Views on the new media market

Vodafone 360 communications drives networks

Vodafone announced Vodafone 360 last week, with much fanfare, and many people focussing on the new, LiMo Foundation based Samsung Vodafone H1 which certainly has a beautiful looking user interface - though I'm slightly concerned about the amount of empty black space on the device, just how readable is that text in those small boxes going to be?

All the excitement about a new phone the more interesting piece of the annoucement - the set of network services that Vodafone are rolling out has been somewhat lost.

Even more interesting is that Vodafone also announced support for these services on other handsets - of particular interest to me was the annoucement of support of Vodafone 360 on the Nokia 6730. This phone is unlikely to generate much excitement - it's a standard candybar device of the same form that people have been carrying around in pockets and handbags for years.

As such it's likely that as Vodafone 360 rolls out to the mass audience, more people will experience Vodafone 360 for the first time on this Nokia handset than on a LiMo based Samsung handset.

So what will Vodafone 360 look like to them? Vodafone 360 on the Nokia handset centres around the connected address book - it seems Vodafone have been reading my post from February, which is that Vodafone need to

• Drive more connections between people and businesses
• Drive more connections between people and other people

Vodafone 360 does exactly this. Integration of social networks drives more person to person connections - whether it's messages as a result of status updates/photo sharing/location sharing, or businesses to people connections from application stores with the Vodafone connection.
The challenge for Vodafone is now to relentlessly focus on this core vision of driving connections - and not get into distracted by trying to "sell content" - content will sell alongside these connections, if Vodafone facilitate the connections.
My experiences from Live Talkback are that mobile phones have massive potential to drive connections with mass scale audiences - since launch we've already had over 65,000 votes on the Live Talkback platform - with individual events showing over 10,000 votes alone - people have a massive desire to connect, and interact. Mobile phones are a large scale social tool, and mobile companies can benefit from understanding that.

Flash on iPhone?

Adobe have announced a distribution platform that directly addresses the challenge to developers of getting your application found by consumers.

Their business model is simple - they buy advertising space from developers at $5 CPM, and they sell installs at $1 per install.

More details on the Flash Platform Distribution service page.

What is interesting is that they also support iPhone applications - is this an early indicator that Adobe will at some toolchain support for Flash on the iPhone? If so it's likely to prove disappointing to Flash developers, as they are specifically targetting "Applications" with this solution - which might mean no flash in browser for the iPhone.

Vodafone 360

Vodafone are expected to announce Vodafone 360 on Thursday this week.

I'm watching this announcement with great interest - as Vodafone has been quiet in the rush of operators to launch "App Stores" - yet with Vodafone's size and scale they have the potential to influence large numbers of consumers globally.

Vodafone have been undergoing a bit of an internal refocus recently - significantly their CEO Vittorio Colao moved from massive Vodafone site at Newbury to Paddington while an office move for the CEO of a multi national isn't all that significant, the message to Vodafone staff that the focus is moving to the team in Paddington, significantly the Vodafone Internet Services head Pieter Knook who is at the forefront of driving Vodafone's push to generate new revenue from internet services.

Vittorio presented the following slide at a recent investor's conference

Which sets out the two sides of an operator - both an efficient raw data pipe to customers, and also a "smart pipe" which enables new distinctive Vodafone assets to new customers for Vodafone.

This in turn creates new Service opportunities - which benefit both Vodafone, and Vodafone's customers.

I'll be watching closely what Vodafone reveal on Thursday - what I'm expecting is

• A new Vodafone 360 branded handset jointly produced with Samsung
• Social media integration, powered by Zyb
• An Application Store that supports JIL and also LiMo Foundation platform binaries

What I'm most interested in is how Vodafone combine the reach they have with customers, with the services the offer to third parties - with their marketing skill and reach they have a huge opportunity to bring mobile applications and services to far greater numbers of consumers - which open more opportunities for developers.

Adobe acquires Omniture

So Adobe (ADBE) is acquiring Omniture (OMTR) for $1.8bn. While this is well within Adobe's comfort zone (the management team at Adobe swallowed up Macromedia for $3.6bn with barely a ripple) it does look pricey for a company that has $300m revenues and around $100m earnings - 6 times revenues, 18 times earnings - Adobe better hope that the promise of cross selling analytics to it's customer base holds true - some major sales acceleration is going to be required to provide a return to Adobe stockholders.

This acquisition underlines Adobe's intention to move up the value chain for web creation - from their core strength in boxed software creative tools, through to value added ongoing services - the data analytics provided by Omniture is one example, and I'd expect to see more acquisitions of companies that provide value around the advertising space - both for creative companies building advertising and running campaigns, and also the exchanges that provide advertisment serving online.

If Adobe+Omniture can use their joint business intelligence to enable digital content creators to improve the traffic and experience on their sites then everyone wins - consumers get a better online experience, business get a more efficient, effective online presence and Adobe and Omniture get an increased share of the value created.

A key risk here is that consumer growth on the internet continues to grow.

While it may be "self evident" that the internet is going to continue to grow 10 years ago much the same could have been said about the TV broadcast industry, with an explosion of digital channels surely there was going to be massive growth in the opportunity for TV broadcasters?

Audience attention today is fragmenting away from the internet - mobile phones have already proved that they can fragment voice revenues, the experience of sitting at a desk, and choosing to call someone using a mobile phone rather than landline sat next to it is an experience that most business people have daily. The convenience of using a mobile (integrated contacts, wireless) is too tempting for many people.

With larger screens and wireless data connections mobile devices are starting to do the same to traditional PC based, online activities. For the early adopters who read this blog I ask the following question:

"Have you ever checked your email on your phone/iPod Touch while sat on the sofa, and only decided to get your PC if there is something interesting there?"

Most people answer "Yes" with a look of recognition. Mobile devices are fragmenting attention away from the PC. For discovery and quick interactions consumers are choosing the most convenient device - the one that fits in your hand, and delaying the PC experience to a more "in depth" activity once content has been discovered.

This behaviour - consumers picking the convenient device is going to continue, and fragment audience attention. The challenge for Adobe + Omniture here is that Adobe's traditional strengths are solely in the online and print experiences. Omniture is great at providing metrics around the online experience, and it's very hard to get metrics from print - but neither company is strong in the fragmented mobile market - the rise of application experiences will further weaken this position. (more on why I think mobile applications will win the battle for consumer attention)

Of course this fragmentation creates new opportunities to drive consumer engagement across multiple screens - and that's exactly what my company Live Talkback is working on.

What language for your mobile app?

5 years ago the choice for a company creating mobile applications was easy.  The clear global leader in mobile was Java (J2ME).  If you wanted reach you needed to create your app in Java, and port to the different platforms and devices.

In some regions there were specific leaders - BREW, led by Verizon in the US, with support in Korea and Latin America.

Smartphones were a segment of their own - with their own solutions, and a self selecting group of high value consumers who could afford handsets, and would expect appropriately high quality applications that could be achieved with access to native SDKs

The mobile market going into 2010 is starting to look a little different, and challenges the accepted wisdom that Java is best for reach.

As we enter 2010, we have even more fragmentation in the mobile platform with more devices coming out with different platforms, platforms supporting multiple development environments.

I expect that by the end of 2010 a mobile developer who is creating "mass market" applications will need to consider the platforms below that will all have greater than 10% market share in countries in Europe

• J2ME - for "feature phones" from Sony Ericsson, Samsung, LG and Nokia
• Symbian - for "smartphones" from Nokia
• Android - for "smartphones" from HTC, Sony Ericsson, Motorola
• LiMo - for "smartphones" from manufacturers to be revealed
• OS X - for "smartphones" from Apple
• Blackberry - for "smartphones" from RIM

There are also going to be some "also ran" platforms - Windows Moble, Palm's WebOS - but at least 60% of the market share is going to be split between 6 platforms, some of which force use of Java, some force use of native code, and some allow choices of the two.

So any application developer is going to need to consider creating at least one native application, one java application, and might choose to take advantage of other technologies (Web Runtime, Flash) that provide an advantage for a particular application.

This significantly increases the cost for any application developer who aims to reach the mass consumer market on mobile, compared to using desktop & web technologies where there are fewer competing platforms and fewer differences between the platforms.

The installed base of PC's globally is around 1 billion, by comparison the number of mobile phone users globally is around 4 billion.

If you want to deliver a new service to the users of those devices you need to look deeper however.

The global number of unique internet users is estimated as 1.6 billion - each PC worldwide is shared between 1.6 people.

In much of europe mobile penetration rates are typically 120% - so by comparison the average phone is used by 0.83 people.

So a developer targetting the "middle class" economies, where mobile, PC and internet usage is growing, and there is disposable income to spend on new applications and services has a tough time - 1.6bn people can be reached using web, managing fragmentation across browsers.

To achieve the same in mobile the developer is going to have to manage at least 6 platforms, where each platform has it's own fragmentation similar to supporting the PC browser market.  While the market is still 2.5 times the size, it's 6 times the cost.  This is compounded by the fact that price expectations are lower in the mobile market than in the PC market.  The most common price point in Apple's App Store for the highest grossing applications is $4.99 - a fraction of what is achieved by the massive revenue generating applications such as Microsoft Office in the PC arena.  

The economics for mobile developers are already tough - and will continue to get tougher in 2010, but it's not all bad news - as the smart developers in mobile will be able to achieve scale beyond the PC, and will be able to reach emerging markets faster than the PC will.  The simplicity, convenience and low cost of mobile devices create new opportunities that the PC can't reach - but 2010 will continue to be a year of investment for mobile application developers.

App Store Shootout - week 1 results

The first week of my App Store shoot out results are in.

As a reminder the competitors in this race are

• Apple's App Store (get app) - the generally accepted "king of the hill" of application stores
• Nokia's Ovi (get app ) - Nokia's answer to Apple's challenger, a serious competitor from the volume king of the smartphone market
• GetJar (get app ) - the plucky outsider from Lithuania proving that you don't have to be a major brand to be a success in driving application downloads

My experiment so far has been simple - I've been offering a free application for live audience interaction and voting (if you are interested in having your content or event featured in the app then contact me directly)

All applications have been available with the same promotional message and content - which is english language only at the moment, and UK focussed as the UK is the launch market, but the application is available globally for those interested in UK content outside of the UK.

So, what are initial results after the first week of being offered for sale?

1. Ovi Store (2935 downloads)
2. Apple's App Store (218 downloads)
3. GetJar (217 downloads)

What is impressive here is the scale by which Ovi beats Apple and GetJar. It's over 10 times the number of downloads in the first week.

Let's look a little deeper at this and understand what countries the downloads are coming from:

Leading country by application store

1. Ovi Store - India (13% of downloads)
2. Apple - USA (78% of downloads)
3. GetJar (report not available)

Apple's App Store is dominated by US downloads - while Ovi is much more evenly spread - in fact on Ovi the application has been downloaded by consumers in 127 different countries, while on Apple's App Store it has been downloaded in just 19 different countries.

Another surprise from the Ovi statistics is different handset models that are being used. Live Talkback is offered on 3 different form factors of handset - QVGA Portrait devices - the traditional "candybar" type QVGA smartphones. QVGA Landscape devices - the email focussed enterprise devices mostly, and the new touch devices - the 5800, N97 and 5530 devices.

The QVGA Portrait devices so far have proven to be the most popular with 55% of downloads, the second most popular are the touch devices - with 34% of downloads.

There is a wake up call for iPhone developers here - if you are looking for downloads outside of the USA, developing for Nokia devices and using Ovi Store could be, based on the results so far 5x more successful than an iPhone focussed strategy.