Sim Numbers Increasing

A 28 per cent growth in global SIM card shipments between 2006 and 2007 was driven by new opportunities from emerging markets, according to a coalition of SIM card vendors on Wednesday.

SIMalliance, a global association made up of the world's biggest SIM card manufacturers, also said that the new generation of high speed multimedia handsets was contributing to growth in shipments, with 3G-enabled cards representing 14 per cent of all shipments.

Since the arrival of mobile broadband, emerging technologies such as smartphones have outsold laptops by as many as 2 million in 2007, and has brought new players to the mobile space, creating a pivotal new role for the SIM in addition to its existing role of securing identity across networks.

The Total Market Available (TAM) for SIM card shipments is estimated to have increased from 1.9 billion in 2006 to 2.7 billion in 2007, and the SIMalliance also announced an outlook for 2008 above the 3 billion mark.

The biggest year on year growth in SIM shipments was recorded in India, where number rose from 123 million in 2006 to 194 million in 2007, a growth of 58 per cent. Latin America wasn't far behind with an increase of 43 per cent year on year from 159 million in 2006 to 228 million in 2007, followed by a 41 per cent rise in the Middle East and Africa from 260 million to 366 million. While Greater China experienced an increase from 332 million in 2006 to 427 million in 2007 , a growth of 29 per cent.
"The significant technological advances that we see in the market, such as the impact of smartphones, are all dependent on the SIM's capabilities," said Michel Canitrot, chairman of the SIMalliance. "We believe that the SIM Industry, in light of the prosperous market environment, can open the SIM to other players within our eco-system and accelerate the adoption of these advances to the benefit of all operators

Sony BMG and Nokia Tie Up

Music giant Sony BMG has become the latest heavyweight to sign up for Nokia's Comes With Music platform, which gives subscribers unlimited access to music catalogues and allows them to keep the tunes they download.

The Finnish vendor introduced the controversial model in December, as a platform that enables consumers to buy a Nokia device with a year of unlimited access to millions of tracks.

Once the year is over, customers can keep all their music without having to worry about it disappearing when their subscription is over.

This move flies in the face of previous business models used by Nokia's own UK-based Music Store and that of rivals such as Omnifone's MusicStation platform - which stop users listening to music once their subscription has been terminated.

The Comes With Music platform launched with content from Universal Music Group International, making Sony BMG the second of the big five to sign. However the company has not yet specified which devices the service will be available on [although the marketing material features the N81] and what the actual pricing model will be.

On Tuesday, the Finnish firm revealed that at the end of the one year period, subscribers can transfer their downloaded material by substituting their new device or computer for the original devices, thus locking users into a product upgrade cycle.

Subscribers will also be able to continue to purchase additional tracks from the Nokia Music Store, or move on to a Nokia unlimited access subscription service. Nokia's existing Music Store prices individual tracks at 80p each, with albums starting at £8.00. The store also offers a monthly subscription for PC streaming for £8.00.

Thomas Hesse, president of the Global Digital Business & US Sales for Sony BMG, said, "We think this business model will encourage users to sample a wide range of material, expand their musical tastes, and listen to more music than ever before"

Comes With Music is expected to launch in the second half of 2008.

SE takes a Hit

Fourth placed handset vendor Sony Ericsson made good on its earlier warnings on Wednesday, as a slowdown in market growth of mid-to-high end phones, took its toll on the company's bottom line.

For the first quarter, the Japanese-Swedish joint venture took a knock that sent its net income down to Eur133m, from Eur254m in the same period last year.

Sales fell 8 per cent from Eur2.92bn down to Eur2.7bn for the same period.

The company shipped 22.3 million units, a 2 per cent increase compared to the same period last year, although the average selling price of handsets dropped from Eur134 to Eur121 due to slowing market growth in mid-to-high end phones in markets where Sony Ericsson has a strong presence.

Dick Komiyama, president of Sony Ericsson, said, "Our product announcements during the first quarter have been well received by the industry, and we expect to see a positive effect from these announcements during the second half of 2008."

During the quarter, Sony Ericsson added a new sub-brand to its product portfolio with the announcement of the Xperia X1, a high end multi media device based on Windows Mobile, which will launch in the second half of the year. The Xperia brand joins the company's popular Cyber-shot and Walkman brands.

Sony Ericsson forecasts that the global handset market for 2008 will grow at a rate of around 10 per cent from more than 1.1 billion units in 2007. The majority of this growth is expected to be in emerging markets.

Unlimited calls by Skype

Internet telephony provider Skype this week introduced a flat rate, unlimited calling plan to landline numbers in 34 countries.

It is the first time Skype has offered a single, monthly flat rate for international calling to landline numbers.

The new subscription options have no long term contract, and the prices top out at Eur9.95 per month. European users can get unlimited calls to landlines in 34 countries across Europe, the Americas and Asia for Eur8.95, while US users can get the same deal for Eur6.95.

Stefan Oberg, VP and general manger of telecoms at Skype, said, "For example if you live in London, for just Eur2.95 a month, you can call your grandmother in Poland, whenever you like, talk for up to six hours at a time, and not worry about how much it's costing you. Your grandmother doesn't need to understand the internet. You just use your Skype subscription to make the call and she just picks up the phone. And if you have friends and family spread over the world, you can reach them all for as little as Eur8.95 a month. When you combine the free features Skype is known for - from instant messaging to conference calling to video calls - with our subscriptions, it's hard to find a better alternative."

Last week it emerged that Skype's parent, online auction house eBay is considering selling off the internet telephony operation, unless it finds a better stratagem for integration of the two businesses by year end.

John Donahoe, who assumed the role of chief executive officer of eBay at the end of March, said that the company is focusing on the synergies between Skype and its main business. But if those synergies aren't regarded as strong enough, Skype's position in the eBay portfolio would be reassessed.

eBay's acquisition of Skype in 2005 is largely regarded as a $2.6bn blunder. An outlook given further weight after the auction house wrote down the value of the purchase by $1bn last year.

eBay's efforts to monetise Skype have largely fallen flat, and the unit's main source of revenue remains user purchases of Skype-out minutes, allowing subscribers to call non-Skype numbers.

Nevertheless, Skype itself continues a strong growth curve. The operation announced $126m in revenue for the first quarter of 2008, representing 61 per cent year over year growth. The VoIP player added 33 million registered users in the quarter, ending the period with more than 309 million registered users around the world. Skype is even expected to turn a profit sometime this year and the introduction of flat rate tariffs looks set to help it do just that.

Juniper talks up Mobile Banking

The number of consumers accessing banking services on their mobile phone is set to increase tenfold over the next four years, to reach 816 million by 2011. Industry analyst Juniper Research said this week that financial institutions are delivering an increasing variety of products in the mobile environment, from fund transfers, bill payment and presentation to account management and customer service.

As a result, the annual number of global mobile banking transactions is forecast to rise from 2.7 billion in 2007 to 37 billion by 2011, as a greater number of services are deployed worldwide. The analyst also anticipates that increased consumer confidence, due to the enhanced security measures being utilised in mobile financial services will be crucial to greater usage levels. However, Juniper cautioned that a number of hurdles have yet to be overcome, including financial regulation, payment transaction costs, revenue share issues and customer support difficulties.

Following the trends outlined in all research on mobile data services recently, the China and Far East region is expected to have the greatest number of users of mobile banking services, followed by Western Europe and the Indian sub-continent.

Conceptually the mobile phone and the act of payment seem a natural match. But, as is the case with many of the good ideas this industry has had, material success on a grand scale remains elusive. The problems are familiar: the use case is difficult to define, there are various technological solutions, which generally lead the demand, and the industry is reaching beyond the bounds of its natural habitat.

3 Go Mad over Mobile Access

As the mobile Internet goes mass-market, consumers will start to abandon their fixed terminals, according to Hutchison Europe. In 10 years people will forget that the PC used to be their main way of accessing the Internet, predicted Christian Salbaing, managing director of Hutchison Europe, umbrella company for the various 3 mobile operations in the region. "It's a challenge, but we'll get there," Salbaing told delegates at the Telecom World Congress in London on Tuesday. "My kids don't know what an LP is," he said, referring to the migration of pre-recorded music from vinyl to CD and now MP3.

More advanced networks and handsets, along with flat-rate data tariffs and a customer-friendly roaming environment will be the main drivers of mass-market mobile Internet usage. There are already handsets on the market catering to differing needs, Salbaing noted, listing the Nokia N95 with its powerful camera, Sony Ericsson's range of music phones and the iPhone, which he said can "do it all with a better interface". There is also a need for full-functionality for the value segment, Salbaing said, using 3's Skypephone as an example.

"The HSPA version of the Skypephone is coming in the coming two or three months," said Salbaing.3 has increased network speed to 7.2 Mbps in most European markets now, Salbaing said. "In 2009 this will have doubled to 14.4 Mbps.

But Salbaing was nonplussed when it comes to WiMAX "We're pretty much technology-agnostic," he said. "[But] WiMAX is not a full mobility solution for us today." He suggested that it might be an option in future, for backhaul, or to extend coverage to particular areas, but said that at present the company is happy with the network it has. "Why try a new solution," he said. Our networks are IP-based, therefore it is logical to offer VoIP, Salbaing said.

"For us Skype is an incremental revenue stream," he added. "We certainly haven't seen any of the cannibalisation that was predicted." Salbaing dismissed suggestions from the audience that 3's approach to mobile data – by partnering with the major brands like Skype, Yahoo, MSN and so on – carries the risk of turning into a bitpipe. A couple of years ago, all the mobile operators had the same handsets, technologies and business models, he said. Now, operators are now taking differing approaches to their customers and five years from now, "there will be a differentiation between operators," he insisted. "Is that a bitpipe? I don't think so."

Ultimately though, Salbaing says that customers have a finite amount to spend on communications. "[The question is], where are the revenues in this?" Salbaing asked. Customers have somewhere between £15 and £50 to spend per month, "whichever way you cut it." The customer does not see the distinction between operator, content provider and bitpipe, he explained. If the customer doesn't get what they want, "they'll switch," he said.

LTE Gains Traction

Nokia, the world's largest handset manufacturer, has signed up Sony Ericsson, NEC and Alacatel-Lucent to its plans for a 4G wireless system. The companies have formed a licensing framework for their patents for the emerging mobile standard, called Long Term Evolution (LTE).

The deal will add momentum to LTE, which is seen as a direct competitor to Wimax, which is being pushed by Intel. The first LTE networks are being rolled out in the US and China. LTE is a faster and more long distance wireless system compared to 3G. Nokia and its partners believe LTE is the logical evolution of 3G systems and are selling it as a solution for mobile phones, as well as laptops and even fixed broadband connections, replacing wi-fi.

The framework deal also involves NextWave Wireless and Nokia Siemens Networks. The companies have committed to keeping royalty payments for use of essential LTE patents low to give the technology the best chance of success. Intel believes Wimax will be the future of wireless communications.

In a recent interview with BBC News chief executive Paul Otellini said in a year's time 10 million people would be using Wimax, rising to "hundreds of millions two years after that". "We see Wimax as the most cost-effective way to deliver high-bandwidth wireless broadband," he said. A handful of Wimax-enabled phones have been produced so far. Nokia itself has released a Wimax-enabled internet tablet but pulled out of a partnership with Intel to look at putting 3G connections onto laptops alongaide Wimax.

Its Android Opera

Web browser developer Opera Software has made its popular Opera Mini browser available for the Android mobile platform. A technical preview release is already available on the company's developer site, inviting the Android development community to test the fresh build.

"Today we're glad to deliver our mass-market mobile browser to the Android development groups," says Jon von Tetzchner, CEO of Opera. "Opera Mini will be able to empower users of Android-based handsets with access to all of their favourite web sites with popular features for smooth effects and scalable, tailored viewing."

The Google-backed Open Handset Alliance (OHA) is just one of the forums seeking to consolidate mobile Linux through Andoid, and telecoms.com got a sneak peak at the Android platform running on demonstration hardware at Mobile World Congress in Barcelona. David Rose, director of OEM sales at chip maker ARM demonstrated the platform running on the already aging ARM9 processor. The interface was clean and surprisingly smooth flowing given the polished appearance of the UI, showing what could be achieved on lower end or older devices.

However, there wasn't much to see beyond what Google has already demonstrated in its own promo videos of the platform, so the demonstration was hardly conclusive.

The almost hardware agnostic deployment capability of Android is critical to the OHA's claims that Android is a platform that can be rolled out across any device range and developers are increasingly throwing their weight behind the platform.

Opera Mini boasts more than 40 million users worldwide across mobile platforms and enables web browsing from low-to-high resource handsets by compressing data at a remote server before sending content to the phone applet for rendering.

MySpace TV does Deal

MySpaceTV shows such as Quarterlife, Roommates and Special Delivery will soon air on screens outside the US. The deal was signed with the Shine Group which is run by Elizabeth Murdoch - daughter of Rupert Murdoch who owns MySpace parent News International.

The deal covers DVDs and merchandise but MySpace retains all net rights to its programmes. "MySpace is essentially the world's largest focus group," said Travis Katz, head of MySpace's international arm, announcing the deal at the MipTV-Milia conference in Cannes. "You can see what resonates with people and then take that content and blow it out worldwide," he added.

Mr Katz said MySpace was developing local versions of its existing programmes plus original content in the 26 countries in which it operated and added that the company was discussing with hundreds of others about deals on its shows. The deal marks a fresh attempt by MySpace to find an audience for its programmes beyond the internet. US network NBC broadcast MySpace's "Quarterlife" in February but viewing figures suggest it ranked dead last among all shows aired in that time slot.

Many media companies have tried, and failed, to use the web as a testing ground for new shows, Forrester Research analyst James McQuivey told the Reuters news agency. "It hasn't produced bankable shows outside of the internet, or even on the internet," he said. "If you look at it (Web shows), there's a good reason why -- it's mostly bad." The MySpaceTV deal comes only days after the social networking site announced a partnership with three record labels to create an online music store.

No Tipping Point for Mobile Ads, Yet!

Mobile advertising is fast approaching a 'make or break' point and deciding whether consumers accept ads and indeed, whether there is any real revenue to be derived from them, will be the key factor in the next 18 months. Industry analyst Gartner predicts that worldwide mobile advertising revenues are to surpass $2.7bn in 2008 - a $1bn increase on 2007.

They feel that the market has developed slowly and still has some way to go. "Innovative developments, such as minimizing the number of keystrokes required to access information, using the phone's camera to improve the overall user experience and tying content or shopping location relevancy to advertisements will move the market forward," said Tole Hart, research director at Gartner. "To encourage users to accept advertisements, advertisers must improve the way search results are managed on the handset so that the experience is painless and rewarding to end users."

The mobile advertising market has generated a lot of hype for a variety of reasons, but there are still several problems to overcome going forward. Gartner identifies some of these issues as the slow adoption of multimedia, lack of consumer acceptance, lack of metric transparency, immaturity of standards, diversity of platforms, form factor issues, cross-media integration priorities and the complexity of the value chain, inventory of content, privacy, education and ease of accessing content.

Hart believes that many of these issues will be resolved during the next two years, resulting in a make or break situation for mobile advertising which boils down to two questions: "Will customers accept advertisements, and can brands and advertisers drive revenue via mobile advertising?" Hart said.

At present, it's evident that some operators are more cautious than others about the prospects of mobile advertising. On Monday, 3 UK unveiled an ad supported, mobile music video service, which delivers videos to customers with no data charge, supported by short, targeted video ads. But last week, Orange UK launched a three month trial that will allow subscribers to get discounted music in exchange for eyeballing adverts.

Interestingly, Orange is the host network for ad-supported MVNO Blyk, which launched late last year, and it appears that Orange is using Blyk to test the water for ad-funded content. Andrew Frank, research vice president at Gartner, said that, "Advertising often runs the risk of being perceived as junk mail or a privacy violation, so advertisers must use such targeting techniques with care.

"However, sponsored content has proven successful in other media. There are several companies working on providing mobile content integrated with advertisements. In addition, location has long been thought of as a factor for relevancy, but to date precision has been limited as the capability and the cost of GPS has been too high, along with the low penetration of GPS phones."