Samsung Looses Smartphone Share

Posted by Sam Churchill on

Samsung is losing smartphone share to cheaper Chinese rivals and high-end Apple phones, reports Reuters. Samsung last week gave second-quarter earnings guidance that was far weaker than expectations and is on track for its worst quarterly profit in two years.

Korean research firm Counterpoint surveyed 35 markets accounting for nearly 90 percent of global smartphone sales and found that the eight-month-old iPhone 5s sold 7 million units in May, compared with about 5 million for Samsung’s flagship Galaxy S5, which was in just its second full month of sales after a late March release.

Data from research firm Canalys showed that Samsung’s market share in the first quarter of 2014 fell to 18 percent from 20 percent a year earlier, while the likes of China’s Xiaomi and Lenovo made gains. Sony’s Xperia Z1 narrowly missed the top 10 and Motorola’s Moto G, Huawei’s Honor 3C, and LG’s G2 all made the top 20.

ComScore reports that for the three months ending February 2014, smartphone penetration in U.S. now stands at 68.2% with a total of 163.2 million owners. Apple currently rules the OEM market with a 41.3% share.

Digital Ad Spending: Over the Top?

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Will Google, Facebook or others invest in wireless? Let’s look at the numbers provided by eMarketer. While nobody’s projections can be expected to be very accurate, I’m fond of eMarkerter’s charts. They’re clear and don’t equivocate.

According to eMarketer, advertisers in the US and Canada both devoted around one-quarter of total media budgets to digital last year. In 2014, eMarketer estimates, US advertisers will devote 28.2% of total budgets to digital.

By 2018 eMarketer expects 37.3% of total US ad spending will be for digital ads.

US advertisers spend nearly $565 per person, on average, to reach each consumer in the United States in 2014. That is expected to increase to $670 by 2018.

eMarketer estimates that the United States will pass $180 billion in advertising spending this year, or nearly one-third of the worldwide total. Mobile will lead this year’s rise in total media ad spending.

By 2018 digital ad spending in the US will pass tv ad spending, according to eMarketer.

By 2018, mobile will account for more than 70% of digital ad spending, totaling some $82 billion in the United States.

Google is expected to control more than half of mobile advertising dollars worldwide in 2014 (some $32 Billion), according to eMarketer.

Many people say Google will not invest in wireless. But Google’s investing in Fiber, which is much more expensive per user, and they’ve got the world’s biggest ad network.

Of course they’ll invest in wireless.

Google is a consumer-facing ad company. They don’t need a business alliance as much as Microsoft and Apple do.

Clear Channel Outdoor, the largest billboard advertiser, is building on their global launch of Connect, which utilizes Near Field Communication (NFC) tags, QR codes and SMS capabilities.

If Google and Facebook don’t build WiFi and LTE networks, perhaps billboard advertisers will. A billboard would make one heck of a MIMO array.

Facebook & Microsoft: Big Gain in Digital Ad Bucks

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Microsoft will surpass Yahoo in global digital ad market share this year, according to E-Marketer. Yahoo’s share of the $140.15 billion digital advertising market will fall from 2.86% to 2.52% this year, anticipates EMarketer, while Microsoft will grow its net worldwide ad revenues by more than 20% over 2013 to reach $3.56 billion, or 2.54% of the market—just enough to surpass Yahoo for the first time.

Google and Facebook are the big dogs, of course.

Google continues to dominate the global digital ad market, netting 31.45% of digital dollars invested by advertisers worldwide this year. While Google’s share may be falling somewhat, Google will still increase its net digital ad revenues 15.0% to reach $44.08 billion globally this year, eMarketer estimates.

Facebook and Twitter are making the biggest market share moves this year, and Facebook will increase its share from 5.82% in 2013 to 7.79% in 2014—by far the largest among the US-based companies.

Due to its continued success in search advertising, Google will maintain control of more than half of mobile advertising dollars worldwide (some $16 Billion), despite losing a small amount of share year over year.

Facebook is the star of mobile ad growth. It is expected to take 22.3% of the $32.71 billion global mobile advertising market this year, up from 17.8% in 2013 and 5.4% in 2012. Twitter will continue its ascent in the mobile ad world as well, growing from 2.4% last year to 2.8% in 2014, according to E-Marketer.

Apple and IBM Form Business Alliance

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Apple and IBM have formed a Global Partnership. The new IBM MobileFirst for iOS utilizes IBM’s big data and analytics capabilities, with Apple’s hardware and software using iPhone and iPads platforms in business.

According to the companies, it’s grounded in four core capabilities:

  • A new class of more than 100 industry-specific enterprise solutions including native apps, developed exclusively from the ground up, for iPhone and iPad;
  • Unique IBM cloud services optimized for iOS, including device management, security, analytics and mobile integration;
  • New AppleCare® service and support offering tailored to the needs of the enterprise; and
  • New packaged offerings from IBM for device activation, supply and management.

The biggest challenge for team Android is having to herd cats to reach corporations, says ZDNet’s Larry Dignan.

Team Android will need Accenture and HP to push Android in the enterprise. But SAP, Salesforce and others may stay out of any platform debates.

Microsoft may be a bit insulated, according to ZDNet. Microsoft dominates in the enterprise, will make some serious mobile device management headway and has Office running better on iOS than its own Windows.

In an interview with Re/code, Apple’s Tim Cook and IBM CEO Ginni Rometty described the tie-up as one that only the two companies could deliver.

“If you were building a puzzle, they would fit nicely together with no overlap,” Cook said of the relationship. “We do not compete on anything. And when you do that you end up with something better than either of you could produce yourself.”

Sprint and T-Mobile: Joint Bidding on 600MHz?

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Sprint and T-Mobile are reportedly planning to jointly bid approximately $10 billion on spectrum in next year’s FCC incentive auction, according to the Wall Street Journal.

The $10 billion is part a $45 billion Softbank package meant to finance Sprint’s rumored acquisition of T-Mobile, the paper said. Any merger between Sprint and T-Mobile would require the approval of the FCC and Department of Justice, of course.

This joint venture will likely only happen if the merger deal is still in play at the time of the auction.

With 30 MHz reserved for smaller carriers, this joint venture would make money available for next year’s 600 MHz auction. A budget of $10 billion might buy a 20 MHz slice (10 MHz x 10 MHz), or two swaths of 10 MHz (5 MHz x 2).

Sprint shut down Nextel’s 800 MHz iDEN service in July 2013 and has since been refarming its 800 MHz spectrum for FDD-LTE service. Sprint expects to cover 150 million POPs with 800 MHz LTE by the end of 2014 as part of its tri-band Sprint Spark service.

Since Sprint has 800MHz towers, perhaps Sprint could use their infrastructure to host a joint 600 MHz network, although T-Mobile also plans to deploy 5×5 MHz 700 MHz A Block spectrum by year-end, which it acquired from Verizon for $2.4 billion.

Dish is also likely to bid on 600 MHz, perhaps spending some $5 Billion on 10 MHz (5 MHz x 2). That would leave the duopoly 40 MHz, or 20 MHz each, if the FCC’s guesstimate of 70 MHz freed by TV broadcasters proves correct.

Dish could be the new 4th network.

French operator Free Mobile, launched in 2012, built their own 2.6 GHz network to cover at least 25% of the French population. Free is now the second largest ISP in the country.

The French public is the beneficiary of this competition, notes Engadget. Rates are now lower across the board, with Orange, SFR and Bouygues all launching discount brands.

Free Mobile users can get 20 GB of LTE data for $27/month. That could deliver a fair amount of wireless streaming video – especially with H.265 encoding that could cut HD bandwidth nearly in half.

Both Dish and Sprint/T-Mobile appear to be positioned to deliver “wireless cable” on higher frequencies, while 600 MHz could provide voice and data roaming. Sprint is using 8T8R equipment at 2.6 GHz and is launching 40MHz carrier aggregation, with 60 MHz on deck. That’s 6x the bandwidth and more towers to deliver mobile video.

AT&T and Verizon are so 20th Century. Their only option is to buy a duopoly position to keep prices high and complain to government about unfair competition.

The real death star is Comcast. I hope Charlie keeps his cool.

Sprint/T-Mobile: Real Deal?

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FierceWireless says that SoftBank and T-Mobile US parent Deutsche Telekom have reportedly reached a “basic agreement” for Sprint to merge with T-Mobile, according to a report in the Japanese business publication Nikkei.

Deutsche Telekom, which owns 67 percent of T-Mobile, has agreed sell more than 50 percent of T-Mobile’s shares to Sprint, the Nikkei report said.

Reportedly, SoftBank will pay cash and will use stock swaps to cover the estimated purchase price of more than $16 billion. Multiple reports in early June indicated that Sprint would pay $32 billion for T-Mobile in a transaction that would combine the No. 3 and No. 4 U.S. wireless carriers, so a $16 billion price tag for around 50 percent is inline with those reports.

According to the Nikkei report, the two sides are still hammering out the details of the deal, which would give the combined carrier close to 100 million customers, nearing the scale of AT&T Mobility and Verizon Wireless. Eight financial institutions will reportedly help SoftBank finance the deal.

The FCC says AT&T and Verizon command around 70 percent of all low-band spectrum licenses (below 1 GHz). Sprint and T-Mobile hold around 15 percent of all low-band spectrum licenses, so the combined company should be eligible for bidding on large chunks of 600 MHz spectrum next year.

Duplicating 600 MHz macrocell infrastructure would not be cheap. Combining towers, infrastructure and management is anticipated to save big bucks.

The tricky bit would be FCC and Justice approval.

The loose cannon is Dish Networks. They will also bid for 600 MHz spectrum. Would Dish partner with Google, Amazon or Facebook to create a new “4th Network”? If it pencils out, sure. But who would “host” such a network? A combined T-Mobile/Sprint would have spectrum to burn. They wouldn’t need Dish spectrum.

AT&T hopes to buy DirecTV for $49 billion, so Verizon could be a possibility for Dish — but that would just eliminate a competitor (after Dish acquires 600 MHz frequencies). God help us if Comcast joined forces with Dish, an outcome that could be increasingly likely if T-Mobile and Sprint merge.

Perhaps a Japanese or South Korean carrier could run the show for Dish for a 50% stake. Consider that a Softbank takeover of Sprint seemed far-fetched 2 years ago.