Mobile cloud computing subscribers to total nearly 1 billion by 2014

NEW YORK, USA: ABI Research forecasts that the number of mobile cloud computing subscribers worldwide will grow rapidly over the next five years, rising from 42.8 million subscribers in 2008, (approximately 1.1 percent of all mobile subscribers) to just over 998 million in 2014 (nearly 19 percent).

Mobile cloud applications move the computing power and data storage away from mobile phones and into the cloud, bringing apps and mobile computing to not just smartphone users but a much broader range of mobile subscribers.

ABI Research recently released a major study of mobile cloud computing, which the company believes is the first published report to examine this disruptive technology model in depth.

According to senior analyst Mark Beccue: “From 2008 through 2010, subscriber numbers will be driven by location-enabled services, particularly navigation and map applications. A total of 60 percent of the mobile cloud application subscribers worldwide will use an application enabled by location during these years.”

Some quite innovative applications are already commercially available. Lock manufacturer Schlage, or example, has launched LiNK –- a keyless lock system for the home that enables subscribers to remotely control not only the door lock, but heating/cooling, security cameras and light monitors, all via PC or mobile device.

Business productivity applications will soon dominate the mix of mobile cloud applications, particularly collaborative document sharing, scheduling, and sales force management apps. ABI Research expects some or all of the major PaaS platforms — Google, Amazon AWS, and Force.com –- to market their mobile capabilities aggressively starting in 2010.

Beccue concludes by reiterating his finding that, “By 2014, mobile cloud computing will become the leading mobile application development and deployment strategy, displacing today’s native and downloadable mobile applications.”

Apple/Google spat represents opening shot in high-stakes wireless data battle

EL SEGUNDO, USA: Apple Inc.’s recent move to reject Google Inc.’s Google Voice software from its App Store represents an initial skirmish in the escalating battle among wireless operators, cell phone makers, and content developers and aggregators over who will control revenue generated by applications and data services, according to iSuppli Corp.

Google Voice is a free Voice-Over-Internet-Protocol (VOIP) application that provides no-cost phone calls in the United States along with a range of services, including call screening, voice mail with transcriptions and Short Messaging Service (SMS).

With Apple not giving a reason for rejecting Google Voice, speculation has been rife that the company’s wireless operator for the iPhone—AT&T—demanded the application’s denial, fearing it could erode its service revenue from iPhone subscribers.

Apple’s move, and the news following afterward that Eric Schmidt—chief executive officer of Google—would resign from Apple’s board, reflect changing circumstances in the global wireless industry due the rise of data applications and services for the new generation of smart phones.

“The explosive growth in wireless data service revenues, mobile applications and smart-phone device unit shipments during the past two years is spurring a dramatic shift for the global cell phone industry,” said Dr. Jagdish Rebello, director and principal analyst with iSuppli.

“Companies including Apple, Google, Nokia, RIM and Microsoft are trying to muscle in on the wireless carriers for a share of the lucrative and growing mobile premium content, service and application pies. Regardless of who wins, this battle will alter the balance of power in the mobile value chain.”

Global revenue for wireless data services, excluding messaging, is projected to grow by 26.2 percent to reach $87.7 billion in 2009. This follows 57.1 percent growth in 2007 and a 60.3 percent expansion in 2008 for total data revenue among the world’s wireless carriers.

iSuppli is forecasting that total data revenues of carriers worldwide, excluding messaging, will grow to approximately $188 billion by 2013. In contrast, total revenues for all services offered by the world’s wireless carriers will remain roughly flat at approximately $866 billion in 2009.

Mobile applications, such as those on Apple’s App Store, are key to stimulating the data service revenue growth.

“Clearly, mobile data revenue is key to the continued health of wireless carriers and the cell phone value chain in the future,” Rebello said. “In this battle, ownership of customers and who can monetize data services and applications are up for grabs.”

Apple’s rejection of Google Voice is a dramatic illustration of this fight for data revenues.

“By introducing applications and services that allow customers to make calls and send text messages without paying the operators, wireless operators have no incentive to invest in network upgrades,” Rebello said.

“This is the reason why many carriers are pushing out the upgrades of their networks to 2010/2011, compared to 2009/2010 before. With billions of dollars in expected investments, the stakes are huge for the wireless carriers.”

The figure presents iSuppli’s forecast of global wireless data revenue excluding messaging revenue.

iSuppli: Global Wireless Operator Non-Messaging Data Revenue by Country (Millions of US Dollars)Source: iSuppli, Aug. 2009

Wireless carrier success strategies
To sustain the growth momentum in data revenues while maintaining their relations with other players in the value chain, wireless carriers must develop and implement carefully thought-out business models. Operators need to develop strategies that are built around four central tenets:

* Monetizing broadband access.
* Co-operating with the mobile value chain to develop and offer compelling applications and content.
* Offering revenue-generating services that take advantage of mobility.
* Leveraging mature billing capabilities and inherent customer trust to develop new applications that can take the industry to the next level.

Specifically, it’s critical for wireless service providers to implement new strategies and to develop business models optimized for each of the different revenue opportunities in mobile broadband access, content and applications marketing and value-added service offerings

“Failure to do so will result in contraction in data and total revenues, excessive subscriber churn and a slowdown in market development,” Rebello warned.

Smartphone downloads from all app stores to reach 6.67 billion in 2014

MOUNTAIN VIEW, USA: Smartphone penetration in the US mobile markets is increasing rapidly. For some time, mobile operators have been offering a branded 'catalog' of mobile content and services that could be purchased from the handset itself.

However, all that is changing for smartphones, in which newer types of targeted app stores are being introduced to enable the device owner to purchase content from outside the operator environment. The availability of a large number of inexpensive or free mobile applications that leverage the next-generation technical capabilities of the target device will help drive adoption.

However, in the end, service differentiation and generating suitable return on investment from the app store business could be challenging.

New analysis from Frost & Sullivan: An Insight into the US Smartphone Application Storefront Market, finds that smartphone downloads from all app stores will reach 6.67 billion in 2014. The market segments covered in this research include prepaid and postpaid mobile, SMS and MMS, mobile Internet, iPhone, Android, Windows Mobile, Palm, and Symbian.

"Next-generation devices are being introduced at a rapid pace, and stakeholders are offering app stores to facilitate downloads of compelling applications from multiple categories, serving a wide range of communication, entertainment, information, and personalization requirements of the mobile user," says Frost & Sullivan Industry Analyst Vikrant Gandhi.

"For example, Apple, Google, Nokia, Palm and Microsoft have either already introduced app stores or are in various stages of app store rollouts and are working to ensure that the entire service experience is compelling for the end user or device owner."

A vast majority of applications are available 'free of cost' to the end user, significantly driving adoption in the US smartphone app store market. These applications leverage advanced device capabilities such as touch screen, accelerometers, full Web browsing, and location-based services, among others, to deliver a truly compelling proposition.

The most significant challenge is to ensure service differentiation and optimal management of the scale of the app store business. App store providers should always be open to support new business models to drive the introduction of innovative services and content types. Having a clear value proposition is also important for mobile operators.

"Unless the app store providers establish exclusivity agreements with application developers -- something that is not feasible for a large majority of applications -- it will be difficult to provide enough differentiation through the app stores," notes Gandhi.

"The best example of how this could be done is Apple's app store, in which the entire experience of service purchase and consumption -- including device characteristics, form factor and the operating environment -- was a radical shift at the time of its introduction."

This does not mean that services could not be differentiated at all. The moot point then is the extent to which providers are willing to invest in their infrastructure to offer new service to their customers, which then ties back into something that is still being examined -- identifying the main purpose of launching the app stores and if app stores alone are strong enough reasons to purchase a particular type of device.

A single participant cannot provide all the services in the mobile content industry. App store providers need to work with multiple application providers and offer them sufficient incentives for their app store initiatives.

Services of independent, third-party app store providers such as Handango, Handmark, and PocketGear can also be used to run an app store business profitably with adequate service differentiation.

"For instance, outsourcing or white-labeling of the app store business might become a good idea in the long run since a device vendor or an operating system provider may not want to commit large resources to manage the smartphone app store business," concludes Gandhi.

Smartphones: Silver lining of declining handset market

Ovum comment from Adam Leach, Devices principal analyst.

Smartphone shipments will reach 406.7 million by 2014
UK: During 2008, in a first for the mobile industry, consumer demand for third-party applications started driving both handset sales and revenues for developers and OEMs.

Apple's success with the App Store has prompted other players to focus on devices that can enable third-party developers to easily bring applications and services to mobile phones. Subsequently the global economic downturn has stimulated a renewed focus on smartphones.

The collapse of the market for mid-tier handsets in 2009 is polarising the handset market, with vendors and mobile operators focusing on two types of handset: those targeting the low-end and high-end segments. The end result is a quickening of the replacement of 2G in favour of the high-end 3G handsets, and greater volumes of smartphones.

Ovum expects that these factors will see smartphone shipments grow by 18.7 percent between 2008 and 2009 despite the overall decline during the same period in the total mobile phone market. This growth will continue at a CAGR of 19.5 percent through to 2014, at which point smartphones will account for 29 percent of the total global handset market.

Symbian remains market leader, Google Android rising star
In 2008 Symbian OS represented 58 percent of the smartphone market. Its position as market leader has been achieved by Nokia's championing of the platform and its widespread use within the player's device portfolio. Following Nokia's acquisition of Symbian and creation of the Symbian Foundation, Nokia will continue to be an active supporter and drive the platform deeper into its portfolio.

Ovum expects Symbian OS market share will drop to 43 percent by 2014 due to rapid adoption of new platforms such as Android, although it will maintain its market leadership. From a standing start in 2008, adoption of Android will be rapid and we expect Android shipments to reach 72 million units by 2014, representing 18 percent of the market and overtaking shipments of Windows Mobile.

Android shipments will be driven by adoption by all tier-one OEMs (except Nokia) and an active developer community.

Smartphones are dead! Long live managed device platforms
While smartphones are set to proliferate over the next three to five years, the category itself will become less relevant as attention shifts towards distinguishing those devices that are actively managed by OEMs, MNOs, web companies and retailers from those that aren't.

Consumers will increasingly make buying decisions based not on a device's potential to support advanced capabilities but 'crucially' on the vendor managing their data and services on the device.

The ability to deliver a tightly integrated end-to-end service proposition including content and applications directly to consumers was pioneered by Apple and Google. Ovum describes this approach as a managed device platform (MDP), as examined in our report: "Of iPhones and Androids: redefining the smartphone and other devices."

The adoption of the MDP model by Nokia, Google, Microsoft, Sony and other major vendors will drive the adoption of those smartphone software platforms that are backed by these companies.

'Unmanaged' smartphones will still have a place in the market. However, they will appeal mainly to users who do not wish to be tied to a particular vendor's offering or are content with a more basic service package. Smartphone platforms that do not have the backing of major vendors will not ship in significant volume in five years' time.

Defining the smartphone market
Ovum defines a smartphone based on its software platform. Therefore, Ovum considers the following to be smartphone platforms: Symbian OS, Windows Mobile, Android, OS X, BlackBerry OS, Palm OS, Web OS and LiMo.

Google Latitude: Operator business case heading south?

UK: Comment from Jeremy Green, Practice Leader & Michele Mackenzie, Principal Analyst, Ovum.

Google is stealing a march on operators
Location has long been touted as one of the key enablers which should be core to both the operator’s own direct-to-consumer (D2C) service offering and more recently as a network enabler which operators could open up to third-party application developers and preferably at a premium.

However, operators have dragged their heels for so long that device vendors such as Nokia and Internet players such as Google have stolen a march on the operators, launching their own location-enabled applications and building location platforms which allow them to enable third-party applications and build developer communities to serve their own user bases.

Google is in the process of building a location network across its markets and this is largely independent of the operator’s cooperation (although it is dependent on the operator refraining from disruptive action).

For most operators, it is too late to develop location awareness as a fully fledged premium service. And it was becoming increasingly unlikely that they would succeed in offering location as an enabler to third parties.

But Vodafone’s recent announcement that it will open up its network APIs to the developer community puts Vodafone at least back in the picture. Vodafone is one of the few operators with the size and scale to take on some of the other contenders. But is it too little too late?

Neither side ready for a fight
Google’s location platform uses a number of data criteria and location solutions in order to pinpoint the user’s location. It takes the device’s dynamically assigned IP address in order to determine the user’s country information.

It then identifies the cell tower which is serving the user in order to determine further the location of the user; this is done by the Google Maps application itself, so that the device can calculate its own location without any further information from or calculations by the operator’s network.

Google has built its own database of cell tower locations and cell IDs, information which is collected through active ‘war driving’ and its mapping application and fed back to its database. Google Latitude also uses the network of WiFi access point locations in order to determine the user’s location, and lastly the GPS functionality on the mobile phone.

Google’s service is to some extent dependent therefore on the operator’s infrastructure. At present, this would not be an issue for most operators who are seeking to drive further data traffic on their networks and Google’s applications are contributing to this.

But for those operators who are providing their own location services either as a D2C offering or business-to-business (B2B) offering, Google may well be undermining their business case.

The G1 Android phone offered in the UK by T-Mobile does not support Google Latitude, even though Google Maps is available, and G1s offered by other operators do support Latitude. This is allegedly because T-Mobile UK has requested that the feature is disabled, citing privacy concerns. This suggests that the operators are not prepared to go down without a fight, and that Google is still sensitive to operator concerns.

Advertising is key to success again
In line with its core business model of advertising, Google is likely to focus on monetising Latitude through advertising revenues, mainly local advertising. It may look at how it could generate revenues from selling contextual information on its users, presumably to advertisers. This will have to be done on an aggregated level in order not to compromise the data privacy of its users.

We believe that Google will make its location tools, including APIs, available free of charge to developers on the Google platform in order to drive usage of the Web.

These developers will therefore be able to query Google’s database of users’ locations, subject to the privacy constraints set by the users themselves and stored on the platform; we think that Google does not plan to charge for this.

It’s worth noting, though, that Google’s location server (which makes this possible) is not a Gateway Mobile Location Centre in the sense intended in the architecture for location services standardised by the mobile industry almost ten years ago. This too may be an indication that the operator-centric model for mobile location services is past its sell-by date.

Operators lose prime position for LBS

BOSTON, USA: Wireless carriers are increasingly losing control of location-based service provision to Internet companies such as Google and Yahoo, and to handset vendors like Nokia, according to “Location-Based Services: Opportunities within an Emerging Battleground,” the latest report from the Strategy Analytics Wireless Media Strategies Service.

Operators have focused primarily on navigation, people locators and ‘find the nearest’ services, but struggled to drive location service adoption for each of these categories.

However, the development of cell tower databases by companies such as Google and Skyhook, along with the integration of location APIs onto handsets, has enabled the development of a diverse set of location applications for distribution through popular channels, such as Apple’s App Store and Google’s Android Marketplace.

“Strategy Analytics expects that these elements, combined with greater GPS handset ownership and data plan adoption, will trigger growth in location-based service revenues from $650 million at the end of 2008 to almost $8 billion by 2013,” comments Nitesh Patel, Senior Analyst, Wireless Media Strategies, at Strategy Analytics.

Over 80 percent of these location revenues will come from location-enabled search and voice-guided navigation applications.

This report also identifies Google and Nokia as significant threats to carrier ambitions. David MacQueen, Director at Strategy Analytics, added: “Nokia has made significant moves in location-based services through its acquisition of mapping data provider, Navteq, and smaller companies, such as Plazes and bit-side. Nokia’s significant handset market share, combined with its ability to integrate location applications onto its handsets, places it in a strong position to compete with carrier and internet brands for ownership of location service users. Similarly, Google’s significant brand strength and carrier independent location positioning database threatens to disintermediate the operator from the location services value chain.”

Samsung I7500: its first Android-powered mobile phone

SEOUL, KOREA: Samsung Electronics Co., Ltd., a leading mobile phone provider, today unveiled the I7500, its first Android-powered mobile phone. With a launch of I7500, Samsung became the first company among the global top three mobile phone manufacturers to unveil an Android-powered phone.

“Samsung is among the earliest members of the Open Handset Alliance and has been actively moving forward to introduce the most innovative Android mobile phone,” said JK Shin, Executive Vice President and Head of Mobile Communication Division in Samsung Electronics. “With Samsung’s accumulated technology leadership in mobile phone industry and our consistent strategy to support every existing operating system, I believe that Samsung provides the better choices and benefits to our consumers” he added.

The Samsung I7500 is a cutting-edge smartphone, featuring a 3.2” AMOLED full touch screen and 7.2Mbps HSDPA and WiFi connectivity, giving users access to Google™ Mobile services and full web browsing at blazing speeds.

The Samsung I7500 offers users access to the full suite of Google services, including Google Search, Google Maps, Gmail, YouTube, Google Calendar, and Google Talk. The integrated GPS receiver enables the comprehensive use of Google Maps features, such as My Location, Google Latitude, Street View, local search and detailed route description. Hundreds of other applications are available in Android Market. For example, the application Wikitude, a mobile travel guide, allows consumers to access details of unknown sights via location-based Wikipedia articles.

Based on Samsung’s proven product leadership, Samsung I7500 comes with latest multimedia features. The large and vivid 3.2“AMOLED display ensures the brilliant representation of multimedia content and enjoyable full touch mobile experience. Along with supporting a 5-megapixel camera and various multimedia codec formats, the I7500 also provides a long enough battery life (1500mAh) and generous memory capacity up to 40GB (Internal memory: 8GB, External memory: Up to 32GB) to enjoy all the applications and multimedia content. The phone also boasts its slim and compact design with mere 11.9mm thickness.

The Samsung I7500 will be available in major European countries from June, 2009.

Google phone beckons as industry leaders announce open platform for mobile devices

Is the Google Phone finally going to see the light of the day? Well, the following release (below) has all the makings of a mega telecom happening. Read on!

A broad alliance of leading technology and wireless companies today joined forces to announce the development of Android, the first truly open and comprehensive platform for mobile devices. Google Inc., T-Mobile, HTC, Qualcomm, Motorola and others have collaborated on the development of Android through the Open Handset Alliance, a multinational alliance of technology and mobile industry leaders.

According to Engadget Mobile, Google will be holding a conference call at noon eastern (November 5) to unveil the details of its long-rumored Android mobile operating system. Joining CEO Eric Schmidt will be other members of the 34-member Open Handset Alliance, including the chief executives of Deutche Telekom, HTC, Qualcomm, and Motorola. So keep watching this space!

According to the release, this alliance shares a common goal of fostering innovation on mobile devices and giving consumers a far better user experience than much of what is available on today's mobile platforms. By providing developers a new level of openness that enables them to work more collaboratively, Android will accelerate the pace at which new and compelling mobile services are made available to consumers.

With nearly 3 billion users worldwide, the mobile phone has become the most personal and ubiquitous communications device. However, the lack of a collaborative effort has made it a challenge for developers, wireless operators and handset manufacturers to respond as quickly as possible to the ever-changing needs of savvy mobile consumers. Through Android, developers, wireless operators and handset manufacturers will be better positioned to bring to market innovative new products faster and at a much lower cost. The end result will be an unprecedented mobile platform that will enable wireless operators and manufacturers to give their customers better, more personal and more flexible mobile experiences.

Fully integrated Android platform
Thirty-four companies have formed the Open Handset Alliance, which aims to develop technologies that will significantly lower the cost of developing and distributing mobile devices and services. The Android platform is the first step in this direction -- a fully integrated mobile "software stack" that consists of an operating system, middleware, user-friendly interface and applications. Consumers should expect the first phones based on Android to be available in the second half of 2008.

The Android platform will be made available under one of the most progressive, developer-friendly open-source licenses, which gives mobile operators and device manufacturers significant freedom and flexibility to design products. Next week the Alliance will release an early access software development kit to provide developers with the tools necessary to create innovative and compelling applications for the platform.

Android holds the promise of unprecedented benefits for consumers, developers and manufacturers of mobile services and devices. Handset manufacturers and wireless operators will be free to customize Android in order to bring to market innovative new products faster and at a much lower cost. Developers will have complete access to handset capabilities and tools that will enable them to build more compelling and user-friendly services, bringing the Internet developer model to the mobile space. And consumers worldwide will have access to less expensive mobile devices that feature more compelling services, rich Internet applications and easier-to-use interfaces -- ultimately creating a superior mobile experience.

Open Software, Open Device, Open Ecosystem
"This partnership will help unleash the potential of mobile technology for billions of users around the world. A fresh approach to fostering innovation in the mobile industry will help shape a new computing environment that will change the way people access and share information in the future," said Google Chairman and CEO Eric Schmidt. "Today's announcement is more ambitious than any single 'Google Phone' that the press has been speculating about over the past few weeks. Our vision is that the powerful platform we're unveiling will power thousands of different phone models."

"As a founding member of the Open Handset Alliance, T-Mobile is committed to innovation and fostering an open platform for wireless services to meet the rapidly evolving and emerging needs of wireless customers," said René Obermann, Chief Executive Officer, Deutsche Telekom, parent company of T-Mobile. "Google has been an established partner for T-Mobile’s groundbreaking approach to bring the mobile open Internet to the mass market. We see the Android platform as an exciting opportunity to launch robust wireless Internet and Web 2.0 services for T-Mobile customers in the US and Europe in 2008."

"HTC's trademark on the mobile industry has been its ability to drive cutting-edge innovation into a wide variety of mobile devices to create the perfect match for individuals," said Peter Chou, Chief Executive Officer, HTC Corp. "Our participation in the Open Handset Alliance and integration of the Android platform in the second half of 2008 enables us to expand our device portfolio into a new category of connected mobile phones that will change the complexion of the mobile industry and re-create user expectations of the mobile phone experience."

"The convergence of the wireless and Internet industries is creating new partnerships, evolving business models and driving innovation," said Dr. Paul E. Jacobs, Chief Executive Officer of Qualcomm. "We are extremely pleased to be participating in the Open Handset Alliance, whose mission is to help build the leading open-source application platform for 3G networks. The proliferation of open-standards-based handsets will provide an exciting new opportunity to create compelling services and devices. As a result, we are committing research and development resources to enable the Android platform and to create the best always-connected consumer experience on our chipsets."

"Motorola has long been an advocate of open software for mobile platforms. Today, we're excited to continue this support by joining Google and others in the announcement of the Open Handset Alliance and Android platform. Motorola plans to leverage the Android platform to enable seamless, connected services and rich consumer experiences in future Motorola products," said Ed Zander, Chairman and CEO of Motorola, Inc.

Open Handset Alliance Founding Members
Here are the founding members of the Open Handset Alliance:

Aplix (www.aplixcorp.com), Ascender Corporation (www.ascendercorp.com), Audience (www.audience.com), Broadcom (www.broadcom.com), China Mobile (www.chinamobile.com), eBay (www.ebay.com), Esmertec (www.esmertec.com), Google (www.google.com), HTC (www.htc.com), Intel (www.intel.com), KDDI (www.kddi.com), LivingImage (www.livingimage.jp), LG (www.lge.com), Marvell (www.marvell.com), Motorola (www.motorola.com), NMS Communications (www.nmscommunications.com), Noser (www.noser.com), NTT DoCoMo, Inc. (www.nttdocomo.com), Nuance (www.nuance.com), Nvidia (www.nvidia.com), PacketVideo (www.packetvideo.com), Qualcomm (www.qualcomm.com), Samsung (www.samsung.com), SiRF (www.sirf.com), SkyPop (www.skypop.com), SONiVOX (www.sonivoxrocks.com), Sprint Nextel (www.sprint.com), Synaptics (www.synaptics.com), TAT - The Astonishing Tribe (www.tat.se), Telecom Italia (www.telecomitalia.com), Telefónica (www.telefonica.es), Texas Instruments (www.ti.com), T-Mobile (www.t-mobile.com), Wind River (www.windriver.com).