iPhone

Orange heads for iPhone goldmine (maybe)

Paul Rasmussen — Fri, 27 Nov 2009 12:56:31 -0500

With Orange now selling iPhones in the UK, analysts have forecast that the company will have more than one million customers using the Apple device by the end of next year. If this occurs, the market research firm Mediacells claims that Orange could gain £750,000,000 in revenues from these subscribers.

This huge revenue boost, according to Mediacells, will be driven by Orange's iPhone ARPUs being nearly 30 per cent more (£10 per month) than non-iPhone users.

However, the £750 million in additional income does not account for the cost of purchasing the devices from Apple. Mediacells estimates that the cost to Orange for each iPhone will be around £250 per device, leading to Orange still generating more than £500 million of revenue from selling the iPhone on its network in the UK.

Mediacells' chief executive, Brad Rees, said: "Selling the iPhone remains the best way for operators to get customers to part with more cash, even in a recession. The fact that Orange has not undercut O2's tariffs with its own iPhone offering just goes to demonstrate Orange's confidence that it can generate new customers and reduce churn through selling the iPhone."

But this forecast, which might look wildly optimistic to some, is already under pressure given that one of Europe's largest supermarkets, Tesco, has agreed with O2 to resell the iPhone as part of its MVNO deal. Tesco, known for undercutting rivals on price, is being positioned by market watchers to be the first to open a price war with Orange and Vodafone (when it eventually has access to the handset) that will bring carnage to what has been a ‘steady state' retail price environment since the launch of the iPhone.

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Mobile News

Vodafone pushes for iPhone to carry 360 service

Paul Rasmussen — Fri, 13 Nov 2009 12:44:35 -0500

In an effort to enhance the appeal of its 360 service, Vodafone has confirmed that it will be submitting its application portal for use on the iPhone and Android platforms.

According to Bobby Rao, marketing director for Vodafone internet services, the company plans to submit elements to the iPhone App Store, such as Maps, People "and whatever else they choose to accept." However, this move would seemingly conflict with the strictly Apple-only software environment of the handset, with its carefully policed App Store and vendor-defined look and feel.

Rao said that Vodafone would submit elements of 360 to the Apple store and planned to run the platform on branded smartphones such as Android handsets, not just on its own-brand, midrange phones. The first 360 cell phones run the LiMo operating system.

Rao also pointed out that other manufacturers already working with the company were keen to take 360 and Vodafone Shop on board. "We already have agreements in place with several handset manufacturers [to offer 360 services], which are data compatible but not all on an open OS. Plus being able to access the Shop on things like S60 devices extends the reach of the portal."

Whether to accept applications like 360 Maps and People will be a key challenge for Apple. Rejecting them would offend a major channel to market, at a time when it is seeking greater volume for the iPhone, and could even attract antitrust attention as with its Google Voice dispute. Accepting them would be a significant step along the way to dual-branding and a greater influence for the operator over the user's mobile web experience.

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Rethink Wireless and Techradar

UK iPhone price war opens with free add-ons

Paul Rasmussen — Wed, 11 Nov 2009 12:39:16 -0500

While Orange and O2 UK have made high profile statements that there will be no price war in the UK over the iPhone, O2 has opened up doors by cutting the price of the tethering option and giving free landline ADSL broadband to its existing iPhone customers.

This move follows the announcement that Orange had sold 30,000 iPhones on the first day it became available in the UK, which the company is claiming as a record for a handset launch. The company also included its Orange Wednesdays app that provides Orange iPhone and iPod touch users a two-for-one cinema voucher that can be used at screenings every Wednesday night.

However, O2 has responded with the incentives of offering a free trial of the Sky Sports TV package for the first 90 days, hoping to lure people in with a bumper package of festive sport and entertainment.

Meanwhile, in an attempt to recover from the confusion surrounding ‘unlimited data limits', Orange has come clean and stated that it won't cut off users breaching the 750Mb 'fair use' data limit on the iPhone. "We don't restrict the service, and we don't charge subscribers any more if they go over 750Mb. It's just an indication of where we'd prefer people to be," said the company.

"When people reach 750Mb they're free to use as much as they want after that. If we see customers using loads more than that though, then we'll send them alerts by SMS or phone call, to tell them they're using more than they should be."

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IT Proportal

Nokia continues to lead smartphone market; outpacing rivals

Paul Rasmussen — Fri, 06 Nov 2009 12:19:15 -0500

Much has been made of the rocketing growth of Apple, RIM and HTC in the smartphone market, while Nokia has been lambasted for failing to recognise the trend and has missed out on this fast growing handset segment.

However, IDC's worldwide quarterly mobile phone tracker continues to position Nokia as the overall leader in converged or smartphone shipments with the popular flagship device, the N97, driving its market share to 37.9 per cent in Q3/09, compared to 37.1 per cent a year ago.

RIM has overtaken Apple to gain 2^nd place, albeit that its shipment volumes were largely North American-based. However, the company also posted significant improvement internationally, with some regions recording triple digit growth year over year.

Apple recorded its highest volume yet in a single quarter, driven by the near worldwide availability of the iPhone 3G S which triggered another round of annual replacements for Apple loyalists. However, while the iPhone has struggled within emerging markets, its arrival at China Unicom this year could foreshadow greater shipment volumes (although early reports would seem to indicate otherwise).

HTC retained 4^th position, excluding phones sold under another company's brand, and remains the largest provider of Windows Mobile-powered devices. Samsung returned to the top five vendors during Q3/09, although volumes were flat from a year ago. The company saw marked improvement in Asia/Pacific, Latin America and EMEA, and has been a big supporter of Windows Mobile.

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Evertiq

Cheap touchscreen phones drive down ARPUs, claims report

Paul Rasmussen — Wed, 04 Nov 2009 11:24:04 -0500

While much is said about high-end smartphones boosting ARPUs, a new study claims that the emergence of cheaper touchscreen handsets is doing the opposite, driving down ARPUs by 23 per cent.

According to TNS Comtech, which carried out a consumer survey of 240,000 interviews over the course of one year, consumer misunderstanding is to blame. The study claims that consumers are not aware of the difference between a phone with an advanced OS and a touchscreen phone with a basic OS. While this may mean operators are able to grow their customer base, by offering cheap touchscreen handsets, they will be doing so at the expense of their margins.

Paul Moore, director at TNS ComTech, said that, although it was all too easy to attract value driven customers with non-smart touchscreen phones, "operators and manufacturers alike need to think long and hard about their handset portfolio and the effect that handset types are having on customer value. They should take care to educate consumers about the differences between operating systems and not simply push phones that drive volume sales but contribute negatively to value."

To worry operators further, the growth in the global smartphone market slowed to four per cent in the July-to-September quarter as sales of more advanced handsets fell in Europe and Latin America, said the research firm Canalys this week. The firm said much of the recent growth in the smartphone market has come from the most expensive models--iPhone, Nokia's N97 and the BlackBerry Bold--but vendors are increasingly focusing on offering cheaper models.

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Telecoms.com and Reuters

Orange causes confusion with iPhone data download limit

Paul Rasmussen — Wed, 04 Nov 2009 11:21:52 -0500

Even though Orange has not yet launched the iPhone in the UK, it has hit trouble by offering an ‘unlimited' data service with a 750Mb per month limit, and implied that subscribers will not be able to use mobile internet applications like Spotify, AudioBoo, Ustream, Facebook and YouTube.

The company has attempted to quell the rising level of concern by claiming its T&Cs state that the handset is "not to be used for other activities (eg using your handset as a modem, non-Orange internet based streaming services, voice or video over the internet, instant messaging, peer to peer file sharing", a spokesman has stated that "popular streaming services will not be banned for iPhone users."

"As a result," said the Orange exec, "we do not intend to apply network protection controls to anyone, as long as they are within their usage allowance. The T&Cs are in place to reserve the right to restrict access should they continue to exceed our Fair Usage policy."

Orange said that its research in other European countries found that the average user downloaded less than 200Mb per month. Defending the 750Mb limit, the company maintained this would provide a user with either five hours of video downloaded from YouTube, 75,000 mobile web pages, 30,000 normal web pages, around 250 full music tracks or 1,500 mobile games.

Interestingly, the present sole UK distributor of iPhones in the UK, O2, has kept its download offers far more vague without putting a figure on the data limit. There has been evidence of some people receiving a text warning them of their usage and 'suggesting' better plans.

For more on this story:
MacWorld and Network World

Symbian apps developers question future of OS

Paul Rasmussen — Wed, 28 Oct 2009 14:08:20 -0400

Despite the exec director of Symbian, Lee Williams, placing great emphasis on the exciting enhancements planned for the mobile operating system (OS) at this week's Symbian Exchange and Exposition tradeshow, its applications developer community seemed to think otherwise.

Not helped by a total lack of up-beat announcements from the handset vendors offering Symbian-based handsets, the consensus from apps developers exhibiting at the event was that the OS was stagnating.

Visions Objects, which makes across-platforms handwriting apps, believed that Symbian had done little to keep up since the advent of Android. "I think that the approach of the operating system on mobile phones has changed in the last 12 months," said Denis Escleine, its business development manager. "It's now driven by the iPhone and accelerated by Android. I think Symbian is far behind... If there is no change in user friendliness, and opening of the environment, I think it will die--they have to react."

Other developers commented that the Symbian OS was becoming less popular with an increasing number of companies asking for apps to be built for them based on the iPhone or Android platforms.

Williams has attempted to combat these negative viewpoints, stating that handsets with the first fully open-source Symbian implementation would become available in the first half of 2010, with further versions scheduled to appear in handsets for the second half of 2010 and early 2011.

However, while this OS development roadmap might look sluggish in comparison to the competition, Williams claimed that over 450 new OS features were being planned for the next 12 to 18 months with a focus on NFC, a social web API and a new UI framework.

This update from Williams might be overshadowed by the rumour that Sony Ericsson--a long-term Symbian supporter--will launch it first Android-based handset next week, including a new UI similar to HTC's Sense UI.

For more on this story:
The Mirror

Smartphone market driven by OS wars and feature migration

Paul Rasmussen — Wed, 28 Oct 2009 09:06:20 -0400

While iPhone shipments are growing quickly, smartphones based on the Symbian operating system (OS) remain dominant and will continue to grow over the next several years, reports In-Stat. However, Symbian will wane, resulting in a drop in net Symbian-based smartphone shipments in 2014.

Meanwhile, the basis of competition will change from the OS to the functionality and "user experiences" that the phone can provide. The advanced feature sets of smartphones continue to evolve as users demand capabilities such as touch screens, increased camera resolution and Wi-Fi connectivity options. "In-Stat believes new OSs such as Android and Maemo will cut away at Symbian market share," says Allen Nogee, In-Stat analyst. "Although there are relatively few open source OS-based smartphones in the market today, the open source OS momentum is difficult to ignore. After years of hype, it is easy to see that 2010 will be the year of Android." Article

Smartphone revolution tests established players – page 2

Keith Mallinson — Tue, 27 Oct 2009 17:15:32 -0400

Major operators such as Vodafone are no less challenged by the rise of Apple and others. Vodafone's moves--I'm loathe to describe most of these as strategic--aim to hedge its position against competition for customer control and margin right across the value chain. Whereas the old enterprise-focused BlackBerry provided significant added-value for operators and did not pose a competitive challenge, in its expanded guise to consumers the BlackBerry ecosystem competes for the customer relationship and bottom line profits. Vodafone and Orange picking up iPhone distribution in the UK counters O2 on expiration of its iPhone exclusivity. Whereas this eliminates a competitive advantage for O2, it also puts Apple in an even stronger competitive position versus the operator market. Apple anticipates a fall in street prices with carrier competition in iPhones, but it does not expect its wholesale prices to fall. So far, Google's Android is predominantly with the T-Mobile with the HTC G1, but this OS is also set to diversify. For example, Vodafone's Verizon Wireless joint venture with Verizon is imminently expected to announce a Motorola "Droid" phone.

Vodafone and other carriers have numerous possibilities in smartphones. Focus is required. Vodafone has had a mixed relationship with Nokia for a decade or more. Club Nokia's mobile portal threatened to circumvent Vodafone and was crushed in order to preserve the regular handset trade. Club Nokia's reincarnation with Ovi was backed by Vodafone since 2007.

Vodafone's 360 initiative is an attempt to get back into the driving seat where its Live! portal has failed. It is promising sophisticated personal contacts management, social networking and an applications store. Its payment mechanism enables content and applications charges to appear on the phone bill. Vodafone plans to rollout 360 to Germany, Greece, Italy, Ireland, Portugal and Spain by yearend and into a further nine nations during 2010.

Vodafone has signed-up phone suppliers Samsung and Nokia with LiMo and Symbian OS respectively for 360. The attraction of LiMo's Linux is the pledge that this will never be used to circumvent the mobile operator with the independent service portals and applications stores that are strategically being pursued by Apple, RIM, Google and Nokia with Ovi.

A key potential competitive strength for 360 versus Apple, BlackBerry and Google is that Vodafone can allow developers deeper access into network capabilities with applications running on a variety of OSs. Similarly, Orange has opened up applications programming interfaces under its Orange partner Program.

Easier said than done. Most carriers groups are loosely structured federations: ownership and control is not absolute. It is difficult for Vodafone's corporate centre to impose a one-size-fits-all approach across many operating companies because local history and conditions differ significantly from nation to nation.

Carriers are disadvantaged by their limited scale. Even though Vodafone is a large group with 315 million proportionate subscribers worldwide, this is still less than a tenth the worldwide market of 4 billion subscribers addressed by Nokia and increasingly other smartphone and OS vendors. Scale attracts developers, helps amortize development and operational costs and build cool brands.

The Joint Innovation Lab initiative promotes creation of mobile applications and services with a global platform for developers. Widget compliant handsets from supporters LG, RIM, Samsung and Sharp will enable developers to create applications that can be rolled out to customers across JIL member companies China Mobile, Softbank, Verizon Wireless and Vodafone with a combined user base of more than 1 billion worldwide.

Many such alliances in IT and telecoms have failed over the years in their attempts to drive cohesion and scale. Alternatively, Ericsson is helping carriers by offering mobile internet, applications and messaging services including hosting to all comers on a white label basis. Carriers worldwide brand these as their own.

Vodafone's old anxieties about Nokia should be the least of its worries with so many new strategic challenges.

Keith Mallinson is a leading industry expert, analyst and consultant. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.

Smartphone revolution tests established players

Keith Mallinson — Tue, 27 Oct 2009 17:13:43 -0400

With smartphones set to account for most handset sales by 2013--in terms of value if not also in terms of volumes worldwide--these devices, their operating systems and mobile Internet service delivery environments are crucial competitive elements for manufacturers and mobile operators alike. Several new entrants, rapid market growth and the precipitous share decline for leader Nokia underline that this is still an emerging marketplace. The pecking order is being reestablished with major upsets for various leading names.

Nothing could be more disruptive than Apple's iPhone and its App Store offering 85,000 applications and 2 billion downloads to date. This is an enormous success for Apple, a mixed blessing for its mobile operator partners with the business model Apple imposes and it is a major threat for many others. As Apple takes the lion's share of ecosystem value and dis-intermediates operators from applications sales with its own user experience and billing platform, partner and competing operators alike are looking for alternatives.

And Apple is just getting into its stride. It has plenty of scope to expand distribution with competing operators when exclusive deals expire. It supplies to just 80 nations so far. Corporate purchasing is only beginning to introduce iPhone, as is higher education. Apple claims more than 50 percent of Fortune 100 companies are evaluating iPhone for widespread deployment.

The smartphone market segment has been splintered. Nokia smartphones and its Symbian operating system have taken double digit market share losses over the last year or two, albeit with significant market growth. Once ruling supreme with shares of 50 percent in smartphones and 60 percent in smartphone OS, market entry of iPhone and Google's Android, together with stellar growth for BlackBerry and modest progress for Microsoft have harmed Nokia irrevocably. Further declines are inevitable as emerging competitors strengthen.

What's particularly scary for Nokia is that Apple's relatively small iPhone volumes are generating sales in the third quarter of 2009 of $4.5 billion compared to Euro 6.9 billion ($9.7 billion) for all Nokia's handset sales. Gross profits for iPhone are getting close to Nokia's Euro 2.1 billion ($3 billion). Although Nokia shipped 110 million devices in the quarter, the average price of these was just Euro 62 ($87). In comparison, iPhones yield an average of $610 apiece at the wholesale prices paid by operators...Continued