Ask yourself, what can be learned from this example scenario?

Thursday, February 21, 2013

Why FTTH is about Advancing Economic Development

The global wired broadband market -- including DSL, cable, and fiber-optic services -- generated $188 billion service revenue in 2012, that's a 7 percent increase from 2011.

According to the latest market study by ABI Research, fixed broadband service revenue will grow to $251 billion by 2018.

Across the globe in 2012, fiber-optic broadband service revenue had its strongest year-over-year growth of 24 percent, while DSL and cable broadband grew 2 percent and 6 percent respectively.

Fiber to the home (FTTH) is expected to grow stronger than other platforms throughout the forecast period. In 2018, FTTH revenue should reach $81.6 billion, generating almost one-third of global broadband service revenue.

Globally, overall broadband average revenue per user (ARPU) has continued to decline across all broadband platforms over the past few years. In some nations, consumers are getting more and paying less.

"The trend is expected to endure as the majority of network operators are trying to offer lower prices to capture a larger market share. In some countries like Japan and South Korea, increasing competition from LTE services is expected to pressure fixed broadband operators to offer lower service pricing in the long-term," said Jake Saunders, VP and practice director of core forecasting at ABI Research.

The wireline broadband market in United States increased to $43 billion in 2012 -- that's up from $41 billion in 2011. However, fiber-optic broadband represents only 7 percent of the total broadband revenue in U.S. market.

The primary FTTH operator in America, Verizon, experienced just a 3.1 percent increase in broadband revenue -- particularly due to adoption of its FTTH service called FiOS. However, that growth rate will not enable the U.S. market to catch-up with the recognized leading global markets.

As more consumers gain access to super-fast broadband services, FTTH adoption will continue to grow. ABI Research forecasts that United States FTTH revenue will reach $4 billion at the end of 2013. Clearly, there's significant profit opportunities in providing these superior broadband offerings.

I believe that FTTH is going to be a compelling catalyst for tech start-up cluster development in the 21st Century. We only need to look at places like Kansas City and Chattanooga to realize that more savvy entrepreneurs will choose to relocate their emerging business to gain access to these gigabit super-fast broadband networks.

That being said, perhaps the key question is: how is the lack of world-class communication infrastructure depressing economic growth across the rest of the nation? When will all American entrepreneurs in large metro areas have access to a globally competitive super-fast broadband service?

How much longer must American entrepreneurs wait for infrastructure that delivers economic development parity with the world's leading innovators? Moreover, why isn't a meaningful gigabit broadband stimulus plan a higher priority on the agenda of U.S. economic policymakers?

Wednesday, February 20, 2013

Global Pay-TV Market Grew to $238 Billion in 2012

If you've followed the news last year about the consistent decline in cable TV subscribers within the United States, then you may have assumed ​that the overall market was in decline.

The worldwide pay-TV market actually grew at a steady pace in 2012 generating $238 billion by end-of-year, that's up from $223 billion in 2011, according to the latest market study by ABI Research.

The global pay-TV market is expected to generate $304 billion in 2018 with a compound annual growth rate (CAGR) of 4 percent. In some markets, continued revenue growth will likely come from increases to subscriber fees -- not from the addition of new subscribers.

That being said, the global service revenue contributions from cable TV are proving to be mixed, according to ABI's current assessment.

The Asia-Pacific region saw service revenue growth due to underlying increase in subscriptions.

However, cable TV operators in North America are experiencing an ongoing decline in service revenue as result of a contracting subscriber base -- despite cable TV service innovations such as DVR and HDTV offerings.

Globally, IPTV is gaining market share year-over-year while the rest of the pay-TV platforms are slowly contracting. IPTV service revenue market share increased from 10 percent in 2011 to 11.5 percent in 2012.

Cable TV market share dropped to 47 percent in 2012 from 48.5 percent in 2011, while satellite TV market share dropped around 1 percent during the same period.

"Availability of super-fast broadband networks and bundle offers from telcos over high-speed networks are driving the growth of IPTV adoption. IPTV market share is expected to increase to 18 percent in 2018, to generate $53 billion in revenue," said Jake Saunders, VP and practice director at ABI Research.

Based on the ABI Research global pay-TV market share analysis, satellite giant DirecTV ranks first -- in terms of pay-TV service revenue across all platforms. In the global IPTV sector, Verizon is the top ranked IPTV operator with the highest service revenue.

ABI Research has not offered any encouragement to the notion that the pay-TV market is likely to change. For the time being, we should anticipate more of the same results from each of the global markets mentioned in this latest report.

Tuesday, February 19, 2013

More than 140 Million Smartphones in Latin America

The overall Latin American mobile market will grow by 7.1 percent this year -- ending 2013 with 742 million mobile subscriptions, according to the latest market study by Informa Telecoms & Media.

While many developed mobile markets are struggling to continue growing, because of the deterioration of economic conditions, Latin America’s mobile market will prosper in 2013.

"There is a big appetite for mobile data services in the region, and such services will be the growth engine for the sector," said Marceli Passoni, senior analyst at Informa Telecoms & Media.

Although voice will remain the main revenue stream for mobile network operators, accounting for 76 percent of service revenues, data revenues will increase by 18 percent year-on-year -- reaching $27.7 billion.

The low PC and fixed-broadband penetrations in Latin America, combined with a reduction in smartphone prices and greater affordability of mobile data plans, contribute to the increasing mobile broadband adoption.

The popularity of smartphones has increased significantly in Latin America, and smartphones are expected to account for 46 percent of total handset sales in 2013. Meanwhile, Informa estimates that the number of smartphone connections in Latin America will increase 35 percent year-on-year in 2013, to 140.7 million.

Mobile broadband adoption has been the driving force behind strong momentum for LTE technology in the region, with the majority of operators planning to launch 4G services shortly, according to an industry survey by Informa.

In contrast to 3G, which took off in developed markets much earlier and faster than in Latin America, more than 60 percent of operators polled said they would launch 4G services by 2013.

LTE-spectrum auctions are also planned in Argentina, Colombia, Jamaica, Peru and Uruguay this year, and the service is expected to go live in Chile and be fully commercially launched in Brazil.

Although more than 40 LTE phones have been launched globally, that is still a fraction of the nearly 2,500 3G-handset models on offer. But the number of LTE handsets is expanding rapidly, which will drive down costs.

As a consequence, in 2013 LTE will represent only 0.3 percent of mobile subscriptions in Latin America. But given the speed at which LTE is being launched worldwide compared with previous technologies, it is likely to be more widely adopted in the medium term.

In 2013, the region will also see strong pressure from regulators against monopolistic practices in the telecoms market.

"Local governments want to strengthen antitrust regulation in the market by restricting the participation of dominant players. In Colombia and Mexico, where America Movil dominates the mobile market, with over 60 percent share, the discussions will be hot in 2013," Passoni added.

Monday, February 18, 2013

160 Million Mobile Video Calling Users by 2017

With traditional core revenues from circuit switched voice under pressure, telecom service providers across the globe are exploring new strategies to remain competitive in an IP-based networking environment. To date, video communication is an untapped opportunity.

As the market evolves, both mobile network operators (MNOs) and third-party service providers are encountering new challenges as they seek to increase (or maintain) market share and revenues.

The number of users of mobile video calling services is forecast to increase four-fold to almost 160 million by 2017, driven by improvements in both the user-interface and the underlying technology, according to the latest market study by Juniper Research.

Advertising and freemium models are beginning to emerge in the mobile video calling market, but revenue generation remains the key challenge for mobile video calling service providers.

Freemium models are being explored, but are behind other areas of the broader mobile market, while mobile advertisers have yet to explore the potential of mobile video calling in earnest.

"Mobile advertising is becoming mainstream, but the model still needs to be adapted for mobile video calling for meaningful revenues to become available to service providers," said Anthony Cox, Associate Analyst at Juniper Research.

Despite this, Juniper believes that key players in the mobile video calling market have recently received additional funding from their backers, representing an implicit blessing of their business strategies.

Further findings from the market study include:
  • Specialist mobile VoIP companies are opening their Application Programming Interfaces to third parties, including MNOs, to gain revenues.
  • The arrival of 4G will give further impetus to mobile VoIP take-up but potentially accelerate the decline in overall voice revenues for MNOs.
  • Advanced IP-based services will develop faster in developed markets due to the direct correlation between 3G and 4G roll-outs and the take-up of mobile VoIP and mobile video calling.
  • Revenues from the circuit switched voice market will continue to fall over the next five years but will not accelerate.

Friday, February 15, 2013

Media Tablet Market Grew an Amazing 75.3 Percent

The overall personal computing market went into an apparent tailspin during 2012. Regardless, media tablet shipments outpaced predictions reaching a record total of 52.5 million units worldwide in the fourth quarter of 2012 (4Q12), that's according to the latest market study by International Data Corporation (IDC).

The tablet market grew 75.3 percent year over year in 4Q12 (up from 29.9 million units in 4Q11) and increased 74.3 percent from the previous quarter's total of 30.1 million units.

Lower average selling prices (ASPs), a wide range of new product offerings, and increased holiday spending all acted as catalysts to push the already climbing media tablet market to record levels.

"We expected a very strong fourth quarter, and the market didn't disappoint," said Tom Mainelli, research director at IDC. "New product launches from the category's top vendors, as well as new entrant Microsoft, led to a surge in consumer interest and very robust shipments totals during the holiday season. The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."

Apple's iPad once again led the market, and the firm's shipment total of 22.9 million units was exactly in line with IDC's forecast for the period. A strong iPad mini launch, plus availability of the fourth generation full-sized iPad, led to solid 48.1 percent shipment growth over the same quarter last year.

However, strong competition in the market led to Apple's market share declining for a second quarter in a row (down to 43.6 percent from 46.4 percent last quarter).

Number two vendor Samsung experienced 263 percent year-on-year growth, shipping nearly 8 million combined Android and Windows 8 tablets during the quarter to grab 15.1 percenet of the market, its same market share total from the previous quarter.

Amongst the other top 5 vendors, Amazon and Barnes & Noble both saw their market share increase sharply as new products gained traction during the holiday season.

Amazon shipped more than 6 million tablets during the quarter, increasing its share to 11.5 percent, up from 8.3 percent the previous quarter, with year-over year growth of 26.8 percent; Barnes & Noble shipped close to a million units, increasing its share to 1.9 percent, up from 0.7 percent, despite a year-over-year growth rate of -27.7 percent.

Meanwhile, number four Asus saw its share slip from 7.8 percent to 5.8 percent despite continued strong shipments of its Google-branded Nexus 7 tablet and the highest year-over-year increase in the top five at 402.3 percent.

Microsoft entered the market during the quarter with its Surface with Windows RT tablet, but failed to reach the top five after shipping just shy of 900,000 units into the channel.

"There is no question that Microsoft is in this tablet race to compete for the long haul. However, devices based upon its new Windows 8 and Windows RT operating systems failed to gain much ground during their launch quarter, and reaction to the company's Surface with Windows RT tablet was muted at best," said Ryan Reith, program manager at IDC.

IDC believes that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, people may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets -- but until then, ASPs on Windows 8 and Windows RT devices need to come down to drive higher volumes.

Thursday, February 14, 2013

Samsung and Apple Dominate Smartphone Growth

The worldwide mobile phone market grew 1.9 percent year over year in the fourth quarter of 2012 (4Q12), as strong holiday smartphone sales raised shipments of these devices to levels nearly equal to those of feature phones.

According to the latest market study by International Data Corporation (IDC), vendors shipped a total of 482.5 million mobile phones in 4Q12 compared to 473.4 million units in the fourth quarter of 2011. For the full year, the global market for mobile phones grew 1.2 percent on shipments of more than 1.7 billion units.

In the worldwide smartphone market, vendors shipped 219.4 million units in 4Q12, which represents 45.5 percent of all mobile phone shipments, the highest percentage ever.

The 36.4 percent year-over-year growth was slightly below IDC's forecast of 39.5 percent for the quarter. On an annual basis, 712.6 million smartphones were shipped globally in 2012, which was 44.1 percent more than in 2011.

"The high-growth smartphone market, though dominated by Samsung and Apple, still presents ample opportunities for challengers," said Kevin Restivo, senior research analyst at IDC.

Vendors with unique market advantages, such as lower-cost devices, can rapidly gain market share, especially in emerging markets.

Samsung set a new record for the number of smartphones shipped in a single quarter and in a single year. Its broad and deep line-up of Android smartphones, particularly the Galaxy-branded Android family, combined with sustained demand for its mid-range and entry-level models to account for the remarkable shipment volumes.

2013 is shaping up to be a pivotal year for Samsung as its Tizen smartphone strategy takes shape. Samsung will continue to rely on Android as its primary operating system, however, as the move to Tizen will not likely take place overnight.

Apple's record iPhone shipments in the quarter were driven by successes in Greater China, where shipments more than doubled, as well as the U.S., where 6.2 million iPhones were activated on Verizon alone.

Interestingly, the company's success was due in large part to older models, in particular the iPhone 4, which Apple couldn't make enough of in the quarter relative to demand. Its sales success with the older model could portend success in higher-growth emerging markets where the company has performed well.

Wednesday, February 13, 2013

10 Billion Mobile Coupons will be Redeemed in 2013

The number of discount coupons redeemed through mobile phones and media tablet devices is expected to reach 10 billion this year -- that's up by more than 50 percent on last year, according to the latest market study by Juniper Research.

Juniper believes that innovative retailers are increasingly seeking to offer mobile as a delivery channel -- both as a means of driving in-store retail and to enhance consumer engagement and retention.

It pointed out that while mobile still accounted for a comparatively low volume of coupons issued, retailers had been encouraged by the markedly higher average redemption rate of mobile coupons (approx 10 percent) when compared to traditional print media and PC coupons (typically 1 percent or less).

Furthermore, the study findings showed that mobile couponing offered retailers the opportunity to marry their digital and physical assets.

"While we’ve heard that online retail is killing the High Street -- witness United Retail filing for Chapter 11 bankruptcy in the U.S. and the recent administrations of Jessop’s and Blockbuster in the UK -- mobile offers a means of engaging with the consumer at every point in the retail life-cycle, from product discovery to product purchase," said Dr Windsor Holden, research director at Juniper Research.

However, their market study report stressed that it was critical for retailers to ensure that such coupons had a time-based element -- noting that a number of offers had gone unintentionally viral, leading to brands being unable to service the demand for their products.

Other key findings from the market study include:
  • Apple’s recent high-profile launch of Passbook is expected to act as a catalyst to both coupon deployments and adoption.
  • Retailer reluctance to upgrade POS (Point of Sale) terminals for authentication and redemption is creating a bottleneck, effectively suppressing the deployment of mobile coupons.

Tuesday, February 12, 2013

One Billion Tablets will Ship Over the Next 5 Years

At the close of 2012, nearly 200 million tablets will have shipped worldwide since 2009 and an additional 1 billion tablets are forecast to ship over the next 5 years, according to the latest market study by ABI Research.

New research that explores the impact a media tablet has on the daily life of a U.S. consumer shows that 22 percent of users spend $50 or more per month and 9 percent spend $100 or more -- that's much higher than spending levels observed by typical smartphone users.

While tablets are most recognized as digital media consumption devices, there are a growing number of other common use-cases that extend beyond reading magazines or watching streaming video content.

"Tablets are quickly becoming the go-to transaction screen within the home," says Jeff Orr, mobile devices senior practice director at ABI Research.

Spending on-device of physical and virtual goods has not yet impacted retail storefronts -- which are already concerned about their venues turning into showrooms for eventual online purchases.

Logistics, such as price checking, using a coupon and location-based searches, consistently rank as the most common activities -- each performed by more than 50 percent of tablet users in the previous 90 days -- while shopping for products or services.

"The opportunity to keep consumers buying in-store squarely remains with the retailer. So far, the presence of a media tablet during the shopping experience has not altered the sales channel where consumers finally buy products," notes Orr.

Moreover, the actual amount of usage cannibalization that a tablet has on traditional print editorial and TV program consumption varies.

Most surprising is that tablets are increasingly used in conjunction with other media types (14 percent for TV; 17 percent for newspapers and magazines), which makes the experience more interactive and immersive than the more typical static content engagement.

These consumer media tablet usage findings are part of the ABI Research service offerings, which includes Research Reports, Market Data, Insights and Surveys.

Monday, February 11, 2013

Global Smartphone Shipments are Up by 42 Percent

Smartphone shipments exceeded 200 million units in Q4 2012, with the annual total reaching 671 million -- representing a growth of almost 42 percent year-over-year, according to the latest market study by Juniper Research.

Samsung continued its phenomenal growth over the year shipping a record 63 million smartphones and accounting for over 30 percent of all smartphone shipments in the quarter. Once again, sales of the Galaxy S3 drove growth, with sales surpassing 40 million in November 2012.

However, despite the holiday season boost and iPhone 5 sales, Apple posted lower than expected iPhone sales -- at around 47.8 million, but still a record quarter for the company.

With Samsung leading the market, Juniper believes that Apple will need to continue focusing on innovation, while retaining its brand leadership.

Meanwhile, Nokia shipped 6.6 million smart devices in the fourth quarter, with the new Lumia device line still to make a significant impact with shipments of 4.4 million.

Nokia’s Symbian based handsets experienced a large decline, reaching 2.2 million. Overall, the Finnish company made a $3 billion loss for the year, but posted a profit of $586 million for Q4 2012. Smartphone shipments reached 35 million in 2012 compared to just over 77 million in 2011 -- that's down by 54 percent.

BlackBerry's recent results -- which run to a different financial schedule -- are expected to account for almost 6.7 million smartphone shipments for Q4 and over 31 million for the year.

With the release and launch of BlackBerry 10 and a new line of smartphones somewhat improving the situation, the Canadian company will struggle to gain back a significant market share in 2013.

Huawei posted impressive sales in 2012, with the introduction of a range of new smartphones and tablets, posting sales revenues of over $35 billion. The company introduced over 23 models of smartphone devices and is estimated to have shipped almost 20 million smartphones in 2012.

While other smartphone vendors, including LG and ZTE, have managed to maintain their smartphone market shares, they are still facing challenges when competing against the premium brands.

Similar to Samsung, these vendors are introducing a number of new product lines and launching marketing activities to maintain their visibility in the global mobile handset market.

Friday, February 08, 2013

How Smartphone Adoption Escalated During 2012

As I look back at the enabling role mobile networks played in advancing the Global Networked Economy during 2012, I'm wondering what to expect this year. Last years' performance was amazing, as the smartphone became a mainstream device that people everywhere used to gain access to the internet.

Nearly 196 million smartphones and 451 million handsets were shipped during the fourth-quarter (Q4) 2012, according to the latest market study by ABI Research.

This brings 2012 annual totals to 653 million smartphone and 1.6 billion handset shipments -- representing a 36 percent and 2 percent Year-over-Year growth rate respectively.

Smartphones accounted for 43 percent of all handset shipments in Q4, which pushed smartphones to 41 percent of all shipments in 2012.

Samsung retained its lead position overall by shipping 106 million handsets of which 60 million were smartphones in Q4 and capturing 31 percent of total smartphone shipments.

In 2012 Samsung grew its handset shipments by 21.6 percent and its smartphone shipments by 123.8 percent. Despite missing most analyst estimates in Q4, Apple grew its smartphone shipment share to 24.5 percent, up from 16.4 percent in Q3.

Apple shipped 47.8 million iPhones in Q4 bringing its 2012 annual total to 135.8 million. Apple’s 2012 annual shipment growth declined from 96 percent in 2011 to 46 percent in 2012.

"It is clear that the iPhone’s hyper-growth has ended, and ABI Research believes that Apple’s market share will peak in 2013 at 22 percent," says Michael Morgan, mobile devices senior analyst at ABI Research. "Unless Apple is willing to trade iPhone margins for low cost iPhone shipments, Apple’s handset market share will become dependent on customer loyalty."

Looking at the rest of the pack, Nokia shipped 86.3 million handsets and 6.6 million smartphones in Q4 -- while BlackBerry’s shipments of smartphones declined to 6.9 million. ZTE had an excellent Q4 with 20.7 million handset shipments and 11.2 million smartphone shipments.

ABI believes that Samsung and Apple are both under pressure to maintain their market lead as less costly smartphones gain momentum entering 2013.

Technology optimization choices and a diverse handset portfolio are critical decisions over the next 6 to 9 months to come out ahead.

Thursday, February 07, 2013

Exploring Applications for Mobile Phone SIM Cards

Mobile phone subscriber identification module (SIM) card annual shipments are expected to rise in 2013 by 5 percent to 5.5 billion units, according to the latest market study by ABI Research.

Growth is slowing as markets near saturation and the SIM card becomes increasingly ubiquitous across different mobile network technologies.

However, areas of growth remain with new applications, form factors, and an increasing breadth of connected products.

As such, the related market value will grow at a higher rate to $2.3 billion this year and ASPs are forecast to increase slightly over the next five years.

The emphasis is now on extracting maximum value from the 6.3 -- rising to 7.5 -- billion SIM cards in circulation.

ABI believes that 4G mobile network rollouts, Near Field Communications (NFC) and solutions offering more advanced security for payments -- such as DRM, authentication, and encryption -- will all see higher end SIM cards shipping over the next few years.

"Following shipment growth in 2012 of 8 percent, this is the first time that the SIM card market has had two consecutive years of single-digit growth, said John Devlin, Security & ID practice director at ABI Research.

There is a growing emphasis from leading vendors on new developments to grow their SIM card businesses. The problem is that this is a limited market, highlighting this fact is that, even in 2017, over half of shipments will still be for use on 2G mobile networks.

New form factors and the growing need for data connectivity in consumer electronics and M2M devices will provide some further respite to a slowing market.

In 2012, 3FF, 4FF, and MFF accounted for 6 percent of shipments; by 2017 this will have increased to 33 percent. Simultaneously, 3G and 4G will have grown from 19 percent to 42 percent.

The end result of these advances is that high-end SIMs -- i.e. 512KB and above -- will account for a third of SIMs shipping in 2017.

Wednesday, February 06, 2013

Global Tablet Shipments to Reach 145 Million in 2013

Traditional PC manufacturers that missed or underestimated the growing demand for media tablets have had to consider drastic measures -- as a result of their apparent lack of strategic foresight.

Whether these devices are being used for entertainment, convenience, or enhancing productivity, media tablets continue to gain mainstream adoption in the worldwide marketplace.

According to the latest market study by ABI Research, an estimated 145 million tablet devices will ship globally in 2013.

A combination of new market entrants, more affordable choices for consumers, and increased adoption by business users will support the next wave of growth.

"The rate of innovation is slowing as tablet vendors augment their product portfolios to meet the needs of market audiences," said Jeff Orr, senior practice director at ABI Research.

The late 2012 launches of Apple’s iPad mini and a variety of slates based on Intel architecture and the Windows 8 operating systems will likely begin to show some progress this year.

Most of the attention for tablets is coming from North America -- where the outlook for 2013 has the region consuming just over 50 percent of worldwide shipments.

Business interest in tablets is expected to grow to 19 percent of all shipments in 2013 as more PC OEMs unveil product solutions designed for the workplace.

While some cannibalization of the PC installed base is likely, the majority of new tablet opportunity comes from workers that have, until now, worked without the benefits of computing technologies.

Recent media reports cited the uptake of tablets as the sole cause for the demise of the eBook Reader, though the ongoing ABI Research study of the eReader market reiterates that tablets have little to do with the trajectory of dedicated digital readers.

"The facts are that the U.S. market continues to dominate eReader shipments and an aging Baby Boomer population looking to replicate the print reading experience is a waning audience," adds Orr.

ABI believes that if other world regions do not successfully organize digital publishing markets, the dedicated eReader market could go away -- without regard for the adoption of tablets and other mobile devices.

Tuesday, February 05, 2013

Mobile Retail Marketing to Reach $55 Billion by 2015

For the retailer, the mobile device increasingly represents a multifaceted opportunity. It offers the ability to extend remote purchases to a mobile environment, unlimited by the fixed constraints of the desktop PC.

In fact, most savvy retailers have already started to utilize mobile devices -- such as smartphones and media tablets -- as a touch-point on each stage of the retail life-cycle.

According to the latest market study by Juniper Research, annual spend by retailers on mobile marketing will reach $55 billion by 2015 -- almost double the $28 billion that's expected this year.

Their market study of the retailer landscape found that the development of a growing media tablet market had created new opportunities for brands seeking to enhance engagement with consumers.

With eCommerce migrating to mobile and nomadic devices, advertising spend on both tablets and smartphones is continuing to grow strongly as retailers (notably in North America and Western Europe) migrate their own spend to digital in general, and mobile in particular.

Similarly, they observed that mobiles were driving retail in-store traffic through coupons, with coupon redemption apps becoming an increasingly popular mechanism of distribution and coupon storage.

Furthermore, it highlighted the increasing trend towards the development of additional distribution channels -- such as augmented reality and near field communications -- as mobile becomes increasingly integrated into in-store retail strategies.

However, Juniper cautioned that while retailer engagement with mobile channels had increased dramatically, many had still not optimized their Web sites for mobile browsing, registration or payment.

"If retailers truly want to maximize the mobile monetization opportunity, then optimization is critical. If you are using mobile advertising for consumer acquisition, you need to push users to a site with which they can comfortably interact; retailers that fail to respond to consumer demand will fall behind, said Dr Windsor Holden, research director at Juniper Research.

Other key findings from the market study include:
  • Brands are increasingly seeking to integrate campaigns across mobile social networks such as Foursquare and Facebook.
  • Brands and retailers need to ensure that mobile ads are frequency capped to prevent overexposure.

Monday, February 04, 2013

4G LTE will Reach 1+ Billion Mobile Users by 2016

Worldwide subscribers to the 4G wireless standard known as Long Term Evolution (LTE) are projected to surpass the 100-million mark this year, according to the latest market study by IHS iSuppli. LTE subscribers worldwide will reach 198.1 million in 2013 -- that's up by 115 percent from 92.3 million last year.

Since being adopted in 2010 with just 612,000 users, the 4G next-generation wireless technology has grown by leaps and bounds, surging by an astounding factor of 22 to 13.2 million subscribers in 2011, and then jumping another 599 percent in 2012 to nearly 100 million subscribers.

By 2016, LTE will claim more than 1.0 billion users, as shown in the figure below, equivalent to a five-year compound annual growth rate of 139 percent.

"With LTE emerging as a true global technology standard, its ecosystem now faces both challenges and opportunities," said Wayne Lam, senior analyst for wireless communications at IHS iSuppli.

Rapid adoption will drive design innovations, particularly in smartphones, but issues like spectrum fragmentation will also remain a challenge for mobile network service providers. Overall, however, the LTE space will be less worried about rifts or divisions in technology, and more concerned with laying the foundation for sustained growth across the entire LTE landscape.

Globally, wireless network operators have been continually building the infrastructure for LTE technology, driven by increased appetite among consumers for faster content delivery, feature-rich applications and expansive mobile services such as social networking.

While the majority of early operator activity was concentrated in Europe and Asia, North America propelled new subscriber activity in 2011 and 2012.

The bulk of growth during the last two years also came from smartphone upgrades -- especially as 4G LTE technology hit top-of-mind for data-savvy consumers. This is because more than any other type of phone, smartphones are able to take further advantage of the faster data connectivity provided by LTE, which leverages the kind of low-latency, always-on mobile broadband service that consumers now demand.

But even as LTE has become the de facto global standard for 4G over WiMAX, an early rival, interoperability across multiple carriers and spectrum holdings is far from consistent.

While the precursor 3G technology was deployed over a handful of spectrum bands globally, LTE so far has registered more than 40 different frequency spectrums, resulting in a complex landscape for equipment and component suppliers.

Even in the face of this technical difficulty, the advantages to be derived from LTE are considered to be substantial.

Compared to previous cellular standards, LTE with its low-latency performance allows the handling of a wider range of applications -- such as live video streaming, video conferencing, voice over IP and real-time multi-player gaming.

These new applications, in turn, create fresh market opportunities for component supplier and device manufacturers.

In particular, LTE is a force multiplier for innovation among smartphones. To take advantage of a more capable network, device manufacturers are accelerating the pace of innovation for applications processors, touch-screen displays, camera technology and ever-more sophisticated mobile operating systems and software.

Friday, February 01, 2013

Why Telecom Service Providers need Marketing Talent

According to the latest global market study by Ovum, telecom service providers must continue to focus on cost controls to offset relatively flat revenue growth over the next five years. That being said, a significant ongoing cost is the employment of their internal workforce.

Ovum believes telecom service providers may still have the potential to gain greater economies through their global telecom vendors -- in terms of network rollout, network operations, network optimization, customer experience and service quality management.

Ovum forecasts a 2 percent annual growth rate in telecom service provider revenues between 2012 and 2018, as these carriers struggle to combat increased over-the-top (OTT) service competition. Moreover, their customers seem more interested in buying devices or mobile apps than telco services, and they continue to resist usage-sensitive billing for internet access.

With little prospect of new revenue growth, Ovum anticipates that telecom service providers will attempt to further contain their capital expenditures (capex), but this is only part of the complex story.

"Service providers will keep a tight rein on their capex budgets, but they do need to spend heavily on technology -- both their customers and the competition demand this. What's changing is that operators are more smartly attacking their operating expense (opex) budgets, which opens new opportunities for vendors," says Matt Walker, principal network infrastructure analyst at Ovum.

Getting to the Core of the Apparent Problem

In order to take full advantage of this professional services revenue opportunity, it's crucial that vendors have a true understanding of telecom service provider opex challenges. That's something which has been complicated by the lack of granularity and consistency in financial reporting, amongst other known barriers to progress.

Ovum's newly created taxonomy of opex segments across all telecom service providers reveals that network or IT operations account on average for 18 percent of their operating costs, of which 60 percent ($126 billion) is for spending internally -- mostly using high-cost salaried staff.

"If you're an operator, this is a huge cost that needs to be managed," says Walker. "As operators look to lower operating risks and their cost bases, one option is additional services projects that involve the transfer of employees."

However, to meet the service provider current needs, telecom vendors will have to offer different professional service solutions than in the past. Why the shift in staffing requirements? It's because telecom service providers need help monetizing their networks and retaining customers, not just deploying the equipment.

Meaning, the most pressing business challenges are marketing-related, not technical. Besides, you can't transfer skilled marketing talent to a telecom vendor if you don't already employ those people.

Therefore, forward-thinking telecom vendors must demonstrate that they have the skilled marketing professional services talent available on their team, or that they can contract savvy marketers with proven telecom domain expertise when and where they're needed.

Furthermore, once telecom service providers realize that they can't cost-cut their way to increased revenue and improved profit margins, then the demand for professional marketing staff will likely accelerate. But here's the showstopper -- that qualified marketer talent is clearly in short supply.