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3G: Strategies & Trends
Mobile Broadband Trends, 3G Migration Tactics, & Device Practices
• Introductions • Section 1: Migration Strategies - Mobile Broadband & Data Services Trends (1 hour)
Question & Answers
• Section 2: Value Added Services - Best Practices & Strategies (1 hour)
Question & Answers
• Coffee Break (15 min) • Section 3: Device Planning - Devices Driving Broadband Adoption (50 min)
Question & Answers, Discussion of Issues & Implications
• Section 4: Qualcomm presentation - technology evolution and roadmap (30 minutes) • Closing Thoughts (15 minutes)
Strategy Analytics – Focusing on Convergence
Strategy Analytics is a global leader in analyzing wireless communications, broadband services and media, automotive electronics, telematics, consumer electronics, and emerging technologies. With a strong focus on delivering insights that address business challenges in dynamic markets, Strategy Analytics applies its knowledge, analytical expertise, and over 35 years of experience to meet the needs of market planners, strategic planners, and product development planners.
including mobile communications. tariff initiatives. customer segmentation. With a decade of experience in research. and software companies with a focus on the European mobile communications industry. Phil Kendall holds an MSc in Economics from Birkbeck College. where he was the principal analyst covering a diverse range of telecoms markets. Mr. Prior to joining Strategy Analytics. Kendall utilizes his broad sphere of knowledge and valuable strategic insights to ensure that decision-makers are well prepared to identify opportunities and threats as the wireless industry evolves from voice to data and from circuit to packet mode. Director Mr. and a BA in Economics and German from the University of East Anglia. and 3G network evolution. Kendall is responsible for providing strategic and tactical support to leading wireless operators. equipment vendors. fixed mobile convergence. fixed network services. London.Presenter Biography Phil Kendall. 4 . satellite and cable TV communications. operator expansion strategies. Kendall was a research analyst at CIT Research. Mr. He is a regular speaker at wireless industry conferences and has authored major reports on landline substitution. analysis and consulting in the wireless and wire line telecoms industries.
Section 1 Migration Strategies: Mobile Broadband & Data Service Trends
<Insert Presenter Name>
Section 1 Agenda
Migration Strategies: Mobile Broadband & Data Service Trends
• 2G to 3G migration: voice to data • 3G Data Trends: offers, pricing and marketing strategies • Network challenges of data growth: tools for traffic management and supporting the move from web-centric to media-centric usage • Question & Answers
2G to 3G Migration: Voice to Data
Data Revenues as New Growth Driver
markets are very competitive • We need our share of the “next billion” subscribers BUT • How can we avoid going broke if we get them? • 3G and Value-Added Services (VAS) are key to profitable growth: – – – – Raise average revenue per user (ARPU – often calculated per subscription) Reduce churn Achieve network efficiencies vs.The Operator’s Growth Dilemma • Voice revenues are shrinking. 2G Compete on value not price alone .differentiate 8 .
Voice Market Struggling in Many Regions • Voice & SMS revenues declining in many mature markets – Regulation & competition suppressing European mobile voice – Recession also influencing spend patterns 200 100 0 -100 -200 -300 -400 -500 -600 -700 -800 Annual Service Rev Growth ($ mn) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Non-SMS Data SMS Voice Total SPAIN 9 Source: Wireless Operator Performance Benchmarking Q2 2010 (Strategy Analytics. Sep 2010) .
strong smartphone sales with required data plans pushes growth in non-SMS data service revenues as worst of recession passes Annual Service Rev Growth ($ mn) 2500 2000 1500 1000 500 0 -500 -1000 -1500 -2000 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Non-SMS Data SMS Voice Total USA 10 Source: Wireless Operator Performance Benchmarking Q2 2010 (Strategy Analytics.Growth in Non-SMS Data Can Help Offset Decline in Voice and SMS Revenues • In US. Sep 2010) .
Q1 2010 Growth Voice SMS Non-SMS Data 11 Source: Wireless Operator Performance Benchmarking Q1 2010 (Strategy Analytics. June 2010) .Global Trend: Non-SMS Data Main Growth Contributor • Global View: Non-SMS data the main contributor to revenue growth – Non-SMS data ARPUs up 20% year-on-year and revenues up 35% – SMS revenue growth not compensating for fall in voice revenues Annual Revenue Growth Monthly ARPU (US$) 20 18 16 14 12 10 1Q09 2Q09 3Q09 4Q09 1Q10 Voice SMS Non-SMS Data 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% Q1 2009 .
5 years at same level as WCDMA after 6 years and GSM after 7.Technologies Adoption Curves Shortening • HSPA technologies on a strong adoption curve: – Subscriber count after 3.5 yrs 1. March 2010 Quarters after Launch 32 12 . LTE likely to lag HSPA adoption (though beat WCDMA) Time to 150 Million Global Subs 300 Million Subscriptions 250 200 150 100 50 0 2.4 yrs GSM WCDMA HSPA 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Source: Strategy Analytics.4 years – Given network build requirements.
2G to 3G Migration: Postpaid Influencing 3G Growth Curve • Japan/Korea moving towards 2G shut-downs (around 10 years after 3G launches) • US / Australia still on strong 3G growth curve • W European falling behind as carriers struggle to push into prepaid massmarket 100% 3G* Subscriber Market Share 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Postpaid mass market Japan Korea Italy Australia US UK France Germany Prepaid mass market 0 3 6 9 12 15 18 21 24 27 30 33 Quarters after Launch *3G relates to WCDMA and CDMA2000 1xEV-DO 13 .
8x end 2007 base) – Other consumer electronics (CE) devices showing growth but still small percent of total active mobile broadband subscriptions in 2010 (US accounting for almost half of CE connections) Active Mobile Broadband Subscriptions 500 400 Millions 300 200 100 2005 2006 active 3G/4G handsets* 0 2007 2008 3G/4G modems/PCs 2009 2010 3G/4G other CE subs 14 * Active 3G/4G handsets = 3G/4G phones used with non-SMS data services Source: Strategy Analytics Mobile Broadband Opportunities .3x end 2007 base) – 81 million active 3G modem/PC users by the end 2009 (4.Early in the Cycle of Mobile Broadband Growth: Active Subscribers • Smartphone and modem growth in mobile broadband markets – 224 million 3G handsets used for non-SMS data by the end 2009 (2.
3x higher 5.3G Drives Average Revenue per User (ARPU).000 800 6.6x higher 1.6x higher Voice Data 80 100 40 60 ARPU (US$) • Significant increases in voice and especially data ARPU among 3G customers • DoCoMo average page views for FOMA and mova users rose from 9/day to 50/day with increased 3G penetration 15 .200 100% Page Views 3G penetration (%) 80% 60% 600 400 200 0 2003 2004 2005 2006 2007 2008 40% 20% 0% Internet page views (bil) 2. Application Use: Early Examples in Developed Markets UK Market (2H 2007) KDDI (4Q 2007) Chunghwa (4Q 2007) Hutchison 3G Others EV-DO PDC/1x WCDMA GSM/GPRS 0 20 1.
11 .Vodafone Hutchison Australia (VHA) Case Study: Maintaining Data Revenue Growth with Lower Pricing • VHA driving active 3G data users in both PC/modem and handset market – Handset growth from “increased data allowances. lower prices and innovative products” • Non-SMS Data ARPUs flat: but lower prices & better devices driving significant increases in adoption rates & 40% data revenue growth VHA Mobile Data Revenues (A$ mil) SMS 3G Services $153 $150 1H-09 $190 $224 $184 2H-09 $208 1H-10 16 Current exchange rate: US$1 = AU$1.
Windows Mobile. Android.8x 3G levels. Brew Mobile Platform) – Customized 3G VAS (for local market).5G + WiFi bundles • Smartphone ARPUs 2. Symbian.3x 2G levels and 1.9 17 . – Helping to deliver around 80% growth in mobile Internet revenues and 35% growth in non-SMS data ARPUs Current exchange rate: US$1 = NT$31. including Hami VAS suite for iPhone – Attractive data plans with 3.Chunghwa Telecom (CHT) Case Study: Smartphones Key Mobile Value Driver • CHT focused on driving smartphone adoption to grow value added services (VAS) revenues – Diversified smartphone platforms to maximize customer choice (iPhone.
7% of service revenues in 2Q10.4x higher than 2G – and subsidy per device a modest 2x 3G ARPU. Current exchange rate: US$1 = RMB 6. • Music & video key 3G services.83 18 . • Sales & Marketing (S&M) and Subsidies accounting for nearly 60% of 3G service revenues in 1H – though ARPUs 3.8% of subscribers & 11. so good 3G customer lifetime value.China Unicom Case Study: 3G Subsidy Investment Offering Quick Payback • 3G accounting for 4. complementing browsing & email use.
3G Data: Offers. Pricing and Marketing Strategies .
many 3G services will not penetrate beyond urban elites % of average daily GDP/capita 20 . relative to emerging market incomes – An Indian downloading one video per day would be spending over 5% of daily GDP – In contrast. a consumer in the US spends less than 1% Cost of Video Download Relative to Income India Brazil Mexico Spain UK US 0% 2% 4% 6% • Given the skewed income distribution in most emerging markets. most 3G services are expensive.Data Pricing Trends: Cost as a Growth Barrier • Even with aggressive pricing. this means that without radically different pricing.
17/minute. CEO) – Also emphasizes scale and reach: “Isn’t it time you were part of something big?” • Heavily promotes HSDPA as fixed broadband access for residential and commercial users – Fixed RM98 (US$27)/month (768 kb in HSDPA coverage) – Mobile (Huawei USB modem or Dell embedded laptop) RM138 (US$39)/month – “Unlimited” to 3GB/month 21 . sports US$5.005 (US$0.Success Stories: Maxis (Malaysia) Offers Range of Price Options.80/month.60/month) – Video messaging (US$0.40)/month + RM0.001)/kb • Promotes broad range of services • Positioning includes emphasis on new content/services – Video calling (US$0.28/message) – “Maxis is aiming to keep pace with mobile innovation and some of its moves have been 'Global Firsts‘ “ (Sandip Das.03-0.005 (US$0.001)/kb – 5 MB RM8 (US$2. HSDPA Q3 2006 • 3G data plans include low priced options for casual users – Unlimited RM99 (US$28)/month – 1 MB RM5 (US$1.07-0. on/off network) – TV (3 basic channels US$2. depending on plan.25)/month + RM0. Services to Drive Uptake • Launched WCDMA July 2005.
– MTNL: 50.000 3G subscribers in 300 cities (Dec 09) • 3G prepaid SIMs at US$1.25 for all non-premium channels (MTNL) or 15 nonpremium channels (BSNL) • Both have an “impulse buy” pricing option of one channel for 24 hours for US$ 0.India 3G VAS • 3G licenses only awarded in May 2010 to private operators – Spectrum awards made 1 September 2010 – Significant deployment not expected until 2011 • State owned BSNL and MTNL already have 3G licenses – BSNL: 750.21 – For comparison multiplex movie tickets in Mumbai start around US$1.50.10 22 .25 and prepaid activation cost of US$ 2.000 subscribers in Delhi and Mumbai (July 2009) – BSNL and MTNL currently offer mobile TV in addition to video calling and high speed internet • Monthly subscriptions: US$3.
for example these from T-Mobile Austria: US$/month Austria Austria Austria T-Mobile T-Mobile T-Mobile Web&Walk 100 Web&Walk 500 Web&Walk 3GB Add-on Add-on Add-on 100 MB/month 500 MB/month 3000 MB/month 6.82 13. Flexible Plans • European mobile broadband pricing – There are relatively few plans left with no usage limit – Operators used to charge a fee for each MB over the plan limit (overage) but many have moved to throttling (reducing speed) rather than charging for overage – It is common with some operators to offer a range of add-ons with different allowances.Pricing Trend: Moves Away from Unlimited Data to Tiered.45 23 .64 20.
Fair Usage. and that strong customer satisfaction on mobile broadband was due to: 1) Not overpromising on speed 2) A good network 3) No overage charges (use throttling) 24 • . No Surprise Charges • • • Marketing that highlights typical. no per MB fee after T-Mobile suggesting that average usage levels have stagnated due to fair use policy. not maximum speeds Fair Usage to limit certain activities/abusers (eg Peer 2 Peer) and thus network quality/speeds for rest of users is improved No surprise charges: on-device communication with user before data cap reached.Customer Satisfaction Improved with Good Marketing.
no roaming) • In Australia. data plans typically mandatory with smartphones. Recent price plan changes include: – – – move away from “one size fits all”: AT&T entry level plans for smartphones improved user notifications and renewable “buckets of data” instead of per MB overage charges to avoid “bill shock” Prepaid unlimited mobile broadband – higher modem price. plus free USB modem with 1GB monthly plan. • Mandatory smartphone plans still rare outside of N America – Though iPhone model of bundling data into core service plan is becoming more common 25 . more limited network roaming (new Virgin Mobile $40 unlimited on Sprint 3G network. combo caps let smartphone and modem share a pool of data: – 3 Australia: AU$29/US$26 per month plan offers voice/text cap and 50MB handset data.Pricing Trends: More Segmentation in Mobile Broadband and Shared Data for Multiple Devices • In US.
Differentiated Pricing Extracting More Value: the Next Wave in Pricing Flexibility • Sky Link (Russia) offers highly differentiated data plans. 280 websites for 6-10 and 10-14 yr olds • Flash suggesting 11% increase in data adoption in 7 months – 3% of this coming from plans with content/website restrictions • Few operators yet to move beyond on-net / off-net price differentiation 26 .ru SkyLink portals www.ru c.livejournal.ru Children's Internet $3 $17 $5 Monthly fee $90 $66 $67 $57 Unlimited access for: 50MB/hour 60MB/hour of http/https/flash streaming/internet paging weekend use 00:00-08:59 www. based on time of day.odnoklassniki.livejournal.ru SkyLink portals 60MB/hour of www. protocol or specific web sites. – using Flash Networks’ Harmony services gateway Tariff Unlimited Internet Unlimited WEB Unlimited Weekend Unlimited Nights Unlimited LiveJournal $3 Unlimited Classmates Unlimited mail.mail.com www. hourly volumes.
UK Micro-SIM iPad plans: Vodafone O2 Orange Three Monthly Data Allowance 200MB US$3. iPad plans which typically match standard USB Modem tariffs.1* US$3.6 US$11. – More open tablet/slate and PC market requires this SIM-only approach.SIM-only Data Plans addressing finite operator distribution capabilities • Operators are using SIM-only data plans to tap into broader 3G device ecosystem.7** US$11.g. with retention challenges offset by subsidy avoidance. Orange 3GB / 10GB plans and all O2 plans include free public WiFi use.4 10GB US$39 US$39 US$23.4 Notes: * plan valid for 24 hours use.4 US$23.7 3GB US$23.6 US$15. – e. ** plan valid for 7 days use.1* 1GB US$15.4 US$23. though greater focus on smaller data bundles. 27 .
alarm monitoring.Next Wave of Growth: 3G for the Masses. satnav. etc.) through a mix of retail and mainly wholesale deals – Verizon Wireless creating modular wholesale/partner platform through Open Development Initiative (ODI) to drive new connection volumes: Retail Model: Wholesale Model: Custom Model: 28 . New Device Types • Pushing 3G handsets and data plans to mass market and beyond – The low cost smartphone – Apps for everyone: the high end 3G feature phone – Entry level and mid-level usage plans: going from ad hoc use to data plan • The promise of new emerging device types – AT&T success: over 7% of subscriptions are “connected devices” (e-readers.
Summary of Best Practices for Pricing. Positioning 3G Mobile Data • Operators in emerging markets having some success with different ways of 3G promotion – – – – – Fixed broadband alternative Wide range of exciting new services Devices Flexible pricing plans with attractive entry level options Leveraging position of mobile handset as principle computing/web device for many users • Data usage stimulation mainly coming from lower prices. though significant flexibility still available for price discrimination – Usage caps / bundles to exclude high-use customers from low prices – Data plans bundled into postpaid monthly charges or linked to prepaid spend/recharge activity – Content-based pricing and zero-rated transport within content plans 29 .
Network Challenges of Data Growth: Tools for Traffic Management .
Jan 2010 Source: NTT DoCoMo FY09/10 Earnings Briefing.A Familiar Story: Data Traffic Huge Ramp in 2009+ • Operators typically reporting 3-5x increases in data traffic Source: AT&T 4Q09 Earnings Briefing. Apr 2010 31 .
Cost Control and New Revenue Streams Key to Profitable Traffic Growth Portugal Mobile Traffic & Revenues 1000 900 800 700 600 500 400 300 200 100 0 Data Traffic Voice Traffic Service Revenues 1Q06 = Base 100 • Exploding mobile data traffic is not matched Costs by revenue growth • A “smart pipe” role will only work if operators can control usage better – to contain costs – To monetize based on customer needs/behavior 32 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Starhub Mobile Traffic & Revenues 2500 Data Traffic 2000 Voice Traffic Service Revenues 1Q07 = Base 100 1500 1000 500 0 3Q09 Rev 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 .
and upstream content as users create and share more photos and video using mobile devices Global Mobile Data Traffic 6000 5000 Petabytes 4000 3000 2000 1000 0 2005 2006 2007 2008 2009 P2P 2010 Audio 2011 Video Other 2012 2013 33 Web/email/messaging/data . service level agreements.Mobile Data Traffic: Moving From Web-Centric to Media Centric • For networks. best efforts downstream data delivery to requirements for improved latency. move to more media consumption means a shift from bursty.
Source: Nokia Siemens Networks 34 . – O2 UK: overall. usage also varies significantly.1% of O2’s customers generate nearly 1/3rd traffic.5 GByte/user/month High-end smartphones: around 200-400 MBytes/user/month Mid-range smartphones: around 100 MBytes/user/month Feature phones: 5-10MBytes/user/month • And within device categories. as highlighted by operators struggling with iPhone traffic loads: – AT&T: 3% of iPhone users generate 40% of smartphone traffic. 0.Mobile Data Traffic: Device Mix and Usage has Big Impact • Average Usage levels vary significantly by device type: – – – – PCs/modems: around 1.
Femtos) Pricing. Compression 35 . Deep Packet Inspection.Mobile Traffic Jams: Building a Network (de)Congestion Tool Box Network Share. picos/microcells. LTE. (backhaul. Throttling Network Intelligence. WiMAX Data Offload (to WiFi. Traffic management (Analytics. Fair Use. Data Caps. sectorizing) Upgrades to HSPA+. Policy Control) Optimization. Capacity builds.
CAPEX Pressures: Data Traffic Explosion Driving Network-level Consolidation 30% Wireless CAPEX as % Revenues (12 month rolling average) CAPEX as % Service Revenues 25% N America 20% C/L America Asia-Pacific C/E Europe 10% W Europe M East & Africa 5% 15% 0% 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07 2Q 07 3Q 07 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 Source: Strategy Analytics Wireless Operator Performance Benchmarking Q1 2010 1Q 10 36 .
throughput) Personalization: Deliver “My Experience” over Many Devices $$$ 5Gb+ High QoS SLA for speed $ 250 Mb+ Low QoS Throttle speed 37 .TOOL: Use Intelligence Work Smarter. Not Harder Video Optimization Policy control Services in Cloud Deep Packet Inspection Customized Service Tiers (QoS. speed.
half of netbook 3G connectivity time happens at home Source: Strategy Analytics US Netbook Owner/Intender Survey.TOOL: Offload Data to WiFi. accounting for more than ¼ of connection time for those with a mobile broadband plan – On average. Femtocells US 3G Data Use At Home Remains High Connection Time by Type: Netbook Users with Mobile Broadband Data Plan At Home At Work/College Other 0% 20% 40% Wired 60% WiFi 3G 80% 100% Other 34% At Work/ College 16% 3G Netbook Use by Location At home 50% • 3G use is common at home. N=458 38 . July 2009.
Femtocell Strategies: Limited Use to Date, Modest Increase Expected
• Femtocells still mainly being sold as signal boosters, with varied pricing strategies:
– Starhub Singapore: free femtocell, US$23/month for unlimited voice/text (data use over femtocell charged at standard rates); – Vodafone UK: US$80 femtocell, all use charged at standard rates; – AT&T: US$150 femtocell, US$20/month unlimited voice plan; – Verizon Wireless: US$249 femtocell, all use charged at standard rates.
• Femtocells represent good vehicle for offloading in-building data traffic, though limited activity in this space so far
– Softbank’s 2010 femto launch offering free device to build fixed/ mobile bundles and manage iPhone traffic loads.
Building Blocks for Mobile Broadband Operators
Add Value, Customize, Differentiate
Enhance User Experience, Monetize
Intelligence, Analytics, Policy Control Bulk of Spend
RAN, Backhaul, Core Capacity Spectrum The Base
Backhaul Move to IP, Ethernet to Scale w RAN Upgrades
Summary and Recommendations: Mobile Broadband and Data Services Trends
• Mobile Broadband PC connections generating strong incremental revenues in both mature and emerging markets:
– Excellent opportunities as both substitution or complement to fixed broadband
• 3G Smartphones key to growth in non-SMS data revenues
– Mandatory data plans in N America, though less common elsewhere – Operators looking to tariff plans with inclusive voice/text/data or bonus/reward schemes on prepaid – Operators also reliant on quality of smartphone data experience to drive data plan adoption
• Smartphones and PCs causing traffic explosion in all markets
– Unlimited data plans increasingly rare (and unnecessary) – Traffic management and optimization (particularly video) essential – Need for operators to use analytics and network intelligence to differentiate & customize
Section 2 Value Added Services: Best Practices & Strategies <Insert Presenter Name> .
usage • Best practices: Advanced Asian market highlights • Emerging Markets: Success with m-payments in Africa. video. app stores.Section 2 Agenda Value Added Services: Best Practices & Strategies • Analysis of the most popular advanced data services (browsing. cloud services) • Best practices: maximizing the user experience to drive VAS uptake. social networking. China moving fast to leverage 3G • Europe and North America: Convergence and the triple/quad-play opportunity • Question & Answers • Coffee Break (15 min) 43 .
Most Popular Advanced Data Services .
Value Added Services: Browsing still the Biggest. Apps. Social Networking US Handset Data Revenues 45 40 35 30 25 20 15 10 5 0 Text and media alerts Games and Applications Video TV Music Browsing $ Billions 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • Consumer demand is driving the opening of the mobile internet • Browsing is the “killer app” of 3G networks 2015 45 . But Strong Growth in Video.
Apps: Didn’t the iPhone change everything? US Applications Market: Value versus Volume 14000 12000 10000 8000 6000 4000 2000 0 3500 2500 2000 1500 1000 500 0 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 Value Volume Consumers love “free”! 46 Downloads (m) 3000 $m .
• Trends of more cloud services and operators opening up network APIs to developers continue in 2011. 47 . Video on demand is taking a strong lead over linear (streaming) TV services. particularly around time-sensitive video such as sports. However. Cloud Services • Consumer demand for mobile applications will continue to grow. Mobile Video. Open APIs. Operators will target this growth through their own application stores and the WAC initiative to improve on current application supply. fragmentation will continue to prove a significant challenge. • Mobile video actually achieving some success.Growth in Operator Application Stores. even as social networking and cloud services gain popularity.
6%. while ringtone use declines 48 . 30% • • • Strategy Analytics predicts combined consumer and advertiser spend on mobile media will rise from $75Bn in 2010 to $139Bn globally by 2015 Asia Pacific will continue to contribute the largest share of global mobile media spend in 2015 accounting for 36. and mobile video and music (streaming) will rise strongly. 2% CALA. 19% APAC. versus North America (31%) and Western Europe (18.Global Mobile Media Growth 2009-2015 Global Mobile Media User Penetration 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2009 2010 2011 2012 2013 2014 2015 Global Mobile Media Spend By Region: 2015 MEA. 5% Western Europe.6%). 6% CEE. 37% Music: Full Track Broadcast Mobile TV Music Streaming Mobile Video Ringtones Mobile Games North America. Penetration of mobile games (via downloads).
g. will grow as social networks implement more effective advertising solutions on their platforms Source: Strategy Analytics Wireless Media Strategies 49 .Global Mobile Social Network Services (SNS) Growth 2009-2014 Global Mobile SNS Users / % Share of Mobile Web 200 150 100 50 0 2009 2010 2011 2012 2013 2014 25% 20% 15% 10% 5% 0% 3500 3000 2500 2000 1500 1000 500 0 Global Mobile SNS Revenues ($m) (* EXCLUDES BROWSING REVENUES) 2009 Messaging 2010 2011 2012 2013 2014 Global users (m) Share of Browsing (%) Advertising Content/Transactions • • • • Social networks gain further strength in mobile domain. mobile SNS users will grow from 64m in 2009 to 186m in 2014. aided by services like Facebook. for operators the next largest revenue driver is SMS/MMS messaging revenues (e. 77%). which operators share with SNS owners. and are becoming a platform for both content delivery and messaging. from status alerts) Advertising revenues. Location-based social networks helping to grow the advertising pie. Browsing (access) dominates mobile SNS revenues (approx. Globally.
USA + W. compared to 32% of other mobile web users. Mobile Facebook users access mobile web on average 3 times per day Frequency of Mobile Web Use High Mobile SNS % Other Mobile Web Users 0% 20% 40% 60% 80% 100% – Regularly use mobile web (>1x per week) Occasionally use mobile web (<1x per week) Stopped using mobile web •Strategy Analytics predicts that more than half of mobile SNS users in W. 2009.Mobile Social Network Services (SNS) Users: More Regular Web Users. More Sticky Average Length of Web Surfing Session on Mobile High Mobile SNS % Other Mobile Web Users 0% 20% 40% 60% 80% 100% • Mobile Social Network Services (SNS) users report a marginally higher percentage of longer mobile surfing sessions than other mobile web users – 30% of mobile web sessions among mobile SNS users are longer than 10 mins. – 0-10 minutes 31-60 minutes 11-30 minutes 61 minutes or longer • Mobile SNS users are more regular mobile web surfers – 45% of mobile SNS users browse the web from their mobile device multiple times per week. Mobile SNS users access Facebook on average 25 mins per day. Europe. N=2414 . compared to 23% of other mobile web users. EUR will use SNS primarily on their mobile device by 2015 50 Source: Strategy Analytics Consumer Research.
Value Added Services: How is business practice evolving? Billing Operator. credit card or third party Pay per download Microtransactions Subscription Advertising Monetization Routes to market On device Open internet Operator portals Discovery & Delivery Openness 3rd Party Development APIs Developer program Content management 51 .
operators must enable new business models to allow “free” to become a revenue generator Monetization Managing choice and understanding the audience is critical for operators to keep a strong portal Discovery & Delivery Openness Operators moving to an open environment but open should not mean unmanaged 52 . To maintain leadership.How do operators hit the sweet spot? Historically this has been the operators’ strength.
Maximizing the User Experience to Drive Uptake .
Mobile Application Stores: Customizing the Experience and Promoting Stickiness • Application Store Benefits – Customize and personalize the experience based on individual needs and preferences of the user – Personalization creates an emotional connection between the device and the user develops stickiness and customer loyalty – Enhances usability and promotes data services use • Mobile Twitter App users report better usability than PC web interface • Most free downloaded applications are rarely used – Unimportant. since no penalty to the user: abundant smartphone memory. no cost to download (on unlimited data plans) • Exclusivity and Large Personal Collections Lock Users In – Repurchasing and/or porting apps and content collection to another platform time-consuming and expensive • Overcoming Buyer Remorse? – How to ensure satisfaction if paid-for applications do not represent value for money? Tarnishes reputation of store owner? Should users be able to get my money back? Try before you buy? 54 .
2009 .Benchmarking Mobile App Stores: Apple App Store Sets Standard = User Experience (UX) Strength = Average = UX Weakness = not evaluated 55 Source: Strategy Analytics User Research US and UK.
Cool Transitions Disadvantages Customization for different platforms/devices Less flexibility for user than browser Advantages No or Marginal Customization for Different Platforms/Devices Faster Roll Out to Installed Base Disadvantages Optimization for one feature or service means sub-optimal performance for others Full customization for each device Updating features post-launch Disadvantages Slow. imprecise page navigation HMI cumbersome for authentication Cookie support on older devices 56 .Content Delivery Mechanisms: Device Centric Complementary Approach to Optimize the User Experience Network Centric Advantages Deep integration provides seamless user experience Advantages Better UE than Browsers: Fewer Clicks to Access Content. Simpler Navigation. No URLs. Cleaner UI.
March 2010. (simple/regular tasks) • Use “Context” to Surface appropriate content – – Threaded messaging Group contacts/messages by person/role. N=414 . MMS. Media Upload) – HTC “FriendStream” approach PC Mobile App • Leverage Convergence and provide seamless interface across multiple touch-points – – Encourage setup on a PC (complex/rare tasks) Provide widgets on handset for updates/messages etc. not type 57 Source: Strategy Analytics Mobile SNS User Study. to develop common experience across PC/mobile % Users Reporting Core Facebook Task Easy to Use 100% 95% 90% 85% 80% 75% 70% 86% 89% • Deliver via Apps/Widgets – For Facebook & Twitter. mobile app users are more engaged and more satisfied 82% Mobile Browser • Integrate all social connected services (Multiple SNS.Experiences to Meet the Needs of Mobile Social Network Service (SNS) Users • Partner with major and hot new SNS brands – Leverage open APIs etc. SMS. IM. Email.
Best Practices: VAS Examples from Advanced Markets .
The service lets users send and receive presents anytime. 59 . – Gifticon can be exchanged into a real product in off-line store. anywhere through the Internet. instant messenger and mobile phones.Best Practices Advanced Asian Market Highlights SK Telecom Service : Gifticon Launched : End of December 2006 • Gifticon = Gift + Icon – A mobile-based gift coupon service in wire/wireless Nateon(IM) using gift icon to present to friends or to ask friends to buy something for the user.
estimaed time with wireless data communication Wireless Internet Bus users get the infos with the above tools 60 . bus intervals.Best Practices Advanced Asian Market Highlights Seoul Bus Tracking service: Bus Management System in Seoul City Electronic board on each bus stop [Traffic Center] Bus info in real time [Bus Company] Bus info in real time Automated Response System on phone PC Internet [GPS] : To spot bus locations Collecting infos on road conditions.
Innovative Experiences: Context Awareness • Examples: – – – – RIM: Profile Changing based on Physical Context HTC: Settings adjustment based on Geographical Context Ovi Store: ‘Social Recommendation’ Major OEM: Automatically Create “Favorite Contacts” List by Messaging Type. Depending on friends contacted by that method – Major Operator: “Do you want me to send a ‘Running Late’ message?” 61 .
Scenarios for Sensing and Adapting to Context Physical Context Where am I? Home. Abroad? What am I near to? Adapt Time Context Is it day. Car. evening. or night? Is it a weekday or weekend? Recommend Take Action Social Context What are my friends doing? Who can I connect with? My contacts My appointments My messages My media My settings … Activity Context What am I doing? What do I need to achieve today? 62 .
business search) Social Context (friend finder) Proximity-Based Action (auto-synch) Enhancing Relevance Surfacing Content of Interest (based on recommendation) Surfacing Contacts (based on status & protocol) Surfacing Anticipating Needs Action Intent (e. search-based advertising) Intelligent Action (e.g.g. context of mobile web use) Decision Support (e.g.g. weather) Local Search (e. “I’m on my way”) 63 .g.Adding Value Through Context-Awareness Local Information (e.
Best Practices: VAS Examples from Emerging Markets .
e. CDs. ringtones. e.g.g. convenience stores. tickets. music. cinema tickets • Fund transfer between two people.g. games.g. typically < $10 • Mobile content.g. vending machines. use in fast footfall areas like quick service restaurants (QSR).g. music • Online content.g.g. DVDs • Services.Mobile payment segmentation Remote Payment Micro payments • Small value purchases. virtual currency.g. e. e. typically > $10 • Physical goods. books. video content • Others. petrol/ gas stations. parking • Large value purchases. e. money lending/ settling debts Macro payments P2P money transfer Proximity Payment Contactless payments • Paying for goods or services at point of sale using a contactless enabled device e. public transport stations 65 . e. e. e. taxis. domestic and international remittance.
0 2.0 4. ≈ 20.000) Photo: J.0 FY 2008 FY 2009 FY 2010 • Globe (Philippines) G-CASH – – – – • MTN Uganda: 1 million subscribers in 15 months – – 16% of subscriber base ≈ US$ 20 million per month • Average transaction US$ 21 Gilgil.0 2.0 4.0 6.Operator Successes: P2P money transfer Users (mil) • M-PESA has truly been a killer app for Safaricom (Kenya) – – – 9.0 Users (mil) Revenue (Ksh bil) 6. Blight.0 8.0 8.5 million registered users (60% of subscriber base) Contributed 9% of total revenue in FY 2010 Builds presence outside major urban areas Volume ≈ US$ 100 million per month 18K authorized outlets (2X # of ATMs in Philippines) Recently signed deal with Boku to use GCASH for virtual world payments Hampered by somewhat complex registration procedures 10. Strategy Analytics 66 M-PESA Revenue (Ksh bil) . Kenya (pop.0 0.0 0.
India: Mobile Money Slow Start Due to Policy • Reserve Bank of India (RBI) has been very conservative about permitting mobile forms of payment – In 2008 RBI asked banks to slow their planning for mobile payments – Policy guidelines issued in August 2009 opened the gates a little. has launched a trial of Nokia Money in Pune – Initially primarily a bill-paying service 67 . partnering with Yes Bank. but P2P transactions were still prohibited • Maximum transaction value set at Rs. 5.000 (US$ 107) • Nokia.
Best Practices China Moving Fast to Leverage 3G • China Mobile services leveraging 3G now seeing faster growth: – Service: mobile payment/ wallet services – Launched: June 2010 – Users by Aug 24: 2.7 million – Service: mobile reading service – Launched: May 2010 – Users by end June: over 6 million – Movie and video streaming: over 6 million users (Mobile TV only 300.000 users) – Music download service: over 3.2 million 68 .
US$35.3 for 19GB 70 .9 for 100300MB.Convergence Examples in Europe: 3G & Wireline Broadband Bundles • Emergence of bundled wireline/3G broadband products – Generally discounts for users taking 3G and DSL – Some combination products.6/month for DSL + 3G • No usage caps (previously 0.8 discount over separate price Banda Larga Móvel • free 100MBytes/month of 3G for DSL customers • then US$17. though operators seem to be struggling to market smaller data allocations on 3G within these Home Starter + Internet Everywhere • US$31.2/month for DSL + 3G • 3GB usage cap on 3G • US$7.5GB on 3G) • 3G only pricing at US$16.90 for 300MB-1GB • additional 3G plans available at c.6 for 5GB and US$26. US$4.2/month below TMN prices A1 Breitband Unlimited • US$34.
241 € 3. Home Phone.Adding Mobile Broadband Triple Play and Quad Play to the Mobile Revenue Baseline Potential Revenues (Millions in Local Currency) from Mobile Triple Play & Quad Play Upside Revenue Potential for Bundling Varies Significantly By Country Mobile Triple Play would be attractive in Germany. Italy and UK.738 71 Quad Play (TV.196 Spain Euros € 284 € 286 € 2.000 0 France Euros € 268 € 57 € 3. Internet and Mobile Broadband) Mobile Broadband Triple Play(Quad Play w/o Home Phone) Mobile Revenue Baseline 7.000 1.000 6. Home Phone.327 € 2.033 UK Pounds £78 £708 £1.∆ Revenue from Bundling . Internet and Mobile Broadband) Mobile Broadband Triple Play(Quad Play w/o Home Phone) Mobile Revenue Baseline Source: Strategy Analytics Tariff and Revenue Strategies for more details See report: ‘How Mobile Broadband Wins Against Quad Play’ . Quad Play could have significant impact in Italy Revenues Millions in Local Currency Quad Play (TV.514 Italy Euros € 2.254 Germany Euros € 579 € 2.000 3.000 5.118 € 1.000 4.000 2.
strategyanalytics.com rather than a telco 72 . essentially a acting as broadcaster www.Orange France: success in converged TV for a telco? • Orange France: Content Everywhere strategy – Video content: Build audience. differentiate and grow ARPU (pay content & airtime) – Fixed and mobile network assets in France. • Orange France very different from Orange in other markets – Acts and operates like a media company competing against SFR (which in effect also is a media company) and the likes of Canal+ and Vivendi – Particularly strong focus on triple play / 3-screens strategy – Orange France is a major pay-TV company.
com 73 . although barriers are falling • Handset fragmentation – OS and device feature set fragmentation represents a challenge for converged media distribution on mobile • Quality of service (QoS) over mobile networks – Consumer perception of quality of video and music delivered over cellular a major barrier – Network capacity issues will remain greater on mobile versus fixed networks • Media companies lacking understanding of why mobile is different to online has also held some usage back – As has telco companies lacking understanding of how media industry works www.strategyanalytics. – Consumer willingness to pay a premium for dual downloads of music tracks from operators has not been successful – Data plan and high pricing of casual data use is slowing adoption.Convergence challenges • Device Capabilities – There will continue to be limitations of the capability of mobile handsets versus desktop PCs and other large form factor devices • Pricing models – Consumers don’t want to pay separately to have access to same content on separate devices.
Access Content: Anywhere at Any Time – – Access all of my TV and filmed entertainment media. PC and mobile phone? 49% Interested • 0% 20% 40% 2 3 60% 4 80% 100% • Monitor. HVAC. etc. personal content (images.Consumers Perceive Content-Related and Control-Related Benefits of Convergence • Consumers perceive two major use scenarios of converged offerings – Content-Related and Control-Related: Store. tag for later consumption on another device Q.Not at all 5 .Very Interested Source: Strategy Analytics UEP. Dec 09-April 2010. Connected Consumers Study. How interested are you in having a common operating system or user interface look and feel across your TV. Manage. UGC. messages contacts…) Consume on the move.) 1 . music. N=48 74 . Control and Automate Remotely – – Monitoring (home and family) Control (lighting.
Time.and Activity-based Context Human-Machine Interface 75 . Social.Which Mobile Experiences Will Add Value and Support Differentiation Beyond 2011? Improving Web Experience Smarter Devices ‘Always-On’ Experience Content Delivery Mechanisms Long-tail Applications New Revenue Models Customizable UI Personalization & Relevance Network Convergence New Connected Devices Consistent Experience Across Multiple Screens Access. Share Convergence & Cloud Services Context & Multi-Tasking Context Awareness Evolution of Messaging Management of Presence Physical. Manage.
offer ways to differentiate. churn upside – Bundles for pricing discounts for fixed/mobile broadband early offers – Converged content and services across multiple devices. better user experience on smartphones – Social networks key category driving browsing sessions and access revenues • Beyond browsing. but still early stage market 76 . content • Compelling user experience essential element to drive VAS growth • Convergence still at early stages but offers revenue. cheaper data plans. in-home and portable.Summary and Recommendations: Value Added Services • Browsing a key driver of mobile data services – Helped by faster networks. mobile video app downloads gaining traction – time-sensitive video streaming and Video on Demand more popular than mobile broadcast TV – Make apps available for both high-end smartphones and “smart” feature phones to gain access to additional market segments that want personalization.
Section 3 Device Planning: Devices Driving Broadband Adoption <Insert Presenter Name> .
Section 3 Agenda Device Planning: Devices Driving Broadband Adoption • Handset Trends: Smartphones and smart feature phones driving growth • Connected devices: Future of embedded notebooks. netbooks and tablets • Best Practices: Emerging business models & Distribution trends for new connected devices • The next wave of connectivity: M2M. Mobile Health. Autos and Expanding the Mobile Ecosystem to Other Areas • Final Question & Answers & Discussion of Issues and Implications 78 .
Growth in Smartphone Volumes to Drive Global Handset Sales Global Handset Sales by Type Millions of Units.200 12% 1.600 1. as feature phone and basic phone volumes stagnate and gradually decline.000 800 600 400 200 21% 0 2008 2009 2010 2011 2012 2013 2014 2015 21% 21% 22% 67% 65% 59% 56% 53% 51% 50% 49% 14% 19% 22% 25% 28% 30% 32% Smartphone Feature Phone 21% 21% 20% 19% Basic Phone Smartphones will drive market volume growth. 79 79 . Percent of Total 1.400 1.
400 1.000 800 600 400 200 21% 21% 21% 67% 63% 57% 6% 7% Smartphone 8% 52% 48% 45% 43% 41% Feature Phone Smart Feature Phone 21% 22% 21% 20% 19% 0 2008 2009 2010 2011 2012 2013 2014 2015 Basic Phone • Superphone: A high-tier.200 12% 14% 2% 3% 4% Superphone 5% 6% 18% 20% 4% 22% 5% 24% 25% 25% 1.0 GHz and a main display over 4. 80 80 . • Smart Feature Phone: A high-tier or mid-tier.600 1. Percent of Total 1. mostly data-centric feature phone with a touch screen and WiFi.0 inches in diameter.Superphones and Smart Feature Phones to Lead their Categories in Growth Global Handset Sales by Type Millions of Units. multi-tasking. supersized smartphone with a processor faster than 1.
The segment between $100 . by 2015. However. Source: Strategy Analytics Wireless Smartphone Strategies 81 .$190 ASP is expected to see strongest growth in volume and value.Global Smartphone Shipments by Tier 2009-2014 500 450 400 350 300 250 200 150 100 50 0 2009 Volume Sales (million units) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2009 2010 Volume Share (%) 2011 2012 2013 2014 • • SA believes that the highest smartphone price tier ($300> ASP) will see only very slight growth (2% annually). 44% of the smartphone market value remains in the $300+ price tier.
100%) • GPS • Touch • WLAN • QWERTY • >4 MP Camera • Music • WAP • MMS • FM Radio 82 . Touch.10%) HTML Browser Growing (10 .40%) SMS Mature (40 . and WiFi Gain Traction 2008 NFC Modular Form Factor Software Radio QWERTY FM Radio GPS Music WAP SMS MMS Java Touch Flex Display GPS NFC WLAN QWERTY Touch WAP Music HTML Browser FM Radio Java MMS 2014 • QWERTY • WLAN • >4MP Camera • Touch WLAN •? • 2-4MP Camera • FM Radio • GPS • MMS • WAP • <2MP Camera • Music Emerging (0 .Handset Enabling Technology Evolution (2008 2014): QWERTY.
Tapping Revenue Opportunities is a Challenge Touch QWERTY Voice HTML Flash Java GPS Camera Haptics DLNA Pico HDMI Input Enablers Content Enablers Hardware Enablers Output Enablers Service Enablers NFC MMS Browser 83 .
email.QWERTY Growth Fueled By Messaging Services QWERTY Phones Percent of Global Handset Sales 30% 27% 25% 20% 18% 13% 10% 10% 5% 2% 2004 2005 4% 2006 4% 2007 2008 2009 2010 2011 2012 2013 2014 6% 21% Input Enabler 25% 15% VS. 0% • The evolution of QWERTY devices started with smartphones … but today driven by messaging feature phones. browsing. social networking) Input Content Service Hardwar e Output 84 . • Operator interest in non-voice services (SMS.
Enhanced Browsing Core Component in Internet Services Full HTML Browser Phones Percent of Global Handset Sales 60% 54% 50% 40% 36% 30% 20% 17% 10% 9% 0% 5% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 12% 23% 46% 41% 50% 30% < HTML 5 > • Mobile browsing is the killer application that drives data usage • Full HTML browsing as a differentiator for handset vendors • Access to the same Web (not a “lite” version) is critical • Context awareness allows the mobile browsing experience to be richer than on PC Input Content Service Hardwar e Output 85 .
security. sales to 2014 Mature Market • Traditional mobile subs are maturing -.) than people • Nearly every machines has information someone needs: safety. but what next? Today’s Market • Non-traditional devices are now becoming embedded • CE OEMs meeting and partnering with carriers Emerging Market • More machines (industrial. diagnostics. support. consumer. etc. 86 .Embedded Wireless is the Next Wave in Mobile Broadband Devices Slowdown in Legacy Markets 6.7 billion people. Cumul.6 million subscriptions (2009) Filling the gap: Emerging Connected Mobile Devices Penetration will Fuel Growth >10 billion machines and sensors. etc. 4. <1% penetration Embedded as % of Portables TAM.lower handset growth rates • Mobile Broadband drives now.
87 . Smartbooks and plenty more to come • By 2014 there will be an installed base of 112 million Embedded Wireless consumer electronics devices in the US market. Netbooks.A Brave New World of Connected Convergent Devices • We are witnessing a continuum of Connected Convergent Devices used for ubiquitous casual computing: – Mobile internet devices (MIDs) Tablets. E-Book Readers.
Netbooks. e-Book Readers (eBRs). Cloud based. Video. music. email. Dedicated reader Device 6 browsing. MIDs. infotainment Voice. Imaging. video. MID Smartphones Smart feature phones US$250 Source: Strategy Analytics Connected Home Devices US$500 US$750 US$1000 Unsubsidized Retail Price 88 . Ebook. Mainly Atom & XP 8 E-Book Smartbook Non traditional devices Tablet browsing. ARM ecosystem 4 Smartphones 2 ‘Smart Feature’ phones browsing. email. Tablets: The “Fourth Screen” Battleground Display Size (Inches) 20 + Connected TVs Fixed networked devices 14 Thin & light Notebooks Notebook 12 Netbook 10 browsing. VoIP. email.
P. Amazon. casual browsing Media & eBooks Mainly at home Comfortable environment Shareable “Always on connection” Uses Cases Usage Environment Quick. N=24 89 . browser essential Young Many own iPhone Brands: Apple. Tablets Buyers Young (median age 31yrs) 70% own S. Samsung eBooks Quick. Sony Quick. Apple.Comparing User Insights for Netbooks. e-Book Readers (eBRs). N=798. HP. Dell. & laptop Brands: Sony. casual browsing Media 60% home (29% bedroom) Comfortable environment Shareable 20-40% work/travelling 77% Cellular and WiFi Desires & Preferences Source: Strategy Analytics Netbook & eReader Owner/Intender Surveys. Apple. 2009. Samsung Middle Aged (median 37yrs) 95% own mobile & laptop Brands: Sony. iPad UX Evaluation. casual browsing 59% at home “Convenience” #1 priority Shareable 77% say cellular “vital” 40% full color screen. April 2010.
Netbooks will migrate towards ultra-portable ‘lite productivity’ devices .eBookReaders niche for hardcore readers SOCIAL DEVICES Informed. light OS ideal (e.g. Entertained… wherever I am Personal & Work Productivity Comfort. Portability. may or may not have physical keyboard Mainly for basic tasks in home > Fast. Fast Connectivity and Media Experiences Enhanced MediaCentric Shared Experiences 90 .Needs Served and Usage Scenarios by Device PERSONAL DEVICES Convergent use cases > ONE "sharable device" product category 7-10" screen.Tablets/mediapads will dominate consumer casual usage device segment . Android) . Productive.
making the phone the most powerful device category.Enabling Technologies Allow Handsets to Have More Use Cases than Other Devices Beyond the PC Voice Music Camera Video Games Navigation Productivity. New Use Cases 91 . context aware services and applications. Internet Context Aware Portable High-end Computing Mobile handsets are empowered by Enabling Technologies to provide consumers with flexible. on-the-go.
The 4th Screen for the home: Touch. Connected Home Devices Service 92 . Wi-Fi. Thin Ultra-portable tablet that can easily detach from charging base •Calls •Contacts •Voicemail •Browser •Email •Family Calendar •Apps Telephony Information Home Entertainment Service Provider Apps •Music. Photos •Universal Remote Control •DLNA interoperable •Home Control & Monitoring •Energy Management •IPTV •Apps Source: Strategy Analytics. 3G. Video.
Product Planning Implications: E-Readers Converge With Tablets & Multi-Media Devices “If I’d have asked consumers what they wanted.” •Compelling. “Connected” experiences driving evolution • Tablets interpose using multi-media as the future value-supplement to e-reader Sony VAIO X Series Notebook HP Slate Tablet PC Amazon Kindle and Kindle DX Apple iPad EnTourage Dual-Book Lenovo Tablet Notebook Asus 1005HA Netbook HP Airlife 100 Smartbook Alex e.book reader General Computing Dedicated / Optimized Multimedia 93 . they’d have told me faster horses.
5mm Audio Jack Enterprise Comms Personal Entertainment 94 .Enabling Technologies Drive the Four Screen Index Adoption In the Car • GPS • Bluetooth • Voice Recognition • FM Transmitter • HDMI • TV Out • DLNA • WiFi At Home Navigation & Music Media Control At the Office • SIP • QWERTY • E-mail • Pico Projector On the Go • FM Radio • Browser • Push-to-Talk • 3.
or transparently including access with device purchase or content purchase? – Who will own billing. customer care – provide ease of use and customer satisfaction? Operator Lead Device Vendor Lead Content/Web 2. could offer integrated femto introductory service bucket/period with device purchase 95 . access could be bundled in content price Build on presence. Build on device centric brand multiscreen.0 partner Focus on extension of online/content extension to multiscreens. in-home VAS experience/excellent user building on home gateway w interface. or off-hours.Connected Devices: Evolving Business Models • Focus on what makes most sense to consumer – – – – Which brand(s) have best traction? Who would consumer naturally look to for service? Would consumer want service as part of a bundle? Will pay as you need service make sense.
though covers only 1% of gross adds Globe spent $27m on subsidies in 2008. though limited addressable market – – – e. etc. from $1. postpaid subscriber acquisition costs (SACs) at $130 for Globe Telecom. Smartphones. • • Emerging market subsidy spend typically negligible across total subscriber base $100+ subsidies still available in postpaid base.g.160m service revenue base UMC Ukraine spent <$3m on subsidies in 2008. following “standard” developed market practices.Subsidy Trends: Emerging v Mature.080m service revenue base Globe Philippines: SACs per Gross Add 250 20 18 16 14 12 10 8 6 4 2 0 2004 2005 2006 2007 2008 96 UMC Ukraine: Blended SACs per Gross Add US$ per Gross Add 150 100 50 0 2004 2005 2006 2007 2008 Postpaid Prepaid Blended US$ per Gross Add 200 SIM card & voucher cost Handset subsidy Advertising & marketing Dealer commission . from $1.
operators are often working with partners to address opportunities and target new devices and services with embedded mobile modules – – – – Automotive/telematics Mobile health Smart grid and electricity/energy management Video surveillance • B2C categories.The next wave of connectivity: M2M. Autos and Expanding the Mobile Ecosystem • Machine-to-Machine communications is gaining attention across a wide range of vertical markets..g. such as mobile health services and devices for the consumer (e. personal heath monitors) • While many of today’s services use minimal bandwidth. Mobile Health. medicine bottle caps. improved 3G and 4G networks will spur development of more bandwidth intensive services and applications 97 .
building on external mobile broadband modem market • Lower smartphone prices and more functional feature phones address more price sensitive segments and make data accessible to new users • New device categories and vertical markets offer growth. but business models need to fit – In many cases. wholesale or partnership models make most sense – Low ARPU per device. driving 3G data use – Smartphones tap into multiple OS – Superphones and smart feature phones are leading growth in their handset categories – Casual computing devices for browsing. but margins attractive 98 .Summary and Recommendations: Device Planning: Devices Driving Broadband Adoption • Device portfolios expanding. multimedia consumption will gain traction.
Closing Thoughts & Final Discussion .
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