Gemalto, SIM card maker turned “world leader in digital security” (I wonder how many companies claim that title; it’s like boxing, it seems) announced it would subscribe to a capital increase in Netsize, turning Gemalto’s share (24% pre-money) into a majority position.
This may well signify another move towards a closer tie to highly integrated hardware/software/service solutions on the mobile value chain. Gemalto is one of the leaders on the SIM card side, it manufactures SD cards, USB tokens, smart banking cards, etc. Netsize sits on the service side of things: it provides SMS and MMS delivery, is one of the leading mobile payment providers and provides content management platforms. Glue it together, and it becomes a vertically integrated solution from the same mould. Has someone been reading Apple’s philosophy?
Besides these points, cross-selling opportunities would appear to be fairly obvious, too. The only mismatch could be that Gemalto focuses on digital security (they list mobile connectivity, identity and data protection, credit card safety, health and transportation, e-government and national security). Alas, no messaging and entertainment here, the two main areas of Netsize’s business.
This little mismatch is not unprecedented: does anyone remember the VeriSign acquisition of Jamba? Whilst it seems it may (just) have been paid off, the match between the companies was never really there, it seems. Let’s hope the Gemalto-Netsize story will be a brighter one.
The latest iteration of the Carnival of the Mobilists is out over at Andrew Grill’s London Calling blog (and it is the last one for this year, too). It contains interesting posts from MMS initiatives, to the use of SMS in political campaigning, app store comparisons, a look at Samsung’s Bada and much more. It also includes my very own post on the potential of Android.
Head over there, give it a good read and enjoy yourself!
Here’s a cool graphic from the good folks over at Lifehacker/Gawker on the size and significance of the Internet.
Image credit: http://cache.gawker.com/assets/images/17/2009/12/500x_theinternetisbig.jpg
Here’s this week’s Carnival of the Mobilists (its 201st iteration in fact). This week, the Carnival is hosted over at Phil Barrett’s Burning the Bacon blog, and he has lots of goodies to share, including my own post showing an example of why Nokia struggles. Besides this, you will find posts on:
- Android-based tablets
- Droid taking out a bite on RIM (or will it?)
- a nice post on the ubiquity of SMS and
- NFC (near-field communication for you ignorant ones…
Go now and give it a good read. You’ll find the carnival here.
Egoblogger extraordinaire Robert Scoble has never been known to be shy, and so he declared with his usual great fanfare that Europe did not matter any more in terms of mobile innovation. Why did he say that, you ask? Well, Nokia apparently took him to visit their research lab in Cambridge (no, not in Espoo) as part of a (Nokia-)sponsored geek tour. And Scoble was not impressed. Because (1) everyone appears to have been texting when he was on the tube (how quaint), (2) the N97 isn’t cooler than the iPhone and (3) Symbian is much clunkier than the iPhone’s OS or Palm’s WebOS, Scoble deduces that Europe has had it.
He reduces this loss of leadership in mobile innovation to handsets or, more specifically, to the coolness factor of handsets (“London’s cool kids are [not] hot and bothered” about the N97). And, with that somewhat tight limitation, he might actually be right. Nokia has been losing ground on the coolness and usability front for quite a while. However, when it comes to technical ability, their devices are still quite hot. Scoble basically uses the iPhone plus the first Android-based (Taiwanese [sic!]) phones to declare that the king is dead.
Hardware is a Commodity
Now, let’s try to differentiate a little. Would you say the US have the lead in computer manufacturing? Well, probably not. IBM’s ThinkPads are Chinese, then there is Sony, Samsung, Toshiba, and there is HP and Dell. There is of course also Apple (“designed in California”). Does it matter at all where the hardware is from? No, not at all, and no one really cares anymore. And why not? Because hardware is basically a commodity, that is in a world where one does not actually see that much of the hardware because the interfaces are software-driven. And these are from Microsoft, etc.
In mobile, this has not been true in the past because their were such vast differences in the available hardware that the usability was severely impaired should you have been using, say, a low-end Motorola device as opposed to a high-end Nokia. This is where the myth of European mobile superiority comes from. And, with Apple, RIM and maybe Palm again, this is firmly in North American hands. There are of course Samsung and LG, the Korean powerhouses who drive their market share up and up. Android devices G1, G2 and Magic are from Taiwanese HTC. However, given how far mobile software and indeed services have come: does it really matter either way today? I say it does not.
Here’s the Innovation: Services
If one wants to see where mobile innovation is happening, one would need to go to South Korea, Japan, Finland (not the Nokia research labs but, say, the public transport system where you can pay via SMS for the past couple of years already), Austria (mass deployment of mobile RFID-payments), South Africa (mobile wallets and very evolved mobile marketing services), Malaysia, the Philippines and even Kenya (mobile money transfers). Certainly not the US though, I’m afraid. They are still the country where “can you hear me now?” campaigns rule.
The iPhone has changed a lot of things of course. However, American Idol arguably did a lot more. It brought, shock, horror, texting to the Americans. SMS being, of course, a service. And why, Mr Scoble, should that be bad? Carriers (other than in the US) have made 25% of their revenues and 50% of their profits over the last 10 years with this unassuming little thing. That’s not too shabby, is it? The iPhone (and Palm’s WebOS) have introduced a new level of ease of use, and one that was long overdue. One that woke Nokia, which had comfortably dominated the space with less and less innovation on the software side, up (and Nokia might be a little slow to open their eyes properly). And one that will improve service levels all over the world.
Where the Big Market is
However, let us also not forget that the best-selling phone of all times is the Nokia 1100. No, it doesn’t do Java. It has a battery life of close to 20 years though and comes with a flashlight installed. Both very handy things to have in rural parts of developing or emerging countries. Nokia is having a fairly comfortable market share in these countries. I am not sure if that is a good thing to rest on though: as these markets, they demand more sophisticated devices. And because the computer penetration is much lower than in Europe, Japan, South Korea and North America, the significance of evolved mobile devices will be even more important. Nokia thought this would carry it through. However, we are seeing now that that might not be so: its smartphone market shares are rapidly decreasing.
Europe is not Europe
One last word on Europe: distinct to what Mr Scoble appears to have in mind, Europe is not a country, and this is not meant to be sarcastic. Europe is a pile of little countries and in each of them a couple of carriers rule like little kings. It makes for an extremely complex (and, consequently, low-margin) playground to deploy services. The US (as well as some of the huge Asian countries) have the incredible opportunity to deploy applications and services in one language through less than a handful of carriers to hundreds of millions. No such thing in Europe.
And this is why the US should lead in every aspect really: it is an evolved, competitive economy and it enjoys the tremendous upside of being (almost) completely aligned as to the framework: language, currency, carriers, billing systems, legal system, etc. This is the reason why the US has indeed leapfrogged Europe, the continent, when it comes to basic mobile applications: economies of scale are much easier to achieve there.
Software, Services, Interfaces
When one looks at Nokia in its current state as the sole indicator of where European mobile innovation is, one might be disappointed (as I pointed out numerous times, e.g. here). However, when one looks at how concert tickets are being sold via mobile, public transport, parking fees and vending machines all using mobile as a wallet solution, or indeed Obama making his latest speech available via SMS (there are more than 10x as many mobile phones in Africa than PCs according to Tomi Ahonen), then one can and should still be awed. And, no, in spite of its President the US is not (yet) close in this respect.
I hope, however, the US will catch up on this front sooner rather than later, too. Because of the size of the market and the aforementioned advantages, it would unleash incredible opportunities that would bring all of us fantastic new services and applications. And, Mr Scoble, it does not matter if these are 160 characters or polished web pages; it depends on what you want to do with it (as you, being one of the most prolific Twitterati, surely know).
I did not text anymore because I hated the UI and could not stand the clunky interfaces (in spite of T9; I’m too old, I guess). I started again with the iPhone. Why? Because – distinct what some people say – it’s a great interface: it displays the conversation, it looks neat and I have a full keyboard (the touch screen works much better than I feared; and I used a Blackberry for years and years). But that is not a question of the device or the technology, it is solely a question of the software. I would be much happier if I could also use my iPhone (or any other phone) to buy my newspaper (which I can with an RFID-equipped credit card in this country and which I could do in, say, Austria, a country with 2/3 the population of Illinois and a footprint smaller than Maine).
What Scoble misses (or omits in his post) is that the next leap in innovation will be a service-driven one (just as we saw on the Internet: first hardware, then basic apps, now sophisticated services).
Mobile has had the hardware phase, it is going through a “basic” app phase, and some European, African and Asian countries have entered the value-added services phase already, some years and years ago in fact! Compared to the US, they’re leading, by a lot! They’re perhaps just too small for the Robert Scoble to realize they’re there… But, as I said above: this is not about Europe leading the US (apart from the fact that it would appear to being Asia that is truly leading and has been for a while): it is about the evolution of an incredibly powerful communication device that is being unlocked for more and more applications and services; and this is independent from country and nationality!
Along those lines: why, Mr Scoble, should it be a bad thing that Europeans now “must” visit Cupertino and Mountain View. California is nice, isn’t it? Not a bad thing to go visit every now and then at all! We’re living in a large world, Mr Scoble, not only on a single continent, and mobile is a facilitator spurning new ecosystems, not only a device.
Image credit drawing: http://www.aartkom.cz
It was only a matter of time, I guess, and here it is: Estonia will allow its citizens to vote by SMS in 2011. However, the Estonians too have been watching the US Presidential elections in 2000 and decided hence that one needs some additional security to make it safe. Enter a chip that every citizen can apply for and get into his/her phone. If or if not this makes it really safe (my guess it that it should be possible to apply some decent security if the device is “hard-wired”), can (and probably will) be discussed at length by the experts. But it might just not matter much: I find it hard to believe that more people would actually jump through those additional hoops required to be admitted.
English newspaper The Guardian published the results of a couple of recent surveys on mobile content, including the quarterly “Orange Digital Media Index” and a study carried out by TNS and, alas, no real surprises here:
- Ringtone and wallpaper downloads are slowing and are on the decline and, frankly, who in their right mind with a phone that plays MP3s, has a good camera as well as multiple connections to a computer, would spend money on such little gimmicks anymore? Ringtones were down more than 10%, whilst wallpapers still grew but at a meager 3%.
- Full-track downloads of songs though were on the rise — 292,000 in January on Orange UK compared to only 100,000 ringtones.
- SMS are going strong (up 21% or 1.3bn for the month in the UK) according to Orange, a number to which I, through my 12-year-old son’s phone bill, contribute no small share…
- TNS believes mobile IM is on the rise but this is not really the big thing. What IS the big thing is that, according to TNS, more than 1 in every 3 messages a user sends from either his/her mobile OR computer are SMS (38%), and that shows how ubiquitous the whole thing has become. Again, judging by my son’s communication patterns, I believe that: his choice of messaging is – in order of relevance: 1) SMS, 2) IM, 3) (and I mean a very, very distant 3) e-mail.
So pretty much all as expected. Unfortunately, no news on mobile video, games or applications in this one although this is there might actually have been interesting things to report. I am actually wondering now why I even bothered recording this at all… Apologies…
I have been dealing with Jaiku and Twitter, the micro-blogging machines, a lot recently (see here, here and here). Today though, I stumbled across an article that put a rather different twist to it, and it makes you wonder… The piece is written by a mother of 3 daughters who tries to use Twitter as a mass communication tool (broadcast SMS) only to be utterly frustrated as none of her “super-communicating” daughters takes it up – too complicated, too onerous, too cumbersome, too – as one academic has it – surveillance-style.
Now, is that so? It would counter my (borrowed) argument of the intrinsic attraction of objects to social circles around such objects. It doesn’t seem to work with daughters though… Well, I wonder: The mom, a tech-savvy NY Times journalist, tries to put Twitter to a use, namely to shorten communication with her 3 daughters (no need to having to tell each of them – separately – that she is on the way to XYZ). However, the object of interest to each of the daughters is very different to the ones of the others (cardigan, pizza, shopping, …). So, no stumbling block after all: Twitter, et al are for people who group around a common object, which must be of common interest (e.g. the status and availability of black cardigans in the NY youth scene), not around one that only seems to be common (mom). Mom only happens to be at a point of interlinking circles, different objects that all touch her; she is not – at least not in the examples elaborated upon in the article – the central object herself.
Adoption-wise, this does of course not make things easier as the Twitters of this world need to migrate user behaviour: fans of Cheshire golf clubs or the NY indie music scene, Parisian vernissage goers and Seattle jazz fans will all have had ways to communicate prior to Twitter’s entry on stage; they need to be convinced that this is a superior tool to keep the community buzzing. And because there is slightly less vanity space involved (Twitter doesn’t allow you nearly as much room to put your wares on display), the communication bit must be utterly compelling to pull people across. It is the only USP the concept has. And this explains why the take-up is not as quick as for other social media: this is the raw core of it, and the simple truth is – as we know never simple.
I am hopeful though that they’ll find a way: object-centered sociality is the way!
Now, this has been puzzling me for years: the US carrier policy (I am not sure how many still do it) of charging the recipient of a text message for that message. How odd is that? You sit in a restaurant, the waiter brings you a bottle of wine that you did not order. You do not drink the wine (because you did not order it and you do not like wine) but you are being charged nonetheless. There is even a bolder version of this: the same waiter works for a winery, and they send you that bottle as a marketing trick, say to lure you into booking travel to the Loire wine region. Yet again: you did not order it, you did not drink it, they charge you. No, you say, this is surely not possible. And I agree.
However, the US arm of T-Mobile (and I am sure others before them) is doing just that: if users that do not hold a special data plan (something like a don’t-pay-for-wine-you-did-not-order-plan) are being charged for every SMS they receive, be it your teenage son telling you that he didn’t make it [home/to school/to your appointment 3 hours ago], be it your partner announcing that he/she is on the tube and will be home in 10 minutes or be it the tourism authority of the Loire region working hard on improving travel to their area – you pay.
This now seems to backfire as there has been a class action filed against T-Mobile US seeking redress for exactly that. According to the report about it, “the plaintiffs allege T-Mobile USA’s texting policy violates federal telecom law and Washington state’s consumer protection-unfair business practices act” but, quite frankly, I would have thought it would also violate a string of other, more mundane laws about contracts and invalidity of coercive business practices, etc. Unfortunately for all of us who like to drool over those incredible sums in US law suits, “the suit did not contain a dollar figure for alleged damages.”
It is about time that this stops: it estranges your customers, it provides for horrendous customer experience, and, really they shouldn’t say they didn’t see it coming…
