Consumer Choice?

With the fall of both Zavvi and Woolworths over the last months the UK consumer of music suffers even more than at any time since I have been buying it.  

I have no wish to have my listening dictated by the whim of a PR agent for the record companies.  The fact that the Christmas Number 1 has become the anointment of the X-Factor winner rather than a competition is only the tip of an iceberg.  The New Comers List for 2009 whist showcasing talent does not tell the whole story it is the will of the record labels who wish to launch the next Duffy, Kylie et al whilst promoting artists like Coldplay, Lily Allen etc..

I listen to Jazz mainly the artist that are available on iTunes are limited in terms of range and quality.  My local Zavvi whilst not a large stockiest of Jazz benefited from the fact that at times you could meet Courtney Pine as it was his local music shop.  I have managed to get the last three CDs he has released signed because of that fact.

This week I wanted to get a couple of CDs that were not yet available for download.  With only HMV as a specialist I was unlucky, WHSmith have yet to grasp the opportunity presented by the fall of rivals and Tesco stock just the top 50.  One CD was available as an import from Amazon at £16 the other you buy from the Artist's Website where an EP costs £12. So much for consumer choice.

Perhaps those that set up DarkerThanBlue can find some funding and relaunch the site as a music hub? I know that the important element of Woolworths failure was the removal of Entertainment UK who undertook the distribution of Music Games and Books and it is this decline that has hit consumers most.

How are others managing to get music outside of the Cities?  I hope that as small bookshops have been able to survive after the Net Book Agreement was removed we might see new music stores open.

Since Christmas I have taken advantage of the chain of Oxfam shops close to clients to replace a number of old music that I have on Tape with cheap CDs.  However not many of those that give music to Oxfam listen to Jazz. Before the rise of eBay we had local CD Warehouse that served the needs of those looking to buy and sell second hand CDs.  The company went bust but now it could return if others see the opportunity.

Anyone doing Mobile Banking in the UK?

Mobilink have released its latest analysis of its customer base.  It says that the service is used by young families and new home owners.  So I guess that at the moment this is a service for the person concerned about budgets rather than someone looking to replace cheques to make P-2-P payments.

I talk to quite a few people about mobile usage and whilst I have been told about M-Banking by those from Pakistan, South Africa, Kenya, Nigeria, Uganda and America no one in the UK other than people working in the Banking Payments community have used Mobilink.  Thus I have to question the validity of the report.

Since 2005 I have been evangelising Mobile Banking, it is a service that I am confident will happen on all phones.  The technology is simple in that text based, browser based and Java solutions are available dependent on the type of handset and transaction you are attempting.  On a simple level once people replace bank details with a mobile number it will be easy to transfer funds by text rather than write a cheque, with a small fee more and more will also pay by phone rather than use small value notes and coins.

With the Banks looking at the cost base as well as their capitaisation I feel that they will seek to become more local and less international.  Using the mobile phone rather than Internet Banking will be a technology that the consumer adopts, too many of us share a computer but very few share a phone and so it is more secure and we almost always carry a phone whilst most of us have a static computer (even if it is a laptop).

Carnival of the Mobilists

MJelly has hosted the Carnival this week and has a number of excellent pots from those in the Mobile Ecosystem talking about what matters most to them.

Looks like my evening will be spent condensing a number of the other posts that made it into this weeks post.

Mobile Zeitgeist

Sitting and thinking over the Christmas Holidays I took the opportunity to consider the state of the Mobile Industry.  Following my post asking for a Leader to step forward and create an Ecosystem that benefits all a few asked the question was Mobile a single entity or was it a number of Industries?

Whilst I agree that at present what we see might be more a kin to a medieval Britain in that what is seen are a number of waring fiefdoms I have to say that after some twenty years we might be reaching a degree of maturity that sees those that run Networks, Handset Vendors, Chip Makers, Equipment Manufactures and Regulators starting to take a rounded view that looks at the relationships between all that makes up the Mobile Industry.  As we enter difficult economic times to maintain the present position let alone move forward Leaders and Managers understand that it will require cooperation as well as innovation if mobile is to maintain its historic share of the wallet.

On a simple level I look at the talent in the industry and ask is the average IQ of those working in Mobile rising, falling or about the same as it was at the start of 2006?  Are those that are joining Mobile brighter than those that we coming into mobile in 2000 or below the standard of those joining in 2002?  At present I have to say that those I see starting a career in Mobile are not as smart as they were ten years ago when it was an exciting place.  A lot of those that joined Mobile at the time of the 3G auctions have moved onto the next hot trend, which might be philanthropic commerce in Africa and South East Asia judging by the updates of friends on LinkedIn! One of the issues that I have with those that have joined the sector is that they do not seem to have the drive that the previous entrants had to understand the history of Mobile so that can avoid the errors of the pioneers.  It might be a function of becoming Middle Aged but the current Youth do not seem to want to undertake any form of education but rather seek training so that they can perform the day to day duties of their role.

A review of the Networks sees that in Mature markets size is a good thing as consolidation sees those operating national networks seeking to become more International to share infrastructure in what looks like an old fashioned arms race.  The race seems to be one of speed as capacity fills they are looking at merging towers.  With an eye on costs all CEOs are looking at what can be undertaken to maintain profits are revenues fall.  Rationalisation in the sales channel means that no longer are the Networks prepared to speed money on acquisition but rather wish to reward loyalty. The Brave CEO  whilst cutting cost will also invest in CRM tools that improve knowledge. In the Emerging Market the CEO is faced with far greater challenges in that most of his customers have a limited budget that sees them using his network for less that 6 days a month.  The interesting thing is that the Emerging Market CEO is far more attuned to his customers needs and incentivised to insure that they have network coverage and customer service.

There is no dought that at present it is the Handset guys who are feeling the downturn the most.  The interesting element seems to be that the activity is speeding the end of life for a number of 2G handsets rather than the stalling of development.  In a recent presentation I talked about the move towards a number of standard Operating Systems in an effort to limit the cost and time of introducing handsets onto a network (just look at the pain RIM are feeling with the launch of Bold).  I see that we will have one form of Symbian (Nokia S60), LiMo and one from Windows Mobile, RIM, Apple.  Symbian’s new business model has seen the death of UIQ and the new license agreement means that Nokia have no reason to cut down is premium software stack to save money.  Whilst Android looks like a better opportunity than developing for Apple it is still a closed system that has the Networks concerned that Google is more an Enemy than a Friend.  I am sure that by the end of 2009  we will see more  devices available  on the Android platform than  iPhones but cost might be an issue should the networks decide not to  subsidise the cost of those handset.

In the Chip business it is the lag with the handset makers that will effect most and the question is who is prepared to maintain Engineers in the current market?  Those that offer simple solutions such as CSR will be the most effected and survival will mean that they need to find a bigger firm to buy them.  Those that produce chips for industries other than mobile will find themselves squeezed as costs do not match revenues.  All these facts mean good news for Qualcomm and I think that more will license the ARM Instruction set and develop chips capable of matching the speed and capacity available in today’s mobile network.

Equipment Makers face an interesting year with 3G spectrum auctioned in  India and China offering the opportunity and threat.  The staged roll out of Mobile Broadband offers opportunity to sell volume but with a limited margins.  The risk for Equipment Makers is that the Networks scale back the roll out of HSUPA and HSDP+ as revenues fail to kick in.  Looking at the future, this year we will see LTE finalise.  Losers are likely to be Nortel, Motorola and Alcatel Lucent who bet too much on WiMAX.  Ericsson and NSN will suffer as the Chinese buy market share.  Huawei will continue to impress the Networks with the quality and speed of its Engineers.

At this moment I do not think that the Industry is in terminal decline, but it is getting smaller.  I would like to believe that those in charge of the various stakeholders have the knowledge to insure that the decline is limited in terms of time and effect. Looking at the progress in America over the last year the launch of mobile banking shows that a federated approach benefits everyone.  

Cometh the hour cometh the man.

Sitting to write my Predictions for 2009 for clients and I am struck by how disjointed the Mobile Industry is. Over the last year I have heard to oftan from Senior Executives the phrases "Bypass the Networks to get to the Consumer" and "X are Parasites after our Customers for free". To me this demonstartes limited understanding of the Ecosystem that has evolved over the last 25 years. It also forces me to ask who is the Figurehead for Mobile? The PC industry had Bill Gates, the Internet has John Chambers but who do we have?

2009 looks like a hard year for most, which will require cooperation from all if we are to survive the storm. To limit the losses and maintain progression someone needs to look at the WHOLE industry and see that if we are to deliver on its potential it at last needs a genuine leader. That person will have to have an understanding of the HISTORY of all in our Industry and see that we now face the third inflection point which means that it is no longer about a single player controlling the market but rather an ecosystem that requires all to be healthy. Once they understand where we have come from they will need to understand what we could achieve so that they can start to work on what will need to change to get there.

A Figurehead will be able to talk with the Mobile Networks, Infrastructure Makers, Handset Manufacturers, Software House and those who provide the Content and build a Federation that is capable of taking us forward. They will understand that in most countries Mobile is one of the Top 5 industries when it comes to share of the GDP and so will be able to talk with Politicians and Regulators to reassure that they are not forming a Cartel. If we can find our Champion they will be someone with the vision to grow the sector 10-15 fold over the next five years.

As our Champion they will need to talk with the Press in such a way that they explain how we have come so far so fast, the focus will not be on the gadgets but rather the the impact on people's lives and the benefits mobile have brought. It cannot be about the technology, too many of the Engineers in mobile grew up watching Star Trek and have devoted themselves to fulfilling what they saw on the TV. They will need to speak in Parables that educate and evangelise just what an impact the mobile has had in twenty short years. We have the potential to make the mobile phone THE remote control for life, but do we have the person who can deliver that prospect?

Talking to the Industry, he will need to be able to insure that the future is about mutual benefit rather than a zero sum game. A Mobile Phone Network might need to pay over the odds for base stations but the Equipment Manufacturer will have to deliver software that works to open application interfaces so that handset and services work on the equipment without the need to new firmware. Handset Manufacturers will need to understand that the days of milk and honey are over, they need to adopt global standards that allow developers to reach customers and thus stimulate usage. When it comes to selling applications there needs to be a better store than Apple, Google, Handango or Vodafone have managed to build so far. Handset Manufacturers need to better understand and work with component suppliers, now is not the time to destock but rather invest, a Chipset manufacturer needs a return on their investment or they will stop innovating the cost base does not work on a networking effect.

With a Champion for Mobile we will have someone who in Private can bang heads so that all can benefit and in public sells the Industry to the World. It has worked for the PC and the Internet the most successful with such a model has to be the Catholic Church. The CEO's of all the Major Players could form a "house of Cardinals" just do not let them ellect a leader. Those I currently see at the top of the tree lack the knowledge or charisma to be a Champion, as they are the second generation of leaders in the sector they do not have the understanding of the level of cooperation rather than competition needed for ALL to progress.

A look back at 2008

This year in terms of mobile technology I have decided to take a multiple device strategy rather than try and do all things with a single machine. Whilst it has not been cheap it has been productive.

I have downgraded my Sony Ericsson P1i smartphone to the Sony Ericsson C905i and the first plus side is that I can now operate for a whole working day rather than discover that my battery has died just as clients from America come a calling.

I also managed to upgrade my Skypephone from 3 with the second generation of the handset. The device looks better than the original, the battery lasts longer and the new price plan means that I only have to top up every 90 days. However 3 seem to have missed a trick or two because whilst they give me access to Planet 3 I cannot buy anything for my handset. I hope that they have learnt from this with the Facebook phone.

When I am heading into London to meet people rather than give presentations I have taken to carrying either my iPod Touch or Eee PC which allows me to keep on top of my email and also surf the web whilst I await my coffee to cool enough for me to drink it.

When I do need to take my Laptop or Macbook then I also pack my Mobile Broadband dongle so that I can do some work whilst the tube makes its slow trundle back to Hertfordshire. I have tested the service provided by Orange, 3 and Vodafone and the later is best suited to my needs as they at least seem to be able to provide at least 50% coverage on my journey home. I just wish that the power drain was less.

In terms of services I use on my handset, the good news about no longer having a UIQ handset is that I can at last use Yahoo Go 3. The interface is good, I would like to have access to a few better widgets but it works well as a simple app store. It allows me to have access to my email, RSS feeds and upload photos to flickr. I have also been Twittering away on my phone which is interesting. Other Social Networking on my handset has not been as successful, for facebook to work for me I need a bigger screen and LinkedIn is best done with a 13inch plus screen.

I am starting to work more with the GPS in my handset. I don’t use it everyday but I do use it at the weekend when I am visiting places new to me.
In deciding to carry a number of devices I have had to invest in a couple of bigger bags to carry everything. I have also been talking with a friend who runs a bag design company about the need to develop a better man bag. As well as phone I carry a Camera, iPod, Sony Reader, Note Book when I am working. At the weekend the Sony Reader and Camera are not needed but I then have a bigger camera and lenses and my Macbook.

I was thinking that I had a strange case on OCD with my collecting of gadgets but watching others on my commute I am seeing more and more people are carry a range of devices. A recent news report said that UK kids were the best to mug as they were carrying over £800 of gadgets, so I cannot be alone. My disposable income just means that I am to buy more gadgets than the normal consumer.

The impact for the Mobile Networks, I am the guy that you should sell SIM only to for the main device and then as some form of loyalty programme you should offer mobile broadband. Talking of loyalty, when are you going to start doing with just some of the data that you have about me? Why don’t you use the opportunity presented every month to start a conversation with me? Why don’t you look at the HLR data and understand that I have become somewhat of a fan of Sony Ericsson and so stop trying to push another maker’s device at me? When are you going to reward me with lower call costs to my most called numbers?

2009 will be an interesting period in the history of mobile. I am sure that over the period I will get 4-6 new handsets, I hope to get a femtocell so that my home is better served with 3G services. I don’t think that I will be looking for convergence anytime soon, rather as with my knife draw in the kitchen I will seek out the best tool for the job. When it comes to embedded mobile broadband I hope that Sony don’t do a deal with T-Mobile for connectivity because if they do I will format the machine before I transfer data and then demand that my Network support my Vaio.

Is this lazy analysis?

The last few days has seen a number of sites pick up on the latest news from Canalys bout the shape of the smartphone market. The latest view on the shape and movement in Smartphones is that Apple has grabbed second place in the market with some 17% jumping over RIM and Windows Mobile. Getting detailed numbers on the size of the business market is very difficult and looking at the PR for this report I have to question some of the assumptions.

Whilst I have no reason to question the analysis of Apples success with the 3G iPhone I have to question the numbers for both RIM and Windows Mobile. Over the course of my work I has been difficult to accurately get shipment numbers for either of these companies, the Management of both are very good at not answering questions and the fact that the distribution channels are different to the classic handset business that sell to consumers. Whilst both RIM and HTC do sell handsets to the consumer most are business sales and are thus far more difficult to measure.

I do agree that Apple will have a fight to keep it's position as number 2 in the market now that most fans who wanted the God phone have got one. Since the period this report covers is the one that includes the summer I would expect to see changes in the next two reports that see Apple slip to 4. Symbian's performance as the dominant supplier could be interesting, this report shows that in the period 18.5M Symbian handsets were sold which is somewhat above the forecast given by Symbian themselves at their recent Smartphone show.

Post included in 148th Carnival of the Mobilists

This weeks carnival is over at MoPocket and my post on Symbian has been included.

The posts on the iPhone are interesting if you don't like mine.

Giving Up on a Smartphone

At the start of this week Orange sent me a new handset. I decided that this time I would take the Sony Ericsson C905 rather than a Smartphone. For the last six months I have been able to access my Email via a Windows Mobile Smartphone, Sony Ericsson P1 and iPod Touch I also have a Mobile Broadband Dongle and so have been able to use my Laptop to reply to email even if I cannot find a hotspot.

Rather than carry power cables so that my main handset has a days worth of power I have a handset that has fast connectivity for the times that I need it. If this experience continues I might just decide that when my renewal is due on the other Smartphone I no longer wish to have such a device and once again select a simple device; I know that the Network would be happy to give me a cheaper device which it has to pay for. I wonder if the Handset guys have strategy people who are looking at the fact that we now seem to be carrying multiple devices becuase the Smartphone is not something that we buy into as consumers?

Over the last three days I have charged the phone once, I am using the handset to check email when travelling have been able to download Yahoo Go3, Opera, Google Maps so I have not given up on data but rather no longer have a Qwerty input device.

If I find that the form factor does not work then I will have to swap the handset for something else but at present I am happy to have a phone that makes calls and receives messages for a whole business day and I am carrying a number of other devices that allow me to respond to those messages that I see as important.

Maybe once Orange gets its mapping service to work I might discover that the battery drains faster because I am using GPS. But if the experience of my Nikon Coolpix P6000 are any indication geotagging will be limited.

I still would have loved to have been able to have something simple that would have transfered the content stored on my old handset to the new one quickly and simply. If only Cognima had been able to find a route to market for the software as well as service that is now Shozu. I now that mobyko does something similar but it just does not seem as simple.

Photo from Sony Ericsson Blog

Has Symbian not learnt from Psion?

Last week I went to the Symbian Smartphone show with hope, it had moved out of the docklands and the Handset business is facing competition at the high end. After 30 minutes at the show I was fealing that Symbian is at the risk of missing the party.

In the Keynote Symbian's CEO spoke about the fact that this year 50M new smartphones will be sold making 250M handset shipped in the 10 years it has been formed. He said that these numbers demonstrate to developers that by sticking with with Symbian they will have the advantage of speed. However when you look at the new developer networks what you see is a shop that sits outside the networks control and has very simple terms (providing that you are not a competitor to the main spftware).

Others in talking about evolution accuse Symbian of being bloted. Whilst long time watchers call the death of UIQ which means that the new Foundation will be based on the S60 platform. This means that Symbian is at risk of becoming a Software arm of Nokia and who would want to get in bed with the largest handset maker?

This years Symbian event was my fifth year in attendance the quality of the speakers this year was weaker than in the past. I would have hoped that in moving to Earls Court they could have got Senior Executives from Vodafone, Orange and T-Mobile they did not. This forces me to question just what level of endorsement does Symbian have? Having considered things I fear that they have little more than warm words.

The FT is reporting that in this economic downturn will hit the handset guys rather than the Networks. The Symbian devices are amoungst the most expensive and so are at risk when budgets are cut by Networks looking to limit costs. Walk into a handset shop and what you see from RIM, Apple and Windows Mobile all impresses more than the Symbian Handsets.

Psion stopped making PDA's when they were let down by Motorola on the development of a Smartphone and internal research showed that the consumer want a number of devices rarther than one that did it all. Whilst PSION allowed some excellent engineers to develop few remember that however did not save the company. On the basis of what I saw last week Symbian is at risk of being the platform that the train passes rather than stops at.

Technology Futures Network event

Last month I managed to make it up to Oxford to listen to Craig Barrett speak at the Said Business School to a group of MBA students and members of the Technology Futures Network.  The first event of the TFN at the same venue saw Dr Irwin Jacobs of Qualcomm and so it was good to hear another from the chip industry talk.

Craig Barrett has been with Intel from the early days having joined from the teaching staff at Stanford University.  He spoke about the fact that what any country needs to succeed in the present climate is an Environment for Innovation.  The first thing that is needed is Smart People, these are well educated in mathematics and science rather than business and finance.  The next thing that is needed in Smart Ideas, these are both basic development and Blue Sky research.  Finally what is needed is Smart Environments this is somewhere that has Money, Government that taxes smart and offers innovators protection and promotion of their ideas.

Craig went on to talk about planning to eat your own children i.e. what you are doing today will not do for next year therefore if it has to change then you should be the one that does that change.  Look for the Technology Transformation in a sector and grasp the opportunity to upset the status quo and lead that industry.  He used the rise of Nokia and fall of Motorola to demonstrate the change to digital in mobile telecommunications in the mid 1990's. 

One of his grips was that the Bush Government has let the R&D Tax credit system lapse and so now US businesses are offshoring Research and Development because of the tax rates.  Intel at present invests 50% of its budget in South East Asia.  His other major grip is the quality of maths education in the under 12's if a child has a bad teacher in these early school years they are lost to maths because they cannot catch up.

His advise to the MBA students in the room was that they should have read engineering if they want to be a CEO.  The reason is that it equips you to be a better problem solver.  Once you have a management position act like a pre-school child and always ask why - five times to get to the bottom of the problem/issue.

Finally he said that once you become an Executive eat out at the chinese regularly as the best advice he has had was from the fortune cookies.  His top three are 

1. "If you want to win you have to chose to compete"
2. "Small deeds done better than great deeds planned" and
3. "The world is always ready to receive talent with open arms"

After two weeks of working hard to prove assumptions on models in a changing market his opening comment that the future is knowledge therefore education is critical are wise words.

Random Thoughts

Have been busy thanks to the current financial situation and so not had time to blog.

The Mobile Networks seem to have changed the business model successfully when it comes to Subscriber Acquisition Costs which has affected both the retailers and handset manufacturers. The Networks are looking for staged payments over the course of the contract dependent on spend which combined with longer length contracts could have changed the business model of the likes of Phones4You and Carphone Warehouse.

The European Regulator seems to wish to use her role to promote political ambitions back home, however in doing so she has made it very difficult to invest in new data services if you are a mobile network. Some of her economics seem strange from my seat when it comes to the cost of transit. It is all well and good to look at the lowest cost but at this moment very few networks are effective as we have a mix of standards running on 4 generations of networks.

Looking at networks the move towards Mobile Broadband still is a solution looking for a market in my view. However I do not think that we will be looking at the technology in the same way as we do with MMS; the consumer needs to understand better what he is getting before we have something that is long term. Recent trips have shown that WiFi and Mobile Broadband in London are mainstream with the number of “old style” internet cafes that are closed. My summer holiday in Greece proved that the same is not true as you move south with very poor service available.

What does all this mean to the Consumer?

I think that the traditional spurge on Handsets at Christmas will not be seen this year. Whilst some have been attracted to the glitz of an iPhone more have turned their back on it. Over the last few weeks I have been interested to look at the number of people who are using a Blackberry. It no longer seems to be the technology of the City, I have had to wait for shop assistants to finish an email and been held up in the Gym by women emailing. It will be interested to see what happens once they have got the bugs out of the Bold and Storm when it comes to attacking the consumer market. Sony Ericsson has a challenging time ahead it needs to get the new handsets into the stores at the same time it needs to retire handsets like the K800i. A number of Senior Executives are using the Xperia handset prior to its launch and I for one love the handset. Nokia seem to have lost the love in Europe with few interested in Comes with Music and the availability of E and N series being limited by the larger Networks. The reason for this is I think the price is disconnected at the moment. Looking at Price Plans as I do more and more often the Consumer is expected to pay some of the cost of the handset or commit to a higher than average monthly fee.

Recent research has shown that Mobile Networks have at this moment got the tariffs wrong. They are giving away too much, with under 40% of those on a contract using 50% of a bundle. This means that perceptions of value are lower than they should be. We are in danger of forgetting just what the mobile premium is. When I joined Motorola the fixed telecoms network was unreliable and getting to talk to someone was hit or miss. Roll the clock forward nearly 25 years and we now call someone rather than someplace if we cannot connect we can leave a message. New technology allows presence based solutions which will allow users to see who is available to take a call just as we can with IM services such as Skype.

My Holiday Experience

This year we took our family holiday in Kos.

I did not have my mobile on all the time but I did use it someone of the time. 

The first thing that I was interested to discover was that my connection in the Hotel was with Turkcell rather than a Greek network.  In Kos Town I was connected with Wind and in the more rural areas I was on Cosmote.  Whilst I know that the order in which I connect when roaming is a function of the relationships that my Network has with overseas providers I was surprised to discover that when I was in Greece my primary connection was with a Turkish network.

Text messaging was not functioning as well as I could have hoped.  Messages were delivered out of synchronization.

In my Hotel WiFi connectivity was to a satellite services rather than DSL line.  This meant that timing was everything if you wanted a service that worked.  Try and get online between 19:00 and 22:00 local time and you were likely to discover that the service was patchy.  If you connected between 10:00 and 15:00 the service worked well.  This meant that Email was as reliable as my SMS.  

Given that the fixed Internet was so poor I would have been happy to try the Mobile Broadband however I could not get a connection that was any better than GPRS.

Looking at some of my fellow holiday makers use of mobile was interesting.  Most seemed to feel that they were on Holiday and so did not carry their mobiles with them.  At the end of a day by the pool a number could be found catching up on voicemail before heading for Dinner.

The most interesting group was the children holidaying with Parents.  A few took a phone call to inform the other that they were in Greece and saw that they cut the call immediately thinking that they were being charged  for an International Call.  

From my observations I say that Mobile Networks need to do more planning of network coverage.  Turkcell have planned a network for the 1.5M who stay in Bodrum in the holiday period; whilst the Greek Networks are working on the 20-30K who live on Kos in the Winter.  An intelligent network could see base stations deployed for the high season and then placed in sleep mode.  The incremental revenues would be profitable as they would be predominately holiday makers who were paying roaming rates rather than a flat fee.

The experience of the youths shows that pricing is still something that is a dark art.  Better information needs to be sent to those arriving in a new country so that they do not experience  bill shock.

Latest Carnival of the Mobilists

My post has been included in the latest Carnival by Andreas over at Vision Mobile. Go over and read a round up of some of the best writing on Mobile Blogs in the last seven days.

iPhone 2.0 a stepping stone not Nirvana

So one week into iPhone 2.0 and what do I think so far?

The device is owned by four friends so far. Another few have said that they would upgrade to one after the summer holidays once others have smoothed out the bugs for them.

Would I get a iPhone or am I waiting for a Sony Ericsson Xperia X1 which should be available in September?

I think that I will pass on the iPhone at present. I was lucky enough to be given a 32GB iTouch which I have upgraded to 2.0 and so am able to share in some of the excitement of the App Store. I would have issues with the iPhone on battery life and my big fat falanges make text input a bind. I also am finding Mobile Me a little light of functions compared even to the SE Phone Suite when it copmes to moving data between laptop and device.

The App Store is interesting and I wonder how long before we might see similar on the Operator Portals for ALL handsets. Russell Beattie points out that it is not something thought up by Apple but rather borrowed from Qualcomm who developed it for the Brew Platform.

I am still to be convinced that Mr Jobs is committed to the Mobile Phone market. You only have to look at the present pain felt by others to ask if he has the endurance? The iPhone has not broken the market for Mobile, Apple have learnt just as Nokia did that the Networks are still key in any relationship with the user thanks to the billing relationship reather than coverage. Whilst we see statistics that show a significant number of users of mobile data services none yet say that for any particular service they are exclusive users of the service! Thus Apple are doing things better than others but it is still the same user activity if different experience.

I might become more conviced about the iPhone if I could discover more than one form factor. When it comes to iPods I am give a choice not just in terms of storeage but also in terms of form factor with the Shuffle, Nano, Classic and iTouch but when one looks at the iPhone you get two coloure and two sizes! Not exactaly a wide range, even compared to RIM for example.

I am sure that now we have a 3G iPhone we can expect to see more people using one. A number of committed MAC fans will now be ready to own one, dispite having to downgrade the quality of their camera. I am confident that in those markets where the Consumer has choice we will see even better penetration. I guess we will have to wait until we have iPhone 3.0 before we can say if this was a fad or a serious player in the game?

New Report: Market is ready for Mobile Wallet

The latest report from John Devlin at IMS Research points out that the federated approach of the US, Japan and South Korea is gaining traction when it comes to Mobile Payments. "Strong Partnerships are being formed between Banks and Mobile Networks;" comments Devlin.

The reason - Improved coverage, greater uptake of feature phones and smartphones, higher mobile penetration and service availability have all contributed to this. As much as anything, greater demand from consumers, operators and financial stakeholders has seen the number of application developers and platform providers all multiply in numbers in recent years.

So can we expect these benefits to be seen in the UK?

I fear not. The way that UK Banks have adopted Faster Payments shows that the technology infrastructure is lagging behind in to many of the High Street Banks. With the rush to lend money the Banks have not invested in the systems needed to effect day to day current account transactions without those the ability to interface with a mobile phone to make payments will be very limited. The current difficulties within UK Banking means that they are looking for low cost solutions rather than high value. So we have to expect to be left on the hard shoulder let alone the slow lane when it comes to mobile banking.

Fierce 15 for 2008

Looking at the latest list of Start-Up in Wireless to follow from the Fierce point of view I was interested to see that mFoundry was one tipped for a bright future. Since first hearing of them they have managed to get funding from Bank of American and now serve 15 of the top 20 Banks in America when it comes to mobile banking. The PayPal P2P payment service on mobile is one that uses mFoundry.

"Effective mobile-banking marketing targets specific segments, such as business travelers, and highlights the ways mobile banking can serve the segments," said Tripp Rackley CEO of Firethorn at the Mobile Commerce Summit last month in Las Vegas. Marketing to specific groups also helps financial institutions gain more mobile users than just the early adopters, he added.

American Banker says that within 12-24 months ALL Financial institutions will use Mobile as a channel to customers. If this is right then mFoundry and Firethorn along with ClairMail and Yodlee will be at the centre of a very profitable industry. Javelin have been looking at the market for some time and Bruce Cundiff reports that almost a third of users are Paying Bills, almost the same are monitoring transactions and over a quater are transfering funds between accounts.

Whilst all these things excite me, I am frustrtaed by the fact that as a Customer of the Halifax I am at the back of the line when it comes to technology adoption. The way that the "Bank" has adopted faster payments shows that they are very much a follower when it comes to new technology.

Carnival of Mobilists

MJelly has the editors pencil this week when it comes to selecting the best in Mobile blogging and he has selected my post last week on Time for a Change.

Head over an take a look at some excellent analysis of the Symbian deal amd Purple labs buying back of its IP from Openwave.

Time for a change?

If we are to see Mobile to continue to grow, then some structural changes are needed. With change at the top of Vodafone could we have a catalyst for change?

The new CEO of Vodafone offers something different from the status quo. In Viterio Colao you have someone with the skills of a Strategy Consultant supplemented with Operational Experience of a Country Manager. Having worked in the Italian Media industry he also has developed diplomatic skills that sees him able to form federations.

The price of a mobile minute is afalling thanks to competition and regulation. Whilst I expect to pay some premium for my use of mobile over fixed it is not as great as it once was. The reason for the deflation in the value that I place on the value has to do with my perception that mobile coverage is not as good as it once was; along with the lack of innovation in the basic product, Voice. Those that offer Mobile Data Services have failed to grasp the fact that for me it is connectivity for my Laptop whilst I enjoy a coffee between meetings rather than ebay and facebook coverage on my handset.

With a new CEO vodafone can take advantage of their scale and influence to alter the way the whole ecosystem functions. They could acknowledge the fact that at this moment the revenue streams are out of kilter and recent adjustments have not achieved a better balance.

At the moment Equipment Manufacturers have little incentive to innovate with margins falling over the last two years to less than 5%. If Ericsson, Nokia Siemens Networks or Nortel cannot find a reason to invest in developing new data solutions then what chance the Mobile Internet? The current Mobile Broadband has placed a massive load on the OSS and BSS systems in Mobile Networks as 5% of users are consuming two thirds of all data on the network. Whilst Huawei have excelled in the development of HSDPA/HSUPA/HSDP+ as they have taken marketshare to the point that today sees them leading the field; what will motivate them to create the flat architecture needed to open the mobile web?

The content space is no better with those that provide free content doing better than those who have a subscription service. The quality of the network means that very few attempts to watch streaming media by myself have been a success. Efforts by Networks to impose additional standards have resulted in displacing successful content with bland services that nobody wants. The iTunes platform is not something loved by Artists because the economics are wrong however the portal approach of Mobile Networks seeks to replicate this.

The battle between Handset Manufacturers and Mobile Networks seems to have swung to much in favour of the Networks. Sony Ericsson joined others in reporting a slowing of sales this year and a lowering of its average selling price. This means that they will expect to get a better return on the investment it makes in handset design which means that we can expect handsets to stick around longer. The only people I know who upgrade the firmware on a phone are iPhone users who are prompted to do so when they connect the device to a computer rather than over the air. To many early adopters have attempted to do so on other devices and turned them into bricks because of Operator profiles. If we slow the rate of release of new handsets then we will slow the rate of innovation as this is the only way that we can seed new services. We are now looking a handset makers moving towards three platforms in a way similar to the computer market with Windows Mobile, Symbian and Linux. This lowers the cost of deployment for Mobile Networks and makes the developers lives easier because the APIs needed will be smaller.

Recent projects have seen me look at the launch of Mobile Banking in the US. Over the last year they have managed to get over 8M Consumers to move from the Internet to the Phone. Some are just doing simple queries whilst just under half are making payments. This market is serviced by a wide range of service enablers who have acted as trusted providers sitting between Banks and Mobile Networks. All in the process share the rewards in a federated approach no one is talking about "my customers" rather it is about users. Dependent on the handset and my financial needs I can Bank using SMS, Browser or Java Aplet. All those working in Mobile Banking have a common evolutionary path that sees them working towards Mobile Payments and then Mobile Wallet over the next 2-3 years. They will include Store Cards, Coupons, NFC, Access and Keys in the evolutionary steps. They are all able to work on the development of functionality because they have a framework that is stable thanks to the Federated approach.

The work of the European Commission seems to be to reduce the mobile premium to zero via regulation.

Taking all of the points above I would hope that Stratergy in Vodafone would apply some degree of logic that says its time to make a massive change otherwise we face the risk of becoming a dumb pipe. If European Networks do not change the way that they deal with partners then they will find themselves by passed. The difference between fixed and mobile is that mobile has the payments mechanism built in thus connected consumers with retailers the mobile network could take a commission on the sale. If Vodafone were to look outside of Telecoms and say we will become a facilitator in the same way as Tecso's Clubcard provider the ARPU will not come just from handset user but from those that want to communicate with them; this is after all the plan of Blyk. Better software installed at the level of the base station could improve the information that the Mobile Networks gather and thus aid knowledge about the users. At this moment my Network providers know very little about me or my useage of mobile as I us more than one network and so simple bill anaysis fails.

In Europe rather than buying new subscribers the focus needs to be getting more of the current subscribers wallet. As a mobile user we all have a budget, some of the most informed users are those with a limited budget. My daughters and their classmates have an excellent knowledge of prices for mobile and are innovating how they share content off network. What they present for Vodafone is a communication chanel which used correctly will provide revenues far greater than the amount they spend on connectivity. The FMCG community has an excellent knowledge of Brands and are will to pay for a conversation with small groups who they can get to spend money on increasing the money they already spend on a product.

If you look at the failure of WiMAX, IMS, MMS ..... to find a market you will see that one common feature is the lack of a common ecosystem. Perhaps if these technologies had first attempted to form a Federation then they would have been a success? Vodafone has the power thanks to size and footprint. Does it have a CEO prepared to change the game?

Some quick thoughts

Have been busy causing trouble and disrupting poor thinking in some of the big clients that I consult for.

On one level I am ashamed by some of the thinking that I have seen from the Blue Chip Strategy Houses and have to hope that clients will reject the invoices when they are presented. However I fear that the fact that people were not fired if IBM were hired rings true when it comes to Bain and McKinsey.

Over the last week I have been forced to look at the published analysis of Mobile Broadband in Europe more than I would have chosen to. Clients have asked will we see the Mobile Networks follow the fixed in becoming just a dumb pipe? The one thing that I think will stop this is the payment relationship that the mobile networks have, if you already have one payment mechanism why would you need to invent a new one as you did with pay pal on the fixed internet. I also think that Voice could play an important part in the new data services that we will use. Vox shows some of the possibility with turning you voicemail into text. My Opera browser on the desktop shows some of what might happen with its voice controls. Before you buy into mobile broadband, the situation in Sweden, Finland or Austria is not something that can be used for the Globe or even the five biggest European markets on the basis of population. PC ownership in Spain and Italy is far lower than in Northern Europe for a start.

What are Nokia doing with Symbian?

Since the departure of Psion from the party it started Nokia have controlled the shape and direction of Symbian. We are told that Symbian leads the Smartphone market in terms of sales globally. However do Symbian phone's demonstrate that they are smart? When I was a Psion user you had a community of geeks who developed and exchanged software which they hoped they could replicated on Phones. They failed because the Networks were closed to personalisation that was more than just wallpapers and ringtones. I have explained that I see handsets as looking somewhat like the computer market of the mid-1980's in that we have too many Operating Systems. Only history will prove if Symbian was the DOS3.1 of mobile OS rather than VAX. The power of Nokia has put Symbian at risk because of its close association. At the moment all I see is Nokia saving money paying licence fees and the demise of S40 because the only reason it is used at present is because it has a lower charge. If they both have a zero cost Nokia will Supersize the OS with S60.

Was Motorola's new handset the last roll of the dice? This weeks new handset with its Kodac 5Meg Camera was behind the curve once again. Is this something to show that they still are around in the hope that they can find a buyer? Will be interested in seeing how public Huawei are about the PE House offers for a stake in their Handset Business. Should give an idea as to just what my old Motorola shares are worth not that I expect to be able to more than buy the family a round of ice creams with the "profits"!

Today's FT shows that what some Vodafone shareholders wanted may be about to come to pass with the Head of Verizon talking about taking control and buying assets overseas. The new CEO faces a challenging time when he takes the top job at Vodafone. I expect that those in Newbury are on for exciting times for the next 12 months.