Posts Tagged ‘AT&T’
2010: The year of Android
As 2009 comes to close, everyone is playing the predictions game, including me. So, here are my predictions for the new year.
1. 2010 is going to be the year that Android comes into its own. There is a lot of device movement behind it and we shall see a true iPhone challenger coming from the Android camp. Every major device manufacturer that is part of the Open Handset Alliance is going to come out with dozens of Android handsets. Also, we will see Android being deployed on devices other than Smartphones. Though it remains to be seen how Google positions Android versus its Chrome OS.
2. Android Marketplace is going to be next big goldrush for the app developers. The legions of Java developers are salivating at and furiously developing apps for the Android marketplace. Given Google’s free-for-all approach to the marketplace, I think that apps for Android are going to explode in 2010 and probably surpass the iPhone app store by 2011 unless Apple makes a drastic change to its App approval policy.
3. 2010 will see the introduction of data bandwidth caps and tiered pricing. As I mentioned in my post yesterday, AT&T is already making noise about how 3% of its data users are hogging 40% of the bandwidth. I believe that AT&T is getting ready to introduce data bandwidth caps and tiered pricing as early as Q1 of 2010.
4. Microsoft will make a major push to regain marketshare in 2010. Microsoft is at crossroads here, should it pursue a closed-wall approach like Apple or should it follow Google’s path. This is a long-shot prediction but I think Microsoft might end up acquiring a major player to disrupt the iPhone and Android hegemony. Though RIM, Palm and to a small degree, Motorola are likely targets, but I would not be surprised if Nokia and Microsoft partner up to develop or extend Windows Mobile.
So, there you go. These are my predictions. Stop by and let me know what you think or what your predictions are.
AT&T and worsening bandwidth crisis
Last week at the CTIA, AT&T acknowledged that it is having issues with the bandwidth and how the some users were utilizing lot of data bandwidth and how it was impacting the service. Clearly, AT&T has its hands full satisfying demand for data bandwidth with its existing user base which according to research has increased 5000 times over the last 3 years. Inspite of this, hardware manufacturers continue to launch new products on the AT&T network. We know that Dell is planning to launch its new Android-based mobile phone on the AT&T network. Today, Nokia announced that it will launch its new netbook, the Booklet 3G on the AT&T network for $299.99. Not to mention, RIM launching its new white Blackberry Bold, LG & Samsung continuing to provide additional new products. Given all this, I have just one question: What are they thinking?
From a business sense, it is logical to go where your consumers are. Granted, AT&T has one of the largest customer base in US and have been very successful with iPhone. But, given the bandwidth crunch AT&T is facing, if I am one of the executives making this decision, I would really not want to launch on this network, especially if it is a new product. Ultimately, no matter how good a device, customers buy the complete package: mobile device and the service. And if the customer is not going to have a quality experience on my device because of issues at the service provider, guess what they are going to say: the device is no good, since it keeps dropping the connection. I know this is not the device fault because I am enough of a geek to know what is causing this. Even an average consumer may have heard or know that connection loss may not be the fault of the device. But, if it occurs repeatedly, most consumers will give up on the device, much like I have the iPhone which I use only as a secondary phone. For my business, my primary phone is still a Blackberry 8830 on the Verizon network.
Already, living in Silicon Valley, I am reminded daily of the AT&T bandwidth issue on my iPhone. Sure, AT&T is working on fixing this issue and I know that because I got a mailer from them stating that they have improved the coverage in my area. Guess what, inspite of that, my iPhone keeps dropping the calls atleast 3-5 times a day. I am truly dreading what will the impact be on the AT&T network once the new devices are in consumer hands.
What is your mobile platform strategy?
In the beginning there was the PalmOS mobile platform, and then there was Symbian, then Windows Mobile and RIM’s Blackberry OS. Then came the juggernaut iPhone OS from Apple. That was followed by Android from Google. Soon Palm will launch another mobile platform called the WebOS. All these different platforms lead to a question: How many mobile platforms can your company support?
That is just the operating systems. Already the mobile industry is fragmented with dozens of smartphone manufacturers. Add in the different features of the handsets themselves, like accelerometer, GPS, camera, etc, and you have a whole matrix of feature sets that need to be accounted for.
It is amazing how often entrepreneurs and product managers at smaller companies have said to me that this is their strategy. Then I ask them how soon they will be on all these platforms and I get a vague answer of as soon as we can. Given this situation, how long can companies justify developing products for all platforms?
Companies really need to evaluate their strategy against their resources. Building and supporting products on multiple platforms is costly and labor intensive process, just ask all those who build and support PC and Mac products. The complexity increases multiple-fold in the smartphone space. As an entrepreneur or product manager, you don’t have the time to wait until the product has been tested on all the platforms. You need to be out in the market before your competition.
Considering the limited funding and resources, you have to decide on one or two “hero” platforms as Tim Westergren, founder of the popular Pandora music service calls them. He has decided that iPhone is the “hero” platform they will focus on and when WebOS from Palm is available, that will be its second “hero” platform.
There are definite benefits in this strategy: You can develop a product that leverages the various features of that platform. You are able to conserve your resources by developing on few platforms. You can become the “best-in-class” on the specific platforms.
On the flip side, though, you have to weigh how successful are your target platforms going to be. iPhone has done phenomenally well and therefore could be a no-brainer for a lot of us. However, if you were targeting say Android or even the much-anticipated WebOS from Palm, you just have to look back at all those folks who jumped on the PalmOS bandwagon and decide if the rewards outweigh the risk and what is the likelihood of the platform surviving a few years.
Once you have decided on the platforms, like all good strategists, keep evaluating them and your strategy. Tim Westergren did not embark on his strategy right from the get-go. In fact, for two years Pandora was available on AT&T and Verizon Wireless’ application stores where it languished. Only when iPhone came along and Tim decided to launch his product on that platform did he found success.
AT&T readying 6 new phones for release
AT&T put out a press release today announcing the release of 6 new phones and there is something for everyone. Lets start with the Nokia E71x, the much delayed and much talked, slim Blackberry competitor. It will be released in coming weeks with $99.99 price tag with 2-year contract. There is a second Blackberry lookalike, the Samsung Propel Pro. This one runs Windows Mobile and will be available in April for $149.99. Next up are two touchscreen sliders from LG, the Xenon and Neon. The Xenon comes with 2.0 megapixel photos and includes AT&T Navigator, Napster Mobile, eMusic Mobile. It comes in 3 colors and will be available starting April 8th for $99.99. The LG Neon is targeted towards teens and adults who text a lot. It will be a low cost device that will be released in coming weeks. Finally, there are two more Samsung phones: the Impression and the Magnet. The Impression is a messaging phone with AMOLED screen. It will go on sale on April 14th at $199.99. The Magnet is a slim, low-cost messaging phone with quick messaging capabilities. It will be released sometime in April.
[Via Boy Genius Report]
Best Buy offers iPhone on the cheap
Listen up, you Best Buy Rewards Zone and Silver Premier members, if you have a hankering for the iPhone 3G, mosey over to the nearest Best Buy store, flash your card and get $50 if you are Rewards Zone member or $100 if you a Silver Premier member. Of course there are catches to this: First, you have to be enrolled in the membership programs before Feb 21st. Second, you still have to sign up for 2-year contract with AT&T to get the iPhone for as low as $99 bucks.
[Via Boy Genius Report]
Will US carriers do away with handset subsidies?
As we all know the US mobile handset market (and most markets worldwide too), is very heavily subsidized by the carriers. That is what allows us the consumer to buy a $500 phone for $199. The carriers have a vested interest in subsidizing the handset, that’s what keeps the customers (both new and old) coming in and paying higher monthly fees. The handset makers too have an interest in getting their handsets out to the consumers cheaply as it impacts their bottom line directly. But all this is at a cost. In Q3 2008, AT&T had to take nearly $1 billion hit to its bottom line due to iPhone subsidies, and that is just for one phone. Surely, the execs at the carriers would be sorely tempted to get rid of these subsidies to improve their bottom line and also reduce the huge debt they carry (nearly 50 to 70% of their assets).
However, before they do, they need to look at the Japanese mobile industry. That should certainly give them a pause. In January 2007, Softbank introduced its ‘White Plan’ which did away with subsidies for the handset in exchange for lower monthly fees. The other two carriers, DoCoMo and KDDI quickly followed suit. Since then, the handset sales in Japan have been down nearly 30%, according to Jeita, the Japanese electronics association. The average handset lifetime has also increased to 3 years.
Also, the Japanese carriers already have a healthy source of revenue other than fees, namely the charges they collect for allowing users to charge their purchases to the phone. In US, there is already a move towards building an alternate source of revenue, namely the application stores for the smartphones. However, those are primarily owned by the handset maker, not the carriers. Carriers have been slow to adopt this strategy and have had limited success with the stores they have launched.
It has to be very tempting for the US carriers to follow suit as DoCoMo is reported to announce an increase in operating profit by 20% due to reduction in subsidies for the period April-Dec 2008. However, if the US carriers followed their Japanese brethren, I believe the handset sales will be down more than 30%, more likely around 44%.
AT&T grumbling about the $900 million subsidies in its conference calls and report was not just a CEO’s vent, it was a balloon floated to test the waters. While the market and handset makers are not ready to see the subsidies go the way of dodo anytime soon, investors are chomping at the bit for that 10cents per share increase to their portfolio. There is a strong likelihood that US carriers will get rid of the subsidies, especially on the high-end phones in two to three years, if not sooner.
AT&T gets into hot water over American Idol text messages
There is a huge uproar among the Twitter community over AT&T sending unsolicited text message promoting yesterday’s American Idol season premiere to millions of so-called ‘heavy texters’. A lot of people were upset about it and here is what some of them had to say about it:
jonsteinberg: Really AT&T? I’m paying U over $100 a month & U still think its cool 2 send me text messages advertising American Idol?
waltruppar: Are you kidding me AT&T? Please don’t send me SMS spam. Especially if it’s about American Idol!!!
spencerholleman: AT&T is now sending me unsolicited text messages advertising the new season of American Idol. What did I do to deserve this?
However, this will blow over if it was an end of the saga. But sadly it is not. Some customers are receiving these messages today some 14 hours after the show is over. For example:
turkchgo: ROTFLOL, just got a text message on my iPhone from AT&T reminding me to watch American Idol, which aired, you know, 14 hours ago! F A I L
nosugrefneb: • Dear AT&T, please stop texting ads about last night’s Idol premiere because 1) I don’t care, and 2) it was last night. Love, Ben
Of course, AT&T is spinning it to say that it was only sent to customers who have voted on American Idol previously and heavy-texters. But, it is still spam as it was unsolicited. Also, New York Times put out an article on it, so you know this PR disaster is snowballing fast for AT&T. Let’s see how AT&T reacts to all the backlash.
HTC’s 2009 lineup
HTC has always had a stellar lineup in the years past and this year is no exception, according to the leaked images. There are 25 devices in all including second Android based device called Hero, updates to existing devices like Touch Diamond and Diamond Pro and some new devices. Some of them are going to make it to the 4 US carriers. Here is the list:
[Via Boy Genius Report]
Verizon and RIM bungle Storm launch
Verizon Wireless and RIM had promised there would be ample Blackberry Storm devices for all customers. However, that was not the case. This morning I went to get the phone at 6:30 am to wait in queue. I was about the 25th in queue. Shortly, before 7 am the store manager was out with a writing pad informing people after about the 15th person or so that they were not going to have enough on hand, another shipment was on its way and he would take down the customers’ phone numbers and call them when it was in. Even then you were not guaranteed the phone. You had to make it out to the store within 15 minutes of receiving the phone call otherwise you were out of luck. So, what gives? Well, Boy Genius Report had some early information yesterday saying that Verizon would not be able to meet the demand. Apparently, according to Verizon, it was RIM’s fault that they were not able to ship enough devices. To me, that just is the Big Red pointing a finger at the manufacturer for its inability to estimate the demand and not having a strategy in place to meet the rush for the device. I have been with Verizon for a while, but right now, I am really pissed at them for bungling perhaps their best opportunity to take on AT&T and Apple iPhone. No matter what success the Storm has, I think, this experience will forever be associated with the launch and perhaps hard to live down for Verizon Wireless and RIM to a degree. And I thought I had it bad, until I read the plight of one of our reader who was lied to twice and is very annoyed at Verizon right now. You can read about his encounter here.
AT&T looking towards software to enhance iPhone experience
AT&T has been riding the iPhone craze to becoming a leader in the telecom space. However, that exclusivity will not last forever. So, they are looking ahead and trying to be pro-active about their future success. The iPhone development was unprecedented in that the phone was made without AT&T input. They were luckly in that Steve Jobs and company did a fantastic job with the phone. Can you imagine what it would have looked like for AT&T and the rest of the mobile space if iPhone had bombed. It has allowed AT&T to take a $900 million hit on profits while still growing through its voice and data plans.
However, AT&T has learnt from this experience and has decided not to rest on its laurels. Here is an interesting article from CNN Money on what AT&T is doing to keep its leadership position. One of the technologies they are working on is to transfer videos from the iPhone to TV with just a flick of a finger on the iPhone. Now, that would be cool. However, it is going to take some time for that technology to be available.
I am certainly glad that AT&T is taking some concrete steps to insulate its future. I get a feeling that AT&T is looking in its crystal ball and is not liking that it is so tied to the pipes and spectrum. It see Apple capturing a share of revenue through its app store to which AT&T has no access. It also sees that its capital-hungry investments in infrastructure which has laden it with huge debt could become millstone around its ability to grow. Finally, it sees that mobile phone carriers are fast becoming utilities which can have far-reaching consequences. It recognizes the signs of time and wants to diversify into being able to provide a complete experience to the user while at the same time reducing its dependency on the spectrum and other capital intensive investments.
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