Tag: revenue

  • Opt-In Subscriber Database "Crucial" To Mobile Operator Ad Revenues

    INTERVIEW: Mobile operators are searching for new and innovative ways to generate revenues beyond service plans.

    Julien Oudart, sales and marketing director for French mobile advertising company Sofialys, tells smartphone.biz-news about the opportunities open to carriers from opt-in subscriber databases.

    There is no doubt that mobile operators are facing plenty of challenges in today’s rapidly evolving telecommunications ecosystem.

    But Julien Oudart, sales and marketing director for French mobile advertising company Sofialys, believes there are plenty of opportunities for operators to monetize their offerings beyond service plans.

    He said carriers in Europe are still a big part of the value chain and have made steady progress in taking "a piece of the advertising action" through offering services such as mobile video and mobile games.

    "All these things work technically. Now it’s a matter of attracting brands," he said.

    Volumes on games and video are still low for mobile, but Oudart said he was confident this would change.

    "We will get there as more people connect to these services," he said. "Mobile has it all in one device. You get video, games, a phone – different options."

    This opens up opportunities for creating cross-media content, but Oudart said the key element is access to subscribers.

    "I think an opt-in database is crucial," he said.

    Especially so since legislators in the US are saying it is illegal to push campaigns to people without their consent – effectively making it spam.

    By tapping their user base to sell to pan-European advertisers, Oudart said operators were in a good position to generate additional revenues.

    Consumer Attitudes

    He said consumers are willing to opt-in and be exposed to advertising if – and this is the important bit – they get something attractive in return.

    "We always try and be transparent. So when we sign someone up there is no pre-ticked box which will then see them receive spam," he said.

    "We explain to people that they will receive promotions. It is then up to them to say yes or no."

    The lure for consumers, according to Oudart is the promotions and coupons they receive for different brands and goods.

    To be effective these have to be correctly targeted based on people’s user profiles.

    "I don’t think people are against being exposed to brands," he said. "What matters is that relevant brands reach people and to communicate to the right segment."

    Another element to specific targeting is geo-tagging, something the French mobile operator SFR has been trialling with a few thousand subscriber volunteers from its user database.

    Four companies were signed up for the trial, including a restaurant chain and jewellery chain.

    Oudart said everytime a user passes one of the participating businesses, a 20 per cent discount coupon might be pushed to their handset, or they are served an ad for the relevant outlet.

    "Geo-location services will be important," he said.

    However, he stressed that it’s vital not to annoy users by bombarding them with messages – Sofialys always asks how many messages someone wants to receive in a week, according to Oudart.

    Headquartered in Paris, the supplier of mobile marketing and advertising solutions was formed six years ago as a technology provider to help operators and publishers monetize mobile portals across Europe, Asia, Middle East and the US.

    Its biggest customer is SFR, which owns a 20 per cent stake in the company, but it also works with a pool of mobile publishers and agencies.

    Expanding Horizons

    However, Oudart said Sofialys is beginning to expand its operations with other operators and clients around Europe.

    He said there are several possibilities in the UK and they have just signed a partnership contract with Adfrap, a UK-based full service mobile agency.

    "For us it’s an interesting step into the UK market," he said. "It generates between 80-100 million pages views every month.
    "When you reach significant volumes like this it starts to be interesting."

    Oudart said they have also signed up a pool of dot.com publishers and are working with a couple of sales houses in the UK.

    In general terms mobile advertising has not been that badly affected by the economic situation, according to Oudart, and continues to grow at a healthy rate.

    Its buoyancy has been boosted by the iPhone, which he said has "shaken up everything".

    The Apple handset has done a lot to drive up mobile broadband use – something that Oudart believes is both an opportunity and a challenge.

    He said it creates more volumes – but because it is easier for the likes of Google and Yahoo to put ads on the iPhone, the entry barrier has been lowered.

    "We know how mobile works and we can bring value to this," he said. "But more people can now do what we do – that’s why we are trying to differentiate ourselves."

  • Consumer LBS Market to Double, "Free" Services to Gain


    Worldwide consumer location-based services (LBS) subscribers and revenue are expected to more than double in 2009.

    The growth is being driven by the higher availability of GPS-enabled phones, reduced prices and the appearance of application stores, according to Gartner.

    Research from the firm’s analysts shows that despite an expected 4 per cent decrease in mobile device sales, LBS subscribers are forecast to grow from 41.0 million in 2008 to 95.7 million in 2009.

    They calculate that revenue is anticipated to increase from USD $998.3 million in 2008 to USD $2.2 billion in 2009.

    Annette Zimmermann, senior research analyst at Gartner, said the LBS industry has matured rapidly in recent months through a mixture of consolidation, improved price/performance of the enabling technologies and compelling location applications.

    "Factors driving the increase in the next year or so include higher availability of GPS-enabled phones, reduced prices and appearance of application stores," she said.

    Gartner predicts that advertising-based or ‘free’ LBS (disregarding data charges by mobile carriers) will gain more traction as users adopt it as a way to limit costs.

    Mobile carriers that stick to the current predominant business model of charging users USD $5 to $10 per month plus data plans will experience high churn rates as users will look for free alternatives.

    In North America and Western Europe, the share of users taking advantage of free services is approximately 10-15 per cent today and is expected to grow to 40-50 per cent in 2013.

    Zimmermann said the competitive landscape will change and most mobile carriers need to alter their approach toward offering LBS and dealing with developers.

    "Subscriber growth will hinge on "free" – disregarding data charges – services," she said.

    "Mobile operators’ initiatives to open up the application programming interface (API) to third-party developers will help them compete against other players in the market and will also be beneficial to the different parties involved, down to the end user."

    Gartner expects more compelling and useful applications and services to come to market in the next 12 to 18 months such as digital coupons to be redeemed in a nearby shop and points-of-interest search services.

    Smaller niche players will survive in local markets only when they have an established user base and unique offering that larger players cannot compete with. Other players will be acquisition targets for larger vendors.

    The Gartner analysts said LBS market dynamics vary by region. For example, North America is the largest market due to mobile carriers’ strong efforts in navigation services and family-safety solutions.

    In Western Europe, navigation is currently the most used application, followed by local search and "friend finder." There is still no significant uptake of safety applications.

    Japan will continue to see steady growth as GPS has been required by law in mobile phones since 2007.

    In Asia/Pacific, during the summer Olympics, location services were for the first time offered in China which is now an advertising-based solution and free to the user.

  • IDC Reports Storage Software Sales Decline


    Storage software revenue has experienced its first quarterly year-over-year decline in more than five years, according to IDC.

    The analysts’ Worldwide Quarterly Storage Software Tracker showed that the device management, replication and infrastructure categories had the biggest declines.

    Symantec was the only vendor to grow revenue year-over-year, increasing 2.5 per cent. Hewlett-Packard’s 21.5 per cent drop was the biggest fall, while market leader EMC slipped 14.5 per cent.

    Michael Margossian, research analyst, storage software at IDC, said the combination of the normally slow first quarter for most companies with the continued economic climate was displayed in the first quarter’s results.

    "A majority of companies displayed either negative or very low year-over-year growth," he said.

  • VoIP Equipment Sales Plummet, IMS Revenues Grow


    VoIP equipment purchases are decreasing at the expense of spending on the deployment of IMS (IP multimedia subsystem) technology, according to Infonetics Research.

    Worldwide sales of IMS equipment, including HSS (home subscriber servers), CSCF servers, and voice application servers, are forecast to jump 74 per cent in 2009 over 2008.

    However, worldwide VoIP revenue in Q1 totaled USD $600.4 million, down 33 per cent from the first quarter of 2008 – the sharpest quarterly decline ever.

    Diane Myers, directing analyst, Service Provider VoIP and IMS at Infonetics Research, said no product segment or region was immune to declines in the service provider VoIP equipment market.

    Diane Myers, Infonetics Research

    Most large Tier 1 service providers are coming to the end of major VoIP projects and most ILECs and PTTs have put PSTN migration plans on hold.

    She said the service provider VoIP equipment market had a "rough" first quarter, declining 29 per cent sequentially in worldwide revenue. "The market pause for VoIP equipment is being exacerbated by the global economic downturn as service providers put VoIP equipment purchases on hold," she said.

    "We are beginning to see a noticeable shift in spending from stand-alone VoIP networks to IMS deployments."

    Myers said that while the core IMS equipment segments, CSCF and HSS, are still small compared to the service provider VoIP market, deployments remain strong in EMEA and Asia Pacific.

    Infonetics’ IMS Deployment Tracker shows Ericsson, Alcatel-Lucent, Nokia Siemens, and Huawei leading the way with core IMS equipment.

    "The core IMS equipment market had an impressive quarter with $63.7 million in revenue," she added.

  • Rackable Systems Announces First Quarter Fiscal 2009 Financial Results


    Rackable Systems this week announced its financial results for the first quarter of fiscal year 2009.

    The ecological server and storage product provider reported Q1 revenue of USD $44.4 Million, up 14 percent sequentially, including delivery of two ICE Cube containerized data centers.

    Total revenue for the first quarter ending April 4, 2009, was USD $44.4 million, compared to USD $38.8 million for the fourth quarter of 2008 and USD $67.8 million in the first quarter of 2008.

    Mark J. Barrenechea, president and CEO of Rackable Systems, said he was pleased with its revenue and working capital progress quarter over quarter.

    But he admitted dissatisfaction with the overall results.

    "Although the economic turmoil will remain a challenge in 2009, we are focused on accelerating innovative products to market, controlling expenses and completing the acquisition of Silicon Graphics’ assets, enabling us to achieve better gross margins and customer diversification," he said.

    Rackable Systems ended the first quarter of 2009 with USD $181.2 million in cash, cash equivalents, long-term and short-term investments, compared to USD $180.6 million at the end of last quarter.

    The company’s lower gross margin was attributed to three factors:

    • reducing high-cost inventories of certain components through aggressive pricing
    • the significant revenue mix of our large Internet data center business
    • increased competitive pressure from various server vendors offering aggressive deals during the quarter

    Rackable Systems has received court approval to acquire substantially all the assets of Silicon Graphics, Inc. for USD $42.5 million in cash, plus the assumption of certain liabilities associated with the acquired assets.

    The acquisition is anticipated to be completed by approximately in May subject to the satisfaction of closing conditions.

  • 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.

  • 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
  • Skype Revenues Continue Growing in Q1


    Its future with parent eBay may be uncertain but that hasn’t prevented Skype from continuing to generate revenue.

    eBay’s Q1 financial statements published this week show the VoIP company is still increasing revenue, minutes and users.

    In the first quarter of 2009, Skype had revenues of USD $153.2 million, up from USD $145 million in Q4 of 2008.

    If trading continues in this vein the company is on target for USD $600 million in revenues for the year.

    Skype added 37.9 million registered users in Q1 – up from 35 million new users in Q4 2008.

    This takes its total tally to 443.2 million.

    In addition, it rang up 2.9 billion Skype Out minutes in the quarter – panning out to just over 6.5 minutes per user.

    Certainly a healthy position for a company that could be spun off from its parent.

  • AQA2U Launches Twitter-like Premium Text Service


    Text message answer provider AQA has launched a new mobile service that it claims will allow content publishers to make money by sending text messages.

    In what could be seen as a reference to Twitter, UK-based AQA’s CEO, Colly Myers, describes the new venture as "web 2.0 with a business model".

    He said the service allows anyone with interesting content to connect and keep in touch with their followers, making money from every text that’s received by subscribers.

    The company started off by setting up AQA 63336 (Any Question Answered) five years ago.

    This service answered questions texted to it – so far it has provided over 17 million answers to over 2 million customers.

    With AQA2U content "publishers" create topics for people to subscribe to, market these topics to their followers, and then start writing content.

    AQA2U sends their content out to subscribers using premium text, giving publishers the majority share of net revenue received.

    Publishers are limited to no more than 14 texts a month or 3 a day, for which they receive 7-9p per message per subscriber.

    Users pay a maximum of GBP £3.50 a month, plus a 98p initial fee.

    Myers said that with no set-up costs, and with only 25 subscribers, a publisher can make GBP £275 per year.

    With 250 subscribers, a publisher can make GBP £3,000 a year.

    "AQA2U puts texts, alerts, updates and offers from anyone who’s got something to say, into the hands of followers who are passionate enough to part with a few pounds per month," he said.

    "We already know people will pay for this, as we get many thousands of texts to AQA 63336 asking the same types of questions time and time again."

    Myers said he was confident of rapid growth as even small publishers who get a few people to subscribe start making money, and all publishers have a vested interest to market their topics.

    "We’ve got over 2 million customers with AQA 63336 in five years, so we’re confident of getting 2 million subscribers in the next five years with AQA2U – delivering 20 million texts per month from publishers."

    We’d be interested to hear your feedback on this new service. Would you pay to receive content?

  • Paid Apps Imminent For Android Market


    Google’s Android Market is expected to begin accepting paid applications this week for the first time.

    The move could provide a much-needed boost to the platform, which currently has around 800 applications.

    This is far below what Apple’s App Store had achieved in its early months. Incidentally, the App Store has just passed the 20,000 mark for apps, with over 500 million downloads.

    While Android Market’s position can partly be attributed to the G1 not being as popular as the iPhone, that’s not the whole story.

    Another key element could be the fact developers haven’t been getting paid to come up with shiny new apps for Android.

    With the incentive of remuneration thrown in, the desite to create software for the G1 and soon-to-be launched handset additions to the Android platform is likely to be much stronger.

    Interestingly, Google is deviating from Apple’s revenue model in that it receives nothing from the downloading of paid apps.

    Both app stores will give developers 70 per cent of the revenue, but whereas Apple pockets the other 30 per cent Google is passing it on to the carriers and to pay settlement fees.

    Anything that gets the Andoid Market rolling has to be welcome, expecially as others – including RIM, Microsoft and Palm – are expected to launch their own app stores very soon.