Tag: O2 Page 2 of 3

Is Apple to break iPhone exclusivity?

On 18/07/2009

There have been rumours galore about Apple’s exclusive deals for its iPhone all over the place (see e.g. here for Verizon). New reports have now surfaced that appear to confirm that Apple is looking at this option for both the US and the UK (and, if this works, presumably also for other territories):

In the UK, T-Mobile confirmed it was in talks with Apple over stocking the iPhone 3G (the 3GS remaining exclusive to O2, which also has its hands on the Palm Pre) and Orange is “believed”, to be as well.

In the US, the Verizon discussion has been around for a while. A new report now suggests that losing the exclusivity would spell doom for AT&T: the report estimates that as much as 30% of AT&T’s customer are with the carrier solely because of the iPhone exclusivity. This sounds a little high to me: after all, the iPhone penetration in the US is much lower than that (it held just under 11% market share globally in Q1/2009). Are they saying that all the other users (those with the less fancy handsets) just stay on AT&T to share into the iPhone limelight? No, I thought not…

Apple is in any event in a beautiful position at the moment: so far, most of its competitors’ “iPhone killers”(Palm Pre, Blackberry Storm and innumerable devices from Samsung, LG and Nokia) have failed to challenge its numbers and, quite literally, all of the app stores set up by competitors showed meagre results compared to the – now – 1.5 bn (!) downloads in a little over a year from the Apple App Store. The good folks from Cupertino are therefore now in a pretty good position: they proved (a couple of times now) that they shift 1m+ devices – on the opening weekend! They bring a lot of sex appeal in which the carriers, not generally known for coolness, can bask. They cracked the content dilemma and produced a thriving developer community, which made people actually use their phones for all these things that have been promised for so long (iPhones are connected, most others can connect). In short: in carriers eyes, they are – aside from the horrible fact that Apple takes a healthy cut – a really good thing for networks that see themselves locked into cut-throat pricing wars over voice and SMS (bringing in, anecdotally, up to 50% of European carrier profits over the past 5 years) and craving for a way to increase user ARPU (app revenue on the iPhone is, apparently, $27 per device). Happy days…

Palm Pre & iPhone: O2 wants it all

By Volker

On 25/05/2009

In 1, OEM

O2 has won the exclusive distribution rights for the Palm Pre in the UK it is reported. This is noteworthy as the carrier also is the exclusive distributor for the iPhone in the country, so putting the iPhone “killer” next to the ubiquitous uber-smartphone might be a bit of a daring move? Or is it? Let us bear in mind that there are a lot of voices that caution about the operators’ for the iPhone: huge average data consumption on flat rate plans is not likely to drive ARPU. Apple managed to break the old operator model by taking chunks of the revenues realized through its devices and it does not share in any content sales. Apple does not allow anyone to put their brand onto its device (I am struggling to find any O2-related information on my iPhone, and even I think they might have taken it a bit too far… So, the Palm Pre deal actually does a couple of things:

It gives O2 a shot at what might (or might not) be the next big thing (although analysts expect that – at least initially – sales will be much lower than for the iPhone: “Its going to sell principally into the base, to existing Palm owners and existing Sprint subscribers”).
It allows O2 to put a little more leverage in its relationship with Apple. Having a device on its roster that has a powerful specs, an appealing interface and something like a cult following (although the cult appears to being a smaller one than the one of the Apple fashionistas) would help O2 in future negotiations.
If (or when?) the exclusivity period for the iPhone ends (which commentators expect to happen soon), O2 would have another uber-cool gadget exclusively (I for one swapped over to O2 to get my hands on an iPhone).

So whilst few people do not know much, the combination of the above provides any number of good reasons for O2 to go for the Pre (assuming the business model agreed with Palm is not too bruising; but one can expect Palm, which has to fight its way back into the market, to be slightly less demanding than Apple), which promises to being a fairly cool device indeed: besides having a lot of all the things the iPhone has (touchscreen, multi-touch, cult following) and some more (QWERTY-keyboard) it beats Apple on home court: take Apple’s aversion to cables, the Pre doesn’t have to be “plugged” into anything; you just place it next to its touchstone charger and it charges by magnetic induction. Steve Jobs will be fuming about this one… oh, and it runs 15-20 apps simultaneously. The one question might be: which apps? But, hey, let’s see where they’ll get to…

22/23 April: European Media Conference, Prague

By Volker

On 16/04/2009

In Events

I have mentioned this earlier: Next week, I will be headed to beautiful Prague in order to attend and contribute to the European Mobile Media Conference. If you can, make sure to head over (there is even some last-minute discount).

I will be speaking about the phenomenon that is “social games” (are there really that many non-social games?) and I am fairly excited to be able to meet and learn from a couple of rather remarkable people that promise to bring fresh views to the mobile entertainment table. Speakers include carriers (Telefonica/O2, Vodafone, T-Mobile will all be there) and distributors (the CEO of Aspiro, Gunnar Selleg, will be amongst the speakers), OEM and technology platform providers (Nokia, Nokia-Siemens, Ericsson) but also – and maybe most remarkably – a few luminaries from the classic agency world, namely Mark C Linder (WPP) and Jonathan MacDonald (Ogilvy) whose views will surely be tested by the godfather of mobile advertising, Russell Buckley.

Have a look at the full programme and ping me if you are coming!

R.I.P. European i-mode: one more down

By Volker

On 26/03/2008

Following last year’s drop of i-mode by O2 UK and Telstra (see here), Germany’s third-largest carrier E-Plus is now dropping the service, too. I saw the cause last year in the ways of the data charges (through which NTT DoCoMo makes most of its money for the service) and noted that this wasn’t too compelling for users and this seems to hold true, in particular in view of the move towards flat-rate data plans introduced in recent months by a lot of carriers, which will continue in the coming months, too.

Outside Bouygues in France and, seemingly, O2 in Ireland, it never took off over here. Rotten subscriber numbers in spite of huge marketing budgets. R.I.P. Nuff’ said.

Zed's community is precious!

By Volker

On 09/10/2007

In Social

Zed announced that it “will unveil a bunch of hugely ambitious community services at CTIA”. The new stuff was apparently previewed at a closed press briefing in Madrid today, to which, alas, I was not privy… Test services will apparently go live in two weeks’ time during CTIA.

Zed had announced it had invested a whopping EUR50 million in a web 2.0/mobile 2.0 strategy to drive subscriptions around community services “such as multiplayer gaming, IM, blogging and so on”.

After former owner Sonera had sunk legendary fortunes into developing Zed into some monster brand, most people thought it was more or less doomed. When Spanish group LaNetro took them over though, it re-positioned itself and, with 85% in-house produced own content (no royalties) and sometimes contested subscription bodels grew revenues to a rather impressive $320m in 2006.

Now, in the community area, Zed is said to contribute some of the cash it invested into statiOn, an application for PC and mobile that consolidates all these services in one place for Zed subscribers. Version 2 (what a fitting version number for a web 2.0 app) will apparently be launched at CTIA.

Whilst I believe it is entirely on the money to predict that “the mobile market will go the same way as the wired internet in the direction of community services”, I am not sure if a – arguably complex-ish – PC-mobile application is the way out; this does not give anyone anything new. In fact, a lot of social networks and communities already today seamlessly evolve into platform-agnostic things: Jaiku uses mobile as a major part, Facebook Mobile sees more users, MySpace and, again, Facebook have announced recent deals in the mobile space, Yospace (acquired by Emap; see also here) is serving 3 and O2 UK, my fine employer Hands-On Mobile has launched Yatta-Video on SFR and soon on other carriers, and everyone else has a “social network” or “community” suite on offer. So will we really need a specific application (downloadable?) that will help connect the two media? Isn’t it much rather about seamless — dare I say it? — convergence WITHOUT the need for additional (complex) application layers? Isn’t this one of the public secrets of web 2.0, its incredible ease of use?

Zed concludes its analysis that “the future is certainly not in solo personalisation products”. Well, yes, that might be true but is it really well enough positioned to capture users on their quest into the social networks, too, in particular in the light of the above? I will never ever discount Zed again, so I am truly intrigued by what they will announce and I really hope it is something exciting and innovative. Go on!

O2 gets iPhone in UK – good or bad?

By Volker

On 18/09/2007

In OEM

“US customer satisfaction is off the charts”. These were the words of Steve Jobs on the iPhone, adding he was keen to bring this to UK consumers as well. Now, he would say that, wouldn’t he? The lucky (!?) operator to grab it is O2 UK. Why? “We got to pick the carrier that felt most like home, and that’s O2”, says Mr Jobs.

From 9 November 2007 onwards, the iPhone will be available at a cost of 269 pounds which, converted to c. $540, is substantially more than the comparable price in the US (but then, the UK price includes 17.5% VAT, whilst the US price apparently did not include sales tax). From 35 pounds per month (but tied into an 18-month contract), you get an all-you-can-eat data service that also gives you free access to 7,500 Wi-Fi “the Cloud” hotspots in the UK. This is small consolation for the fact that – rather disappointingly – Apple does not offer a 3G version of the iPhone for the European release but is still running on EDGE; O2 is reported to have been working on upgrading its EDGE network in the UK, which is another addition of cost to what already seems to being a costly deal (since you wouldn’t normally have to add this to a 3G-capable network). Also, it looks as if it was not unlimited after all: O2 said that “1,400 internet pages per day would break the deal as part of fair usage agreement.” Over Wi-Fi, too? Why?

The remarkable spin abilities of Mr Jobs were again on show when he explained the reason for not adding 3G Here‘s what he said: “The chipsets work well apart from power. They’re real power hogs. Most phones now have battery lives of 2-3 hours and that’s due to these very power-hungry 3G chipsets. Our phone has 8 hours of talktime life. That’s really important when you start to use the internet and want to use the phone to listen to music. We’ve got to see the battery lives for 3G get back up into the 5+ hour range. Hopefully we’ll see that late next year. Rather than cut the battery life, we’ve included Wi-Fi and sandwiched 3G between Edge and a more efficient Wi-Fi.” So in effect it is better to have 8 hours of battery life because your browsing takes longer than on 3G? Hmmmm…

The one thing everyone is really curious about is whether those recent speculation that O2 offered a whopping 40% revenue share on airtime (AT&T offered 10% USA). Sadly though, nothing has been confirmed to that end although the 10% seem more likely (and it is in itself a continuation of the small revolution Apple triggered with that deal in the US).

And, yes, I want one…

i-mode dropped by O2 UK & Telstra

By Volker

On 18/07/2007

Today’s a busy day, and here comes the next piece: we read that O2 UK will stop selling i-mode handsets from the end of this month, so that the service it licensed from NTT DoCoMo will probably soon come to an end. Elsewhere was reported that Australia’s Telstra will close the service in December of this year.

O2 UK spent £10m in marketing which yielded a mere 260,000 users over the past 2 years. Telstra is believed to have gathered less than 60,000 followers of the service. Not impressive and only the last examples of i-mode’s failures outside of Japan (and some pockets in Europe, namely with Bouygues in France and O2 in Ireland).

The woes continue as some other markets either pulled the service already or did not even launch it: following the disappointment in the UK and presumably closely monitoring the struggle of E-Plus O2 did not launch it in Germany. MTS Russia generated a mere $150,000 per month from it. In India, the launch on Hutchison Essar was pulled “in part” because Vodafone invested in the company. Exact numbers are hard to come by but as one does not hear booming statements of its overwhelming success, conclusions can probably be drawn…

What is it then that made i-mode such a success in Japan and such a failure nearly elsewhere? Is it the change of the mobile landscape with more and more operators abolishing usage-driven data charges, the general increase in bandwidth on phones which allows users to access more rich content more easily (this used to be an advantage of i-mode), or the lack of support from handset vendors (often cited)? It probably is a bit of everything really but quite possibly the old and overcome model of making money by letting the meter run: users outside of Japan are neither used to this anymore nor do they welcome it. And rightly so: the value is not in the time I spend browsing. The value is in a specific application, service, game, etc. Being charged for this would appear to be eminently sensible: I buy a product and I pay for it. Paying to use the pavement to go to the shop is less convincing as a concept.

Update: The International Tribune has an i-mode article here. It basically confirms the above but offers some additional viewpoints and quotes and such…