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!

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?

Going Off (Portal) in Vegas

Next week I will be attending my 25th CTIA conference. This year’s Vegas show will occur with the twin backdrops of the overall economic mess coupled with the positive trends in mobile application use.

On Thursday April 21, I will be on a panel discussing the Off-Portal business models. The irony is that although I have made a living for the past several years in the Off-Portal marketplace, I believe that this model is not relevant to the future. Let me explain.

For those who are not familiar with the lingo for this segment of the mobile business, let me define a few terms. (If you know all of this you should skip down)

Mobile Carrier Portal – This is the homepage on a handset of a carrier’s wireless Internet service. The carrier determines what services are promoted and placed on the portal. This is also referred to as “on-deck” or “on-portal”

Off Portal – This is any service that is available to the subscribers of a carrier that is not linked to the carrier owned homepage and direct links. This service is usually promoted through use of a shortcode.

Shortcode- a five or six digit number that is used to provide information or other services via SMS

Premium Shortcode – A five or six digit number that is connected to a service that the subscriber will pay a one time or monthly payment.

The mobile value added service market has been divided for the past 5 years between “on-deck” providers and “off-portal” service. The services were predominately information and news services, coupled with fee based ringtone, wallpaper and games services. The advantage of being an on-deck provider was free promotion for your service by being within the captive (or semi-captive) carrier internet web service.

Alternatively, off-portal services were promoted with a mix of traditional web advertising and search engine optimization, coupled with television, radio and print. The off-portal application and content providers also promoted their services via premium shortcodes. To use an off-portal service the subscriber sends a message such as “join” to the code, goes through an opt-in process and gets subscribed to a service such as monthly ringtones. The billing of these services is provided by the carrier.

It seems that regardless of a company’s portal status, they had envy for the other model. On-deck providers wanted the “freedom” to promote their services and drive even greater traffic to their site, while off-portal services desired the free promotion model of the on-deck players.

This game is largely over. Just as the original AOL closed portal gave way to the general Internet, the protected closed gardens of the carriers are done. If their portals are “done”, then off-portal, as a concept is done.

The explosion of smart phones with powerful standard browsers, large screens, pointing devices and keyboards renders a pre-installed carrier bookmark almost valueless.

If you have a fee based service that is on a carrier’s portal, you will have to promote that service with investment that will eventually approach the advertising investment of the off-portal services. This trend is further accelerated by the 3rd party application store trend.

The application stores are filling the promotion void created by the reduction of prominence of the carrier portals.

So on Thursday I will sit on a panel to discuss the challenges and opportunities of the off-portal business model. This business model has made 100’s of millions of dollars for application and content providers and, of course, the carriers.

My opening comment will be that this model is in its end days.

My next article will be on what a carriers and application providers should do to manage this transition.

Cheers and Jeers for Mobile without Numbers

My article “The Future of Mobile – without numbers” created a large reaction.  I received a full inbox worth of cheers and jeers.  For those who cheered, I say “thanks.”

For those who jeered, I say, “Thank you very much!”  I have always believed that when people challenge your thinking and your logic, you have the opportunity to learn and make your own arguments better.  With this in mind, I have created a couple of broad categories of challenges from my critics.   (If you have not read the original article you should first check it out with this link)

 These areas are:

1-The sociological, technological and economic feasibility of my hypothesis that social networking and VoIP will fundamentally change the mobile industry

2-What should the Wireless Service Providers do to counter this threat?

Item 1:

To explain and expand on my logic more fully it is useful to look at some history.

What was the key invention that made the Internet a global phenomenon?

It was not TCP/IP, or browsers or even Google.

The key invention was the Domain Name Server (DNS).  DNS translates a domain name to an IP addresses.   It is much easier to remember www.nytimes.com, instead of its IP address (170.149.173.130).  DNS servers are continuously updated around the globe as Internet services switch IP addresses; add new destinations or new web services are created.

DNS is also what makes email possible.

Prior to global DNS services the translation of a name to an IP address took place (if at all) in the equivalent of a local address book on your computer.  You would update this local file with new IP address/Web name pairs as you discovered them, with the obvious problem that your local address book did not automatically update to track changes.

 Does this sound familiar?        

For nearly 100 years telephone services have been in the local address book mode.  As a telephone subscriber, the implied requirement was for you to carry your own version of a local DNS in your pocket. Your phone contacts would only update if you physically made a change to your address book.

The phone company would issue all subscribers a regional, printed, version of DNS on a yearly basis, the big phone book.

This fundamental use case did not change until the introduction of phones with imbedded contact lists.  With embedded contact lists you could scroll through a list and click to call.  This feature eliminated the need to dial or punch all the digits yourself, but was still limited to your personal updates.

Prior to the ability to look up and retrieve phone numbers for people and businesses on the Internet, the only global DNS equivalent for telephone service was “411”, information service.

The use case for smartphones is the start of a fundamental change.  With their larger screens and easy keyboard entry, you just type the name of the person you want to call and press send.  The connection with the phone number is further eroded.  The contact list still, however, must be maintained personally, just like our Grandparents did with their paper versions.

I can still remember the phone numbers from my friends in high school, but have to look up my kids’ numbers.  The reason is that I never use my kids’ numbers; I just type their name.

The ability to take your phone number with you when you change providers (landline or wireless) was a big boost to the manual updating of address books.  This was made necessary because of the lack of Global DNS in telephone service.

The emergence of large, ubiquitous social networks is the final missing puzzle piece that will finally alter this 100-year pattern and make phone calling similar to typing “nytimes”, instead of its IP number.  These social networks provide several key elements.

They are a collection of your friends, family members and business associates.  Your network(s) contain the majority of people you need, or want, to communicate with on a regular basis.

Secondly, your networked friends should give you permission to view and have access to their actual phone numbers.  This access will give you the equivalent of global DNS for your contact list!  The updating of the phone numbers will no longer be your responsibility, but the responsibility of your friends.  This is the same scenario as a Webmaster updating their web services IP address for DNS.  Even if Voice over IP (VOIP) services do not emerge as a dominant mobile trend (I believe they will), then the social network aspects will be a major force unto themselves.

So, at least to this point the logic is that Social Networks = Global DNS.

The last aspect of social networks is that they can easily provide an “always connected” status.  This is the way instant messaging services (AOL, MSN, Yahoo, Skype) work today.  This always-connected feature creates a direct IP path between any two (or more) members.  If you have a direct IP path, you can easily create voice and video communications services.

The combination of social networks providing DNS-like service and IP connectivity is the core of the technological argument.  The fact that the Internet has trained a large segment of the world to access sites and services by name, instead of by IP number is my proof point that there should not be a sociological issue with my scenario.

The economics of this scenario are more difficult to predict.  I agree with those who said that the social networks and VOIP providers such as Skype would not run a global communications network without significant revenue and profit.  The issue to consider is:  Have the economics of providing a significant portion of this service forever altered in a significant manner?

VOIP service for home or business is significantly less expensive for the consumer than a direct-wired solution using 100-year-old twisted pair telephone technology.  The ease of provisioning and maintenance, and the lower cost of transmission and billing, has changed the economics of landline services.   It is less expensive to transmit and manage a very high bandwidth data path using Internet technologies, than to maintain individual transmission paths.  

Why not the same for mobile?

Item 2:  What should the Wireless Carriers do?

If I were the CEO of a major service provider I would execute the following strategy:

Recognizing the importance of the trends that I discussed, the game that is now being played puts this mobile carrier at a structural disadvantage.  If you think you are going to lose at the game that is being played, you change the game.

The Carriers should obtain their own DNS service for their subscribers that updates continuously and allows for one click friend calling.  This service should be a collection of the key social networks.  

The Carriers should Interface/partner with Facebook, LinkedIn, etc and create a superset DNS of their subscribers’ contacts.  Then they should build the social networking application(s) directly on the phones to permit IM, voice, and video communications. The existing mobile numbers can be used as the equivalent IP addressing scheme.  The integration with the social networks will also permit contextual communications as the subscriber has access to their friends profile and status.

The strategy of partnering with the social networks for calling DNS functionality and contextual communications would create tremendous value. 

The marketing possibilities for a Wireless Carrier with this strategy are huge.

If this strategy was implemented by just one carrier (Verizon for example) then they could market to your friends list to switch and get In-Calling rates (free) when they call each other.  If 98% of your calls were within your social networking contacts, then it would make sense for that group to be on a single carrier.

The Carriers have tried viral marketing in the past with In-Calling and T-mobiles Fav-5 program.  What I am suggesting would be many orders of magnitude more impactful.  The first carrier that figures this out and executes will steal many of their competitor’s subscribers and really change the game.

The last issue for the Carrier strategy section is to counter the VOIP threat.

My strategy would be to embrace and profit from it.   There are two obvious moves to capitalize on mobile VOIP.  First, follow the strategy of the landline providers by creating your own VOIP mobile service that utilizes your connections into the social networks.  You can have a flat monthly fee for VOIP calls.

Secondly, you can also provide a “bring your own VOIP” service plan.  The Carrier would charge a lower monthly fixed fee that would reflect their lower costs in servicing these 3^rd party subscribers.

Over the past five years the bulk of new mobile service investment has been on mobile data applications. Mobile  voice services have not evolved beyond the basic voice call, callerID, voicemail stage.  This is the opportunity to merge the data application investments directly with the core voice service.

The real issue for the Wireless Carriers will be in the recognition of this threat and the real opportunity that this fundamental disruption in the market it creates for a first mover to capitalize on the changes and redefine how people communicate.

I hope I have addressed many of the Jeers that I got last week.  I welcome your comments on these expanded explanations and logic!

A ray of sunshine in the gloom?

The economic news is gloomy, even frightful.  The near term impact on the mobile services market will be predictable.  After all, is that $10/month ringtone subscription really essential? Do I really need to download a $7 game?  What about those Internet services for my phone? 

 

 There is one key tsunami trend that will buck the economic downturn, and eventually make this sector stronger and more vibrant than ever.  That trend is the mainstreaming of Smartphones.  The first ripple in this wave was the initial launch of the Iphone.  The wave increased with cheaper Blackberry’s, the LG envoy, the Instinct, and of course, another, cheaper Iphone.  The Smartphone has gone mainstream consumer.

 

This is the Tipping point!

 

 Within the next 6 months we should see the lower featured versions of these phones as the free phone choice for new contracts – wow.

 

These phones are significant for three characteristics. –  Larger Screens, Improved browsing experiences and better data input (real and virtual keyboard entry) I watch with great interest because my youngest daughter (a “tweener”) and her friends all have this class of phone. “Dad I need a keyboard type – its just dworky on a keypad…”

 

This class of phones will become the standard device over the next year.  The mobile Internet is finally arriving in force.  So – the economy will do what the economy does.  Up and Down, Down and Up.  And consumer and Internet technologies will do what they do – only improve.

 

When the economy finally recovers  – a new base of Internet class mobile devices will be in the hands of the public.  The value chain of today’s e-commerce and advertising driven industries will emerge, like a tsunami, on the mobile scene.

 

 

Flat Rate for Wireless

In the last couple of days the major carriers have announced competing flat rate wireless deals. No more counting minutes. These new plans might be as significant as the original AT&T one rate plan that revolutionized wireless pricing. I say “might”, because the price is still rather high and the plans all but eliminate the family plan users. For the heaviest of wireless users, this plan can save money and eliminate hassle, and follows on the heels of similar flat rate plans for wireless messaging and data usage.

A side benefit for the carriers is the eventual reduction in billing complications.
Do all telecommunication services eventually migrate to a flat rate pricing structure when they mature?
I say Yes. With excess capacity and variable demand, flat rate pricing is a good option.
Cable and Satellite television are flat rate, most home wire line services (circuit and VOIP) are flat rate, internet services are flat rate. As a communication service matures, the variable rate of the next bit approaches zero. As the variable cost of a new subscriber is virtually eliminated, the flat rate pricing schemes emerge.

The value added services that are up sells on these flat rate services, tend to be themselves, flat rate services. Examples are, HBO for $15/month, Navigator services for $9.99 month, Internet Virus protection at $5 month, etc.
With variable delivery costs plummeting they biggest expense becomes attracting a new subscriber and retention once a subscriber signs up for the service.
The exceptions to this trend are royalty and license fees for media and content. The creators of content expect to be paid for the distribution of their intellectual property. This is a very logical assumption.

 The technology that distributes their content is training the public to expect monthly subscription prices. It is inevitable that most media will also be purchased as a flat rate subscription. The key will be the manner in which the content creators are paid for their product, since you cannot generate good Music, Video, games, ringtones, books, etc, at zero variable cost.

Open Network Debates at CTIA Show

Oct 26 By mobileman

This was the week of the annual CTIA Wireless IT show. I have been attending, and speaking at this show since its inception in the late 1990’s. This show was different from past events in a way that may not be fully appreciated for some time. The conference promotes wireless data services to consumers and enterprises. In the early years, data on wireless networks was a real four letter word.   

When I was a Director at Lucent in the 1990’s it was not uncommon to have to explain to Top executives the difference between content, enabling API’s, and operating systems. With those days in the collective rear mirrors we are at a stage where data revenue is accounting for 15% of carrier revenues and climbing. It was further announced at the show that the volume of SMS text messages in the U.S. is now 1 billion per day. On the surface everything is pointing up. 

In the middle of this self congratulatory week, Walter Mossberg of the Wall Street Journal rained on the parade. His Wall Street Journal article declaring that the mobile industry a closed “Soviet style” planned economy was not taken well by the CTIA and its main clients, the wireless carriers. However, in the halls, bars and some of the panel sessions, his views were greeted with quiet (look over your shoulder..) applause.

This cry to open up the wireless carrier networks also occurs at a time when the FCC is about auction a valuable chunk of 700 MHz spectrum. This confluence of industry news, trends and events created the perfect storm for one of the more lively and controversial panel sessions I have ever participated.

The title of the session was “Off Portal , razing the closed garden wall”. My colleagues on the Panel were the ever affable, and never afraid to strongly state is mind, Andrew Bud of Mblox, the thoughtful professional of OpenMarket , Steve Shivers. Additionally on the panel were, Fredrik Ruben of Ericsson, who took a surprising aggressive view towards openness and a new comer (at least to me) Jayanthi Rangarajan of Novarra , who was most outspoken on declaring that the Internet is the solution.

 

Mblox largely benefits from the Status Quo, as they have built a significant business in connecting content players to carriers. The other panelists were either neutral to pro-Openness, with Rangarajan being the most outspoken in declaring the open network, Internet Style, agenda. 

 

My position was this. We have grown the premium SMS market from $80M to over $1 billion in three years. We have done that in an industry with the restrictions, conservativeness and rules of the major carriers. The off portal arena is where the bulk of entrepreneurial   activity is in the mobile industry. So, after we say “good job” and take a bow, the question is how do we grow from $1 to $100 billion?

We cannot accomplish a two order of magnitude increase within the existing industry structure. The mobile economy must become part of and seamlessly integrated with the e-commerce economy of the internet, and beyond.   We must use the phone as a point of purchase device for goods and services that goes well beyond ringtones, wallpaper, alerts and games.

There are two ways to achieve this lofty goal. The first way would be for the carriers to re-think the value chain that has been imposed on the markets and make their networks more open to the free flow of all means of commerce. The carriers have a huge imbedded advantage to capitalize from this next wave of value creation. The ability to bill on behave of, to provide location based API’s, and their own storefronts all places the carriers 90 yards ahead in a 100 yard dash.

The carriers should think of themselves as Amazon.Com.  Amazon has created a powerful commerce machine out of their platform. They have opened this platform to complimentary and competitive services. By making their platform available at a reasonable cost that is competitive with the general the e- commerce market,  Amazon has no doubt forestalled and eliminated the development of numerous competing services. In short, it is easier and more economic to use the Amazon platform for you e-commerce storefront, than build your own.

The wireless carriers can take a page from the Amazon playbook.

 

The second way in which this openness can occur is to remove value from the carriers (a la Mossberg) and turn their billions of dollars of investment into pure pipes. This will either happen by the creation of an open network competitor via the 700 mhz auction, or entrepreneurs and disruptive technology that breaks down the walls.

In either scenario, change is inevitable. The choice is clear. 

If I where the CEO of a Carrier , I would recruit some of the best of brightest from leading E-Commerce companies ; Amazon, E-Bay,  Google, Apple etc., and also from companies such as Visa and American Express.   I would charge these new executives to infuse the necessary corporate culture DNA to make the necessary changes within the Carrier value chain that does not just preserve investment, but creates immense value out of a machine that is in many ways more powerful than the static internet.

The carrier would have to reward these entrepreneurs in a similar manner to their potential outside of a Carrier company. It would be a bold, big move.

If Carrier companies choose instead to play “defense” and try to preserve what they have at the stifling of innovation then they clearly lose.

Even with a 90 yard head start, if you stand still, you will lose.