Telefonica to halve bills for Spain's unemployed
Spanish telecoms operator Telefonica is offering half a million unemployed customers 50 percent off their bills in a bid to keep clients as joblessness in Spain rises fast. Telefonica said on Tuesday it would cut unemployed customers' fixed-line and mobile phone costs by half this year, subject to a maximum cut of 20 euros for each bill. Such discounts are unheard of in other large European economies such as Britain, Germany and France, where the percentage unemployed remains in single figures. Spain has the highest jobless rate of any European Union country at around 15 percent in February, with nearly 3.5 million people out of work following the collapse of a decade-long house building and real-estate boom.
"This is not a move to capture new clients but one to help out those with problems," said Telefonica Chairman Guillermo Ansaldo. Telefonica, Spain's largest telecoms company, could lose up to 100 million euros in sales this year from the discounts, which also apply to newly created small and medium-sized businesses, some analysts said. The company expected a smaller impact from the one-off measures, which last until the end of 2009, to customers who have had both fixed and mobile services for the last six months.
Behind Telefonica's move is also a desire to protect market share as cheaper, virtual operators seek to profit from what is expected to be Spain's worst recession since its 1936-1939 Civil War. "With this offer, Telefonica is ensuring the unemployed continue to spend with them," said one Madrid-based analyst, who asked not to be named. (Reporting by Andrew Hay, Robert Hetz and Sarah Morris, editing by Will Waterman)
23 Mar 2009
Türk Telekom wins court ruling in a dispute with Turkcell
Türk Telekom wins court ruling
Türk Telekom, Turkey’s main fixed-line phone company, won a court ruling in a dispute over fees with mobile operator Turkcell.
Turkcell must pay the 30.1 million Turkish Liras ($18 million) that Türk Telekom has been claiming for inter-network calls, plus interest from the time of the claim in May 2002, Türk Telekom said in a filing with the Istanbul Stock Exchange yesterday, citing a ruling by the commercial court in Ankara.
Nortel May Pay Executive Bonuses During Bankruptcy
Nortel May Pay Executive Bonuses During Bankruptcy
By Steven Church and Joe Schneider
Nortel Networks Corp., once the largest telephone-equipment maker in North America, won U.S. and Canadian approvals to pay eight executives bonuses of as much as $7.3 million as the company tries to reorganize in bankruptcy.
The potential bonuses are part of a larger plan to pay 92 managers more than $23 million, including the eight members of Nortel’s senior leadership team. Another 880 employees may be paid as much as $22 million under a plan to ensure key workers don’t leave.
Paying the managers more than the workers is necessary “because of the high level of expertise for these individuals,” company attorney James Bromley said. “We believe it is appropriate for the circumstances.”
Toronto-based Nortel filed for bankruptcy in January in the U.S. and Canada after losing almost $7 billion since 2005. The company has said it will fire at least 5,000 workers this year as part of a plan to reorganize as a smaller business.
U.S. Bankruptcy Judge Kevin Gross approved the plan today following a hearing in Wilmington, while Ontario Superior Court Judge Geoffrey Morawetz granted the same approval in Toronto over objections from about 67 Nortel workers who were fired and didn’t get severance pay.
‘Enormously Complicated’
“The board cannot properly function without the advice of its senior, experienced, leadership team,” Lyndon Barnes, a lawyer for the Nortel board, told the judge in Toronto. “This is an enormously complicated task.”
Bromley said the $7.3 million is an estimate for how much the eight senior executives could make if the company achieves certain goals, including court approval for a plan of reorganization. About $5 million would be shared by five executives in the U.S. and the rest would go to three executives in Canada, Bromley said.
On March 6, the $22 million in retention payments for workers was approved, along with part of the proposal to pay managers a bonus. Full approval of the management plan was delayed in part because U.S. creditors sought financial projections for 2009 from the company before agreeing to the executive bonuses.
Those projections have been delivered to the creditors, said Nortel’s Canadian lawyer Derrick Tay.
In its Chapter 11 petition in Delaware, U.S. operating unit Nortel Networks Inc. said it had assets of $11.6 billion and debt of $11.8 billion as of Sept. 30.
22 Mar 2009
Vodafone freezes salaries
Vodafone freezes salaries
Mobile phone giant Vodafone has frozen salaries for its 10,000 UK staff as it looks to slash costs, it has been reported. The move comes barely a month after Vodafone announced it was cutting around 500 jobs in the UK as part of plans to save £1 billion worldwide by March 2011.
According to the Independent on Sunday other measures to affect the firm's UK subsidiary include scrapping bonuses and ordering sales representatives to keep their cars for longer.
In a confidential memo Guy Laurence, chief executive of the UK business, reportedly told staff the move to stop pay rises was a "tough decision to make, but a responsible one". "If we had agreed to a salary rise it would have forced us to increase the number of redundancies in the recent announcement," he said. A Vodafone insider told the Independent on Sunday that morale at the firm was at "rock bottom" after the announcement. "Staff who worked like hell this year to make sure the company can post huge profits have been stabbed in the back," the source said. It is understood that management will also forego any salary increases.
Newbury-based Vodafone has seen conditions worsen in the UK and other key markets as the recession has deepened, hitting sales of handsets. As well as its headquarters in Newbury, Vodafone has call centres and offices in Newark, Banbury, Theale, Trowbridge, London, Warrington, Stoke-on-Trent and Hayes
Mobile phone giant Vodafone has frozen salaries for its 10,000 UK staff as it looks to slash costs, it has been reported. The move comes barely a month after Vodafone announced it was cutting around 500 jobs in the UK as part of plans to save £1 billion worldwide by March 2011.
According to the Independent on Sunday other measures to affect the firm's UK subsidiary include scrapping bonuses and ordering sales representatives to keep their cars for longer.
In a confidential memo Guy Laurence, chief executive of the UK business, reportedly told staff the move to stop pay rises was a "tough decision to make, but a responsible one". "If we had agreed to a salary rise it would have forced us to increase the number of redundancies in the recent announcement," he said. A Vodafone insider told the Independent on Sunday that morale at the firm was at "rock bottom" after the announcement. "Staff who worked like hell this year to make sure the company can post huge profits have been stabbed in the back," the source said. It is understood that management will also forego any salary increases.
Newbury-based Vodafone has seen conditions worsen in the UK and other key markets as the recession has deepened, hitting sales of handsets. As well as its headquarters in Newbury, Vodafone has call centres and offices in Newark, Banbury, Theale, Trowbridge, London, Warrington, Stoke-on-Trent and Hayes
17 Mar 2009
Google introduces phone services
Google introduces phone services
By Maggie Shiels
Google has strengthened its mobile services with the debut of a service called Voice that could be a challenge to Skype and other phone firms.
It lets customers make cheap international calls and gives them a speech-to-text feature for voicemail. The services are available thanks to Google's acquisition of phone firm GrandCentral which gives users a lifelong universal phone number.
"This could be big. Google is seen as disruptive," said analyst Jon Arnold.
"They are a wild card in telecoms and wireless but this is Google and they are very smart at what they do.
"The core of Google's business is search and for a long time the industry was concerned about the GrandCentral acquisition. What was the fit? What was the motivation? It will be interesting to see where they ultimately go with this," said Mr Arnold, principal of analyst firm J Arnold & Associates.
Table stakes
Google Voice is the first major update to GrandCentral, which Google bought for an undisclosed sum, thought to be $50m (£36m) in 2007.
The service gives subscribers one number that lets them route all their phones through - home, office and mobile.
Users also get a single voicemail account regardless of which phone messages are left on
Google Voice is the latest attempt by the company to reach out beyond online search and advertising.
Domestic calls will be free but international calls will require users to set up a Google Checkout account. Calls to landlines in the UK will cost 2 cents per minute.
EBay's Skype offers free domestic and international calls made over the internet from one computer to another, but there is a charge to landlines and mobile phones.
Skype president Josh Silverman told analysts and investors that "chat and voice will become table stakes". He also revealed that the company is adding 350,000 new users a day and is on track to do more than 100 billion calling minutes in 2009 alone.
Google does not view the service as a threat to Skype or other telecom companies any more than its Google Talk offering, which lets users chat over the internet for free.
"This is about allowing your existing phone to work better," said Craig Walker, now group product manager for real time communications at Google and co-founder of GrandCentral.
"It's not that we are replacing your phone, we are giving [it] the ability to work better," he said.
He declined to say how many users had signed up. Google Voice is currently only available to former GrandCentral users.
"Chore"
Google Voice also allows all voice messages to be turned into text which will then be sent either through an e-mail or an sms.
"Voicemail can be a pretty negative experience for a lot of people," said Mr Walker.
"Now it's about putting the user in control. We will transcribe voicemails and convert it into text and put it in your inbox so that it's searchable and you will always have a record of that voicemail.
"Voicemail need no longer be the chore it has been in the past," he declared.
Mr Walker demonstrated its search capabilities by displaying the 1,000 or so voicemails he had accumulated while testing the system over the past few months.
By typing "pool man" in a search box, he located an old voicemail from December 2008. Returned results were in both text and audio form.
"I would never have been able to find that number. The phone company deletes everything for you after a couple of weeks and the scrap of paper I wrote the number on is long gone. This feature makes your voicemail a pretty powerful tool," said Mr Walker.
Opportunity
Google boss Eric Schmidt said he viewed mobile as the next big opportunity.
At the recent Morgan Stanley Technology Conference in San Francisco, Mr Schmidt said he believed mobile search revenues would over take those on a PC within a few years
"The fact of the matter is that mobile devices are going to be the majority of the way that people get information," he said.
A report in February by the Kelsey Group suggested that "about 20% of U.S. cell phone subscribers are on the mobile web right now and only about 5.2 million are doing searches".
Mr Arnold said that if Google perfected its speech-to-text feature to other languages, all bets were off.
"This could be very powerful given the globalisation of markets. Language is another barrier and when you break that down, the world of communications opens up and globally this has exciting opportunities," he said.
By Maggie Shiels
Google has strengthened its mobile services with the debut of a service called Voice that could be a challenge to Skype and other phone firms.
It lets customers make cheap international calls and gives them a speech-to-text feature for voicemail. The services are available thanks to Google's acquisition of phone firm GrandCentral which gives users a lifelong universal phone number.
"This could be big. Google is seen as disruptive," said analyst Jon Arnold.
"They are a wild card in telecoms and wireless but this is Google and they are very smart at what they do.
"The core of Google's business is search and for a long time the industry was concerned about the GrandCentral acquisition. What was the fit? What was the motivation? It will be interesting to see where they ultimately go with this," said Mr Arnold, principal of analyst firm J Arnold & Associates.
Table stakes
Google Voice is the first major update to GrandCentral, which Google bought for an undisclosed sum, thought to be $50m (£36m) in 2007.
The service gives subscribers one number that lets them route all their phones through - home, office and mobile.
Users also get a single voicemail account regardless of which phone messages are left on
Google Voice is the latest attempt by the company to reach out beyond online search and advertising.
Domestic calls will be free but international calls will require users to set up a Google Checkout account. Calls to landlines in the UK will cost 2 cents per minute.
EBay's Skype offers free domestic and international calls made over the internet from one computer to another, but there is a charge to landlines and mobile phones.
Skype president Josh Silverman told analysts and investors that "chat and voice will become table stakes". He also revealed that the company is adding 350,000 new users a day and is on track to do more than 100 billion calling minutes in 2009 alone.
Google does not view the service as a threat to Skype or other telecom companies any more than its Google Talk offering, which lets users chat over the internet for free.
"This is about allowing your existing phone to work better," said Craig Walker, now group product manager for real time communications at Google and co-founder of GrandCentral.
"It's not that we are replacing your phone, we are giving [it] the ability to work better," he said.
He declined to say how many users had signed up. Google Voice is currently only available to former GrandCentral users.
"Chore"
Google Voice also allows all voice messages to be turned into text which will then be sent either through an e-mail or an sms.
"Voicemail can be a pretty negative experience for a lot of people," said Mr Walker.
"Now it's about putting the user in control. We will transcribe voicemails and convert it into text and put it in your inbox so that it's searchable and you will always have a record of that voicemail.
"Voicemail need no longer be the chore it has been in the past," he declared.
Mr Walker demonstrated its search capabilities by displaying the 1,000 or so voicemails he had accumulated while testing the system over the past few months.
By typing "pool man" in a search box, he located an old voicemail from December 2008. Returned results were in both text and audio form.
"I would never have been able to find that number. The phone company deletes everything for you after a couple of weeks and the scrap of paper I wrote the number on is long gone. This feature makes your voicemail a pretty powerful tool," said Mr Walker.
Opportunity
Google boss Eric Schmidt said he viewed mobile as the next big opportunity.
At the recent Morgan Stanley Technology Conference in San Francisco, Mr Schmidt said he believed mobile search revenues would over take those on a PC within a few years
"The fact of the matter is that mobile devices are going to be the majority of the way that people get information," he said.
A report in February by the Kelsey Group suggested that "about 20% of U.S. cell phone subscribers are on the mobile web right now and only about 5.2 million are doing searches".
Mr Arnold said that if Google perfected its speech-to-text feature to other languages, all bets were off.
"This could be very powerful given the globalisation of markets. Language is another barrier and when you break that down, the world of communications opens up and globally this has exciting opportunities," he said.
Vodafone Hangs Up on DRM
Vodafone Hangs Up on DRM
by Chloe Albanesius
DRM-free music is coming to Vodafone. The U.K.-based company has signed deals with Universal Music Group, Sony Music Entertainment, and EMI Music to offer copyright-free tracks via the Vodafone Music Store for mobile phones and PCs. Customers who have already purchased Universal, Sony, or EMI music through the store, powered by RealNetworks, will be able to switch them to MP3 format for no charge.
DRM-free tracks will roll out in Germany, Italy, the U.K., Spain and New Zealand by the summer with other countries covered by Vodafone will be added "in due course," the company said.
"By Vodafone pioneering DRM free on mobile and offering MP3s on PC, [customers] will now have the freedom to download tracks from their favorite artists without any device restrictions allowing them to experience their music however they want it, wherever they are," Pieter Knook, Vodafone Internet services director, said in a statement. Vodafone also reportedly is in talks with fellow U.K. mobile phone provider O2 to share its networks.
by Chloe Albanesius
DRM-free music is coming to Vodafone. The U.K.-based company has signed deals with Universal Music Group, Sony Music Entertainment, and EMI Music to offer copyright-free tracks via the Vodafone Music Store for mobile phones and PCs. Customers who have already purchased Universal, Sony, or EMI music through the store, powered by RealNetworks, will be able to switch them to MP3 format for no charge.
DRM-free tracks will roll out in Germany, Italy, the U.K., Spain and New Zealand by the summer with other countries covered by Vodafone will be added "in due course," the company said.
"By Vodafone pioneering DRM free on mobile and offering MP3s on PC, [customers] will now have the freedom to download tracks from their favorite artists without any device restrictions allowing them to experience their music however they want it, wherever they are," Pieter Knook, Vodafone Internet services director, said in a statement. Vodafone also reportedly is in talks with fellow U.K. mobile phone provider O2 to share its networks.
Türktan : 55 TL'lik Kampanya Bugün itibariyle 340.000 Yeni ve Numara Taşıyan Abone Getirdi
Türktan : 55 TL'lik Kampanya Bugün itibariyle 340.000 Yeni ve Numara Taşıyan Abone Getirdi Avea Genel Müdürü Cüneyt Türktan, rekabetin geçen yıl numara taşınabilirliği öncesi, aboneleri, bağlayan kampanyalarla başladığını belirterek, 55 TL'lik tarifenin 1 aylık sürede Avea'ya 340.000 yeni ve numarasını taşıyan abone getirdiğini belirtti. Kendisine tartışmalara neden olan bu 55 TL'lik kampanyanın detaylarını ve tartışmaları sorduk : |
AT&T to Cut 12,000 Jobs
AT&T to Cut 12,000 Jobs
by Jeff Gamet
Telecom giant and Apple iPhone partner AT&T revealed on Thursday that it plans to cut about 12,000 jobs, or four percent of its workforce, through 2009. The layoffs are in response to a weaker economy and what the company called "a changing business mix." AT&T plans to start cutting jobs in December as part of a move to streamline its organizational structure. Certain jobs, however, are off limits because of work guarantees in union contracts. Even as AT&T axes some jobs it plans to increase staff in other areas including wireless, video and broadband to meet customer demand. The move may be in response -- at least in part -- to the changing telecom landscape as more customers move away from traditional phone service to rely just on cellphone instead.
by Jeff Gamet
Telecom giant and Apple iPhone partner AT&T revealed on Thursday that it plans to cut about 12,000 jobs, or four percent of its workforce, through 2009. The layoffs are in response to a weaker economy and what the company called "a changing business mix." AT&T plans to start cutting jobs in December as part of a move to streamline its organizational structure. Certain jobs, however, are off limits because of work guarantees in union contracts. Even as AT&T axes some jobs it plans to increase staff in other areas including wireless, video and broadband to meet customer demand. The move may be in response -- at least in part -- to the changing telecom landscape as more customers move away from traditional phone service to rely just on cellphone instead.
Skype Targets $1B Revenues
Skype Targets $1B Revenues
by Ray Le Maistre
eBay Inc. laid out its three-year roadmap for investors Wednesday, including projected revenues of $1 billion in 2011 for its VoIP services subsidiary, Skype Ltd.
eBay bought Skype for a whopping $2.6 billion in September 2005, when it was generating less than $25 million per quarter in revenues. (See EBay Buys Skype for $2.6B.)
In its most recent three-month period, the fourth quarter of 2008, Skype's revenues hit $145 million, with eBay stating that the VOIP services business had been profitable for eight straight quarters. Its total revenues for 2008 were $550.8 million, and it ended last year with more than 405 million registered users. (See eBay Reports Q4.)
eBay believes Skype will continue to grow. The online auction specialist noted in its roadmap that Skype is "expected to more than double its revenues to over $1.0 billion in 2011… Skype’s metrics continue to accelerate as the company further establishes leadership in free and paid internet-based voice and video communications, with growth opportunities in core consumer, mobile, businesses and platform. Skype’s leadership position has strengthened over the past year, driven by a new management team and the launch of many innovative products."
One major area of potential growth for Skype is in the mobile voice services market. (See Skype Goes Android, Skype Slims Down for Mobiles, and 3 Launches Skypephone.)
But the packet voice services landscape will have changed significantly in three years' time, with other online big hitters looking to muscle in on Skype's territory, and traditional telcos looking to hold on to as many voice minutes as they can. (See Are Carriers Gunning for Skype? and Why Carriers Want to Compete With Skype.)
One rival is Google, which late Wednesday unveiled details about its Google Voice service, which has been developed using capabilities the Web services giant took on board when it acquired GrandCentral Communications in 2007. (See Google Buys Unified Services Startup.)
On its Official Google Blog, the company boasted that Google Voice "improves the way you use your phone. You can get transcripts of your voicemail and archive and search all of the SMS text messages you send and receive. You can also use the service to make low-priced international calls."
It may still be early days for Google's new voice app, but it might just have a say on whether Skype makes that $1 billion milestone as soon as 2011.
by Ray Le Maistre
eBay Inc. laid out its three-year roadmap for investors Wednesday, including projected revenues of $1 billion in 2011 for its VoIP services subsidiary, Skype Ltd.
eBay bought Skype for a whopping $2.6 billion in September 2005, when it was generating less than $25 million per quarter in revenues. (See EBay Buys Skype for $2.6B.)
In its most recent three-month period, the fourth quarter of 2008, Skype's revenues hit $145 million, with eBay stating that the VOIP services business had been profitable for eight straight quarters. Its total revenues for 2008 were $550.8 million, and it ended last year with more than 405 million registered users. (See eBay Reports Q4.)
eBay believes Skype will continue to grow. The online auction specialist noted in its roadmap that Skype is "expected to more than double its revenues to over $1.0 billion in 2011… Skype’s metrics continue to accelerate as the company further establishes leadership in free and paid internet-based voice and video communications, with growth opportunities in core consumer, mobile, businesses and platform. Skype’s leadership position has strengthened over the past year, driven by a new management team and the launch of many innovative products."
One major area of potential growth for Skype is in the mobile voice services market. (See Skype Goes Android, Skype Slims Down for Mobiles, and 3 Launches Skypephone.)
But the packet voice services landscape will have changed significantly in three years' time, with other online big hitters looking to muscle in on Skype's territory, and traditional telcos looking to hold on to as many voice minutes as they can. (See Are Carriers Gunning for Skype? and Why Carriers Want to Compete With Skype.)
One rival is Google, which late Wednesday unveiled details about its Google Voice service, which has been developed using capabilities the Web services giant took on board when it acquired GrandCentral Communications in 2007. (See Google Buys Unified Services Startup.)
On its Official Google Blog, the company boasted that Google Voice "improves the way you use your phone. You can get transcripts of your voicemail and archive and search all of the SMS text messages you send and receive. You can also use the service to make low-priced international calls."
It may still be early days for Google's new voice app, but it might just have a say on whether Skype makes that $1 billion milestone as soon as 2011.
Verizon Throws Open FiOS TV to Developers
Verizon Throws Open FiOS TV to Developers
by Tara Seals
Verizon Communications Inc. wants to change the broadcast game and for good—by taking an iPhone application approach to the TV model.
Ever consider how cool it would be to customize your television screen view with, say, a Web forum on the show you’re tuned into, or Twitter feeds running along the side of whatever you’re watching? Verizon aims to blur the line between Web and television by opening up its FiOS TV service to third-party developers to write applications that will do all of that and more.
Sure, we all remember Web TV. And the idea of click-to-order television ads has been around for a while. But in practice, Caller ID on the television screen has pretty much been the only mainstream mash-up of triple play services. But what Verizon is proposing is far more revolutionary.
The carrier is emulating what’s happening with mobility and the third-party application store model by giving developers and Internet companies like the Googles and Amazons of the world access to open APIs for FiOS TV. The fruits of their labor will be a variety of widgets that mash up television and Web content for relevant (or irrelevant) purposes. The apps then will be made available in the Widget Bazaar.
Just like the Apple App Store. And look what happened with that—millions of downloads and thousands of available applications and who knows how much revenue for everyone involved.
"Subscribers will be able to go to a catalog of widget services, a bazaar, and choose the ones to display on their FiOS TV systems," Verizon spokesman Eric Rabe wrote in a blog post.
There are some FiOS widgets available already that pop up to feed news, horoscope info, weather, sports and traffic to the screen, and Verizon is working on Twitter and Facebook apps as previously announced. But the inclusion of a third-party developer model has the potential to bring thousands of Apple iPhone-style software bits to subscribers, opening up a whole world of customizable viewing and untold business models. Verizon also plans to take a bite out of the Web-to-TV video threat with the initiative. “We’re also planning several other new services including an easy way to play Internet video on the TV screen,” Rabe wrote. “Those sorts of features are nowhere to be found on old-fashioned cable.”
by Tara Seals
Verizon Communications Inc. wants to change the broadcast game and for good—by taking an iPhone application approach to the TV model.
Ever consider how cool it would be to customize your television screen view with, say, a Web forum on the show you’re tuned into, or Twitter feeds running along the side of whatever you’re watching? Verizon aims to blur the line between Web and television by opening up its FiOS TV service to third-party developers to write applications that will do all of that and more.
Sure, we all remember Web TV. And the idea of click-to-order television ads has been around for a while. But in practice, Caller ID on the television screen has pretty much been the only mainstream mash-up of triple play services. But what Verizon is proposing is far more revolutionary.
The carrier is emulating what’s happening with mobility and the third-party application store model by giving developers and Internet companies like the Googles and Amazons of the world access to open APIs for FiOS TV. The fruits of their labor will be a variety of widgets that mash up television and Web content for relevant (or irrelevant) purposes. The apps then will be made available in the Widget Bazaar.
Just like the Apple App Store. And look what happened with that—millions of downloads and thousands of available applications and who knows how much revenue for everyone involved.
"Subscribers will be able to go to a catalog of widget services, a bazaar, and choose the ones to display on their FiOS TV systems," Verizon spokesman Eric Rabe wrote in a blog post.
There are some FiOS widgets available already that pop up to feed news, horoscope info, weather, sports and traffic to the screen, and Verizon is working on Twitter and Facebook apps as previously announced. But the inclusion of a third-party developer model has the potential to bring thousands of Apple iPhone-style software bits to subscribers, opening up a whole world of customizable viewing and untold business models. Verizon also plans to take a bite out of the Web-to-TV video threat with the initiative. “We’re also planning several other new services including an easy way to play Internet video on the TV screen,” Rabe wrote. “Those sorts of features are nowhere to be found on old-fashioned cable.”
ZERO01 Offering Unlimited Mobile Service with VoIP
ZERO01 Offering Unlimited Mobile Service with VoIP
By Marin Perez
Zer01 is taking on AT&T, Sprint, T-Mobile, and Verizon Wireless by offering unlimited voice, text, and data plans for $69.95 a month with no contract or credit check.
The company is able to undercut the competitors by using a voice-over-IP client on the handset for all voice calls. This is made possible by interconnect, or roaming, agreements to use AT&T's and T-Mobile's networks to tunnel to Zer01's IP backbone. For an extra $10 a month, users also will be able to make unlimited international calls to 40 countries.
Zer01 CEO Ben Piilani said the company has developed proprietary algorithms and defragmentation engines to handle latency issues and ensure that the VoIP has a high quality of service, even over an EDGE or GPRS connection. While there are already mobile VoIP applications from Fring and Skype, the difference is that Zer01 is providing the data itself, Piilani said.
"We look at ourselves as a new carrier, and this is definitely a disruptive technology," Piilani told InformationWeek.
The new carrier will initially only be available on Windows Mobile smartphones with version 6 or above, but the company is working to support Android, Symbian, Java Brew, BlackBerry, and "jailbroken" iPhones. Customers will be able to purchase devices directly from Zer01 or bring their existing handsets to the network. Piilani said once Zer01's software integrates directly with the handset's operating system, the end user's experience will be the same as if she were calling on a cellular network.
One of the most appealing factors of the new carrier could be the unlimited data service. The four major carriers have a limit on how much data mobile broadband customers can use, and this can sometimes lead to expensive bills if the cap is exceeded. Piilani said Zer01 will have truly unlimited data, and he wants users to tether their handsets to provide connectivity for laptops on the go.
With the infrastructure already in place, and users prepaying for service, Piilani said the company will be able to generate profits even with a price tag that's about $30 lower than its nearest competitor. One issue the company may face is that it won't be able to offer subsidized handsets, and an unlocked smartphone can cost more than $400. But Piilani said once the service is available on a wide variety of devices, users will be able to use the phones they already own.
While the carriers will generate some revenue from the interconnect agreements, they can't be happy with losing the voice revenue. Piilani said he could not go divulge the terms of the interconnect agreements, but he was not worried about carriers cutting off network access. AT&T didn't respond for comment.
Zer01's service will go into a private beta in April, and the company will announce a commercial launch data at the CTIA trade show next month.
By Marin Perez
Zer01 is taking on AT&T, Sprint, T-Mobile, and Verizon Wireless by offering unlimited voice, text, and data plans for $69.95 a month with no contract or credit check.
The company is able to undercut the competitors by using a voice-over-IP client on the handset for all voice calls. This is made possible by interconnect, or roaming, agreements to use AT&T's and T-Mobile's networks to tunnel to Zer01's IP backbone. For an extra $10 a month, users also will be able to make unlimited international calls to 40 countries.
Zer01 CEO Ben Piilani said the company has developed proprietary algorithms and defragmentation engines to handle latency issues and ensure that the VoIP has a high quality of service, even over an EDGE or GPRS connection. While there are already mobile VoIP applications from Fring and Skype, the difference is that Zer01 is providing the data itself, Piilani said.
"We look at ourselves as a new carrier, and this is definitely a disruptive technology," Piilani told InformationWeek.
The new carrier will initially only be available on Windows Mobile smartphones with version 6 or above, but the company is working to support Android, Symbian, Java Brew, BlackBerry, and "jailbroken" iPhones. Customers will be able to purchase devices directly from Zer01 or bring their existing handsets to the network. Piilani said once Zer01's software integrates directly with the handset's operating system, the end user's experience will be the same as if she were calling on a cellular network.
One of the most appealing factors of the new carrier could be the unlimited data service. The four major carriers have a limit on how much data mobile broadband customers can use, and this can sometimes lead to expensive bills if the cap is exceeded. Piilani said Zer01 will have truly unlimited data, and he wants users to tether their handsets to provide connectivity for laptops on the go.
With the infrastructure already in place, and users prepaying for service, Piilani said the company will be able to generate profits even with a price tag that's about $30 lower than its nearest competitor. One issue the company may face is that it won't be able to offer subsidized handsets, and an unlocked smartphone can cost more than $400. But Piilani said once the service is available on a wide variety of devices, users will be able to use the phones they already own.
While the carriers will generate some revenue from the interconnect agreements, they can't be happy with losing the voice revenue. Piilani said he could not go divulge the terms of the interconnect agreements, but he was not worried about carriers cutting off network access. AT&T didn't respond for comment.
Zer01's service will go into a private beta in April, and the company will announce a commercial launch data at the CTIA trade show next month.
3G Indoor Coverage drives China Mobile Market
3G Indoor Coverage drives China Mobile Market
Research and Markets ( http://www.researchandmarkets.com/research/eaf47e/cellular_network_i) has announced the addition of the "Cellular Network Indoor Coverage in China: 3G Drives the Market" report to their offering.
Our research shows that more than 60% of mobile voice/data traffic takes place in indoor locations, including offices, houses, and public transportation stations.
In 2008, China's mobile market entered its transition from 2G to 3G. The incoming 3G market, with huge market potential, becomes the new arena for the three mobile operators in China: China Mobile, China Unicom, and China Telecom. Our research shows that more than 80% of data traffic in 3G networks will occur indoors. Therefore, indoor coverage becomes the key in winning the 3G market competition.
This report outlines the current deployment of indoor coverage in China, details the popular 2G and 3G indoor coverage technologies, analyzes the future market demand of indoor coverage systems, and discusses the relationship and attitude of every link in the industry chain. In addition, the report provides indoor coverage equipment revenue and overall revenue forecasts.
Research and Markets ( http://www.researchandmarkets.com/research/eaf47e/cellular_network_i) has announced the addition of the "Cellular Network Indoor Coverage in China: 3G Drives the Market" report to their offering.
Our research shows that more than 60% of mobile voice/data traffic takes place in indoor locations, including offices, houses, and public transportation stations.
In 2008, China's mobile market entered its transition from 2G to 3G. The incoming 3G market, with huge market potential, becomes the new arena for the three mobile operators in China: China Mobile, China Unicom, and China Telecom. Our research shows that more than 80% of data traffic in 3G networks will occur indoors. Therefore, indoor coverage becomes the key in winning the 3G market competition.
This report outlines the current deployment of indoor coverage in China, details the popular 2G and 3G indoor coverage technologies, analyzes the future market demand of indoor coverage systems, and discusses the relationship and attitude of every link in the industry chain. In addition, the report provides indoor coverage equipment revenue and overall revenue forecasts.
Ericsson Demonstrates 500 Mbps DSL
Ericsson Demonstrates 500 Mbps DSL
by Geoff Duncan
Cable operators might be touting 20, 50, and 100 Mbps services, but Ericsson just did its first live demo of 500 Mbps DSL.
Cable operators like Comcast might be in the process of rolling out 20, 50, and even 100 Mbps services to selected customers via DOCSIS 3.0 technology, but that doesn't mean all hope is lost for folks unable (or unwilling) to sign on the cable industry's dotted line. Swedish telecommunications gear-maker Ericsson has just performed its first live demonstration of VDSL2-based technology that enables transfer rates of more than 500 Mbps per second—and that's over six twisted copper pairs—just like an ordinary phone lines—bonded together into one big pipe.
"This demonstration confirms Ericsson's leadership in broadband access technology and our commitment to the continued research and development of DSL technology to improve operators' business with new access solutions," said Ericsson CTO Håkan Eriksson, in a statement.
At first, of course, the technology will be aimed at communications operators, enabling them to use existing copper networks as network backhaul for radio base stations, which in turn will speed up the deployment of mobile broadband technologies like HSPA and Long-Term Evolution (LTE), which promise high-speed mobile broadband in the next few years. Ericsson envisions operators supplementing existing fiber networks with existing copper links for the last mile, enabling simpler, less-costly broadband rollouts. Ericsson doesn't see high-bandwidth VDSL2 technology replacing fiber, but instead offering an alternative to running fiber over last-mile deployments where copper pairs are already available and where running fiber all the way to an endpoint isn't practical.
The new high-bandwidth VDSL-2 reduces noise in a copper pair using cross-talk cancellation, and actually operates at lower power requirements than current DSL technologies. Standards for VDSL2 and line bonding are completed, with standards for vectoring (the process that eliminates cross-talk) should be completed by the end of 2009.
by Geoff Duncan
Cable operators might be touting 20, 50, and 100 Mbps services, but Ericsson just did its first live demo of 500 Mbps DSL.
Cable operators like Comcast might be in the process of rolling out 20, 50, and even 100 Mbps services to selected customers via DOCSIS 3.0 technology, but that doesn't mean all hope is lost for folks unable (or unwilling) to sign on the cable industry's dotted line. Swedish telecommunications gear-maker Ericsson has just performed its first live demonstration of VDSL2-based technology that enables transfer rates of more than 500 Mbps per second—and that's over six twisted copper pairs—just like an ordinary phone lines—bonded together into one big pipe.
"This demonstration confirms Ericsson's leadership in broadband access technology and our commitment to the continued research and development of DSL technology to improve operators' business with new access solutions," said Ericsson CTO Håkan Eriksson, in a statement.
At first, of course, the technology will be aimed at communications operators, enabling them to use existing copper networks as network backhaul for radio base stations, which in turn will speed up the deployment of mobile broadband technologies like HSPA and Long-Term Evolution (LTE), which promise high-speed mobile broadband in the next few years. Ericsson envisions operators supplementing existing fiber networks with existing copper links for the last mile, enabling simpler, less-costly broadband rollouts. Ericsson doesn't see high-bandwidth VDSL2 technology replacing fiber, but instead offering an alternative to running fiber over last-mile deployments where copper pairs are already available and where running fiber all the way to an endpoint isn't practical.
The new high-bandwidth VDSL-2 reduces noise in a copper pair using cross-talk cancellation, and actually operates at lower power requirements than current DSL technologies. Standards for VDSL2 and line bonding are completed, with standards for vectoring (the process that eliminates cross-talk) should be completed by the end of 2009.
16 Mar 2009
For the first time, a global operator is using mobile VoIP in GSM
For the first time, a global operator is using mobile VoIP in GSM
Qnective Inc., a U.S. public company, headquartered in Zurich, Switzerland, can post one of its first significant triumphs. BT inmo, a wholly owned subsidiary of BT Telecommunications Plc, has purchased a licence for global sales of mobile VoIP solutions from Qnective.
The Qtalk product family forms the basis for secure, cost-optimised mobile services which BT inmo is developing for BT Global Services.
Qnective is specialised in the development of VoIP (Voice over IP) voice and data solutions for mobile communication. The Qnective solutions are specially designed for operators and business clients.
Licensing agreement with BT inmo
Oswald Ortiz, Chairman of the Board and CEO of Qnective, remarked that "Qnective is pleased to be working with an industry leader to license Qnective's first-of-its kind technology."
For the first time ever, a global operator is using mobile VoIP voice communication in GSM and mobile data networks. Harry van Streun, CEO, BT inmo: "Qtalk from Qnective is the first truly mobile VoIP product which actually earns the 'carrier grade' rating." No other provider currently has a comparable, high-quality product and service range in a combined GSM and mobile data network environment such as HSDPA, UMTS, EDGE und GPRS."
8 Mar 2009
After Slow Start, VoIP Is TakIng Off In Europe
After Slow Start, VoIP Is TakIng Off In Europe
By W. David Gardner
A TeleGeography survey estimates 35 million VoIP lines were in use in Europe by the end of 2008
After a slow start in some European countries, voice over IP is finally catching on in a big way, according to a Thursday report on fixed VoIP lines.
In the survey of fixed-line VoIP usage, telecommunications market research firm TeleGeography said usage had jumped from 20 million consumers to 30 million between mid-2007 and mid-2008. TeleGeography estimated 35 million VoIP lines were in use in Europe by the end of 2008.
The firm's survey found that VoIP fixed-line penetration varies widely from country to country with, for instance, 50% of French households using fixed-line VoIP and less than 3% utilizing the IP technology in Spain.
"Europe may have a single market, but it's far from common," said TeleGeography analyst Patrick Christian in a statement. "While the uptake of IP telephony services varies widely, VoIP has been a powerful spur to innovation, even in some countries with relatively modest numbers of VoIP subscribers."
The Washington-based market research firm predicted strong growth figures for VoIP in Europe, where it expects the number of VoIP users to hit the 45 million mark by the end of 2009.
As for mobile VoIP, it has been slow to take off in Europe, although its adoption will likely spread beyond the relatively modest undertakings by Skype and some smaller VoIP providers. Skype has been offering its VoIP service on its mobile 3 Skypephone for several months in a handful of European countries including Austria, Denmark, Italy, and Sweden. Nokia is planning to offer Skype on some of its N Series phones beginning in June.
By W. David Gardner
A TeleGeography survey estimates 35 million VoIP lines were in use in Europe by the end of 2008
After a slow start in some European countries, voice over IP is finally catching on in a big way, according to a Thursday report on fixed VoIP lines.
In the survey of fixed-line VoIP usage, telecommunications market research firm TeleGeography said usage had jumped from 20 million consumers to 30 million between mid-2007 and mid-2008. TeleGeography estimated 35 million VoIP lines were in use in Europe by the end of 2008.
The firm's survey found that VoIP fixed-line penetration varies widely from country to country with, for instance, 50% of French households using fixed-line VoIP and less than 3% utilizing the IP technology in Spain.
"Europe may have a single market, but it's far from common," said TeleGeography analyst Patrick Christian in a statement. "While the uptake of IP telephony services varies widely, VoIP has been a powerful spur to innovation, even in some countries with relatively modest numbers of VoIP subscribers."
The Washington-based market research firm predicted strong growth figures for VoIP in Europe, where it expects the number of VoIP users to hit the 45 million mark by the end of 2009.
As for mobile VoIP, it has been slow to take off in Europe, although its adoption will likely spread beyond the relatively modest undertakings by Skype and some smaller VoIP providers. Skype has been offering its VoIP service on its mobile 3 Skypephone for several months in a handful of European countries including Austria, Denmark, Italy, and Sweden. Nokia is planning to offer Skype on some of its N Series phones beginning in June.
Mobile Data Infrastructure Market to Decline This Year
Mobile Data Infrastructure Market to Decline This Year
The mobile data infrastructure market is forecast to experience a double-digit decline in revenues in 2009, according to a study by IMS Research. Mobile WiMAX may be hardest hit as credit markets dry up, jeopardizing many of the smaller pure WiMAX vendors’ most important customers.
Coincidentally, this economic downturn comes at a time when many operators are outlining their plans to either upgrade their existing 3G networks or migrate to next-generation networks. Before the economic crash, many thought 2009 would be a year defined by aggressive expansion of mobile data networks and large investments in 4G.
Although the IMS Research report “Mobile Broadband: 4G Network Evolution” forecasts a slowdown in 2009, a quick recovery is expected in 2010 on the heels of widespread 3G upgrades and next-generation network investments. Other report findings include:
Installed base of mobile data users is forecast to remain relatively insulated from the economic downturn and achieve steady growth throughout the forecast period,
The mobile data infrastructure market is forecast to experience a double-digit decline in revenues in 2009, according to a study by IMS Research. Mobile WiMAX may be hardest hit as credit markets dry up, jeopardizing many of the smaller pure WiMAX vendors’ most important customers.Coincidentally, this economic downturn comes at a time when many operators are outlining their plans to either upgrade their existing 3G networks or migrate to next-generation networks. Before the economic crash, many thought 2009 would be a year defined by aggressive expansion of mobile data networks and large investments in 4G.
Although the IMS Research report “Mobile Broadband: 4G Network Evolution” forecasts a slowdown in 2009, a quick recovery is expected in 2010 on the heels of widespread 3G upgrades and next-generation network investments. Other report findings include:
Installed base of mobile data users is forecast to remain relatively insulated from the economic downturn and achieve steady growth throughout the forecast period,
Upgradeable base stations will accelerate the adoption of next-generation network infrastructure equipment
Chinese infrastructure vendors are expected to increase their market share over the forecast period
Total mobile data infrastructure market is expected to be worth between $30-35 billion by 2013.
Mobile Broadband: 4G Network Evolution also provides detailed shipment analysis of mobile data infrastructure equipment including transceivers, base stations, and BSC/RNCs along with the associated revenues and forecasts through 2013. In addition, the report contains subscriber forecasts for EDGE, HSPA, EV-DO Rev. X, TD-SCDMA, mobile WiMAX and LTE.
Telefonica to launch triple-play service
Telefonica to launch triple-play service
Spanish-owned telco Telefonica and satellite TV provider DirecTV are discussing the possibility of launching a joint triple-play service in Argentina. The service will include TV, internet and telephony services, according to Guillermo Delfino, marketing manager of DirecTV. Talks began over two months ago, and currently focus on the idea of certain departments within the two operators cooperating together to issue the bills. A commercial launch date has not yet been decided on, or whether a pilot phase will be rolled out.
Spanish-owned telco Telefonica and satellite TV provider DirecTV are discussing the possibility of launching a joint triple-play service in Argentina. The service will include TV, internet and telephony services, according to Guillermo Delfino, marketing manager of DirecTV. Talks began over two months ago, and currently focus on the idea of certain departments within the two operators cooperating together to issue the bills. A commercial launch date has not yet been decided on, or whether a pilot phase will be rolled out.
2 Mar 2009
Sony drops VoIP Go!Messenger service on PSP
Sony drops VoIP Go!Messenger service on PSP
By Doug Mohney
Sony is going to shut down its VoIP Go!Messenger service for the PSP March 31. Sony launched the free service in Europe last year. Go!Messenger was supposed to be a four-year partnership between Sony and wireless network operator BT. PSP users were able to talk directly via video chat, as well as send videos, voice recordings and text messages; video was enabled through a PSP Go!Cam add-on. Why pull the plug? "Although Go!Messenger brought innovative communications features to the PSP community, the service has not developed the base of users that we were hoping for," Sony is quoted as saying. Sony Europe says there no direct jobs to Go!Messenger linked to the service, so there aren't any downsizing measures (at Sony) taking place from the shutdown. It's not clear if Sony is thinking about developing other applications for the Go!Cam or it has more apps in the pipeline; there's no direct quotes either way floating around.
By Doug Mohney
Sony is going to shut down its VoIP Go!Messenger service for the PSP March 31. Sony launched the free service in Europe last year. Go!Messenger was supposed to be a four-year partnership between Sony and wireless network operator BT. PSP users were able to talk directly via video chat, as well as send videos, voice recordings and text messages; video was enabled through a PSP Go!Cam add-on. Why pull the plug? "Although Go!Messenger brought innovative communications features to the PSP community, the service has not developed the base of users that we were hoping for," Sony is quoted as saying. Sony Europe says there no direct jobs to Go!Messenger linked to the service, so there aren't any downsizing measures (at Sony) taking place from the shutdown. It's not clear if Sony is thinking about developing other applications for the Go!Cam or it has more apps in the pipeline; there's no direct quotes either way floating around.
1 Mar 2009
Telefonica posts profit of 7.6 billion euros despite crisis
Telefonica posts profit of 7.6 billion euros despite crisis
The Spanish telecommunications giant Telefonica posted a net profit of 7.6 billion euros (9.7 billion dollars) in 2008, down 14.8 per cent from 2007 but above forecasts.
The 2007 profit had been boosted by extra income from the sales of subsidiaries such as Endemol and Airwave, the company explained Thursday in a press release.
Revenues grew 2.7 per cent to 57.9 billion euros in 2008. Business in Latin America compensated for a slower market in Europe, with Latin American revenues up 14 per cent.
Customer base grew 13 per cent to 259 million worldwide. Growth was fastest in mobile phones (up 17 per cent to 196 million), broadband (up 21 per cent to 12.5 million) and pay television (up 30 per cent to 2.2 million).
The Spanish telecommunications giant Telefonica posted a net profit of 7.6 billion euros (9.7 billion dollars) in 2008, down 14.8 per cent from 2007 but above forecasts.
The 2007 profit had been boosted by extra income from the sales of subsidiaries such as Endemol and Airwave, the company explained Thursday in a press release.
Revenues grew 2.7 per cent to 57.9 billion euros in 2008. Business in Latin America compensated for a slower market in Europe, with Latin American revenues up 14 per cent.
Customer base grew 13 per cent to 259 million worldwide. Growth was fastest in mobile phones (up 17 per cent to 196 million), broadband (up 21 per cent to 12.5 million) and pay television (up 30 per cent to 2.2 million).
Turcell creates new markets for Turkish firms
Turcell creates new markets for Turkish firms
Turkey's leading mobile phone operator Turkcell has been opening new markets abroad for Turkish companies during global economic crisis period.
Ozcan Ermis, general manager of Turkcell's Belarus unit, told the A.A correspondent on Friday that Turkcell's company, "Life", started to serve in Belarus three months ago and he hoped that they would achieve great success in this country after its achievements in Ukraine.
"After we started to serve in Ukraine, nearly 200 Turkish companies began operating in this country since 2005. 27 Turkish companies invested in Belarus within three months. We estimate that the number of Turkish companies would exceed 100 in Belarus within one year. We assist Turkey by creating new markets for Turkish companies," he said.
Turkey's leading mobile phone operator Turkcell has been opening new markets abroad for Turkish companies during global economic crisis period.
Ozcan Ermis, general manager of Turkcell's Belarus unit, told the A.A correspondent on Friday that Turkcell's company, "Life", started to serve in Belarus three months ago and he hoped that they would achieve great success in this country after its achievements in Ukraine.
"After we started to serve in Ukraine, nearly 200 Turkish companies began operating in this country since 2005. 27 Turkish companies invested in Belarus within three months. We estimate that the number of Turkish companies would exceed 100 in Belarus within one year. We assist Turkey by creating new markets for Turkish companies," he said.
Digital Divide in US
Digital Divide in US
A Pew Internet and American Life Project studying who uses broadband at home found that:
Roughly one-quarter -- 27%-- of U.S. adults are not Internet users.
43% of those who don't surf are over the age of 65.
43% have household incomes under $30,000 a year.
In comparison, 85% of households with incomes over $100,000 have broadband at home.
About one-third -- 35% -- of people who do not have high-speed Internet or broadband service said it was because service was too expensive. They said the price would have to drop before they adopted the service.
62% of dial-up users say they are not interested in giving up that connection for broadband. When asked what it would take to get them to switch to broadband, 35% said the price would have to fall.
A Pew Internet and American Life Project studying who uses broadband at home found that:
Roughly one-quarter -- 27%-- of U.S. adults are not Internet users.
43% of those who don't surf are over the age of 65.
43% have household incomes under $30,000 a year.
In comparison, 85% of households with incomes over $100,000 have broadband at home.
About one-third -- 35% -- of people who do not have high-speed Internet or broadband service said it was because service was too expensive. They said the price would have to drop before they adopted the service.
62% of dial-up users say they are not interested in giving up that connection for broadband. When asked what it would take to get them to switch to broadband, 35% said the price would have to fall.
iPhone Apps are the Real Money-Maker
iPhone Apps are the Real Money-Maker, Analyst Says
by Carla Thornton
According to a new study, some smartphone owners spent as much on applications for their cell phones last year as they did on the devices themselves. Call it the Apple App Store effect, says the ABI Research study on mobile storefronts. Despite having one of the smallest catalogs of all the development platforms -- now around 15,000 app titles compared to 85,000 each for Palm and RIM -- Apple's iPhone App Store has generated significant sales across the board.
"Apple did a lot for the market [last year] with its massive marketing effort telling the public how great mobile content is," said senior analyst Jeff Orr in a news release. "That created a 'halo' effect for the rest of the industry: other device manufacturers and content developers working on non-Apple platforms all saw a bump in sales and downloads because there's more awareness of the smartphone category." As a result, this year more mobile application storefronts will be launched from Nokia, Palm, RIM and Samsung, said Orr.
The study, conducted in November, asked 235 U.S. smartphone users who installed applications on their devices in 2008 how much they had spent in the last 12 months. ABI found that almost 17 percent doled out between US$100 and $499 for mobile apps. The majority spent between zero cents and $100.
Considering how cheap most mobile apps are, starting for as little as a buck at Apple's App Store, that translates into a lot of downloads. There has also been a lot of excitement about mobile apps thanks to Apple heavily marketing its App Store for the iPhone and iPod Touch.
Of course, notes Orr, the downside is that Apple has created the expectation that all mobile apps should be as cheap as the ones it offers. On Dec. 31, 96 percent of the 12,000-plus titles in the App Store cost less than $10. That's cheap compared to the rest of the industry, which charges between $7 and $25 a pop.
But smartphone users shouldn't expect to see Handango or other favorite mobile storefront slash prices just to compete with Apple, Orr told The Standard. "The average selling price of content will return to the industry average over time, and the open market where developers set the price will prevail," he said. "At the end of the day, Apple's 99-cent iTunes model does not build a market for apps."
Not everything in the App Store is truly a bargain, though. While some simple utilities go for less than $1, there are a number of professional apps that go for far more, like a stage lighting app called iRa Pro which costs $900.
ABI projects mobile app sales to rise from "hundreds of millions of dollars" this year to over a billion dollars in 2010.
by Carla Thornton
According to a new study, some smartphone owners spent as much on applications for their cell phones last year as they did on the devices themselves. Call it the Apple App Store effect, says the ABI Research study on mobile storefronts. Despite having one of the smallest catalogs of all the development platforms -- now around 15,000 app titles compared to 85,000 each for Palm and RIM -- Apple's iPhone App Store has generated significant sales across the board.
"Apple did a lot for the market [last year] with its massive marketing effort telling the public how great mobile content is," said senior analyst Jeff Orr in a news release. "That created a 'halo' effect for the rest of the industry: other device manufacturers and content developers working on non-Apple platforms all saw a bump in sales and downloads because there's more awareness of the smartphone category." As a result, this year more mobile application storefronts will be launched from Nokia, Palm, RIM and Samsung, said Orr.
The study, conducted in November, asked 235 U.S. smartphone users who installed applications on their devices in 2008 how much they had spent in the last 12 months. ABI found that almost 17 percent doled out between US$100 and $499 for mobile apps. The majority spent between zero cents and $100.
Considering how cheap most mobile apps are, starting for as little as a buck at Apple's App Store, that translates into a lot of downloads. There has also been a lot of excitement about mobile apps thanks to Apple heavily marketing its App Store for the iPhone and iPod Touch.
Of course, notes Orr, the downside is that Apple has created the expectation that all mobile apps should be as cheap as the ones it offers. On Dec. 31, 96 percent of the 12,000-plus titles in the App Store cost less than $10. That's cheap compared to the rest of the industry, which charges between $7 and $25 a pop.
But smartphone users shouldn't expect to see Handango or other favorite mobile storefront slash prices just to compete with Apple, Orr told The Standard. "The average selling price of content will return to the industry average over time, and the open market where developers set the price will prevail," he said. "At the end of the day, Apple's 99-cent iTunes model does not build a market for apps."
Not everything in the App Store is truly a bargain, though. While some simple utilities go for less than $1, there are a number of professional apps that go for far more, like a stage lighting app called iRa Pro which costs $900.
ABI projects mobile app sales to rise from "hundreds of millions of dollars" this year to over a billion dollars in 2010.
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