September 23, 2010

While there has understandably been a lot of attention given to consumer apps post iPhone and the plethora of application stores that have emerged, business mobility and enterprise mobility offer huge potential from horizontal to vertical applications and from smartphones to iPads and tablets to superphones.

In both NA and W. Europe, business customers account for under 30% of users but are the dominant streams of both revenue and profits for operators. On the device side, premium priced models from RIM, Nokia, and Microsoft Mobile licensees as well as the iPhone have long been key drivers of profits in a market where low single digit margins are the norm.  The explosion of smartphone choices has led to the battle ground moving beyond the corner office, to other executive and now increasingly the midlevel manager.

With a new range of devices competing for space in the corporate market, the issue of corporate versus individual liable has become an increasing priority for IT decision makers. Add on the complexity of managing an expanding list of OS (Android, iPhone, Windows Mobile, Symbian, Palm, MeeGo, Bada from Samsung) and the growing importance of mobile portable devices with access behind the firewall and one can already feel a corporate migraine forming…. And that’s before we even discuss device management, mobility policy, device retirement etc. etc.

I am looking forward to CTIA Fall (San Francisco October 5-7) and in particular to the Enterprise Mobility Boot Camp moderated by Philippe Winthrop of the Enterprise Mobility Foundation. The boot camp spread over two days will address many of the issue listed above with our own Andy Brown featured in an analyst roundtable on October 6^th.  I look forward to meeting you there. Don’t hesitate to contact Philippe for passes to this the deep dive enterprise mobility event.

David Kerr

David Kerr
Snr. VP - Global Wireless Practice
Tel: +1 617 614 0720
Mob: +1 262 271 8974

The iPhone launched in mid 2007. Apps launched in mid 2008. Hulu is still not on the iPhone – or any other mobile platform for that matter. While some content owners have finally dipped their toes into the proverbial mobile waters - as ABC has done with the iPad - mainstream content owners continue to ponder their next move. Sports however continue to dominate.

I initially analyzed the success of sports in the report, March Gladness. Since publication, the Baseball season has started, Hockey and Basketball have completed playoff runs, the World Cup launched into full swing, and Golf’s Masters and US Open have all made their way to the mobile device.

And sports continue to dominate:

• As of April, ESPN’s Scorecenter application has been downloaded more than 5 million times
• More than 1.2 million people downloaded NBC’s Olympic application in the US
• The FIFA World Cup App game ($2.99) was the #2 app on June 16
• ESPN’s 2010 FIFA World Cup game was the #3 and #10 on June 16 and 9 respectively
• The US Open’s mobile site recorded 1.7M visits during the championship, an increase of 518%
• Allot Communications announced that its data showed a 26% increase in mobile broadband usage during the first 10 days of the World Cup

So, how can other content owners get off the mobile sidelines? By learning the following lessons:

1. Timely content is important. Whether it be a TV show that aired the previous night that a fan wants to catch-up on during a commute or a live press conference content needs to be available when a user wants it,
2. Provide an additive experience to TV. One could argue that video would drive interest in mobile sports but other information such as in depth stats, tracking information, and scores are integral to the experience as well and often times drive snacking behavior. In fact, focusing offering context beyond video will lead to a compelling second screen experience for fans while watching TV.
3. Release in various forms. Apps are a component of the go to market strategy but not the entirety. The mobile web is integral. Supporting all platforms (iOS, Android, BlackBerry, Windows, and Palm) is also imperative. Leveraging excitement into other apps such as games can turn into additional revenue.

Overall, it is imperative that content owners begin to do more than just experiment with distributing content on the mobile device. Sports have trail blazed a path of success that other content owners can follow. But they have to step up to the plate or risk users finding their content from alternative channels.

-Josh Martin

Devices Perspective

As expected, the back half of the year is already full with Android announcements. When Android was first announced in late 2007, there was some skepticism in the industry that operators might find it tough to partner with Google and many of them would go for the “wait and watch” approach. It is fair to say that Google has dealt with the issue diligently by scoring wins with three of the top four major US carriers.  

As of today, the Android scorecard for major US operators is as follows:

T-Mobile USA : Three Android devices, the HTC MyTouch, Motorola Cliq and Samsung Behold 2. TMO US has been a slower mover in the converged device space. No doubt that the carrier is positioning Android as a preferred platform in the converged space.

Sprint: Two devices, the Samsung Moment and HTC Hero. The new devices will complement Palm devices in the smartphone segment. However, we believe the Palm Pre and Pixie are likely to remain the focus of the carrier during the holiday season.

Verizon: Two devices; although the device partners are not announced at this point. RIM has been a key vendor partner for VZW, especially in the converged device segment. Blackberry devices have benefitted from heavy promotions, such as the BOGO offer for most of the year (Buy One, Get One free). With the addition of Android in the Verizon portfolio, it will be interesting to see whether it will have any impact on subsidies/promotions offered on RIM devices during the seasonally strong fourth quarter.

AT&T: AT&T is under no pressure to include Android to its portfolio in the near term. The Apple iPhone is doing a superb job in attracting new subscribers and upgrades. However, the carrier has hinted on several occasions that they are open to multiple platforms. The AT&T portfolio already supports Windows Mobile and Symbian in addition to RIM and iPhone. In our view, it is only a matter of time that additional platforms, such as WebOS and Android, will be joining the ranks of AT&T.

Android’s penetration of major carriers' portfolios will fuel interest among the developer community to build compelling applications. The US is the world's most important handset market and Android has gotten off to a good start. Although the expansion of Android to major US carriers' portfolios is good news for Google, it is too early to say whether the devices announced so far have sufficient traits to differentiate sustainably from one another.  It remains to be seen how effectively OEMs utilize Android in differentiating from the sea of Android devices expected to join carrier ranks in the next 6 to 9 months.