Category Archives: blackberry

Google Acquires Patents – and Also Motorola

Google + Moto is the BIG NEWS of the summer.  It was big enough to grab me out of my blog vacation.  While the pundits are filling the airwaves with analysis on this one , I view it perhaps more simply, more straightforward.

The battleground for supremacy in connected devices (mobile smartphones, Tablets, and  set-top boxes) has moved from the R&D labs to the court rooms.  The patent wars between Apple and Google are fierce, with Microsoft bulking up on its own portfolio as part of the consortium that bought the Nortel patents.

Motorola was worth the price Google paid just for their patent portfolio.  In patent wars if you get sued, you better have a patent in your portfolio that can hurt the attacker.  In this way you trade mutual assured destruction with a patent stand-off.

When Google acquired the rights to Motorola’s 25,000+ patents, they bought both defensive capability and offensive firepower.  Apple may go after Android for an Apple patent but what are the changes that Google now has a patent that can hurt Apple?

It is impossible to design and produce a device such as an iPhone, iPad, or Android device that will not infringe on someone’s patent.  Impossible.  What a company must do is acknowledge that they will infringe and hope the other guy also infringes on their patents and us the mutual infringement to to either create a license arrangement or to have both companies do nothing.

Google’s price of $12.5B is about $500,000 per patent, which seems to be a bargain compared to the $4.5B  Apple and Microsoft for 6000 Nortel patents.  Their price was  $750,000 per patent.

Lets assume that the Motorola sale  is approved and Google gets the Motorola patent portfolio.  Google’s next problem is that they have also bought a company that makes handsets.  I say this is a problem because this is a huge company in a market that is different from Google’s core competency.  This is also a company that competes with Google’s other OEM partners for Android Devices.  The conventional wisdom is that these other OEM partners will start to defect, en mass,  to Microsoft.

Yeah right….

What does defect even mean?  Microsoft will pay these companies to produce some Windows phones anyway.

Android is free.  Can Microsoft compete with free?  Google makes its money on Android from their ad business.  Microsoft must make money from their software license for Mobile 7 operating system.  Besides for being years late to the party, Microsoft is structural disadvantaged to compete.  At best they can hope to be a number 3 player.

Google has two choices.

Number 1: They can acquire the patent portfolio and then spin out the Motorola Mobility Business, probably re-cooping half their initial investment.  They could sell Motorola’s handset and tablet businesses, along with licenses to the patents they now own to either HTC or Samsung, their two most important OEM partners.  This would be an amazing move.

Number 2:  Keep the Motorola hardware business and expand Android into the Cable Set-Top Box market.  This is the riskier of the paths as the sheer weight of a big manufacturing company could alter the culture of Google for the worse.  This path would be an attempt to become “Apple”.  While this path seems to be the assumed defacto strategy of Google, I am placing my bets on scenario #1.  This will take a couple of years to play out, so hold onto this link and let’s see if I am right.

An indicator that we are on Scenario 1 will be if Microsoft acquires RIM (Blackberry) or Nokia.  This would be an acknowledgment that the Google OEM manufacturers are not going to defect to Microsoft and that they must own a hardware company to compete.

This has only gotten worse in the last 10 months!

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Filed under Acquisitions, advertising, android, Apple, blackberry, Cable, Droid, Google, HTC, iPad, mobile advertising, Mobile Application Stores, mobile commerce, smart phone, Smartphone

Why I like the iPad 2….confessions of an Android user

My experience with the first generation iPad ended with my returning the loaned device without a purchase While my first experience with the IPad1 left me wanting, I was completely seduced by the iPad 2. With all my positive experiences with my Droid Incredible, I had been holding out for a new Android tablet.   I succumbed to the iPad 2 when I realized that what I wanted  in a tablet could be provided by Apple.

This was my wish list

1.  Business applications and the ability to leave my laptop home for some business  trips

2.  Infotainment, interesting multimedia formats for my news

3.  Entertainment, generally video from my favorite Television and Sports programs

4. Great looking device, want to be one of the “cool kids”

5. New applications coming everyday that matter

6. Decent customer support

I concluded that for this generation of devices, the iPad2 is king.  Here’s why…

To begin with I have a Wifi-only 32Gig model.

For business apps I need email access to multiple accounts, including Exchange. The iPad was easily configured for 4 accounts and I had all my email singing within a minute.

Next, I need to edit Microsoft office docs.  I installed “QuickOffice” and it works great for most light-editing tasks.  I am writing this blog article using the word version of quick office on my iPad. Of course, I also need to print documents. These are several printing apps for the iPad.  I use “PrintCentral” for printing. I just installed the app and it found all the printers in my house. I was able to print from my iPad with less problems than we typically have from a Microsoft machine!

I also require access to the “Dropbox” application. This is a shared, synchronized cloud storage service. I use it to share files among my computers, Droid Smart phone and now iPad, with clients and family.  This app effectively adds 50gig of virtual storage to my IPad.  I have Microsoft office files, music, video and pictures in various Dropbox folders.  Not only is the Dropbox app for iPad great, but Dropbox  and Google Docs seamlessly integrate with QuickOffice.  The permission and privacy features on Dropbox allow me to share access for specific folders with specific people.

A mission critical business app for me is Skype.  While it works great on my Droid phone, having the iPad (really an iPhone App) with video is a good addition.  I wish Skype would upgrade their app to take more advantage of the real-estate available on an iPad screen.

Another business oriented app I tried was “logMein”.  Initially, I  thought this was a new dish at my local Chinese restaurant, but it is program that connects with a Mac or PC and displays the screen of that machine on your iPad.  LogMein (Log-me-in) gives you full control of your remote machine to access files and programs.  I have to admit that while it works, I am not sure how often I will actually use it.

So, for business environment the iPad gets high marks.

Infotainment

Generally this category consists of websites turned into interesting multimedia applications for the iPad.  I have the NY Times, CNN, the Daily, CBS News, Fox News, ABC news, Huffington Post, The Onion, BBC, USA Today and even my old college newspaper, now an IPad app, “The Concordiensis” from Union College. The mix of text, photos, audio and video creates a multimedia publication unlike anything else.

Entertainment

This is the area that I originally had the most concern for the iPad due to the lack of native  (or any) Flash support. The savior for entertainment is the app “iSwifter”.  Using this proxy browser app I am able to watch web video from NBC, Fox and even HBOGo. The video I want to see on the web is completely accessible on my iPad, even Flash video.  Other great entertainment apps include MLB At Bat 11. If you like MLB on an iPhone or Android, you will love it on an IPad.  I just wish you did not have to pay for it separately on each device.

Kudos to the guys at MLB for having the best Sports App…period.

Another cool app is “Tune-In”.  This is a live radio app that gives streaming access to many radio stations within the US and the world.  I recently listened to a Tampa/Carolina NHL hockey game on my IPad.  All of these entertainment apps are in addition to the usual YouTube, iTunes, and video apps that are built into the IPad.

Great looking, cool device.

All I can say here is that like most Apple products, the iPad sets the standard for physical design that all the other tablets will chase. The incorporation of the smart cover is another great feature. Among its other capabilities, the ability of the cover to support iPad at an angle for typing is key.

Applications

This is a major reason for my decision to go with an iPad in lieu of an Android. Unlike the smart phone app market in which there is a rough equivalence between the must have iPhone and apps, Apple seems to have a clear lead in tablet specific apps. Apple also has a huge sales lead in tablets. For these reasons my logic is that an iPad will have a distinct app advantage for the duration of this generation of tablets. (Next year or so)

Customer support

Generally I have been very happy with customer support from Apple. An exception to this was a call I made for an iPad issue. The first I tried to sync my Mac iTunes to my iPad, none of the music or videos would sync.  I called Apple support and the first answer I got was that since all of my music was not bought on iTunes, it would not sync.   What??! Despite the logical problems with that statement, the Apple rep stood firm with his answer.  I then called back and got someone different who directed me to “clear my sync queue” with a program called “iSync”. After I followed her directions, all of my media was able to sync.

Overall, I have been pleased with the new iPad.  As a confirmed Android user for Smart phones, I was hopeful that the Droid tablets would be more competitive with the iPad.  This round goes to Apple.  We will have to wait another year or so to see if Google will catch-up in this segment as they have with smart phones.

As for Blackberry or Windows Tablets?  As we say in New Jersey…

Fuggeddaboudit!

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Filed under android, Apple, blackberry, cloud computing, Content, FLASH, Google, HTC, iPad, iphone, Ipod, microsoft, mobile, Mobile Application Stores, movies, reviews, skype, smart phone, Smartphone, Social Media, Twitter, Verizon, widgets, wifi, Windows, Windows Mobile

Microkia – Birth of a New Species? or Death of Old Ones?

Last Week Nokia announced that they were ditching their Symbian Smartphone OS in favor of Windows Mobile 7.  For those consumers who live, work and play in North America this announcement barely warrants a yawn.  For the rest of the world- the world in which Nokia has been the number one mobile device for what seems like forever – this is big news.

I was an “involved player” in the early formation of Symbian.  At the time a Palm-like device from Psion was dominant in Europe.  The three intelligent organizers (as they were called 14 years ago) came from Palm, Psion and Microsoft.  The conventional wisdom, at the time was to not allow Microsoft to establish a monopolistic stranglehold on mobile platforms, like it did in the PC.

From this strategy grew the Symbian operating system that was used primarily by Nokia and Ericsson. Symbian was based on the Psion OS.  During the BiCE (Before Iphone common era), the coolest smartphones were in Europe and ran Symbian.  Microsoft tried to continually adapt a desktop centric design philosophy to mobile devices.   They had very modest success, far less than their corporate ego would admit, externally or internally.

The good news is that the strategy worked.  Microsoft never established a monopolistic foothold in the mobile space.  The industry exchanged one dominant force for another. Apple and Google have established that position in this next generation.

In the AiCE (After iPhone Common Era) period the world changed.

Nokia’s dominance which was (is) based on great physical phone design, radio interfaces, button placement, and distribution, suddenly seemed less relevant.

The great Symbian operating system was like the  Neanderthals, once Homo-sapiens appeared.

A report released just 4 days ago listed Apple with a 45% share of Smartphones in Europe, followed by 16% for both Android and Blackberry.  Symbian had fallen to around 12%, and is in free fall.  Nokia’s Smartphone share in the largest Smartphone market (North America) is close to nil.  On a worldwide basis, Symbian  has just been eclipsed as the leader by Android with both around 30% share.

Against this backdrop, Steve Elop the CEO of Nokia and most recently a top executive at Microsoft, issued an internal Memo in which he likened the Nokia business to a burning oil platform with multiple fires. Great imagery! (His complete memo to the Nokia troops is at the bottom of this blog)

Meanwhile Microsoft has also been ablaze, except they continue a public stance of  “damn the torpedoes, full speed ahead”.  They seem to have temporarily righted their ship with Windows 7 sales, mainly because businesses refused to buy the disastrous Windows Vista.   They are becoming the Xerox of the new millennium- Lots of great ideas and ground breaking technologies,  with very poor execution.

I have mentioned in previous blog articles that the Windows 7 Mobile, on the surface looks like a viable technology. However, the product is very late to the party, is called “Windows”, and its marketing was linked to Zune (Do you have one?) and Xbox.  Good ideas, poor execution.

Against this backdrop, Steve Elop hooks up with his former Boss, Steve Balmer and the two sinking ships attempt to tie themselves together to stay afloat.  Nokia will have to navigate through the support issues for the millions of Symbian consumers and also there now seemingly aborted relationship with Intel on the Meego Smartphone platform.  Nokia is rationalizing themselves as a hardware platform vendor, not a software producer.  They are making a deal that seemed unthinkable for over a decade.  They have been pushed into a partnership with Microsoft by the success of Apple and Google.

The real winner is Microsoft.  Nokia is betting their Smartphone future with the Windows Platform and hoping that it turns around its plummeting Smartphone share.   Microsoft is risking much less because they have much less to risk in the mobile space.  They have a single digit of market share.  The announced Micorosoft relationship with the largest manufacturer of mobile devices, as they say, “Can’t hurt!”.

The integration and production of  “Microkia” phones will take at least 6 months and  more likely a year.  That’s another year of innovation and product releases from Apple and Google.

The Micorosft /Nokia combination must define a new class of Smartphone, perhaps aimed at developing markets , that is a clear differentiation from the highend iPhone and Droids.   Without a new Smartphone species, Microsoft and Nokia with continue to look like Neanderthals and suffer a similar fate.

——————————

Steven Elop – CEO of Nokia – Memo to his troops

Hello there,

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

Stephen.

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Filed under android, Apple, blackberry, Google, iphone, microsoft, mobile, Mobile Application Stores, mobile commerce, Nokia, smart phone, Smartphone, Windows, Windows Mobile, wireless

HTC Incredible – The Bright Side

After getting lots of comments on the frank discussion of my new Droid, I decided it was time to give the other part of the story.  In general, I really like this new superphone.  Yes, I’m still having battery issues.  I  recently had a day in NYC, away from my home office, and I was down to 15% by noon.  But lets not dwell on that.

I have downloaded about 30 free apps for my phone.  I have kept about half of them and trashed the rest.  My advice is to stick to brand name content and carefully reviewed apps.  If you just browse and download whatever you like, you will have many apps that don’t work or worse…

While the HTC Friends widget gets lots of publicity, the individual Facebook and Twitter Apps are better for me.  For the record I use “Peep” for Twitter.  The Foursquare app works well, the LinkedIn app – not.

Many of the most useful apps are targeted at managing your Droid phone.  Among these I recommend “Lookout”.  This is a combined virus scan, backup and lost phone locater – and is presently free.   As I mentioned in my first review a Droid is more like a PC.  When you download  “Caveat Emptor”   For the lost phone feature, you can locate your phone on a Google Map on the Web and even have it emit a siren sound.  Warning- don’t give your web lookout password to anyone or you will likely have a siren in your pocket at the worst possible time!

The widgets that come prepackaged for managing Bluetooth, WIFI , GPS and mobile networking are very useful in managing battery life.  Just keep everything off that you really don’t need.  I have found the GPS is a particular battery hog.

For syncing music, I finally got SallingMedia to work.  The trick is to create playlists for anything you want to sync and then to just sync those lists.  For video you can just drag an mp4 into the video folder on your phone.

One of the pleasant battery surprises was that I was able to watch a 2-hour movie on my phone and still have over 50% battery left!  There are a couple of decent free video players in the app store.  You should try mvideoplayer or stream media player. ( A free shout out to anyone who correctly guesses which movie I debuted on my droid –  there is a hint in this article)

A key to the usability of my Droid is mastering the notification pull down.  Just slide down your finger from the top Verizon logo and you bring down a list of recent emails, messages, program alerts, etc.

For sheer fun there are many “soundboards” in the app store.  These soundboards provide famous sound clips for many movies and TV shows.  I downloaded several and keep them in a folder.

Another app that I like is “barcode”.  It is a build in barcode reader that auto generates a search and shopper price comparison.  Don’t know if I ever will really use it “in real life”- but it’s pretty slick.

I also downloaded “SkyDroid”.  This is the one paid app I have.  It cost 99 cents.  It provides a GPS function linked to golf courses.  I am playing a round on Friday, so I’ll let you know how it works.  The website has a nice interface to map out any golf course that is not yet in their database, and of course it uses Google maps.  It took me about 30 minutes to enter the local course.  I am sure it will not help my golf game, but it is a cool thing to have.

There are apps that are un-Verizon-like in the store.  These include porn, a way to download “free” mp3s and a program to turn your Droid into a broadband modem for your laptop.  The former is surprising for the normally protective Carrier, the later 2 are ways to violate your contact TOS and bypass Verizon’s own broadband connect service.  The world of openness has its consequences.  You have to exert personal responsibility – just like the real world.  Just be careful if you give one of these to a minor.

Lastly, my absolute favorite feature on my Droid is the voice recognition with speech to text.   This is really great.  I thought my biggest issue would be with the virtual keyboard – however I respond to most messages and emails by speaking into the phone.  Imagine – a phone you can speak to!  What a concept.  The voice recognition can be used for almost any text input field. I have used it for emails, SMS, Google searches and contact searches.  Its accuracy is very good – although it needs a little work on its Yiddish!

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HP answers Palm Code Blue

New Icon on Palm Web OS Smartphone?

The Smartphone business has been very busy this week.  One day before Verizon officially releases the Droid Incredible (I am tracking mine via Federal Express), HP scoops in and acquires Palm.  Palm does have some pretty good technology and mobile handset know-how.  Do they have $1.2 Billion worth?  HP says yes and, anyway – that’s just a rounding error for them.

If you have seen the Web OS on Palm’s devices you have to be impressed.  Why this really makes sense for HP is that it is so much more than Smart Phones.  Perhaps you noticed that Apple iPad launch last month?  Tablet and netbook computing are the next disruptive technologies.   The Palm OS will likely make a bigger near term impact on HPs tablet and netbook devices.    This is not good news for Microsoft.

The OS landscape for the sub-laptop market is rapidly fragmenting.    Android from Google, Chrome OS (Google competing with itself?), Web OS from Palm, Apple OS4, Windows 7,  Windows 7 mobile,  RIM and Symbian (Nokia).   The environments that appear limited in scope are RIM and Windows 7 mobile (just SmartPhone) and Windows7, Chrome OS (Netbooks). Android, Palm Web OS, Apple OS and Symbian all provide (in theory) a unified sub-laptop platform.

What’s a developer to do?    Can an OS thrive with a single hardware vendor – Steve Jobs would certainly say yes, so why not HP?

The near term loser is likely Microsoft.  By the time they have Windows Mobile 7 devices in the market, HP/Palm should have been able to iterate an upgraded device and spend significant marketing bucks attracting both consumers and developers.

All of this competition is good for innovation and good for consumer price points.  It will take at least another 3-4 years for this market to shake out completely.  When the dust settles you can count on Apple and Microsoft still standing – their present overall positions in OS technology are virtually unassailable.  What will be interesting is their relative market strength in this very interesting sub-laptop market.

If you dominate this new market you are THE company for the next generation.

HP has placed their chips on the table.  Who is next?

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Filed under Acquisitions, blackberry, cloud computing, iPad, iphone, Ipod, microsoft, mobile, mobile advertising, Mobile Application Stores, netbooks, Nokia, smart phone, Smartphone, Social Media, Verizon, wireless

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? Continue reading

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Mobile Content : Case Study for Economic Recovery?

 

The deluge of economic doom and gloom in the news would make Chicken Little seem like a wide-eyed optimist.disney-chicken-little-sky-falling

Headlines scream at consumers with news like:

Auto Sales Plunge 45% to 27-Year Low

-Unemployment Rate hits 8.1%, Most Jobs lost in a short time period since they started keeping track in 1939

-Citicorp stock dips below $1

With all of this news you would expect that Eli Lilly, the manufacturer of the world’s leading anti-depression medication would be having huge profits. Their stock is down about 30% since the beginning of the year. I wonder if they hand out Prozac in their cafeteria?

In midst of all of these downward indicators, I saw several news stories in the last week about the forecast for Mobile Content Services.

The best the press could muster for a down beat story on the Mobile Content industry was “Under the worst case scenario, Mobile Content would grow by only 7% this year”. The worst case scenario for GM, GE, Chrysler, AIG, and the other former titans of American Industry is that they cease to exist, and for Mobile Content its only 7% growth. Wow!

Unfortunately the Mobile Content industry is not a trillion dollar industry and cannot impact the overall economy in a meaningful way. It can however serve to highlight what still works in our economic system.

When innovation is coupled with the right financial and human capital resources, true value is created for consumers, investors and employees. This has been the model for value creation in high tech for a generation.

During the worst economic carnage since the 1930’s, a new economic value chain has been created that is enabling unprecedented portfolios of mobile applications on a new generation of devices.

There are now over 15,000 Apple iPhone applications.

Twitter and Tweeting are accepted terms used on the nightly news.

Android (G1) is not science fiction and 10 year olds are carrying Blackberry’s.

I’ve been in the Mobile Content Industry for over a decade. The vibrancy of this new economic value creation system for mobile content is what we have been trying to achieve for a long time. Device technology, software, networks and courageous investors and management have finaly created the reality of what was once just a dream.

Despite the example of the mobile content industry, there are literally hundreds, if not thousands of successful value-creating entrepreneurs presently on the bench. These are the leaders who have started, managed and sold companies. In the process they created tens of thousands of jobs, made millions for their investors and providing valuable services for businesses and consumers. Of course not every business was successful, but enough were to make a well-managed portfolio a good return.

I have the honor to personally know many of these industry leaders. I find their forced bench sitting, due to a lack of investment capital, one of the most staggering aspects of our present economy. Our nation never needed their talent more than it does now.

The U.S. Economy is going through a fundamental re-structuring. We have lived beyond our means because we have not created enough products and services that are valued on a global scale. The economy for the goods and services of the last century will continue to shrink. In my view the financial debacles of junk mortgages and the Madoff Ponzi schemes are symptoms of the underlying problem with our economy. Money was created with schemes that were in the final analysis, valueless.

We need new innovation, new services, new products, and new industries. We need real value creation.

The mobile content industry is just one example of such a value creation industry.

So here’s a note to all of you investors out there who have run for the hills.

“If mobile content and applications can thrive in this environment, what do you think will happen when the general e conomy finally recovers?”

seedmoney1

 

For those with the capacity and the courage to invest in the right opportunities now, the rewards should be extraordinary.

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