As Chinese consumers make the move to smartphones, the billion-plus mobile phone subscribers represent a potential expansion opportunity for manufacturers, and a challenge for Apple.
“Based on recent data reported by Chinese research firm, Analysis International, which has tracked smartphone sales for the past several quarters, Apple may have a challenging time replicating the market share success its iPhone has seen in other countries: In the third quarter of 2012, Android accounted for 90.1 percent of all smartphone sales in China,” GigaOM reports.
The post includes a graph from Analysis International that shows Google’s Android consistent rise in adoption from Q2 2011 to Q3 2012. Nokia’s Symbian platform controlled almost a third of the market in 2011, but quickly dropped off to less than 5 percent by the last quarter.
“Analysis International also tracked the average selling price of handsets by platform and that helps explain the situation,” notes the post. “While costs for all smartphones have been decreasing in China, the average Android handset costs about one-third that of an iPhone.”
As consumers switch from feature phones, low- to mid-end Android models are still large improvements, even if they don’t offer all the bells and whistles of Apple’s phones.
“I suspect Apple will still sell more than enough iPhones in China to add billions of profit for the company,” the post states. “But any ideas of iOS taking a large portion of the market in China — or India, for that matter — have to be tempered due to the fast growth of Android.”
According to a new report from Gartner, global sales of smartphones rose 47 percent in the third quarter compared to last year.
Samsung and Apple accounted for nearly half the market while Nokia took a slide from third place in market share down to seventh.
Android increased its share among operating systems from 52.5 percent to 72.4 percent. Nokia’s Symbian and RIM’s BlackBerry platforms fell sharply, while Samsung’s Bada rose to fourth place.
Total cellphone unit sales declined as smartphones continue to gain in popularity.
“More than 427 million phones were sold in total during the third quarter, 3 percent down on the same quarter a year ago, Gartner said, but up slightly on the 419 million devices shipped in the second quarter,” reports CNET.
“Meanwhile, smartphone sales are continuing their upward trajectory compared to feature phones — 169 million smartphones were sold during the quarter, an increase of 47 percent year-on-year.”
GameStop plans to close 200 of its stores around the globe next year. The world’s largest video game retailer says 3 percent of its outlets — primarily in Canada and Australia — are operating unprofitably.
The Texas-based company operates 6,650 stores worldwide. It recently reported that third quarter sales were down 8.9 percent from a year ago, to $1.77 billion. However, these figures are better than originally estimated and GameStop’s shares rose 4.25 percent to $24.48.
CEO J. Paul Raines notes the company is showing “strong resilience in the face of challenging category headwinds, and the new categories of digital and mobile are creating new profit pools that we are exploiting aggressively.”
“The retailer heads into the U.S. holidays weighed down by a two-year industry slump as players gravitate to mobile and online play from console-based games,” reports Bloomberg. “Raines said the company managed to expand margins in a ‘tough video game market’ by expanding into the re-sale of Apple iPads and other mobile devices and growing its digital download business.”
Investors are watching this month’s launch of Nintendo’s Wii U, the first major console release in six years, to see if it will have an impact on purchases of packaged games.
“GameStop hopes the start of a new console cycle with the Wii U launch and just-released high quality games like Microsoft Corp’s ‘Halo 4’ and Activision Blizzard’s ‘Call of Duty: Black Ops II’ will boost hardware and software sales this holiday season,” notes Reuters in a related article.
While some American game developers have shied away from free-to-play models, the genre could soon become a dominant force in the gaming industry as developers creatively construct games to make the experience better for both the gamer and the developer, writes GamesIndustry.
Many current free-to-play games annoy users because they “effectively put a tax on fun” by employing dwindling energy levels that need to be replenished. However, the article notes: “The future is digital, and the elasticity that freemium offers will be to everyone’s benefit.”
“A lot of games that we like and enjoy today could very easily be free-to-play: ‘Fallout 3’ or ‘Skyrim’ could be, the ‘Grand Theft Auto’ series could be,” suggests game designer American McGee. “Any game in which there is a world, and you’re going around acquiring items and interfacing with shops, any of those could work under a free-to-play model… I suspect that if you’d launched ‘Fallout 3’ as a free-to-play title rather than paying $60 for the disc it would have had equal or greater success.”
Brandon Beck of Riot Games has a different view of the future of free-to-play games. He argues the shift to free-to-play may take longer than people think, and that it may never fully happen.
“I don’t think the industry has figured out the right free models for many types of games — even your standard console platformer,” he notes. “So a rush into free-to-play may end up limiting the kinds of content choices that are available to players.”
“That would be a travesty, because we all want to see rich, linear eight-hour experiences continue, as well as many other kinds of games that don’t fit into the conventional free-to-play box,” he adds.
Developers agree that free-to-play has great potential, but it will only realize that potential if companies develop better, more interesting, and more creative games, argues GamesIndustry.
Activision set a new sales record for its latest first-person shooter when “Call of Duty: Black Ops II” hit $500 million in sales on its opening day.
“That easily outguns first-day sales of ‘Halo 4,’ which Microsoft said on Monday totaled $220 million,” AllThingsD notes. “Activision’s war-themed title also easily beats last year’s blockbuster release, ‘Call of Duty: Modern Warfare 3,’ which achieved $400 million in sales within 24 hours, and about $1 billion after 16 days.”
Notably, Microsoft’s “Halo 4” sells exclusively for Xbox while “Call of Duty” is available on Xbox, PlayStation 3 and Nintendo’s upcoming Wii U. Also, the latest “Call of Duty” only got a score of 84 on the review service Metacritc compared to a 91 for “Halo 4.”
Activision Blizzard’s CEO Bobby Kotick says the new release was impressive even by Hollywood’s standards.
“With first day sales of over half a billion dollars worldwide, we believe ‘Call of Duty’ is the biggest entertainment launch of the year for the fourth year in a row,” Kotick says. “Life-to-date sales for the ‘Call of Duty’ franchise have exceeded worldwide theatrical box office receipts for ‘Harry Potter’ and ‘Star Wars,’ the two most successful movie franchises of all time.”
StoryVisualizer (or StoViz), a new PC-based technology, can reconfigure video sequences around specific characters to create a “personalized video episode” based on a specific character, writes New Scientist.
StoViz uses image analysis to isolate actors’ faces and the backgrounds in certain scenes. The technology also analyzes audio to find key words that help compile similar scenes and stories.
“The software then assembles a group of scenes that its video and audio algorithms have decided are semantically similar, and therefore hopefully represents the same plot line,” explains the article.
Hervé Bredin of the Computer Sciences Laboratory for Mechanics and Engineering Sciences in Orsay, France has been working with a team at the Toulouse Institute for Computer Science Research to develop the technology. The team has tested StoViz on TV series with different formats: “Malcolm in the Middle,” “Game of Thrones” and “Ally McBeal.”
“The system could easily be activated via a screen menu, says Bredin, and perhaps in the not-too-distant future you might simply say the name of your favorite character to a Siri-like voice interface,” suggests the article.
The technology could be useful for people who need to catch up on a series or wish to understand the backstory behind a character. But some question if the technology is actually useful.
“I frankly wonder about the character of a viewer who would wish to use this when up to date with a series,” says Simon Parnall of pay TV systems maker NDS.
North Carolina State University researchers have developed software that could help improve Wi-Fi network throughput by 700 percent.
The technology, called WiFox, “monitors the network’s congestion and assigns an access point high priority when it accumulates a backlog of data,” writes Digital Trends. This allows networks to better handle high volumes of traffic, like when many people are accessing the same network at a coffee shop.
“In tests funded by the National Science Foundation, NCSU researchers found that WiFox led to performance improvements of 400 percent for a network with 25 users and 700 percent for a network of 45 users,” explains the post. “The tests also showed that the Wi-Fi network was able to respond to user requests four times faster on average than a network not using WiFox.”
The researchers will clarify details about WiFox next month at a conference sponsored by the Association of Computing Machinery.
“Most likely, the program has an algorithm that will allow it to quickly direct the flow of traffic,” speculates Digital Trends.
“Of course, the effect crowds have on a wireless network depends on how good your router is. Besides, if the Terahertz band investigated earlier this year by Japanese researchers ever becomes commonplace, Wi-Fi could be speedy enough that we won’t need wireless traffic cops.”
Since 2008, Dish Network has been buying up wireless spectrum and in the past year it has repeatedly said it is looking for a partner to build a wireless network.
The company recently met with Google to explore the possibility of a collaboration, but according to a person familiar with the matter, “the talks between Dish and Google aren’t advanced and could amount to nothing,” the Wall Street Journal reports.
“Most of the spectrum Dish has is designated for satellite use,” explains the article. “Dish has asked the Federal Communications Commission to allow it to use the spectrum for a solely ground-based cellphone network. The FCC denied Dish a needed waiver last March, opting for a yearlong deliberation process that has yet to reach completion.”
The fact that Dish is actively looking for partners while awaiting approval shows the company’s dedication to building out a wireless network as opposed to just selling the spectrum, which is worth several billion dollars.
Dish chairman Charlie Ergen says the company’s potential partners include companies, like Google, that would like to be in the business but currently don’t have any experience. He did note, however, that it would be easier for Dish to team up with a company that already has infrastructure.
“While Google doesn’t have expertise in wireless infrastructure and doesn’t control spectrum, the company has cash — more than $45 billion at the end of September — which could be used to help build a new network,” the article states.
“By gaining some control of wireless spectrum, Google could push to increase Web traffic speeds on mobile devices,” so people spend more time with Google’s services, increasing Google’s revenue. “Google also could ensure the availability of new services such as Google Wallet, a mobile payments system that currently is blocked by AT&T and Verizon.”
According to Time Warner CEO Jeff Bewkes, cord-cutting is exaggerated, and very few people other than low income Americans are actually giving up their cable subscriptions for digital services.
Despite their growing popularity, Netflix, Amazon and other streaming services are not threatening the TV industry, Bewkes says. They “are largely distribution platforms that don’t own the quality content audiences want to watch,” notes paidContent. “[Bewkes] added that such platforms compete with each other and not with traditional TV companies.”
“Despite his dismissal of cord-cutting, Bewkes did acknowledge the emergence of ‘cord nevers,’ which are younger people who never acquire cable in the first place,” the article continues. “For them, he said it’s not a question of money — ‘they can afford three Starbucks a day’ — but rather different habits and expectations. Bewkes pointed out that the ‘cord nevers’ are not receiving the best content (it will be interesting to see if this argument one day sways them into signing up).”
Bewkes touched on advertising, suggesting ad-only models are not viable for most content, and companies need to create ads that people want to watch.
The cable industry also has some problems that need to be addressed, such as the rising cost of sports. “Half of the population that doesn’t want sports is subsidizing the other half that does,” Bewkes says, noting that consumers are forced to buy expensive sports channels they might not want as a part of their cable package.
“All of this suggests that the cable industry will finally have to give in and offer consumers a full-blown a la carte model — but don’t hold your breath,” the article states. “The simple reality is these rich and powerful companies are going to ensure that a cable subscription remains a toll to get access to things like HBO and the NFL on the iPad.”
Amazon is losing between $500 million and $1 billion annually on its streaming service, according to Netflix CEO Reed Hastings.
Netflix and Amazon often compete for content deals, and Hastings’ estimates are based on the value of the content agreements that Amazon has won.
Netflix recently reported that it will spend $2.1 billion on content rights in the coming year. It charges its customers $8 a month for its streaming service.
“He says he thinks Amazon’s costs are split evenly between its U.S. operations and in Europe, where it operates the Lovefilm streaming service,” AllThingsD reports.
“In the U.S., Amazon rents and sells digital movies and TV shows on a one-off basis via its Amazon Instant Video service,” the article continues. “It also offers a large catalog of titles for free to customers who pay $79 a year for its Prime shipping service, and recently began testing an option that lets customers pay $8 a month for Prime; Hastings’ estimate is based on acquisition costs for the Prime/video bundle.”
According to Sandvine, Netflix accounts for 33 percent of Internet traffic, while Amazon sits at just 1.8 percent. Even so, Hastings says, “Amazon is the best competitor we’ve ever faced.”
Google began releasing a transparency report semiannually in 2010, hoping to “shine a light on how government actions could affect our users,” the company’s public policy blog explains. The latest report, covering January through June 2012, shows a growing number of government requests for user data and content removal.
“This is the sixth time we’ve released this data, and one trend has become clear: Government surveillance is on the rise,” the post says. “Government demands for user data have increased steadily since we first launched the Transparency Report. In the first half of 2012, there were 20,938 inquiries from government entities around the world. Those requests were for information about 34,614 accounts.”
A graph accompanies the post, showing a gradual increase in government requests for data with a slight uptick in the last year.
“The number of government requests to remove content from our services was largely flat from 2009 to 2011,” the post continues. “But it’s spiked in this reporting period. In the first half of 2012, there were 1,791 requests from government officials around the world to remove 17,746 pieces of content.”
By comparison, the number for the July-December 2011 period was only 1,048.
“The information we disclose is only an isolated sliver showing how governments interact with the Internet, since for the most part we don’t know what requests are made of other technology or telecommunications companies,” the post states. “But we’re heartened that in the past year, more companies like Dropbox, LinkedIn, Sonic.net and Twitter have begun to share their statistics too. Our hope is that over time, more data will bolster public debate about how we can best keep the Internet free and open.”
Goodbye Facebook, hello Twitter. Tech billionaire Mark Cuban says he’s moving his business away from the top social network to smaller sites because, “it now appears that to extend beyond minimal reach is going to cost brands more money,” Cuban told ReadWrite.
“That’s because in September Facebook changed the algorithm that controls which messages get through to which members,” the article explains. “The result is that some brands a sharp dropoff in the reach of their posts — as much as 50 percent in some cases.”
Facebook says the change was directed at reducing the spam in users’ newsfeeds — not getting more money from brands.
Cuban, however, is unconvinced. “I think this is a reflection of Facebook searching for more revenue since going public and the more it costs to reach followers on Facebook the lower the value to the brand of being on Facebook.”
Cuban owns the Dallas Mavericks, and recently Facebook wanted to charge him $3,000 to promote a post to one million of the Mavericks Facebook fans.
“The big negative for Facebook is that we will no longer push for likes or subscribers because we can’t reach them all,” Cuban says. “Why would we invest in extending our Facebook audience size if we have to pay to reach them? That’s crazy.”
Cuban says he won’t be abandoning the social network altogether but wants to reach followers first on other platforms. “In addition to Myspace, Twitter and Tumblr are both ready, willing and able to support brand activation without holding followers hostage for additional revenue.”
“I get that they want to reduce the speed at which news scrolls off of people’s Facebook pages. The more stuff, the less you see; the less you see, the less you engage. All good points by Facebook,” Cuban admits. “But it’s a reflection of overall design and strategy weakness.”
More than one hundred musicians have signed an open letter asking Pandora to stop its support of the Internet Radio Fairness Act, an act that would reduce royalty payments on Internet streaming radio services.
“We are big fans of Pandora. That’s why we helped give the company a discount on rates for the past decade,” the letter begins.
“Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon?” it continues. “That’s not fair and that’s not how partners work together.”
“Congress has many pressing issues to consider, but this is not one of them. Let’s work this out as partners and continue to bring fans the great musical experience they rightly expect.”
Pandora argues that the act promotes fairness since it brings the royalties in line with those of satellite radio services.
The music industry agrees that the royalties should be in line with each other, it just argues that the satellite services should pay more, like Pandora.
People have long requested a browser-based player from Spotify, and the Swedish company has responded by releasing a beta Web version of the popular streaming music software.
The new version allows people who cannot or do not want to download applications to use Spotify’s immense music library (competitor Rdio has had a Web player for years).
The Web version also allows people to log in to their Spotify account on computers other than their own.
“It’s unclear exactly what technology Spotify has chosen to use for streaming music in its Web player,” writes The Verge.
Spotify uses peer-to-peer technology on its desktop application, and streams directly from Spotify servers for the mobile app.
“The Web player is now live in some regions, and users will receive a Facebook invite when the service is ready,” notes the post.
Google announced a new upgrade to Google TV on Wednesday, which now offers advanced voice control, a new programming guide app and features from Google’s Knowledge Graph.
“The most important new feature of the update, which has internally been called Google TV 3.0, is voice control: Users can trigger channel changes, start apps and fire up the program guide with simple voice commands,” reports GigaOM.
The system is sensitive to context, bringing up Web content, shows or videos as commanded by users. The article also notes that the Google TV voice control is different from that of Microsoft’s Xbox and Samsung’s TV platform.
“The company decided to add the microphone to the remote control to allow users to use both,” explains the article, noting that the “old D-Pad still works great for simple navigation tasks, which can be overly complicated if you want to solve them through voice or gestures.”
The smarts behind Google’s Knowledge Graph also powers the recently launched Google Now app.
“Google Now and the thinking behind it has been a big inspiration for Google TV going forward, [Google TV product lead Rishi Chandra] added, explaining that the goal is to eventually display content in very much the same way that Google Now displays its information cards to its users.”
Google TV 3.0 includes a new programming guide called PrimeTime that gives access to live TV and streaming content, “but shines especially during live TV viewing, when shows on other channels are displayed through topical overlays,” notes the post. “Eventually, the same functionality will exist for YouTube and other on-demand content.”
As Chinese consumers make the move to smartphones, the billion-plus mobile phone subscribers represent a potential expansion opportunity for manufacturers, and a challenge for Apple.