Views on the new media market

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?

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.

And one more thing

So Apple launched a new category yesterday. It's the web pad. Sorry, I mean the Tablet PC, no, no, I mean the MID, err, the eBook. Well something like that anyway.

What consumer want has the iPad converted into a need?

Apple have a track record in bringing products to market in an existing area, and executing better than the incumbents in creating high end, premium, high margin products. They have achieved this with desktops, laptops, portable music players and phones. As Steve Jobs presented the iPad is targetted at the space currently occupied by netbooks, and previously occupied by an array of products, none of which have demonstrated huge success.

What has made netbooks a success in this category? Price. Netbooks offer the promise of laptop functionality at a much lower price point - making them an acceptable additional device. The iPad is close here - the entry level device at $499 is close enough to netbook prices at around $300 to cause people to look - though the gap is still significant enough to dissuade many people.

The same is true for eReaders - Amazon's Kindle is $269 - so it's possible to get a netbook and a kindle for the same price as an iPad. Will consumers view the style and functionality of the iPad as worth the premium?

iPad has some very elegant software in it - it seems to do what it's aiming at very well - what is the likely impact?

Winners

• iPhone software developers. With the marketing hype and hope around iPad skilled iPhone software developers will find themselves even more in demand
• Digital media companies - particularly those with a clear content monetization strategy built off a solid web presence
• HTML5 + CSS developers - Safari in the iPhone OS is significantly ahead of most browsers in what it can do
• RIM - business people with money, and wanting a portable "iPhone like" experience can now keep their Blackberry (with all the advantages of power consumption and corporate email) and buy themselves a personal iPad - less pressure to get iPhones in corporates.
• Amazon - the rush to get eBooks will help Amazon's retailing - you can after all read your Kindle books on the iPad, using the Amazon Kindle iPhone application, I'm willing to bet Amazon can be a better book retailer than Apple - if they no longer have to produce and sell hardware even better - they make money on the content.

Losers

• Adobe. No Flash on the iPhone makes Adobe's core proposition to web developers weaker. Anyone who want's to reliably deliver video to the iPhone + iPod Touch + iPad economy needs an HTML5 solution as well as Flash.
• Intel - Apple's delivery of a superb ARM based browsing solution hurts Intel in the growing low power market. Expect to see more smartbook type notebooks based upon an ARM core with much better battery life than intel based devices
• Microsoft - the emergence of a new "application economy" around iPhone OS hurts Microsoft's long term position in being able to leverage Windows as the platform of trust for application developers

Let's see 1 year from now where these players end up.

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.

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.

Symbian Foundation tries another binary compatibility breaking experiment

Symbian Foundation is starting on a path to a brave experiment on the importance of a catalogue of applications in the mobile phone space.

The Symbian^4 release of the platform will break compatibility in a big way.

What does this mean?

Applications built for the 100m+ devices on Symbian before the ^4 release will cease to work, and developers will need to rewrite parts of their applications for new devices.

This is a brave experiment by the Symbian Foundation. While undoubtedly it will create open space to make great products by getting rid of legacy, it does level the playing field with other new entrants in the market. Symbian^4 devices will be a new platform, just as iPhone, Android, LiMo, Palm WebOS devices were when they first launched - so they better be great devices to attract developers.

Traditionally "consumer" platforms have been successful if they have maintained compatibility - Microsoft Windows is the iconic example of this, as each release software from the previous few releases - and with release cycles in 3-4 year windows, this means that 10 year old software continues to work. Other platform providers have learned from this - Apple provided an excellent compatibility story for consumers in moving from traditional MacOS to OS X and then from PowerPC to Intel architectures. Similar examples can be seen in gaming consoles from Sony (PlayStation) and Microsoft (XBox) and Nintendo (Gameboy -> Nintendo DS)

There are other examples where devices have chosen to break compatibility - and failed as they haven't attracted the software catalogue and consumers have chosen other devices as they cannot take advantage of their back catalogue of software. Sega's transition from the successful MegaDrive to the Sega Dreamcast was not successful for them.

Developer adoption is more mixed - developers will move to a new platform that provides them with sufficient advantages - the success of new product & platform introductions such as iPhone, Java demonstrate this. Once on the platform developers do expect a continued level of compatibility - developers don't value having to rewrite old code. Successful software platforms such as Java and Flash have understood this, and provide managed solutions to allow developers to reuse old code without changes - but when adding new code take advantage of new features.

There is one particularly pertinent piece of history here. Symbian has broken application compatibility once before.

In the transition from "EPOC" a PDA operating system that delivered high performance on 2 AA cells and a 18Mhz ARM7 core - Symbian moved to only supporting Unicode for mobile phones.

This meant that all software written for the old PDA products needed to be rewritten.

What happened then? The main licensee, and the originator of Symbian, Psion never made the transition to unicode products, and ultimately switched to producing Windows CE based products only.

So if history repeats itself with Symbian^4 with Nokia in the role of Psion, I would predict that future Nokia devices will be based on a non Symbian platform.

Of course there may be another lease of life for Symbian after Nokia - just as there was for Symbian after Psion.

A brave experiment indeed.

Chrome OS is an opportunity for Microsoft

Google's announcement of Chrome OS today - with precious little detail is still interesting. While the proof of whether Chrome OS will have a significant impact on the market long term will have to wait for key details of what a full implementation of Chrome OS, together with supporting applications and business models consists of it won't be a small undertaking. A complete consumer OS today needs to have

• An email client that supports POP and IMAP clients - Exchange support would be nice too
• Audio player
• Video player
• Word processing application
• Spreadsheet
• Photo management
• Contact management
• Calendar

All these need to work offline - while it's clearly possible to build these using web technologies making all these web technologies work seamlessly offline is harder - and the competition is a very mature, offline operating system.

The other critical question is - what is the business model for device manufacturers - even if these components are open any full OS has patent infringement risks, these risks need to be bourne by someone - whether the device manufacturer, or the supplier of the components. Google may even be more creative - and offer device manufacturers a revenue share of advertising traffic that comes from Chrome OS devices. Mobile phone operators are very comfortable with subsidising mobile handsets that generate voice revenue - why not web devices that generate advertising revenue?

All of this represents a challenge to Microsoft's operating system and Office revenues on the desktop - so how might this be a challenge?

Microsoft's strengths lie in creating great desktop applications, and they have the tools, skills, engineers and ecosystem to continue to do this. As Google embraces the desktop with Chrome OS their core skills in creating great, scalable server software don't provide as big a strategic advantage as before.

If Microsoft take their traditional approach of "embrace, and extend" - and provide a great HTML5 runtime in IE8, and great HTML5 developer tools to .NET developers - then add some .NET extensions to IE8 (and, being creative people add .NET extensions as downloadable plugins for other browsers) then Microsoft can take advantage of their traditional base of desktop developers, and focus on creating great productivity applications.

Microsoft Office Online, offline running on Chrome OS maybe?

The product or platform challenge

There is a huge attraction today in building a platform - whether it's a software platform competing for space on devices (Android, Symbian, LiMo, Java, Flash, WebKit, Opera), or an "in the cloud" platform on the internet (Amazon, Facebook, Twitter, Myspace) - what all the new media and technology upstarts want to be is to be a platform that has multiple great products from innovators both within the platform company and outside the platform company.

We've seen this evolution before - both in technology (the evolution of the mainframe platform companies like IBM, the desktop platform companies such as Microsoft and Intel) where the platform consisted of hardware+OS software and the products were software applications that ran on the combination and also in media with the creation of the TV broadcasting companies - where the platform was the (licensed) TV broadcast infrastructure, and the products were the TV shows.

In both cases the platform owners were able to leverage huge returns over a long period of time, and create large barriers to entry to competitors.

No wonder everyone wants to be a platform.

So how do you go about building a platform?

Platforms succeed because they have multiple, great, products that use them - so to create a successful platform you need to first create multiple great products. Sometimes in the rush to win the platform wars this essential fact can get lost - and people hope that merely by building a great platform automatically great products will get built.

Unfortunately it turns out that there is more to building a great product than merely starting with a great platform. While a great platform can help you build a great product - it doesn't stop you from building a mediocre product.

This is a challenge for anyone who wants to take advantage of a platform to create a product - how do you pick the right platform to build your product on?

My recommendation? Look for the platform where the people responsible for that product are focussed on creating multiple great products of their own using the platform.

Looking at the platform landscape today I see the following as clear winners

• Apple (Mac, iPhone/iPod Touch, iTunes Store are all great products, and can be used as great platform)
• Amazon (Amazon's store, Amazon Marketplace are great products, so I'll continue to use AWS as a great platform)
• Open Web and WebKit - WebKit's quality and performance across multiple devices shows potential, and where WebKit isn't there the web standards are a great platform to develop against
• Linux (server side) - for web services Linux has such a rich, flexible heritage, and such a broad range of technology available it's an great platform to build with

I'm also keeping an eye on the following - as they have great products and the potential to be great platforms

• BBC - iPlayer is a great product, if this becomes a platform it could be a global success
• Google - search is a great products - and they have the potential to be a great platform company, but it's still early for their other products and platform plans
• Cisco - great network products, but not yet clear how they are leveraging this to be a platform
• Adobe - some good products, some that are OK, but increasingly challenged by the Open Web

Android ups the game

With the latest release of Android devices such as the HTC Hero Android looks increasingly compelling as a platform for mobile consumers as well as being a compelling platform for developers.

A significant challenge to application developers has previously been that Android applications need to be written in Java - which is fine if an application is being developed from scratch, or ported from an existing mobile J2ME platform, but for applications that come from either a desktop, or a mobile RTOS platform the language of choice has long be compiled C code.

By enabling companies to port existing C or C++ libraries and wrap those in Android specific UI's (written in Java) Android have significantly reduced the barrier and cost to developers who are creating applications that run across multiple devices - from desktop through to embedded devices.

As we see more people experimenting with Android on different platforms (netbooks, mobile internet tablets, and I expect to see Android on set top boxes too) I'll expect to see more innovation from application developers.