Wireless Media Strategies

Research and analysis on consumer mobile media usage and trends, as well as the strategies and performance of media companies, handset manufacturers and operators.

September 10, 2014 09:18 wshi

I almost titled this post “Apple conceded defeat”, but that would be too much of a tease, as teasing as when my colleague in the Wireless Device Strategies team called the new Apple Pay “revolutionising”.

When it comes to mobile payment, Apple has steadfastly stayed outside of the NFC camp,  until the launch of NFC-based Apple Pay, which has become a de facto admission that NFC is a better solution, despite its  cosy relationship with Bluetooth Low Energey (BLE).

Samsung, among others, has been championing NFC based mobile payment for quite a while, both through partnering with mobile operators and promoting its own service by working with the financial services.  It also beat Apple to first use fingerprint reader as payment authentication method, through its partnership with PayPal, making it the leader among handset vendors in rolling out mobile payment.

However, to compare with Samsung’s earlier initiatives, Apple Pay has its own advantages.  To start with, as we said in our report to evaluate Apple’s content and service strategy, the half a billion (and increasing) credit cards associated with iTunes accounts can immediately provide Apple with a potential user base that no other OEM with similar ambition can compete.  And this is exactly what Apple does.  Additionally , Apple Pay is also supported on the newly launched Apple Watch, making the user experience more complete, though Apple has not released too much detail as how this is implemented, as there is no TouchID on the Watch.

Meanwhile, Apple Pay’s limitations are also obvious, for example it’ll only be available in the US at the beginning.  Mobile operators’ reaction to Apple Pay will be another interesting area to watch.

At the end of the day, the entry of Apple Pay is good news to NFC payment, and to mobile payment in general.  We’ll publish an “Insight” dedicated to this topic in the coming days which clients will have access to.  Also, it’s time we updated our mobile payment forecast, I’m afraid.

 


June 14, 2013 10:53 npatel

Why has Google acquired crowd-sourced map and navigation provider Waze and why has it paid the large sum of $1.3 Billion for a company? Waze’s initial proposition was built on providing free voice-guided navigation to users in exchange for anonymously tracking users’ journeys, while drivers use the application for trip guidance. Tracking drivers’ journeys provides Waze with valuable information, which is used to create more detailed maps and real-time route guidance. For example, monitoring journeys allows Waze to identify one-way roads, see where new roads have been build, collect average traffic speeds to identify disruptions and provide dynamic re-routing, and to identify where traffic signals are likely to be. Waze also encourages drivers to report traffic incidents on their routes, in order to alert other Waze community members of potential journey difficulties. As such Waze has become a serious social tool for drivers obsessed with avoiding traffic. Users of Waze can also able to contribute to map editing through its community dashboard.

What has been surprising has been the ability of Waze to grow its user base, despite the integration of free map and navigation application by OEMs like Nokia’s HERE, Google’s Drive and more recently Apple’s Map service. Waze reported over 47 million users, but as always it’s likely that many were registered but inactive users, rather than drivers actively using the application.

With Google’s large base of Android users, high use of its Google Map and Drive service, Google has access to a large volume of traffic probe data already. So why has Google spent so much to acquire Waze?  Is it because Google gains access to a community of users that are clearly obsessed with traffic and that have bought into the concept of sharing traffic and route information for the greater good? Does Waze possess technology assets to enhance Google’s dynamic routing capabilities? In reality it’s probably a combination of these factors, but more strongly influenced by reports that Facebook (which is becoming one of Google’s main rival for digital advertising spend) was looking to acquire Waze for around $1 Billion in May 2013. So, interest from Facebook, combined with a shortage of alternative targets (that have achieved similar scale) are the two driving forces behind the acquisition.


June 10, 2011 17:05 dmacqueen

Social gaming companies are being acquired right, left and center. RIM has just splashed out on Scoreloop. The top 2 Japanese social networks have been active in getting involved in mobile social gaming. Following the move of its rival DeNA, which spent $403m buying US social mobile publisher ngmoco in October last year, GREE has bought social games platform OpenFeint in a $104m deal.

There’s a lot of activity and a lot of companies playing in this space. Xbox Live is part of WP7, Sony is almost certainly bringing social gaming connectivity to Android with PSN (see my previous blog on the topic), Apple’s Game Center, ngmoco / Plus+, OpenFeint, and one could argue Facebook Connect as well. How many gamer identities do I have to have? The simple fact is that today, each game will only use one platform, but as an end user with multiple games, that means I have to sign up to multiple social gaming platforms. The pertinent question is which ones I sign up to (and actually use) because this will determine the winners and losers.

The advantage ngmoco, OpenFeint, and Facebook Connect (if you count that as social gaming) have is that they cut across gaming platforms and so perhaps have a greater chance of achieving critical mass. That will be a major factor in deciding the winners. With all the other platforms having some sort of built-in audience, the onus is on OpenFeint and Plus+ to woo developers and end users while they have a window of opportunity. Facebook Connect lacks gaming features, Apple’s Game Center is a poor effort, and there is time before Xbox Live/PSN hit mobile in any serious way. However, stumbling now could be game over for these (previously) “indie” platforms.


April 19, 2011 15:12 jmartin

Thanks to RIM I have had the opportunity to test a Playbook (and it’s pre-release software) for the last several days which has afforded me enough experience to come to some early conclusions.

 

In short, the Playbook feels like a thoughtfully created device and there is a lot to like.

1. Innovative user interface. Gone are front facing buttons replaced instead with swiping on the bezel to bring up different menus, screens, etc. It truly feels like an innovation in a space that after just one year already feels a bit stale.

2. True multi-tasking. This has been often touted by RIM and it really is a game changer. And while I may not need to have a video running in the background while playing a game the fact that I can have multiple tasks running at once makes me feel like the Playbook is more of a productivity tool than competitor’s devices.

3. Speedy. The Playbook is fast, responsive and handles web browsing with aplomb. It also plays spectacular 1080p video.

But there are also a few areas for improvement.

1. Lack of apps. RIM should have focused on having 10 to 20 key apps available at launch that are amongst the most popular; Facebook, Twitter, Skype, OpenTable, Yelp, Angry Birds, Kindle (Kobo does come pre-loaded but it’s not nearly as popular), Ebay and a handful of others – including e-mail (see point 2). And let’s not forget BlackBerry Messenger – RIM’s own offering which seems to be missing. It’s not necessarily about how many apps you have but the quality and utility of those apps.

2. No e-mail client. I understand the logic behind RIM’s decision to only allow e-mail via tethering from a BlackBerry - if the Playbook was exclusively an enterprise play. But it’s not. This decision inherently limits the market to BlackBerry users who keep their handset with them at all times. RIM has said they will release an e-mail client within 60 days but if I did not have a BlackBerry I would probably hold off on purchase until it is released.

3. It’s small. Maybe too small. Even using all of the 10” of the iPad screen makes creating content difficult – albeit possible. But the seven inch screen – while great for thumb typing - simply isn’t big enough to write a report. It’s great for e-mail and messaging though and I think I would bring it with me more places than my iPad 2 because it’s small. So there is a give and take. However, RIM should consider various sizes. The use-case for tablets isn’t quite “set”, but if they become primarily home devices, larger screens may be more desirable.

After reading the early reviews of the Playbook I tempered my expectations so it was nice to be positively surprised by the device upon using it. And the issues it faces today are ones that RIM is already addressing. E-mail is coming. More apps are coming. Blackberry Messenger must be arriving soon.

If QNX is in fact the future of BlackBerry it portends very good things for the platform. The Playbook is nice to use, fast, responsive, and the multi-tasking makes me long for the feature when using my iPad.

Overall, the Playbook has a lot of potential and will answer a vexing market question – does the 7” form factor offer enough differentiation from a smartphone while enough differentiation from a larger tablet to have a role in the market. Or does it just become the smartphone for people with oversized pockets?


March 22, 2011 17:00 jmartin

The opening of the Amazon Android App store on its surface may not appear to usher in a sea change in mobile apps distribution. While competitive third parties such as GetJar already exist Amazon is a different entity entirely. There are a few tactical and fundamental reasons why Amazon matters.

1. Amazon's extensive billing relationships. Apple claims to own the most accounts with associated credit cards at north of 200 million. The only other potential/possible rival to that is Amazon. So, while Google may use Checkout or PayPal or even carrier billing for the Android Marketplace Amazon can begin selling apps to people with credit cards on file today. This is a very important difference and could make Amazon the defacto purchase place for buyers who already have an account there.

2. Enhanced Discoverability. One key to Amazon's success thus far is its ability to uncover similar items that could be of interest to users based on browsing, buying, and ownership patterns. Android has struggled mightily on this front and as a result Google is left trying to get users to pay for more content. Amazon could introduce apps in a new way and help expose new applications based on user behavior. Another component is that Amazon knows of other purchases so it could recommend apps that work cross device (at some point in the future) and suggest new hardware that works with a buyer's ecosystem, and more.

3. Broad consumer insight. If a user is an avid Amazon buyer, Amazon knows the kind of books one buys, movies ordered, and electronics in a house. This knowledge could allow Amazon to create incredibly tailored recommendations to users in addition to recommending new hardware that can take advantage of the apps purchased. Amazon could become the one-stop digital shop for Android and beyond. If you don't think Amazon's free Prime video streaming plays in to this role then you don't know Amazon.

4. Credibility. People know and trust the Amazon brand and that could lead users who are less comfortable with Google Checkout or PayPal or even carrier billing to use Amazon as a trusted retailer when buying apps. For Amazon this is a big win because it may expand its customer base of credit card accounts if successful.

5. Amazon has unrivaled resources. As evidenced by the exclusive release of Angry Birds Rio it's pretty clear that Amazon has the resources to drive partnerships and make itself known as a place for Android Apps.

The notion that will probably play out in the media is something along the lines of "Amazon versus Google" and eventually "Amazon versus Apple" but the truth is, if Amazon is successful then Google comes out ahead because more people are using more apps for longer periods of time. Google isn't expecting to drive real profit from its app store anyway so if Amazon can grow the user base Google will be happy. This is in no way an Amazon versus Google scenario. And Amazon continues to sell Apple products so it's not really an Amazon versus Apple scenario either. Simply, Amazon sells stuff and more of that stuff is becoming digital. Amazon's success would actually help Apple because it could reduce the regulators breathing down the company's neck.


March 1, 2011 10:37 jmartin

On Wednesday March 2, Apple will announce the iPad 2. We?ll keep track of what the news means for the future of mobile media right here.

December 2, 2010 15:12 npatel
On 1st December 2010 US ad network Millennial Media officially announced its expansion into Europe, entering into a fairly crowded mobile ad network space, which also includes Google (which acquired AdMob in 2010), Apple, Smaato, Yahoo, Microsoft, 4th Screen Advertising, Unanimis, Yoc, Sofialys, and DaDa among others. Strategy Analytics was invited to its launch presentation to hear more about its plans and ambitions. Globally, the Millennial Media mobile ad network is currently delivering 16 billion page impressions monthly, with Europe generating 2 billion (just 12.5%) of that. With Ofcom today indicating that 26%, 21% and 18% of cellular users in Italy, Spain and the UK respectively owns a smartphone, there is clearly still potential for growth in Europe, as more mobile phone owners substitute feature phones and expensive pay as you use data tariffs with smartphones tied to generous data plans. Indeed, Strategy Analytics also believes there is growth opportunity in Europe, and predicts strong growth in mobile display advertising with advertiser expenditure rising ten fold $600 million in 2010 to $6 billion 2015, as more users drive mobile web page impressions. So where does Millennial Media believe it will fit in to the existing mobile advertising market place? Mobile Ad Network Positioning Well, it’s aiming to find the middle ground between premium ad networks like 4th Screen Advertising, and Orange owned Unanimis, which aim to maximise inventory return for premium publishers to get high CPMs, and blind ad networks aimed at filling large volumes of unsold inventory where its all about low CPMs and volumes (see figure above). Millennial Media does not intend to compete with the higher value mobile marketing campaigns from Blyk, Hipcricket or mobile operators like O2 Media. Personally, I’m a bit sceptical this gap really exists. So ultimately I do expect Millennial to fall into the blind ad network bucket over time. On the other hand in these tough economic times brand advertisers are increasingly looking for metrics to prove advertising ROI, in which case Millennial Media will be well positioned to grow. Either way, validating Millennial Media’s claim is something we hope to do as we continue to conduct more research into this area. Nitesh Patel

October 29, 2010 17:10 jmartin

Angry Birds is a runaway success. It has appeared in the top ten Apple apps for the last 26 weeks. More than 2M copies were downloaded on Android almost immediately. However, Angry Birds is Rovio’s only game. Once everyone who is interested in games has downloaded it, how does a company like that continue to make money? Are they destined to be a “one hit wonder” and disappear after the initial burst of downloads?

The solution seems to be to sell themed applications! The Angry Birds Halloween app is just the beginning of a trend we expect to see more of from developers successful with a single product, as Rovio has already discussed a Christmas themed Angry Birds to be released later this year. It’s unclear if Labor Day, Boxing Day, or Bastille Day will warrant their own themed applications.

The fact that themed applications are launching shouldn’t come as a shock but their release does show us that companies are still testing various strategies.

Instead of leveraging in-app purchasing to sell the themed levels, Rovio sold Angry Birds Halloween as an independent application. This is interesting for a few reasons:

It shows there are some limitations with in-app purchasing. Specifically

  1. The audience for the app may be different (or larger) than the original app thus limiting it to those who bought the original limits the audience
  2. Having an app appear in the top ten must sell more product than marketing an upgrade in-app by garnering “free” ad space on the list
  3. The halo effect could occur introducing new users to the original app.

Lima Sky on the other hand updated their application, Doodle Jump to include a Halloween theme but did not release a new app. This could be for a number of reasons

  1. Lima Sky didn’t want to develop an entirely new app
  2. Lima Sky felt the boost of Doodle Jump downloads sufficiently met their sales goals

Neither approach was wrong or right but simple present different ways to pitch an app. However, the results seem clear - Angry Birds Halloween sits atop the iTunes US Top Ten app list on 10/28/2010 while Doodle Jump is in eighth. The original Angry Birds is second. Now, Angry Birds is inherently more popular so it’s not a clear cut victory but the numbers don’t lie. It is now reported Rovio has sold more than 1M copies of Angry Birds Halloween netting nearly $700,000 in the process.

What this means is that other successful developers may in fact follow Rovio’s lead in the future. A holiday edition of Skee-Ball might include rolling pumpkins or Christmas ornaments. And as these successful developers crowd the top ten with multiple applications they will reduce the space available for new developers. Combine this with Apple not updating the top ten lists during the holidays (Thanksgiving and Christmas) and entrenched developers stand to benefit even more as users are exposed to their offerings while emerging players struggle to break into the top ten. This only furthers the notion that enhanced discoverability is key for future app stores and could present an opportunity for other platforms to woo developers.


October 20, 2010 15:10 npatel
Words like ‘experimental,’ and ‘niche,’ are often used to describe the status of advertising on mobile phones. However, on 14th October 2010 Google announced that its mobile advertising business is currently operating at a $1 billion annual run rate, which I believe represents a significant milestone and proof point that advertisers are beginning to take mobile advertising much more seriously. Strategy Analytics estimates that globally advertiser spending on mobile will reach over $6.9 billion in 2010, which we estimate would give Google a 15% share of the total mobile advertising market. This compares to Google’s 35% share of the total digital advertising market. We are not surprised that Google’s share in mobile advertising is lower than its total digital share given that mobile advertising is more fragmented than the online advertising market. Our advertising estimates are built on assumptions about growing mobile media usage and the average price that advertisers pay media owners to display their adverts within their properties. Indeed, Google has confirmed this growth in usage is fuelling the rise in its mobile advertising revenue - the company claims that search queries conducted by mobile handsets has increased by 500% over the past two years, with search queries from Android devices playing a role in that growth. Search requests from Android phones increased 300% in 1H 2010. This evidence of improving usage will also have a positive impact on advertisers’ attitude towards allocating their budgets to mobile, with companies like Google, Apple, Microsoft, AOL, and Millenial Media positioned to benefit from this shifting sentiment. Although Apple is a one platform pony in the handset market it has shown how successful it can be at exploiting its niche. In June 2010 at its WWDC Apple stated that advertisers had already committed $60 million to its iAd platform. As online advertising networks Microsoft and Yahoo also continue to ramp up activity in mobile advertising, the next big question is – who will follow Google to be the next $1 billion mobile advertising company? Nitesh Patel

October 12, 2010 04:10 David Kerr

sa photo dk

At CTIA in San Francisco last week, away from the fanfare around LTE rollouts and the next dozen tablet devices (ok, I exaggerate a little), Sprint had an announcement which will have significantly higher impact on mobile broadband adoption and revenues: Sprint ID. 

Sprint ID promises to up the ante on personalization and ease current feature phone users into the smart phone ranks.

Sprint ID offers instant personalization along key themes/packs where the operator has done the heavy lifting of identifying and group related applications of interest to different persona from wallpaper to ringtones to apps. While the one click marketing line is not quite matched by reality given pesky little things like accepting terms and conditions etc, Sprint ID is a significant breakthrough in my opinion as:

  • it broadens the market appeal of Smart phones to current feature phones users with a simple to understand offer in a range of device price points including the critical $49 and $99 levels.
  • it tackles one of the biggest weakness of all app stores: discoverability of content and simple personalization.

Three handsets were featured at launch of Sprint ID: Sanyo Zio™, Samsung Transform™, LG Optimus S™. These three devices cover key price points in the Sprint portfolio and provide customers with a range of form factors, industrial design and brand to meet their tastes. Interesting to note that both LG and Sanyo retain the right to put their own packs on their handsets as well. This is a big win for LG as its Optimus S™ will be available for under $50 with contract giving the vendor a much needed boost in the smartphone space. Samsung meanwhile continues to shine at Sprint occupying the lucrative $149 spot with its Transform™. All three devices of course require a Sprint Everything Data plan.

However, for me the more significant impact is that operators and oems are finally realizing that customers don’t buy phones or services or apps… what they really want are positive experiences

… be that socially connected, sports, education, health and fitness, fashion etc. This is something that our User Experience team has been evangelizing for the last 7+ years. Whether its 80k apps on Android or 250k on Apple store or 10K on RIM, one common experience has been exasperation at the huge waste of time, energy and emotions in finding ANYTHING!!! Which happens first, eyes glazing over or fingers cramping with so much scrolling? Either way the net result is often a disappointing experience which the early smart phone coolaid drinkers have learned to live with.

Newbies to the smart phone arena, will certainly have less tolerance and spend less time to personalize their device and enable applications. Sprint ID is well tailored to the next wave who are taking tentative steps into the smart phone space

 

David Kerr

dkerr@strategyanalytics.com