On Technology and the Future: Education, IoT, AI, Mobility, Games

Virtual Goods Boom in 2010!

On 09/06/2010

I stumbled across an interesting piece of intelligence today, which looked at the development of virtual goods in the market place. According to this, median spend on virtual goods by users in North America has climbed a whopping 67% year-on-year to $50 p.a.

Equally interestingly, males are the largest spenders and, broken down by ethnics, Asians (26%) lead Hispanics (20%) by some margin over whites (11%).

So far (sic!), most virtual goods (how many? I don’t know) are purchased from stand-alone web-based games (World of Warcraft anyone?) but 31% had bought items in social networks (that would be the Zyngas and Playfishs of this world) with 29% in “network-based games” (what are they, I wonder). Facebook credits were used by 16% of buyers. Mobile? No word. It’s coming though: do bear in mind that there are 3x more mobile subscribers in the world than Internet users! And, yes, that’s true…

$13m for Idle Screens?

By Volker

On 08/06/2010

In 1

Taiwanese handset maker and Android maven HTC has bought French idle-screen specialists Abaxia for $13m (or so industry sources say). Abaxia says it increases ARPU

by putting services at a zero-click distance to the user and pushing services directly to the front screen.

Think push notifications to a J2ME feature phone. Abaxia works with carriers and OEM to optimize the interface across multiple devices from different suppliers, which seems an apparent benefit to carriers as it will allow them to make their on-device brand communication consistent throughout the handsets available through them. That an OEM should then buy the company could therefore surprise…

And as to the use of idle screens? Hm, I am not totally convinced: an idle screen is, well, idle. I may be tempted to jump to it if an app sends me something from a friend (because, hey, it’s a friend in need) but I am not sure if the same attention can be garnered from the latest and greatest service offer from your operator. This is however what Abaxia claims it excels in. According to its website, the company helps

to drive not only data revenue but […] to recover failing voice ARPU and secure advertising ARPU.

And here, well, show me the money. I have yet to see a convincing solution for this, and I am not sure if an attempt to capture the idle screen is the way to go.

However, when it comes to interface improvements, it might just work. So all might not be lost. And, in any event, congratulations to the teams at Abaxia and HTC!

Book Review: “Delivering Happiness”

By Volker

On 07/06/2010

In 1, Thoughts

This is (slightly) off-topic as it looks at a new book written by a guy who has come to fame not in the mobile but “only” in the online world (or click-and-mortar as would be more accurate). But it is a book that will give everyone who has to deal with value chains, investors and people (vendors, customers, employees) a couple of interesting insights on how it can (also) be done.

The book, of which I received an advance free copy (which I was told I needed to disclose here), is by Tony Hsieh, the iconic CEO of Zappos, and it is called – unsurprising to anyone who has ever heard im talk – “Delivering Happiness”. It is available for sale from today.

The book has two very distinct parts. The first one gives you an interesting and humorous account of the journeys of an entrepreneur – all the way from a worm farm when ickle Tony was 8, via LinkExchange, which he managed to sell to Microsoft for $265m, through the start, near-death and eventual exit with Zappos, which sold to Amazon when it was valued at some $1.2bn on the day of closing.

Part 2 could be termed the introduction to the Church of Hsieh. Tony is famous for preaching the importance of happy employees in order to run a good business, and there is many an example from the world of Zappos that raises eyebrows elsewhere in the corporate world (to pay new employees $2,000 should they leave within X weeks being one of them). Most of it comes from one of the 10 core values Zappos set itself, namely the “be fun and a little weird”, and I find it almost insulting to judge a company or its policies by random examples alone.

At the very least, the book shows you that there is much more to it than the wacky ideas of a driven entrepreneur (and I’ll get to more in a moment). If you take, for instance, the story of the $2,000 leaving-bonus and look into it a little deeper, some very sound thinking reveals itself:

The idea is that people should only stay if they really feel aligned to Zappos’ vision and principles and the idea is that only people whose mindset is a real fit will not be tempted enough not to take it; it also shows a lot of respect to the nature and common sense of their employees: if the job [and the company] is really that good, $2,000 is very little! According to the book, less than 1% take the cheque.

So what do you get from that? 1) employees that should be a better fit than average, and 2) reduced recruitment cost. The first part is invaluable whenever you run a business that has customers (so, always) because employees that fit with your culture and vision should be better enabled to communicate this – internally and externally, which helps the business. The second part is self-explanatory.

The relentless focus on company culture is as awe-inspiring as it must be spooky to some. And it is, arguably, amongst the reasons for their sale to Amazon (or so VentureBeat interprets this part from the book). Sequoia pocketed $248m on $48m investment and were keen to liquidate (and, according to Hsieh, his board was not entirely convinced of “Tony’s social experiments”).

One should however not forget over this that Zappos operating principles are based on hard-nosed facts (from vendor relations, logistics, finance, employees to customer relations), and the “secret sauce” might then indeed be the company culture (Tony Hsieh is of course not the first one to propagate this). If he tried to take things too far is beyond me to say but I would say that a company that strives to make its customers, vendors and employees happy is not following a necessarily wrong path – even under cold-nosed corporate standards:

Happy customers will help you by coming back to you (low retention costs and follow-on revenue) and by recommending you to their friends (low acquisition costs and incremental revenue);
Happy vendors will be more likely to accommodate your requirements as to your stock (lower cost of supply), delivery schedules, etc, etc.;
Happy employees reduce your employee churn and will – arguably – provide for higher productivity of the company as such (lower operating cost).

It is, in short, a very worthwhile book to read. And if you read it with the right glasses on, you will be able to look through what might sound like the preachings of Hsieh to find some real benefits for your own company (whether it exists already or is in the formation stages in your mind only and whether it is mobile, online or good old brick and mortar). If you are then still a believer, check over here for more…

And if you want to buy it?

Buy “Delivering Happiness” here

Conference: Mobile 2.0 Europe, Barcelona

By Volker

On 04/06/2010

In 1, Events

On 17 June, a wonderful conference opens its doors: organized by the formidable Rudy de Waele and his team, the beautiful city of Barcelona (but without the usual Mobile World Congress stress and with better weather than in February!) is host to Mobile 2.0 Europe.

You will find a great line-up of speakers from across the mobile ecosystem, which should allow for a wonderfully balanced overview of what’s going on. The organizers have lined up senior guys from the giants of the industry, such as:

Nokia
RIM
Vodafone
Opera
Telefonica
Orange
PayPal Mobile
Microsoft

But they then coupled them with the nimble and agile guys like us, so you will also find:

Distimo (analytics)
Scoreloop (yes, I will be speaking)
The Astonishing Tribe (UI experts)
W3C
Future Platforms
and more…

As if this wasn’t enough, the AppCircus will also stop at the event with an on-stage show of the best and brightest apps around.

Join us, it should be tremendous fun! The registration page is here.

Carnival of the Mobilists # 225

By Volker

On 02/06/2010

In 1, Carnival of the Mobilists

This weeks Carnival of the Mobilists is hosted over at mobiEnthusiast (with a strikingly familiar WordPress theme), and it comes with a lot of goodies, amongst which a stat-packed post on mobile money (and one on why banks need to fully understand it), Ajit Jaokar’s take on net neutrality, the iPad as a spoke in the mobile wheel, a look iAd vs Google/AdMob as well as two podcasts from carnivalist extraordinaire Peggy Salz: A Thomson Reuters SVP suggesting mobile is about companion products and Handmark’s Paul Reddick on why a good brand and a great app may not be quite enough.

Last but not least, my post on the state of mobile games on Android has been included.

So go over there and have a good read. It’s here.

Smartphone Market Shares Q1/2010

By Volker

On 19/05/2010

In 1, Apple, OEM

Gartner published the latest smartphone numbers for Q1/2010 (or so I read), and it is testament to the continuing rise of this segment: sales increased by nearly 50% year-on-year (and do remember that there was this recession-thing last year). Total sales were 54.3m units in the first quarter of this year. Not too shabby!

On the OS side, the rising stars are Android (9.6% global market share from 1.6% a year ago), which is now bigger then Windows Mobile (and it took it only a year!) and iPhone (15.4% vs 10.5% in Q1/2009). The silverback gorilla still is Symbian which dropped to 44.3% from 48.8%. Blackberry is also down (albeit only slightly: 19.4% from 20.6%).

Here’s a table:

Has Android Got Game?

By Volker

On 17/05/2010

In 1, Apple, OEM

According to a recent report, Android has zoomed past Apple in US smartphone OS share, taking the #2 spot with 28% behind Blackberry (36%) but now ahead of Apple iPhone OS with 21% (and, yes, I know that Apple somewhat lamely queried the accuracy of this). Be it as it is, Android is growing (and we all knew that, did we not?). According to Google’s CEO, Eric Schmidt, the company now sees 65,000 new phones being activated per day; this equates to a run rate of 23.7m for the year.

This is good news for handset manufacturers like HTC, Motorola and Samsung (all of who are shipping successful Android devices) as well as Google (which is fairly tightly embedded in the whole thing) but does it also reflect on the wider ecosystem of developers producing applications and services for the platform?

The main points that are usually mentioned are:

Low overall numbers: Digital Chocolate’s CEO Trip Hawkins moaned the company sold less than 5,000 units of its hit game “Tower Bloxx” on Android Market, which was indicative for the lack of uptake. If that is so overall, may remain to be seen. I beg to take into a account that Android as a platform is fairly new and the overall install base is still smaller than its competitors.
High price-sensitivity: according to an AdMob survey in January 2010, 12.6% of Android apps are paid vs. 20.4% on iPhone OS; the same survey revealed however that the average monthly spend was actually similar on Android ($8.36) and iPhone ($8.18) though higher on iPod Touch, which runs the iPhone OS, too ($11.39).
Return policy: Google allows users to return an app for a full refund within 24 hours of purchase. This is seen particularly onerous for games (a lot of which can be played start to finish inside that time frame).
Discovery: developers feel Google fell well short of Apple on this one. There is no possibility to discover apps from outside a mobile device (i.e. no iTunes) and Google has not really done anything in terms of marketing either (very much unlike Apple).
Ease of purchase: I would like to add ease of use of the buying process. Registration with Google Checkout is a far, far cry from setting up an iTunes account. This will very likely change very, very soon as Google will add carrier-billing now that it decided to move distribution of its branded Google Nexus One from D2C web-only distribution to the usual carrier model.

So what about it? Let us not forget how young Android is – even compared to the adolescent iPhone. The platform launched from an install-base of zero some 18 months ago, with the HTC G1 being the only device out there – and available through a single US carrier, T-Mobile (with a market share around 12%). Whilst I do not want to take anything away from Apple’s superior accomplishments with the iPhone, the growth of Android is not too shabby either! And with a plethora of manufacturers deploying Android-based handsets now (cf. the growth numbers above), Android is likely to be powering into the fore even more (irrespective of whether or not the above stats on it overtaking iPhone OS in the US already being true).

Price-sensitivity is not actually as bad as people think: the aforementioned AdMob survey shows nigh identical average spending patterns. Personal impressions may again be hampered with by early experiences: be reminded that, initially, there were only free apps out there. They will surely still be hanging around, but will they also for much longer?

Apple has always been extremely scrupulous on approval of applications on its platform. And whilst this may now be held against it every now and then (e.g. in the case of nipples or Pulitzer-price-winning political cartoons), it has helped it to uphold a fairly high standard of quality, which Android was lacking (initially) and which even led to “crap-filter” apps. One can however safely assume that this will change once the market size improves: Apple’s margins might be superior to everyone else in the world but that does not mean that the margins game developers can achieve with it are the same. With Android OS primed to expand at a much faster pace, the numbers will clearly speak for it, and – I would posit – that will bring more and more quality to the store, with the fads sinking fast.

Also, do not forget the big brands: they do not necessarily care for a small share of the audience only. Whilst Android was fledgling and just starting up, they may have held back but, ultimately, they are about reach, and Android is certainly bound to deliver that. I would therefore suggest that we will be seeing an influx of large brands (gaming and otherwise) onto the Android platform very soon, and this will also help user orientation as to what to go for and what not.

The discovery of apps will also be helped by the more open nature of Android. There have been a number of announcement for curated stores by carriers (e.g. Vodafone, Orange, Verizon Wireless, Sprint, etc.), and these will certainly not be allowing a free for all! Besides that, the app store model does per se pose some challenges on developers: the more successful a platform (and/or store) is, the harder it is to be discovered. One might need to look for other solutions in that respect…

The billing side of things is bound to improve, too. With carrier-billing around the corner (cf. supra), this will get easier and better. And also easier and better than it is on the iPhone: charges will simply appear on your carrier bill (smart pipe anyone?). Besides that, the business models for games are undergoing significant changes anyhow: Freemium takes centre-stage, and so it should: the model allows people to try a game out and be charged for it only when they know that a) they like it, b) what they are being charged for (e.g. that coveted sword, a couple of precious lives, or that cool background theme).

Remains the return policy. I have been raising this with Google, and it must be pointed out that similar things exist on the iPhone (they’re just “better” hidden). So besides the obvious (Google’s good intentions came back to haunt them), it is also time to think of new business models (cf. Freemium). It is not something constrained to Android: transparency requires you to deliver value. If you do, there are good and transparent means to monetize that value; and users will follow.

So, yes, there is game in Android. If you don’t believe it now, just wait for it! 😉