Mobile Internet is the next big thing in India going by recent reports by Google. Indians have emerged as the second biggest consumers of mobile internet with 5.9% share of 14 billion mobile page views. Though the report may be majorly flawed because Google has not measured the China numbers, the statistic is quite telling in favor of India.
The reported transition to the “fourth screen”, i.e Mobiles is well and truly happening as the number of new data connections added globally this year will be higher on the mobile than on the PC.
The rise in the numbers of mobile internet in India is fueled by both post paid data accounts (numbers 25 million of the 500 million or so mobile users in India) and another 55-65 million pre-paid users who use the operator WAP portals to access the Internet. Thats about 13% of the total subscription base* of India.The number of Internet users on PCs in India is growing at 50% per annum and would hit the 100 million mark by the end of 2010. In Comparison China added 100 million new users to the online community last year.
Interestingly however, the mobile access trends in India are completely contrarian to the global trends. Sample This:
1. Unlike almost every other country where the highest number of usage came from a smartphone, in India, the top two devices were mid-range Nokia phones — the Express Music 5130 and the 3110c, both of which cost between Rs 3,500 and Rs 5,500
2. The iPhone, the Rs 30,000 handset from Apple that accounted for nearly 40% of the global mobile web traffic in February, did not figure in the top 10 devices in India.
3. Nokia, which had just one presence in the world top 10 devices for mobile Internet, took all the 10 spots in India. Its devices also accounted for 59% of all mobile web traffic from India, followed by ‘Others’ and Sony Ericsson and Samsung.
4. Nokia’s N70, the only Nokia presence in world’s top 10 devices for generating mobile Internet traffic, was the most popular ‘smartphone’ in India, followed by other N Series devices such as N80, N73, N72 and the iPhone.
This thus re-iterates my view on the Indian Markets that low cost innovation would drive adoption in Indian Markets. The Indian markets have not seen any effort to reduce the cost of ownership of smartphones which has thus been an entry barrier to mass adoption of smartphones.
The voice network congestion, high data tariffs and low penetration of VAS services (compounding by lack of compelling apps and VAS) have been stumbling blocks to mass adoption of internet on Mobile. Regulatory clearances and 3G roll outs will help massification of the mobiel internet.
In the mean time, Indian markets have crossed the 600 million subscriber mark. The last 100 million subscribers came in a record of 3 months.
June 13th 2010:Will Microsoft Unveil the Natal on this day?
Of the three technologies that Microsoft is aggressively pursuing, Natal is intended to be the “Future of Gaming”. The others include Surface (The Future of Touch) and Microsoft’s Cloud computing efforts.
Microsoft is now readying for Xbox 360 Experience press conference at the E3 show in Los Angeles on June 13. I expect it to be the unveiling of the Natal powered new series of Xbox360. However, whether it’s a formal announcement or just another explanation of the technology won’t be known until then.
Natal, is Microsoft’s camera-based motion controller. In early demontrations, the technology has been extremely impressive, although no one quite knows how Natal will hold up in real-world gameplay in millions of different home gaming setups. At this year’s Consumer Electronics Show, Microsoft said that the Natal technology would ship by the 2010 holiday season.
In The mean time, Rival Sony is decking the PlayStation Move, a combination of a Nintendo Wii-like nunchuk and the PlayStation Eye camera. I would have liked to see Sony integrate the FOLED technology on this one, but it looks like Sony has conserved that one as the next big story, the next big release.
Palm is sinking… if stats had their way. However, the CEO and Chairman refuses to accept the facts on his face.
Palm is sinking and from the looks, it doesnot look like it has more than 12 months left to it. The “white knights” if any are few and far between. Palm reported quarterly revenue $350 million earnings with a net loss of $18.5 million; sending the stock on another nosedive to around $4.These results are after adopting the new accounting rules that let certain companies accelerate revenue recognition.
One reason for Apple’s bang-up last quarter was the accounting rules change. All it did for Palm was to keep things from looking even more dismal. The cash-on-hand picture will only get worse.Out of the 960,000 units that Palm moved into distribution, only 408,000 actually sold through to customers.
The biggest issue that puts them in play right now is the cash burn-rate of the company and their current valuation; the market cap is around $667 million. Sales are expected to plummet next quarter as carriers work off excess inventory and while the company has a $600 million cash cushion, this is likely to vaporize quickly as sales dry up.The company is expecting less than $150 million in sales this quarter; a huge drop from the $349 million in the prior quarter. This is mostly related to the excess inventory that the carriers are holding, but this is scant relief, because the whole problem is end demand and no reduction in inventories is going to fix that. The other issue weighing on their cash balance is their huge accounts payable balance of $190 million (almost 2x its receivables), which will also burn through a lot of cash this quarter
The next quarter revenue estimate is expected to be lesser than $150 million.
Whats more worse than a sinking ship? To complicate matters further for the beleaguered Palm, its management doesnot seem to see the obvious. Heres what Jon Rubinstein had to say about Palm’s problems at hand:
“Our recent underperformance has been very disappointing, but the potential for Palm remains strong.The work we’re doing to improve sales is having an impact, we’re making great progress on future products, and we’re looking forward to upcoming launches with new carrier partners. Most importantly, we have built a unique and highly differentiated platform in webOS, which will provide us with a considerable – and growing – advantage as we move forward.”
The announcement of Palm and Pre for AT&T is a positive, but with competition from Nexus One and iPhone 4G, one would be cautious about nets on Palm and Pre. WebOS was supposed to be a silver bullet, but it isn’t, because consumers simply don’t want to buy Palm’s products. Current products have been eclipsed in hardware terms and new competitor hardware is on the horizon. No amount of marketing is going to make the products sell well against the coming competition.
The recovery from a crisis begins with the identification of the problem and there-after the solution. The way it looks for Palm, they have not yet defined their problem in the first place. Forget looking for solutions.
The Google-China spat coincides with a particular souring of US-China relations and an increasing belligerence of Chinese leadership to all things western that seem to challenge it’s vice grip on the cultural and political environment of China. Before the censorship issue spiraled out of proportions, Google had collaborated with the Chinese government to censor online info available to the Chinese public. But things went a little too far, with Chinese hackers trying to hack into the Gmail accounts of Human rights activists in China. A lots been spoken about whose loss is it anyway?
Here’s my take on whether the opportunity loss for Google outweighs the Chinese loss of its freedom to information and expression.
The Great wall has been a symbol of China for long and metaphorically it can be regarded as guarding a closed kingdom. The status has not changed over the centuries.
The Google-China spat is probably a good indicator of the parochial thought that pervades the Chinese policy makers and the leadership.
While Multinational and Global organizations are doing big business in and with China, the inner core of Chinese thought is still very non-transparent, conservative and insecure.
By trying to regulate, the power of free expression, the Chinese leadership is also denying its citizens the right to stand together with their global counterparts.
Bottomline, Google’s loss may be transient and transitory. But China seems to be doing a permanent loss to its technology innovation and its human rights to information and expression.
The second coming of MVNOs in US
On Monday, Sprint said has signed deals with four MVNO partners interested in offering post paid wireless services under their own brand – Long Distance Consolidated Billing Company (LDCB), NPG Cable, Call One and Baja Broadband. NPG will offer a quad play bundle combining video, internet, home phone and cell phone service, while Chicago-based Call One will offer a single source for integrating voice, data, video and internet services with phone systems and network equipment, wiring, installation and management. Baja Broadband will enhance its broadband cable system in New Mexico, Colorado, Utah and Nevada and LDCB will bolster its wire line long-distance service with wireless.
The US versus Europe MVNO Debate
This is good news for MVNOs after almost being written off from the map of United States. So is this the second coming of MVNOs or is it just consolidation after the end of the initial hype. Contrary to the US markets, the UK and European Markets have successful examples of MVNOs and MVNAs running. In Europe Tesco Mobile is major player, but we haven’t seen the same model succeed in the US which also has large volume retailers like Win Dixie, Wal Mart, Target and others. Amongst others, ESPN Mobile and Disney Mobile have failed in US and Virgin Mobile is struggling. In the UK, Virgin Mobile is a major mobile brand.
The one difference that seems to emerge between the US and the European markets is that the Europeans seem to be able to stick to a business plan that caters to a niche. The US investors have been overeager to dominate a whole country when they should be content with one or two states or categories.
So what’s working and what’s not
The strategy of adding value through price is not going to last long, if it hasn’t passed already.
The MVNO model is alive and well in Europe and what is really promising over there, as in the US, is that network operators are behind the model now rather than fighting it. Over time this will lead to greater access and control to the underlying infrastructure for the MVNO, giving the capability for further innovation which, is really where the MVNO model will thrive and have a big impact on the industry as a whole. Opening up and allowing more control of the underlying network and its capabilities will essentially allow the MVNO to act as another service layer with which to develop and offer more innovative products and services particularly in the apps space. In my opinion the products and services in the broader market today really are just at the tip of the iceberg in terms of how telecommunications can help us in our everyday lives
The stunted growth in terms of innovation so far, would be to do with protectionism by operators, or the walled garden approach as it’s become known.
Over 2 and a half years after it was originally announced the 3G and BWA auctions finally seem to be underway with the March 19th deadline of bids of 3G and the March 21st bids of BWA spectrum being invited.
The reserve price for pan-India 3G spectrum is Rs 3,500 crore and for the BWA auctions, the reserve price is Rs 1,750 crore.
Predictably, the 3G auctions have attracted the existing 2G players with not even a single entrant:global or Indian in the list.The absence of global bidders is likely to ensure that the bidding will be conservative, and probably lower than the ambitious Rs 40,000 crore revenue target first announced by telecom minister A Raja. The BWA list has four new players — Augere, Tikona Wireless, Infotel Broadband Services and Qualcomm — while Spice is making a comeback into the telecom space.
However, the data revenue growth in the near term is not expected to be robust enough to justify extravagant bidding by the players. Given the absence of foreign players and an uncertain return mathematics, the mechanics of aggressive bidding will not be a part of the process.
The positive to all this is that Mobile VAS companies and the apps developer comunity in India which has been in an impoverished state for long, will find sudden traction given that all and most of these companies will try to maximize on revenues from the data stream. Airtel has sshown the way with 2.5 million downlaods of its Apps from its month old Apps store. Monetizing VAS downloads is going to be a different thing altogether.
There are those like MTS, Uninor and others who havent bid for 3G. Going forward there would a question of the seriousness of their efforts and commitment to the Indian Markets. We will watch the play here.
Dual SIMs entered the Indian Markets with stealth and are often connoted with inferior quality Chinese White branded handsets. However, the response to Dual SIMs and Multiple SIM handsets from the Indian markets has been phenomenal. The markets have almost move to the tune of 25% per month of the total handset sales from dual/multiple SIM handsets.
This inspite of the fact that it didnot have active support from the big 5: Nokia, Samsung, LG, Sony Ericsson and Motorola. Dual SIMs handsets have powered low cost players like Spice, Micromax, Karbonn to 20% market share levels. So much so that the organized players such as Samsung, LG and Nokia are also jumping into the dual SIM bandwagon. Here’s a media release that i had given on the scope, market, consumer preferences and cons of the multiple SIM handsets.
The scope of multiple-SIM phones in the Indian market
A large percentage of mobile users have a tendency to maintain two to three connections and therein arises the need to accommodate this requirement through multiple SIM phones. This is actually a reflection of the fact that markets in India are maturing even while 15-20 million subscribers are added every month. Multiple SIM phones are mainstream in Europe, Russia, Thailand and other mature markets. Indian Users are slowly waking upto the trend of multiple SIM cards. Consumers today want to keep their work connection separate from their home connections. Yet others like to toggle between two operators one with cheaper VAS/SMS and the other with a cheap talk plan. There are still others working across geographies who maintain multiple connections: One from the Home network and the other from the other geography network. Another new category of consumers prefer to maintain a GSM and a CDMA connection and there-in lies the utility of GSM-CDMA phone.
Do such phones hold promise in rural segment
While Multi SIM phones are globally a feature of mature markets, the spread in India covers rural segment also. This is because cheap SIM and talk times allow people to maintain multiple connections. The cost differential between a Multi-SIM phone and a Mono SIM phone is lesser than the perceived benefits and utility of owning a Multiple SIM Phone. Hence there is a market which exists in this segment as well.
The growth of Dual SIM phone segment in India
Market analysts say that, in India 50 million people have multiple SIM handsets and the numbers are increasing by 2-3 million users every month. That is 20-25% of the total market and is substantial.
Will the success of Dual SIMS be replicated in the Triple SIM segment?
Any new segment must have a valid consumer proposition for it to make business sense.
In India, Dual SIM phones are more widely accepted for the reasons mentioned earlier. A Triple SIM phone has a niche market in business usage (Order Booking, Handling multiple partners, small retailers and SMEs). Thus in terms of numbers, a dual SIM phone will have more acceptance, though a triple SIM phone will make sense for its kind of users.
The value addition of triple SIM phones to the consumer
Lets sample a few types of consumers of the Triple SIM phone:
A restaurateur who has a delivery service; a travel agent who has multiple phone connections; businessmen who need to manage customers, vendors and personal contacts and People who travel a lot who need to maintain low cost Talk options in two or more geographies and a data/VAS connection. The Triple SIM is a solution where-ever there is a need to work and manage more than 2 kinds of user groups. As stated earlier, this market is niche but a triple SIM phone has a direct relevance to these users.
Will we see SIM support number rising further to 4 or 5 in the coming days?
Dual SIM has mass connotations, Triple SIM has a niche; however, 4 or 5 SIM phones would be an overkill. There is very limited consumer proposition for more than 3 SIMs and hence we do not see a relevance to any consumer category for 4 or 5 SIM phones. Besides on the technology part, a 4/5 SIM Phone will lack stability, cause battery drainages, Overheating and burn outs.
Disadvantages of multiple SIM phones?
As discussed earlier, we can only put 2 PCBs on a phone. Using more than 2 may cause phone instability, battery drainages, Overheating and other technical issues. 2 PCBs support Dual SIM the best, Triple SIM optimally. Hence going beyond 3 SIMs is technically not preferred.
Even while Google builds itself as a worthy alternate to Apple in the Applications, Developer Community and Apps STore space, Apple still dominates the Apps stores globally. There are more than 30 competitors (Telcos, Device manufacturers and Telecom Consortiums) in this space, and the market is getting fragmented across, Apple still holds it own in the Applications store space.
Microsoft’s new Windows Phone 7 Series will launch with only a tiny handful of apps later this year.