Category: OEM

O2 gets iPhone in UK – good or bad?

On 18/09/2007

“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…

Sony Ericsson to leverage PSP and Bravia brands?

By Volker

On 12/09/2007

In OEM

According to the FT, Sony Ericsson ponders the release of PSP and Bravia (its TV moniker) branded high-end mobile phones, quoting SE’s president, Miles Flint. The Bravia-phone is – I was surprised to learn – already a reality, namely as a mobile TV phone with DoCoMo in Japan. Regarding a PSP phone, Flint was cautious, saying that the technology was still some way from being perfected. “We need to make sure that it is a credible phone, and be sure we are justified in putting that identity on it,” he was quoted.

This approach would continue SE’s strategy to leverage Sony consumer electronics brands in its phone business, which it has done with the ubiquitous Walkman (now turned video player) and its digital camera brand, Cybershot. This strategy has apparently helped to double its margins – in addition to moving up one spot from #5 to #4 in the leading manufacturers’ list.

It seems eminently sensible to try and build on Sony’s considerable fame in consumer electronics, in particular as Nokia (most recently with its high-powered and feature-packed N95) and new entrant Apple seem to be pushing the edge of the envelope, and LG adding on the design front (the Prada phone and the LG Shine spring to mind). SE’s approach of weaving the trust it enjoys from consumers for its electronic devices into the mobile phone branding may well be suitable to counter this race. However, as was also noted, Mr Flint did not forget to point out the most important thing: “We need to make sure that it is a credible phone, and be sure we are justified in putting that identity on it.” There you go!

The statements probably come on the back of reports during the last weeks (e.g. here and here) that SE was to release a games phone with a games-oriented user interface and styling, and comprising – geek excitement levels rising through the roof – things like motion-sensitivity, which will pave the way for Wii-like gameplay on a handset (be aware of flying handsets on your commute then).

iPhone, iPhone, iPhone, iPhone, anything else?

By Volker

On 09/06/2007

In Apple, OEM

Now, I wonder if this is damaging to the readership of this blog: this must be the 3rd time or so in the very young age of this that I have been drawn into the debate about the device that reinvents telecommunications, interaction on the go, human interaction and also orders you a coffee at Starbucks. Holy Jobs, what have you done? However: there have been a couple of interesting pieces written on this wonderous affair, so I’ll have another crack:

The WSJ has a piece about the iPhone and its “answers”, which are, alas, no answers. They compare the HTC Touch, the LG Prada (of which you could read here, too), the Samsung UpStage and the Nokia N95 (reported on here). It steers the debate to the probably most important aspect of the not so secret secret of Apple’s success, namely the combination of smart technology with very smart marketing. It is not my words (or thoughts) but the ones of very, very smart Yankee analyst John Jackson who said “Any handset maker is more than capable of making clever devices. But it’s really about business models. That’s where Apple maintains its business advantage.”

However, the hype has been less in Europe and Nokia’s market position is stronger in Europe and because the N95 has everything the iPhone has (except for brand and the looks) and some more (namely 3G although that might well come in the iPhone’s European iteration) AND because the N95 is out in the market and kicking some substantial rearsides, this might well work (remarks another smart analyst, namely Mr Greengart.

Anyway, Cellular News published some information on the average potential iPhone user (courtesy of Solutions Research Group), which is this:

If they can sell the 10m devices to this user base, then AT&T (I still prefer Cingular) and all other Apple partner will be happy chappies indeed.

And the beat goes on… but what would you say if the one, the only, the incredible Hummer phone would take all the glory? Doh!

Verizon strikes back (or does it?): Prada phone vs. iPhone

By Volker

On 30/05/2007

In Apple, OEM

It does remain interesting, doesn’t it? Days after AT&T was confirmed to have the iPhone for a minimum of 5 years exclusively, Verizon comes back to announce the launch of the ultimate fashion device (in a rather literal sense), namely the Prada phone (or LG KE 850). Verizon was keen to stress that this will not be the only music phone they will offer but this seems to being the current main contender of the iPhone: it has similarly sleek looks, both have a touch screen and even the LG UI is somewhat Apple-esque (See review here).

One of the interesting things is to see how a phone that – in Europe – runs on the trusted MIDP 2.0 platform (and will, for Verizon, presumably run on the no less trusted BREW platform) will perform against the first one utilising Apple’s OS X. If Apple manages to have their OS run as smoothly and matter-of-factly as it does on their computers, we will all be up for a ride: whilst phones may not be as buggy as some of Microsoft’s earlier (or indeed current?) operating systems, Apple’s OS X is one hell of an elegant OS and supposedly superior to anything I have seen on the currently available systems. However, OS X requires quite a bit more in computing power than these, and this poses (at least) two challenges, namely a) battery life and b) speed.

LG’s Prada phone on the other hand has shown in the UK that it is a proper everyday device that works well (and looks good). It also comes with 3G (other than the iPhone) although of course it lacks WiFi. LG has recently shown that it has a nifty hand for great look-and-feel: the Chocolate, the Shine and the Prada phone all show a fantastically slick approach to handset design. Since LG phones run on a “usual” OS, all applications and games, etc that run on “normal” phones, also work for them. And Apple? Nothing I heard of. Even the iPod games have already been cracked (see here).

If one would assume that the iPhone performs well, it would however be sad if that was only for one operator/carrier. Will Apple make the same mistake it made on its superior Mac OS in the mid-80s, i.e. kill its market prospects by being to exclusive? One would hope that they have learned but perhaps their more recent success with a similar approach for the iPod has overshadowed the no doubt painful learnings they must have taken from being erased by Micrsosoft and the inferior DOS on the computer OS front. Let’s see…

Does RIM move from Hardware to Software Model?

By Volker

On 15/05/2007

In OEM

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.

Quo Vadis, Microsoft Advertising Strategy?

By Volker

On 05/05/2007

In OEM

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).

Apple's iPhone with 10-30% market share? I don't think so

By Volker

On 25/04/2007

In Apple, OEM

Another survey with interesting numbers: according to this one, 9% of all US consumers are “very” or “somewhat” likely to buy Apple’s iPhone. Funny that: The iPhone is initially only available on Cingular/AT+T (cf here), which has a market share of 28%, so just about 1/3 of all Cingular subscribers (or c. 19 million) would have to be interested in buying an iPhone.

Folks, buy Apple stock now. But then (screeech): Apple said they were only targeting 1% of the market, which makes it 1m devices, and AT+T’s COO says they have already 1m inquiries … this would lead 18 million willing Cingular subs + everyone outside the US without the sleek and coveted thing. Not so good…

Isn’t all this somewhat weird? The phone costs $499 and $599 respectively (at least according to this), and 1/3 of a carrier’s subscribers going for one of the top-priced options would be contrary to everything we’ve seen so far. Rather unlikely, I’d say. So: if the price was dropped to below $300, an additional 10% would buy the 4GB model and a staggering 20% the 8GB model. Make that 30% market share then – with one device. Woah.

The blurb concludes that Apple should exceed its sales goals for, wait a minute, 2008 (sic!) and then closes with the beautiful caveat “provided the device lives up to consumer expectations”. Amen!

If Apple gets it right (which I hope as I like them), then 1m devices in 2007 would not be a bad start (considering it is one carrier and one country), in particular as high-priced as they are. Assuming that they could in fact open the pipeline for higher demand, we could well be seeing one of the top handsets in the market place (so-called blockbuster handsets regularly are between 2-3.5% share of all handsets on a carrier). That would be impressive enough.

Then they would only have to add 3G, I suppose…