Business News Holding

Tag: aapl

  • App Store Growth Risks Confusing Consumers

    INTERVIEW: Mark Newman, Chief Research Officer at analyst house Informa, talks about some of the latest trends affecting the mobile voice and data markets.

    Speaking in advance of his address to the Insights’09 conference next month in Lisbon, he discusses the impact of the iPhone, the rush to open app stores and carriers’ attitude to mobile VoIP.

    There is no doubt the phenomenal success of Apple’s App Store has been the spur for other handset makers and carriers to open similar ventures.

    The rush to download software to the iPhone has led to Nokia, Google, Microsoft, Palm and RIM, and operators like Vodafone, announcing their own versions of online mobile application stores.

    But while these will give consumers incredible choice Mark Newman, Chief Research Officer at analyst house Informa, said the proliferation of app stores might also lead to confusion.

    "It’s going to become a complete nightmare for the consumer," he said. "Already they have to make a decison about which device and which operating system, now they also have to decide which app store.

    "It’s unclear today if you buy a high-end Nokia device, with Vodafone as the operator and running the Symbian operating system, which app store you will first get access to."

    Newman said he believed there would be "massive fragmentation" since operators supporting hundreds of different handsets were not going to make all applications available on every handset.

    Mark Newman, Informa

    But he said mobile operators were keen to tap the lucrative app market because they realised that in the long-term new revenue-earning services are needed if they weren’t to become simply "dumb pipes".

    "Here we have a brand new market created by Apple. The operators are not going to allow Apple to secure that for themselves," he said.

    Newman is speaking at the Insights’09 conference next month in Lisbon, Portugal, an event covering a range of themes related to the global mobile market.

    He will be talking about the latest voice and data mobile trends on a global and regional scale.

    Mobile Has Become Indispensible

    In an interview with smartphone.biz-news, the analyst said there is no doubt that the mobile industry is being affected by the global recession.

    But he said that the financial results seen so far from the operators suggest that it is more robust than many other sectors.

    "The mobile phone is no longer a discretionary spend," he said. "It’s something we need for our everyday lives.

    "There are examples of people economising in their bills – but not as much as thought."

    Newman said a glance at any "high street" in any country around the world would reveal the dynamic and fast-changing nature of the mobile phone.

    He said this applied as much to the hardware – the handsets – as to the software and mobile applications.

    "In any country we will have 3-10 mobile operators, often fighting very aggressively to win market share," he said. "The winner tends to be the consumer."

    Newman said there had been two big new trends in mobile industry in the last couple of years.

    Mobile Broadband: Success and Challenge

    The first was mobile broadband, which allows laptops to be connected through the mobile network.

    He said that while the industry had been reasonably optimistic about the success of this service, operators have been surprised at how quickly it has grown.

    "Now it is a very big market and in many places is outselling fixed broadband," he said. "This brings new revenues for the operators but it also brings about major challenges for them as well.

    "Data services use up a lot more bandwidth than mobile voice services, so the operators are having to invest heavily to ensure support for data requirements."

    Newman said the evidence so far was that mobile broadband use was not dissimilar to that for fixed – with a lot of P2P traffic, which sucked up bandwidth.

    "What the mobile operators do not like is consumers paying a flat rate for services," he said. "They will think of ways around this."

    iPhone Sets the Pace

    Newman said the second big change to impact heavily on the mobile industry in the last couple of years has been the iPhone.

    He said the Apple handset’s success has had a profound effect – both on mobile operators and handset manufacturers.

    "If you look at its recent history – the last six months – it has moved from being an iconic handset in terms of its design, but it is the first example of a handheld device that people can use for basic internet connectivity," he said.

    "It is very exciting for a huge number of people and has opened up new services and possibilities."

    Newman said making internet connectivity mobile – and not just something you did from home – created the potential for a raft of features, not least the ability to use smartphones’ location capabilities to design new applications.

    While the iPhone is oriented towards the top end of the market, Newman said the fact it had been so succesful meant it was now being marketed to the broader consumer market.

    "It’s quite likely that Apple will introduce some low-priced offering," he said. "Which will be a threat to the likes of Nokia, Sony Ericsson, Motorola and Samsung."

    Posturing For Position

    Apple has also shown its ability to generate revenue through its app store and when it came to consumers paying for mobile applications, Newman said this has been well managed through the iTunes Store.

    He said having billing capacity was one factor that operators have in their favour, but it was unclear what payment mechanism Nokia, for example, was intending to use.

    "Nokia would like people to buy a Nokia device and be billed by Nokia," he said. "But the operators want revenue share from Nokia."

    Newman said that as a result, the industry is currently experiencing the early stages of posturing between players to determine how this very lucrative new market is going to be handled and divided up.

    He didn’t expect the outcome of this to be known for two to three years.

    "It’s not clear who will win," he said. "In the short-term it will be confined to high-end devices.

    "But that’s going to start to change as handset makers bring down the price of phones with internet capability."

    Newman said the issue was much simpler with Apple, since it had one device and a strong brand in the market.

    He said this meant Apple was in the "enviable position" of having the leverage to more easily dictate the terms of deals with operators.
    "Apple will keep that advantage," he added.

    As for Apple’s competitors, Newman believes Android will be a force to be reckoned with even if the early devices supporting its OS have not been as attractive as hoped.

    He said RIM’s Blackberrys and Palm’s soon-to-be launched Pre will both see demand for applications but not on anything like the scale of the iPhone.

    Mobile VoIP Not in Carriers’ Interests

    One area where Newman doesn’t see operators backing down is on the issue of Voice-over-IP (VoIP).

    While carrier 3UK recently launched a SIM card that allows users to make Skype calls for free, it stands out among mobile operators who have largely sought to block VoIP use over their networks.

    He describes 3UK’s position as unique and doubts if any other operators will follow its lead.

    "3UK is a group that entered the European market quite recently," he said. "They have come into a crowded market as the fourth or fifth operator and have the disadvantage of adding spectrum at high frequencies.

    "It’s not desperation – that’s harsh. But 3 has to offer something that’s different. They are using Skype largely as a marketing strategy in order to win customers from their competitors."

    Newman said that if any other operator took this approach it would simply be to stand out in a crowded market.

    "I can not see why it would be in an operator’s interests to allow VoIP," he said. "Eighty per cent of their revenues are voice, so there is really little or no motivation to allow VoIP."

    In the future, however, Newman said the roll out of next-generation LTE and the fact they were going to be All IP Networks meant it would be more difficult for operators to stop subscribers using VoIP.

    "Because of that we are seeing a lot of operators investing in technology that allows them to see different types of VoIP applications," he said.

    Newman said this raises the possibility of operators charging by VoIP type, with users being able to pay for the "privilege" of using VoIP.

    New Entrants

    If the dynamic nature of the mobile industry is causing carriers to feel the heat, consider also the situation with handset manufacturers.

    Recently, a number of companies whose heritage is in the PC space have either entered, or shown a desire to enter, the smartphone market – most notably Acer, HP and Dell.

    Newman said this was significant because of their access to low-cost manufacturing bases in the Asia Pacific region and their ability to share components, such as screens, across devices and industries.

    Consequently some of the traditional handset makers will be put under pressure over the next three to five years.

    He said this would result in some leading brand names’ market position being seriously transformed in much the same way that Sony Ericsson has moved from a position of great strength to one of weakness.

    Mark Newman will be speaking at the Insights’09 conference being held on 8-10 June in Lisbon, Portugal
    Click here for more information.

  • Vodafone Plans App Store For 289m Customers


    Vodafone is joining the increasingly busy application store game by launching its own venture in a number of European markets later this year.

    The mobile operator will take a 30 per cent share of all app revenue – mirroring Apple’s App Store.

    Interestingly for developers, Vodafone is to supply a program that allows software to run on any Vodafone device.

    Previously, developers had to configure their apps to each handset – a lengthy process and one that restricted uptake.

    The new program will simplify that and give apps access to the operator’s 289 million customer base.

    Vodafone is to handle the billing for the apps that will be charged directly to a customer’s telephone bill.

    This could be a major advantage for the operator. Earlier this month, Nokia announced that it would have to drop operator billing from its US Ovi Store – a set-back for the venture.

    Vodafone will also provide developers and partners with access to "network capabilities," including location awareness.

    This will allow them to create apps that take into account a user’s current position.

    What is certain is that consumers will soon be spoilt for choice – although there may also be confusion over where to go first for apps.

    Vodafone has, however, said that a user with a Nokia phones on its network can chose which app store they want to use.

    The success of the venture will also hinge on the quality of the apps – and that will be influenced by whether developers feel drawn to Vodafone – and are willing to hand over a 30 per cent share of their revenues.

    The first apps are to roll out at the end of the year in the UK, Italy, Germany, Spain, Netherlands, Greece, Portugal and Ireland with more territories added later.

  • Apple Expected to Extend iPhone To Multiple Carriers


    Apple will almost certainly break with its exclusive AT&T agreement and allow other carriers to support the iPhone, according to analysts.

    Citigroup’s research firm say that while the arrangement with AT&T has benefitted Apple, the company is likely to open its smartphone to more US operators within the next two years.

    Analyst Richard Gardner cites a number of reasons for this, including the fact Apple is in a strong position and so can have its demands met by carriers.

    These extend to generous data plans, a lack of co-branding and an absence of revenue sharing at the App Store.

    What is also likely to be a major issue for Apple is the potentially dwindling pool of new iPhone users at AT&T.

    It is estimated that rivals Sprint, Verizon and T-Mobile combined could offer a target market of up to 150 million subscribers by 2010 (although only around 20 per cent are likely to become iPhone owners).

    While it has been suggested that AT&T is interested in paying to extend exclusivity, the cost to do so might be prohibitive.

    As Gardner points it would need to be high since the revenues offered by going with multiple carriers are large.

  • Blackberry Curve Overtakes iPhone To Be Q1 Best-Seller


    Helped in no small part by aggressive promotions, RIM’s Blackberry Curve became the best-selling US smartphone in the first quarter of 2009 – overtaking Apple’s iPhone.

    The Curve’s popularity helped increase RIM’s consumer smartphone market share by 15 per cent over the previous quarter to almost 50 per cent, according to market research firm NPD.

    Apple’s iPhone – the previous top-seller – and Palm each saw their market share slip by 10 per cent during the three-month period ended March.

    NPD’s director of industry analysis, Ross Rubin, attributed the changes to an aggressive "buy-one-get-one" promotion by Verizon Wireless.

    "The more familiar, and less expensive, Curve benefited from these giveaways and was able to leapfrog the iPhone, due to its broader availability on the four major US national carriers," he said.

    The promotion also helped RIM secure two additional top five positions.

    In the third slot was the BlackBerry Storm, and the fourth was made up of all BlackBerry Pearl handsets with the exception of flip models.

    T-Mobile’s G1 handset running Google’s open Android software was the fifth most popular smartphone during the quarter.

    Based on US consumer sales of smartphone handsets in NPD’s Smartphone Market Update report, the first-quarter 2009 ranking of the top-five best-selling smartphones is as follows:

    1. RIM BlackBerry Curve (all 83XX models)
    2. Apple iPhone 3G (all models)
    3. RIM BlackBerry Storm
    4. RIM BlackBerry Pearl (all models, except flip)
    5. T-Mobile G1

    Smartphones, which represented just 17 per cent of handset sales volume in Q1 2008, now make up 23 per cent of sales.

    Rubin said this showed that even in a challenging economy, consumers are migrating toward Web-capable handsets and their supporting data plans to access more information and entertainment on the go.

  • iPhone Beats Blackberry in Customer Satisfaction Survey


    The iPhone has come top of JD Power’s customer satisfaction study measuring consumer tastes.

    The Apple handset ranked highest among smartphone consumers judging five factors: ease of operation, operating system, features, physical design, and battery function.

    The only area where the iPhone didn’t score well was for battery life – an issue only too familiar with the devices’ owners.

    Overall the iPhone received 791 out of a 1,000-point scale, ahead of LG’s 772 points and Samsung’s 759 points. The trio were the only smartphone to rise above the industry average of 751 points.

    Those below the average were mainly companies making Windows Mobile devices, with HTC, Palm and Motorola earning scores of 744, 736 and 659 respectively.

    RIM’s BlackBerries also fared significantly lower than Apple with a 739 score.

    JD Power said that generally smartphone satisfaction has risen since its last survey in November 2008.

    Other findings include the fact that smartphone users send an average of 17 emails a day, and 82 per cent report that they use things like address books and to-do lists to stay organized.

    The survey included 2,648 smartphone users who owned their phone for less than two years.

  • Palm Preparing Second Pre-like Smartphone For 2009


    With a launch date for Palm’s much anticipated Pre still to be announced along comes news that Palm is preparing a second Pre-like handset for release this year.

    The smaller and slimmer device will be pitched at a different part of the smartphone market, according to Techcrunch.

    Palm is said to be "very far along" on its second Pre-like handset, which will run the new WebOS operating system.

    Spec details – such as whether it will have a touchscreen keyboard – are unknown.

    Equally unclear is what effect a second device, launched so soon after the Pre, will have on the flagship smartphone’s sales.

    Elsewhere, more information has been emerging on the Pre this week, with iSuppli estimating that the Palm smartphone costs around USD $170 to make.

    The calculation is based on the device’s hardware and manufacturing costs using second-quarter component and assembly pricing.

    The breakdown of the USD $170.02 consists of a hardware cost of USD $137.83, manufacturing and basic test costs of USD $9.58, and software and licensing costs of USD $22.61.

    The analysis does not include shipping, logistics, marketing and other channel costs.

    iSuppli expects Palm will try to sell the Pre to wireless carrier Sprint Nextel Corp for about USD $300.

    But the analysts said the actual cost to consumers will be around USD $200 due to an expected carrier subsidy.

    Just when the Pre will be released is still largely a mystery, although the latest projection is 7th June.

    An interesting choice, if correct, as this is the day before Apple holds its World Wide Developer Conference (WWDC).

    And that is where the next generation iPhone is widely believed to be set for release.

  • Zoho Expands Mobile Device Coverage For Business Apps


    Zoho has extended mobile support for its free web applications to all the major smartphone platforms.

    Initially only available for the iPhone and Windows Mobile, Zoho Mobile now supports Android, BlackBerry and Symbian mobile platforms as well.

    It offers six apps geared towards collaborative business productivity:

    • Zoho Mail
    • Zoho Calendar
    • Zoho Writer
    • Zoho Sheet
    • Zoho Show
    • Zoho Creator

    Zoho’s Raju Vegesna said mobility was an important aspect for its on-line applications.

    The company has so far launched 19 different applications — from CRM to Mail, Reports, and Wikis.

    He said all its current and future mobile initiatives will be available under Zoho Mobile as mobile support is expanded to all upcoming applications.

    Zoho is entering an increasingly competitive market, with Google upgrading its apps’ mobile experience.

    Microsoft has also been making noises about providing mobile support for its Office products.

    Zoho is certainly taking the right approach by ensuring that its apps function across all the major mobile platforms.

  • Mobile App Revenues To Reach $25bn By 2014


    Mobile app revenues are expected to climb to more than USD $25bn by 2014 – fuelled by the launch of a raft of new application stores.

    But while one-off downloads currently account for the majority of revenues, that will change with the increasing utilization of in-app billing, according to Juniper Research.

    Its Mobile Applications & Apps Stores report suggests that rising revenues from additional mobile content will see value-added services (VAS) providing the dominant revenue stream by 2011.

    It also notes that many Tier 1 operators will seek to deploy their own app stores in a bid to maintain content revenue share.

    However, the report’s author, Dr Windsor Holden, said that in the longer term, the greatest benefits to operators would be derived from data revenues associated with app usage rather than from the retail price of apps and content.

    She said this was providing that the operators rejected the walled garden approach.

    "Data revenue growth is dependent upon operators embracing policies which enable open access – a policy which also involves facilitating app stores which compete with their on-portal offerings," she said.

    The report also noted that, given the fact that app stores currently cater exclusively for smartphones, then operators, developers and content providers would be unwise to ignore opportunities from traditional app and content distribution and monetization channels.

    Other findings from the Juniper report include:

    • Games will remain the largest category in terms of overall app downloads and revenues, although Multimedia & Entertainment apps will attract the greatest share of VAS revenues from 2009 onwards
    • App stores present a significant challenge to traditional content aggregators who may be obliged both to expand the range of their content portfolios and to amend their business models to remain viable

  • Sandisk Sees Growth In Mobile Devices


    Sandisk expects increased demand for its mobile storage products as a result of continued growth in the smartphone, MIDs and notebooks sectors.

    The flash memory provider said demand for its mobile solutions was actually increasing – as were prices.

    Eli Harari, Sandisk’s CEO, speaking in its first quarter earnings this week, said he expected demand for NAND to continue to grow particularly for mobile and portable computing platforms.

    He said this would help absorb the industry supply growth projected for second half of 2009 and ensure price stability.

    Pointing to the changes currently taking place in the mobile market, he compared them to those experienced by the Internet in its early days.

    He said these would also have important implications for Sandisk’s mobile storage business.

    Apple’s iPhone and its App Store, RIM’s Blackberry Market, the adoption of Android by smartphone makers, as well as Nokia and Microsoft’s plans were all mentioned as playing a role in fuelling the demand for flash memory.

    "The opportunity for us is these devices will have to be content with wireless bandwidth and coverage limitations, making off-line, local caching of increased amount of data, central to devices’ usability," he said.

    "Paradoxically, the promise of always-connected devices in cloud computing is resulting in the ever greater need for local storage on the devices themselves."

    Harai said Sandisk was seeing increasing demand from "major players" in the mobile ecosystem for its mobile storage solutions, including Mobile Card, embedded iNAND and solid state drives for notebook PC’s.

  • Vopium Picks Up Innovation Award; Extends App to iPhone


    Vopium has become the latest mobile VoIP provider to introduce an iPhone application.

    The addition to its supported handsets comes as the company was named winner of this year’s European Mobile VoIP Technology Innovation Award by Frost & Sullivan.

    The annual award is presented by the growth consulting company to the company that has demonstrated technological superiority within its industry.

    Luke Thomas, programme manager with Frost & Sullivan, said that by offering a cost-effective service, Vopium was able to enhance customer loyalty and confidence in its applications.

    He said this had enabled the firm to create a sustainable competitive advantage over other mobile VoIP providers.

    "Considering that Wi-Fi is not as ubiquitous as cellular networks today, Vopium has also made provisions for users to automatically connect to a 3G network when Wi-Fi is not available within a particular location," he said.

    Vopium has expanded rapidly in the last six months, launching its free software programme using mobile VoIP and Wi-Fi technology to reduce the cost of international phone calls in 16 countries, including the UK, Germany, Switzerland, France and Spain.

    Tanveer Sharif, Vopium’s CEO

    The company also recently became the first mobile VoIP provider to offer mobile backup – a free service which allows Vopium customers to store their address book contacts and calendar securely online.

    Vopium’s iPhone app is now available in the App Store. Users will receive 30 minutes of free calls and 30 text messages to get started.

    Tanveer Sharif, Vopium’s CEO, said support was being extended to the iPhone to enable "millions of consumers and businesses to transform the powerful mobile device into the only solution they’ll ever need to call the world at a fraction of traditional mobile operator costs".