Santa Clara: Intel Corp chief executive officer (CEO) Paul Otellini said he is not seeing unexpected weakness in enterprise technology spending that Cisco CEO John Chambers cited when he forecast quarterly earnings below estimates.

“This quarter is playing out as we thought. The enterprise is good, it’s not fantastic, so we don’t see a change in that,” Otellini said in answer to a question at Intel’s annual investor day on Thursday.

Shares of Cisco Systems Inc, which relies on government and corporate spending on Internet gear, dropped more than 10% on Thursday following its earnings report a day earlier.

“I think John’s comments were focused on Europe in particular. We haven’t seen any change in Europe demand on the enterprise side,” Otellini said.

Much of the presentations by Otellini and other Intel executives showcased the chipmaker’s long-awaited push into smartphones and ultrathin laptops. Intel offered little new hope to investors concerned about languid PC sales.

Otellini also forecast that Intel, with its deep pockets, would survive as one of a handful of leading-edge chip manufacturers as the sector moves toward larger and costlier factories.

With the industry preparing to increase the size of the silicon wafers it uses, letting manufacturers fit more chips on each, future leading-edge factories will cost more than $10 billion each to build, compared with about $5 billion now, Otellini added.

With worldwide PC shipments barely growing, Intel has been racing to establish a foothold in smartphone and tablet markets, where processors based on ARM Holdings’ power-efficient chip designs are widely used.

Last month in India, Lava International launched the first smartphone using Intel’s new Medfield processor and the device has received respectable reviews from benchmark testers.

“We’re getting awfully good reviews for our first phones,” Otellini told investors at an annual Intel event. “We have ambitions; you’ll see more announcements over time and very cool capabilities built into phones.”

Before declaring that Intel is a serious player in the mobile market, many investors are waiting to see how successful the new handsets become with consumers. Growing expectations that Intel will be able to compete have fueled gains in its shares in recent months.

Intel is heavily promoting a PC category it has dubbed ultrabooks, similar to Apple Inc’s Macbook Air and offering some of the technological chic the iPad and other tablets epitomize.

Major manufacturers like Asus and Hewlett Packard are launching ultrabooks, but some investors are concerned that the expensive components used in them, such as solid-state drives, make them too pricey for many consumers.

Intel vice president Kirk Skaugen, in charge of the ultrabook push, said the laptops are aimed at prices starting at $700.

Demonstrations of future gadgets, including an ultrabook with a touchscreen display, won polite applause. But analysts said they heard little to reduce concerns that Intel may sacrifice profit margins on sales of its processors to make ultrabooks affordable and help drive sales.

Otellini said sales were on track and would pick up in the second half of 2012 as more manufacturers start using Intel’s new Ivy Bridge processor for PCs. “We’re on track to meet our goal of 40% of consumer notebooks this holiday season being ultrabooks,” Otellini said.

Last month, Intel posted quarterly earnings that failed to inspire gains in its recently high-flying stock and also said costs associated with ramping up new production lines for the Ivy Bridge chips would hurt gross margins more than expected.

Global PC shipments in the first quarter grew a tepid 1.9% from the year-ago period, according to research firm Gartner.

Helped by emerging markets, the new Ivy Bridge processor and ultrabooks, Intel expects PC shipments this year to grow by a “high-single digits” percentage.

Otellini said manufacturers are working on 20 tablets using Intel processors and Microsoft’s long-awaited Windows 8 platform, expected later this year.

San Francisco: Yahoo Inc director Patti Hart will not seek re-election to Yahoo’s board, according to a source familiar with the matter, as the Internet company finds itself engulfed in a controversy over its new chief executive’s educational background.

Hart led the search committee that hired Scott Thompson, the president of PayPal, to take the CEO reins at Yahoo in January.

Last week, an activist hedge fund waging a proxy battle against Yahoo revealed that Thompson did not have a college degree in computer science as was stated in his official company biography and in Yahoo regulatory filings with the US Securities and Exchange Commission.

Yahoo has acknowledged that Thompson does not have a computer science degree, initially calling the discrepancy an “inadvertent error.” Yahoo later said its board of directors will investigate the matter.

A Yahoo board member since June 2010, Hart is the chief executive of electronic game products company International Game Technology. International Game was not immediately available for comment.

According to the person familiar with the matter, Hart’s exit from Yahoo’s board is being driven by pressure from the board of International Game Technology, “which doesn’t want her to be distracted.”

Yahoo was not immediately available for comment.

The controversy marks the latest setback for Yahoo, which is trying to revive its revenue growth and is facing a bitter proxy fight with Third Point, it’s largest outside shareholder.

Third Point has called for Yahoo to turn over all records related to Thompson’s hiring.

Hart also was accused by Third Point of embellishing her educational record. Third Point alleged last week that she has a degree in business administration, rather than in marketing and economics, as was stated in regulatory filings.

Yahoo confirmed that Hart has a bachelor of science degree in business administration with “specialties” in marketing and economics from Illinois State University.

Hart’s exit would mark the latest change to Yahoo’s board, amid long-running investor discontent with the company’s performance and management.

In February, Yahoo said that Chairman Roy Bostock and three other directors would step down. One month before that, Yahoo co-founder Jerry Yang resigned from the board.

Hart’s plans not to seek re-election were first reported by the technology blog AllThingsD.com, which cited unnamed sources.

Brussels: An explosion of people checking into social networks is being exploited by mobile application makers and private detectives, who say they can use people’s online chatter and photos to track them and find out where they live.

In March, Apple stopped downloads of a “stalker” mobile application that told men where women around them were “hanging out”, using only publicly available information from social networks.

But other readily available apps can do the same and more, say online investigators who use them.

When a person uses a mobile phone to post a tweet on Twitter or upload a photo to the image-hosting website Flickr, sometimes so-called geolocation data can be found lurking underneath the tweet or photo. This can be used to track down their local haunts, including their home or where they study.

“It is quite easy sometimes to work out which house a tweet is coming from,” said Neil Smith, a former police officer turned online researcher in Britain.

Geolocation research is a fast evolving area as most applications are built on the back of freely available open-source software.

One of Smith’s favourite applications was developed by 27-year-old Greek IT engineer Ioannis Kakavas, who aptly called his invention Creepy.

The free app collates geolocation data attached to a person’s tweets and pictures to figure out where they might work, said Smith, who says he uses it to track down perpetrators of insurance fraud for corporate clients.

Police officers in Vancouver, Canada and in Arizona and Colorado in the United States also say they have used Creepy in their investigations.

An array of social networks like Twitter, Foursquare, Twitpic, Flickr, YFrog, Gowalla, and Lockerz can provide such geolocation data, Kakavas said.

Some of these websites allow users to disable geolocation, but those like Foursquare and Gowalla depend on it. Twitter users can choose to enable it when they join and Facebook says it strips off the location data on photos.

Smith, who says he has recently been hired by journalists who want to use geolocation data in their research, says his work is for “honourable, legal purposes”.

For many parents, mobile apps that use geolocation can also be a source of reassurance: FamilyTracker and Life360 are two apps which show parents where their children are on a map.

But Smith and other professional snoops admit that many people oblivious to geolocation data can find themselves unwittingly exposed.

“Teenage girls are taking pictures of themselves unclothed and then sending them to their boyfriends,” said Chris Hadnagy, a security expert and owner of social-engineer.com, a service which shows companies how vulnerable they might be to hacking.

“These photos may contain the location of where the photo was taken.

Regulators in the United States and the European Union have come out in force for new ways to protect people’s privacy online, but geolocation data on social networks seems to be at anyone’s fingertips without breaking the law.

“We have geolocation information that the users knowingly and deliberately make public,” said Kakavas, who says he developed Creepy to show people how easy it can be for prying eyes to scrutinise their private lives.

But Smith cautioned: “If you don’t care about your own security then don’t be surprised by tools like Creepy which can harvest that information.”

US and EU regulators agree that people using the Internet should have the choice to stop websites from gathering their data to send them targeted ads.

To meet these demands advertising firms, web publishers and privacy experts have been meeting under the banner of the World Wide Web Consortium (W3C) to write an updated version of “Do Not Track”, a tool users can install on their browser to stop online marketing companies from gathering their web browsing history.

But geolocation is more difficult to deal with.

“Because where someone is located may affect how they are treated under law, we cannot bar all geolocation,” said Aleecia McDonald from the open source browser company Mozilla Firefox, a member of the W3C.

“However, we are agreed that very precise geolocation … which gets down to about a dozen households, is not in keeping with the spirit of Do Not Track.”

Los Angles: Google, known more for its search engine and e-mail service, has bagged the first licence in the US to test self-driving cars along busy public roads in Nevada. Officials of the Department of Motor Vehicles in Nevada, California, said they have issued Google the nation’s first licence to test an autonomous vehicle that does not need a driver on its public streets.

Nevada issued a special licence after demonstrations on state freeways, state highways, in Carson City neighbourhoods and on Las Vegas’ landmark Las Vegas Strip, the state’s Department of Motor Vehicles said in a press release.

It is the first licence issued in the United States under new laws and regulations that put Nevada at the forefront of autonomous vehicle development, it said.

The new licence plate is red and features the infinity symbol and the letters AU, for autonomous vehicle. All such cars on the road are “test” vehicles for now, though the state signaled it intends to be “at the forefront of autonomous vehicle development.”

“I felt using the infinity symbol was the best way to represent the ‘car of the future,” state DMV director Bruce Breslow said.

“When there comes a time that vehicle manufactures market autonomous vehicles to the public, that infinity symbol will appear on a green license plate.”

Google, known to dive into other big ideas such as space elevators to Internet-enabled glasses, was the first company to apply to test its self-driving system in Nevada, the press release said.

It also indicated that “other auto manufacturers have indicated their desire to test and develop” such technology in the state.

In a 2010 post on Google’s official blog, engineer and Google X founder Sebastian Thrun said that the self-driving vehicle project aims “to help prevent traffic accidents, free up people’s time and reduce carbon emissions by fundamentally changing car use.”

He noted that the “automated cars use video cameras, radio sensors and a laser range finder to ‘see´ other traffic, as well as detailed maps … to navigate the road ahead.” There is no driver needed, though one is typically in the front seat ready to take control if need be, Thrun was quoted as saying by CNN.

Earlier this year, Google said it had “safely completed over 200,000 miles of computer-led driving.”

Helsinki: Angry Birds maker Rovio Entertainment said sales jumped tenfold to $100 million last year as gamers flocked to download its titles, adding business was now strong enough for a stock market listing.

The Finnish startup making Angry Birds games — in which players use a slingshot to attack pigs who steal the birds’ eggs — has been valued by analysts at up to $9 billion, just short of that of struggling world No.2 phonemaker Nokia.

Rovio said on Monday its finances were good enough for a listing after revealing a highly profitable 2011 in its first public disclosure of business results and forecast a bumper year ahead.

Rovio, originally founded in 2003, became a global phenomenon after it launched Angry Birds for Apple’s iPhone in late 2009.

Since then it has remained at top of the gaming charts with more than 800 million downloads and it had 200 million monthly users at the end of 2011, just short of US-based Zynga’s 240 million.

“Rovio has fended off all rivals so far,” said analyst Tero Kuittinen from Finnish mobile firm Alekstra. “Rovio is still the king of the mountain, despite stiff recent challenges by OMGPOP and Disney’s ‘Where’s My Water?´”

Rovio plans to launch several more titles in 2012, which include a non-Angry Birds title, chief executive Mikael Hed told Reuters in an interview.

Rovio predicted further growth driven by growing cellphone sales and its significant investments in product development, branding, brand protection and corporate infrastructure.

“2012 looks fantastic,” Hed said. “We have had some very strong download numbers over four months.”

Its Angry Birds Space game was downloaded more than 50 million times in 35 days since its launch in March.

Rovio is also expanding its brand to toys and playgrounds, and is taking the birds to the big screen. The first full-motion animated movie featuring the characters is in the works and the short animations are a YouTube hit.

Consumer products, which includes merchandising and licensing, generated around 30% of revenues last year, with the share higher in the fourth quarter, Hed said.

At the shareholders meeting on Monday listing plans were not on the agenda, but Rovio has earlier said the company would likely be ready for an initial public offering next year, either in New York or Hong Kong.

“This company is preparing itself and getting ready,” said Anders Lindeberg, Rovio’s head of investor relations, adding the firm was working on meeting corporate governance requirements.

Rovio reported 2011 profit before tax of 48 million on sales of €75.4 million ($99 million), for a margin of 64 percent. The company did not provide historic data, but has said 2010 revenues were around $10 million.

Last year Rovio raised $42 million from venture capital firms including Accel Partners, which previously backed Facebook and Baidu, and Skype founder Niklas Zennstroem’s venture capital firm Atomico Ventures.

Rovio was founded after three students including Niklas Hed — CEO Mikael Hed’s cousin and now Rovio’s COO — won a game-development competition sponsored by Finnish mobile phone maker Nokia and Hewlett-Packard CO.

Shares in Nokia, whose headquarters are just a few buildings away from Rovio, were 1.4% lower on Monday, valuing the firm at €8.84 billion ($11.6 billion).

Seoul: LG Electronics Inc, the world’s No.2 TV maker, plans to launch Internet-enabled TV based on Google’s platform in the United States in the week of 21 May, as the South Korean firm seeks to gain a larger share of the emerging Internet TV market, a senior LG executive said on Monday.

The move reflects an aggressive push by the duo to defend against a potential threat from Apple Inc, which reshaped the handset market with its iPhone smartphone and is widely expected to unveil a full-fledged TV product later this year or early next year.

“Production of Google TVs will start from 17 May from our factory in Mexico and US consumers will be able to buy the product from the week of 21 May,” Ro Seogho, executive vice president of LG’s TV business unit, told a small group of reporters.

Google TV allows viewers to access Google services such as searches and YouTube videos on their television screens.

Ro said LG will decide whether to expand the offering to Europe and Asia after reviewing sales performance in the US market.

LG gave no shipment target or details of prices or screen sizes.

Research firm IHS iSuppli estimates the global Internet-enabled TV market will grow nearly 60% this year to 95 million sets, far outpacing the TV market overall, which is expected to expand by just 2%.

The second version of Internet TV by Google, which hopes to replicate the success of its Android mobile software in the TV market, comes after its previous model, unveiled in 2010, failed to catch on with consumers.

Google’s attempt to capture the living room audience has seen limited success so far due to a lack of web content or support from hardware manufacturers.

TV manufacturers from LG to its bigger rival Samsung Electronics Co have their own Internet-enabling TV platforms and are aggressively pushing their own technologies, along with Google TV, to gain the initiative and prop up margins with high-end products amid growing competition from low-cost producers.

LG plans to fit around 60% of its TVs with its own NetCast platform installed, to allow viewers access to the Internet, social networking and online games as well as LG’s own TV applications.

LG saw its TV division’s profit margin rising sharply to above 4% in the first quarter, helped by strong sales of high-end models such as 3D TVs and Internet-enabled sets, just when Sony Corp, Panasonic Corp and Sharp Corp expect to have lost a combined $21 billion in the business year that ended on 31 March.

LG doubled its share of the 3D TV market to 15.3% in the fourth quarter of 2011 from earlier in the year, helped by cheaper and lighter 3D glasses that do not require the batteries and switches used in conventional 3D sets made by Samsung, Sony and others.

Sony’s share of the 3D TV market tumbled to 13% in the October-December quarter from 34.6% in January-March quarter of last year, according to DisplaySearch.

LG hopes to further steal a march on its rivals by bringing forward the launch of a 55-inch flat-screen TV using next-generation technology, raising the stakes in a cutthroat battle for the living room between Asia’s top tech powerhouses.

Google has long held ambitions in the television arena, hoping to extend its online advertising business to the big screens that still command the lion’s share of global advertising budgets, and to make the best use of its ownership of YouTube, the world’s most popular online video site.

But Logitech International, one of Google’s initial partners that developed a set-top box offering the service, said late last year it had lost tens of millions of dollars building set-top boxes for Google devices due to weak sales.

An LG official said retailers’ responses to the latest Google TV were positive.

California: LinkedIn Corp raised its outlook after smashing first- quarter revenue and profit expectations, racking up strong growth from services that help companies find and hire employees.

“The guidance was surprisingly high,” said Ken Sena, an analyst with Evercore Partners. “I think it’s a matter of them being able to use the data they have more efficiently to drive better results for their partners.”

The company increased its 2012 revenue outlook on Thursday by $40 million to a range of $880 million to $900 million.

LinkedIn shares were up 10% in after-hours trading at $120.50 from their $109.41 close.

The company, based in Mountain View, California, was one of the first prominent US social networking sites to make a debut in an initial public offering a year ago, whetting the appetites of those eagerly awaiting Facebook’s impending IPO.

With more than 161 million members worldwide, LinkedIn is being closely watched by investors to see if its business model is solid.

LinkedIn shares are up nearly 70% year-to-date and are more than double its IPO price of $45.

A combination of international growth expansion and a hiring spree in order to generate more sales are behind the company’s revised forecast, said Kerry Rice, an analyst with Needham & Co.

“LinkedIn has the best value out there,” said Rice about companies seeking employees.

LinkedIn also announced on Thursday that it acquired content sharing company SlideShare for $118.75 million in a mix of cash and stock. The service lets professionals upload presentations and share them with others.

The company was started in the living room of former PayPal executive Reid Hoffman, who co-founded LinkedIn in 2002. It makes money by selling services and subscriptions to individuals seeking jobs and companies looking to hire.

LinkedIn reported first quarter revenue rose 101% to $188.5 million, besting analysts’ average forecast of $178.58 million, according to Thomson Reuters.

The top line results were bolstered by the strong performance of the company’s three units.

Revenue at its hiring solutions division, which represents more than half of total revenue, jumped 121%, while it grew 73% at its marketing solutions unit that sells display advertising.

“I think marketing solutions is the biggest surprise in terms of how much the numbers beat, given the weakness out of Yahoo,” said Herman Leung, a senior analyst with Susquehanna Financial Group, which holds a stake in LinkedIn.

Premium subscriptions — offered to members for more specialized services — saw revenue increase 91%.

Excluding special items, first-quarter earnings per share of 15 cents was well above analysts’ expectations of 9 cents per share.

Net income rose to $5 million from $2.1 million in the same quarter a year ago.

London/Helsinki: Samsung Electronics unveiled a new top-of-the-range Galaxy smartphone in London on Thursday, updating the most direct rival to Apple’s iPhone with a larger touch screen and more powerful processor.

The South Korean technology group, which overtook Finnish company Nokia as the world’s biggest cellphone maker earlier this year, said the new Galaxy SIII model would go on sale in some markets in late May and around the world from June.

Last week, Samsung reported a record $5.2 billion quarterly profit, boosted by Galaxy smartphone range whose sales outstripped the iPhone.

Samsung sold around 45 million smartphones in the first quarter and contributed most of its operating profit.

The new Galaxy SIII model will have a 4.8 inch touch screen, 8 megapixel camera and will use the latest version of Google’s Android software.

Analysts said the expected massive marketing campaign and features of the handset – billed as the official smartphone of the London 2012 Olympics – were likely enough to generate strong sales, but the launch left many of them unexcited.

“It is not an eye-catching device that will overwhelm consumers,” said IDC analyst Francisco Jeronimo.

The blue lights in the launch venue downtown London, echoing the cold rainy day outside, and the background sounds of nature, which Samsung said inspired the design, resulted in a fairly muted atmosphere in the room.

Won-Pyo Hong, head of product strategy at Samsung’s mobile business, said it expected sales of the Galaxy SIII to outstrip predecessor SII’s more than 20 million units.

“Definitely, we expect so. The level of interest from our partners has been bigger,” Hong told Reuters in an interview. He said the marketing budget would also increase, even if brand awareness was already quite high.

“We need to spend more on marketing to address consumer interest and to meet requirements of our partners,” he said.

Analysts said the new device represented a formidable challenge to rivals, given a combination of the Galaxy brand, sales support from operators and heavy marketing.

“Samsung must make the most of a 4-5 month window of opportunity with the Galaxy SIII before Apple changes the game once more with its next generation iPhone,” said Geoff Blaber, analyst at CCS Insight.

The new Galaxy will be powered by Samsung’s quad-core microprocessor, which the company hopes will also be used in handsets made by HTC and Motorola, as well as Apple, its biggest customer for components.

The Exynos 4 Quad, based on British chip designer ARM Holdings Cortex A9 technology, enables more tasks in a shorter period of time – for example streaming video can run on one core while the other cores update applications, connect to the web and scan virus-check, simultaneously.

Apple and Samsung’s near duopoly in high-end smartphones was not expected to come under threat this year or next.

“Samsung is now the only company that can compete with Apple and challenge it in the smartphone segment,” said IDC’s Jeronimo.

Samsung shares hit a lifetime high after its first-quarter results, pushing its market value to $190 billion, 11 times that of Japanese rival Sony, though still only a third of Apple’s, the world’s most valuable company.

In stark contrast shares in Nokia, whose betting on a tie-up with Microsoft to revive its fortunes in the lucrative smartphone market, are at a 15-year low. Nokia said last month it would make a first-half loss as it struggles to revamp its product line.

Technology research firm Ovum said in a note on Thursday it expected Microsoft to establish its Windows Phone as a relevant smartphone platform only by 2017.

At its annual meeting on Thursday, Nokia’s chairman-designate defended the group’s turnaround strategy to investors losing patience with its efforts to catch up.

New Delhi: The spurt in demand for feature-laden smartphones is a boon for applications developers—and advertisers.

Credit Suisse Group AG forecasts that annual sales for smartphones will cross one billion units by 2014. Add to that the hefty 39% growth in sales that Gartner projects for 2012 and the excitement of app makers is understandable.

As for mobile applications, ABI Research estimates that 29 billion apps were downloaded worldwide in 2011, up from nine billion in 2010, the market growing at 12% month-on-month. And according to International Data Corporation (IDC), the global mobile app downloads are forecast to soar to 182.7 billion in 2015.

App developers, expectedly, are finding ways to take advantage of the spurt, mostly by placing advertisements in scores of applications ranging from gaming and social networking to banking.

The Indian market for advertising in apps is in its infancy. The Internet and Mobile Association of India and the Indian Market Research Bureau in a joint report predict that the country’s mobile advertising market will reach Rs 144 crore by 2013. Only 20% of this will be from apps, so the challenge for the developers is to grow the base, while looking for alternative revenue models.

Typically, a developer and an app store split revenue in a 60:40 ratio. But with most apps available free, developers need new ways of monetizing them, which is why the in-app economy is fast becoming a focus area.

The revenue model for in-app advertising is of two types: cost per click and cost per impression. In-app purchasing entails spending money to buy virtual goods or unlocking certain features or levels as in games.

Nokia Store, the app store run by the phone maker, claims to have 13 million downloads a day globally, with about 12 million a week from India. “With every 100 downloads on Nokia Store (formerly Ovi), we make $1. For developing a single app, whether paid or free, we spend about $3-4 (as one-time development cost over and above which is the cost of upgrading the apps). There is a 70% profit margin for developers,” said Virat Singh Khutal, chief executive of Twist Mobile Pvt. Ltd, an Indore-based app developer and a publisher firm on Nokia Store.

According to an IDC report, the shift towards in-app monetization is more in the free app category. This is reiterated by Dippak Khurana, chief executive and co-founder of Mumbai-based mobile ad network Vserv.mobi, who said Indian users are more interested in free rather than paid content. “In India, 85-90% app downloads are for feature phones. Smartphones such as iPhone (from Apple Inc.) are not that deep inside the Indian market. iOS (Apple’s mobile operating system) is a better network for paid apps, whereas Android (from Google Inc.) and products based on Java (from Oracle) are a better option to distribute free content,” he said.

Adds Vishwanath Alluri, founder and chairman of Hyderabad-based IMImobile Pvt. Ltd that develops mobile and tablet apps for brands such as Samsung Electronics Co. Ltd and the UK’s The Spectator magazine, “The iPhone has changed everything in the West, including in Europe. But the Indian market has predominantly been a voice-related one where smartphone penetration is very low.”

In India, the freemium model supported by ads is the best business model because the market for paid apps is far too small to support the revenue model, said Khutal of Twist Mobile.

Under the freemium model, the app is given away for free, but users can spend money to add more features. “This gives a lot of scope for small companies to make an impact. The Indian app market is 80% underserved. It is a huge opportunity for app developers,” he said.

Generally, in in-app advertising, either a banner ad or a full screen ad with interactive features works best for brands in terms of awareness and engagement and for mobile content companies, said Khurana of Vserv.mobi.

Transition ads are also popular for users to view during “breaks”. For instance, Vserv.mobi designed a campaign for Tata Photon Plus in which it placed the ad while transiting from one level to another in a game. Yahoo! Inc. promoted its cricket app by publishing a full screen in-app ad. It clocked 285,000 downloads in 25 days.

The client is charged only on successful installation of the app and not on the initiation of a download.

Ads shown at the launch of an application are hard to miss and offer a clutter-free exposure of the creatives. For enhanced interactivity, there are rich mobile media ads running either as a billboard or a video.

For instance, InMobi ran a rich-media campaign for Unilever Plc’s weight-loss product Slim Fast. It created a motion-activated ad where users had to shake the phone to discover a new flavour. Once a user reached the new flavour, she could expand it to see the nutritional value and contents.

Mostly, ads are provided by mobile ad networks such as Google AdMob, InMobi, vServ.mobi and MobiSolv. They are the meeting points for publishers and advertisers.

“These mobile ad networks also act as application distribution intermediaries cross-promoting apps with their ad network through embedding ads of one programme in another,” said Prakash Sreewastav, CEO of Hyderabad-based Winit Software Pvt. Ltd, an app strategy and development firm working with clients such as Jet Airways India Ltd and Cisco Systems Inc.

With the mobile application development world highly fragmented owing to the proliferation of multiple handsets and mobile platforms, the cost of application development is usually very high. According to Alluri of IMImobile, trends change on the fly. “Ads need to have two things: specificity and sensitivity. They need to be specific to the target audience so that there is no mismatch, and sensitivity matters for the recall rate that the ad carries. This is only possible in TV or print or radio. Mobile advertising might not be a great medium,” he adds.

Many experts say the in-app advertising and the application industry will need another two-three years to take proper shape. The main reasons for the slow growth are the lack of a large base of smartphones in the market and poor infrastructure such as Internet accessibility. “The hybrid model of driving revenue after the download will play an increasingly large role for many developers in future,” said Jasmeet Gandhi, head of services marketing at Nokia India. “In-app advertising and subscriptions combined with large operator billing footprint are at the forefront of these new models.”

Small and medium enterprises (SMEs) in India are yet to explore the mobile phone as a medium for ads. “Indian publishers and mobile application developers will gain and profit only after these SME B2Cs (business-to-consumer firms) start adopting mobile advertising, as only then they can develop apps that specifically target growing Indian mobile-savvy consumers,” said Sreewastav of Winit.

New Delhi: A couple of months ago, more than 500,000 women received multimedia messages on their mobile phones of actor Katrina Kaif vouching for the efficiency of a hair-removal cream. The company that put out the ad, Reckitt Benckiser India Ltd, would have spent a lot more to reach as many people at random—and not necessarily a specific demographic—on the Internet.

Encouraged by the response to its first mobile ad, Reckitt is planning a campaign to promote its flagship brand Dettol through an ad film designed for mobile screens. Hindustan Unilever Ltd (HUL), Dabur India Ltd, Kraft Foods India and many other companies selling anything from food supplements to deodorants are evolving ad strategies around mobile phone formats—voice, text or multimedia messages, mobile Internet and applications—as the viability of the platform becomes clearer.

India has the second largest population of mobile phone users anywhere—at 900 million—and about 15% of them access the Internet on handsets equipped with newer and faster technology, according to the Internet and Mobile Association of India (IAMAI).

“The distribution reach of this medium is unparalleled,” said Atul Satija, managing director and vice-president, Asia-Pacific, InMobi, a mobile advertising agency. “It offers a creative canvas similar to that of television and has the added benefit of immediate interactivity with the consumers.”

The interactivity, and the flexibility of the platform, is the key. Four months ago, HUL, India’s largest consumer goods company, launched a voice-based mobile phone campaign for its detergent brand Wheel aimed mainly at buyers in rural India. The promotion was targeted at listeners of All India Radio, the state broadcaster with a wide rural and small town reach, who were asked to call a specified number and hang up. They would then get an auto-generated call that played a recording of a humorous dialogue between a couple highlighting lighter, romantic moments in their life.

The test pilot had eight so-called interactive voice responses (IVRs), or eight different recordings to play back to callers. HUL registered 320,000 calls during the four-week pilot from 28,000 unique callers, or potential buyers, said Abhiroop C., head of media services at HUL. It increased the number of IVRs to 30 and at the end of three months registered five million calls from 770,000 unique callers.

The growth of mobile advertising has been much faster than that on the Internet, said Dippak Khurana, chief executive at Vserv.mobi, a mobile ad network that serves ads through mobile applications and mobile websites. “The Internet took 16 years to reach 100 million users,” he said. “In half the time, mobile advertising has reached the user base of the Internet.” Khurana, like many others, believes the mobile phone will be the second largest advertising medium after television because of its reach.

Neeraj Roy, managing director and chief executive at Hungama Digital Media Entertainment Pvt. Ltd, believes the mobile phone will do better than the Internet as an ad platform as it is easier to use and provides connectivity on the go. “Growth drivers for mobile advertising are the basic growth in mobile and Net-connected devices, the advent of enhanced and enriched application ecosystem and consumption of different types of content by users,” said Roy. Hungama is a digital entertainment and marketing agency that has worked with brands like Pepsi, Tata Sky and Bacardi in mobile advertising.

Companies declined to share their mobile advertising budgets, but market numbers reveal the platform’s expansion. The share of mobile ads grew nearly 17% in the previous financial year to Rs 105 crore. The latest Digital Advertising Report jointly published by IAMAI and the Indian Market Research Bureau predicts mobile advertising will rise to Rs 144 crore by the end of 2013.

“Earlier, people used to laugh off Internet advertising saying it is minuscule. However, now it is a Rs 1,500 crore market growing at 15% per annum,” said Khurana. His prediction is that mobile advertising will grow at 125-130% in the next three years.

A media buyer who declined to be named for this story said consumer goods, telecom and auto brands spend 7-10% of their total advertising budgets on digital advertising and one-third of that is reserved for mobile ads. Firms spend between Rs 2.5 lakh and Rs 70 lakh on mobile ad campaigns, depending on the nature of the campaign and the size of the brand, said Satija of InMobi.

The Reckitt Benckiser campaign for Veet hair-removal cream was sent exclusively to Aircel Ltd’s women subscribers. Blyk Media India Pvt. Ltd, which worked on the campaign, said the multimedia messages promoting the brand were not spam as the subscribers had opted to receive ad messages.

Sunil Sampath, a 23-year-old analyst with financial consultancy Grant Thornton, said he does not like receiving calls and ad messages on his mobile phone as they are often “random and irrelevant”. But interestingly, he doesn’t mind updates from his favourite brands such as Levi’s or Marks and Spencer as he finds them useful.

Subscribers who do not want to receive ads on their phones always have the option of registering on the National Do Not Disturb registry, meant to prevent spam calls and messages.

Bharti Airtel Ltd, India’s largest telecom service provider, considers mobile advertising a huge asset as it allows targeted campaigns.

As part of the mobile campaign it launched for Life OK, Star India Pvt. Ltd’s new Hindi channel, pre-paid subscribers of Airtel in Hindi-speaking states received “end-of-call” notifications stating, “Don’t forget to watch Life OK at 8pm tonight.” End-of-call notifications are messages all pre-paid subscribers get after making a call or sending messages. The campaign, conducted three hours before the launch of Life OK on 18 December, improved the channel’s ratings, said Mohit Beotra, head of emerging business at Bharti Airtel.

The use of the vernacular plays a role. “When we change or modify content with a vernacular angle, for instance, if we say, “asli” instead of “real” (in Hindi-speaking regions), the response rate of the campaign shoots up from 6% to 35% in parts of Maharashtra, Bihar and the North-East,” said Shubhodip Pal, country manager at Blyk, a UK-based mobile media firm that has worked with 30 brands in India including Cadbury and Knorr.

India’s hinterland offers a significant audience for mobile ads that’s put at 312.62 million cellphone users, according to January data released by the Telecom Regulatory Authority of India.

“Penetration of mobile is higher than conventional media in most rural markets. With the evolution of the mobile device in rural India, from a simple communication device to a complex one which offers entertainment, banking and information, the opportunities are endless for any marketer,” said Abhiroop of HUL, which earns a sizeable portion of its revenue from India’s villages and small towns.

To cater to the growing demand for mobile advertising, a variety of specialized firms are coming up—such as digital media and content developers and application developers catering to mobile ads. “Mushrooming of these agencies in the market has just started. It’s still early days, but the first phase has started,” said Roy of Hungama Digital, which began its life as an online promotions agency in 1999.

Blyk entered India about one-and-a-half years ago. “Mobile advertising is young. What you see is firms taking first steps into this medium to learn, experiment and see the kind of impact they can create towards their consumers,” said Eric Kip, global chief executive of Blyk Ltd.

The future of mobile advertising will be determined by the growth of smartphones and mobile Internet in India. More than 10 million smartphones were sold between January and November 2011, according to CyberMedia Research India. Smartphones accounts for 6% of the total mobile handset market.

“The true value of mobile advertising is not possible through an SMS or an MMS. Rich media advertising on smartphones is the way forward,” said Satija of InMobi. “In the next 12-18 months, the Net will become a subset of mobile Internet.”