Monday, July 29, 2013

How Much Will Connected Car Business be Worth to ISPs?

Broadband mobile connectivity is about to become default in vehicles, adding a new computing environment beyond office, home, and on-the-go,” writes Forrester Principal Analyst Charles Golvin in a new report on connected cars.

The GSM Association predicts that by 2018, global revenues from the connected car business will include €24.5 billion from in-vehicle services, such as traffic information and and web-based entertainment, up from €9.3 billion in 2012).

Hardware sales might amount to about €6.9 billion, up from €1.2 billion in 2012).

An additional €4.5 billion will be generated by the delivery of telematics services, such as customer relationship management, (up from €1.8 billion in 2012), while €4.1 billion will be earned by mobile service providers in the form of access and mobile data, up from €814 million in 2012.

The GSMA suggests almost 36 million new cars will be shipped globally with embedded telematics (BMW ConnectedDrive and GM Onstar, for example) by 2018, about 31 percent of the total number of cars shipped in that year, up from 5.4 million in 2012.

Others think the volume will wind up being bigger for what might be called “over the top” uses of driver smart phones and other devices. The GSMA forecasts that almost 21 million of the cars sold in 2018 will be fitted with smart phone integration systems (18 percent of total cars sold). In 2012, 1.9 million cars shipped with smart phone integration solutions, such as Ford Applink or Toyota Entune.

These systems typically enable the driver or passengers to view apps running on the driver’s smart phone on a screen in the car and, in some cases, to interact with these apps using vehicle controls.

The connected vehicle is now emerging as a unique computing environment, distinct from the office, home, and on-the-go environments, Forrester argues.

One need not even agree that automobile communications is that sort of new development to recognize why mobile service providers are interested in auto-based communications.

There is universal agreement that global markets for mobile services sold to people is becoming, or has already become, saturated. Machine to machine communications therefore emerges as the next big source of connection and revenue growth.

It isn’t so clear how much various parts of the ecosystem will benefit, but there are logical candidates.

Carmakers see ability to create new recurring revenue streams from emergency calling and automatic accident notifications, entertainment like Pandora and information services like Google search.

Mobile operators see new recurring service revenues. Application developers likewise see new opportunities to sell apps and services.

Another Internet Bubble?

If you have lived through one or two asset class bubbles, any sign that any market you care about is experiencing superheated growth of asset prices will make you quite queasy. This Statista chart should have a cautionary effect. 

2013_07_29_Stocks

Saturday, July 27, 2013

Samsung Sells 1/3 pf all Smart Phones Globally in 2Q 2013

The global mobile phone market grew six percent year over year in the second quarter of 2013, according to International Data Corporation.

And though Samsung and Apple have lead the smart phone market, sales of lower-cost devices represent much of the sales volume. In that area, Alcatel and Huawei had high double- and triple-digit growth rates in the second quarter for their Android-based offerings shipped to high-growth countries such as China and India.

In the second quarter of 2013, these vendors from outside the “top five suppliers” accounted for 44.8 percent of the overall shipment volume, up from 42.2 percent in the same quarter one year ago, IDC estimates.

"Though Samsung and Apple are the dominant players, the market is as fragmented as ever,” said Kevin Restivo, IDC senior research analyst.

Another Way of Looking at Communications Industry Disruption

If you ponder a list of 25 consumer-facing experiences made marginalized or made obsolete over the last few decades, you will notice how many touch the communications and content consumption businesses directly. In other cases, the communications business is affected indirectly. And make no mistake, being made “obsolete” is a disruption.

Start with landline phones. It is true that landline phone use has not really been made obsolete; nor has it actually disappeared. Still, in most markets, mobile accounts outnumber fixed voice lines by a substantial margin, 3:1 or better. In virtually all developed communications markets, use of fixed voice lines is declining.

Even in markets traditionally higher “unserved” in terms of widespread voice communications, mobile has revolutionized communications.

One corollary, given that almost everybody has a mobile, is that demand for public pay phones has diminished as well.

Also, at least within domestic markets, long distance charges are not a relevant concept. In international calling markets, VoIP services have made global calling generally affordable, as this look at Canadian long distance price trends shows.



These days, people do not call 411 for information, they look it up on their smart phones. LIkewise, that has affected the ways use phone books, directories and encyclopedias. Use of paper maps likewise has diminished, because it increasingly is unnecessary to rely on anything other than a smart phone for such purposes.

For the same reason, sales and use of stand-alone GPS devices has declined. One might also point to alarm clocks as a device made often unnecessary because the phone provides the same function.

The finding and publishing of most forms of information also has shifted to Internet delivery, often enhanced by location information. Consider newspaper classified ads.

That change in “search” is part of a shift to computer-enabled information processes, including storage. And in the storage area, floppy disks and compact discs (and increasingly, hard disks) have been replaced by cloud storage or solid state memory. Likewise, videocassette recorders and facsimile machines no longer are widely used.

Add the process of manually “backing up your data,” which is something cloud storage automates.

Paid-for email accounts, film developing, dial-up Internet access, video rental stores and record stores are other examples of consumer retail behavior and revenue streams that have largely disappeared as well.

The point is how much the communications business, content consumption and now computing businesses have been disrupted, and are being disrupted by Internet technology, and how relatively rapidly those changes have happened.

Friday, July 26, 2013

3/4 of All U.S. Access Lines Now are Mobile

As recently as 2004, there were just about as many fixed network voice lines in service as mobile lines. By 2012, mobile lines had grown to represent about 75 percent of all lines in service.

Mobile lines about doubled between 2004 and 2012, while fixed lines dropped about 50 percent. 

 

Municipal Broadband Sometimes is Not a Good Idea

Digital Region Limited was set up in 2006 by "Yorkshire Forward" and four south Yorkshire local authorities--Sheffield city council and Barnsley, Doncaster and Rotherham--for the purpose of providing Internet access in the area.

The intent was to provide access to about 20 percent of households, or about 108,000 people. The project has cost almost £100 million. 

But Digital Region has managed to sign up just 3,000 customers, and spends about £10 million each year serving those 3,000 customers.

Some might say there was little demand for Digital Region's services.

The area already was served by Virgin Media, where adoption of Virgin Media access services was about 75 percent.

Those customers had access to 30 Mbps speeds at competitive prices. 

Digital Region was supposed to use fiber to the curb to provide faster speeds, but wound up delivering just 16 Mbps or so. 

Demand matters, even when intentions are good. 


Municipal Broadband Sometimes is Not a Good Idea

Digital Region Limited was set up in 2006 by "Yorkshire Forward" and four south Yorkshire local authorities--Sheffield city council and Barnsley, Doncaster and Rotherham--for the purpose of providing Internet access in the area.

The intent was to provide access to about 20 percent of households, or about 108,000 people. The project has cost almost £100 million. 

But Digital Region has managed to sign up just 3,000 customers, and spends about £10 million each year serving those 3,000 customers.

Some might say there was little demand for Digital Region's services.

The area already was served by Virgin Media, where adoption of Virgin Media access services was about 75 percent.

Those customers had access to 30 Mbps speeds at competitive prices. 

Digital Region was supposed to use fiber to the curb to provide faster speeds, but wound up delivering just 16 Mbps or so. 

Demand matters, even when intentions are good. 


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