Byte me on my App and the Brontosaurus paradox

Byte me on my App and the Brontosaurus paradox

Mobile phones are ubiquitous. Mobile phone users are migrating to smart-phones and downloading thousands of Apps. Our App-ing Generation are so dependent on their Apps. Memory is out-sourced to Google and Facebook. The smart-phone has evolved into a necessity, bespoke in its design and color and ringtone. But there are dark forces at work – frozen markets – markets that emerge in time period t+1 from emerging technologies in time period t. They present new sources of revenue; and spherical competitors, that is, competitors who come from anywhere at any time in a market-as-a-game. The long awaited Verizon-Apple iPhone promised so much for Apple fans last year and we expect more from iPhone5 in June 2012; however, it signals a new convergence between telcos and smart-phone players who will be eager to exploit revenue opportunities in frozen markets. Verizon management had been lobbying the regulators in the US for the end of net neutrality to exact a fee on byte-hungry users of traffic. There really is no argument for single non-discriminatory fixed monthly fee for an App-user who, for the fixed fee, can either send 1Kb emails or watch a 30Gb video. Telco management realise this to be so; they already extract revenue from the economics of mobile phone usage with the ARPU bundling of minutes ……but Apps are a bit different!

Inevitably the telco providers will identify likely future revenue yields from a byte fee – that is, you pay for your downloads as you would your electricity or water charge. The smart-phone technology market is a market-as-a-game with a demand and supply wherein companies like Apple, Asus, Google, HTC, LG, MS/Nokia, Samsung, Google/Motorola are evolving as players in a game. They are listed here because they each had great ‘toys and gadgets’ and ‘bells and whistles’ at the annual CES shows. Promises of new toys and more gadgets – the physical feel of a prototype model, has created a ghost demand for devices and new Apps. We will be able to observe in 2012 how the players evolve, partly by company strategy and partly by the dynamics of the market.

For example you the consumer by demanding more communication devices and the integration of hardware software and services are challenging the players. Without a doubt the iPAD sans Flash has compressed our preferences and expectations into one hand-held touch screen device that can handle video, music and computing. As more tablets like iPAD crowd-out the legacy of the PC market share is a classic zero sum game. PC players will respond. They can play a waiting game as technology is on their side. MP4 video format may be cool but the App-ing Generation may prefer to run video format such as WMX and DIVX –but that requires a high CPU speed that is evolving in your tablet iPAD.

Furthermore, there is the upper constraint on App-ing due to the restriction of 3G bandwidth. And the telco players are either investing in more base stations or are considering a discriminating byte-fees with the inevitable end of net neutrality. There are emerging spherical competitors to Apple who come from anywhere at any time….Google and its Android partners, Microsoft/Nokia and LG are positioning themselves for the convergence of technology… Apple initiated the technology market-as-a-game with the launch of the iPhone in would be foolish to make future predictions but there is one key point……the spherical competitors and the frozen markets will determine the final winners and Apple Inc should avoid the Brontosaurus paradox; the Brontosaurus took a long time to realize that it had been bitten on the tail! Let’s observe the game in 2012 and be prepared for a byte-fee in the interim.

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