Earlier this week, the New York Times reported on a study by Forrester.  The key finding: “Even though just 9 percent of shoppers own tablets, sales from tablets already account for 20 percent of mobile e-commerce sales and 60 percent of tablet owners have used them to shop.”  Certainly tablets are set to have a disruptive impact on a variety of services and devices, but it is important to frame “mobile” in the correct light.

The term “mobile” is being thrown around too loosely.  Mobility is a relative term, but it is frequently being used in the absolute sense.  There are several device attributes that influence the degree to which a device/experience is mobile. These include device size, power or battery life, and availability of content. Size and batter life are self explanatory. The smaller a device the higher degree of mobility it affords users.  This of course assumes some constant level of usability.  One could easily imagine a device so small it isn’t useful to the end user. In this way, size could have asymptotic characteristics.  Size influence on the device’s degree of mobility can also be general (applied to the entire size of the device) or it can be specific to an attribute of the device like screen size, antenna, etc. For power and battery life, the great the longevity of power the greater the degree of mobility provided by the device.  Power longevity also doesn’t necessarily mean battery life. The in-vehicle experience readily provides 12V power to devices used in and around vehicles, but these are still mobile devices in the general sense for which we are using it here.

The degree of mobility a device provides is also a function of the content it provides the end user.  This content can take many forms and can be delivered in many ways.  Content includes video (ie Portable DVD players) and audio (ie portable tape players to MP3 players).  It could include maps (ie GPS) or other information (ie data available on the Internet).  It can be delivered to the device physically (ie tapes, CDs, DVDs) or digitally.  Content delivery influence on mobility is also a function of time.  It can be delivered before the device moves into a “mobile” state – this is generally the case with devices requiring physical media.  But content is of course increasingly being delivered while the device is in a mobile setting using spectrum.  This use to be only really applicable to radio and some TV, but is increasingly applicable to all forms of content. The greater the access to content, the greater degree of mobility the device can provide.

I’ve written in the past about Amazon’s (eventual) entry into the tablet world.  Some interesting research from Retrevo consistent with points I’ve made in the past. First, consumers have grown quickly comfortable with Amazon as an OEM. You’ll recall that the original Kindle was panned heavily by critics, but consumers have warmed quickly to Amazon devices. As you can see from the chart, 55 percent of respondents interested in a tablet say they would seriously consider buying a tablet from Amazon.

The results of the study are also consistent with a point I’ve made repeatedly on differentiation.  In order to compete in a quickly crowded segment one must differentiate.  It isn’t just that OEMs are competing with Apple in this space  – in order to succeed in the tablet segment, OEMs must bring to market something different.  They can differentiate by screen size, form factor, feature set, or price.  Until now there has been minimal differentiation and I’m not sure there is enough flexibility to compete by differentiating form factor or feature set.  There might be large enough segments of the population interested in screen sizes less than (or more than) 10 inches that there is still room to compete by screen size. Ultimately, I think the most likely place to compete will be price (assuming the user experience is comparable). The results of the study suggest half of those interested in a tablet would consider an Android tablet over an iOS tablet if it was priced below $300.

Some interesting tidbits here from Akamai (with the full report here).  My comments are in Bold.

  • The average monthly 3G traffic is the highest for laptops (1-7 GB), followed by tablets (250-800 MB) and smartphones (80-600 MB) ->  not surprising

 

 

  • On tablets & smartphones, online audio, e-mail, software downloads, and social networking traffic are big consumers of 3G data traffic. -> great story for Pandora, staying connected while on the go (email, social networking traffic), and filling voids in your time or discovering apps in social settings and downloading them immediately (app downloads)

 

  • Tablet and smartphone devices usually have frequent and short sessions typically during the whole day, sometimes showing a periodic nature. -> consistent with my thesis – consumers grab the “best” device for a given activity when that device makes sense because of some product attribute.

 

  • Laptops are usually on mobile connections for a few longer sessions, mainly during daytime and the evening -> not surprising, driven by production which is happening during large blocks of time

 

  • Tablet traffic patterns over 3G mobile networks are much closer to smartphone traffic patterns than to laptop traffic patterns -> tablets are above scaling a specific aspect of mobile phones (the screen size) so usage scenarios are similiar.

By now you’ve read the news that RadioShack (RSH) will stop carrying T-Mobile devices on September 14th and start carrying Verizon devices on September 15th.  If you missed it you can read more here: (Reuters, TechCrunch, Engadget). How impactful might this be for both Verizon and RadioShack?

Let’s start first with RadioShack.  Despite poor results, the stock was up big on the news – closing up nearly 20 percent.  Clearly the markets think this is a positive move.

Verizon is the largest wireless carrier in the US with about 31 percent of the market – followed by AT&T with 27%, and T-Mobile and Sprint with about 12 percent each. A shift from T-Mobile to Verizon should give RadioShack access to roughly 17.6M additional households. More, the trend is positive with Verizon enjoying net subscriber additions. Verizon has roughly 85,300 postpaid connections while T-Mobile has about 40 percent of that sum (33,600 postpaid connections). This deal gives them access to over 50K more postpaid connections – an increase of over 50 percent.

About 45 percent of RadioShack‘s revenue comes from their mobility platform which includes postpaid and prepaid wireless handsets, commissions and residual income, prepaid wireless airtime, e-readers, netbooks with embedded network capability, and tablet computers.  Nearly 70 percent of this revenue comes from upfront commission revenue and residual income received from wireless service providers.