Tag: Ovi Page 2 of 4

N-Gage dies (again)

Nokia’s N-Gage game service has just been declared dead, well dying anyway. always been a concept that has under-delivered painfully. In its first iteration, the device, it was a gutsy but maybe not entirely thought-through attempt to combine phone and dedicated handheld gaming device (it was always going to lose as one simply looked outright silly even when putting the thing towards ones ear to make a call – even when stood at a Star Trek convention, and that is telling). The “new” iteration, the software platform, struggled to take off. Nokia tried mightily to produce showcases demonstrating the superior gaming abilities of the platform compared to “regular” feature and smart phones but the efforts were thwarted from a number of angles:

Too expensive

It was a costly affair to deliver a game optimized for the N-Gage platform. When there is no proven distribution model that can guarantee decent returns, there would always be limited uptake from developers and publishers.

Too small a niche

N-Gage was always geared towards dedicated gamers. All marketing was directed this way, the positioning was distinctly high-end, no non-game applications were shown (or even contemplated, I guess). The power of the platform thus was funneled into a niche of a niche, i.e. high-end gaming. I would suggest that one could as easily have positioned it as a powerful media platform full stop. One that allows for beautiful execution of any number of simple or complex apps (and a game is basically “only” one app category).

There’s an app for that

The iPhone then was arguably the final punch. In spite of developer frustrations growing over discoverability within this pile of 100,000+ apps, the platform has spurned exceptional games galore, and not only casual ones either. Real Racing is as punchy a racing title as one will ever get one on a handheld. And with people flogging to the app store in drones (rather than visiting it once to rarely if ever return), it appeared a less risky (and certainly more fashionable) move to leave it at that. Notably, Apple got the positioning piece (see above) right: even though it is a powerful gaming platform in its own right (anecdotally, the good folks at Firemint managed to string Real Racing to up to an impressive 82 fps), it never looked at this as a sole or even the main focus of the platform. There is a good reason why their already famous moniker says

there’s an app for that

rather than

there is a full 3D, 60+ fps, multi-player, high-end, Bluetooth and WiFi-enabled fighting game with dedicated combo mode for that.

And Mark Ollila, Nokia’s Director of X-Media Solutions and a games and general industry veteran, nails all of this down when he says that

One lesson is the complexities of offering rich games content on a global scale. […] How do you handle the billing, the local marketing intricacies and the type of gaming experiences that work in different markets? And what do consumers actually want – is it the high-end games with connected features that N-Gage was delivering, or a much broader catalogue?

At the heart of it is the conceptually different approach of monolithic, super-rich and highly integrated platform versus a more modular approach: in Apple’s app store ecosystem (or in Android’s for that matter), you can integrate most if not all of N-Gage’s features, too: multi-player gaming, communities, trial versions, etc. But you don’t have to. The former lacked flexibility, which made it susceptible to the nimbler, faster moves of a modular system.

Well then. It at least gives Nokia the opportunity to focus solely on building out the Ovi platform and fix the bugs it has been plagued with at the start. Nokia clearly feels the pains of the rapidly changing market place and it struggles to adapt swiftly (which is – and one should appreciate this – much harder when you are running a product portfolio that has a market share of well double your nearest competitor and stretches all the way from the most basic feature phones to the most advanced smart phones) but it has people that should be capable to turn it around. Not easy, mind you but they’re a mighty player that has shown its ability to innovate numerous times, never forget that.

App Bonanza or Analyst Bonanza?

In the last two days, two forecasts informed us about the value of the mobile app market in – convenient as ever – the distant future that is 2013. US analyst firm Yankee Group predicts the US app mobile market to be worth $4.2bn by then. Today, British analyst Wireless Expertise (run by former Netsize exec Anuj Kanna) topped this easily by predicting the (global) app market size to be $16.6bn by that time (free copy of the report here).

I can hear your moans…

However, let’s have a look at the numbers then, shall we? At the end of 2008, there were 4.1bn mobile phones in the market. Because apps tend to thrive most on smartphones (and the analysts seem to thrive on them, too), let’s have a look at that sub-sector. I would estimate the smartphone share to being somewhat under 10% (Symbian claims c. 250m devices in market, Apple has some 30-odd million, so RIM, Windows Mobile, Android, Palm, etc should probably be OK with the balance of some 100m). In Europe and the US, the share is much larger but in the big volume markets China and India it is bound to be much smaller, at least for the time being. Global smartphone shipments in 2008 were around 140m.

If we estimate a 20% growth year-on-year for smartphones (vs. 5% for the overall phone market, which seems to be loosely in line with the general dynamic), then we would end up with something like 900m smartphones by 2013. Yankee Group predicts that smartphones in the US will quadruple by then (from 40m to 160m) and does not seem to be very far off. Wireless Expertise thinks the global number will be 1.6bn, which again, might not be that far off.

The question is however if people will really download this much stuff: Yankee Group predicts that the actual value of the market will rise 10-fold and that the average price point of an app will be $2.37. Why that is so, you ask? Well, pay $495 and you will know; I don’t…

Now, the good folks of Wireless Expertise see the thing quadrupling until 2013. They do, however, count “ordinary” mobile games as they are being sold through carriers amongst the apps, which means that their starting point is higher, namely $4.6bn in 2009, so they’re looking at this quadrupling. They raise some smart points on app stores and how they (well, it) changed the way users access and consume content, how carriers will need to look for alternatives to increasingly commoditized voice and messaging propositions, etc. But why there should be a 400% rise in e.g. traditional J2ME mobile games remains – whilst it would be wonderful – pretty much in the dark.

Talking of J2ME and feature phones: I do not know how they are being woven into the equation but there would certainly be a wide field for any self-respecting crystal-ball-reader here: on the one hand, app consumption on such devices has traditionally been fairly shabby but, on the other hand, this could well change if connectivity, bandwidth, UI and the right price plans would come together to offer a compelling mobile web solution. So then apps would need to be translated into widgets or something like that. Would users then pay for them? Don’t know. Or would it be the “Freemium” model according to which “Free gets you to a place where you can ask to paid?”

The challenge of these reports is their “simplified” assumptions: if only one of them fails, you go “oops”, and your prediction is halved (or worse). On Wireless Expertise’s case, this is particularly clear: their assumption is that there will be a dual strategy of (presumably OEM-driven app stores) and mobile web-based widget stores. Now, they further assume that Ovi, Windows Market, etc will all be as successful as Apple’s App Store. By early (anecdotal) data, this could not be further from the truth (see here for what that may mean). Nokia in particular struggles to get its head around a viable and compelling media strategy (cf. here and here). And hence the beautiful hockey stick would actually fall flat on its face.

Now, I am not predicting total doom and gloom, in the contrary. I do think that Apple’s wake-up call has brought a much-needed new wave of innovation and I also believe that this will be successfully incorporated by some carriers and OEMs. But by all of them? Not very likely.

And so we see: the reports are a touch on the optimistic side when it comes to volumes and assumptions. But, hey, that’s their job, I guess, and after all they have at least dropped their masks now: Yankee Group call it fairly openly a “gold rush”. And what happens then we had been shown a long time ago: you end up eating your shoelaces. So maybe this is less of an app bonanza and more of an analyst bonanza then…

Oh Nokia, where art thou?

Nokia struck again, it seems. This time? No, not another multi-billion dollar acquisition such as Navteq but another tiny start-up, namely the “boutique” travel social network Dopplr, which the Finnish telecoms giant allegedly gobbled up for anywhere between €10-15m. Hm. Hm Hm…

Dopplr’s Business Case

Let’s see what Dopplr does (besides its co-founder [and angel investor] being an old Nokia hand): the idea is to share trips with friends so that a) people coincidentally going to the same place at the same time (“what??? you will be in Barcelona in the second week of February, too???”) will find each other and b) they can share cool and “unique” tips from other travelers. It is (was?) one of the group of location-aware social networks that have been and are still waiting to come out of cover.

Nokia’s Master Plan

The deal is great for the Dopplr guys who seem to have made a nice return and the pieces of the jigsaw on a very, very, very high level seem to make sense: Nokia is assembling a location-based empire. They acquired Navteq in what was Finland’s largest acquisition ever, they bought German location social network Plazes, and now Dopplr. And it now all comes together at Ovi Maps (which looks quite good!). Makes all sense, huh? The rationale was – arguably – to do to sat-nav systems what they did to (small) digital cameras: kill them and incorporate it into their phones (or multimedia devices). When Nokia moved to Carl-Zeiss lenses, mobile phone camera were basically on par with low- and mid-tier digital cameras. Why carry 2 devices if 1 will do the same job. Easy! And boy did it work!

So, let’s do the same with maps. And, more importantly perhaps, do not maps (and location-awareness in general) find a completely new way of justification in mobile phones, i.e. in devices that are, well, intrinsically mobile? Yes, it does. When Steve Jobs premiered the original iPhone, he famously ordered coffee from the nearest Starbucks, using a maps application. Simple, right? Wooing the masses but nothing much in it, right?

But! On the maps side, Nokia competes against Google Maps (this is what Jobs was using), which is free (if one leaves aside the probably not insignificant investment that will have gone into this service with its various extensions such as Streetview et al). It also has an open API and many, many people use this. It is embedded on the iPhone (Jobs again) and most people I know use it on their Blackberry because it is better than RIM’s own offering. A free download to most phones, Nokias included.

The Impact of (Fairly) Open Networks

Now, I never got these highly specialized things anyway. I find them way to complex to handle: when I am going on a business trip, I am normally much too busy to feed data in some travel network or other. And when I am going on a personal vacation, I am a) even busier and b) want to be left alone (normally). Oh, and did you see that Twitter plans something like this, too?

But even aside from this, when it comes to “being found”, all my friends (real and virtual) knew through my blog, through Twitter and Facebook that I was going to France this summer. Do I really need another, specialized service for this, over and above the ones that can provide that information and also everything else? In other words: does it make sense to try and hone a super-focused service when similar (if not identical) results can – and already are being – achieved through smart filters on networks that have somewhat of a head-start when it comes to active users? I mean, Facebook has more than 300m users, MySpace – even if it seems to be struggling a little lately – will have more than 150m. And then you have Twitter, Bebo, Hi5, Orkut, StudyVZ, etc, etc, etc. – that is more than Nokia sells all year.

Now, the existing players are adding geographical awareness as an additional feature to their services. I mean, even YouTube is doing it!

But the real point is: whoever uses one of these (say, when you are in Brazil, you use Orkut), there is a certain likelihood that your friends will, too. Otherwise, you would not be on it. Need more? I doubt it.

On top of that, it is – arguably – much easier to integrate a location-based function into a network that already has hundreds of millions of users (and I am not talking of hundreds of millions phone users because they only are potential users of any service that might come with the phone) than to build one. Nokia does certainly have a great starting point (it sells more devices per year than Facebook and Twitter users combined; see – old – numbers here) but they are not with Nokia because it provides such a great network but because their phones are good.

When it comes to services, it has become an issue of today’s mash-up world where access and resulting services go across a variety of – more often than not – open offerings rather than tight proprietary ones, and Nokia seems to be struggling of getting to grips with this. Some commentators compared it with Yahoo!‘s M&A swoop in order to try and grab back the love it lost to Google and others. Even if one isn’t so harsh, it seems obvious that the thought pattern behind Nokia’s thinking might be a little outdated. I stand to be corrected (and would love to be since Nokia has brought a lot of really great stuff to the world) but that is what is worrying me. So congratulations again to the Dopplr team again but, dear Nokia, for the time being I remain skeptical as to the commercial sense of it (and, yes, I appreciate that €10-15m is but a fly speck on your balance sheet if it fails…).

EA Mobile, Namco Bandai and the State of Carrier Decks

After many rumours and ominous statements that it was “reviewing its activities” Namco Bandai confirmed today that EA Mobile will thenceforth act as its distributor for mobile games outside the US and outside any app store.

After Taito and Eidos, EA Mobile just gobbled up another major distribution deal and the exodus from J2ME games distributed via carriers continues. It also means that EA’s dominance over the operator decks has just increased a little more yet again. It had estimated (back in June) that its 2009 mobile revenues would reach $185m (although this arguably includes Apple’s and other people’s app stores as well as embeds).

What is worrying is that this cements the oligopoly of games distribution in all major markets. EA Mobile, Gameloft occupy the top 2 slots very comfortably with Glu an equally comfortable but distant third. I-Play, Digital Chocolate, Real and Connect 2 Media are fighting for place and Xendex, Handy Games and a few others seek (and sometimes find) niches to prosper. THQ Wireless, Vivendi Games Mobile have departed. Player X found a new home under the mighty wings of Zed. And then? If the above companies all manage to maintain a healthy business, this might be enough; there are silverback gorillas in every market segment. If not though, this might become a doomed sub-sector; the limelight would then be on the (failed) ecosystem operators tried to build: overly fragmented with everyone of them wanting it just so and just their way rather than agreeing on a largely unified structure and processes pressed margins from a system that has been tough from the outset (handset fragmentation and international spread mean fairly high cost per capita anyway).

The accumulation of external properties arguably also mean that EA will need to run a business that is almost a combination of a publisher and an aggregator (with its very own challenges). The issue of shelf position (will they give Tetris and the Sims undue preference over Space Invaders, Pac-Man and Cooking Mama?), the commercials of their own deals (they anecdotally paid Hasbro a handsome sum), and the generally dominant position will all come into play and it is inconceivable (well, is it really?) that their partners will continue to play ball.

It might of course only be a brief interregnum on the way to an app store world. Smartphones are very much on the rise and, in that world, such stores seem to rule. Apple has taken the lead, Android followed suit and new stores are springing up almost by the day, which also includes operator-led ones: Orange already has one, Verizon Wireless has announced one (mobile web-based) and so has Vodafone (which might actually be bigger than Apples) as well as many others. The OEM all do the same (even though some carriers want to disallow them): Nokia Ovi, Blackberry App World, Sony Ericsson, LG, Samsung, you name them, they have it. The question of course is if that might mean the same thing all over again: will they again want it all just so? Will they again have it just their way so that a user would have the unique flavour of operator X on handset Y in this unique way, meaning that – again – thousands of SKUs would be required to service them? Groundhog Day? I hope not!

Image credit: http://www.antitrustreview.com/files/2007/07/files51lsaydhrsl.-ss500-.jpg

Nokia to buy Cellity

Nokia has announced that it will acquire “certain assets” of Hamburg-based mobile software firm Cellity, these “assets” being its people and technology. Cellity’s current offering, an “address book 2.0”, which promises to connect and consolidate a user’s contacts and messages across mobile phone, social networks, etc into one inbox. It also offers a dashboard to manage this. However, this – the company’s current – service is said to be discontinued. So what is Nokia buying then (besides the very talented people)? My best guess is that Nokia would want to use the technology to ease consolidation and interaction across a variety of their handsets’ and services’ (including Ovi).

Good on the good folks of Cellity. Let us wait what it the result will hold in stock…

AdMob on iPhone ad impressions and why Andrew Bud is wrong

Mobile advertising firm AdMob has released some numbers on ad impressions on iPhone vs other smart phones and the result is, well, that Apple is basically a 50kg flyweight boxer competing against Sumo wrestlers 5 times it weight (8% smartphone footprint but more than 40% ad impression share).

Now, very (!) crudely put, this does not mean that it is 8 times as successful on mobile advertising. It does mean however that users are 8 times more likely to use applications where ads are being displayed. Here’s some of their stats:

iPhone Apps (in AdMob’s network):

  • The top iPhone apps had more than one million users in the UK in May 2009
  • 5% of iPhone apps had more than 100,000 active users in May 2009
  • 14% of iPhone apps had between 10,000 – 100,000 active users in May 2009
  • 27% of iPhone apps had between 1,000 – 10,000 active users in May 2009

Mobile web browsing market in May 2009:

UK:

  • 48.7% of ad requests came from Apple handsets (iPhone and iPod Touch)
  • 28.4% of ad requests came from the iPhone
  • 282,493,761 ad requests from users in the UK

US:

  • 45.1% of ad requests came from Apple handsets
  • 25.7% of ad requests came from the iPhone
  • 3,804,373,544 ad requests from users in the US

Global:

  • 31.4% of ad requests came from Apple handsets
  • 18.6% of ad requests came from the iPhone
  • 7,997,946,483 ad requests from users around the world

Interestingly, MEF and MBlox Chairman Andrew Bud (who is being quoted at the end of the article) said that Apple’s app store compared to Nokia’s Ovi Store like a niche boutique to Tesco (or, if you are in the US, Walmart). Is that so? No it is not. And here’s why:

Apple is a boutique with more items on sale than a Tesco megastore. And its (less) customers buy trolleys full of wares. Moreover, their high-spending customers leave the store with a spring in their step and committed to come back the next day.

Nokia is a super-store with gazillion potential (!) customers where 1 in 20 stroll through aisles stocked with not so cool things and most of them walk out without buying anything and, on top of that, feeling fairly downtrodden and frustrated about what was on offer.

So, for the time being, I’d choose the Apple boutique. If that choice changes will depend on whether Nokia will manage to stock their shelves with more compelling wares and improve on their tills (less queuing, more bang for your buck, etc). Oh, and get those cold strip-lights replaced, please!

Sony Ericsson & GetJar: jump-starting an App Store

sony_ericsson_logo

Everyone is jumping on the app store bandwagon and, so far, Sony Ericsson had been a little behind. Some thought this might be related to its PlayNow Arena offering, which is already an app – or rather media – store of sorts. But it turns out that the handset maker was plotting a different strategy and one with an interesting result indeed.

It was reported today that Sony Ericsson will partner with GetJar on the creation of an app store. GetJar (the guys with the ugly logo) is a giant in the distribution of mobile content who had gone to clock up 200m downloads in only 2 years by last year (and now recording 6.5m+ downloads per week and more than 300m since launch)), which was, prior to the Apple App Store a very respectable number indeed. Now, GetJar has now something like 45,000 apps on their store. However, these are for free. The company appears to making their money with ad injection…

Sony Ericsson will apparently provide a mix of GetJar’s free applications and premium content. The solution will be using GetJar’s platform and will roll out in the 13 countries that currently support PlayNow Arena first. Compatibility is currently ensured with 38 of Sony Ericsson’s handsets but they intend to roll out to further markets and models over the year. It supports J2ME and Symbian on the outset but they plan to support other platforms in the course of the year. Android probably…

The deal allows Sony Ericsson to jump start its store though and that might be the most important piece of it: it can combine its own catalogue (through its current offerings) with GetJar’s huge catalogue of free apps, thus avoiding the fairly empty places that some of the other guys put together (Palm announced it will launch its Web Catalogue with “a dozen or so” apps, even Nokia’s Ovi Store had “only” 20,000 “items” in at start). GetJar’s platform is arguably fairly powerful since this is the only thing they do, so a quite smart move.

On GetJar’s side, I wonder if this is the one of the first steps into a new direction (Sony Ericsson was not the first app store deal they signed; 3 UK and Portuguese carrier Optimus apparently signed up with them, too, which I had overlooked; apologies). The company’s business model is/was based around ad infusion, it seems (see their CEO blog about it here). So this might be the next wave to monetizing platform and content on it…

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