Archive for June, 2007

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June 28th, 2007

Verizon’s iPlan

Verizon Wireless has begun the heavy promotion of music-capable cell phones in response to Apple’s iPhone launch with AT&T. (See Fierce story.)

It’s a good response. For many in the younger age groups, the new iPhone will be off limits unless their entire family (which is the case with tens of millions of subscribers in the US) can switch to AT&T. We just published research on the kids, tweens and young adult market. Most cell phone users in these segments are still on their parents’ plan. About half of 18 to 24 year old’s are.

A friend of mine called me about a month ago. Her nephew (age 16) was having a COMPLETE meltdown because he wanted an LG Chocolate (he’d just lost his Razr), but the family was on Sprint. They ended up getting him another music-capable phone, but not the LG Chocolate.

The promotion of music-capable phones and accessories is a good one.

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CATEGORIES: Wireless
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June 25th, 2007

Cincinnati Bell & Fixed Mobile Convergence: Service or Feature?

Cincinnati Bell launched their dual mode (cellular + Wi-Fi) handsets and service today. (See story) The concept of improved indoor coverage and unlimited calling is very appealing. Our consumers tell us that quality of coverage and perceived value are the two most important criteria when selecting a wireless service provider. This service hits both. Few people today add Wireless service to their home bundle – this could move those numbers.

I think it’s an interesting play especially for the smaller, regional operators who are already offering broadband, local and long distance, wireless and TV service. They also have a public hotspot service. Owning the network end-to-end should play in their favor though it’s unclear in how many households this condition exists. They didn’t mention the need to purchase a new router (or have one issued by Cincinnati Bell) or have Cincinnati Bell broadband service though this may be assumed.

The service requires the purchase of a new handset which appears to be a fairly typical phone (i.e., adequate

with great features, but not the LG Chocolate so many teenagers want). Handset replacement cycles may slow the uptake of the service as consumers may not be ready to upgrade or are waiting for higher end options.

One of the more interesting questions for me though when I think of fixed mobile convergence is whether or not they are a) services or b) features in the long run. Cincinnati Bell will charge $10 per month. However, if the primary driver of adoption is improving indoor coverage, will consumers pay more? or will improved indoor coverage be a condition for loyalty and acquisition? If it’s the unlimited calling that is the primary motivator, then the $10 per month seems like a great value – esp. with a lot of family members.

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CATEGORIES: Wireless
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June 6th, 2007

Mobile Classifieds – Automotive

Crisp Wireless announced that they are powering a mobile version of Cars.com. As a mobile analyst, I think this is interesting for a lot of reasons. Not many commerce sites have mobile versions.

Cars.com plans to monetize their audience with geo-targeted ads. Yes, lot of companies say they will do this, but Cars.com really can as they ask for zip code information upfront and know which dealers consumers are researching online. There have been a handful of mobile classifieds announcements, but not from major online players in industry verticals.

Here is a take from our lead Automotive analyst, Belis Aksoy.

I understand that Cars.com is the first online auto classifieds site making the listings available to mobile devices, but Edmunds.com is the pioneer in this field with Edmunds2go. Back then (2001) Edmunds was trying to make money by connecting qualified buyers who happened to be on a dealers’ lot and making a purchase decision and searching for pricing information on the Edmunds2go, and Edmunds.com was connecting them to financing and insurance companies. Edmunds was trying to make money through deals with these affiliate partners (through 800 numbers listed on the site). I do not think Edmunds2go is still alive. I am a Cingular user and Edmunds2go is listed under the shopping related Web sites. However, I did not get access to the site.

Cars.com initiative is good, but I think these companies are forgetting that car buying is not a random activity. As you know it takes months for researchers to come to a buying decision. So, as a buyer I will not leave the search process for financing and insurance information until the last minute while negotiating with a dealer. So, I would not be surprised if Edmunds2go did not bring the expected results.

As for Cars.com, I think the model is closer to bringing expected results, especially since it is an ad supported model. But they are going to be facing with another challenge that Edmunds.com has also faced a while ago and that is the demand factor. Only about one percent of online car buyers search vehicle information on cell phones, and this percentage is even lower for used car buyers. Given that many people now have Internet accessible cell phone, Cars.com should make sure to spread the word out well.

I would also be curious to hear if how the experience is going to be on the phone. We are seeing increasing percentage of used car buyers visiting online classifieds sites and one of the factors driving this increase is the availability of detailed vehicle pictures. I wonder to what extent this type of information will be available.

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CATEGORIES: Wireless
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June 5th, 2007

MVNO’s – Not Much New to Say

I’ve been fielding quite a few inquiries around the prospects for MVNO’s in the US. There isn’t a lot “new” to say that we haven’t been writing about for the past couple of years. (OK, except that 80,000 customers not paying is new. See story.) Bottom line is that the majority of mobile subscribers in the US seek quality of coverage and good value. A handful want handset selection and will choose T-Mobile for the Sidekick or Cingular for the iPhone. It’s hard to beat the infrastructure owners (e.g., Verizon, AT&T) on any of these dimensions. This will evolve over time and more consumers will seek differentiators (e.g., entertainment offerings), but for now it’s more important that they are on their friends’ networks.

I don’t believe MVNO’s are “dead” as a lot of journalists have been trying to get me to say. Virgin Mobile just filed to go public on 5/1/07 with close to 4.6 million subs. and over $1B in annual revenue. Yes, their ARPU is less than half the national average, but they’ve leveraged an existing brand and targeted a then underserved market in the US and have done well.

The other challenge facing the MVNO’s who are targeting teens and young adults is that these kids aren’t paying their own bills. Recent research we published showed that about half of 18 to 24 year olds are still on their parents’ plan.

Here are some links to other blogs on MVNO’s:

Amp’d Mobile: From Media to Minutes (05/06) (Blog)

MVNO Math (ESPN Mobile and other MVNO’s)(07/06) (Blog)

Helio Launches (05/06) (Blog)

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CATEGORIES: Wireless
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June 5th, 2007

Using Ring Tones to Save Lives

I’ve been spending a lot of time talking to clients recently about how to drive increased usage of wireless data services. One of the themes has been to offer services and applicaction that appeal to a broader audience.

“Mooing” ring tones are being used to lure leopards out of the wild.

See story.

Why they aren’t using a computer or CD is its own interesting question. Could go back to the issue of a cell phone being their only electronic device.

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CATEGORIES: Wireless
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June 2nd, 2007

Amp’d Mobile Files Chapter 11

Looks as though Amp’d Mobile has filed for bankruptcy. (See story)

This certainly doesn’t mean that things are “over” for the MVNO, but it does speak to the high costs associated with operating as a wireless service provider. They’ve raised over $200M and are publicly reporting 200,000 subscribers. The math isn’t so simple though. They are a media company as well as a wireless service provider. Their portal strategy is just getting underway in Japan (KDDI) and Canada (Telus). They’ve really pushed the envelope with multimedia on the cell phone as well as their UI. Their per subscriber numbers are impressive.

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CATEGORIES: Wireless