Weekly Digest Issue No. 554
O2 launches debit card | iPad 2 to launch next week?
O2 launches debit card
Mobile operators are increasingly being forced into re-thinking their revenue streams, as average revenue per user (ARPU) continues to drop and the way consumers use their mobile phone changes, due primarily to the proliferation of smartphones and apps.
Perhaps in a bid to enhance its revenue streams, this week O2 jumped into the financial services market, through the launch of O2 Money, which it's calling a "prepay money card". Users can put EUR20 to EUR350 per day onto the card and use it in ATMs and anywhere that accepts Visa payments, in Ireland, abroad and online. The cards can be topped up either online, in O2 retail stores or at Payzone outlets. The O2 Money card costs EUR4.99 and users will have to pay a fee to top up, ranging from EUR0.80 to EUR2.99, dependent on the top-up amount.
Speaking at the launch of the card, O2 Ireland CEO Stephen Shurrock said: "This first financial services product from O2 marks the start of the convergence of the mobile phone and the wallet, and firmly positions us at the forefront of this trend in Ireland."
This convergence of the mobile phone and the wallet is fast approaching, with many mobile operators around the world planning launches of near-field communications (NFC) enabled devices in the next year or so. NFC is perhaps best known for its ability to enable mobile payments, and has been on the horizon for a couple of years now. In the near term we can look forward to seeing NFC-enabled devices from RIM with its upcoming BlackBerrys, while there are also rumours that the iPad 5 will support NFC.
iPad 2 to launch next week?
Murmurings coming out of Silicon Valley suggest the launch of the iPad 2 could be as soon as next week. An Apple event has been scheduled for 2 March in San Francisco, the home of Apple launch events, and invites for the event have started appearing in inboxes, TechCrunch reports.
The iPad 2 is expected to be thinner and lighter than the original iPad, with a faster processor, more RAM, and a front-facing camera for FaceTime video chat. There's also talk of advanced graphics capabilities to allow playback of high-definition video and 3D graphics.
Talk has been ongoing since the beginning of the year of an April launch for the iPad 2, although in the last few weeks rumours of a delay had begun to circulate. However, judging by reports this week and the news of an Apple event next week, it looks likely we will get to see the iPad 2 sooner rather than later.
Even as industry watchers and Apple fanatics eagerly await the launch of the second-generation iPad, speculation emerged earlier this week that an iPad 3 could well be on the cards for the third quarter of this year. According to Apple Insider, the rumours were sparked by a blog post by John Gruber at Daring Fireball, where he indicated that the release of HP's TouchPad, due in the third quarter, could "bump up against" the iPad 3 launch. Though he has since clarified his comments as "mere guesswork", a later report in TechCrunch said that Apple is planning a "big fall surprise" with the iPad 3.
A third quarter release of a new iPad would fit in with Apple's tradition of releasing a new iPod model just in time for the Christmas season. So far though, iPad 3 speculation remains just that.
Zynga valued at USD10 billion: sources
Interest in the new breed of web 2.0 companies, encompassing social networking, gaming and music, is thriving, with funding rounds and potential IPOs being reported on a regular basis. And this week is no different. It emerged that social networking gaming goliath Zynga, developer of the phenomenally popular Farmville and Cityville, is in talks with group of new investors looking to plough a reported USD500 million into the company, with unnamed sources quoted in Bloomberg valuing the gaming firm at around USD10 billion.
Let's put this valuation into some sort of perspective. A recent funding round valued Facebook at around USD50 billion; Groupon is considering a stock market flotation with a valuation of around USD15 billion; and rumoured Twitter talks involving Facebook and Google, each of which was said to be eyeing an investment in the micro-blogging site, saw Twitter's valuation soar to USD10 billion. These four companies -- Facebook, Twitter, Groupon and Zynga -- are widely considered the 'big four' of the internet sector, but there are plenty other firms poised to whip up massive interest and funding during the year.
All of this activity signals a true changing of the guard within the internet industry, with one-time pioneers like Amazon, Yahoo and even Google, to a certain extent, being eclipsed by these brighter stars. But are these massive valuations an accurate reflection of the overwhelming popularity and potential of these companies, or is there a danger these valuations are severely over-inflated and the sign of another tech industry investment bubble?
Spotify closes in on USD100m funding
Separately this week, Spotify got sucked into the new dotcom frenzy, with news that the music streaming site is said to be close to completing a USD100 million funding round. The funding will come from Russian Facebook investor Digital Sky Technologies (DST), which is reportedly poised to take a 5 percent stake for USD50 million, and Silicon Valley firm Kleiner Perkins, which holds stakes in Twitter and Zynga, will also take a 5 percent stake for USD50 million. The investment values the five-year-old Spotify at USD1 billion.
Any investment it receives will see Spotify try to break the US market. The firm, which was set up in 2006 in Sweden and now has its headquarters in London, has enjoyed relative success in Europe, where it has 10 million people using its ad-free service, and less than 1 million paying for its freemium service. The most recent audited annual accounts for Spotify, for 2009, reveal it lost STG16.6 million in the UK on revenues of STG11.3 million.
Spotify has recently signed deals with EMI and Sony in the US, according to CNet; however, if it is to succeed in the US it will also need to land deals with at least one of the remaining two big four labels -- Universal or Warner. So far there has been no indication that such deals will be reached.