Will Apple's Low Revenues Slow Down The App Store Phenomenon?
from the loss-leader-redux dept
Apple triumphantly announced a little while back that iPhone and iPod Touch users had downloaded more than a billion applications from its App Store in under nine months. But a research firm said last week that it estimated Apple had only earned a maximum of $45 million for itself from all those downloads. The figure was extrapolated from research into the pricing of apps, and isn't based on anything Apple has disclosed about App Store revenues, but it does illustrate how Apple's using the App Store: just like the iTunes Music Store, as a means to drive hardware sales rather than generate significant direct revenues. The App Store adds value to iPhones and iPod Touch devices, making the hardware more desirable, just like iTunes does for other iPod devices. That's the real value for Apple, and is measured in strong device sales, rather than direct revenues.Will these figures and their implication put the brakes on the app store craze that's tearing through the mobile industry? If Apple's already garnered more than a billion applications, and only has a max of $45 million to show for it, it would seem to call into question the widely held belief among mobile operators and other device vendors that app stores offer a valuable new direct revenue stream. Perhaps Apple's experience demonstrates that the real value of app stores is in extending the capabilities of hardware with new software and services, and using this to make the hardware more attractive, and in turn driving sales. But will the other players see app stores in the same way, or try to exploit them as revenue streams? Apple's shown with the iTunes Music Store that it is willing to use loss leaders as a tool to sell hardware. Will operators and other vendors be prepared to do the same?
Filed Under: app store, iphone, loss leader
Companies: apple
Why Does The CDC Have Better Data On Mobile Penetration Than The FCC?
from the that's-what-we-call-regulatory-capture dept
It's well known that the FCC has long had incredibly bogus data when it comes to broadband and mobile penetration in the US. In many cases, this is due to efforts from legacy providers who don't want accurate penetration info to get out there, because that might lead the government to realize how little actual competition there is in the market. Kevin Werbach points us to the fact that it appears that when people are interested in mobile phone penetration in the US, it's not the FCC who has the data, but the Center for Disease Control (CDC), who went out and collected their own damn data because it needed to know that data to make sure its phone surveys remained accurate. It's quite telling of the state of the FCC when it's the CDC that has better data about the industry the FCC regulates.Filed Under: cdc, fcc, wireless penetration
If You Thought Your Mobile Phone Contract Was Bad... This Guy Got 60 Years In Jail...
from the phones-in-jail dept
It's no secret that prisons are having a tough time stopping inmates from getting contraband mobile phones, which they use to communicate with others, and often to continue committing crimes. So, in an effort to send a message to prisoners, one Texas inmate who was caught with a mobile phone just had an extra 60 years tacked onto his sentence. It's unclear from all the reporting what the guy's initial sentence was, but no matter how you add it up, it's difficult to see how 60 years in prison for a contraband mobile phone fits into the confines of a sentence that matches the crime.Filed Under: jail, mobile phones
Suggestion: Don't Text Message Your Boss While On The Witness Stand
from the that-would-be-a-mistrial dept
We recently wrote about a trial where there were concerns that a jury member was sending Twitter messages during the trial, but that's nothing compared to text messaging while on the witness stand. Yes, apparently a guy who was being questioned as a witness, used a break in the action (as the judge spoke to the lawyers in the case) to text message with his boss, who was also in the court room and at the plaintiff table. After being alerted to this by a "courtroom spectator," the judge declared a mistrial:"Let me be really frank about this," the judge said. "I never had this happen before. This is completely outrageous, absolutely outrageous."These stories of technology in the courtroom seem to be coming up more and more frequently. It seems as though very few people have really thought through the implications of the many channels of communication that every individual now has with them, and how that changes common assumptions about how people can and will communicate, even in "constrained" areas.
Toledano responded, "It was on a break."
Silverman shot back: "It doesn't matter. You are communicating about the case and the subject matter of the case with a witness who is currently under oath and before the jury,"
Toledano said, "I'm sorry, after we took the break, it's not in the middle."
The judge explained himself again.
"It's a problem on your communicating with the witness about his testimony whether it's before the break, after the break and during the break while he's testifying," he said. "This is outrageous."
Filed Under: text messaging, trial, witness
T-Mobile Germany Tries The Jedi Mind Trick With Mobile Skype
from the no-it-isn't-yes-it-is-okay-it-is dept
The Skype app for the iPhone proved to be an instant hit, topping App Store download charts around the world, including Germany, where T-Mobile reminded its customers that using Skype, or any other VoIP app, could get them kicked off its network. The operator now says it's "looking at different ways of dealing with VoIP", perhaps including offering some special plan where users would have to pay some fee to use VoIP. It also says it's not actively blocking any voice apps, although when it begins selling the Nokia N97 smartphone later this year, the Skype application that's normally pre-installed on the device will be stripped out. T-Mobile's justification for removing the app is great: it's not because they don't want people undermining voice revenues by using Skype, but because "by not putting Skype on, subscribers could choose from a number of VoIP apps, and not be limited to just one." That's as opposed to having Skype pre-installed, and customers being able to download and install any other VoIP app alongside it. Only in the world of mobile operators does removing choices for customers actually increase customer choice.Are Cellphone Carriers Like Gas Stations?
from the Liger-In-Your-Tank dept
It's a simple lesson from Kindergarten: Share. You probably don't think of oil companies as being particularly good at this - except perhaps in the sense of sharing oil price hikes at the pumps - but it turns out they have another hidden sharing skill that they'd rather you didn't see. They share gas and pipelines, run by pipleline firms called "common carriers". Although not widely known, there is very little difference between the gas you buy at competing fuel stations in the US. The gas is a commodity product based on quality specs, and the differences are mostly marketing.The privately-owned national gas/oil distribution infrastructure is quite formidable (offering a massive legacy advantage over any future fuels). There are pipelines that cross the country, refineries, trucks, equipment, tanks, catchments, reserves - all to deliver fuel to a growing economy (yes, growing...over the long-term at least).
But it would be prohibitively expensive to build such an infrastructure for EACH of the gas station brands. So instead of separate pipelines snaking the country, one each for Chevron, Shell, Texaco, Philips, etc...they share. Tanker ships deliver a standard grade of oil to refineries where it is refined to standard grades of fuel. And while the refineries may be owned by a specific oil company, the fuel they produce is put in common pipes to transport across the nation. Thus, the premium gas that Shell puts in the pipe in California could be taken out by Texaco in Nevada. Since it is a commodity product, it doesn't matter whose batch of fuel is taken out of the pipe, it only matters how much. This pipe is quite "dumb", but the network is shared, and the commodity that is transported is a standard package - sound familiar to any telco people?
The Fair Trade Commission in the US has stopped gas companies from making false advertising claims, and if the companies are selling the same gas, they can't claim it to be better. Thus claims like "More powerful" get replaced with the metaphorical, nonsensical "Put a tiger in your tank!" Is shared infrastructure and a standards-based product killing the gas companies? No. How do they compete if the product they sell is EXACTLY the same as their competition? What's the value of brand?
The answer lies in a small trick. The FTC won't allow them to say their gas is better if it's the same. But if they inject some small amount of "additive" just before selling the gas to customers (This additive can be anything...even a secret formula of 11 herbs and spices) that's all it takes to claim a different product. And with a different product, the gas companies can claim to have a "cleaner running" product, or "burns better" or whatever angle they want to promote with their brand. It works. They have been sharing pipes for decades, so maybe their case is instructive for telcos.
There IS money to be saved from sharing a single infrastructure. Especially when the product is standards-based. GSM, EDGE, 3G, HSPA, LTE are all pretty standard. As are Metro Ethernet, IP backhaul, etc. So I believe the carriers are on to a good idea in reducing their CapEx by sharing common network elements. Even more so because of the frequent 2G-3G-4G-... upgrades needed to compete. They can easily continue to differentiate by offering special "additives" to their product.
And while the gas companies' additives are mostly snake oil. The telecom "additives" are quite important, and can truly differentiate a mobile subscription over the raw bits inside the dumb pipe: Customer service, retail presence, data services, location platforms, fixed/mobile integration, easy-to-read bills, the iPhone, fave-5, rollover minutes...these are all very important parts of the service mix, and are true differentiators about which customers care. The things that subscribers don't care about might as well be shared. Amazon.com and buy.com both ship with UPS - do you care that they share the delivery mechanism?
Sol Trujillo, outgoing CEO at Australian cellco Telstra, is making the opposite gamble, detailed in a speech at MWC. He thinks the differentiator is the network infrastructure, and is piling money into it to be the first carrier to offer high-speed LTE technology, contrasting his approach to the common-carrier approach of Telfonica and Vodafone. While LTE is great, thinking that the network is a differentiator is wrong, and shortsighted. No customer has ever cared about the technology or the infrastructure. And while Telstra invests in a brief technology lead with LTE, their higher costs of upgrades may eventually make them technology laggards compared to competitors that share.
I can see it now: "Cleaner burning Vodafone Wireless", or "AT&T. Put an Apple in your tank!"
Filed Under: common carrier, gas stations, utilities, wireless
AT&T Says Its Network Can't Keep Up With All The Cool Stuff You Can Do With The Smartphones It Sells
from the nice-touch dept
AT&T caught a lot of flak at the beginning of April, when it updated the terms of service for its mobile data network, banning all sorts of activities on it. AT&T later said the changes had been made in "error" and removed the new language, though it later reinserted language banning "redirecting television signals for viewing on Personal Computers" -- a ban apparently aimed directly at the forthcoming SlingPlayer application for the iPhone, which lets users watch TV from their Slingbox at home on their mobile device. The app has now been released, but it only works over WiFi, not the 3G mobile connection, because AT&T says, in a nutshell, that its mobile network doesn't have enough capacity to support streaming-video services if they take off. So all those cool data applications Apple and AT&T tout for the iPhone or other smartphones sold by the operator? Just remember they exist only at the behest of the carrier; if they threaten to expose its network's shortcomings, they'll get blocked.Filed Under: impressions, network, promises, smartphones
Companies: at&t
