Wireless Democracy in Estonia

It was only a matter of time, I guess, and here it is: Estonia will allow its citizens to vote by SMS in 2011. However, the Estonians too have been watching the US Presidential elections in 2000 and decided hence that one needs some additional security to make it safe. Enter a chip that every citizen can apply for and get into his/her phone. If or if not this makes it really safe (my guess it that it should be possible to apply some decent security if the device is "hard-wired"), can (and probably will) be discussed at length by the experts. But it might just not matter much: I find it hard to believe that more people would actually jump through those additional hoops required to be admitted. 

Cool PR, Estonia, hats off. And see you behind the curtain at the good old voting booth (or whatever it's called) in a few years time. 

RIM eats Chalk

Blackberry maker Research in Motion is acquiring mobile content deployment solutions provider (quite a mouthful!) Chalk Media for $18.7m in cash. Chalk to what they call "pushcasts", which - if I understand it correctly - is basically pushing podcasts to smartphones. The Vancouver-based company is listed on the Toronto Stock Exchange, so it still requires shareholder approval, and the deal is therefore not closed yet.

The move is a neat one: podcasts are increasingly used in the corporate environment for staff communications of all sorts, and the enterprise being the stronghold for RIM, it makes a lot of sense to strengthen its service offering by adding such a tool.

RIM has of course got under fire by Apple's iPhone and this will presumably continue being the case also by the higher-end Android-based phones who have been nibbling away (see here and here) on the Blackberry's pedestal as the businessman's (and woman's) favourite gadget. A lot to defend then, and the price would therefore not seem to be excessive at all... Stringent rationale, me thinks...

Most Precious Mobile Operator Brands

And the winner is... China Mobile. Hard to guess, huh? Some research shows that the Chinese carrier's brand is worth $30.79bn. Vodafone and Verizon took the other spots on the podium. The top 10 is below (courtesy of the good folks at telecoms.com). And for some (by now a little outdated) comparison for how they rank amongst other industries, see here.

The study applies a royalty based on forecast of sales, brand strength (from qualitative panel data) which priced in market share, growth, price positioning, market scope, preference, awareness, relevance, heritage and perception. They complement these slightly fluffy markers with data on turnover, subs, churn, market share, ARPU, profitability, etc and then took the average score of the two to determine the royalty rate applicable. Apply tax and (low) discount rate and off you go. Pretty simple, isn't it? And, yes, I still think Cingular was cooler than AT&T... ;-)

China Mobile	China Mobile	China	Asia	30,793
2	Vodafone	Vodafone	UK	Europe	22,131
3	Verizon	Verizon Communications	US	North America	20,382
4	AT&T	AT&T	US	North America	18,886
5	T-Mobile	Deutsche Telekom	Germany	Europe	16,802
6	Orange	France Telecom	France	Europe	15,489
7	NTT DoCoMo	NTT DoCoMo	Japan	Asia	14,871
8	KDDI	KDDI Corp.	Japan	Asia	14,454
9	Movistar	Telefonica	Spain	Europe	10,799
10	Sprint	Sprint Nextel	US	North America	9,661

AT&T to go all Symbian

An article tells us that AT&T Wireless intends to run all their phones on one platform as soon as 2014, namely on Symbian. Is this odd? I mean: the iPhone isn't Symbian, is it? 

It is of course not odd. The carrier wants to avoid platform fragmentation (see also here and here) which has made it hard to develop mobile applications (and one might well now think that they indeed had a very powerful showcase paraded past them over the last 5 months: see here), and their Director of Next Generation Services, Data Product Realization (can't they have shorter job titles?), Roger Smith called Symbian "a very credible and likely candidate" to be "the One".

AT&T intends to

 provide an own-branded smartphones and they reckon - rightly! - that it would be a "support nightmare" would they run this on various platforms.

Mr Smith also came up with some damning verdicts about J2ME: it failed to deliver a simplification for application developers and, moreover, doesn't allow developers to get deeply enough into a phone's OS to deliver the kind of experiences consumers want (what are these, I ask? Not having to put up with clunky and unintuitive restrictions? Ah, now I get it).

Symbian, Android (see here) or another one: the path is, I reckon, the right one. And it is a milestone for Symbian (and one probably only possible because of the decision to go open source with it) as it would wrap up one of the largest carriers in the world under its wings.

iPhone content is recession-proof, too!

Is it becoming boring or is it becoming more and more exciting? However you view Apple's forays into mobile, it is very, very remarkable (and I do indeed think exciting) indeed: in ads in the NY Times and the Washington Post (see here), the company reports 300,000,000 downloads in 5 months (I leave the zeros in for mere impact...). That's 2.1m downloads per day - on a single handset model, which isn't even the single best-selling one (well, it probably is of recent, but not historically) and is normally only available through one carrier per country (which means that it could also have been, say, 10m downloads per day if extrapolated to the total user base). Woah! Is anyone still skeptical about the equation pretty hardware + pretty UI + hassle-free shop-front + single platform + single distribution outlet = success for content?

The iPhone's fashion factor does, I think, not matter when it comes to the download numbers: If the above chain would not work, people might smile slightly embarrassed and continue fiddling around with the pinch-z

oom of pictures, etc but they would not come back time and again to get more content for the thing; I mean: just running around with it and placing it onto bistro, bar, cafe and probably even Starbucks tables will be enough to prove your membership in the circle of the hip and trendy media crowd.

There's only anecdotal reports (or rather rumours) about how much money is being made by developers on the platform (we still suspect a lot of it will be in the "free" category but one rather reputable games publisher apparently said that they're making more money on the AppStore than through all of Vodafone Global) but these numbers are - in any event - huge!

And it does show that content works if you let it work, i.e. if you make it easy to publish on a platform and if you don't try to be your customer's nanny and determine what's good for them. If people would realize this, and that would be the only lasting impact of the iPhone, that would surely be a lot! Thank you, Mr Jobs!

Mobile Gambling is Recession-Proof

The busy bees over at Juniper are in a pre-Christmas frenzy it seems; they're very active recently (see here and here). Today, they have enlightened us yet again: according to their latest report, there is a niche sector that will actually be completely unaffected by the doom and gloom of the world economy, and that is mobile gambling. They predict this segment to double in size in 2009 to a not too shabby $3.6bn, 30% of which to be coming out of the UK.

However, 3/4 of that are said to come from betting, which is to say it is mainly an extension of existing betting business: Ladbrokes, Bwin, William Hill, etc, all run mobile sites funneling punters into their regular business. The second-largest sector is casino games, which would be the likes of IGT-owned Million-2-1 early movers Spin3 and the likes. And there is presumably poker (Cecure Gaming has captured a good position there it seems: live on all UK operator decks).

What they don't say is if the numbers quoted are gross turnover or only the rake (which is only a small fraction of the total). But the rationale convinces me, too: people will gamble. Hope is a powerful consumer value driver! 

Lower Handset Sales in 2009

The financial crisis will - what a surprise - also catch the handset manufacturers. A report tells us that handset sales are bound to fall in 2009, by 5.6% or 1.215 billion units, to be precise. The backend of 2008 already sees the impact, too: growth predictions have been reduced from 10.4% year-on-year to 8.9%.

This is in line with reports from Blackberry maker RIM who reduced its forecasts today. Even mighty Nokia is expected to lower its forecasts.

It can probably be expected that this will also impact the mobile content market: it is widely accepted that consumers tend to spend on mobile content in the first 3 months after they got a new phone. So: no new phone, no new content... Moreover: the above reduction in growth does not actually show the whole picture. Mobile content uptake is much higher on high-end phones. However, these are normally bought by way of upgrades, and it is there that the most severe drops are being predicted.

“While new subscriber additions are continuing at a healthy pace and are poised to grow by 563.9 million in 2008 and by 506.5 million in 2009, an overwhelming majority of the new subscribers are coming from the rural areas of emerging regions,” Teng said. “These subscribers primarily are purchasers of low-cost, entry-level handsets. However, the pricier feature-phone and smart-phone market segments are driven by existing subscribers who are upgrading their mobile devices to take advantage of new features and advanced data services. As the economic climate deteriorates, these customers are delaying their purchases.”

All doom and gloom then? Well, maybe not: others predict that the recession (at least in the US) will actually drive the number of wireless-only households. And, after all, a mobile game at €/$/£ 5.00 a pop is not the world, is it?

Google to be a force in mobile, too

More research predicting world domination for Google! Well, somehow anyway. According to a new report, Google will succeed with its expansion into mobile. Now, I thought they were there already and had been doing a bit of business there for a while: they're the search engine of choice for quite a number of network operators already (although the jury is still out if this works: see e.g. here), and besides keep adding nifty apps to the mix (their mobile versions of Google Maps and Google Mail apps, well or at least for the Blackberry are pure bliss!). The latter are - for the time being - only an extension to their web apps without, notably, the ads; but this is only a question of time, I think: screen resolutions make AdWord a little awkward these days but higher resolution phone screens (such as for the new Blackberry Bold, which has widescreen QVGA) will likely change that. Google does offer AdSense for mobile already although there, too, no data on uptake or revenue is available (cf. press release).

On the carrier deck search side, I understand that this as well is more a question of land grab rather than actual revenues so far but the above applies, too. That is hearsay more than confirmed fact though.

Now, the aforementioned report thinks that Android-powered phones will grab 3% market share for smartphones in 2009 (corresponding to 8m devices). This is respectable. However, Apple's iPhone is said to hold 17% of the global smartphone market and it is predicted to ship 45m iPhones in 2009. Shouldn't Android phones be able to do more? I mean: Android is not only Google, it is also a gazillion other molochs of the mobile telecoms world (see e.g. here and here). Even if those numbers were right, they wouldn't give Google world domination (remember Nokia? They hold some 40% of the world market...).

Then, say see local search being key, with which I agree. In their own words:

Local search will be key to market growth: innovations in mobile search and advertising will allow for improved local search, directly competing with 'yellow pages' type proximity marketing services. The challenge for Google is to encourage consumers to start performing functions on their mobile browser that they would previously have done on their PC in already established markets.

So: opportunity = local search and connecting this to Google's fantastic capabilities in "normal" search. Threat = no uptake. I would add: getting local relevance and context right is not as easy as one should think (when I walk through London's SoHo, do you think I am looking for media companies (Fox, Sony, etc.) or for Agent Provocateur?

I do think though that Google is indeed best positioned to get this one right: they solved the tough bit of the puzzle, and that is to sift through the vast arrays of the Internet to rank the "right" pages. To limit these to local relevant ones only, is surely "only" a question of adding another condition to your algorithms...

Also: the whole Android idea makes a lot of sense, and Google clearly has the lead in the Open Handset Alliance. So they "just" have to keep up with the innovative speed of the markets then... 

Note: I do not get paid by either Google or RIM (unfortunately) but I do use their services...

Juniper to the Rescue...

We can depend on the researchers from Juniper after all (or maybe they simply felt bad after reading my post on their last report). Whichever the reason, apparently the mobile content industry could be worth a hefty $167bn (!) if - yes, if - the operators would resolve to allowing a workable commercial environment, namely by limiting themselves to lower revenue shares. Whatever the caveats (which are, as usual, hidden in the expensive main report) this number is topping even the loftiest predictions to date; right on in times of the doom and gloom. The key apparently lies in whether operators would act as dumb pipes (no richness for anyone) or a smart pipe (lots of play money for all players on the value chain). In their own words:

"If MNOs are to benefit financially, they need to move away from their Dumb Pipe roots to the Smart Pipe model, though they will clash with the content providers which already dominate the Smart Pipe. A compromise needs to be found."

A smart pipe is understood as one where operators would offer flexible, application-centric value configurations, allowing lean, efficient content offerings from third parties. A dumb pipe is one where content (and value) would merely rush through the pipe without any value being added by the operator. The prevailing model in the mobile games world, namely the on-portal approach where operators implement comprehensive vertically-integrated models ("walled gardens") is suggested to be somewhat doomed as content providers would gain bargaining power (presumably through consolidation of the supply side plus entry of meatier traditional media players in music, video and TV).

This is all pretty speculative though, and without some background it is quite frankly impossible to analyse the numbers some more. Mobile content appears to include (as per their report from March) games, music, video, TV, social networking, adult content, gambling and so on, and so forth. However, the exact calculatory basis is again hidden in the depths of the report, so I don't know (do they e.g. take the gross gambling revenue or on;y the rake, which is only a few percentage points of the former). Anyhow, due to these foggy conditions, commentators seem to either merely re-print the PR blurb or mock it (Stuart Dredge thinks that "only gas could do that kind of money"), which is a shame really; just think what you could with this much money...

Vivendi Mobile Games is History

It had been announced previously and now it seems to be confirmed: Vivendi Mobile Games, the mobile games publishing arm of what now is Activision Blizzard, has closed its doors in Europe (after it apparently already did so in the US two weeks ago). 

Background information on any reasons is hard to come by. Inability to control costs is a rumour frequently heard. One might also think that the overriding business outlook of Activision, which has been licensing out its titles pretty successfully to the likes of Hands-On Mobile (Call of Duty 1, 2, 3, True Crime: NYC, True Crime LA, Guitar Hero III an IV) and Glu (Call of Duty 4 and 5) - and perhaps less successfully to the now defunct Infospace Mobile (see here where they ended up) who did or planned to do Tony Hawks et al on the one hand, and the Blizzard unit that has a game on its hands that is awesomely succes

sful but hard to translate to mobile (namely World of Warcraft) did not leave room for a unit that could successfully compete internally. 

Given that Activision's CEO had also announced (transcript of its respective earnings call here)  it would divest/retire a lot of its more casual Sierra unit (because they could not be sequelled on an annual basis; see some analysis here), the demise of VMG might therefore point more to a strategic decision on Activision's side.  

Blackberry's (My)Space

Would you believe it? The marriage of what was seen only a short while ago as the quintessential businessman's phone and the latter's presumed opposite, the music-centric, young, urban web 2.0-type has is complete. I am talking of course of the Blackberry client of social network MySpace: only a week after being released, the two partners, Blackberry maker RIM and MySpace, reported a rather staggering 400,000 downloads of the application and, perhaps even more staggering, 15 million messages sent and received through it, accounting for 2 million status and mood updates (that's an average of 5 for every user).

The stats in themselves are impressive. However, what it does show is that a) Blackberries aren't only for the cold-nosed investment bankers anymore (or maybe those investment bankers now have the time to go off on a social networking frolic of their own) and b) social networks are not only for the wild at heart anymore (or maybe they never were but we only never realized behind those nicknames).

It might only be a footnote in the mobile applications space but it is a noteworthy symbol for those two things: both smartphones and social networks are very much mainstream. The always connected worlds of both smart(er) phones and social networks always were somewhat akin to each other: both grow in value when availability is pretty much always there. So this shows once more the power of the concept of contextual and relevant connection and connectedness.  Hats off!

China Mobile puts on turtleneck

The theme starts becoming lame, I know (and I herewith promise to look for new semi-funny references to Steve Jobs). However: if the world's largest operator by subscribers changes its dress culture, that is to say swaps from a tightly controlled walled garden to a free store concept, that surely merits this. So, without further ado: China Mobile plans to launch its very own AppStore. Its Chairman & CEO Wang Jianzhou (who was, I think, not sighted in Mr Job's favourite garment) announced this at the GSMA Mobile Asia Congress in Macau. Now, with a whopping 436.1m subscribers, this opens fairly interesting vistas for mobile content - if, yes if, one can hit Chinese taste, that is. They specifically cite Apple's success with its iPhone as a trigger for them to do it. Truly impressive that a company so big would move so quickly.

This will surely hit the news wires some more in the coming days but I will now retire and brush up on my Mandarin...

Et tu, Juniper?

It must be truly bleak: even the best friend of every young telecoms entrepreneur on the fundraising trail whose reports rarely failed to feature as a footnote in an investment memorandum for the next big digital thing now sounds a word of caution. Juniper (whose reports I still cannot afford) issued its latest report on mobile gaming and it actually reduces (for the first time, I'm sure, even if I haven't checked) its prior predictions on the growth and size of the sector in the next, erm, 20 years...

They see growth stifled by the restrictive operator business models. Dare I say it? May they be right? They refer to Apple's AppStore, which is the anti-christ to every operator's walled garden: free for all, free price-setting, Darwinian survival of the fittest (or least-charging), thousands of applications, games, etc, etc, and relatively generous revenue shares on top (although 80% of $0.00 is not very much at all).

Juniper points however to 2 important and true factors: the tolls demanded by the operators to access their precious customer base are very high indeed considering that many do not provide a very compelling service in return. Secondly, marketing and marketing opportunities on-deck normally - well - suck. This was all well and good as long as their were no alternatives (other than the likes of Jamba, Thumbplay and few others). But with the ascent of the iPhone, everyone seems to erupt into a frenzy of trying to replicate the "beautifully simple and compelling UI" for which the purveyors of the Big Black Turtleneck are so famed for. This, Juniper fears, will lead to players exiting that business (I have heard unconfirmed rumours that SEGA decided to call it day on internal J2ME development following their huge success with Super Monkey Ball on the iPhone). 

Other than that though, not much new. And Juniper would not be Juniper if they would not predict "significant" growth in the next 5 years (conveniently long in order to be basically unpredictable): they see the market to roughly double in the next 5 years, which would be 20% growth per year (on today's terms), which is not all that bad after all. 

Blyk's CEO speaks

I post on Blyk, and the next day its CEO rushes to give an interview... Was he upset about what he read and unleashed a PR storm to rescue his company to fight sentiment of the blogosphere? Perhaps, perhaps not. Well, maybe not. On the merits, there is nothing dramatically new but it is worth mentioning, I guess, nonetheless. Judge by yourself.

Blyk gets money

I know I have been depriving you lately (the day-job demanding more of my nightly attention than I would like) but this is remarkable: Blyk, the ad-funded MVNO, which I have covered previously (here and here), raised - financial crisis or not - a rather substantial amount from its existing investors, namely €40m (which apparently translates into $50.4m). Now, do they not read my blog? Or do I not get it (as Blyk's UK MD would probably suggest).

Blyk has by now collected 200,000 subscribers and wants to roll out internationally, namely in Germany (as if the cut-throat market there, including Aldi and Tschibo's money-scraper MVNOs, wouldn't be enough), Spain and Belgium, which would constitute decent growth. My concerns over the financial viability still stand though (cf. here): I cannot see them making money from this longer term (unless you mean the really, really long term; then it might work). And perhaps, just perhaps, the words of Blyk's CEO, Ala-Pietala, who noted (which MoCoNews somewhat fittingly called "ominous") that Blyk also felt the impact of the world's financial situation, point that way, too. Is that to say that they might have got money but they don't make any (or not enough)? Do I get it after all?