Thursday, September 4, 2014

Cell Providers' Broken Revenue Model

New plans such as AT&T Next and Verizon Edge have forced dedicated customers to fall into cheaper plans. My AT&T family plan of four lines dropped from $240 to $160 per month, but of course there was a catch...

Our four-line family plan only sticks at $160 per month as long as no one in our family upgrades their phone with AT&T. Since upgrades are inevitable in today's tech-hungry world, two different scenarios can now occur:

1. Buy your phone for full cost upfront, however the monthly bill will increase $15 per line. (No end date on when $15 addition to bill will end)

2. Participate in the AT&T Next program where phone is borrowed for 12 or 18 months, increasing the monthly bill to $20-$30 per line. (Added benefits include no activation fee and ability to trade-in and upgrade to new phone each year).

In other words, if all four family members are to upgrade by paying full price upfront, then our bill is back where we started at $240 with activation fees possibly driving the price up further. Although I have been due for an upgrade for over two years now, there is absolutely no incentive for me to buy a phone through AT&T. Purchasing an unlocked cell phone from anywhere else will guarantee my bill will stay the same (at $160).

The question to ask is how the hell is this business and revenue model sustainable?

Cell phone carriers' previous revenue model locked their consumer into a 2-year contract, guaranteeing monthly revenue from the cell plan, but more importantly profiting from the discounted phone upgrades and activation fees. This new model not only cuts down customers' monthly bill, but forces the educated consumer to not even consider buying a new phone through their carrier. Google, Motorola, Samsung, Apple...these companies will all offer unlocked flagship phones in which AT&T and Verizon will not see a penny of profit. Sure plenty of customers will upgrade their phone through their provider, but are they going to enjoy the $15 bump on their bill?

So why stick with AT&T or Verizon?

Enter T-Mobile and Sprint, carriers that have long fell behind AT&T and Verizon in U.S. market share. Their new plans offer to buy out existing contracts and offer the discounted phone and plan rates we all want. Unfortunately none of us can pull the trigger. Cell tower reception is still spotty for these players, and AT&T or Verizon still offer more smartphone compatibility options. More data, more minutes, more roaming....whatever. At the end of the day, connectivity is king.


Tuesday, July 22, 2014

3D Printing: Capability & Economic Potential

No matter what insanely high number Wall Street applies to the '3D Printing Industry Potential' for the next five years, one thing is clear, 3D printing technology is here to stay. Speculation will point towards down years for Stratasys ($SSYS) and 3D Systems ($DDD) stemming from a lack of interest or too high of a price for one printer, but the heart of the conversation lies within what many investors are not looking at.

The general public has come to take 3D printing as a far fetched idea rather than a reality. Assumptions are high that one of these personal printers cost thousands of dollars to purchase, and a few more thousand to maintain. But the public is sadly misinformed on the flexibility and variety of 3D printers on the market. There are hundreds of different 3D printers out there today all printing different material at different sizes in different ways. Additive manufacturing is a fascinating technology that dates back to the 90's and just now we are starting to see overwhelming results from a corporate perspective.

The 3D printing industry undoubtedly has legs. General Electric ($GE) made a killing last quarter in the jet industry thanks to their parts manufacturing being automated through 3D printers, a move already adapted by many for bulk production. When it comes to innovation, publicly traded Organovo Holdings ($ONVO) is in the process of bioprinting human tissue samples using 3D printers, or samples to be used by large pharmaceutical companies to speed up their lengthy drug trials. The list goes on and on, but if there is one key takeaway it is this:

The 3D printing industry is emerging in front of our eyes and to think we have not even tapped the software potential yet is exciting. This is not a promotional cry for the 3D stock market, it is applying simple analysis of the technology we have today to conclude this technology is powerful, this technology is trending upward, and we have barely scraped the surface of this technology's capability.

Monday, July 14, 2014

Flagship Phone Frenzy

With mobile phone manufacturers and major wireless carriers sprinting towards the usual fall-winter phone release dates, the United States seems to be just months away from a flagship phone frenzy. iPhone 6, Nexus 6, Moto X+1, OnePlus One, Samsung Galaxy F, the list continues. Never before has the consumer had such plentiful options at their disposal for buying a new smartphone. Barring a hefty upfront price, it is impressive each manufacturer is releasing one or more 'flagship' worthy phones. The LG G3 & HTC One M8 are the latest big players, however neither of these have proven to steal the limelight from the Samsung Galaxy S5 or even iPhone 5. The hardware standards in mobile have drastically skyrocketed in just 12 months, and to think my Nexus 4 of just 18 months feels archaic. Phones are approaching 3 GB of RAM, 1080p HD screen quality, OS overhauls, and more. Each manufacturer is gambling on their new respective models, but guess what...if the phone don't fit, I can't commit.

I am an Android enthusiast. Making the switch from an iPhone to Android device was monumental in how I viewed the future of mobile and the capabilities of what could be done on the Android platform. The Nexus 4 was an aggressive yet satisfying purchase for me upon it's release date. At the time it was innovative, sleek, efficient, and had just about everything I wanted in a phone. As much as I toot the Android horn however, I don't want a phone that doesn't feel comfortable in my hand. I don't want a 5.2" screen. I don't want a phone whose screen can bend. I don't want a replaceable battery. I just want it to fit in my hand.

I will not buy an Apple iPhone 6 this fall when I make my new phone purchase, but I will perhaps grudgingly buy an Android phone that comes with a larger screen than I am looking for. Sure my adoption of a 5" inch screen is inevitable, but now that Android has comfortably surpassed iOS in market share, it is time for the big players like Samsung & Motorola to dive into strategy. Apple knows the market for larger screens is growing, but they also know over half of their users are women and children. The smaller iPhone 6 packs a 4.7"-inch screen (still big for iPhone standards), while the larger model competes on par with Android tablet-phone devices at 5.5" inches. The iPhone is presumed to stay light (160g is damn heavy HTC M8 users) and there really isn't much reason the die-hard iPhone users will stray from what they have already come to love.

So what exactly is my ideal 2014 smartphone? Although my dream phone has not come out yet, here are the specs I believe many of us are yearning for:

Screen: 5.0" inch or less, 1080p display (Quad HD is a battery sucker)
Chipset: Qualcomm Snapdragon 800 or better
CPU: 2.5 Ghz or higher
RAM: 2 or 3 GB
OS: Android 4.4.4 or Android L
Storage: 16 GB if micro-SD slot, 32 GB or 64 GB if no micro-SD slot
Battery: 2500 mAh or higher, NFC chip for wireless charging
Camera: 10 MPor higher in back, 2 MP or higher in front
Weight: Less than 140g

Stay positive Android users. We may want Android running on a device similar to the size the iPhone is flaunting, but the vast amount of manufacturers should give leeway to our next affordable and cutting-edge flagship device.