Author: Volker Page 58 of 73

Bye bye, fixed line…

I mean, it’s nothing new as us mobilists knew it all along but now, alas, someone put their finger in the air and quantified it. So here goes: as early as next year, wireless phone users will outnumber landline users by 3 to 1. Impressive, huh?

Some more somewhat obvious findings are: rich nations are running out of non-users, and in some emerging markets, where rising personal incomes have made wireless affordable, that gap closes quickly, too. Even so, only half the world’s population uses mobile phones now. Most subscriber growth over the next five years will quite naturally come from India, China, parts of Asia, and Africa. I think the author might have forgotten Brazil…

And now, dear content lovers, comes the candy: the analysts say that “[f]irms must boost their average monthly revenue per user, or ARPU. Text-messaging has been the biggest moneymaker, along with ring tones and games. Music and video downloads are starting to catch on”. By 2011, U.S. carriers will garner 35% of service revenue from data products, more than twice the 2007 share, says the Telecommunications Industry Association.

But in emerging markets, non-voice services are growing, too: “Wireless companies need to evolve their business models because of the changing nature of the industry, not just penetration levels,” said Sureyya Ciliv, chief executive of Turkcell. “Communication and information technologies are converging globally.

T-Mobile shuts the door on Nokia's Ovi… Or did it?

Funny little press reports today tell us that T-Mobile “ditched” Nokia handsets that are capable of supporting the Finnish giant’s Ovi (Finnish for door) multimedia portal. The German originator of these news is slightly more cautious: they also report that T-Mobile denied this and merely point out that T-Mobile has less Nokia phones on offer than a week ago and has – quite noteworthy indeed – removed all those that were “Ovi-enabled”.

The background is of course Nokia’s move into the multimedia service area (on which I first wrote about here). Nokia scored some early successes, namely with Telefonica (see here) and Vodafone (see here) but the threat to operator-driven content offerings was clear from the start. Whilst Telefonica and Vodafone were quite content on having the Ovi portal to music, video and games offered from Nokia’s platform, on their desktop alongside their own offering, T-Mobile allegedly sees this as a threat to its own plans. It is, hence, yet another iteration of the fight of carriers for their ground in the media sector.

T-Mobile might feel strong in the media space due to its iPhone monopoly in Germany but even if (and I suspect that that is not the case), it would be a somewhat desperate attempt: if such drastic moves as locking out the market leader’s handsets are required to keep customers on its own content offerings, is it then not a clear sign that such offerings might not actually be cutting it? In particular when the competitor is an OEM that in itself does not really enjoy a particular flair of creativity and buoyancy in media terms…

I would suggest that Nokia is (only?) a noteworthy competitor because of its market share in the OEM market, and not because it is such a good media company. Constraints with a view to placement on the phone’s “desktop” as well as walled gardens and consumer fear for super-high data charges (see an absurd example here) drive people to what is there, not what is best. This is not even disrespectful to the fine folks at Nokia; it merely is to demonstrate that a lot of players are not even there yet, so that it is too early to say who is best. The desperate moves of the carriers as well as historical performance on the content side suggests, however, that carriers may not be the best suited ones. Given that content is only a fraction of their data revenues, this may not actually be a bad thing: could it not be pointing them to do what they’re really good at, i.e. operating a network. If you want to call it a pipe, fine, but just make it a very, very smart pipe, and everyone (most importantly your customers) will love you!

From A to Zed in 1/2 billion dollars

This one leaves me a bit speechless: other than reporting the press blurb, there seems little to say but then, the press blurb is too large to ignore it. So here goes: :LaNetro Zed announced 2007 revenues of a cool $ 554 million with an even cooler $100 million profit (this last bit is only reported by ME; others mention that it actually does not report any profit). There you have it. Revenues from what? Don’t know. “Proper” US-GAAP revenue? Don’t know. Profitable or not? Don’t know. Everyone reports it, no one seems to know the details. A dilemma…

It is the usual crux with private companies: one never really gets the whole picture. On the other hand, I want to be fair: half a billion dollars in revenue is rather honourable by anyone’s count. So let’s try to dissect it:
– In early 2007, Zed bought a piece of Monstermob and, as part thereof, 9Squared. So this will account for quite a bit of the growth. But still! Zed claims to derive revenue from content 85% of which it owns outright. They do sound-alikes (or “original compositions”) rather than the real thing although 9Squared also licenses the SonyBMG and – recently – KOCH catalogues (for ringbacks). Their rationale for going “original” is compelling though: there isn’t enough money off-deck to pay for royalties, said their US CEO last autumn.
– In October 2007, 9Squared reported over 60m downloads to consumers through its BREW application catalog. “This includes real music ringtones, polyphonic ringtones and wallpapers from 9 Squared’s RealTone JukeBox, Univision Tonos, Alltel’s RealTone JukeBox for Celltop, RingTone JukeBox, mTat2 Wallpapers, Musica Real and GAC Country Ringtones.”
– Zed is an early runner on convergence: its Zed StatiOn combines desktop, online and mobile in one offering. Smart move, I’d say: capture the users wherever they are and hook them in with free services that stick (IM, etc). They hooked in MetaCafe into this, too.

In particular the amount of generic content utilised (which improves margins) is, in a content world driven by brands, brands, brands, a very interesting phenomenon – and no mean feat to pull off: to build a customer base (most of them tied into subscriptions, yes) based on unbranded, generic stuff shows that surrendering to the big brands (and their up-front) demands may not be the only way. If all is clean, then my call will be to the carriers: listen, there is a world out there… There is of course always the suspicion that a lot of the revenue might come from subscribers that cannot extricate themselves from nifty and well-crafted subscriptions and suffer a life of funding Zed’s success. Is that so? I don’t have the foggiest clue!

The whole unbranded thing has an interesting twist of course: if it is possible to get so many consumers into this, then – arguably – quality isn’t the big thing after all: Zed’s games don’t seem to rank high (at least I have never seen them rated by anyone of note) and, with a volume-driven business (on their website, Zed claimed to have more than 27,000 games available today), there is presumably little time to cater for high production values and highly polished games.

It is, in any event, a remarkable story: the ugly duckling into which Sonera sunk hundreds of millions, evolves as one of the powerhouses of mobile content. If only their guys would now get in touch and explain to me in a bit more depth how all this adds up… Hey, dear Zed people: drop me a note (volker [dot] hirsch [at] gmail [dot] com) and let me know how this works (OK, or at least get me a bit more insight on those numbers). Thanks!

LinkedIn only a little bit mobile…

And here’s a somewhat disappointing mobile debut: business network superstars LinkedIn announced the launch of their (beta) mobile “application”. However, the app is a mere WAP site with, alas, all the downsides of that: latency, onerous navigation and the whole info from the website only toned down in graphical appeal.

Now, whilst I am big fan of LinkedIn, this is sub-par. Have a look at what Facebook did for the Blackberry: a small downloadable app (yes, I know, it’s painful but probably for the time being the only way to enhance the user experience on mobile), information reduced to the key things one might want when accessing this from a mobile device and then the option (sic!) to access the full monty via WAP. The one piece of information I couldn’t access on the LinkedIn WAP site was the contact info. Hmm. Wouldn’t that arguably one of the key pieces of information I would want to have when I’m on the road (“well, I’m in London. Why don’t I drop John Doe a line. Don’t have him in my address book as we haven’t spoken in a while but we’re still ‘linkedIn’. Doesn’t work. Doh!”).

With all due respect, dear LinkedIn friends, you’ve got work to do!

New Phone flies with Nintendo Games

Little-known handset manufacturer Fly has announced its new MC100 handset which features both Java MIDP2.0 / CLDC1.1. as well as – and that is the cracker – support for Nintendo NES, SNES, Gameboy and Gameboy Colour game formats. There are some neat dedicated gaming buttons and a rather useful-looking “D-pad”.

The handset is powered by a Yamaha chip and also has an MP3-player. Whilst Fly seems to be mainly active in Eastern Europe (that’s at least the only region where they have service centres), the handset is retails at the not too shabby price of $270 a pop; where it goes on sale, remains a miracle: the currency would suggest the US but perhaps it is Russia after all?

Also, the issue if these games are legit remains a bit in the dark. Fly only says that “games (nes/smc/gb/gbc) can be freely downloaded from the Internet and set up in your Fly MC100”.
This would suggest that Nintendo is not involved in this, and there is indeed no active (or passive for that matter) endorsement from Nintendo anywhere to be seen. So this would almost certainly exclude any “proper” Nintendo games from being included (unless Fly wants to risk a visit from Nintendo’s legal eagles). All a bit odd really but, boy, would it be cool were it legit…

How many handsets does a game need to support?

GDC Mobile co-founder and, I am honoured to say, my good friend Robert Tercek, came out with all guns blazing against the carriers’ demand for maximum handset coverage for mobile games that they allow to publish through their deck. Tercek called it a “lie” that operators basically insinuate that a game will run equally well on every handset, and he called mobile games publishers hypocrites as they moaned and whined about it but still play ball… Well, what else are they to do? Stop publishing games?

Since I still work in this industry, I would not perhaps put it that harshly as Rob did but the question is indeed if the network operators’ rationale (“we need to provide for the best possible user experience for every one of our users”) stands true when it comes to this. After all: if you offer a full music track for download, your phone needs to be able to support MP3; an old battered brick that only plays monophonic ringtones won’t do. To put it into slightly starker contrast still: it would be like an ISP would prevent a web publisher from putting a site live only because there are a lot of PCs out there that do not have the right software support. Or if the Germans would not allow any car to be imported into Germany unless its engine software was geared to allowing a top speed of min 200 mph because otherwise the user could be disappointed with the driving experience on the Autobahn.

Is the assumption that someone who has an old T610 would actually expect to be able to play a modern-day 3D racing game on his battered old handset really correct? If I drive a 10-year-old little Twingo, I know that I will not go 200 mph, Autobahn or not. And I will certainly not blame it on the operator of those roads.

If I want Vista Premium or Leopard, I need the machine to support it. And that is an informed decision I need to make. The operators’ approach may have been understandable a few years ago: mobile was a very, very new platform and people had not actually got round to the idea that one could actually do more with one’s mobile phone than making phone calls when away from a fixed-line phone. However, this has changed very quickly very much: even my 80-year-old neighbours now communicate via SMS with their kin. I believe it is safe to assume that the consumers of the year 2008 can very well distinguish between a low-end and a high-end phone and will actually appreciate the difference in performance without blaming their operator for a sub-par one when their phone happens to be a sub-par one. Time for change then, folks!

The constraints of having to support hundreds of handsets impacts the mobile games sector manifold: it makes it prohibitively expensive to develop and publish games with porting costs often being equal or even higher than the actual development. The effect is less innovation (how can you dare trying something new if you have to expend so much money before you even get it in front of a consumer?) but also less usage: it is often more of the same as developers try to minimize their cost by re-using engines (Gameloft has used the same basic side-scrolling engine for at least 20 games to date; highly polished and constantly evolving though, to be perfectly fair to them) and running risk-averse design philosophies where they try to stay as close to a proven hit as possible. This will however not drive consumers to get back for more.

I am however doubtful if operators will come to terms with this in the near term, and, let’s face it, they are not the originators of this platform mess: isn’t it more often the handset manufacturers that fiddle around with screen sizes that differ for more or less every device, that take great pride in running a gazillion different operating systems only to be slightly different to the other guy, that allocate soft keys rather randomly and occasionally swap the green and red call/end call keys from one side of the keypad to the other? Just imagine this last bit on a computer keyboard: is now on your left… try get going with that… Add to that the – yes, they’re here still – operators and their specific demands for this, that and the other, and the fragmentation does indeed create an economic landscape that is very hard to navigate.

This is one to the OEMs and the operators alike: get down to business, compete on the strengths of your devices and services and not on some OS and other software tweaks where the upside to the consumer is, if distinguishable at all, minimal.

In the interim, it would indeed be upon the operators to start trusting the good judgment of their customers in the hardware they hold in their hands better and start dropping those old devices from their requirements that will manage to screw up even the best game.

The prosecution rests… 😉

Zeemote, the 2nd…

I blogged about the Zeemote joystick for mobile phones a while ago (see here). Since then, it seems to have become all the hype: developers at GDC were apparently raving about it (no wonder, as the geek factor is really high: just look at the party photos). I have also had the opportunity to get my hands onto one at MGF last month and saw it in action with Fishlabs Heli Strike 3D helicopter game.

Now: I had not, at the time, made any remarks on the technical ability of this device, and it does play well. BUT I still stand by my grave doubts as to its commercial viability, and I think there are two things one needs to distinguish here:

1) Can it sell? This, I think, is a question of whether or not they manage to bundle it up with handsets. I cannot see this becoming a device capable of shifting serious units all on its on in the Carphone Warehouse or Radio Shack shelf right next to extra batteries, SD cards and headsets.

2) Will it be used? Again, and in spite of its technical capabilities: I cannot see people taking yet another device with them. I said it before, and I say it here again: “Do I have everything I need? Wallet, keys, phone, errm, joystick?” That just doesn’t seem to work.

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