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[Business] Mobile Commerce Growing Rapidly This Year


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Mobile commerce represents a significant opportunity - 90% of Americans own a cell-phone but only 7% of them have conducted a transaction on their phone, according to Nielsen.  This, despite technology that makes it increasingly easy to buy goods on your phone: we tested one company's offerings on our phone and it was surprisingly straightforward with minimal steps. 

Still, calls to companies and executives in the industry indicate that while mobile commerce experienced exponential growth off of a small base in 2009, it is still years from being a ubiquitous, mass-market industry.  For this report we focus on the sale of physical goods via mobile phones, not virtual goods, and include both remote commerce (buying goods on mobile websites) and mobile payments (paying for goods with your phone).  Specifically:
  • Revenue growth spiked beginning in mid-2009 for retailers with mobile offerings.
  • Smaller retailers are now helping drive industry growth in addition to the largest ones.
  • Near Field Communications could enable the industry to scale to ubiquity, but all the stakeholders need to support this and we're likely years from that happening.



A SURGE IN GROWTH BEGINNING IN EARLY 2009

After years of unrealized astronomical forecasts, the mobile commerce market started to take off near the end of Q109 and gained steam throughout the summer.  We estimate mobile commerce grew about 150% to 200% in 2009 (albeit off a very small base) and has experienced accelerated growth during the beginning of 2010.


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We believe a number of factors contributed to this:
  • Retailers started spending more on mobile operations after a long period of holding back on capital investments during a prolonged recession.
  • Smartphone adoption accelerated.
  • Significant press about the industry and buzz surrounding new products raised consumer awareness (Apple profiled a mobile commerce app in a major TV advertising campaign during the beginning of 2009).


In addition, it appears the size of the buys on mobile phones rival those of e-commerce purchases on PCs.  Apparel orders have averaged $75 to $100 for many retailers, with gifts (a popular spontaneous mobile purchase) averaging as high as $35 to $40 an order.  This is an encouraging step toward mass-market adoption since it indicates consumers are comfortable making significant purchases on their phones -- a necessity if the industry is going to approach revenue levels of PC-based e-commerce.


SMALLER RETAILERS STARTING TO ENTER THE FRAY

Given the necessary investment in technology coupled with the infancy of the market, large well-capitalized retailers have been most active in the space to date, according to Todd Ablowitz, president of consulting firm Double Diamond Group.  For example, last year Amazon and eBay accounted for about 70% of all physical goods sold on mobile phones.  However, private third-party service companies are enabling smaller retailers to launch mobile e-commerce sites and accept mobile payments for goods and services.

Private companies like Digby, innerfence, and Billing Revolution are the most active in this space.

Smaller retailers from 1-800-Flowers, ESPN, Toys R Us, to mechanics and contractors have used third-party companies like these to enable mobile commerce.  We estimate mobile has become about 2% to 5% of total revenue for many of these small-to-mid-sized retailers, with some of the larger ones currently generating 8-figure revenue levels from mobile.


NEAR FIELD COMMUNICATIONS COULD MAKE THIS A MASSIVE MARKET

Near Field Communications (NFC) is a high-frequency, short-range wireless technology that runs on unlicensed 13.56 MHz spectrum and enables the exchange of data among devices within four inches of each other (think those fobs that Mobil provides customers with to buy gas by simply placing the fob near the pump).  Mobile phones can access this frequency with an additional antenna and some updates to their SIM cards.  At that point mobile phone users will be able to transact with vendors with point-of-sale (POS) systems that are compatible with NFC without having to supply any credit card or other associated info, which will be stored on their phones.

Mobile operators in Asia have used this and similar frequencies to drive mobile payment initiatives in recent years, but Sarah Clark, analyst and author of the report "NFC: The Road to Commercial Deployment," points out that a lack of uniformity from carriers to vendors has prevented this from accelerating in the US.

For example, in the past year U.S. carriers have been discussing ways to work together to drive the initiative, but talks so far have not amounted to much.  This is because the market is too small currently for an individual carrier to take the risk of spending money to subsidize the development of the technology only to see its competitors hop on board when the industry is more advanced, or see a new technology emerge with a better solution (unlikely given scarcity of spectrum, in our opinion).

Stakeholders will need to come to a consensus and work together to support development or one company must go it alone.  We think the latter is unlikely at this stage.

In the meantime, start-ups that offer alternatives to face-to-face wireless commerce technology like NFC will drive this market initially.


[tbiresearch]



 

[Design] The Eye Mobile Phone


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The Eye is an innovative, slim and ultra-lightweight cellphone concept that features a see thru LCD touchscreen with various amazing functionalities. Aside from making calls and watching movies, the intuitive transparent screen enhances the GPS function with follow arrow through the transparent display to your desired destination.

By utilizing next generation connectivity, it allows the user to take a picture of a building, product or person in real view through the clear glass and search on net to get more information about them. For gamers, this cellphone offers ultimate 3D gaming experience and using their hands as a control with interactive camera sensor.

Also, it can give a virtual picture of your home decoration and show you how a make-over or a cloth will suit on you without even wearing it.


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Designer : Cyrene Quiamco

[tuvie]


 

[Investing] Can The Nexus One Add $20 Billion To Google’s Market Value ?


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How much exactly is the Nexus One line of Android phones worth to Google? The folks at Trefis have modeled Nexus One sales into their financial forecast for Google and estimate that it will account for nearly $20 billion of Google’s market cap (based on its target price pf $659 per share), accounting for 9.3 percent of the total. That is more than its estimated contribution of ad and search partnerships (5.1 percent), Google Apps (3.2 percent) or YouTube (2.4 percent). Only search ads account for more of Google’s total value (68.1 percent).

How does Trefis come up with these numbers? Trefis is an investing site which comes up with financial models for stocks which translate into interactive stock charts and price targets. If you don’t agree with their model, you can change some of the underlying assumption sin the drag-able charts and create your own model (see below). Trefis is assuming Google will sell 5 million Nexus One phones this year, and that the Nexus One market share will grow from 0.4 percent this year to 3.4 percent in 2016, when the iPhone will have an 11.5 percent global mobile phone market share (as shown by the olive-colored line above) and Blackberry will have an 8.2 percent share (green line).


That seems a bit aggressive, but as I mentioned, you can always change the assumptions to something you think makes more sense. For instance, if the Nexus One even manages to capture 1 percent of global mobile phone market share, it would add 2.44 percent to Google’s market share, or about the same as YouTube. The Trefis model takes into account other factors, such as the unsubsidized price and margins declining over time. Remember, even though HTC is making these phones, Google is the one who is selling them, both directly and through carriers such as T-Mobile (who are subsidizing the $530 unlocked price and offering them to consumers for $180 with a contract). The Trefis model projects Nexus One revenues to be:


2010: $2.8 billion
2011: $5.7 billion
2012: $8.5 billion
2013: $11 billion
2014: $14 billion

While it’s fun to play around with these numbers, nobody can really predict how successful the Nexus One family will be. And it is not safe to assume typical mobile phone margins since Google has other motivations for pushing these phones, namely to increase adoption of the mobile Web where it will make its real money through mobile search. Also, this model does not take into account the software revenues from all the other Android phones out there. It is only Nexus One. Trefis estimats that Googl eis making a $231 gross profit on each phone, based on iSuppli’ s$174 component cost estimate plus other costs such as warranty, R&D ($50), and HTC’s cut ($75). Google has publicly stated that the profits from the Nexus One are minimal. Yet, if two thirds of Apple’s market share can be attributed to the iPhone (as estimated by Trefis), it doesn’t seem like a stretch to think that Nexus One can become 9 percent of Google’s.

In fact, if you look at Google’s stock price on the day before the Nexus One was confirmed, it was $590, and it rose to $627 just before the official launch on January 5, adding nearly $12 billion to Google’s market cap in that time alone. Of course, there were other factors contributing to the stock’s rise during that time, but an extra $20 billion on top of Google’s current $185 billion market cap is not unthinkable. (The stock today is trading at $585, after the disclosure that it might be exiting the China market).

How much do you think Nexus One is worth to Google?


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[techcrunch]



 

[Product] 6380 Senior Mobile Phone for Seniors


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This generic-brand mobile phone offers oversize numeric buttons (1-cm wide) that you can read from several feet away – making phone calls nearly fool-proof. The phone was mainly designed for seniors with limited tech savvy, but it’s fine if you’re just looking for a really simple cell phone too. Let me go on the record now by saying If I lose my ability to use the latest high-tech gadgets when I’m an old man, please just put me out of my misery.


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The 6380 Senior Mobile Phone ($75 USD) does actually have a few handy features, including a built in flashlight, and a giant “SOS” button on the back that can automatically dial a pre-set emergency number, and emit a loud warning alarm. It’s also got a minimal display with large on-screen fonts, and a whopping 128×60 screen resolution. Sign me up now!


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Actually, the 6380 does hide a couple of modern features under the hood, including a digital phone book, SMS messaging, a calendar, alarm clock, games (I can only imagine how much fun those are on that screen), and an FM radio. FM? I wanted an AM crystal radio set and a Victrola built-in.

Oh, and I forgot to mention one thing. The 6380 phone only works on GSM 900/1800 bands, so it works everywhere in the world except the U.S. and Canada. Oh well, I didn’t want one anyway.





[technabob]


 

[Design] Burst Projector Concept Cell Phone


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Burst is a concept projector phone designed to boost the functionality and mobility of the conventional touch phones. Burst can project images onto any type of flat surface from projectors mounting aside with its specialized software to deform and compress the touch space display.

The touch screen performs just like the traditional screens, but the operation takes place on the virtual projection space. Burst can project HD interactive full color touch spaces showing applications and menus, that opens in a lower touch space. The innovative user interface of Burst utilizes sound and motion sensors to capture as well as process user interactions inside the touch space.

Super functional applications are the key attribute of Burst. It supports revolutionary video conferencing which will help the deaf and hearing impaired aside from offering many other advantages. The innovative technology of combining a mobile device with a protection product has made it as functional and usable as a personal computer. Moreover, it is packed with various category games to make it a nice piece for all range of gamers. Other highlighted features of Burst include HD projected web browsing, document and media editing, video conferencing and online gaming. It can make user to send and receive calls, take pictures and video, download and listen to music and many more.


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Designer :
DJ German and Ryan King

[tuvie]