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Monday, September 9, 2013

Are "Low End Phones" the Holy Grail of Mobile?

By Duane Higgins, ceo

Microsoft recently paid over 7 billion dollars for Nokia. Largely because of the advantage that Nokia has in the "Low End Phones" market. See this article below:

Microsoft's brilliant move: Keeping the Nokia Name on the Low End Phones it Just Bought.  By Leo Mirani:

Mr. Mirani is talking about phones that range range in retail for $99 or less before tax.

A quick search on Google finds that the term "Low End Phones" gets about  2,770,000 results to date.  "Low End Mobile" getting around About 1,760,000 results. Low End Phones are projected for explosive growth in developing markets. The next version iof ANDROID will be aimed at Low End Phones in emerging markets. Check this article here.

Xiaomi, a Chinese smartphone maker recently hired Google vice president Hugo Barra as part of a push for international growth.  Xiaomi,  this month said it completed a round of funding that gave it a valuation of $10 billion. You will find that much of the Xiaomi targeted markets will be "Low End Phones."

Low End Phones/Smartphones are a massive market and growing exponentially. One marketing research company just recently predicted that there will be 1 billion "Low End Smartphones" purchased yearly by the year 2018. That's only a few years away and that is only the phones considered to be at the low end category or under around $150 according to this article.

So to clarify, thats one billion Low End Phones purchased per year. How much revenue is that? Even at  a $100/phone average price, that would be 100 billion dollars per year in sales just for the unit sales.

So why is the "Low End Phone" market considered to be so valuable by all of the biggest cellphone companies? So large? Growing? Explosive? The answer of course is that people like cheap phones. Especially people in developing and emerging markets. Think India. China. Africa. South America and on and on.

But think a little further.  Why do companies like selling Low End Phones. Especially, when the prices and margins are so low? The answer is that Low End Phones are gateway phones. Individuals who buy Low End Phones of course generally upgrade. Sometimes again and again. That's where the brand recognition and brand loyality come in. Get the customer hooked early and you may have a customer for life. That's Marketing 101.

As you would have guessed. Apple joined in on the "Low End Phone" party with this announcement just today (09/10/2013):

The iPhone 5C, with retina display, will retail for $99 for 16GB.

Saturday, September 7, 2013

Is the Age of the (just one) Internet Over?

By Duane J. Higgins, ceo

I recently wrote a blog post here titled: "One Thousand Splinternets." That post has met with some skepticism and I wanted to follow up with a few more details.

The Internet Corporation for Assigned Names and Numbers (ICANN), a global Internet overseer, is in the process of the largest ever expansion of the domain name system. The group received 1930 applications for the new generic top level domains. The .com or .net part of the web address. There is a very real possibility for the Internet to become very disjointed with many competing factions and interests.

Now, I want to ask you something. Could any of the new domain extensions lead to Splinternets? What do I mean by Splinternets? See these passages from an interesting article published on the Cato Institute website on April 11, 2001 by Clyde Wayne Crews Jr. (your welcome Clyde). Keep in mind that this article was written 13 years ago and there have been a few advancements and changes with technology since then. Also, in many other areas such as regulations, laws etc. However, I do find the article very interesting:

A solution, however, is more Internets, not more regulations.

"One Internet is probably not enough. Instead, owned Internets-proprietary “Splinternets” where prespecified ground rules regarding privacy and other governance issues replace regulation and central planning-may be superior. What matters most is not necessarily the Internet as it exists today, but Internet technology.

Physically, parallel Internets could be up in short order. The Internet itself runs mainly on 13 root servers (computers). Other server and router hardware is obtainable. The fiber backbone is in place. And the audience and applications are growing. Already, dedicated video networks operating on Internet protocol are emerging.

But as broadband infrastructure strategies and server warehouses expand, it is likely that we could surf distinct networks the way we surf Web sites today. At some point, the benefits of tailored, owned networks capable of harmonizing issues of privacy, values, access, and participation outweigh the costs of regulation, endless governance fights, and the costs of inherent insecurity on a nonowned Internet from which criminals and hackers can’t be excluded. One National Security Agency official recently even argued that real security is not an option on the Internet, and a more secure network should replace it."

Now here are some real world examples of just how the proposed "Splinternets" could and maybe are happening:

This is from an article on Forbes dated 11/06/2012:

According to a new proposal document uncovered by the website, is proposing a closed registry for the new .CLOUD generic top-level domain (gTLD). In the Amazon .CLOUD application it states “All domains in the .CLOUD registry will remain the property of Amazon. .CLOUD domains may not be delegated or assigned to third party organizations, institutions, or individuals.”

Would this or could this become an Splinternet?

Here's another example (From a Kevin Murphy article dated Feb. 8, 2013) of a possible Google Splinternet- in regards to thieir application for the .blog domain.

This is what Google, which has applied via its Charleston Road Registry subsidiary, has proposed :
Should ICANN grant Charleston Road Registry’s (Googles company) exemption to the Code of Conduct, and the proposed gTLD operate with Google as the sole registrar and registrant, members of the public will not be able to directly register domain names in this new gTLD. Users will, however, be given the opportunity to make use of a vanity second-level domain as a memorable identifier linked to content...
Google, by the way has applied for 101 generic top-level domains. That's 18.7 million in application fees for the chance to sell the domain extensions. What is Google up to? We shall see. The e-commerce giant applied for 76 separate domains, including .App, .Cloud, .Free, .Game, .Kindle, .Search, and .Zappos.

Now, here is an example of a Splinternet that could happen within the current public (open to everyone) registry format. For example, lets says that one of the new domain extension/registry applicants (just one out of 1000) decided that they would have a public registry (which most extensions at this time will be). All it would take really is one innovative (and well funded) entity to buy one domain name and launch their own private Internet or Splinternet on their own server farms. (or maybe a cooperating accredited registry.) Say at for example. .Club is of course one of the new proposed extensions. Applied for by 3 different companies. Now lets say the registrant of decides to launch a private network of members. The benefits of membership will be a discount home shopping club. To gain membership you would have to purchase a .club membership and receive a membership site (that could be a second level domain site.) For example, if your name was John your membership site could be and the only people who had access to "the club" are club members. Quite simple actually. Now, could this become a private Splinternet? Maybe once the .club memberships reached 1 billion members some might consider it a Splinternet? I wanted to use that particular example because in this case it may not have been the registries (.club) intent to spurn a splinternet however it is possible that one could be launched within the constraints of the public registry guidelines and policies. That's called the law of unintended consequences and also would be the direct result of a market based economy.

Last I checked there were still over a thousand new extensions proposed. .app, .book, .car, .deal, .eco, .fun, .green, .home, .inc, .kids, .law, .mail, .news, .online, .pets, .radio, .sale, .security, .shop, .tickets, .web, and zip. (no to mention nearly 1000 more!) You can use your imagination for more Splinternet opportunities.

There you have it. Splinternets. Speculative Splinternets and flat out planned ones. Predicted some thirteen years ago and the possibility of coming to fruition. Interestingly, the speculation thirteen years ago had nothing to do with the introduction of new domain name extensions (GTLDs). With these new Splinternets- the GTLDs just may end up being the catalyst behind much loftier goals and interests.

So back to my original question. Is the Age of the (just one) Internet over?

Quite possibly.

Tuesday, September 3, 2013

One Thousand Splinternets?

Duane J. Higgins, ceo

Years ago there was a rumor floating around cyberspace that the Internet would eventually be broken into numerous smaller "Splinternets" as they were being called at the time. The impetus for that speculation had to do with so many competing interests and alliances that are constantly springing up around the Internet and with various factions. Thankfully, with the continuous and thoughtful insights of ICANN (the Internet Corporation of Assigned Names and Numbers) none of the Splinternets really happened and the Internet remained "whole." In case you are interested in what the "Splinternet" discussions were really about I would refer you to the most recent Wikipedia entry:

From Wikipedia, the free encyclopedia The splinternet (also referred to as cyberbalkanization or Internet Balkanization) is a characterization of the Internet as splintering and dividing due to various factors, such as technology, commerce, politics, nationalism, religion, and interests. "Powerful forces are threatening to balkanise it," writes the Economist weekly, and it may soon splinter along geographic and commercial boundaries.[1] Countries such as China have erected what is termed a "Great Firewall", for political reasons, while other nations, such as the US and Australia, discuss plans to create a similar firewall to block child pornography or weapon-making instructions.[1]

Clyde Wayne Crews, a researcher at the Cato Institute, first used the term in 2001 to describe his concept of "parallel Internets that would be run as distinct, private, and autonomous universes."[2] Crews used the term in a positive sense, but more recent writers have used the term in a negative sense.

So why am I bringing up Splinternets again at this point in time?

Maybe because the Internet is about to be reorganized in a grand fashion like has never happened before. What Im referring to of course is (ICANN's) impending introduction of upwards of 1000 new domain name extensions onto the global marketplace. What will be the long term impact on the domain name and Internet economies? Is there a chance that the Internet will evolve into exactly what ICANN has been working so ardently against for the past few decades?

What I'm referring is the real prospect of Splinternets.

Could Splinternets really happen?

Imagine if you will the following conversation taking place between three friends at the water cooler in say 10 years from now.

Mary: I haven't heard anything from Steve in a while. Someone told me that he's spending all of his time on .web. You know, the Google owned Splinternet that offers free domain names and free websites. Apparently nearly everything is free there. Free and easy. Just like the 1960's. No wonder Steve likes it there. He never grew out of the sixties and I guess he met a girl on .web. I wouldn't take much of anything seriously that goes on there though.You get what you pay for right?

Joe: I know what your saying. For me I've been using .secure for almost everything. With the encryptions and extra security measures that they take with all of the sites there. I've been thinking that I may just do everything there. That domain is growing so rapidly they say once you try it you wont use anything else. However, I do use .bank for all of my banking and financial stuff. I do like that too. My wife likes .books, .music and .apps. I'm not really interested. However, they say the apps at .secure are like Fort Knox as far as security goes. So I use some of them.

Johnny: All I can say is thank God for .com. With all of these splinternets and new domain name extensions popping up like candy I think we could all go crazy if it weren't for the old standby .com. Dot com is still the standard bearer of everything that is on the Internet. Good, bad and indifferent. Dot com keeps taking these pot shots from the new domain extensions and keeps coming back stronger than ever. I'll take .com anyday and that is all that I need. I has everything that I need and everything that I don't need and sometimes sample if you know what I mean.

Mary: I'm with you on .com however I do have a confession to make. I probably spend 80% of my time on .shop. The way that they have integrated all of the shops and malls there the last I heard they had 100,000 stores and counting. Their top stores are apparently JC Penny and Best Buy. Who would have guessed that? They also have this really neat point system where you get points for buying at any shop there. The savings are unbelievable. I heard on the news the other day that .shop was projected to overtake Amazon in overall sales by 2025. Wouldn't that be something. They have alot more than shopping as well. Just about anything related to it.

Joe: My nephew tried to get on the Chinese Splinternet just for the fun of it. Then he found out that it's all in Chinese and you need permission from the Chinese Government or or something like that. I guess its bigger than all of the other Internets added together. Too bad its so isolated.

Mary: Well back to work for me. Just between the three of us I may be taking a job with the .shop homeworker program. With their direct selling and network marketing programs, I earn points from everyone that I recruit as well. I can cash out the points for a discount and I am making more money there than I do here.

Johnny: Good for you Mary.

Joe: Maybe I can get a job with .secure.

Sunday, September 1, 2013

Is .Com Dying a Thousand Deaths?

By Duane J. Higgins, ceo

There's a common refrain heard around the domain name kingdom regarding .com domain names and most domainers already know exactly what I am going to say next. That is that "Dot Com is King."

Of course nowadays there's more than good reason to question this premise. With ICANN (The Internet Corporation of Assigned Names and Numbers) about to release upwards of 1000 new domain extensions to the marketplace. Some of the new projected extensions may be .web, .shop, .site, .home, .music, .books etc. 

Dot com is of course far and away the most popular of the domain extensions and most versatile. There is now the big question of whether any of the new extensions will ever match the popularity (or universal value) of the .com extension or dare I say overtake it?

For a brief breakdown of the domain name registration numbers please humor me in posting the following facts:

According to a Verisign industry brief released April 2013:

"The fourth quarter of 2012 closed with a base of more than 252 million domain name registrations across all Top-Level Domains (TLDs)." The base of country code Top-Level Domains (ccTLDS) was 110.2 million domain names.

Without getting too much into numbers there are approximately 20 different TLDs available that are not country codes. (such as .com, .net, .org, .biz, .info, .tv, .edu, .gov, .mil, etc.) There are probably at least 200 country specific TLDs (ccTLSs) available for registry. According to Verisign .com and .net TLDs reached a combined total of approximately 121.1 million domain names. Approximately 100 million for the .com extension. 

Ok, now I got that out of my system. Back to my original question. Will any domain name extension (or extensions) ever overtake .com or rival it in dominance?

The answer to that is no and I'll tell you why. There is one reason and one reason only that .com will never be knocked from its lofty pedestal as the king of the Internet. That is that .com had too much of a head start. A twenty year (running) head start to be more exact. Twenty years as king of the hill and that is an eternity in Internet years. .Com is thoroughly ingrained into the psyche and consciousness of the Internet-going public. The consciousness of society if you will.  Consciousness that is hard to quantify and  explain and yet all too real. That is the seat of .com. That is where .com lives.

.Com is just too far ahead. Think light years and not numbers. How do you catch a comet that is traveling at the speed of light and is already a million light years ahead? The answers is that you don't. 

.Com is the king and everyone else will be the pursuers. The new domain extensions will be the pursuers and they will remain the pursuers. Because the pursuers are always behind. Not a bad thing and certainly not a knock on the new extensions. Just a fact of life that the new extensions will deal with.

The final analysis is that .com is and will remain king. .Web, .shop, .site, .app, .home (and 1000 others and possibly more) are and will remain subordinates. Underlings if you will. Of lesser rank or authority. They will never catch up. They will not catch .com. Dot com is etched in stone and the rest in chalk.

.Com  is king and long live the king.