The Rise of the App Store

Over the last three months more and more of those that I have met who are new to Mobile say that they have joined because the industry has gone "Open".  They tell me that the App Store shows that the walled garden of the operators has finally been broken.

As someone who has been in the industry for over twenty years I have to inform then that the assumptions that they are working on are wrong.  We have seen all this before.  Not very long ago O2 had its Source developer community, they gave access to the O2 labs and test equipment for developers to use.  Companies big and small whent to Ealing or Marlow to show that they had just the application that was going to monitise the mobile web.  I did not see one single company that made money from the relationship.  O2 started charging developers for access to the lab and then SourceO2 stopped.

Vodafone, T-Mobile and Orange all had Partner programs that were aimed at launching applications to the consumer all of these have been scaled back.

This week we have news from America that the App Store might be a bubble in that those who download do not use many Apps.  This matters if your business model is ad supported.  The Apple App Store needs to learn from the Palm developers, I will believe that it is open when I can download Opera for my iTouch o replace the iCal with something more suitable.

I do not see the use of App stores as something that will improve the user experience.  I have persisted in try to make the Yahoo!Go service work on a number of handsets.  On my latest Sony Ericsson it no longer connects to the server and so cannot update, it did for a while then it stopped.  On my HTC Touch Plus the application works once in every five attempts! These two handsets are on different networks, I think the issue is that the network api has changes on my Orange handset, it might be an issue with memory on the handset with T-Mobile the issue is with the Radio Network I think.  Poor quality of service means that regardless of excellent design an App will become unloved and unused.   

What about the other handset vendors?

Samsung OMNIA HD

LG Watch Phone

Sony Ericsson Idou

Having considered my opinion overnight and today taken a second walk around the stands I wish to say that in a time when the consumer is expected to part fund the handset upfront the rivals to Nokia do not seem to have taken up the challenge.

The Sony Ericsson stand this year did not have the excitement of last, the "new" handset on show was a Symbian S60 concept device.  When when demonstrated came with more caveats than the new Facebook TOS. What we saw was excellent however after the failure of the Xeperia what hope for this device?  The key display was the accessories that you can now get for your Cybershot or Walkman handset rather than new handsets.  Perhaps SE should have made its redundancies in a more effective manner and kept most of the product developers on?  Its showing in Barcelona says that after three good years the company may now face a downward move that might be difficult to arrest.  

Samsung were showing off their latest smartphone with OLED screen and Samsung's own OS.  The industrial design and display on the device is a delight the fact that it is running Samsung's software rather than Symbian or Windows Mobile is I think a mistake.  A survey  amongst those I know that have had a Samsung reveals that most hate the menus and software to a level that means they would not recommend the Brand to anyone or get a replacement Samsung.  The Company has relationships with both Nokia and Microsoft so why not accept the extra cost and buy the software from them?

LG had a stand that was interesting in that it held both the Prada branded devices and their own handsets.  The cabinet that had the largest crowd was the one with the watch phones.  Talking to gadget fans all were once again returned to childhood and wanted a device so that to could be a special agent. The shrinking of   handset into a simple device that does just voice and text has to be the ultimate second device for all those with an iPhone to complain of its poor performance as a phone.

The Motorola offering when it comes to handsets is best left unsaid lets say that it was only on my third trip the their stand that I saw the handsets.

ZTE was interesting in that they have a range of handsets that in terms of form factor look like those that we see here in Europe.  However they are running Linux and operate on the CDMA network.  They did seem to be busy talking with potential customers from the emerging markets as well as those in the west looking for low cost mobile broadband dongles.

Android had a busy stand next to Microsoft's in Hall 1 but whilst Google had booked a meeting room they like Apple seem to have taken the decision that business is best done away from the public eye.

The strangest demonstration over the last two days of a handset was of the Palm Pre.  The Palm employee kept to his script better than a soap opera star showing the Pebble like industrial design and the off screen gesture technology The ability to source contact email and calendar data from multiple sources was interesting the demonstration however was let down by the lack of information as to the build for GSM networks or the exact chipsets to be used in the production models. 

For Nokia its all about E...

Today Nokia presented to the world two new E-Series handsets the E55 which aims to offer a low cost version of the E71 (which has shipped 10M units in the six months that it has been available) and the E75 (top).  Both of these devices are about giving email to as many people as possible at the lowest cost.  In the remarks from the head of handsets and the CEO of Nokia the primary attack was on Blackberry who they accused of charging an email tax.  As a side line that went for Apple saying that "without a diverse handset range you walked on a knife edge if you had just one product".

The E75 is said to have the best battery life of ANY handset in the Nokia range with 100 Hours claimed on stand by.  The E55 is thinner than the current E71 because it has a micro QWERTY keypad which will help alot of those without a PC use e-mail to make this easy they have launched OVIMAIL for those who at present do not have a Gmail account.

For Nokia the E is not just about a Series of handsets but also about EFFICIENCY making work not a place you go but something that you do regardless of place.  It is also about getting Networks to ship its product in the region of 1M units a day something it is falling short on at this moment.

Where are the crowds?

So the first day of Mobile World Congress is over and the two photos show that this year the show is slower than in the past.  Taken from the first floor of the Nokia stand at 11:00 where last year we would have seen a cloud to match that of a Milan derby this year it looks like Bolton v Portsmouth.

The second photo shows the main meeting zone at noon.  

Talking to some who are working for vendors at the show and they talk about having to work on the stand as headcount has been cut to less than half of what we saw in 2008.

Whilst I like the extra room I have to ask if it is good business for the organisers.  Effectively the show is paid for by the Vendors who hope to meet customers from the networks.  If the Networks are not sending the staff then the Vendors will have to ask if the investment is worth it.

Talking to one small company I discovered that they were spending €200K on attending MWC.  They will need to see €2M worth of sales to say that the trip was worthwhile.  This just goes to show that in these financial times some parties have to come to an end and hard cash needs to work.

Waiting for the show to start

Left with plenty of time to get through the hords of people for the start of MWC09 only to discover no que.

Walking to my first meeting and I see that the number of of adverts inside the show ground are less and smaller than last year.

This is going to be an interesting few days and first impressions are that we are on for a scaled down event. The vib does not seem to be the same as with any of the others that I have attended in Barcelona.

Guess that Six Sigma does not work

BusinessWeek wrote a feature on how Motorola blew it after their results.

Motorola when I worked for it was at the centre of the Mobile Industry with business units that sold airtime, built infrastructure and made handsets.  At the birth of the mobile industry they had a position that none could rival.  

Before the phenomenal success of the Razr they had similar control of the handset market with the StarTAC (which was the last Motorola handset that I owned). The problem with ALL handsets from Motorola was that whilst they looked good and had great reception compared to other handsets it all went wrong when you turned them on.  Despite comments from Customers and Consumers Motorola decided that it new best when it came to user interface and so at a time when others were making handsets that did not require an Instruction Manual they persisted with a solution that required a Personal Tutor!  

Motorola were excellent at helping emerging markets build mobile infrastructure and were one of the first to take minority stakes in Operators.  This fact meant that they were prepared to transfer engineering skills in a way that others did not.  However the role played on the War on Terror has limited the growth of Motorola in these markets.  It is difficult to mount an effective marketing campaign when the TV News has US Military with the Motorola Logo on their helmets, all the product placement that you have on US TV is pointless.

The growth of Mobile Networks means that the airtime business is no longer viable and Motorola exited the industry after the internet bubble.  

The collapse of the integrated model means that the management of Motorola stopped having the data necessary to make decisions from their internal systems.  This failure was compounded as Motorola retrenched to the US and so was developing solutions for just one customer base rater than being a true Multinational.  When I was leaving Motorola they were promoting Six Sigma as the  management tool on which to run the company.  I guess even if you have reduce the error rate down to just 1 in a Million if that mistake happens to be at the very top of the decision tree then it is fatale.  

Motorola is in a deathspin, regardless of the quality of the executive management and the breadth of contacts it has stopped looking to Europe as a customer base.  The only debate is how long will it take to die?  Its interaction with Apple proves that the Engineering focus  is still core to Motorola and so it is unlikely to find salvation in Android.  Cut off half the headcount is not about growth but rather the preservation of cash and so with Mobile World Congress approaching I expect to see long faces from those still carrying Motorola business cards and from the alumni shaking heads about the fall of a giant.

Photo comes from Science Museum in the UK

And end of the gravy train?

Once again I am entitled to a handset upgrade from T-Mobile having had my smartphone for the last 12 months. 

Last year when I did upgrade to the HTC Touch I also had my tariff reduced to reflect that fact that this contract is for my second handset.  For the last year I have not utilised the voice or text bundle included in my tariff but have used the web'n'walk data plan to keep up to date on email.

This year T-Mobile have reduce the handset subsidy dependent spend and length of contract, even with an 18 month wait for my next gadget the handset would require me to pay something towards the handset.  Over the 16 years that I have been a customer of 0ne-2-one/T-Mobile I have never paid anything towards the handset.  So having been asked to make a contribution to the costs for the first time are T-Mobile saying that I lose money for them and so they want me to leave?  They must understand that I am unlikely to recommend then to family and friends and so as a plan this is not the same as a local restaurant switch to BYOB rather than renewing their alcohol license!

As someone who works in pricing mobile services I fully understand that handset subsidies only work when the subscriber uses the network.  The pay it forward method is broken if the consumer does not utilise the service because the handset is the second device and so the consumer in wanting up to date technology should make a contribution the the hardware.

The question for me as a consumer is should I wait until the unit cost of the handset drops to a level that means T-Mobile will give it to me or pay for the gratification of using the latest technology?  I know that as a customer of T-Mobile UK the technology is not that up to date and so the joy of a new gadget is limited.

I think that I will see if I can blag a new handset from one of my contacts at next weeks Mobile World Congress and witch to SIM only as the limited coverage of T-Mobile where I live and work means that it will always be my second line.  The current upgrade strategy must place churn high of the customer actions.

Expectations for MWC09

So next week we have the global event that is Mobile World Congress in Barcelona my daughters asked what happens.  Over the next hour I tried to explain that far from a holiday the week in Barcelona will be hard work with a number of meetings.

Starting from Sunday afternoon through to Wednesday night I will meet with 37 different Organisations who want to talk about Mobile Banking, Next Generation Networks and Voice services.  I will not be sitting in one place entertaining visitors but rather I will be walking from one meeting to the next.  The good news is that I will be well exercised.

Talking with others in the Mobile industry some are giving Barcelona a pass this year stating budget and time issues so hopefully it will be less crowded. The flow of press releases so far talk about  Mobile Broadband, WiMAX deployment in Emerging Markets and Handset manufacturers offering Application Stores. Party invites are thin on the ground compared with previous years and journalists are talking about the lack of sponsorship so it might be that a touch of realism has set in.

With 4 Billion users of Mobile the industry is indeed larger than any predicted 10 years ago.  However the development of Smartphones and Mobile Broadband seem to have lead many down a blind alley. If Networks are to invest in greater speed and bandwidth why should that network be Open? If Networks want to turn infrastructure into low cost access points why would Equipment manufacturers innovate? I am always interested in how others use Mobile when I travel and hope that a trip to Spain might act as a wake up call for those in Northern Europe who see Smart as the future. With Networks having to fight to keep customers the investment has to be made not in new gadgets but rather processes.

I will be posting next week but I hope that MWC09 will not be a disappointment I am hoping that we might see the start of an ecosystem that sees everyone trying to evolve mobile.    

Digital Britain Report

When it was finally published my review of the Digital Britain report was I hope that they did not pay Lord Carter for this.

After two days when my fellow teleworks have overloaded my Internet connection I have to say that Carter has wasted an opportunity.  Because of the lack of investment in the Thatcher years we in Britain find ourselves in a void.  If we had invested rather than Privatised our utilities then we might not be looking at an infrastructure that is failing.

With the Mobile Networks it is not a question of funding capital projects on the whole but rather the need for planning permission.  Given rights to build a base station anywhere that they can rent or buy a site then the Networks will build the coverage that the customers will pay for.  The release of sites could speed the consolidation of Networks in the UK; it has to be obvious that we cannot support FIVE networks.  

At the time of the Internet Bubble I looked at the way that Railroads and Airlines had developed over the previous 100 years.  All those that built the Railroads ended up in failure and those that started Air Travel also ended in financial ruin PanAm was the last to fail.  However we still used trains and planes.

Looking at the demands of UK plc what we see is a need for better infrastructure.  The launch of Cable television shows that we cannot offer regional monopolies rather we need a single wholesale provider. However the lack of a government CTO who understands the engineering requirements of Broadband Britain we do not have a Blind Watchmaker capable of architecting an effective solution.

At this moment we have an opportunity not presented since the end of the World War in 1950's Britain.  If we are to limit the market correction then we need to invest in infrastructure that allows the UK economy be remain the the G8.  The roll out of fiber to finally provide high speed broadband connectivity will give the UK employment in the Civil Engineering sector at a time when the only thing we seem to be building is Sports facilities for the 2012 Games.  We will also provide employment opportunities to raise the level of Engineering Skills in the work force.  Before Thatcher we had pride in Engineers but the transfer to a service economy means that it is no longer so.  With better Engineering in the communications field we could raise the standard in the UK that makes people employment opportunities not currently provided following the downsizing of BT and the fall of Marconi. 

Looking at the people in the street I have to ask that does the man in the street want Broadband?  Whist some could afford a high speed computer that could benefit from 100 Megabits per second connectivity those who limit their experience to light social networking, messaging and catch up TV could function with a connection that is a little better than the current situation.

It is not the consumer that needs better Broadband rather it is business and government that does as without it the UK will demonstrate that we continue to fall back.  With better connectivity we can lift educational standards not just those that are currently in school but also within the workforce.

The last two days has seen an increase in Mobile traffic as well internet traffic but the benefits in terms of revenue has only highlighted the need for investment.  Looking at the response to the report I am surprised that not many are disappointed that Carter has been conservative in his recommendations.

(c) Picture from my Bedroom window yesterday morning.