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ABI Research Blog (93)

What Taptitude user data tells us about Lumia 900's start

Apr 19, 2012 12:00:00 AM / by Admin

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​Ifoundthis blog postby FourBros Studio, an independent app developer, agood read. It sheds a lot of interesting light on the success the firm’s Taptitude game has seen on WP7. As such it is a great example of the revenue opportunities developers can unlock if they manage to create an early hit fora still nascent storefrontlike Windows Marketplace. Moreover, it includes a chart (“Taptitude Players by Device”) that prompted me to take another back-on-the-envelope-styleangle on the continuingguess gameabout Lumia 900 sales.

Assuming that Nokia sold one million Lumia 710s and 800s in Q4 and two million in Q1,the installed base at end-March would have been three million. There were 91 days in Q1, which puts the sales per day at approximately 22,000. Let’s then assume that the installed base has grown linearly, at the same rate, to date. That puts the installed base on March the 16that 2.670 million and on April the 16that 3.354 million – meaning that the avg. installed base for Taptitude’s evaluation period was about 3.012 million. Taptitude’s combined user base for Lumia 710 and 800 was 32,200, i.e. slightly over 1% out of the installed devicebase.

The rate for Lumia 900 is likely to be somewhat higher (given that Taptitude is only available in English, which is a drag in non-English-speaking markets), let’s say 1.5%. Based on this, the 1,900 Taptitude players on Lumia 900 would translate as an installed base of 127,000 devices, accumulated over a period of nine days. That’d be 14,100 devices sold per day, including the launch date that infamously fell on Easter Sunday. Of course, that’s a figure whichrelies heavily on a number of assumptions, especially about Lumia 710’s and 800’s installed base and Taptitude’s uptake rate on Lumia 900. With such a short sales window for Lumia 900, also the exact date of FourBros Studio’s data can make a substantial difference. I assumed the figures were from Monday the 16thsince the blog was published on the following Tuesday.

Nonetheless, a daily sales figure of close to 14,000 devices, distributed through one single carrier, wouldn’t in my view be a bad start. Maintaining that momentum would push the Q2 figure to somewhere near 1.250 million, which would have been 13% ofAT&T’s smartphone salesand 66% of its non-iPhone smartphone sales in Q4. How profitable this start has been is, then,a whole another matter– but at this stage that is secondary. It’s building up the installed basethat both Nokia and Microsoft should focus on for the time being.​

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Lava XOLO X900: Would it be able to carry a $420 price tag with Intel Inside?

Apr 19, 2012 12:00:00 AM / by Admin

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Intel together with Lava Mobiles in India has launched the first ever smartphone which boasts of “Intel Inside”. Named as the Lava XOLO X900 this smartphone marks Intel’s much awaited entry in to the smartphone segment. Lava’s association with Intel and this smartphone was first announced during the MWC in Barcelona earlier this year. Priced at $420 (INR22000), the smartphone runs on Android 2.3 (upgradable to Android 4.0) and is powered by Intel Atom processor Z2460 with a clock speed of 1.6 GHz. Other features include an 8 megapixel rear camera, a front facing camera, HSPA+ support, 4.03” LCD display, HDMI connectivity and NFC.

A partnership with Intel is definitely an achievement for Lava, which so far has been associated mostly with the low cost handset segment. But the question that arises is; will this partnership help Lava command a premium pricing for its latest smartphone. Not so long ago, Micromax tried to achieve a similar feat with its Superfone A85, with gesture control and a 1GHz Tegra 2 processor, priced at $360, but had to bring down the price to $290 within a month of its launch. RIM launched its latest blackberry Curve 9220 in India yesterday at almost half the price ($210). Within the given price band there are plenty of other options for the Indian consumers to choose from, ranging from the iPhone 3GS to a variety of Samsung, Nokia and Blackberry smartphones. It definitely seems to be a difficult uphill journey for Lava.
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Patent Wars!

Apr 18, 2012 12:00:00 AM / by Admin

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​Patent Wars. It sounds like a movie by George Lucas. Something which happened a long time ago in a galaxy far, far away. An epic struggle between good and evil. Pure science fiction.

There is no better way to describe the mania that has swept through the wireless industry over the past year or two. Last week, Microsoft paid AOL $1 billion for 800 patents (and a license to approximately 300 patents that AOL is keeping). Microsoft was also part of the Rockstar Consortium (with Apple, EMC, Ericsson, RIM and Sony) that paid $4.5 billion for the patent portfolio from bankrupt Nortel Networks in an auction last year. Last month, the waiting period for completion of the Nortel deal expired, so Rockstar is now looking to monetize its patent portfolio; in legal jargon, “monetize” means “sue the pants off people”. And of course, Google (which lost out in the Nortel patent auction) is buying Motorola Mobility for $12.5 billion, primarily for Motorola’s wireless intellectual property. Despite being a big part of the Internet innovations that have changed our lives over the past few years, Google has relatively few patents to its name, due to the nave idealism which motivated the company’s founders to share everything in the public domain. Instead of “Do No Evil”, perhaps the company’s motto should have been “File Patent Applications Early”.

How did this all happen?

Perhaps it was inevitable. With astronomical amounts of money flying around in the technological stratosphere, the stakes are high. A shark can smell blood in the water 400 meters away, and lawyers (who are closely related to sharks in the big scheme of evolution) could smell the money floating around in the wireless industry. And, as far as the big companies are concerned, what is a few million in legal fees when billions are at stake?

I remember just a few years ago, when the high-tech companies each had an IP department consisting of one or two lawyers, and these lawyers would meet with the competition one-by-one to negotiate cross-licensing agreements. Both sides would put their patents on the table, pull out the figurative scales of justice to weigh the two piles of patents, and whichever side had less patents would agree to pay some money to the other side. Shake hands, like gentlemen. Going to court over the patents was rare, a last resort only when every avenue of negotiation had been exhausted, and it was seen as a failing if the corporate lawyers were unable to reach an amicable agreement and ended up in expensive litigation.
Not anymore. The news these days is full of suits and counter-suits. Losing market share? Sue your competitor. Meanwhile, patent trolls buy and sell intellectual property like real estate, with no intention of developing any products, just using the patents to threaten lawsuits and extort royalties from legitimate companies that are actually trying to develop and sell new products.
Something is seriously wrong with the patent system today. The high-tech companies that have revolutionized our world today are now spending more time and money worrying about IP (Intellectual Property) legality instead of IP (Internet Protocol) technology. Gives a whole new meaning to the phrase “IP networks”.
With billions being spent on patents, and tens of millions on legal fees, is anybody still investing any money on good, old-fashioned R&D?
There is certainly a temptation for companies to compensate for declining sales by seeking patent royalties, especially companies that may have grown too big and fat and lost touch with the market, companies that are finding it difficult to replicate previous successes. It is easier to simply cash in on a patent portfolio, instead of spending time and effort on R&D with no guarantee of success. The royalty dollars go straight to the bottom line. But, as Jonathan Schwartz (the former CEO of Sun Microsystems) said a few years ago, real companies “innovate, not litigate.”
Personally, I have no objections to inventors being compensated for their creations. The whole purpose is to encourage new ideas and innovation. However, the legal battles going on now over patent rights seem to be having the opposite effect, stifling innovation for fear of being sued. Litigation instead of innovation.
At the moment, the most fiercely fought battles in the Patent Wars are the suits and counter-suits filed by Apple and the competition from Planet Android – Samsung, Motorola, HTC and (by proxy) Google. In my next blog post, I will look at Apple versus Android, and share some insights about the relevant patent laws. Hopefully the information will help everyone to better understand all of the lawsuits in the courts (and the headlines) today.

And, for detailed market analysis from ABI Research, take a look at our Mobile Device Intellectual Property and Royalties research service.

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European Commission, 3: You Are Killing NFC

Apr 16, 2012 12:00:00 AM / by Admin

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It was reported today that the European Commission has opened an in-depth investigation into Vodafone, Everything Everywhere and Telefnica O2’s proposed mobile wallet JV and is expected to give its final ruling whether to let the venture move forward by the end of August http://bit.ly/HO9SqP . The EC has been involved in this matter for several months now, and with the new investigation have just extended the resolution of it.

If you wanted to point to one singular event that is holding up the progress of NFC mobile wallets/mobile payments in the world, it is this ludicrous regulatory mess.

Mobile network operators across Europe have formed JVs and alliances of some form to propel mobile payments forward. The French operators are moving along without any objection from the EC, but you can bet all operators in Europe have stopped most of their work in launching NFC payments/mobile wallets until this challenge, brought by 3, is resolved.
Due to the EC involvement, the flow of NFC capable, mobile wallet –ready handsets in Europe has stopped. OEMs require scale to profitably produce and market mobiles. They and their mobile network operator partners are not going to offer those mobiles to the public until they are sure they can do so without regulatory reprisals. Thanks to the regulatory action, the opportunity to use the Summer Olympics as a way to grandly introduce global consumers to NFC mobile payments is gone.
It will be impossible to make an NFC enabled mobile wallet, which requires specific investments by device OEMs and mobile network operators to establish one or more secure elements within the handset, a totally free and open ecosystem, at least in these formative years. The EC and any other regulatory body across the world needs to realize that.

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The Real-Time Benefit of Telematics

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

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​Having recently taken delivery of a new car and paid extra to get the telematics feature, I was keen to experience the benefits. It was nice to have a bigger map screen placed firmly in the center console rather than trying to read my phone screen. And the voice commands are helpful when the car correctly guesses what I say. But is that all?

No it isn't. The pleasant surprise came on the way to visit a location in an unfamiliar part of the city. After being stuck in a traffic jam for about 10 minutes the nav system suddenly announced that as the traffic appeared to be heavy it was going to change the route and that I should take the next exit. It then guided me through some backstreets to my destination.

So the real-time nature of telematics delivered a tangible benefit. And while I was pleased to be the recipient of some efficient re-routing, I would have preferred it if the system had identified the problem earlier and diverted me before I got stuck.

I also think that had I known my destination in advance that I wouldn't have activated the nav system so would have missed out on this benefit. I don't use it on my daily commute, so will it provide the same assistance if there is a traffic incident ahead? How can it, if it doesn't know where I am going? I am not going to fiddle with the sat nav before every trip, but on weekday mornings it could ask if I am going to the office, and activate the route plan and automatically check ahead for traffic issues after a simple "yes" response.

Maybe some other manufacturers have these features already, but OEMs need to continuously improve the value proposition for telematics. Making it easier to benefit from the technology that is already there is one way. And improving the response is another. Making driving more efficient is definitely worth paying for.

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NOOK in the Dark

Apr 12, 2012 12:00:00 AM / by Admin

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Barnes & Noble today announced a Nook Simple Touch with GlowLight electronic book reader that can be viewed in the dark. The announcement beats recent Amazon rumors of a Kindle eReader with a backlit display.

One of the advantages of the electrophoretic display (EPD) on digital readers is the low power consumption; only consuming power when redrawing the screen and not when displaying static content. B&N claims the new Nook model’s battery can maintain a charge for up to one month of reading with the light on. The company also says that the GlowLight addition is patent-pending.

Shipping in early May, the new eReader will be available for $139 directly from Barnes & Noble and its retail partners. Like other Nook products, the biggest drawback for those considering an eReader is that Barnes & Noble only offers the devices and eBooks in the United States.

Barnes & Noble has successfully maintained its #2 position in the eBook Reader market with its Nook line of devices through 2011. ​

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Historic (4G) Day for India

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

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It is an historic day for India.

Bharti Airtel has become the first operator to launch 4G TD-LTE in Kolkata. Infrastructure was supplied by ZTE, although other Circles are supported by NSN. In all, Bharti has secured 4G licenses for 4 Circles: Maharashtra, Karnataka, Punjab and Kolkata.


Bharti Airtel will not have it all its own way as Reliance Infotel and a Qualcomm both have 4G licenses.

For the Bharti Airtel launch, end-users will have to rely on TD-LTE 4G dongles but that is expected to change by late 2012. The service is therefore expected to attract not just mobility users but also fixed wireless broadband users who don’t have a DSL or cable alternative. WiMAX licenses were issued previously with the expectation that WiMAX operators would target fixed wireless broadband segment but subscriber adoption was muted due to a lack of coverage, pricing and internal support from the WiMAX carriers.

The outlook for LTE looks more promising but time will tell.
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Why I’ve Given Up My Smartphone (For the Time Being)

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

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The furor surrounding privacy and location is no longer media headline grabbing, it is a genuine concern that the industry will need to address. So starting last weekend, I dug my old Nokia from a box that included 2 portable CD players (remember trying to run with them), a floppy disk, some Irish currency (I may need this again), and a Now 24 album - I have been smartphone free for two days.
I have been researching the GPS and location market for 10 years or so, monitoring the stunted yet inevitable rise of LBS. I have always backed location to the hilt for the multitude of positives it can bring versus the limited potential negatives highlighted by the media. Even with Locationgate, I was neither surprised nor found it particularly worrying. But it did represent how the industry’s attitude had changed from one of caution to that of a grab everything gold rush.
When it comes to location, platforms and developers alike are thinking in terms of legal rather than moral right and wrongs, covering themselves through carefully constructed terms and conditions. It has become an arms race, where there is no individual culpability in collective behavior. Applications are now nothing more than Trojan horses, mining data for advertising purposes. Even if developers are reigned in, there is a sense that there will always be loopholes and workarounds, ensuring that someone can access data.
Admittedly, my data isn’t that exciting or important, and having it aggregated, anonymously represents a fantastic way for everyone to benefit without the need for intrusion or extreme personalization. However, the boundary of what is anonymous and what can be tightly linked to my store cards, social medial profiles, search behavior, etc. is now being flagrantly pushed. Despite living an upsettingly mundane lifestyle, there is something unnerving about an electronics company knowing more about my psychological prolife and preferences than me.
I spoke with a carrier last week that is looking at ways to enable the user to not only control how and when location information is gathered, but also to clearly see who is using it. This approach is transparent, easy to use and will restore confidence. This is where the industry needs to go with this. Highly targeted advertising is and can be extremely beneficial for all parties, but the control must be handed back to the user. If not, the industry will back itself into a corner and there are plenty of politicians who will relish the opportunity of putting in place far reaching legislation to limit the increasing power of the internet.
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Google Glass: A Glimpse Into The Internet of Things?

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

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Last week, Google announced Project Glass, an ambitious project to feed on-demand, real time data onto eyeglasses. The project has produced skepticism and mocking, both of which I think are unjustified. Google is merely nudging us along to an eventuality – the click less, swipe less web interface and the internet of things.
 
Last year, I wrote a report on mobile augmented reality in which we found that many enterprising companies are seeking to expand the internet to become even more useful than it is today. Visionaries at companies like Google, Intel, Metaio, and DoCoMo believe there will be a day when we can attach data, graphics, audio or video to objects such as buildings, vehicles, machinery or a location. This data could then be accessed using augmented reality technology – either through a smartphone app through which you would see or hear the data as you looked at the object, or eventually through glasses.
 
While today we are seeing the emergence of smartphone apps and AR, there are lots of challenges before any of this happens for eyewear. Applications would require filters because of information overload – our brains can’t handle too much data at one time. One solution in that respect could be you as a consumer choose the apps you would like to run through your eyewear, just as smartphone users choose apps and run them today on their phones. Industrial and military uses of augmented reality eyewear produce significant eye fatigue. And how would eyewear and smartphones peacefully coexist over time? And then there are issues around attaching data to things -- indoor AR today is limited because of GPS, and image recognition requires huge, cross-referenced databases.
 
But it is easy to see why Google is so interested. Search expands when internet expands, and where search goes, so goeth Google.
 
I believe Google will showcase Google Glass to promote the technology and look to eyewear and smartphone makers to make eyewear eventually. They will potentially make eyewear (with a partner), but as with Google phone and new Google branded tablet, Google knows the key is to make click less touch less web interface and the internet of things universal.
 
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Here Comes HD Voice!

Apr 9, 2012 12:00:00 AM / by Admin

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As I mentioned in a recent Insight, there are several mobile networks today that support HD Voice (mostly in Europe), and a few models of mobile devices with HD Voice are starting to appear, but nothing is happening in the US yet. I believe that this will change in 2012.

Operators with 4G Long-Term Evolution (LTE) networks will begin launching Voice over LTE (VoLTE) service this year. AlthoughHD Voice can be supported by 3G (and even2G) networks, LTE network operators will want todifferentiate theirnew 4G networks and VoLTE serviceswith noticeable improvements in voice quality, which means they willwantto offer HD Voice. The demand forHD Voice inVoLTE phones will provide thecritical mass necessary toencourage thedevice manufacturers toproducelarge quantities ofphone models with HD Voice, which should lead to widespread adoption.

Last week's announcement by Sprint of the HTC EVO 4G LTE is the first mobile device to be offered in the US with HD Voice. Expect more to come as Verizon and MetroPCS and other operators pre-load the market with VoLTE-capable phones prior to the actuallaunch of VoLTE service laterthis year.

For more information on HD Voice, see our 2010 research report Mobile HD Voice.​

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