German news reports say that Vodafone Germany has sued T-Mobile over its exclusive iPhone arrangement with Apple. Vodafone challenges the “combo” of iPhone and a 2-year-contract and asserts that this might be contrary to fair competition laws. Vodafone Germany’s chief describes the iPhone as the “fall of man”, which is pretty funny, come to think of it. The manager says they would fear that the likes of Nokia and Motorola would follow the example and do the same, which would heavily distort the market. Hmm. Who had this thing with its logos on handsets again? Who was the only carrier distributing Sharp handsets? Ah… Given Vodafone’s approach with the rather successful Sharp GX series, which was exclusively (sic!) available to, yes, Vodafone customers, the suit does not feel entirely sincere. One might plead that Vodafone fails on the “clean-hands” doctrine (which, alas, is unknown to German law).
This is of course also noteworthy as Vodafone Global CEO Arun Sarin went on record saying that the iPhone makes for a “pretty poor experience” (unless you are in a WiFi area) and all.
Why then do they insist this is such a bad thing? Do we take it as a sign that the lost iPhone deal might after all have a certain sting to the mighty carrier? This is in spite of it still possibly proving to have been the right decision, with Apple’s share in user fees and all. It may well all come down to branding: Vodafone is thought to have spent hundreds of millions on trying to build its Vodafone Live! brand, which it all but abandoned recently. It was the first big carrier to partner with Nokia on the latter’s Ovi initiative (see here), which in itself may be seen as an admission of failure of its own service.
Whilst I understand Vodafone’s move from the view of the German lawyer I (also) am, the overall approach has something of a child envious of another one’s toy.
UPDATE: Further reports shed more light onto this. T-Mobile may be forced to sell unlocked phones and also give up the 2-year tie-in, i.e. offer consumers to buy the iPhone without a contract. This would be a major blow to the Apple business model and one that might force others to open up, too: MoCoNews reports that French laws have similar provisions.
Most importantly perhaps, European laws on the freedom of goods and services would prevent anyone stopping grey imports into other EU member states where Apple struck other exclusivity deals (e.g. with O2 in the UK), which might become a real threat to Apple’s business model altogether.
It did not take too long to bring down the value of mobile music spearheads Musiwave from $130m to $50m. The former was the price Openwave paid for the French company in 2005, the latter is what Microsoft now splashed out to buy it from Openwave ($46m in cash and $4m in assumption of debt). And at this price, it looks like a rather good buy for the world’s largest software maker.
Microsoft has acquired what was an early leader in mobile music. Musiwave is a giant in mobile distribution of music content – everything from ringtones, ringbacks and full-track downloads to music recognition, etc. Whilst Microsoft will have seized access to a trusted carrier-grade database and provisioning environment as well as Musiwave’s extensive relationships with all players on the mobile music circuit – labels, carriers and device manufacturers. Now it will have to show that it can marry it to its own music-centered services, in particular around its Zunes device and service.
All in all, Microsoft seems to be a much more natural home to Musiwave than Openwave would seem to have been. Good luck to the tall guys in Musiwave!
Following their relatively recent announcement of a multimedia initiative, Nokia reports a big win with Vodafone having agreed to carry their Ovi platform on Nokia devices that are distributed through the operator. Ovi, which is Finnish for door, was to be Nokia’s next big push towards becoming a multimedia company. One of its flagships under that umbrella, the Nokia Music Store, will now run alongside Vodafone’s own music service.
Nokia’s risk with the introduction of Ovi was that operators would reject having the Ovi links on the phones that they were distributing (not uncommon for them to do), so to have the “world’s largest operator by revenue” amongst their ranks is no small feat. Otherwise, Nokia would have seen limited distribution in markets where handset prices are subsidised by carriers, which is true in most!
With Nokia having bolstered its portfolio of offerings in recent months even more (the acquisition of Navteq being the biggest one), this opens the pipeline to a much richer content experience, and this is what might have pursuaded the good folks at Vodafone: with carriers struggling to come to terms on the “right” treatment of content to maximise sales and user experience, a door to a fully-packed store of content and applications must sound tempting.
It might actually mark a turn in the market: could it become the handset manufacturers who will take the lead in the content space and become the funnel through which content providers feed their wares to the consumer? It would make sense in that it is arguably easier for an OEM to ensure that there is optimal performance for a product on a device (after all, they manufacture the device). Such a model would bring relief to the operators who would continue to control the billing relationship with the consumer and hence alleviate fears of removing that bond but they would be a big step closer to becoming the dreaded bit pipe as had happened to ISP on the Internet. I have argued before that this process would – in any event – take longer, so that might alleviate fears.
It is breaking into the control-driven model of operators, and that is a significant development in itself. Nothing will of course change for the content providers, at least not in the short term: it is just that they need to ring a different doorbell now (or rather an additional one…).
So, no GPhone — yet. Google, with quite a number of partners, today announced the already much-rumoured “Open Handset Alliance” under which a Linux-based OS, nicknamed Android has been launched (the SDK will allegedly be available in a week’s time). Here’s a video explaining the deep thoughts of the creators (be quick: YouTube has removed it already…).
The whole industry had been waiting for this, and Google seems to have come up with a black-white thing: it goes back to its roots in open source but overlays it with Java, which has caused the content community a lot of headaches (every mobile phone translates it slightly differently, so one needs a gazillion ports). However, Google has teamed up with no less than 34 partners for the launch alone, including such giants as China Mobile, KDDI, Sprint Nextel, TIM, T-Mobile, Motorola (who seem to be dancing on a lot of weddings recently: UIQ and Linux Mobile are also on their plates), Samsung, HTC, Intel and eBay.
So what does it all mean? According to the members of the alliance, it will be better, bigger, faster for everyone: open source means more applications, less bugs and less cost. According to Google CEO Eric Schmidt, it is “a fresh approach to fostering innovation in the mobile industry will help shape a new computing environment that will change the way people access and share information in the future.” Commentators note that there is apparently one caveat: you’ll have to use Google for navigation. Now: does that bother anyone? Give me Internet on my phone on broadband speed and I happily surf with whoever gives it to me, I’d say. To enact a platform, supported by a lot of sector muscle, that makes the developers’ life easier should be good for everyone indeed as it will undoubtedly bring more usage. Traditionally, carriers feared for the consistency of the user experience. Apparently, Verizon and AT&T have already voiced such concerns also here although the explanation sounds defensive at best: they fear too much advertising. Would it be safe to say they rather fear loss of control?
Quite a few companies have tried to take on mobile as the next frontier and quite a few fared rather miserably on the complexities of the environment presented by the sector (Disney’s MVNO attempts, Infospace and a few others spring to mind). With Google’s might this might be about to change though. A fresh breeze and a unified development platform would, in any event, be a good thing.
Interesting though that, as in recent releases on OS-driven initiatives, Nokia is again absent. This is not promising any good in terms of unifying the landscape, it seems. However, both Linux Mobile (on which Android is apparently based) and Symbian (in which Nokia holds a huge stake and which it intends to make its platform of choice) are C++-based. And that would be easing development pains after all: much easier to deal with than the Java layers, which until now were statutory but might only be optional going forth.
UPDATE 7 Nov 2007: Nokia has said its participation in Android is “not ruled out at all”. It would work with it if it would see sense. Now, a convincing statement sounds differently but it IS noteworthy that the Finnish giant felt the need to comment on it so quickly.