Monday, 25 January 2010

All I want for Christmas is some functionality for my iTablet

I'll be clear up front, I'm not convinced that the iTablet actually exists - Apple are very good at mis-information and the online community sometimes needs to curb its enthusiasm! Anyway, here's my "Christmas list" for iTablet functionality:

1. At least 6 hours of battery life/ 1 week of standby
2. Integrated HSDPA and wifi
3. Reasonably priced books on iTunes!
4. Some mechanism to attach a keyboard and use it like a netbook
5. A decent GPU (iPhone games were my guilty pleasure in 2009!)

Not much to ask, is it? I think I'll be okay on 1,2 and 5. I think 4 is pushing it, as it'd cannibalise Macbook (Air) sales. #3 remains to be seen.

My view is that books have far less replay value than movies - I wonder whether a "books as a service" model similar to LoveFilm would be more likely to succeed than a straight up iTunes music model. I've forgotten how many times I've passed a paperback book onto a friend. The same simply isn't possible with eBooks because of DRM, so I suspect another model is required - a digital library for the twenty-teens? You heard it here first...

Wednesday, 13 January 2010

A conceptal operating model for future mobile Telcos

A colleague and I have been thinking about some of the developments in mobile and have come up with an idea about the structure the mobile industry seems to be heading towards and the strategic issues that could result from the journey towards it. Conceptual at the moment, but it might be interesting, so I thought I'd share:

  • We started with the premise that consumers have become ever more handset-centric, particularly post-iPhone. Operators have therefore moved from subsidising the expensive handset to enable consumers to access their service, to financing their access to devices;
  • We wonder whether this leads to a different view on the operating structure of mobile Telcos. The long anticipated netco/ servco model may be an intermediate state, but perhaps a more apt analogue of the operator’s future model is that of an automobile manufacturer;
  • Why do we say this? Well, the modern auto manufacturer is as more of an assembler of components into a product than a vertically integrated factory, just like the modern mobile Telco. Furthermore, the industry regularly finances the consumer’s access to an expensive product (the car), and differentiates itself not only by its product (which is a commodity to many buyers) but by the terms of access to the capability (mobility, via the petrol station), by retail experience and, moreover, price and terms of finance;
  • Similarly, the smart phone is a pure luxury item that is expensive for most consumers and offers access to increasingly vital multi-dimensional high end communications (via the network – as commoditised as the petrol station...);
  • Operationally, auto manufacturers have a shared, integrated supply chain. They are heavily consolidated into a small number of global groups and share many of the same suppliers. Notably, they also tend to run a finance arm as a separate business;
  • Some of these characteristics are already beginning to emerge in the mobile industry. For example, the growth in the service businesses of Ericsson, Nokia and the nascent throes of network sharing (not to mention ongoing consolidation within and outside core territories). We may also be seeing finance businesses developing, such as O2’s recent foray into retail banking in the UK;
  • Despite its scale, the industry is still very young – 25 years at most, whereas the automotive industry has been going for over a century and has trodden much of this ground before. A couple of lessons that we think are interesting from their journey are:
  • The importance of financial products as value generators in a commoditised industry – what is the difference between “handset subsidy” and “handset finance” – could the latter be used as a tool to ensure the return of the asset for resale or recycling, just as many cars are leased, not bought outright...
  • The importance of building an industrial commons, not simply “outsourcing” – endlessly squeezing suppliers to support margins has ultimately back-fired on the US majors, particularly as their Japanese counterparts did the opposite and are thriving;

  • Both of the above have significant implications on the structure of the operator, far more so than netco/ servco, which simply puts today’s functions into a separate business

That's about as far as we've got so far. Any thoughts then feel free to comment :).

Monday, 11 January 2010

Does Indian acquisition of iLab indicate dawn of post-outsourcing?

I thought the news that Reliance Mediaworks is to acquire iLab was worth sharing. The business case for this kind of acquisition feels very strong and it may turn out to be a shrewd move on Reliance's part.

In the short term there's the obvious benefits of linking the growing Indian-language production industry back to its biggest market. In thr future, however, the expansion of digital production capability worldwide and the growth in the extend of broadband infrastructure in India could lead to a lucrative business outsourcing metadata tagging, rough editing and the like, taking advantage of the low cost of file transfer in the digital production environment. Interestingly, this is something we suggested for the Digital Production Partnership (PDF), in 2008, hence I'll be watching its success or otherwise with interest.