Alert: Social Media Is Eating Into Carrier Revenues, And It’s Only Getting Worse
Twitter, Facebook and other social networks have long counted on the rise in smartphone usage to help fuel their growth: that trend, however, seems to also be taking a toll on mobile carriers — specifically in the form of revenues. The analyst firm of Ovum, part of the Informa Group, has estimated that operators lost $13.9 billion in SMS revenue in 2011, as a result of their customers using services like Twitter and Facebook to message each other instead of the carriers’ own text messaging services — a big rise on the $8.7 billion Ovum estimates was lost in 2010. A separate report from mobile analytics firm Bytemobile has also charted huge growth in the use of social media on mobile — with operators getting virtually no benefit as a result.

Twitter, Facebook and other social networks have long counted on the rise in smartphone usage to help fuel their growth: that trend, however, seems to also be taking a toll on mobile carriers — specifically in the form of revenues.

The analyst firm of Ovum, part of the Informa Group, has estimated that operators lost $13.9 billion in SMS revenue in 2011, as a result of their customers using services like Twitter and Facebook to message each other instead of the carriers’ own text messaging services. A separate report from mobile analytics firm Bytemobile has also charted huge growth in the use of social media on mobile — with operators getting virtually no benefit as a result.

Bytemobile, using data it gathers from its tier-one carrier customers, found that the average mobile user spends around nine minutes per day each on Facebook and YouTube on mobile. YouTube, being a video service, generates 300 times more traffic on data networks. In both of those cases, it notes, neither service generates any mobile operator revenue.

There is a caveat, of course: carriers are still making money from people using their phones to use social networks: users are, after all, still buying 3G and 4G data plans; and many (but not all) carriers also roll public WiFi connectivity into those plans.

It’s questionable, though, whether that incremental data revenue for tweets, status updates and check-ins, and the more substantial data usage from services like YouTube, are able to offset the loss from the more lucrative messaging services that operators built up and still count on for revenues.

It appears that the figure is gradually growing: Ovum points out that a $13.9 billion loss works out to some nine percent of messaging revenues for carriers worldwide, a rise from the six percent of revenues lost in messaging revenue to social messaging in 2010, when carriers lost $8.7 billion in SMS revenues to social media messaging.

Ovum’s suggestion? For carriers to work more closely on making their messaging and other services more collaborative — that is, more partnerships with social networks so that they use the carrier infrastructure to underpin their own communication tools.

There is some of that happening already, particularly in developing countries. France Telecom-owned operator Orange last week announced that it would be launching a new way of accessing Facebook in developing markets, using USSD functionality on GSM devices. It is offering this as an extra paid service to users.

But by and large, operators have missed the boat in more developed markets, where smartphones and mobile apps are the order of the day.

There is still an opportunity in those advanced markets. Carriers, if they got the lead out, could act as mobile app developers and make their own clients to access those social networks, which link in better with the services they already have in place — say for messaging or billing services. That’s something that has been relatively untapped so far.

Should You Upgrade To Mountain Lion?
Mountain Lion, Apple’s latest version of OS X, is currently in beta. However, it is in a stable enough form that some journalists were given sneak peeks over the past few days. I’ve been working with the OS for most of the last week and weekend and, as a public service announcement, I’d like to state that while Mountain Lion is a compelling upgrade to OS X it’s not currently ready for prime time. To be fair, the worst version of OS X I ever used was an early build of Lion. This build essentially rendered my machine useless and made me cry uncontrollably when my Time Machine backups failed. Never, as they say, again. However, being a glutton for punishment, I gave Mountain Lion a spin.

Mountain Lion, Apple’s latest version of OS X, is currently in beta. However, it is in a stable enough form that some journalists were given sneak peeks over the past few days. I’ve been working with the OS for most of the last week and weekend and, as a public service announcement, I’d like to state that while Mountain Lion is a compelling upgrade to OS X it’s not currently ready for prime time.

To be fair, the worst version of OS X I ever used was an early build of Lion. This build essentially rendered my machine useless and made me cry uncontrollably when my Time Machine backups failed. Never, as they say, again.

However, being a glutton for punishment, I gave Mountain Lion a spin.

Mountain Lion installed without a hitch on a 2010 vintage MacBook Air although it refused to install on a 2006 Mac Pro – a disappointment that still burns a little. I know this old workhorse is six years old and more than capable. I’m sure there will be a fix down the line but right now there is no way to get it to install.

The OS has “grey screened” once and my install was marred by a system failure that required, literally, about 24 hours to fix. I didn’t have to sit there the whole time to fix it, but apparently one install froze, the machine locked up, and the secondary install process required a massive download. This took most of a day and night.

The most interesting improvement is the Notifications system. Not unlike Growl, Notifications sit unobtrusively in the corner for a moment and then disappear. There is a new icon in the upper right corner, next to the search glass, that allows you to see recent notifications. Growl still works fine as do most of my apps. I only noticed that QuicKeys, a text macro app, failed for the first few hours of use and then magically started up when I reset the machine.

Messages is arguably abysmal, with two odd UIs clashing with each other wildly. When you look at messages, you mostly see the huge message window. However, there is also a smaller buddy window that is a clone of iChat yet also folks in video chat and Facetime in a melange of odd queues. I’ve also had trouble syncing my conversations across devices. I would love to be able to receive, for example, iMessages that appear on my phone on the desktop and reply from either device. As it stands, the service is focused around an iMessage email address. I’d love it to work with phone numbers as well.

Mail is improved slightly as well, with a new “star” system for important messages and a VIP system for important senders. For example, you can set Mom or the significant other to a VIP and then only receive a notification when a VIP emails. MacWorld has a wildly complete look at Mail, but there’s not much different that anyone would notice except that the new Mail does not support RSS feeds.

Twitter integration worked quite well as did page sharing in Safari.

As for behind the scenes I noticed that Mountain Lion was as stable as Lion and, barring the rare catastrophic shutdown, I’m working as quickly and as efficiently on ML as I was on Lion. I never experienced Gatekeeper’s security system during my time with the OS.

Would I recommend that non-devs upgrade right now, just to “kick the tires?” Assuming you have access to a beta – for whatever reason – I’d say no. I’ve seen a number of bloggers and other tech-types mentioning they we’re upgrading but generally it’s not worth the potential headache and the agony of waiting 24 hours to see if your MBA was totally hosed thanks to an install error was enough to make me want to revert to Lion. However, Apple sent this out as a pre-release for a reason. It works quite well and the new features are actually mostly apps rather then baked-in improvements. Don’t pull the trigger yet. It’s fun to experiment but it’s also fun to have a computer that works.

The Enemy Of My Enemy Is My Friend
Microsoft and Apple should hate one another right now. I mean, really hate each other. After decades of domination, Microsoft has watched their rival move from death’s door to become the most valuable company in the world — over $200 billion more valuable than Microsoft itself. And it was Microsoft who helped get Apple there, remember, with a timely cash infusion in 1997. Steve Ballmer laughed off the iPhone, which eventually helped kill off Windows Mobile — and it’s now bigger than all of Microsoft’s businesses combined. And the company shrugged off the iPad, even as it established a category, tablets, which Microsoft itself had been trying to establish for years.

Microsoft and Apple should hate one another right now. I mean, really hate each other. After decades of domination, Microsoft has watched their rival move from death’s door to become the most valuable company in the world — over $200 billion more valuable than Microsoft itself. And it was Microsoft who helped get Apple there, remember, with a timely cash infusion in 1997.

Steve Ballmer laughed off the iPhone, which eventually helped kill off Windows Mobile — and it’s now bigger than all of Microsoft’s businesses combined. And the company shrugged off the iPad, even as it established a category, tablets, which Microsoft itself had been trying to establish for years.

Now Apple’s iOS ecosystem threatens the very fabric of Microsoft. Given the rise of the iPhone and iPad, and the halo-effect they’re having on the Mac, products like Windows and Office don’t hold the same importance that they once did in the computing world. And their shine is ever-diminishing. People are realizing that they just don’t need them anymore. Apple’s rise is slowly killing the Microsoft we’ve all known for years.

And yet, Microsoft rarely bashes Apple publicly anymore. In fact, they often take their side on arguments or come to their defense on issues. Again, these were once bitter rivals. And these times should be the battleground for their bloodiest battles yet. Instead, it’s all holding hands, s’mores, and Kumbaya.

Why? Because Microsoft has an enemy they hate much worse than Apple. And Apple has the same enemy. Google.

This is nothing new, but the animosity continues to build between the parties. Look at the news today, for example. Following last week’s headlines that Google was bypassing privacy settings in Apple’s mobile Safari browser, Microsoft today says that Google is doing the same thing to their own IE browser. Meanwhile, Google says that Microsoft is full of shit, while Apple is probably off in the corner smiling.

It wasn’t long ago that Apple and Google were aligned against Microsoft. Remember, then-Google CEO Eric Schmidt was on Apple’s board and the two sides worked closely on projects like the original iPhone. Then Android came along and destroyed that relationship. While Google probably didn’t consider it at the time, this set the stage for Microsoft and Apple to align on things like the Nortel patents.

Microsoft should probably be going all-in to combat the rise of iOS, but instead they seem far more concerned with spending obscene amounts of money to bolster Bing as a Google competitor. And they seem to truly enjoy undermining Android by way of licensing agreements with key OEM partners.

Meanwhile, Apple seems downright bored if you ask them about Microsoft as a competitor. But ask about Google (Android in particular) and the knives come out.

Maybe this all just means that Google is doing something right. They have all the biggest technology companies in the world pointing guns right at them. You don’t get to the top without pissing off people along the way. But the way Google has managed to unify all of these main rivals against them should at the very least give them pause. Microsoft and Apple are the two biggest examples. But Facebook and Twitter are finding common ground against Google as well thanks to the search giant’s foray into the social realm.

All of this makes for a fascinating situation in the tech world. On one side there’s Google. On the other side there’s basically everyone else, with new members seemingly joining on a daily basis. And this side is filled with rivals that under any other circumstance would hate each other. But here they’re allied. The enemy of my enemy is my friend.

[image: New Line Cinemas]

Mexico City Boards The StartupBus — But It Still Needs Sponsors
A combined hackathon and road trip to South by Southwest, the StartupBus is in its third year and becoming a bit of a tradition — and this time, it won’t be limited to the United States. That’s because, after doubling the number of buses, the organizers decided to choose participating cities a little differently this year. To make sure it wasn’t overlooking any cities with passionate startup communities, StartupBus organizers allowed people to vote for their favorite regions. And it turns out that Mexico City was one of the top vote getters, behind only Cincinnati and Tampa Bay.

A combined hackathon and road trip to South by Southwest, the StartupBus is in its third year and becoming a bit of a tradition — and this time, it won’t be limited to the United States.

That’s because, after doubling the number of buses, the organizers decided to choose participating cities a little differently this year. To make sure it wasn’t overlooking any cities with passionate startup communities, StartupBus organizers allowed people to vote for their favorite regions. And it turns out that Mexico City was one of the top vote getters, behind only Cincinnati and Tampa Bay.

Until now, the main StartupBus event — founded in 2010 by Elias Bizannes — has limited its departures to US cities. Still, there were signs that it was starting to attract an international following. Entrepreneurs have flown in from other countries to join the US buses, and there was a StartupBus bound for Le Web last December.

Eoin McMillan, who is both “conductor” (basically, the organizer) of the Mexico City bus and director of operations at Bizannes’ new StartupHouse venture, says the entrepreneurs who will actually ride the bus are still being selected. (For logistical reasons, the bus will leave from San Luis Potosi.) In the meantime, there are other obstacles.

The main one, not surprisingly, is money. Some of the costs will be covered by Tec De Monterrey Zona Norte, which McMillan describes as “the MIT of Mexico” and which is sponsoring the bus. In addition, StartupBus will probably be reducing or waiving its normal fee (needed to cover costs like gas and paying the driver). But there are still the basic travel costs associated with the road trip, like buying food and paying for nightly lodging, that could make the trip too expensive for some Mexican entrepreneurs, especially college students.

So McMillan is hoping for help — ideally, he’d like to find a big sponsor who can provide the funding to give each passenger a small travel stipend, but failing that, he’s interested in talking to anyone who might be willing to help. If that’s you, email him at eoin@startupbus.com.

McMillan can speak passionately about the life-changing aspects of riding the bus — after all, he took the trip himself last year, after traveling from Australia to San Francisco to pursue his dreams of entrepreneurship. Now, he admits to not just drinking the StartupBus Kool-Aid, but “mainlining it,” and he says, “The thought that someone amazing who wanted to get on the bus might not be able to because of finances pisses me off.”

He also argues that Mexico City’s involvement is symbolic of a larger trend toward international entrepreneurship.

“It’s no longer about, ‘Can Mexico City compete?’” McMillan says. “It’s about, ‘Can San Francisco compete against the rest of the world combined?’”

I Have Seen The Future, And Its Sky Is Full Of Eyes
Allow me just a little self-congratulatory chest-beating. Four years ago I started writing a near-fiction thriller about the risks of swarms of UAVs in the wrong hands. Everyone I talked to back then (including my agent, alas) thought the subject was implausible, even silly. Well, it’s not like I’m the next Vernor Vinge — it always seemed like a pretty blatantly obvious prediction to me — but I am pleased to see that drones and drone swarms have finally become the flavor of the month. In the last month, the Stanford Law Review has wrung its hands about the “ethical argument pressed in favor of drone warfare,” while anti-genocide activists have called for the use of “Drones for Human Rights” in Syria and other troubled nations; the UK and France declared a drone alliance; and a new US law compels the FAA to allow police and commercial drones in American airspace, which may lead to “routine aerial surveillance of American life.”

Allow me just a little self-congratulatory chest-beating. Four years ago I started writing a near-fiction thriller about the risks of swarms of UAVs in the wrong hands. Everyone I talked to back then (including my agent, alas) thought the subject was implausible, even silly. Well, it’s not like I’m the next Vernor Vinge — it always seemed like a pretty blatantly obvious prediction to me — but I am pleased to see that drones and drone swarms have finally become the flavor of the month.

In the last month, the Stanford Law Review has wrung its hands about the “ethical argument pressed in favor of drone warfare,” while anti-genocide activists have called for the use of “Drones for Human Rights” in Syria and other troubled nations; the UK and France declared a drone alliance; and a new US law compels the FAA to allow police and commercial drones in American airspace, which may lead to “routine aerial surveillance of American life.”

We’ve been reporting on UPenn’s amazing drone-swarm research (great title, John!) and Sandia Labs’s self-guiding bullets, and I’ve been on a drone kick for more than a year. Now John Robb, the author of Brave New War, has taken up the drone cudgel with great enthusiasm: in the last couple of weeks, he’s written about drones as the future of warfare, drone diplomacy, defenses against drones, BattleSwarms, and Francis Fukuyama and the inevitable ban on unlicensed drone technology. Go ahead and take a look: I’ll wait.

Terrified yet? No? C’mon, go back and read some more. Granted, Robb does have an apocalyptic streak, but I’m pretty confident his central thesis is dead-on. Drones, and swarms of them, will be everywhere; they’ll soon change everything about warfare and surveillance; and the recent open-skies FAA mandate will ultimately be rolled back, as governments start trying to extend their “monopoly on violence” into a “monopoly on drones” as well.

Meanwhile, obviously, a lot of people aren’t happy about the notion of police drones –

#HELP by adding your idears on how to KILL HACK & STOP #policedrones by sharing your idears and knowhow scribd.com/fullscreen/819… #DROPtheDRONE—
Someone unnumbered (@ntisec) February 17, 2012

and would rather they be used by the Occupy movement or by livestreaming media.

But the really breathtaking and worrying thing is that all of the above is already yesterday’s news. Tomorrow’s drone swarms will be to today’s clumsy quadricoptors as the MacBook Air is to the Altair 8800. And they’ll be mass-produced. I give you the Harvard Monolithic Bee, insect-sized drones printed — yes, printed — by a team who “have been working for years to build bio-inspired, bee-sized robots that can fly and behave autonomously as a colony.” Want to print (most of) your own drone? Go right ahead.

There’s little doubt that tomorrow’s skies will be stuffed full of eyes. Whose eyes, aimed where, for what purpose, under what control? We don’t know yet. That depends in large part on whatever plans, policies, contingencies and/or regulations we collectively come up with. Unfortunately, it seems that everyone’s still scrambling just to react to last year’s technology. I’ve hardly seen anyone look into the future with the understanding that drone technology is evolving with astonishing speed — and I have a nasty feeling that the powers that be won’t understand just how disruptive that technology might become until we run smack into the rotor blades of the first drone disaster.

Image credit: Bee swarm, doubleagent, Flickr.

Daily Crunch: Rectangle
Here are some recent stories on TechCrunch Gadgets: Motorola Droid 4 Review: This Keyboard Rocks, But That’s About It Review: The Playstation Vita, Sony’s Portable Powerhouse More Backpedaling: Netflix Brings Back the $7.99 DVD-Only Plan ProView Is Suing Apple Over The Rights To An iMac Clone Foxconn Increases Wages, Raises Pay By 16-25% For Chinese Workers

Here are some recent stories on TechCrunch Gadgets:

Motorola Droid 4 Review: This Keyboard Rocks, But That’s About It

Review: The Playstation Vita, Sony’s Portable Powerhouse

More Backpedaling: Netflix Brings Back the $7.99 DVD-Only Plan

ProView Is Suing Apple Over The Rights To An iMac Clone

Foxconn Increases Wages, Raises Pay By 16-25% For Chinese Workers

Google: Unlocking The Door For More Android Originality?
It sometimes feels like a absurd story without an ending, trying to track who is attacking whom in the mobile patent game. But Google has now secured one patent that may demonstrate how companies are figuring out ways of getting around would-be infringement issues — and possibly produce more differentiated products in the process. A Google patent, published by the U.S. Patent and Trademark Office, looks like it could pave the way for a new way of unlocking a mobile device. The news comes just as Android-handset maker Motorola, which Google is in the process of acquiring, got a ruling against it in Germany for another mobile unlock patent, in an ongoing case filed by Apple.

It sometimes feels like an absurd story without an ending, trying to track who is attacking whom in the mobile patent game, and who is “winning.” But Google has now secured one patent that may just demonstrate that companies are figuring out ways of getting around would-be infringement issues — and possibly lead to producing more differentiated products in the process.

A Google patent, published by the U.S. Patent and Trademark Office, looks like it could pave the way for a new way of unlocking a mobile device. The news comes just as Android-handset maker Motorola, which Google is in the process of acquiring, got a ruling against it in Germany for another mobile unlock patent, in an ongoing case filed by Apple.

Apple’s case in Germany rests on the slide-to-unlock gesture, something that Apple has been enforcing against other handset makers as well, such as Samsung — filing a case against the Korean handset maker in California just earlier this week.

In Germany, a court in Munich yesterday determined that Motorola violated those same Apple slide-to-unlock patents in its Android-based smartphone devices — although its Xoom tablets, for what it’s worth, were spared in the ruling.

Florian Mueller notes the ruling carries the possibility of a permanent injunction on it — although it will be up to Apple whether it decides to enforce it, and Motorola has already said it would appeal the decision and that it did not think the decision would have a material impact on sales. It could also modify this feature in its devices though a software update.

If what Motorola says is true — that sales would not be affected by this ruling — what else is at stake here?

There is an argument to be made that there are still too many features that are similar between different, competing smartphones. Android has so far been the clear winner in smartphone market share — with the operating system accounting for the majority of smartphone sales worldwide at the moment. But most individual device makers are not creating distinctive enough products to sell at volumes that compete with Apple and the very biggest of the Android makers, such as Samsung.

At the moment, with Android, some of the most distinctive implementations have been those where handset makers “fork” the OS, although that leads to fragmentation and difficulties further down the development chain.

That’s where Google’s new patent comes in handy. New methods for unlocking will include moving icons from one screen to another, text inputs and voice commands. But as Patently Apple notes, these elements could run together or separately.

This is the direction that Google will hopefully keep moving. If and when this patent gets implemented, it presents one more building block for Android handset makers not only to get around Apple’s legal complaints — but for them to figure out ways of making their products different from each other’s, while still remaining in Google’s ecosystem and not straying too far from the Android flock.

(Image: Glenn, Flickr)

Chart: In Four Years, Apple Sold More iPhones Than All Macs Ever
If anyone has any doubt that iPhones, iPads and other iOS devices are the future if Apple, just take a look at the chart above from Asymco.  It shows all iOS products sold cumulatively versus all OS X products ever sold (Macs) over the past 28 years. The iPhone has only been around for four years, but in that time more iPhones have been sold than all the Macs ever sold in Appele’s entire history. The total number of Macs sold is 122 million. In 2011 alone, if you tally up all the iOS devices including iPods and iPads, 156 million were sold—more than all Macs ever sold. In one year.

If anyone has any doubt that iPhones, iPads and other iOS devices are the future if Apple, just take a look at the chart above from Asymco.  It shows all iOS products sold cumulatively versus all OS X products ever sold (Macs) over the past 28 years. The iPhone has only been around for four years, but in that time more iPhones have been sold than all the Macs ever sold in Appele’s entire history.

The total number of Macs sold is 122 million. In 2011 alone, if you tally up all the iOS devices including iPods and iPads, 156 million were sold—more than all Macs ever sold. In one year. All told, Apple has sold 316 million total iOS devices over the past few years, iOS devices simply overwhelm OS X devices interms of how many are out there. No wonder Apple is making OS X look and feel a little bit more like iOS.

I don’t even know how to describe the steepness of that iPhone sales curve. Even “skyrocketing” doesn’t do it justice.

Social Media Advertising Startup Compass Labs Raises $6M From NEA And Presidio
Compass Labs, which aims to provide targeted advertising on social networks like Twitter and Facebook, has raised $6 million from NEA, and Presidio Ventures. This brings the startup’s total funding to $12 million. Launched at TechCrunch Disrupt two years ago, the startup provides a self-service advertising platform called CLIQ (Compass Labs IQ) that allows brands to serve targeted social media ad campaigns on Twitter and Facebook.

Compass Labs, which aims to provide targeted advertising on social networks like Twitter and Facebook, has raised $6 million from NEA, and Presidio Ventures. This brings the startup’s total funding to $12 million.

Launched at TechCrunch Disrupt two years ago, the startup provides a self-service advertising platform called CLIQ (Compass Labs IQ) that allows brands to serve targeted social media ad campaigns on Twitter and Facebook.

Compass Labs says that the startup differentiates itself from other social advertising options because it has created technology to identify audience segments in granular manner. For example, brands can target advertising based on household income. Founder and Google and Yahoo veteran Dilip Venkatachari says that the startup analyzes public data and mines look alike models to enhance advertising.

The new funding will be used towards product development and sales and marketing.

Finam Puts $10M In Mobile Messaging Application IM+
SHAPE Services, the company behind the cross-platform IM+ messaging applications has raised $10 million from Russian investment firm Finam. IM+ unites all communication needs under a single interface, integrating with Facebook Chat, Twitter, MSN Live Messenger, Skype IM, Google Talk, AOL, ICQ and others. The app currently has 17.5 million users and 800 million mobile ad impressions per month.

SHAPE Services, the company behind the cross-platform IM+ messaging applications has raised $10 million from Russian investment firm Finam.

IM+ unites all communication needs under a single interface, integrating with Facebook Chat, Twitter, MSN Live Messenger, Skype IM, Google Talk, AOL, ICQ and others. The app currently has 17.5 million users and 800 million mobile ad impressions per month.

As a part of the deal Finam and Shape Services will launch a FinamShape joint venture that will release a special version of plus.im web messenger for the Russian market. And Shape Services’ name will be shortened to Shape. Last year Shape Services acquired CrispApp, the Hong Kong based developer of the fone app for iOS