Views on the new media market

Mobile phone manufacturers lost customers

We have launched Live Talkback at Confex yesterday, and I had the opportunity to meet many people who organise and run hundreds of meetings and events across europe every year.  Live Talkback lets them get their audiences involved and engaged in their event - and our solution is both better, and approximately one tenth of the price of our competitors - so we had a very successful first day.

At the event I got to see the reality of the mobile industry with the real public - asking people to pull out their mobile phone and use a mobile service at a show.  This is a target audience who is frequently away from their desk at an event, or a meeting, so mobile connectivity is vital to them - while some people had forgotten to bring their business cards to the event nobody had forgotten to bring their mobile phone.
So what were the phones we saw?

Exhibitors overwhelmingly had iPhones - they valued the rich experience, and it was fun to watch our competitors using Live Talkback on their own iPhones, and going "wow, cool" - another converted customer.

There were a significant number of Blackberries in the audience - often held in front of people checking their email while they walk down the aisles of the show (or maybe voting on the show polls with Live Talkback's Blackberry application)
At least half of the audience though were carrying phones that were around 3 years old, and very battered looking.  When we explained how to use Live Talkback - go to m.livetalkback.com in your mobile phone browser - a common reaction was "My phone doesn't have the internet"  The suggestion of "why don't you try?" - resulted in a success every time, often with a "wow, I didn't know my phone could do that"  So it turns out that consumers in the UK market do have phones with browsers, and are data enabled - yet are not aware of the fact they could use this.

So in spite of nearly 10 years of marketing mobile internet services (Vodafone Live launched in 2001 for example) - the awareness of the internet on phones other than the iPhone has not reached about half of the UK phone buying public.
As bad is this section of the phone buying public seems to have no desire to get a newer phone - they are happy with their 3 year old model, yet few of them are wearing 3 year old suits, or have 3 year old designer handbags.  It does not seem that we can blame the economy for this, the problem lies in the fact that the mobile industry is not providing them with sufficient perceived value.

What is the missing phone?

These people are smart consumers, but they are unlike the technology savvy folk who drive the mobile phone industry.  They value simplicity, quality, elegance.  What does the industry offer them?  3 year old technology repackaged in a new shell, with a cluttered set of features with the minimum investment in software as that is expensive, and all they want is a low cost phone, right?

Where is the "elegant phone" - the phone that is beautiful, and robust, with a simple set of core features done extremely well - yes it is 3 year old technology, but the watch on my wrist has technology that is about 100 years old, and it's still executed superbly, and continues to run reliably after being in continual use for 16 years.
Nokia and Samsung come closest here, but both suffer from the assumption that just re-using the software from older devices.  As the mobile phone market further splits into the smartphone "haves" and the featurephone "don't want's" will anyone successfully address this market?

Best in the world

It was Mobile World Congress last week - the annual get together for people in the mobile industry, and me, and 48,999 of my dearest friends descended onto Barcelona and took over 130,000 square metres of exhibition space and turned it into a temple of all things mobile.

Much has been written about announcements at the event, unfortunately little has been written about the incredible developments at Powermat - who not content with providing wireless charging for mobile phones and other consumer electronics, are also diversifying into wireless power for martini glasses.  Yes, a martini glass that lights up when you place it on the right spot on your bar. How did we ever live without it?   The next evolution is certain to be the self chilling beer glass - pour a warm beer into the glass, place it on the mat, wait 15 minutes - voila - chilled beer.  A new technology revolution for brewers.

Traditionally phone manufacturers use MWC announce their key new phone lineups for 2010 - with three exceptions (Nokia, Blackberry and Apple) this year was the same.  It is interesting to look at positioning statements from manufacturers, and understand how this helps them dominate categories.

Apple

Apple have set the standard that everyone else is following at Mobile World Congress.  Touch was everywhere - as were applications.  Why?  Apple have, and continue to utterly dominate the mobile world in two categories - Internet, and Applications.  Their web browser is undoubtedly the best in the world on a mobile device, and their Application store has a richer choice of applications, and remarkably few poor quality applications - maybe a result of their approval process?

Blackberry

RIM continue to dominate in email devices.  Mobile World Congress is a fascinating event - I saw more people carrying two phones, iPhone and Blackberry than I did anywhere else.  Clearly Blackberry's offer of reliable messaging and voice, coupled with Apple's excellence in Web and Applications is a killer combination for rich business people.  As anyone who has used an iPhone as an integrated device for music, web, applications and email will know the iPhone balks at going more than 8 hours away from a power socket.  This is a weakness that Blackberry can continue to exploit - and with a pending webkit based browser it will be interesting to see how many people they can wrest away from iPhone adoration.

Nokia

The elephant in the room for any mobile event is Nokia.  They remain the worlds number 1 handset manufacturer by volume of shipments - both in overall volumes, and also in the high margin smartphone category.  Any consumer facing service will see that the majority of their users are on Nokia phones.  In it's core market of building high quality, reliable phones at low cost Nokia remains the master.  The lack of any category defining phone however means that there is little to write about.  It is interesting that Nokia chose not to announce new phone lineups at MWC - preferring to focus their marketing efforts on the Ovi store instead.  I look forward to seeing what Nokia can come up with during the rest of 2010.

Sony Ericsson

Once the people who defined, and won the category of "Camera phone" with the Cybershot series, and "Music phone" with the Walkman series, Sony Ericsson continue to lack focus on a category defining winner in the mobile phone space - their headline announcements were around the X10, a small Android phone.   Tough positioning in the Android phone space - with in total 48 different Android phones on show at Mobile World Congress there is clearly a large number of bets on Android as a way to beat Nokia - none quite answer the question for me "what is an Android phone best in the world at?"

Samsung

Samsung are the world number 1 in many of the markets where they choose to operate - from flash memory, televisions and other consumer electronics they have the ambition to get to number 1.  In the mobile phone market they number 2, and still quite a long way behind Nokia.  The key announcement at MWC was the Samsung Wave - the first Bada phone.  This is a phone that is aimed at Samsung's core market - feature phones, those devices that people who are unwilling to pay for smartphones carry around. There are a lot of these - even the most aggressive forecasts for smartphone use in western europe show growth to only 50% of the market by 2012.  Samsung's investment in Bada, and the release of the Wave shift the capabilities of traditional smartphones to the feature phone category.  While their success in this area will be seen as bad by developers as they continue to fragment the mobile platform market, for Samsung I predict great success.  By focussing on a core market, and bringing all their efforts to bear on a single proprietary platform the are able to differentiate from others and excel - creating category defining products.  I believe the focus the Koreans are showing gives them the best chance of toppling Nokia from it's number 1 position by 2012 - but as the Finns are playing their cards close to their chest right now, it's far from certain.

LG

The most surprising announcement I saw at MWC was the announcement by LG that they would be working with Intel and Nokia on the MeeGo platform (the platform that Nokia use in the N900 device)  I will be interested to see how this develops - but for any partner competing with Nokia on the same platform as Nokia life has proven difficult in the past - experiences from Symbian prove this as Nokia has been able to use it's scale to produce more devices, with more features at lower price points and faster than any competitor.

HTC

HTC continue to show innovation in their lineup - and their early bets on Microsoft and Android are paying off - as Microsoft begin a renewed push behind Windows Phone 7 and HTC apply their engineering skils to the devices for this platform I expect to see more growth in smartphone sales from HTC.

Motorola

Motorola continue to be almost invisible in Europe - and having made a big bet on Android are likely to continue to be a minor player unless they can come up with a category defining device.

Coming out of the event I'm most impressed by Samsung, and with HTC, and with Google - who are agressively going after developer mind share with the Nexus One (they gave away Nexus One devices to developers at MWC - reportedly giving away $750,000 worth of devices) - this implies they are positioning the Nexus One as the "Developer's phone" - whether this translates into compelling applications that will drive consumer demand we'll wait and see - in the past on the desktop it has (Microsoft created their leading position in the desktop OS space by partnering effectively with developers).  Unfortunately I didn't get a chance to get my free Nexus One - you know where I am Google if you've got some spare.

AIRpad beat Apple at their own game?

Adobe have been doing an excellent job in co-ordinating media to focus demand for Flash on the iPad. There have been many arguments put forward - one of the most thoughtful pieces is by Jeremy Allaire on TechCrunch one call that I haven't seen is for Adobe to step forward and put their money where their mouth is. Why don't Adobe produce a competing tablet device?

Adobe has all the right partnerships in place - they have been working with ARM for over a year to accelerate flash on ARM cores. They are working with HTC to put Flash onto HTC devices, and have a relationship with Qualcomm accelerating Flash on Snapdragon devices. So building a device wouldn't be that hard. What about selling it? Adobe has great channel to the creative market - who are used to paying around $599 every 18 months for upgrades to Adobe's Creative Suite products. Their consumer products have an existing channel to market through PC and accessory stores - so what would an AIRpad consist of:

• Simple flat, multi-touch display - the power here is in the software platform
• OS - small, simple and light - there are multiple linux based offerings here, an obvious one to pick would be Chromium OS
• Browser - webkit based - Chrome is the obvious pick here
• Application runtime - AIR - which includes Webkit, and already has it's own application store with a rich set of applications
• eBooks - Adobe Digital Editions which already has deals in place with multiple book publishers

Such a product would provide a great showcase for creative agencies to demonstrate their talents to clients - and also provide a great reference design for other hardware manufacturers who want to beat Apple to license from Adobe and drive distribution of.

With Adobe's success in building products that lead to rich, digital content, taking the step into a digital content consumption platform, complete with hardware would be a great way for Adobe to demonstrate it's vision and commitment to it's creative customers - and enable them to have a rich, broad platform that lets them express their creativity in any way they want.

How about it Adobe? When can I get an AIRpad?

It's all about communication

Rupert Murdoch is keeping himself in the headlines with bold statements like Content is not just king. It is the emperor of all things electronic. He's wrong though. Content isn't king - and never was, the king has always been communication

Before the invention of mass broadcast media people told stories - to small or larger groups, people talked to each other, shared stories, and embellished them. Plays were written and performed and this tradition grew leading to the creation of mass broadcast media - whether print, radio or television.

Along this journey part of the art of communication was lost however - the part that your audience is not a passive wall, but a set of thinking, breathing, story telling human beings. The reason broadcast media is successful is that it excites conversation - not just one way, from the content to the audience, but among the audience, and back to the content producer. In the world of mass broadcast this vital link from the audience back to the story teller has been lost.

Fortunately for us the creation of connected devices - whether telephones, web browsers or mobile phones, this connection is being re-established. Citizen journalism from mobile phone carrying newspaper readers, social network discussions of TV shows and audience influenced mass entertainment such as X Factor are all reconnecting audiences with the broadcaster, and the other audience members. No longer does broadcast content stand in a vacuum isolated from the society that it is talking to - the society, you, can talk back.

Getting people talking does require great content - but it also requires an understanding that people want to communicate - so great outgoing content isn't sufficient, handling incoming audience feedback is also important for success.

It's this gap in understanding that may be the reason that MySpace has underperformed Facebook since being acquired by News Corp - in spite of the fact that MySpace has a richer set of content to build on - Facebook has understood the importance of communication to it's core offering.

At Live Talkback we are working at the cutting edge of audience interaction - it's an exciting place to be - we are listening to you all.

Adobe's innovation dilemma

With Apple's launch of the iPad the number of web devices Flash doesn't reach is set to increase. Will this impact the use of Flash by the creatives who are Adobe's core supporters - it's instructive to look at what Flash uniquely provides, and also how did Flash get to the position it is in today.

While many people associate Flash with animated banner adverts (while in fact plenty of animated banners are in fact animated GIF images), Flash didn't start out there - Flash's roots go back to 1996 with the first release "FutureSplash Animator"

There has always been demand from creatives for high quality, interactive experiences - back in 1995 Macromedia Director and the Shockwave format ruled the roost here, with CD ROMs being the key vehicle for delivering interactive digital content. With the rise of the internet the opportunity for Flash opened, and Macromedia (who acquired FutureSplash and re-released it as Flash) allowed an internal competition between Director and Flash, to drive innovation, and ultimately prioritised Flash over Director.

Flash wasn't always as ubiquitous as it is now however - a key point in driving the ubiquity of Flash was the 11 June 1998 deal between Macromedia and Netscape to bundle the Flash Player as part of the Netscape download package. At the height of the "browser wars" between Microsoft and Netscape this was a key deal in delivering a better experience to computer users - and put Macromedia on the path to be a defacto standard.

Merely being there wasn't enough however - Macromedia were able to continually innovate on the Flash Platform enabling people to get more out of their rich web experiences. If we look at the timeline of Flash with key features we see

• 1997 - Flash 3 release transparency and the object library allowing for richer functionality within Flash
• 1999 - Flash 5 improved ActionScript and provided streaming MP3 bringing sound to the web
• 2002 - Flash Player 6 added support for video on the web for the first time - enabling YouTube
• 2004 - Flash Player 7 added Object Oriented programming and rich vector effects
• 2006 - Flash Player 9 new virtual machine for ActionScript with much faster performance, and full screen video

Each release has also brought incremental improvements - such as the move to h.264 video support in 2007, however with any platform the introduction of major new features has slowed down - as the user base has expanded, and the growing number of existing customers ask for new incremental features, rather than spending time and effort on radical, risky innovations.

While there is an ever growing number of new features in Flash Player the adoption of the new features has slowed down - and from the October 2008 release of Flash Player 10, we are still waiting for the 10.1 release.

This comes at a time when creatives are encountering new platforms on mobile - whether iPhone native applications, Android or Blackberry Java applications, or beginning to think about what they could do with the iPad.

Adobe's dilemma is - do they continue to incrementally improve the core Flash Player and Creative Tools used by the large army of creatives that they deliver to - and defend their platform - or make a major bet on a new area - and strike some new "Netscape" type deals to deliver a new wave of creativity to developers?

What should Adobe be thinking about? We can take our lead from the features that are easily accessible in Mobile devices, yet still very hard to do on the web:

• Accelerated 3D - is ubiquitous in desktop PC's now, and is growing fast in mobile phones due to the popularity amongst consumers of iPhone style smartphone experiences
• Location - many smartphones are location aware - applications and services are being built to take advantage of this - many laptops would also benefit from being location aware for the same applications and services
• 3D Video - consumer electronics and the TV industry is betting on a future that includes 3D video, support for 3D video on the web could accelerate the uptake and demand

I await with interest to see if Adobe have an aggressive as well as defensive strategy to address the growing army of web browsers that do not include Flash.