Windows Mobile – Just not Cool

With the holiday season upon us, my son is back from college.  Yesterday he had a dozen of his friends over to “hang out”.  Since this was costing me around 100 pizza bagels and a couple boxes of mozzarella sticks, I thought it was only fair for me to have an impromptu mobile focus group of college students.

Most of them were on the Verizon Network, with one on AT&T and one on T-Mobile.  There were 7 Smartphone class devices (1 iPhone, 3 Blackberrys, 3 Android), 3 Multimedia class devices and 2 feature phones.  Those who had the more impressive devices were much quicker to wave them in the air and show them off, while the feature phone owners were trying to avoid eye contact.

Their preferred manner of communicating with each other was text first, then voice, then Facebook, then IM, and lastly email.

I then described the features of a Windows 7 phone, without naming it.  The live tiles, music integration,  gaming system integration, etc.  I got a reasonable concurrence that those features were “cool” and was asked if they were available on their “app stores”.

More on that a little later on.

I then asked them if they heard of the Windows 7 phone and what they thought of it?  I got lots of frowns and looks of disgust,  “A Microsoft Phone?, not cool” , “That’s for computers, not phones”, “Will it work all the time?”.  You get the general reaction.  The group thought the basic features of the Microsoft phone were desirable, but had a very negative reaction to the name and software system.

I asked them if they would trade in their phone for a free Windows 7 model?  Only the feature phone owners indicated that a free Windows phone would be better than the 2006-era voice and text via t9 models they were forced to endure.

This result is similar to other impromptu focus groups I have managed with my kids’ friends.  Their phone is a social accessory. It is the most important electronic gear they own since they have it with them 24/7.  Blackberry’s have strangely entered the “cool zone” and are as socially acceptable to the teen crowd as iPhones and Droids.  Windows phones are clearly not cool, even though their features are desirable.

What does this mean for Microsoft?  They made a big mistake, another in a long list of mobile missteps, by naming their mobile phone after a PC operating system.  Did I mention that 75% of my sample group used Apple computers as their main machine?  Microsoft has been very successful with XboX, partly because it was NOT called Windows Vista Game System.  Microsoft called their mp3 music player “Zune”, not Windows music player.  Zune has been a market failure, not because of its name, but rather it was outclassed and out marketing by Apple iTunes and iPod.

Microsoft released sales figures for their mobile device on 12/21.  They touted 1.5M devices sold in the first 6 weeks.  This number, however, reflects the number of devices that are in the Carriers stores and pipeline, not how many have been sold to actual subscribers.  Verizon has over 2000 direct retail outlets and easily a similar number of resellers.  You can appreciate how many phones you have distribute to fill the distribution pipeline.

In comparison Android is activating 300K phones a day and Apple sold (really sold) 3M iPhones in its first 3 weeks on the market, over three years ago.

What should the team in Redmond do now?  I believe the clue is in one of the comments from my son’s friends.  “Where can I get these in the App store?”  If XboX gaming on a mobile is valuable, then Microsoft should develop their own apps for Blackberry, iPhone and Android and make money from their “competitors” mobile platforms.

Likewise, they could provide a Zune application for music on these platforms (well maybe not iPhone).  My point is that if Microsoft has valuable applications then sell them as applications.  If my small sampling is at all indicative of how Microsoft’s core targeted market is reacting to their mobile device, they have to seriously re-think what they have done.  Find a cool name for the phone, don’t rely on a Zune/Xbox positioning, and tout the basic phone interface as better than other Smartphone’s.  To some degree they have tried the latter with the ad campaign promoting the ease of use of their device.

The real question will be is the market willing to accept another smartphone platform at this point? What do you think?

My excellent iPad adventure in the land of Les Habitants

During the past couple of weeks I have been using an iPad and trying to figure out where it fits in my digital hierarchy.  For the record my technical stack includes an iMac , a  MacBook,  a netbook and, an HTC Droid Incredible and a Kindle.   While at home the iPad was a toy.  It was something to use while watching television.  Thus it was slightly more convenient than having a macbook or net book  for light browsing and email.  As a book reader it was much nicer than my Kindle (which I still like).  I installed the Kindle app on the iPad and read  a couple of books on it.   It was aggravating that movies that I can watch online easily with my Droid phone cannot be watched on the iPad due to the lack of Flash support.  When will we have an Android Pad?

The interesting part of my iPad experience came when I had a business trip last week.  Instead of taking my laptop I went cold turkey and just took the iPad as my second device, in addition to my Droid phone.  This decision shocked my colleagues, including the one who lent me the iPad to try out!

The iPad did well on the plane as I read the New York Times.  This was especially interesting since the person next to me had the paper version and lusted after my alternative format.  After finishing the Times, I read USA Today, played a couple of games and started to read one of the books I had downloaded via the Kindle app.

I could also imagine that the iPad would make a great personal Video device for longer flights.

At the business meeting I was the cool kid at the table.  After all, what do you really do with a laptop at a meeting? You browse the web, check email and possibly access a presentation.  Since I did not have a presentation to show, the later two were just fine.  For the record if you want to display a power point presentation on your iPad the easiest way is to upload it to Google Docs and then access it directly from the Web.   The iPad is really shines as a net connected device and thus using cloud services is the way to go.  If you don’t have Web access then converting the presentation to JPG images or video also works.  I also installed dropbox on the iPad and it worked great giving me access to my Cloud virtual drive.

The funny part of my day occurred as I was leaving to fly home.  My meeting was in Montreal and that day was also the first day of  iPad sales in Canada.  At an airport sports bar I was killing about an hour why reading on my iPad.  I attracted a crowd of very interested on lookers.  The waitress even brought her boss out to have a gander (Canadian Goose reference…)  Again, I was the cool kid.    This was similar to elementary kids who have their school lunch sandwiches cut on the diagonal, instead of squares.  (Or at least that is what I was told by my kids)

When I passed through Canadian security I was asked if   I had a laptop and I of course proudly proclaimed, no – I have an iPad.  At that point Ihad no less than 4 inspectors handling my device.  They made me turn it on for “security” reasons.  Once I had it on I demonstrated some apps and the book reader.  I was decl

ared safe.   It was a slow day in Montreal for air travel.  This had the makings of a real live Apple commercial.

Note to Steve Jobs:  Get that security tape and air it – great publicity.

When convinced that I no longer was a threat to Canadian airspace with my iPad, I proceeded to the gate.  The flight was an hour late and I began to read my book on the iPad.  Again I drew a crowd when a little kid pointed and yelled – Look DAD, that’s an iPad , cool! I was then obligated to give another demonstration and let some of my fellow passengers check it out.    Just when I was feeling my coolest someone asked me – “hey it looks cool, what does it do?”  All I could thing of was – “It will do whatever you want, once someone figures out what you want”

Understand ? Ehh?

Appvertainment from Jobs-Apple and the iAd

The announcement of iPhone OS4 changes the Smartphone  world – yet again.  As Steve Jobs described the 7 tent poles of the new iPhone/iTouch/Ipad OS, it was clear that the tent was not quite large enough for everyone. The center pole of this tent is clearly– iAds.

The raison-d’etre  for the much heralded multi-tasking feature is Appvertainment.  (e.g. iAds).    Do not be distracted by the fact that he introduced multi-tasking first and iAds last.  They are intimately linked.

Apple is pursuing their app centric  vs. search (Apple vs. Google) strategy for smartphones  through the introduction of their own OS integrated  ad serving technology.  Multi-tasking is the key component in this ad strategy to permit a user to return to an app after an ADHD moment is fulfilled by playing with a cool appvertainment.  Without multitasking you lose your application state/status and have to start over again.  Jobs is trying to change user behavior and reward users for clicking on an ad with an engaging experience, instead of punishing them by having them have to re-start their app.

Appvertainment targeting was not discussed. The social  and geolocation information that the host apps maintain on users will most likely be used for targeting purposes.  The Apple social game network API will no doubt  be used for providing this targeting information for game hosted appvertainments .    Apple is betting that App hosted ads will be valuable than Internet style search ads.

Jobs boosted that the Apple platforms would be capable of serving 1 billion app-ads per day by the summer of 2010.  Even if we cut that number in half and apply a modest $10/CPM ad rate – that represents daily gross appvertainment revenue of  $5M.  Apple’s vig on the ad revenue is 40%.  This is easily approaching a $1B+ annual revenue opportunity for Apple.

Click for full commercial

Another interesting aspect of this strategy is that Apple is clearly focusing on large brands and advertising agencies – in other words, the folks with the largest budgets.   This clearly makes sense.  The cost of an appvertainment production can easily be in excess of $250K+.  The inclusion of integrated and compelling video with engaging interactivity is not the domain of amateurs, but rather professional digital agencies.  The examples that Jobs demonstrated during his presentation (Nike, Disney and Target) are all major national brands with large budgets and big Madison Avenue agencies.

As I watched the presentation another thought came to mind –  “Is this legal?”  What would happen if Microsoft integrated a proprietary ad serving system in their OS and demanded 40% of the revenue of every ad served on a Windows machine?  This topic will clearly be discussed in the blogosphere and perhaps courtrooms in the future.

Did anyone hear a mention of sharing ad revenue with Mobile Carriers?

Another  “pole” of significance is the enhanced suite of enterprise features. Corporate CIOs have had a set of killer issues that prohibited the iPhone from significant corporate sanctioned and supported utilization.  Apple is trying to remove these roadblocks with OS4.  In addition to the enhanced  security and email capabilities is device management.  Device management includes the feature of permitting corporations to load their own private apps on the iPhone.    The execs at RIM should be concerned about their Blackberry franchise.

Apple would not be investing in enterprise features while maintaining an exclusive relationship with AT&T.  OS4 changes Apple from the Trojan Horse of a sexy consumer device on AT&T to a machine poised for world domination.

The competition between Google and their Android platform and Apple will only get fiercer.  Nokia is the only other global player who can play at this level.   Palm, RIM and even Microsoft will fight for the leftover niches.  It is a battle of the controlled and planed eco-system of Apple vs. the Open-Source world of Android.

The Apple tent has room for enterprise applications, has a new revenue source for app developers, and embraces big brands, ad agencies and publishers.  Adobe (no Flash support) and Google are outside the tent of OS4.  Microsoft got the biggest slight in this announcement as their mobile efforts were ignored as though not relevant.  And what about the mobile carriers?  Do they exist in the Apple world?

Kudos to Verizon for taking on Leadership – Mobile without Phone Numbers

Approximately one year ago I wrote an article entitled “The Future of Mobile – without phone numbers.” In my discussion I put forth the proposition that social networks would take over the fundamental connectivity for individuals and that phone numbers would be a network “IP address”.   This article generated 100’s of emails and questions, some supportive, some not, but all thought provoking. It was clear that I had hit a nerve.

A major step towards my view of the future of mobile communications was taken by Verizon in the last week.  Verizon Announced at the Mobile World Congress in Barcelona, and later confirmed and launched at CTIA 2010, an integrated Skype calling service.  This service enables users to click any Skype username, make a call, and not be charged for mobile minutes.  This service even uses the mobile voice connectivity of Verizon for the wireless network of the call.

This is a major watershed event for the industry.  A major carrier embracing voice as a data service, with calls completed outside of the carrier’s equivalent phone number – DNS.

In fact, this capability had been  available by such applications as ISkoot.  What is big news is that Verizon is openly promoting this service and not charging for mobile minutes.   Another advantage of the Verizon version is that it is “always-on”.  I received my first Skype call on my mobile yesterday.  It just happened like any other mobile call.  It was an important business call and all I could think about at the conclusion was – that was cool.

The use of social networks and non-phone number connection services implies that that contact DNS aggregation services will become even more important.  My network contact list will be an amalgamation of my Facebook, Linkedin, Skype, Twitter,  existing phone books, AOL IM list and likely several others.  Aggregating my contact lists, storing them in the network cloud and presenting them to me on demand in a usable form is essential.

While at CTIA I was on a panel discussion with   Mike Mulica, CEO of FusionOne.  FusionOne is a leading example of such a network based contact/address book that spans social networks.  They are certainly a company worth watching in the future, as they appear to be “on the right side of the technology curve”.

A question that remains is how does Verizon generate revenue by connecting calls for free?  Simple answers include increased data subscriptions and greater subscriber growth via churn from other carriers.    In the U.S. market, with mobile penetration approaching 90%, carriers can only increase subscribers by churning their competitor’s customers.   Since the Skype app on iPhone is not as full featured and cannot be “always-on”, VZW has given leading edge users a reason to switch NOW.

In the future I would expect connections between Skype calling capability and other applications on Verizon, especially those provided through the Verizon’s own app store.  I also expect that full mobile video calling and even video conferencing via Skype is no doubt on the roadmap.

This feature is only available to VZW smartphone subscribers , and that means a $29.99/mo data charge.

Regardless of the long term revenue sources, VZW has taken a clear leadership position in its market and now has the their competitors determining a catch-up strategy.  Kudos to Verizon on this move.