Not surprisingly, newspapers this morning were peppered with Black Friday statistics. While most are disappointing to those who were hoping for greater consumer spending, some figures on mobile retailing over the three-day Black Friday weekend are sure to raise a few eyebrows:

• Mobile Payments are More Popular: The WSJ reports that the number of mobile online payments made through Paypal on Black Friday is 650% higher than it was last year. 

• Mobile Product Search has Grown: Siva Kumar, the chief executive of TheFind.com (a product search engine), has stated that the number of searches on mobile devices on Black Friday grew from 5,000 last year to 200,000 this year. 

• Price Comparison Shopping Apps are More Popular: ShopSaavy, a comparison-shopping application for the iPhone, has reported that 1 million users scanned at least one product with the App’s barcode scanner over the three-day Black Friday weekend.

Why are mobile devices generating such heavy usage this holiday season? Data from YG’s Consumer survey indicates that the holiday shopper of 2009 will not only be far more price sensitive than his 2008 predecessor, but will also increasingly rely on sales and price comparison tools when he does decide to spend his hard earned dollar.

The Smartphone, with its instant access to pricing and product review information, is emerging as the tool of choice for any holiday shopper looking to curb their spending. If you’re a retailer and you’re not scrambling to develop or improve your Smartphone App for the rest of the holiday season, two recent YG reports on holiday shopping are required reading:

Connectivity Creates Wiser Holiday Gifts for 2009 and Beyond and ‘Tis the Season: Mobile Retailing Will Transform 2009 Holiday Shopping will provide plenty of insight into both mobile retailing and holiday shopping.

Happy Cyber Monday!

Number of insert ad pages in Thanksgiving Boston Globe, 2008-2009 (Click for a larger version)

Some people watch football on Thanksgiving Day. Because of my prior lives as a marketing consultant and analyst, I do something different: I count newspaper ad insert pages.

Ad circular inserts on Black Friday provide us with interesting information. For one thing, they provide some insight into the advertising budgets of retailers. But more important than that, they provide a good view into the overall economy going into the biggest retail season of the year. If the economy is really bad, retailers don’t advertise much; on the other hand, if the economy is improving, retailers will spend more money on advertising resulting in more pages of advertising. In past years, the results from the Black Friday ad count have been fairly well correlated with actual holiday shopping results.

The ground rules for my counting are that I count only the circulars in the West edition of the Boston Globe newspaper, since those are most representative of the advertising for Black Friday. I convert all ads into 8.5×11 inch, single-sided equivalents. That means that if a retailer puts in an oversized 11×17 inch, double sided ad, that counts as 4 pages (An 11×17 page contains the area of two 8.5×11 pages, and the double sided printing doubles that).

As you can see in the graph that begins this post, this years count provided encouraging news about the New England economy, namely that:

• The Globe had 700 ad pages, the highest number since I started counting in 2005. Previous counts I have done were 412 in 2005, 636 in 2006, and 512 in 2007.
• Ads are up 17% over 2008, but more in some areas. Department stores had the most pages this year as every year, weighing in with a whopping 478 pages compared with 392 last year. Hardware stores boasted the largest percentage increase over 2008, with 42% more pages than the 28 they had in 2008. Surprisingly, electronics and furniture had slightly lower counts than 2008, although both categories have very small absolute counts.

There’s not much further insight here; clearly this is a single indirect measurement in a single retail market. But at the very least, we can certainly say this: the Globe actually delivered more ads (and presumably more ad revenue) this year than last. If a newspaper—a media category that most analysts claim is dying from Anywhere digital competition—can gain advertising this year over last, perhaps in the words of Monty Python, they aren’t dead yet. And by inference, we can claim that the economy really is starting to recover.

Happy Black Friday!

Click for a larger version of the graph

Note to Rupert Murdoch: Jerry McGuire notwithstanding, yelling “Show me the money” is a loser as an Anywhere media strategy.

Murdoch has been making quite a fuss lately about how little Google pays News Corp for its content. Hoping to get Google to up the ante, Murdoch has been threatening to remove all News Corp content from Google and ink an exclusive search deal with Microsoft’s Bing search engine. Microsoft has appeared eager to pay News Corp millions for its content in hopes of wresting search market share from Google.

In the traditional media business where content distribution was tightly controlled by a few major companies, this type of exclusive media distribution deal might have worked. In today’s Anywhere world, where ubiquitous connectivity provides readers with a universe of choice, I expect that such a deal will make News Corp’s business worse, not better.
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Last fall, Yankee Group began measuring the pace of global connectivity with a powerful metric we call the Anywhere Index. It’s simply the number of broadband lines, wired or wireless, in a region compared to the region’s population.

Simple, yes: among other limitations it doesn’t measure the usage of those lines, or their value to their users. But when you compare the resulting indices to GDPs in those same regions, you can see a strong correlation, reinforcing the work done by the World Bank, the ITU, and other entities to demonstrate the benefit of global connectivity. And suggesting that however simple it may be, it’s good enough to track large-scale change.

Carl Howe used Yankee Group’s extensive global forecasts of broadband connectivity to then predict which regions of the world would advance soonest to the state we call Anywhere: when a region has at least one broadband line for every resident.

But as Carl points out in his latest publication, we didn’t know at the time how deep or how long the global downturn would last or who would be most affected. “Because of the actual depth and breadth of the recession so far, consumers cut spending on broadband, businesses pulled back on investments in infrastructure, and carriers reduced their broadband deployments. In essence, the growth of the Anywhere Economy stalled in North America and Europe.”

Thus in the fall of 2009, the number of countries that reached Anywhere status a year after the measure’s debut are those that were less affected by connectivity pullbacks. Broadband lines now exceed the population in three markets: South Korea, Japan, and Hong Kong. Parts of Europe which we originally forecast to reach Anywhere status in 2010–for instance, Sweden and Italy, each with an Anywhere Index in 2009 over 80%–will probably take at least another year to get there.

Nevertheless the global momentum continues, and the total economic impact of the buildout of a global broadband fabric will still be profound. Here you can see that our current outlook for the total value of the Anywhere Network platform itself — independent of access devices, and services atop the network — still closes in on $1 trillion by 2013.

Despite a weak 2009, the Anywhere Economy will grow

Governments around the world now recognize the value of stimulating network expansion. Their investments won’t make up for the lost time in expansion, but they send a powerful message to the private sector: connectivity matters.

For more information on our Anywhere Index and global connectivity forecasts, see our website or get in touch.

Given the opportunity to join IBM’s Global Executive Forum again this year, I jumped. Past experience has proven that it’s an intimate, powerful gathering where C-level execs from global communications and media firms convene to mull key questions in leadership.

Last week we convened in the foggy but serene wilds of rural Hampshire, U.K., for two days of discussion about how to succeed in the new economic environment. The challenges offered by IBM were capture in the subtitle for this year’s event: Taking Risk and Finding Opportunity in Unprecedented Times.

My favorite remark of the sessions, one that I’ve repeated several times already, concerned the need for change in our legacy communications networks to embrace exploding demand for video, data, and new services. In the past I’ve heard a defensive posture from network leaders, rationalizing slow progress in the face of rapidly rising threats. But Jean-Philippe Vanot, EVP for innovation and marketing at France Telecom, said, “It’s no longer a question of if, but when.” Amen to that. Eelco Blok, KPN board member and managing director of its business and wholesale operations, talked about the imperatives to change that his firm’s leadership saw as early as 2005, triggering the brave decision to invest in an aggressive move to an all-IP network infrastructure despite a very challenging financial situation.

I shared this slide, from research that YG analyst Camille Mendler did earlier this year with the Telecommunications Executive Network (TEN), surveying network operators. She asked them what they believed the core selling proposition of a network operator is.

What 50+ network operators think they provide

Thank God, I observed, that the most popular answer was the correct one: a service management platform. Operators of networks who see their mission as providing a platform for the creation of network services of any stripe, offered either by them or by third parties, have the best opportunity to contribute to the increase in collective smarts around the world.

(However, the second most popular answer to her question is just total puffery, to put it kindly. Brand is not a selling proposition for any company, whether it runs networks or makes toothpaste. Brand is rather a means to an end. A valuable brand helps a business do things — reach a target market, for instance, or instill confidence in the minds of buyers that this toothpaste will whiten their teeth better. But brand isn’t something valuable on its own. Operators who identify brand as their selling proposition are more likely to invest in brand promotion and identity ahead of the non-trivial work of transforming their core networks. Brand is thus a dangerous red herring in a converging world.)

I like IBM’s Smarter Planet mantra; I believe in it. But to have one, we need smarter networks. In the words and reported deeds of network and media leaders at GEF, coupled with the early, admittedly modest, green shoots in the global economy, I see progress.

Not satisfied with Verizon’s recent launch of its Android-powered Droid phones, Techcrunch.com is now agog with rumors of Google launching its own phone. What’s unanswered in the post, though, is an important question: Why?

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First it was an idea… then it became a company-wide research mission… now it’s a book.

Today we start talking publicly about something we have been working on at Yankee Group for much of this past year: our first mass-market book. If you have worked with us recently — or even if you have just visited our web site or talked with us about what we do –  it should come as no surprise that the name of the book is ANYWHERE.

The book is nearing publication with McGraw-Hill, for release in stores on January 8, 2010 (although the major online bookstores are taking orders now; hint, hint). You can get a taste of what it’s all about by downloading Chapter 9, “How ANYWHERE Do You Need to Be?” at our book website, which is anywhere.yankeegroup.com.

Since we’re now preparing to support media interest in the book, I thought I’d use this post as an opportunity to practice my book Q&A.  So I’ll interview myself!

Intriguing title! What’s it about? ANYWHERE is Yankee Group’s vision for the emergence of ubiquitous connectivity: when a seamless, capacious, and intelligent network connects all of us and the things we care about. The book explains why this is happening — but more importantly, it exposes the tremendous changes still ahead in all our lives as it happens. We set out the vision, how and when it happens around the world, and what it’s doing for us as consumers, workers, and business leaders. That’s why the subtitle of the book is How Global Connectivity is Revolutionizing the Way We Do Business.

But Yankee Group’s research is all about Anywhere already. Why did you write a book? By any measure you could choose — the number of people touched, the geographical scope of the technologies, the total economic value added — this revolution in the expansion of the global network will be the largest technology change of our lifetimes, even bigger by far than the commercialization of the Internet.  Yet frankly most managers in the business world today don’t yet see the magnitude of those changes: how the network’s expanded reach will continue to ‘flatten’ the planet, how the growing richness of network experiences will create new appetites in us as consumers, how the network’s intelligence will shrink costs in companies and change the fundamental nature of our activities as businesses.

So we wrote this book to educate businesses on how best to steer their initiatives, partnerships, product development, customer service and virtually every other aspect of a business in order to succeed in the Anywhere environment.

What does the reader get? We focused on describing the business impact of the network changes ahead — in non-technical terms — and prescribing specific things that managers can do to profit from those.  For instance, we paint some pictures of how the lives of typical people will change in ten years’ time, in both developed and emerging markets. We show some companies living the Anywhere vision now, and share how that’s transforming their businesses. We explain how to decide when to move, and what to tackle when you do.

Big scope. How did you pull this picture together? Yankee Group’s extensive resources in the communications world gave us the chance to interview over 50 thought leaders in connectivity–from pioneers to CEOs, from small firms to mega-corporations.  Bob Metcalfe, co-inventor of Ethernet… Nicholas Negroponte, founder of the One Laptop Per Child initiative… Dan Hesse, CEO of Sprint… Reed Hundt, former chairman of the U.S. FCC, and many more big thinkers lent us their support. Check out the complete list here. Besides our data assets and terrific contributions from our own analysts, the ideas, advice, and examples from these participants provide very rich context for the Anywhere vision.

You sound excited — why? The reason why all of us at Yankee Group are excited is that we are evangelists for the huge benefits the world will enjoy from the continued expansion of the network — to more people, more devices, and more services. As analysts, we are independent but not neutral: we unequivocally want the Anywhere Network to emerge. The sooner that happens, and the more business people ‘get’ that message and commit themselves to planning how to benefit, the better. With this book, we feel like we’re doing our part to help that all come about.

I’m excited about everyone’s feedback, too. You can talk about it here, follow me on Twitter, join the book’s Facebook fan page, add your reviews and comments on the online book store pages, and of course email me directly as always.

PS: Yes, it’s going to be available in e-book formats as well! You should expect no less for a company working to become an Anywhere Enterprise. Amazon will be promoting it in Kindle form in January — more on that shortly.  Meanwhile — see you Anywhere!

Ubiquitous connectivity beckons this holiday season, bringing with it a new wave of Mobile Commerce (M-Commerce). Consumers can soon expect SMS and MMS coupons, the ability to run price comparisons in real time while at the store and even mobile phone shopping from the comfort of home.

According to a recent Yankee Group survey, 14 percent of consumers are interested in mobile transactions, and an additional 18 percent say they may be interested. Yankee Group predicts the mobile coupon market will reach 2.5 million North American consumers by 2013, ballooning the dollar-amount of the market to $2.3 billion.

Today, Andy Castonguay and I hosted a webinar where we dove into trends from our consumer surveys and explored the devices, conveniences and challenges of M-Commerce as mobile is integrated into the retail shopping experience this holiday season.

The webinar runs about an hour: audio (mp3) and slides (pdf).

Connected homes filled with Anywhere consumer devices sound like such happy places. But  consumer electronics vendors forget that such connectivity also means that consumers get to see their every mistake, and some of those mistakes can be bad for their brands—very bad.

Jarrett Sloan, one of YG’s software gurus, recently had the misfortune of personally experiencing one of Samsung’s mistakes on his Samsung HT-BD1250 Blu-ray home theater system. Samsung recently issued a firmware update for that system, and Jarrett dutifully applied the update using his wireless Internet connection. All was well and good until the system restarted, at which point the system only displayed “LOAD”. His system had been “bricked” by the update.

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Late yesterday, HP announced its intention to acquire 3Com for $2.7 billion.  While this may come as a bit of a surprise to some, I actually think this is a great move for HP.  Followers of this industry know that HP and Cisco have been bitter rivals over the past few years creating a Red Sox/Yankees-like rivalry (I won’t say who is who since I’m a Sox fan).  The acquisition of 3Com by HP is just the latest chapter in the on going feud and helps HP fill in some significant product holes by adding high end switching products, a broad routing portfolio, security products and VoIP capabilities.

3Com is one of the industries most misunderstood companies.  Over the past few years almost the entire networking product line has been refreshed.  It has a huge base of business in China as well as low cost engineering that turns out high quality products quickly.  Its biggest problem though is brand.  When you mention 3Com to anyone in the networking industry, one of two comments usually come up: (1) “those are the guys that bailed on the enterprise market a decade ago;” or (2) “those are the guys that make NICs (network interface cards), palm or low end networking gear.”

Bringing 3Com products into HP not only solves HPs product holes, but also solves 3Com’s brand and distribution problems.  Two problems, one solution.  The move also creates a de facto #2 vendor in the networking industry.  Currently, in the switching market, which is the biggest of the enterprise networking submarkets, HP and 3Com flip flop for #2 depending on how the numbers are cut.  Our research has HP at 11% and 3Com at 9% creating a company with a combined 20% of the overall ports.  This will be the first time the industry has had a clear alternative to Cisco since the mid ‘90s when Nortel was a dominant vendor.

This is the third big acquisition announcement in the past few months following Cisco-Tandberg and Avaya-Nortel.  There is a clear trend to companies rationalizing down the number of vendors they use so we see this trend continue as companies like Brocade, F5, Riverbed, Polycom and Aruba all become legitimate acquisition targets for larger companies.  So, while this may be the most recent announcement, it won’t be the last.

For a more detailed look at my analysis, look for the Yankee Group focus report on this acquisition.