Author: Berni Dwan

Micropayments to be $60Bn by 2015 in Says Gartner

Gartner and many in the micropayment world, want companies to engage Zen-like, in a shift of consciousness regarding how their products and services are sold.

For those who don’t keep an eye on such things, a micro purchase is something you buy online for less than $5 by subscription, on-the-spot, invoiced or prepaid. “Apple’s iTunes music store was originally conceived as a driver for iPod sales, but it has become a shining example of how small electronic purchases can actually become a major revenue-driver for an entire company,” said Jackie Fenn, vice president and fellow at Gartner.

Gartner puts the acceleration down to three intersecting trends – the rise of networks making it easier for PC-based buyers and sellers to locate each other, the low cost of transactions handled electronically, and lastly, the increased usage and sophistication of automatic location identification for targeted content and services.

“Online marketplaces that gain critical mass, such as eBay and Craigslist, already provide an infrastructure to link buyers and sellers cost effectively” said Ms. Fenn at the Symposium. “In the same way that eBay makes it economical for a person in Boston to locate and buy a $10 teapot from another state or country, the emerging mobile delivery and payment infrastructure will provide a framework for buyers and sellers to connect for new types of micro services.”

It behoves organisations then to identify if they can leverage mobile and micro payment processes to economically deliver or consume services delivered in much smaller units.  And the infrastructure for doing this – micro payment systems, mobile connectivity, m-commerce on wireless networks, authentication, and more-granular products and services are becoming more and more firmly entrenched in the world of electronic business.

Zillions of people making tiny purchases would seem to be more significant from a global economics perspective, than millions of people making very large purchases. Micro commerce may be augmenting the revolution of the small spending masses, quietly sitting in front of their PCs in living rooms all over the world.

Gartner

Court Orders New Protections for People Targeted by RIAA

A district court in Pennsylvania has forced the Recording Industry Association of America (RIAA) to rethink the privacy and due process rights of people it has accused of copyright infringement. The impasse arose after the music industry filed a flood of lawsuits against anonymous individuals who they claimed were sharing copyrighted music, but because the industry did not know the identities of the file sharers, it served subpoenas to the individuals’ ISPs seeking their names. The court held that before the ISPs turn over these names, they must first send notices to each file sharer advising them of their rights.

The judge ruled that the RIAA cannot sue alleged file sharers simultaneously, since they had grouped 203 of them, called “John Doe” because their identities are not yet known – into one lawsuit last month. The RIAA must now identify alleged file swappers by their Internet Protocol addresses.

On Friday a subpoena was authorised in the case of John Doe No. 1, but the RIAA will have to make separate requests to seek the identity of each of the remaining 202 alleged file sharers, and must pay court fees of $150 for each lawsuit filed.

“Piracy, both online and on the street, continues to hit the music community hard, and thousands have lost their jobs because of it”, said Mitch Bainwol, Chairman and CEO of the RIAA in a recent press statement. The RIAA and its partners in the music community have continued a variety of public education efforts. These include joining with the FBI to unveil a new anti-piracy warning and seal; expanding the acclaimed “I Download…Legally” media campaign; and working with the university community to develop new programs to educate students about intellectual property laws, discourage illegal peer-to-peer use, and offer legitimate online music alternatives.

Notwithstanding, the RIAA, for the first time ever, included digital downloads in its semi-annual shipment report. For the first half of 2004, there were 58 million single tracks downloaded or burned from licensed online music services.

www.riaa.com
www.eff.com

Half UK Mobile Customers can Access the Web via their Mobile

The MDA was established in 1994 to increase awareness of mobile data amongst users and their advisers. The MDA acts as a focal point for its members, (vendors and users) and outside parties interested in knowing more about the industry.

MDA findings show that half of UK mobile customers can access the Web via their mobile. With a total active, mobile touting customer base of over 52 million, that means about 26 million are surfing the Web on the tiny screen, with GPRS active devices topping 24 million – a 46% penetration rate for GPRS devices for the total UK market. MMS active capable devices, on the other hand, reached 15 million as at 30th June 2004, with a penetration rate of 29% for the total UK market, showing an increase on the previous quarter of 36%.

Announced today, the figures as of 30th June 2004 from UK GSM network operators O2, Orange, T-Mobile and Vodafone show a rapid increase for both GPRS and MMS devices on the previous quarter.

GPRS technology provides “always on” capabilities and faster speeds for e-mail and Web browsing on the move, while MMS capable devices are defined as those with integrated camera phone, attached camera or “MMS capable” of sending / receiving without camera option.

The GPRS/MMS trend is expected to continue, while GPRS services have illustrated an increase in popularity in the last 12 months in both the consumer and corporate markets.

Popular applications predictably include, access to rail/air timetables, mobile chat, location services, mobile images and innovative music services as GPRS and MMS providers strive to suit every customer need.

The MDA announces the total number of chargeable person-to-person text messages and WAP page impression figures sent on behalf of the UK GSM Network operators on a monthly basis and figures are announced in the third week of the following month. You can keep yourself informed by accessing their Web site.

www.mda-mobiledata.org
www.text.it

Sony PSP Arrives on 12.Dec in Japan

After months of speculation that the Sony PlayStation Portable would not appear until 2005, Sony have just announced its release in Japan on 12 December, just ten days after Nintendo DS, and at a price that is much lower than expected.

The PSP, Sony’s entry into handheld games machine market will be available in two flavours. The normal edition PSP at $186, (~ £101, €145) will include the handheld itself, an AC adapter, and a battery pack. A value pack $232, (~£126, €181) will be the normal pack plus a 32MB Memory Stick Duo, a set of headphones with a remote control, and a carrying case.
 
The PSP is more than a mere games machine, it can also be used for watching movies and listening to music files – but not just yet. The standard for films is still under discussion with several movie studios, and a movie line-up and download service won’t be announced for several months. It’s a pity this last task was not completed before announcing the launch, as doubtless much of PSP’s success will depend on it, but we suspect it will be down to rights and DRM protection.

Sony denies that competition from Nintendo DS influenced the PSP price, offering several other plausible reasons. One being that the price was possible because about half of PSP’s parts, including the main computer chip, are produced internally by Sony.  Another being that it was apparently set, based on an informal survey of Sony officials who were asked what they would pay for the PSP if they were going to buy it. Whatever the reason, Sony doesn’t expect to make a profit on PSP until well into next year, obviously being prepared to sacrifice it for strong PSP branding.

There will be 21 games available for the PSP launch, including high-profile third-party titles such as Electronic Arts’ “Need for Speed Underground” racing gaming and Tiger Woods PGA Tour, Konami’s “Metal Gear Acid”, and Sega Corporation’s Puyo Pop Fever – Puzzle

In Japan, Sony plans to sell 500,000 PSP machines by the end of this year, and 1 million by 31st March. Dates and prices for the United States and Europe have not yet been set, although overseas sales are being planned for the first quarter of 2005.

Sony

Keyhole bought by Google for 3D mapping

Moving ever closer to its dream of being able to catalogue almost everything in the world, Google Inc. has just bought digital map-maker, Keyhole Corp.

Google had already recently acquired Picasa, a service that helps manage digital photos, but Keyhole is the first it has acquired since its August initial public offering. All of Keyhole’s 29 employees have joined Google, and its current customer base of about 10,000 come mainly from a coterie of government agencies.
 
Claiming to be the largest 3D, commercial imagery depository online, Keyhole, founded in 2001, maintains a multi-terabyte database of digital images of geographic locations captured from satellites and aeroplanes.  Its 3-D technology provides far-away or close-up views of a region, neighbourhood or specific address. Images can be tilted into different positions, and its image resolution in some areas is as fine as half a foot. We previously saw Keyhole’s 3-D maps being used to zero in on the battlefront on CNN news during the early days of the Iraq war.

Keyhole received its initial financing from Sony Broadband but then raised additional money last year from In-Q-Tel, a venture capital company backed, interestingly, by the CIA.

The Keyhole database includes thousands of cities, and images varying in age from two months to three years. It gets these images from a variety of sources, including the private Colorado satellite companies DigitalGlobe and Space Imaging, while some lower-resolution images come from the U.S. government.

One of the first things Google did after the buyout, was slash the price of Keyhole 2 LT, the basic consumer downloadable software by a whooping 57%, reducing it from $70 (~£38) to $30 (~£16). The more sophisticated Keyhole 2 Pro is priced at $599 (~£327).

Yahoo and MSN already provide online mapping services, enabling users to zoom down to street-level scale, while Mapquest is a popular and established site for directions. Now Google users will no longer have to leave the Google site to avail of this type of service. 

We wait with bated breath to see the uses Google put it to.

Keyhole
Google

U2 iPod and Photo iPod Become Real

iPod PhotoApple’s much anticipated and predicted new iPod – iPod Photo, launched late yesterday, has moved into the multimedia realm, allowing users to view and share photos as well as the normal music play back. The new iPod Photo can hold up to 25,000 pictures and can be connected to a television to play video slide shows. The 40-gigabyte version is priced at $499 (~£272) and the 60-gigabyte model is priced at $599 (~£326).

The new iPod features two Apple patent pending features – Click Wheel and Auto-Sync technology that automatically downloads an entire digital music library onto iPod and keeps it up-to-date whenever it is plugged into a Mac or Windows computer using FireWire or USB.

Separately there is the special edition 20GB U2 iPod as predicted by Digital Lifestyles earlier this month, which is … shock, horror … black with a red wheel!  Its is part of a larger agreement between U2 and Apple, whereby Apple will have exclusive rights to sell all the songs from the band’s new album online through its iTunes Music Store for at least the first few weeks following the release.  U2 iPodThe U2 iPod is expected to be available mid-November for a suggested retail price of £249 (~$456) through the Apple Store, Apple’s retail stores and Apple Authorised Resellers. IPod TV adverts showing U2 were shown on UK television this evening.

The timing of the U2 iPod release coincides with the immanent release of U2’s new album “How to Dismantle an Atomic Bomb”, and “Vertigo,” a single from the album is available exclusively in the US through the iTunes Music Store. 

A “Digital Box Set” offering from Apple called surprisingly, “The Complete U2”, apparently the first of its kind, will contain over 400 tracks including all of the band’s albums and over 25 rare and unreleased tracks.  These can be downloaded from iTunes in the United States and Europe from late November for $140 (~£76).

There are challengers to iPod’s throne though.  Would be kings include Dell Inc.’s new Pocket DJ, Virgin Electronics’ Player, Creative Labs Inc.’s Zen Micro, iRiver America Inc.’s H300, and Archos Inc.’s Gemini XS200.

Notwithstanding, analysts estimate the company could sell close to 3 million iPods this Christmas, so Apple can sing for this year anyway, “It’s good to be the king!”

Preminet: Nokia’s Mobile Content Move

Courtesy of Nokia, mobile content distribution and transaction will reside in a one-stop-shop, making life easier for mobile networks and perhaps more interesting for the owners of some 350 million Java-enabled handsets (at last count.)

Preminet is a hosted open service model that streamlines all the steps involved in delivering content for smart phones through a single channel.

As a result of an agreement announced yesterday between Nokia and Starcut, a Finland-based mobile media publisher, content from Universal Studios and Warner Music Group Content will be made available to operators and consumers through the one-stop content shop.  Preminet and Starcut will provide operators with pre-certified content such as life-style and sports, ringtones, graphics, games and video that they can brand and offer over the Web, or via Java or Symbian OS enabled mobile phones.

Here’s how it works.  Preminet sources premium Java and Symbian OS software from leading developers and content aggregators worldwide to give operators a master catalogue of certified applications, games and other mobile content. A chain supply experts dream system – the sequence includes the Preminet Master Catalogue, Preminet Service Delivery Platform and Preminet Purchasing Client, an innovative software application that make it easy for end-users to trial run mobile applications, content and services before buying. Operators can integrate Preminet content into their own download delivery systems or have Nokia provide a complete hosted solution.

Until now, each operator was responsible for maintaining hundreds of relationships with individual Java and Symbian OS developers as well as sourcing and testing each application before bringing them to the end-user. Now they have a single channel – the Preminet Master Catalogue containing a whole range of Java and Symbian OS software as well as a framework for delivering billing and distributing revenues.

In February, Nokia took one of its first steps towards Preminet when it joined with Sun Microsystems, Motorola, Siemens and Sony Ericsson Mobile Communications to create the Java Verified Process for testing and certifying Java 2 Micro Edition (J2ME) applications for wireless handheld devices.

Preminet is not a new concept though, coming after the Brew development platform for mobile devices from Qualcomm.  Preminet has been launched worldwide and Nokia expects a complete commercial deployment by the end of November.

Time will tell as to how the mobile and content industries will react to Nokia taking this role on, and taking a percentage for each transaction in the process.

Preminet
Starcut

WiFi Pricing in Europe is Over Complex

At the IBM sponsored Wi-Fi Business Development Summit in Paris, consultancy BroadGroup has warned providers to pull back from complex pricing systems for Wi-Fi services, while it also warned major industry players to increase marketing emphasis on monthly subscriptions.

In simpler language – more transparency is needed. The more schemes and user choice on offer, the more complex pricing structures become it would seem, and BroadGroup define the current schemes as being ‘too finely segmented’. Using source material based on two recent European surveys of 122 Wi-Fi service providers and 83 GPRS operators, BroadGroup said that the findings suggested Wi-Fi is trending towards tariff structures that would leave users unable to comprehend what they were being charged. Whether this is the intent of the WiFi operators isn’t clear.

But what alternative is there for WiFi service providers if differentiating offerings is the only way to drive marketing strategies, the current mix leaving users with 365 tariff schemes across 28 countries – one for each day of the year.

It’s true, when you are bamboozled with too many price-saving schemes and special offers you end up being so confused that you just opt for the one you understand the best, and not the one that necessarily cuts your bill. And this is borne out by the fact that BroadGroup provided examples showing that if users did not know how many MB they consumed each month, they could be penalised by selecting an inappropriate tariff.

Furthermore, most Web sites did not provide an interpretation of MB usage anyway. Even if they all did, you’d wonder how many customers would actually have enough time to study them in detail. BroadGroup is currently conducting a study of business travellers in Europe to provide insight into data usage and what users understand as mobile data.

BroadGroup research also found that average pricing in the most popular timebands – 1 hour, 24-hours and 1 month had remained largely unchanged over the last 18 months. 24 hour pricing is now offered by 58% of all service providers in Europe with an average price of €15.08. However in a market where prepaid methodologies now dominated, the consultancy believed there was a need to concentrate on the promotion of monthly subscriptions to sustain business growth.

The consultancy also noted that European Wi-Fi prices continued to be more expensive than the US and Asia.

BroadGroup

Lexmark lose DMCA-case

Lexmark can no longer use the Digital Millennium Copyright Act (DMCA), enacted by Congress in 1998, to stop its competitors from creating and selling cartridges that interoperate with its printers.

A federal court has ruled that a small North Carolina company, Static Control Components (SCC) can continue selling their Smartek chip that allows any printer cartridge to work with Lexmark printers.  Or to put it another way, Lexmark, the No. 2 maker of printers in the United States, have learned the hard way that you can’t commandeer the Digital Millennium Copyright Act (DMCA) in conjunction with copyright law to create monopolies of manufactured goods for your company.

The decision lifts an injunction imposed by a lower court on the sale of Static Control Components (SCC) chips that allow any printer cartridge to work with Lexmark printers. Now, any company that wishes to compete with Lexmark in after-market cartridge sales can do so by using SCC chips in its products.

Congress originally intended the DMCA to prevent mass copyright infringement on the Internet.  But some companies have been scrutinising the small print and using legal loopholes to gain control over after-market competition. Lexmark, for example, programmed its printers to require a digital “handshake” with cartridges, so that only Lexmark cartridges could be used.  But when SCC started selling chips that allowed other companies to refill used cartridges and make them interoperable with Lexmark printers, Lexmark claimed they were engaging in unlawful reverse engineering and sued under the DMCA.

Under section 1201 of the DMCA, it is generally unlawful to circumvent technology that restricts access to a copyrighted work or sell a device that can do so. But Congress also included exemptions in the DMCA explicitly permitting activities such as interoperability, which permits reverse engineering, “for the purpose of enabling interoperability of an independently created computer program with other programs”. 

Unfortunatley for Lexmark, they were unable to convince the judge that SCC was in breach of section 1202, while SCC were able to convince him that they were not in breach.

The now-normal model of very cheap printers and costly ink cartridges may be coming to an end.

SCC Smartek
Lexmark

EU iTunes Expands to 9 Further Countries

Now customers in Austria, Belgium, Finland, Greece, Italy, Luxembourg, Netherlands, Portugal and Spain have their own EU iTunes with the same features and price of €0.99 per song.  A better deal than their UK neighbours who pay £0.79 (€1.16) per track since iTunes opened its store there in June.  This 17% extra loading prompted the Consumer’s Association to ask the Office of Fair Trading (OFT) to investigate the pricing difference, claiming it is a potential breach of the competition law.

With the launch of EU iTunes Apple now reaches customers in almost 70 percent of the global music market, and it also announced that it will launch the iTunes Music Store in Canada this November. 

The EU iTunes Music Store features over 700,000 songs from all four major music companies and more than 100 independent record labels.  It also features exclusive tracks from leading worldwide artists, including Anastacia, Marc Anthony, Andrea Bocelli, Black Eyed Peas, Destiny’s Child, Bob Marley, George Michael, The Prodigy, Gwen Stefani, Travis and Zucchero.

EU iTunes has the same personal use rights as in the US, UK, France and Germany.  Users are allowed to play songs on up to five personal computers, burn a single song onto CDs an unlimited number of times, burn the same playlist up to seven times and listen to their music on an unlimited number of iPods.

The EU iTunes Music Store offers PC and Mac users the same features.  iMix playlist sharing, the dynamic ‘Party Shuffle’ playlist, over 8,000 audiobooks, which can be listened to on any PC, Mac or iPod, and ‘Artist Alert’ email service.  And last but not least, automatic WMA to AAC conversion, enabling Windows users to automatically create iTunes versions of songs encoded in unprotected WMA.

iTunes for Mac and Windows includes the EU iTunes Music Store and is available as a free download immediately from their Website. The EU iTunes Music Store works, of course, with the Euro, and purchase and download of songs requires a valid credit card – that is until Apple finds a company like PayPal to partner up with, as Naptser did this week.

Apple iTunes Music Store