Google announced Gingerbread phone Nexus S with NFC

After burning the fingers with nexus in terms of nexus direct to consumer distribution strategy, Google wants to re-try the same with the help of Samsung this time. Hopefully they wont repeat the first day customer care disaster. Apart from distribution, Google try to hint the operators about operator independent strategy with the introduction of SIP- based voice-calling support. This might have worked when the dream of blanketed wifi from Google became reality by now. The more interesting thing Google wants to try is the payments space and take the geeky credit for introducing the NFC handset before Apple. The key take away, Nexus is a platform to test the waters with developers community rather than targeting the real customers.

Quad core on your smart phone?

Do we really need a Quad core on our smart phones and tablets? May be yes. With the next generation networks like LTE, we can see more computing intense applications and services specially the high end game and videos which can't survive on today's single core processors. Mobile virtualization can solves some of this computing hunger by emulating multi-cores and effectively sharing resources. But the chip manufacturers want to move ahead with a physical hardware solution rather than a software approach. The key take away is smart phones and tablets are the next gen PCs with more computing power.

Apple will become leader in mobile payments by 2014

Apple will emerge as the leader in mobile payments by 2014. There is a possibility of acquiring one or more mobile payments companies like Zong in next 6 to 12 months. iTunes can become common platform for both physical and digital goods. Apple will take a lead on U.S carrier’s mobile payments initiative named ISIS.


Fig: Significant events in mobile payments landscape

With the series of patents on person to person payments, NFC chip behind the screen etc
make clear that Apple has a mobile payments strategy. With $50 bln in cash, apple is well positioned to acquire new startups in the space and hit the ground running.

On the other hand, three of the four national US telcos are to combine their mobile wallets to boost m-payments and ensure they control the trend. Verizon Wireless, AT&T and T-Mobile USA have formally announced their joint venture, Isis. The three carriers are working with financial institutions Barclays and Discover Financial Services. This alliance is trying to eliminate the card networks like visa and master card from the equation. They announced that this initiative might take at least 18 months, which is long lead-time.

The following table compares top3 initiatives:



Some stats on mobile payments market:

- One in every six mobile subscribers worldwide will own a device enabled with Near Field Communications (NFC) capabilities by 2014 according to Juniper Research.

- Juniper anticipates high growth in both North America and Western Europe over the next five years, adding global gross transaction value will exceed $110 billion by 2014.
- Boku raised $10 million in a recent round of funding to buy startups Mobillcash and Paymo in a transaction that was announced in June 2010.

- The number of mobile payment users worldwide will exceed 108.6 million in 2010, a 54.5 percent increase from 2009, when there were 70.2 million users, according to Gartner, Inc. Mobile payment users will represent 2.1 percent of all mobile users in 2010.

Mobile Payment Users by Region (Thousands)
Region 2009 2010
Western Europe 4,519 7,127
North America 1,905 3,502
Asia/Pacific 41,865 62,828
EMEA 16,823 27,091
Latin America 5,131 8,010
Total 70,242 108,558

Some recommendations for Telcos:

- It is recommended to proliferate the European market with NFC enabled handsets, so that the user has choice of picking a non-apple device. The adoption for telcos takes longer time than apple due to fragmented devices and OEMS.

- Finding an alternative business model other than a share in transactional revenue is very important. For ex: mining the user purchase history and suggesting alternative/relative products based on users location.

- Increase the carrier billing relationships beyond digital goods to small services purchase like train/movie tickets

911 system getting a makeover

The long served public safety system deserves a makeover. Texting in emergency situations may look dumb at first glance, but there are situations (one can't speak during hostage situations) where people can take advantage of the technology. The first responders always try to seek as much information as possible, Can Gen Y provide this info via the Text platform? May be. In my opinion the traditional voice calling still be the major first responder platform upgraded with add-ons like texting, live video sharing, sensor based emergency detection (vehicle collisions). With respective funding, the governments always pass the cost to the public via the operators. The people never opposed emergency taxes tag along with their monthly phone bill, no wonder the landlines so far are surviving based on 911 features. Hopefully gen Y can help defines the new system.

iPhone user spend more on credit card and give less to operator

PageOnce inc, compared credit card bills to the phone the user using. Comparing credit card bills to the phone the user using may not give direct correlation, but it is an interesting and unique observation. The results are obvious that the iphone users are big spenders with an average monthly bill of $6872 followed by blackberry, android and windows mobile. It seems there is 35% difference spending between windows mobile user and iphone user. But when it comes to people spending on monthly phone bill, People with windows mobile phone spent on an average $205 compared to $164 by an iphone user. The report does not show breakdown of phone bill, but it is evident that all you can eat plan may be the reason for lower phone bill. The fact that the purchases from iTunes are not considered in the monthly bill may be causing the difference here. It is also clear that apple is grabbing mobile services business from premium customers through their iTunes.

Android handsets out sell Apple IPhone nearly 2 to 1 in 3Q

The Smartphone growth is skyrocketing in US with iPhone4 being the top model consumers purchased in this quarter. But the overall market favored Android with 44% of market share. Apple's iOS devices sales in steady, RIM lost most of the market share to Android. The new release of Blackberry torch did not do much help to RIM. The next battle among these players would be the tablet market. Apple is in forefront with their iPads capturing 95% of market share and Both RIM and Android based tablets sales may increase this during the holiday season. Juniper Research projected the number of annual shipments for tablet devices to reach 81 million by 2015, which leaves a room for market of 75M devices by 2015. On the other hand, Windows Phone 7 who is late in the game got good reviews from industry. They may not dent the US market in 2011 but we cannot underestimate software giant like Microsoft.

Sprint's New Mobile Wallet Application

This also leaves questions like why sprint does that? What is in it for them? Right now there is no direct revenue for them apart from building some customer loyalty. But in future, Sprint may expect revenues for provisioning a card in the digital wallet and some kind of cross selling offers inside the wallet and probably very small percentage from the vendors. There is also speculation that sprint may mine the purchase history to enrich the profiles of the user and probably use them for marketing purposes. if we observe at high level the operator is bending little bit to fit in the payments ecosystem, instead of fighting for a pie in a transactional revenue, finding other models to makeup the revenue.We have to see if digital wallet bring equilibrium among the payments value chain.