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?

Mandalay buys AMV

Twistbox owner Mandalay has bought European D2C firm AMV for $22.8m in cash, shares and deferred consideration. AMV operates the D2C brands Bling et al.. The new European HQ is to be at AMV's UK location in Marlow, which presumably means a demotion of Twistbox's Charismatix branch.

The rationale of the deal appears to be this:

The combination of Twistbox's global on-deck distribution with AMV's direct-to-consumer expertise uniquely positions Mandalay Media to deliver compelling consumer propositions while maximizing revenues for its wireless operator and content partners," stated Twistbox CEO Ian Aaron.

Whether or not this position is "unique" does not really matter. And why a D2C offering maximizes operator revenues is at least unclear, too, but hey, who cares? What is true is that Twistbox runs some operator decks and has - through the old Charismatix links and its adult footprint - some decent links on a number of carriers in Western Europe. To bolster this with £10m of D2C revenue (this is the number the AMV website would make us believe) makes sense as the sensitivity of carriers to accept competing offerings outside their decks might well lessen. In this case Mandalay/Twistbox/AMV may indeed be onto something. The remaining question might be if the (current) breadth of distribution they have is enough. But it's not the end of days...

Mandalay/Twistbox has by now ramped up a decent amount of venture cash (see here for a previous round) and is yet still seen to be breaking into the top tier. Come on, guys!

Playfish fishes for big bucks

Playfish, the social network gaming company founded by wireless industry veteran Kristian Segerstrale, announced a series B round worth a very respectable $17m from Accel Partners and Index Ventures. Playfish boasts 10m monthly users and claims that 4 of its 5 games are in Facebook's top 10. The company also said it recently joined Google's in-game advertising solution and presumably banks on capitalizing on this success. No word on financials but they surely are getting their slice of it (just how thick that slice is, I'd like to know). No word either on any mobile activities (which might be coming given Kristian's background as founder of Macromedia).

Playfish's mantra is to enable people to play games with their real-world friends via the infrastructure provided by social networks, and I can confirm that this works: I am an avid player of their games, particularly "Who has the biggest brain?" (I am no. 5 amongst my friends so far; a list which is topped by Kristian and I cannot help but think that he might possess cheat codes...).

A round of this size by investors of this pedigree raised in these times deserves our unreserved respect. You rock, guys!

No more Landlines

According to research firm Nielsen (whose mobile arm incorporates what was previously known as Telephia), more than 20m household in the US (0r 17%) have ditched landlines in favour of mobile (or as they would call it cell) phones. It signifies a rather steep increase.

Here's the highlights of a white paper they published on the issue (which you can download here):

- U.S. cord cutters tend to have lower income-levels—59 percent have household incomes of $40,000 or less.
Smaller households, with just one or two residents, are more likely to cut the cord than larger households.
- Moving or changing jobs are the biggest life events associated with cord cutting: 31 percent of cord cutters moved prior to cord cutting and 22 percent changed jobs.
- Wireless substitutors tend to use their mobile phones more than their landline peers, 45 percent more per phone, but still save an average $33 per month in a household of one subscriber, less $6.69 for each additional wireless resident, when they cut the cord.

Now, what I do find surprising is not the fact but rather the apparent reasons given for "wireless substitution". It is cost...

On data, Nielsen also speculates:

“Landline wireless substitution may just be the start. [...] As wireless data networks improve and speeds become more and more competitive with broadband, some consumers may cut the Internet cord, as well, favoring wireless data cards and other access through carrier networks.”

Now this I understand, and the study shows indeed that wireless-only consumers use the mobile Internet more than twice as often as their primary access to the web than the good old-fashioned rest (11% vs 5%). It will be interesting to see how quick this substitution works though for the masses: people with money tend to retain their landlines, which suggests that a wireless-only solution is still less convenient. With hardware (computers, phones, etc) becoming increasingly able to access multiple wireless standards (i.e. via the mobile networks as well as WiFi, etc), this factor might however be evaporating relatively quickly.

What's a Smartphone?

Application vendor Handango published its 2008 Yardstick report, which one might slag off as some (rather shameless) PR on content consumption on "smartphones". According to this, 

[t]he Games category leaped from fourth place at year-end 2007 into the second spot behind the Entertainment category.

It also reports that

'Ringtones' was the most searched term in the first half of 2008, and 'games' was a near second, up from number three in the second half of 2007. 'Themes,' 'GPS,' 'weather,' and 'music' also make the list of the top 10 searches."

Surprisingly then, in none of the measured platforms (RIM, Palm, WinME, Symbian) does a single game make it into the top 10... Now, does that mean that places 11-98 were all games? Hmm...

 I then asked myself what the heck is a smartphone? Mobile advertising guys Admob note that

[t]here is no standard industry definition of a smartphone. We [Admob] automatically classify a device as a smartphone when it has an identifiable operating systen and continually update our list as new phones with advanced functionality enter the market.

Globally, Nokia rules the pack: the top 4 smartphones are all from the Finnish giant (Admob numbers), and all N-Series devices, namely the N70, N95, N73 and N80. In the US however, there is not a single Nokia phone (or rather, as they would put it, "multimedia device") amongst the top 20 smartphones. According to Handango, 2 Blackberry devices (8830 and Curve) were the top 2 devices, according to Admob (not representative), it was the Blackberry 8100, the Palm Centro and the Blackberry 8300). Globally, these don't really feature: Nokia has a market share of a whopping 62.4%!  

The more interesting facts are unfortunately from confidential information from the likes of M:Metrics. Without giving too much away, the top devices for games consumption (downloaded) are the iPhone and Nokia's N95, both with quite some margin ahead of everyone else (and the iPhone with quite some margin ahead of Nokia's performance monster). This does indeed show that a powerful handset (or at least one with powerful UI) promotes content consumption, which is, I'm afraid to say, old news indeed.

So, no news then?

No ad-supported content after all? Really?

We will all remember that ad-supported content was the flavour of the month a short while ago. There were successful trials and a lot of hype all around, hell, there are even MVNO based on this model. Now, however, there is a survey that suggests that people will pay to avoid ads (if you are a true believer, look at the end of this post though...). Who's right then?

But, alas, the nasty consumer wants to have it all, it seems. I quote:

While the vast majority (56%) believes that content downloads to mobile phones should be free of charge, there is a growing number of consumers that are so averse to advertising that they are now willing to pay a premium in order to avoid it, signifying a shift in how operators need to be tailoring their offering. A substantial 25% of respondents said that they would rather pay for a download if it guarantees them immunity from advertising.

Now, what then? Free content? And who is paying us poor sods who produce it? Hmm. Now, it gets even more confusing: according to the study, in particular the younger demographic shuns ads. 35% of the 16-24 year-olds would rather pay than get ads vs. only 17% of the (presumably battle-hardened and more cynical) 35-44 year-olds; one would have thought so that the elders with their higher spending power were more likely to pay... Hmm, hmm.

There is another interesting twist to this though. Another quote:

One symptom of this trend is the increased resistance to targeted advertising on mobile phones. Whilst 47% of people feel that adverts tailored to their individual tastes and interests are a good idea overall, half of those who were willing to receive targeted ads on the internet were not happy to receive them on their mobiles.

This would suggest that there is a trend (or rather demand) to bridge the boundaries between media: offer content and do, by all means, use advertising to finance it but do stream the latter to other user screens (presumably the PC first and foremost). Are there any models out there to address that? I haven't heard of any and I must say that I find implementation of this rather tricky to achieve. Just another study then? Hmm, hmm, hmm.

NOW, just when I clicked "publish", I received one of my favourite newsletters, the very recommendable VentureBeat, who published an interview with Nielsen's SVP Mobile Media, Jesse Goranson, and, what can I say, he says it's all good: according to yet another study he cites (which I cannot access), 53% of advertisers (ah, not consumers then) anticipate a rise in mobile ad-spend in the next year. Goranson does, however, also state a flux and indeed uncertainty about where it is going to go revenue-wise. More hmmm's then, I guess. Good night!

Fragmented?

Funny. Sometimes a theme somewhat haunts you... After I have posted about the demise of Tira Wireless (and added some alternative views on the labyrinth that is platforms and handset fragmentation; also go and revisit my posts on the same topic here and here), today we can read that it will all get worse (or maybe not). I bet they read my recent post on the issue... ;-)

The article only mentions somewhat curtly two new platforms, namely iPhone and Android (both of which I have covered before, namely here, here and here - amongst others), and then goes on to report on a panel at CTIA where a panel sponsored by the "Symbian stakeholders" apparently dismissed the whole notion, stating that the market would solve it. Now, it will have to, I guess. However, it is not all that bleak: Symbian, UIQ, Linux, BREW, Win ME and ultimately the iPhone OS are all C-based. Most of them (with the notable exception of the iPhone) also run Java Virtual Machines (JVM), so you can either code in J2ME (which is arguably the most widely supported language) or go native and code native in C+/C++ with then much easier ports to the varying iterations.

The challenge naturally remains (and, yes, I have voiced this previously) with a view to supporting all those odd handsets here and there and everywhere but, let's face it, a lot of them are being imposed on publishers by the carriers who want to make sure that even that last customer that hangs on to his SE T-610 will be served with content (even though he won't ever download a piece). Wouldn't it be so much better marketing if they would simply return a message telling that poor customer:

"Hey, we noticed you tried downloading content to your T-610. You may not have realized that this phone is utterly outdated and will give you no joy when playing games. We would like to offer you a discounted upgrade to the brand-spanking new N76/ W880i/ Pearl/ iPhone/ Viewty/... and your life would be so much cooler. We are confident that you would then also have more luck with the girls/boys... Best. Your carrier"

What I am trying to say is that a lot of the fragmentation issues are (nowadays) artificially imposed, not technologically warranted. Any carriers reading this? Think about it, folks. It won't harm you, I bet!

Thumbplay and Comcast: convergence looming?

Comcast (for you fellow non-Americans: this is one of the larger broadband providers in the US) and Thumbplay (for you fellow non-Americans: these are the guys who kick serious a** in D2C mobile content over there) announced a deal whereby Comcast will sell mobile content source from Thumbplay through a dedicated website to their highspeed Internet customers. Items available comprise everything from Thumbplay's catalogue, that is to say, music, ringtones, video, games, you name it.

With Comcast recording serious traffic (14.4m highspeed Internet customers, 3.7bn page views and 17.6m unique visitors per month) and Thumbplay offering one of the larger catalogues on mobile content (100,000+ pieces), this could be intriguing: consumers have so much better opportunity to look and choose if they can do so in the warmth of their home and the giant size of their 21'' computer screen rather than on a 128x128 mobile phone screen. Content discovery, previews, all the bells and whistles long known on the Internet could thus be married to mobile content as well. Will it work? I am thrilled to hear about it. Traditionally, one loses a lot of people whenever one crosses from one medium to another (Internet to mobile), so the question will be if the additional churn recorded there is less than the probably improved conversion rates due to the superior content choosing experience online.

Tell us more, guys, when you know it!

Apple's App Store rockets through 100m

Following the iTunes success story, we could see it coming, I guess, and indeed after a mere 3 months of going live the mother of all black turtlenecks informs us that the Apple App Store rocketed past 100m downloads for iPhone and iPod. Impressive numbers! And another example how simplicity and a good eye for ease of use wins the day: put applications (games are apparently leading the pack, too, with no less than 700 of them [that's nearly 25% of the total available]!) into one place where a) people can find them and b) it is easy to download, install and run them, and you are on to a winner (operators, listen to this!).

However (there had to be a but, huh?), what the master of PR did not tell us is how much money was actually made with this. We hear the following stats:

• There are 3,000 apps on the App Store, 600 of which are for free. Now, for what percentage of downloads these 20% are responsible for, we are not being told though...
• 90% of the apps are priced at less than $10 (this will include the 20% free ones, I guess). However nothing is said if it is $9.99 that is the prevalent price point or perhaps $0.99 a pop.

The App Store certainly is a success for Apple (in particular considering the relatively low number of devices that access the store, and this deserves our unreserved applause! The only thing is: it might just be that 90% of the downloads were of the unpaid kind and another 8% of the less-than-$3.00 kind, and that would mean that it is actually not such a great success for the developers hoping to make a buck from it (rather than only showing off the funky logo on investor presentations).

The Apple App Store provides a wonderful opportunity to test market prices and all that even though there are probably a lot of people who currently publish stuff there because of its "strategic" value, which will contribute to distortions of the true numbers in terms of values and price points. However, notwithstanding those distortions it would be great if they could share somewhat more meaningful numbers with us; just so we know how hard we should try to flog to those green Apple meadows.

Oh, and, yes, I write this on a MacBook... :) 

Re Tira: there are others!

My post on Tira Wireless' apparent demise triggered a few e-mails, and it was pointed out that, whilst my observations generally seem to have been accurate, I forgot a few players that actually do deliver porting solutions across platforms (e.g. from J2ME to BREW) rather successfully (and do work with some of the larger publishers, too). There is for instance Innaworks, whose Alchemo solution is pretty powerful.

So, I stand corrected: it is actually possible to ease porting nightmares with smart transcoding solutions. I would still maintain though that porting from a single J2ME build (rather than a reference code base) to all devices under the sun is only possible with severe constraints. If that is understood though, the likes of Innaworks and Metismo provide a great ease of pain!

Mobitween bought by Zed

Every reader of this blog will have realized for some time that I am a fan of mobile Flash and the good folks at Mobitween (just see here and here), the mobile Flash pioneers from Paris. And, boy, would I have wanted to work with them some more but, alas, it seems this will remain wishful thinking as they have been the first prey of D2C giant's Zed M&A fund: yes, they have been acquired.

The deal - unfortunately for me, I guess - makes a lot of sense to Zed, who have been raising their revenue numbers to heights so dizzying they would nearly make the initial investments comprehensible... (if only the initial investors had seen anything of that success; but well...): Zed famously claims to make up to 85% of their revenue with

 predominantly in-house produced generic content, and when it comes to speed and efficiency, mobile flash in general and the guys at Mobitween in particular have no match.

So, well done them, and let's hope Flash will continue to roll as it started to promise, so that we can all marvel at dramatically reduced time to market and, consequently, hopefully a vastly improved content offering all around (oh, and buy Zed shares if you can).

Tira in Tears?

Are they no more? I haven't called or sneaked around their offices, so couldn't tell. However, my much more investigative fellow blogger from the MobileGamesBlog seems to know more: according to him, Tira Wireless is no more.

Tira Wireless had a bit of a mixed following: there were the ones who didn't believe in the black box (one build in, builds to support 500 handsets out), and there others who thought this was the best thing since sliced Siemens phones. Now, I admit I ranted mercilessly on a panel (ironically sponsored by Tira) at MEM back in 2005 or so against the black box approach, and the width of their endeavours might have killed it (if it did then; no one can confirm or deny as yet...). To use one build and port it across to handsets from the (in)famou

s T-610 to the N73 is hitting natural constraints, and this is arguably a reason why they never got their hands on the heavy hitters of the sector: their customer list doesn't show a Gameloft, EA, Glu, Digital Chocolate, Hands-On, etc, etc...

A leaner (meaner?) and more focussed approach can get you there as is currently shown by mobile games veteran John Chasey's (of IOMO and Finblade fame) Metismo: not another black box, they don't even claim to being able to do everything under the sun and then some more; theirs is a cross-compiler from J2ME to native C++, and this alone is worth quite something. Smart coding and development environments can and do ease the pains of handset fragmentation, and to have dedicated experts for this makes sense, considering the significant cost contribution of porting to the overall cost of producing a mobile game.

Anyone with more solid news on Tira's fate, please call, e-mail or comment on this thread... Thank you!