Views on the new media market

Scale is necessary, but not sufficient for mobile app stores

As the Nokia marketing machine starts moving I'm hearing the mantra "Ovi store gives you access to 400 million devices compared to the App Store's 30 million" repeated again and again. This happens frequently in europe, to cheers - culturally Nokia is seen as a global success born out of europe, while Apple is a US company.

The problem is that merely having access to 400 million devices isn't a sufficient condition for success of the Ovi store. The users of those 400 million devices have to have some desire to discover and purchase applications.

Historically this has been a challenge for the entire mobile phone industry - outside the niche of mobile java games there are few success stories for mobile applications delivered "OTA" - all the success stories have come from companies who deliver software that is licensed by OEMs and bundled in devices.

The Ovi store faces this same challenge, the last offerings from Nokia (Nokia Content Download, formerly Preminet, formerly Club Nokia) have all failed to be
"app store level successes" - they have all failed to generate download levels in excess of 30 applications per device (implied by 30 million units and 1 billion downloads)

While it's possible that this is a failure in execution by Nokia 3 times, and they will get it right the 4th time, I suspect that Nokia have executed superbly 3 times already, and will continue to execute superbly the 4th time - but with similar challenges in getting large levels of success.

Maybe the problem isn't in the execution, but in the desire amongst those 400 million device owners to get any additional applications. Those phone users view their phone as "just a phone" and don't want to get additional applications on it to complicate it - indeed if they wanted to get a device for applications maybe they also have an iPod Touch, and use Apple's App Store offering.

The challenge for Nokia here is in educating phone consumers that there are valuable applications for their phones that they can get - and this is further complicated by the fragmentation introduced in the mobile market by the operators who sit in between the Ovi Store and the consumer.

While Nokia has the scale - there is still more needed to make the Ovi store a success, educating consumers to the value of applications on mobile phones is no small part of this - and for this Nokia will need partnerships with companies creating great mobile applications.

Symbian Foundation - where does the money come from?

The Symbian foundation has been getting some great press coverage around CTIA - but one question I haven't seen asked is - where does the money come from?

The Symbian Foundation is expected to have 200 employees - now when you include buildings, marketing, and other costs that means I'd expect the foundation to have annual costs of around £20m ($30m for my international audience)

Now foundation membership costs $1,500 per annum. So the foundation could be self funding if it can get 20,000 members. Given the sizes of previous Symbian particpation programs I'd expect 2,000 is a more likely level of participation. This leaves a rather significant shortfall.

It is likely the more active members of the foundation will be persuaded to provide additional funding - which means that the likely source of any shortfall is Nokia. This is fine - but Nokia is also funding most of the development of Symbian code by virtue of employing the majority of the engineers from the old Symbian Software organisation. How long will they see that there is value in funding the Symbian Foundation as well - and what level of influence will they expect from their funding?

In the long term I'd expect to see either a much smaller, lower cost Symbian foundation, or more Nokia influence than in other open source initiatives.