Archive for July, 2006

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July 25th, 2006

Text Messages from My Washing Machine?

Remote controlled laundry machine? Whirlpool and Microsoft, among others, are testing the addition of a washing machine and dryer to your home network. It will send you alerts via IM, email or SMS. I suppose there must be a web interface to set all of this up. I imagine adding TV, washing machine, toaster, etc. to my “home appliance buddy list.” However, since I’m a wireless analyst, I won’t imagine it further. What I do imagine though is an overwhelming number of text messages to my cell phone (that I’m paying for) that have a bunch of information that I neither want nor need. I like the idea of triggering home automation with something as simple as a text message though I think it’s more of an alert system.

It’s an interesting idea. Keys to success will include delivering REAL value to consumers and not simply information. Real value to me would be letting me know if it’s flooding. Also, there has to be an easy way to control information flow such that folks are not overwhelmed with messages. Lastly, how do I know if the machine is online? and can find an IP address? and isn’t connected to my neighbor’s AP? and how do I connect to my own that has security enabled? The washing machine experiment is not unique in highlighting some of the challenges of connected (wirelessly) homes.

See press release.

See story on Fierce.

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CATEGORIES: Wireless
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July 21st, 2006

Starbucks Corporate Citizenship

I blogged about Starbucks’ mobile marketing campaign yesterday. I answered the 6th clue correctly today. They suggested that I go donate a book to a library. Interesting that they’ve mixed in their corporate philosophy of doing good for the world into this campaign.

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CATEGORIES: Wireless
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July 21st, 2006

MVNO Math (ESPN Mobile and other MVNO’s)

I can not resist joining in on the conversation around ESPN Mobile. To be contrarian though, I’m going to assume that they are neither arrogant nor unsavvy about this market. There has been market research around since the beginning of time that says that consumers choose wireless carriers based on coverage at home/work, low cost or reasonably priced handsets, and cost of service. They do not choose wireless carriers for their entertainment options. We did a poll recently on our site – one percent view their cell phone as an entertainment device. We had similar data when asking consumers about their priorities when selecting a provider. I’m going to assume that ESPN Mobile knew all of these things before launching their service, and that they were not arrogant in thinking that they knew more than a hundred wireless analysts collectively.

The Math (Back of the Envelope):

- 1 percent of mobile subscribers would choose a provider based on entertainment options offered

- For simplicity, we’ll assume 200 million mobile subscribers in the US (yes, there are more than this, but this number is easy)

- That means that about two million would choose a carrier based on entertainment options

- Not all of them will be able to switch in any given year because they are locked into one and two year contracts

- Making some assumptions about percentage post-paid additions, percentage of additions that are merely family members, etc. (again rough calculation), let’s assume 12 million people make a carrier decision each quarter. Over two quarters (roughly since the holiday season), that would be 25 million if we round up a bit. If we stick with our 200 million assumption, then we assume that about 1/8th of mobile subscribers have selected a new carrier since the holidays.

- If we apply that 1/8th to the two million (potential market), we come up with 250,000 subscribers who have been in the market in the past six months who said they would make entertainment a high priority. Over a year, this is 500,000.

- (Not sure of the source, but I saw the number in Fierce) – Someone estimated that ESPN Mobile expected to bring in 240,000 subscribers in their first year. This would indicate that they fully expected to take 50 percent of this market. That is a LOT if you consider that there are not only a lot of MVNO’s (e.g., Helio, Disney, Amp’d) in this space with similar goals, but also the carriers. Anyone heard of something called a ROKR that holds 100 songs from iTunes from Cingular? or VCast from Verizon? or “live” streaming TV from Sprint (which, by the way, a lot of people said they would buy)? We are not short on entertainment offerings today. Oh, yeah, and entertainment does not equal sports … some of these entertainment-enthusiasts will make other choices.

- The same article estimated that ESPN Mobile will attract 30,000 subscribers this year. Six percent of this market sounds somewhat reasonable – like a goal they may have had when they started this business almost a year ago. It’s hard to imagine that they thought they would take 50 percent of the market in year one – especially going head to head with those that have been in the market for so many years.

I don’t think they are that arrogant. They don’t have a lot of the costs that other pure plays have. Marketing is an opportunity cost on their network rather than $$ out the door. Still, acquiring customers is hard and it costs a lot. Identifying niches that the wireless carriers themselves aren’t better suited to serve is also hard. Virgin Mobile has done it – four million subscribers in four years which is amazing, but even they have messaging and product that conveys value.

They MUST have a different plan or metrics in mind that they haven’t told these analysts.

Math here certainly isn’t exact, but I don’t think it’s off by an order of magnitude.

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CATEGORIES: Wireless
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July 20th, 2006

Starbucks Summer’s Perfect Storm

Starbucks is running a mobile marketing program this summer. (I think that I first read about it in Moco or Fierce to be fair, but I can’t find the link to their story right now.)Anyway. Here is the link for the information on the contest.

I love the campaign. Components include:

(For me the consumer)
- Short code to sign up (easy) – text “Summer” to 66268
- Trivia questions delivered via SMS – it amuses me
- I won a $5 gift card (ok, real value here) on my first right answer
- Won a drink coupon 5 correct answers later
- Entry into bigger sweepstakes

(For Starbuck’s)
- Online registration
- Online opt-in for future promotions
- Trivia questions/answers tied into their products
- (Will eventually drive foot traffic)

(For the carriers)
- If someone plays the entire contest, they will receive 57 SMS messages AND there is full disclosure on the web site so the player knows up front (at first I was horrified by the number of messages that I would be sending, but then I received the $5 gift card and the coupon for a free drink and I thought … ok, at 10 cents per message, I’m already even)
- One can also submit answers via MMS (photos) – I haven’t trialed this yet, but plan to so stay tuned. At 30 to 50 cents per message (answer), this could generate a lot of revenue

What I haven’t seen/what is missing:

- Wouldn’t know it existed if it weren’t for the press
- Coupons are being mailed to me rather than having in-store redemption right away

I’m sure they thought of these things and there are reasons why they didn’t do them, but still. So not exactly the perfect campaign, but it seems really close so far. Stay tuned for how the MMS version works with submitting photos of answers. I can only imagine that these are verified manually. We’ll see.

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CATEGORIES: Wireless
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July 18th, 2006

Ad-Supported Mobile Video

Saw a piece on Moco’s newsletter earlier today about GoTV’s ad-subsidized video series. We did quite a bit of research on this topic this spring – there is definitely an appetite for ad-sponsored video especially among younger consumers. The open question will be whether or not they’ll pay the $6.99 for a single channel with a limited number of episodes. Today’s consumers are less price sensitive, but mass market will not be.

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CATEGORIES: Wireless
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July 18th, 2006

802.11n products – Where’s the demand?

I saw Glenn Fleiscman’s article today. I would have to agree. What is the hurry? A consumer would have to be streaming high quality video (not sure YouTube qualifies) today to need this kind of bandwidth. To get full bandwidth advertised, you’d have to have the same chips on the “other” side. We do have a handful of consumers streaming video from a PC to a TV … if it’s not on both sides (i.e., TV), what is the point? Also curious that it looks to be embedded.

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CATEGORIES: Wireless
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July 18th, 2006

Wi-FI Conspiracy Theory

I have a new theory (ok, maybe someone else has said this already, but since I’m frustrated by my Wi-Fi experience this afternoon, I’m going to toss it out there anyway) about Wi-Fi vendors and security threats. Everyone in the industry wants consumers to turn WEP/WPA, etc. on. They’ve scared us to death with warnings of identity and bandwidth theft. I think they just want everyone to have their own AP and eventually upgrade to WiMax service to get roaming services.

I’m working from a friend’s place in Menlo Park, CA this evening. I can see about 16 networks from her flat – probably 12 have the security turned on. She gave me her password so I could use her network. I typed it in to the little pop-up screen when prompted.

It’s July 2006 and I get this error message:

“The network password needs to be 40 bits or 104 bits depending on your network configuration. This can be entered as 5 or 13 ASCII characters or 10 or 26 hexadecimal digits.”

Thanks for the tip. It’s all clear now. Good thing that I studied electrical engineering in college and they made me write stuff out in hexadecimals and binary (bits/bytes) ["Six bytes" was our course slogan in fact - I have the shirt at home still with the binary code]. I’ve written some machine code as well back in the day – maybe they can throw that in as well as a hurdle to borrow access on your friend’s network for a while.

Sigh.

I listened to a company this am that was pitching me on Wi-Fi together with WiMax as the ubiquitous clouds of the future.

I know the Wi-Fi Alliance is working through these issues and it’s a tough job, but I’m impatient – this is the kind of stuff that I thought had gone away.

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CATEGORIES: Wireless
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July 17th, 2006

Helio Offers Lower Entry Price Points

I just saw a press release that Helio is offering service at some lower price points than were available at launch. Lowest price point for service at launch was $85 if I remember, and now it is $60. They are also now offering an opportunity to add lines. They haven’t been public with how registrations are going, but both moves make sense either way. $85 is a high buy-in price even if it does compare favorably to packages with similar features at national carriers. Also, our data show that a majority of teens are on their parents plan – even quite a few young adults (at least 18 years of age). Marketing to a youthful audience also means selling their parents on value. I think it’s interesting that the changes/additions come so close to their launch as a lot of people criticized and challenged these exact points prior to their launch. Price of handset and especially service are very important purchase criteria for mobile subscribers. Hopefully this helps them to add subscribers – they are doing a lot of interesting things and pushing the envelope on data services.

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CATEGORIES: Wireless