In the last couple of days the major carriers have announced competing flat rate wireless deals. No more counting minutes. These new plans might be as significant as the original AT&T one rate plan that revolutionized wireless pricing. I say “might”, because the price is still rather high and the plans all but eliminate the family plan users. For the heaviest of wireless users, this plan can save money and eliminate hassle, and follows on the heels of similar flat rate plans for wireless messaging and data usage.
A side benefit for the carriers is the eventual reduction in billing complications.
Do all telecommunication services eventually migrate to a flat rate pricing structure when they mature?
I say Yes. With excess capacity and variable demand, flat rate pricing is a good option.
Cable and Satellite television are flat rate, most home wire line services (circuit and VOIP) are flat rate, internet services are flat rate. As a communication service matures, the variable rate of the next bit approaches zero. As the variable cost of a new subscriber is virtually eliminated, the flat rate pricing schemes emerge.
The value added services that are up sells on these flat rate services, tend to be themselves, flat rate services. Examples are, HBO for $15/month, Navigator services for $9.99 month, Internet Virus protection at $5 month, etc.
With variable delivery costs plummeting they biggest expense becomes attracting a new subscriber and retention once a subscriber signs up for the service.
The exceptions to this trend are royalty and license fees for media and content. The creators of content expect to be paid for the distribution of their intellectual property. This is a very logical assumption.
The technology that distributes their content is training the public to expect monthly subscription prices. It is inevitable that most media will also be purchased as a flat rate subscription. The key will be the manner in which the content creators are paid for their product, since you cannot generate good Music, Video, games, ringtones, books, etc, at zero variable cost.
Kind on Kindle
Mom, My book ran out of batteries!
In my never-ending quest for cool new wirelessly enabled devices, I have been trying out the Amazon Kindle. In case you are not familiar with the device, it is basically an electronic book that accepts downloads via the Sprint network (EVDO) for books and periodicals. I read a novel on this device over the weekend and finished it on the train while commuting this morning. Here are my thoughts on the pros and cons of this new device.
The screen is spectacular for reading text. Several people I showed off the device to thought that it was a demonstration model. The reason being, they immediately thought that the text/pictures on the screen were from a decal because they were so sharp.
I also liked the ability to increase the font size of the text. I found reading for an hour not tiring on the eyes. I can hardly imagine reading for an hour on my BlackBerry without going blind!
The wireless connectivity worked flawlessly. I was able to surf the Kindle-enabled Amazon catalog and select a book from one of my favorite authors.
While reading a novel, I was easily drawn into the book, without distraction from the device.
On the train, I was able to easily read the book with one hand, clicking to new pages. My commuter train is often packed and I rarely get a seat. It is almost impossible to read a newspaper or a book because of the close quarters of the other travelers. I usually read the news on my BlackBerry or listen to an audio book on my iPod. The reading of a novel or a newspaper on the Kindle is definitely an option.
On the negative side: A book just has a soft feel — You “curl up” with a book. You operate a Kindle.
The Kindle is yet another device to carry around. I need a backpack just for my wireless device inventory.
I have not had an issue with the battery life of the Kindle. I keep the wireless connection off, except for downloading a book. I did try the experimental Web browser on the Kindle and it was a poor experience.
It was particularly fascinating to give the Kindle to various people and watch them try to operate it.
In 100% of the cases, the person tried to touch the screen to activate the menu or flip the pages. The paradigm of the iPhone touch screen seems to be expected on advanced devices. The use of the next-page buttons is not a problem and actually makes one-handed operation/reading easier.
The last issue is the price. At $400 it is an expensive electronic toy. You can buy many books for that amount!
The big feature for this device is the “free” EVDO access. This is the first device that uses wireless data as a utility without requiring a wireless subscription. Just based on this fact, this is a groundbreaking device.
As far as the predicted success of the Kindle …
If you can buy a Kindle with “OPM” (Other People’s Money), then it is a fine device. I find it hard to understand how this will be more than a niche product at its present price. Let’s reevaluate the future of the Kindle when it breaks the $100 price point.
Lastly, I feel it’s my duty to issue this warning regarding Kindle usage: While sleek devices like the iPhone can amplify your social life by making you more attractive to the ladies, let’s say, a Kindle can have the opposite effect. So leave it at home the next time you go out
Wireless advertising is coming of age
Feb 01 By mobileman
The use of advertising on a mobile device is poised for the big take-off. There are several factors that are contributing to the rightness of the model, now. The easiest model to understand is the willingness of large content providers to spend advertising investment to attract subscribers to their premium SMS services. Today, mush of that investment is directed at the Web. There is evidence to suggest that the effectiveness and conversation rates for ads on a handset, for services that are targeted for the handset is superior to the web.
This conclusion is almost completely intuitive.
If you are sitting in a stadium and you see a beer commercial, you are more likely to purchase a beer, immediately. If you are instead in an environment that does not have that immediate purchase opportunity (like watching the game on TV), the effectiveness of that ad to drive immediate sales is reduced.
So, ads for handset targeted services seem like a complete no-brainer for the industry.
These ads can come in various forms.
Carriers are opening their Wireless Web (WAP) portals to advertising by both agencies and through direct contract. With this model the carriers can get a cut of the ad revenue.
Other models include MMS interstitial slides and SMS tags. Both of these model have been experimented with and have not been widely deployed, yet.
The next wave of ads are also being e brought in through the Trojan horse of smartphones and Google services.
With internet compatible browsing on Iphones and others, the traditional web advertising model is being dragged on handsets. With the ability to target ads based on browser type, ads will be targeted on smartphones for services that are applicable for the phone itself and for the mobile consumer.
This later models have the potential to remove the carrier from the advertising value chain. I am sure there are significant discussions throughout the carrier community on trying to derive value from this emerging and potentially huge revenue stream