It’s been looming and was long expected but today Vodafone announced it would embed its Vodafone 360 app store on two Android devices next to Android Market. Vodafone says their store would give partners a richer retailing experience than Android Market – but then they would say that, wouldn’t they?
But cheap puns aside, the move does have some legs: Vodafone uses Qualcomm’s Xiam personalisation engine, which provides recommendations based on user behaviour. They claim – and you may have heard that before in any number of my talks – that recommendations are a much stronger driver than promotions, stronger by a level of 4x to be exact. This ties in with my preachings: nearly 3/4 of all purchasing decisions (not only mobile, all of them!) are made on the recommendation of friends. And, alas, this is where “user behaviour” as the applicable pattern comes short: do I care how many, say, Amazon buyers of Grisham novels are also buying other authors’ crime thrillers? No. Why not? Because I don’t know these people. Do I care what my friends may think I like? You bet! Why? Because they know me and my tastes. Doh!
Anyway, back to Vodafone. They have realised (and, credit to them, admit it!) that a vertical implementation where you only get the full scope of 360 services if you have one of two phones doesn’t work. And, well, that’s somewhat obvious, isn’t it? Or is it a reasonable assumption that all my friends will all of a sudden (and at the same time) exchange their various handsets for a Samsung M1? No, I thought not either.
Vodafone did divulge a little data sniplet that must encourage them though, and that is that 360 customers have a 3x higher ARPU than others. If you look at the above (recommendations, friends, etc), that is not completely surprising. So now the next hurdle is to roll it out across their whole range of handsets. And let’s face it: a simple store won’t cut that on its own. Going cross-platform also means that – depending which handset you fancy – you may find different app stores of differing attraction competing with Vodafone’s own for attention (e.g. does Nokia’s Ovi offering seem to have more traction than, say, Blackberry App World but the latter has – from a publisher’s perspective – vastly superior price levels). All in all pretty sub-optimal, I think.
On a sideline: I will be moderating a panel on “How to Make Money as a Developer” this week at Mobile 2.0 Europe in Barcelona and I will be having the immense pleasure of having two operators on the panel (Orange and Telefonica-O2) as well as Microsoft (representing the OS side). This Vodafone announcement highlights some of the challenges the industry is facing. Interesting times!
On 17 June, a wonderful conference opens its doors: organized by the formidable Rudy de Waele and his team, the beautiful city of Barcelona (but without the usual Mobile World Congress stress and with better weather than in February!) is host to Mobile 2.0 Europe.
You will find a great line-up of speakers from across the mobile ecosystem, which should allow for a wonderfully balanced overview of what’s going on. The organizers have lined up senior guys from the giants of the industry, such as:
- Nokia
- RIM
- Vodafone
- Opera
- Telefonica
- Orange
- PayPal Mobile
- Microsoft
But they then coupled them with the nimble and agile guys like us, so you will also find:
- Distimo (analytics)
- Scoreloop (yes, I will be speaking)
- The Astonishing Tribe (UI experts)
- W3C
- Future Platforms
- and more…
As if this wasn’t enough, the AppCircus will also stop at the event with an on-stage show of the best and brightest apps around.
Join us, it should be tremendous fun! The registration page is here.
After much huffing and puffing, Vodafone unveiled yesterday what everyone had been waiting for for months and months: its new Vodafone 360 concept, which will replace Vodafone Live! It launches on – drumroll – LiMo-OS Linux phones from Samsung with touchscreen and GPS and, for the H1, AMOLED display (yum!), WiFi, HSDPA, etc, etc, etc. and also supports a fairly big range of Nokia (not on the N97 though!) and Sony Ericsson devices (although, judging by the screenshots, it doesn’t look as sexy on those).
The 360 thing is, according to the press release
a brand new set of internet services for the mobile and PC which gathers all of a customer’s friends, communities, entertainment and personal favourites (like music, games, photos and video) in one place.
It has an address book with nodes into Facebook, IM (Windows and Google) and will “soon” also cover Twitter, Hyves and StudiVZ (the German Facebook clone). Two tailor-made (!) handsets that use a proprietary (!) interface based on LiMo’s release 2 mobile Linux OS. Users can create groups across different networks (which is very neat!), an app store with 1,000 apps at launch (no word so far what this comprises) and syncing with your computer.
So is this the big thing then? Here’s the good, the bad and the ugly:
The Good
- The service reaches out. It acknowledges (this is a big step for most carriers!) that users have a life outside their carrier. Facebook, Live Messenger and Google Talk are a bit thin, I’d say, but let’s cut them some slack; the others will follow.
- It has a couple of neat twists built-in: I mentioned a few above but there is also a feature that uses some spooky thing called the “Vodafone’s proximity algorythm” and which basically automatically favourites your most-loved people: the most frequently contacted people (like your mom?) come closer to the front.
- At least on the custom-built devices, it looks much better than previous attempts by carriers to make something look and feel a little more user-friendly.
- I hear that the whole widget-thing should be really neat. Now, I haven’t seen any of it as yet but the concept sounds good.
- It works across different operating systems (at least LiMo and Symbian).
As a funny side remark, the PR blurb points out that
The beauty of Vodafone 360 is that all the services work together and they are easy to use.
So they weren’t before, huh? 
— sorry, couldn’t resist…
The Bad
Some commentators mentioned that the cloud-hosted address book and generally aggregation of contacts, networks etc through a provider rather than through the handset would tie people to the provider more closely (which might not actually be anything Vodafone would object to). I am not sure how tough it would really be (as you have your computer back-up), so easy on that.
It is still very much a closed-circuit affair: It is Vodafone and no one else. It is proprietary, tailor-made and not open. This is not good (and, yes, I know that the oft-cited iPhone is proprietary and tailor-made, too). Alas, its applications are not – unless your name is Spotify; then it takes a little longer…
The Ugly
The underlying proprietary thinking is nothing I can see working longer term. In a world that is (Vodafone press speak)
a substantiator of Vodafone’s new brand expression – ‘power to you’ – which is focused on putting the customer in control and enabling simple and easy to manage communications, both mobile and fixed
this is also a little bit of a contradiction.
But I will say that it seems to be the nicest operator-built environment I have seen so far. And for this to come from the world’s largest operator is no mean feat and might actually yield some results. Go on, guys, tweak it, improve it, show us!
The breath of fresh air that Apple has been bringing to the mobile content industry does not seem to end. However, this time, it is not so much fresh air by Apple but rather a borrowed deodorant from Microsoft (more specifically the iPod killer called Zune) and that is app-sharing. Whilst this might be largely superfluous for the Zune (how often will you find a group where more than one person has one? – as the good folks from the Apple Blog mention), it would be upping the usability game again and, for iPhone and iPod users as well as for the quickly growing Android device-base, it would arguably impact the market a little more. This also since the iPhone has become so much of the benchmark every OEM tries to emulate.
So what is it? According to Business Week who have been speaking to someone “familiar with the technology”, the iPhone 3.0 software kit provides for a functionality that could “if activated by Apple” allow users to share apps between them (note to self: ask my contacts familiar with the technology if they came across this, too).
Technically, it’s compelling and simple, well, the latter at least in Apple’s case: It was a nightmare for an engineer (as much as a dream for every “guerilla” marketeer) in the face of a gazillion different handsets with a gazillion different screen sizes, heap sizes, soft key allocations, etc, etc. In Apple’s case: 1 device, 1 screen size… off to the races…
Now, the same thing is supposed to happen with Android devices, too. And there, this might actually be a little harder to achieve; different devices, etc – well you get the gist.
From a user perspective it is of course fantastic: you can try things out before you have to commit to buy (rather than relying on the voluntary “lite” versions). So rather than buying an app that a friend likes (which increases the likelihood you might to but does not necessarily give you certainty to part with your precious cash). So: try it out. You like it, you buy it… It also (as mentioned above) is a big one on the marketing side: the strongest sales people will be happy users. So if a happy user recommends it to their peers, it is so much more likely that they will give it a go. All good stuff.
Would someone from Apple please confirm this?
I wrote about this topic a couple of times already (here and here) but here‘s an interesting update/summary. The gist of the argument remains, only the numbers got better: Microsoft’s XBox has sold 29 million units, and that is fairly respectable (in particular when you consider that people regularly fork out $30 and more per game). Apple however (Mr Gates, I hate to say it) outsold its dear competitor by selling more than 30 million iPhones (and, well, iPod Touch).
Here’s one that nearly slipped through the (well, at least my) net: according to a recent press release, the Eclipse Foundation is set to unveil a unified development platform. It is said that some major players, including Nokia, RIM, Sony Ericsson, IBM and Motorola have joined this initiative already though Android and – predictably – Microsoft and Apple are notable in their absence.
Microsoft has a central market place for Windows Mobile applications in the making. It is the latest (and maybe the last) of the big smartphone platform makers to come forth with such a model. And – with a probably already somewhat reflexive jab to its Cupertino nemesis (yes, Mr Gates’ children are not allowed iPods), it vowed to be more open to outside software developers.
So following the conflicting news about what the strategy for Windows Mobile would be, some learned folks followed up and quizzed Microsoft. So here‘s what they said:
Microsoft will be focusing on building out the quality of the Windows Mobile experience, investing more in working with its partners to ensure the best hardware-software integration. While this may result in fewer phone models, Microsoft will continue working with our partners to innovate on the Windows Mobile platform.
Microsoft is committed to continued innovation of the Windows Mobile platform. Our goal continues to be working together with you to deliver exciting experiences to end users. The implication in The New York Times that Microsoft will limit the number of Windows Mobile devices is not accurate. In an interview with the paper, Todd Peters stated that Microsoft would be focusing on building out the quality of the Windows Mobile experience, investing more in working with its partners to ensure the best hardware-software integration.
Last week during the frenzy that was CES, Microsoft put out two statements that I find slightly confusing. Statement no. 1 was the announcement from Steve Ballmer that more than 20 million Windows Mobile devices had been shipped in 2008. He went on to marvel
“about the momentum we have…We have delivered 11 different mobile phones that have each sold a million units each, and in the past year, we’ve brought to market over 30 new Windows Mobile phones, or more than any other mobile platform in the market”
“I’d rather have fewer devices and be more focused [as] we get better integration [between phone and operating system].”
Microsoft scored an important success with a recently announced a deal that will see its Flash competitor Silverlight (with the most Apple-esque logo ever issued in Redmond) installed on the mighty Nokia‘s s60 and – low-end – s40 devices (or multimedia terminals as the good folks from Finland like their posher phones to be called). Interestingly of course, Nokia also embeds Adobe‘s Flash Lite… Tasty!
Now, is Silverlight really this good? Or is it only another product the people from Microsoft thought they should have on their shelves (arguably not being too happy that Adobe carved out for itself a nice niche for some)? I don’t know and I won’t be able to answer that without embarrassing myself. So: the news tonight is simply that Nokia is a good catch for Microsoft. And, now, the weather…
One small piece of advice to MS though: choose your showcase sites carefully. The Yugoslav maker of one of them (I don’t really know what they’re doing) does not really offer the latest and greatest in web design and functionality…
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!
BlackBerry maker Research in Motion (RIM) pushes into Windows Mobile reports Telephony Online. As it sets out to create a BlackBerry Virtual Machine, this would imply a move from a hardware-driven to a software-driven business model but RIM is playing this down: they say they will continue to build their Blackberry devices and merely react to market demand.
Analysts seem sceptical as loading the BlackBerry software onto a Windows-powered phone is apparently tougher than it sounds. They also claim that vendors may be reluctant to include it in their phone’s basic software stack, and carriers may be reluctant to support it.
And that seems logical: a few years ago there had not been any alternative, so everyone might have played along. However, now alternatives, most prominently from mighty MSFT itself (Microsoft ActiveSync), are here, and one wonders if it will be just as easy. Given Blackberry’s cult following and the wariness towards Microsoft’s dominance, one cannot help but wish for a powerful competitor. However, it might very well be that RIM fell for the old Apple mistake, i.e. trying to marry hardware and software for too long: once the real world has moved on and worked around proprietary systems (even if they are superior), there is no winning anymore.
It heats up but remains VERY fragmented: After Microsoft snatched up Massive and bought Screentonic, AOL now acquired Third Screen Media. Google has been invisible on this front but powers ahead with integrating many of its products onto mobile – and they (can) come with ads (see article and interview with their Director of Product Management, Deep Nishar, here). Yahoo! as well is getting its search products onto more and more carriers, a step to keep doors and screens open… Mighty Nokia announced its own service… Various carriers do it on their own (e.g. Sprint as per the report here). And then there’s a few first-generation “indies”, such as Greystripe and Actionality (indies for how long though?), Exit Games and IDG try the partnering approach – there is certainly a lot going on!
Is this all sensible or is it the silverbacks trying things out and some of the smaller players dressing up for a beauty parade and a big-buck exit by acquisition and/or running after the flavour of the month? AOL seems to think the former: their Chairman & CEO, Randy Falco said that “AOL is one of only four at-scale advertising businesses on the Internet, and the acquisition of Third Screen Media gives us a very strong position in the fast-growing mobile space. It also lets us offer advertisers a more complete set of solutions, from display advertising to search and now a superior set of mobile solutions.”
At the moment, the sector is all talk and little money. According to traditionally buoyant analysts Informa, 2006 saw $871m in ad revenue on the mobile platform (and they didn’t even tell what was comprised; I assume this includes SMS-based services which we can probably agree are pretty crude), others put it to half that (also see the overview on the fine GigaOM blog here). There is little doubt that the sector will grow exponentially but when, how and through which players is pretty much wide open.
Today, for MSFT, Google, Yahoo! et al, these acquisitions are largely insignificant as regards their impact on the P&L but they may well equip them with a much needed spearhead (and knowhow) in the new ad sector, mobile advertising.
If more and more players try to assert themselves, the question will arise which type of advertising model we will see: will it be syndication-driven as it is on the web or will you need to book your ads with every single media owner (as it is in print and TV). At the moment, even though one would/could argue that the mobile is merely a different iteration of online, it would seem as if they’re choosing the latter but then it is very early days.
The big issues are still somewhat unsolved as yet and they will arguably hinder quick implementation: white-listing of data services, so that the end user does not actually have to pay for the delivery of ads to his/her phone, is a big issue that will only be solved once data plans are truly open and not capped at [X] MB (as a few carriers now introduce, e.g. Orange). Many other issues, such as targeting users (relevance) and balancing ads (e.g. in-game; see interesting report here) need more robust solutions, too.
So at present I’d say: congrats to the likes of Massive, Third Screen, Screentonic, etc who have found a deep-pocketed corporate home and good luck and perseverance to all the others.
Mobile Marketing seems hot, even in this young blog where I commented upon it here, here and here already. Now though mighty MS moves again: Microsoft acquired Screentonic, a French mobile advertising firm. This follows their acquisition of leading NY-based in-game advertiser Massive a year ago (see here). Coupled with rumours around this ominous joint venture that sent Yahoo! shares soaring one wonders if MSFT is setting itself up for a true fight with Google.
Google of course has recently bulged up again with its DoubleClick acquisition, in particular as it was said to be interested itself (not that Google hadn’t done anything before: remember their Sky and MySpace deals). According to reports, Google is set to take 32% of the digital ad market this year, up 7% from 2006 (the report is not clear if that includes DoubleClick or not). Yahoo! came in at 18% in 2006 and Microsoft at a meagre 7%.
It is a very exciting space. However, when it comes to mobile advertising can I note that Google hasn’t really moved there yet? Implementing AdSense and AdWord on mobile might be tough as long as screen resolutions aren’t sooo great and data-inclusive plans still the exception but isn’t the absence of any action noteworthy? I think not, at least not at current (becasuse, let’s not forget, they are rather active when it comes to get themselves onto carrier decks as the search engine of choice).
Any move at current is a gamble: data plans can cost you anywhere from nothing to an arm and three legs, users haven’t shown to be taken to ads on the mini screens of mobile phones (unless they get immediate reward: see my blog post here). Microsoft’s explanations (which their GM of Digital Advertising Solutions gave to AdAge) aren’t uber-convincing, more middle-of-the-road talk about CPM, CPC and CPA… These are horrific for mobile at the moment. And mighty MS doesn’t reveal terribly deep insights into the space when they utter things like this when it comes to the carriers: “There’s definitely an economic relationship. I can’t tell you what those [revenue] shares are. Most of the mobile operators today basically look like a web portal on the mobile phone.” It is just that those operators today are more what AOL was in its heydays: they control the whole thing, including the access to the end user. And they do not provide the content, so you will need someone else in there, and, and, and. It might just not be just as profitable and rosy as people often say…
The hope always is that mobiles are the devices that make it easiest to target one-to-one. Fantastic! But the above shows that the jury might very well still be out.
So – as unfashionable as it might have become – Google may just have shown some smart thinking again: sit back (and comfy on their search cushion) unless you see a business unfolding that shows significance impact for your own business – and that would arguably have to be even more to merit such a move for Microsoft (that isn’t traditionally basing its business model on ad sales) than Google (that is).
