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Sole Branded Citigroup Cards Coming To China

Sep 10, 2012 12:00:00 AM / by Admin

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Citigroup announced in August that it was to become the first U.S bank to issue Citigroup branded payment cards into the Chinese market, without the co-branding of CUP (China Union Pay), although CUP will be processing the transactions on behalf of Citigroup the drop in co-branding indicates a growing openness in its payment and banking regulations.

I recently complete a study into China’s migration into second generation microcontrollers and one of my main findings was that the Chinese markets as a whole are becoming more open, relaxing its restrictions and allowing non-local vendors the opportunity to compete in markets that traditionally were locked to local vendor participation only.
China’s relaxing regulations is primary driven by two main reasons:
China desire to adopt and migrate to high end technologies, means that outsourcing to non-local vendors is sometimes a necessity with local vendors currently unable to produce a comparable solution
There has been much lobbying about China’s “unfair” regulations, closing off external competition or making it extremely difficult and challenging to enter the market. One example saw both MasterCard and Visa take such a case to the World Trade Organisation to which it won partial support
Pair the relaxing regulations with a dramatically growing market and the recipe is created for banks, financial institutions, smart card and IC vendors to increase their interests and focus within China. The banking population in the region is growing at a substantial rate. As well as a growing market, China is embarking on card migration to its PBOC 2.0 standard alongside a new social security/payments card, to which the government plans to deploy around 800 million by 2015. Overall ABI Research forecasts that the installed base of payment cards within China will increase by 360 million units between now and 2017, at which point China will account for 26% of all smart payment cards in circulation worldwide.
I think although Citigroup have become the first US bank to deploy a sole-branded card, it also needs to be noted that CUP participation is still active with it processing the transactions. I do not believe that this scenario will change in the near or mid-term future. Although China may be softening its stance with its regulations on foreign vendor participation, I believe that partnerships with local vendors will always be a requirement in some shape or form to maintain a slice of the pie for Chinese stakeholders.
More in depth analyses and detailed forecasted data on China’s payment cards market can be located within ABI Research’s Security & ID practice, under the Payment and Banking Cards & Contactless Technologies service.

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Varyingly Coherent HTML5 Musings

Sep 4, 2012 12:00:00 AM / by Admin

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​We’ve been doing quite a bit of research on HTML5 lately, especially when it comes to quantifying its impact on mobile app development. I’ve personally grown slightly concerned by the width of generalizations that you tend to see in the discourse over this subject. There are a lot of predictions (many of them, admittedly, very insightful) flying around, but with preciously few numbers backing them up. For that reason, we have as part of our Mobile Application Enabling Technologies service conducted forecasts that include tons of data on how we estimate the 25 most important HTML5 features to be adopted in the coming years. Naturally, we’ve got also forecasts on the installed base of HTML5-capable mobile devices.

On top of that, there’s also a new study that among other things includes an assessment of how feasibly apps from different categories could be built by using the web code. To do this, we reviewed close to 600 individual iOS apps one by one and rated their “HTML5 feasibility” on a four-point scale. With a score of 1 implying a “negligible” feasibility and 4 implying a “strong feasibility”, the mean score for all sampled apps was 2.6 – but there’s obviously a large degree of variance between the categories.

But I digress. Instead of being diverted to a thinly veiled marketing pitch, I actually wanted to talk about browsers. My expectations of the mobile web probably count as (for the lack of a better word) mildly bullish, and that is mainly because I’m also expecting a lot of innovation out of the mobile browsers. HTML5 will be factoring into developer strategies certainly also in the form of hybrid apps, which are distributed via native storefronts, but in the actual open web it’s namely the browsers that either unleash or smother its potential.

Given Android’s share of the device market, Google is understandably a key player here. The regular Android browser did a remarkably poor job as an enabler of HTML5 features, but with hindsight I’d assume that this was down to the behind-the-scene work Google was doing on Chrome. And now that Chrome has been successfully migrated to the mobile environment, it really does beat the latest Android built-in browsers hands down. If you haven’t tried them for yourself, you can get a goo​d idea of the progress from the always-interesting HTML5 Test site.

And then there’s always the current frontrunner, Dolphin, which in August became the first browser to pass the Ring 1 on Facebook’s Ringmark test. It’s also the first mobile browser to try its luck with two nascent but long-term crucial APIs: camera access, and push notifications. I don’t expect developers, let alone mobile web users, jumping to adopt such features en masse before they become more widely enabled (i.e. enabled by native browsers), but it’s with moves like this how we’ll get the ball rolling.​​

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Gesture Recognition Enabled Mobile Devices

Aug 30, 2012 12:00:00 AM / by Admin

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​Gestures are ingrained in human communication and it is virtually impossible to communicate with someone without moving your hands or gesticulating with your fingers while in conversation. Gesture recognition technology adds another dimension to our interactions with machines, devices, or computers. It is projected that over 600 million smartphones will be shipped with vision-based gesture recognition features in 2017.

Camera-based tracking for gesture recognition has actually been in use for some time. Leading game consoles Microsoft Xbox and Sony PlayStation both have gesture recognition equipment - Kinect and PlayStation Eye respectively. These devices are in their seventh and eighth generation. Several challenges remain for gesture recognition technology for mobile devices, including effectiveness of the technology in adverse light conditions, variations in the background, and high power consumption. However, it is believed these problems can be overcome with different tracking solutions and new technologies.

Currently, only a small number of the smartphones shipped have gesture recognition. Pantech, a Korean smartphone OEM, began selling its Vega LTE handset in Korea during November, 2011, with gesture recognition technology using camera-based tracking.
Finally, in our latest gesture recognition report we estimate that 27 million mobile devices shipped in 2012 will have gesture recognition technology. Currently, the only large volume device type being shipped using gesture recognition technology is the game console. By 2014, we expect to see mass adoption of the technology in the market, driven by personal mobile devices - smartphones and media tablets.
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Dedicated eReaders to Survive the Media Tablet Onslaught as a Niche Play

Aug 30, 2012 12:00:00 AM / by Admin

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​Eleven million eReaders are projected to be shipped globally in 2012, down from a peak volume of 15 million devices in 2011. The growing popularity of media tablets - along with declining U.S. "baby boomer" population and lack of organized digital bookstores outside of the United States and Western Europe - will reduce eReader opportunities in the future.

Over the next 5 years, annual eReader shipments are projected to drop by a compound annual growth rate (CAGR) of 6.1%. In contrast, global media tablet shipments are predicted to increase from approximately 102 million annual device shipments in 2012 to nearly 250 million in 2017. Despite the average tablet selling for more than $465 as a result of Apple's dominant market position, tablets are expected to outsell eReaders nine to one this year.

There are several reasons for the growing popularity of the tablet device. Users are able to utilize a better computing platform and device performance on a tablet compared to an eReader. Tablets are versatile and support a broader range of display applications while eReaders are primarily used for reading print. Apple and Google have spent billions of dollars in developing operating systems and providing a better user experience for their media tablets. Most eReaders are still using basic Linux operating systems.

For more information on ABI Research's recent study and service on eReaders, digital publishing, media tablets, and mobile enabling device technologies, please click here.

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What is Google’s Indoor Location Strategy?

Aug 28, 2012 12:00:00 AM / by Admin

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The further I delve into the indoor location market the more complicated Google’s current indoor location offering looks.
Looking at the location technology side of the business, despite launching a number of indoor maps, Google has yet to offer a high-precision technology to developers or store owners. It has publicly discussed using an extension of its existing wide-area cellular and Wi-Fi technologies indoors, but as yet there is little or no information on accuracy levels, etc. Google has created an application for developers to create an RF map of their building to compliment a physical indoor map. This strongly suggests it is looking at a handset-based hybrid solution that utilizes Wi-Fi RF fingerprinting technologies, in combination with MEMS, Bluetooth, etc.
This would be the obvious route for Google, but it remains to be seen how robust this approach will be over the next 2 years. MEMS companies have indicated that consumer dead-reckoning is still 18 months away. RF fingerprinting is only as strong as the ever changing map on which it relies. Much like the outdoor world, companies will need to find a way to extensively map indoor environments, while also enabling dynamic updates. Crowd-sourcing is certainly an option here, but to do somay require it to open up the technology to developers, which Google has yet to do.Furthermore, unlike the outdoor world, buildings are private property and there may be some legal issues around user-generated content. Overall, there is a feeling in the industry that if you throw enough technologies at the indoor problem (Wi-Fi, Bluetooth, cellular, MEMS, NFC, etc.), at least one will stick in most environments. IC vendors are still working on this and it will be 2013 at the earliest before we see some really interesting solutions.
One way to bring robust accuracy to the market today is through dedicated infrastructure. Google has recently announced a partnership with Boingo to offer ad-funded Wi-Fi in large urban areas, with 250 locations across the US. This will be used to promote Google Offers. It may be that this partnership also includes using the dedicated infrastructure to improve location accuracy.
On the mapping side, Google has taken a very unusual approach. It is providing a platform for buildings to have their indoor maps added to Google maps for free, yet it does not allow them to use the maps in any way, while retaining all rights. The result has been disillusionment from building owners that have worked with Google and an increasing reluctance from those who are considering it. One mapping company said that it has to work on the basis that Google will eventually open up APIs to indoor maps, making them freely available to developers, while another questioned if it can legally do so without recourse.
Google is slowly bringing a number of efforts together; namely Google+ Local, Business, Offers, Shopping/Price Listing Ads and mobile payments. It is creating a platform for local businesses to advertise products side by side. It would appear that indoor maps and location will play a part in these endeavors. What we can safely assume is that it is working on an indoor location technology, most likely a hybrid, handset-based appraoch. If it continues to restrict access to map rights and APIs, it may find it will alienate may of the larger retail brands, who are currently looking to bild their own mobile applications and indoor location technologies.

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Small Cell SoC M&A Heats Up

Aug 24, 2012 12:00:00 AM / by Admin

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​Today Qualcomm announced that it had acquired DesignArt Networks, one of the leading small cell baseband and backhaul chip suppliers. Terms of the deal were not announced but the price Qualcomm will pay has been reported in the Israeli press to be in the range of $120-$140 million.

Founded in 2006, Israel-based DesignArt offers SoC and Software products for indoor and outdoor small cell base stations and remote radio heads. DesignArt also offers integrated line-of-sight and non-line-of-sight wireless backhaul solutions. DesignArt can support concurrent self-backhaul and relay capabilities with their DAN 3300 and 3400 baseband SoC chipsets, but also have a separate DAN3200 backhaul mobile SoC which can support sub 6 GHz, microwave and 60 GHz E-band through a software programmable SoC platform. This is a very unique and powerful value proposition where small cell backhaul is top of the agenda for most OEMs and carriers.
Qualcomm will add the DesignArt LTE and backhaul solutions to its existing portfolio of small cell and Wi-Fi technologies and incorporate DesignArt into its Qualcomm-Atheros Division.
We first reported on this deal in early July when rumors first surfaced in the press and we described the deal as part of a continuing M&A trend for small cell silicon. In 2010, Broadcom acquired small cell specialist Percello for $86 million and then in 2011, Broadcom acquired microwave backhaul specialist Provigent for $313 million. Last year we also saw Mindspeed acquire small cell vendor Picochip for $52 million.

Backhaul is one of the areas in which Qualcomm does not have a significant market share as arch-rival Broadcom dominates the segment. Broadcom is the only chipset vendor in this market that has a backhaul and small cell portfolio. This acquisition, if it goes ahead, could be the start of an attempt by Qualcomm to recapture position against Broadcom, using DesignArt as a catalyst.
In addition to solutions for backhaul DesignArt also offers SoC solutions for base station baseband and this deal puts DesignArt head to head with Freescale, Texas Instruments and Mindspeed for small cell basestation SoCs.

The success of this acquisition is all about how quickly Qualcomm-Atheros can integrate DesignArt’s products and IP into their roadmaps and this combination could become a very powerful Wi-Fi/Small Cell/Backhaul portfolio - something no other vendor has.
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M-Commerce Will Not Cannibalise E-Commerce; Is This The Same for NFC and Payments?

Aug 24, 2012 12:00:00 AM / by Admin

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​I have recently done some more work looking at the potential of m-commerce and the end result of current developments and trends. Whilst it is true that there are instances where mobile may be a more suitable and convenient means of accessing the internet and making a purchase, overall I do not think that it is a complete replacement of traditional broadband-based e-commerce.

I wrote a recent ABI Insight detailing my thinking behind this. In short, user behaviour andpreference will likely dictate that certain usage and (higher value)transactions will more than likely continue to be conducted at home (or in the office) via a PC,laptop or WiFi-enabled tablet. As a result, e-commerce will continue to account for a greater proportion of transaction value than m-commerce.

There will be areas where this is not always goingto bethe case. For example, markets which are particularlymobile-orientated or those where mobile is the primary means of accessing the Internet.

I then started to think if this might turn out to be the casefor NFC. Will mobile (through NFC) replace traditional means of transaction, specifically cards and cash. Those providing such technology insist that this is the long-term goal but will user behaviour dictate that things will turn out otherwise?

I think that this largely depends upon two factors or conditions. Can the card networks and those enabling non-card and cash transactions developa compelling mobile user experience that is better than what we already have? By this I am not just thinking of coupons, loyalty,etc. as I think that this is a necessity. I mean, can it be better, easier/quickerand smoother than pulling out my wallet, handing over the card, entering a PIN and/or signing the receipt? I am not sure that the proposed double-tap procedure, with PIN, for medium-high value purchases is theanswer and so we may see NFC being limited to micro-payments.

The second point is how quickly and widely non-NFC based payment solutions are acceptedby the majority ofretailers at POS. This has begun in online (andmobile) channels and I am seeing initial adoption in brick-and-mortar retail premises. Will retailers and users find more benefit and identifythis as a better experience than NFC (which largely replicatees the existing transaction procedure)?

It is possible that they might - particularly if it integrates more with the online experience and transactions. If this is the case then I think that all of the delays, especially in the past two years, could have harmed the potential that we all saw for NFC and it is at risk of being usurped. I believe that mobile transactions (of one form or another) will become more common and popular and that this will impact the value of spend on bank cards, whether traditionalcards in my wallet or virtual ones inmy handset.

I think that it is now down to the card networks, and especially the MNOs, to move quickly and invest and innovate to attract both retailers as well as consumers. If they don't then theywill miss out on the pending move to mobile-based payment solutions.

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Everything Everywhere Pulls of 4G Coup with Ofcom Approval

Aug 21, 2012 12:00:00 AM / by Admin

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​ Everything Everywhere (EE), joint venture of T-Mobile UK and Orange UK has been given the go-ahead by UK regulator Ofcom to repurpose its 1800 MHz 2G spectrum for LTE services. This means that EE will be able to launch 4G LTE services before the end of 2012, as they have been preparing their network for a quick upgrade in anticipation of this decision.

EEis not the first operator to launch 4G services. Earlier in 2012, UK Broadband launched a pilot 4G service in a few boroughs of London with plans to launch in city wide LTE in Swindon later this year.

O2 and Vodafone in the UK have already conveyed their disappointment and dismay at Ofcom’s decision saying that it creates an uneven playing field. With EE most likely launching LTE in 2012, the earliest that any of its competitors can expect to launch 4G is mid 2013, if the 4G spectrum auctions indeed go ahead in 2013. While EE owns bulk of the 1800 MHz spectrum band, Vodafone and O2 have 900 MHz spectrum which they could potentially refarm for LTE. However, neither operators have really pushed for 900 MHz refarming, but seem more keen on gaining fresh spectrum in 800 MHz and 2.6 GHz bands.

The third operator, Three UK isn’t as opposed to the the Ofcom announcement as it is part of the MBNL consortium with EE, through which the three operators share base station sites across the country. EE is also meant to relinquish some of its 1800 MHz spectrum holding possibly to Three UK, in line with its merger obligations which it has to meet before end 2012. This means Three UK might also be able to launch a limited 4G network earlier than Vodafone and O2.

Ofcom feels that UK consumers will benefit with this early launch of 4G, and while it does give EE a headstart, in the longer run the competitive factors should iron out. While EE does benefit, the fact that the device ecosystem for LTE 2600 is much wider than LTE 1800, it seems that O2 and Vodafone are crying hoarse for no reason. LTE 800 MHz is also a popular band choice with an equally large device ecosystem with network costs that will be lower than any of the other bands as lower spectrum denotes wider coverage and fewer cells.

Overall, Ofcom’s decision has set the 4G ball rolling in the UK, and for better or worse its high time it did!




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Troubles in the (Gaming) Cloud?

Aug 17, 2012 12:00:00 AM / by Admin

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Rumors today (August 17, 2012) suggest cloud gaming (and virtual desktop software) company OnLive is in dire straits. Some reports have claimed the company has (or will) undergone mass layoffs and is preparing to file for protection from its creditors. At the same time some individuals are also speculating that OnLive might have gotten acquired and these layoffs are transitional pains. The only official word from Onlive claims the company is not shutting down.
Assuming OnLive’s financial situation is as troubled as some of the news implies this could mean trouble for the cloud gaming market – at least for full scale independent B2C services. This could be part of the reason why Sony elected to acquire Gaikai instead of OnLive. Gaikai operated as a B2B cloud gaming platform instead of a full B2C service and was therefore less reliant on end consumer demand. In addition to operating services for clients Gaikai was also an advertisement platform that allowed developers/publishers to offer consumers cloud based demos. In the hands of Sony, Gaikai could evolve to become a more full featured gaming service under the PlayStation umbrella – this is likely another reason why Gaikai was more appealing to Sony (limited Goodwill or brand equity with OnLive).
So where does this leave OnLive and cloud gaming?
If OnLive was recently acquired, then this news coupled with Sony’s recent acquisition of Gaikai suggests deeper pockets are necessary to effectively operate and market a dedicated cloud gaming service. An acquisition does, however, bring reassurance about this distribution model’s future. If the company is in fact simply facing a daunting financial situation this would highlight the difficulties other companies have faced entering the gaming market and potentially call into question if a cloud gaming service operating independently could reach the necessary scale to justify the high server and operational expenses.
Regardless of the situation there is certainly interest in cloud gaming, at least from vendors within the industry. OnLive is part of Vizio’s CoStar (Google TV) STB platform and Ouya, the upcoming Android based game console, also signed on as a partner. Samsung and LG were also working with Gaikai to bring cloud gaming services to each companies’ respective connected platforms. The cloud as a delivery mechanism for gaming will continue to evolve and in time consumer behavior might adequately support an independent platform, but it would seem that time is not now. In fact OnLive, might simply transition to a business model similar to Gaikai’s and focus on B2B relationships, we shall see.
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Barnes & Noble Lowers Prices on Nook Color and Nook Tablet devices

Aug 13, 2012 12:00:00 AM / by Admin

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US bookseller ​Barnes & Noble announced price reductions today on its Nook Color eReader (now $150) and Nook Tablet (8GB/16GB now $180/200, respectively) devices.

The price cuts by Barnes & Noble keep the bookseller competitive in both the eReader and Tablet markets. As other vendors work to make new product announcements in advance of the end-of-year buying season, Barnes & Noble has decided to extend the lifecycle of its current products even further.

Barnes & Noble has arguably the most compelling color eReader solution available (in any country). The online book catalog is about 80% similar to the titles offered by Amazon’s Kindle store in addition to color content not found on Kindle. As a point of comparison, Amazon does not offer a color eReader; only its Kindle Fire tablet supports a color display.

The challenge Barnes & Noble faces with its Nook line is the long-term viability of dedicated eReaders and the growth in its audience. Tablets are certainly capable of being effective digital reader devices through the use of a bookstore-supported app, but at the penalty of being more expensive than a dedicated CE reader. B&N has a limited audience – only the US. With eReader purchases dominated by the US and its Baby Boomer generation (while the next US generation – Gen X – favors the more versatile tablet market), the total available market for Barnes & Noble is shrinking.

At the end of the day, it really doesn’t matter much about the hardware device prices for dedicated eBook Readers since content is king. Consumers are buying the eReader device that gives them access to the content catalog most aligned with their reading interests.

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