Monday, 19 December 2011

An early Christmas present for French taxpayers

France became the latest country in Europe to successfully allocate its 800MHz spectrum today, achieving a rather higher sum than they expected.

Not much more to say on the subject, expect that Orange France came within a whisker of breaking the record for amount paid per-person, per MHz for the LTE spectrum. Only T-Mobile in Germany paid more - EUR0.73 vs EUR0.71, demonstrating that even the current economic malaise hasn't dented enthusiasm for next generation communications.

Friday, 16 December 2011

What I've been reading this week

I’m firmly of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye this week.

Digital media

Worth a flick through, although interesting that the website is buggy if you’re not using Chrome. Sign of the times?

The arrogance of the music industry is astounding – why should Megaupload take down something that was legitimately produced and paid for? Do you think there might be a reason the labels and publishers are dying out?

Emerging markets

Old news that I’ve just stumbled on again - I believe that these gateways hold the key for African telecoms networks as onshore cabling becomes more widespread. Malawi is land locked, but could still play a hub role in onshore connectivity.

New business models

This historic deal to merge some of the distribution of the US major cable networks could be excellent news for Verizon’s VDMS digital supply chain business. Having Comcast and/ or Time Warner on board would be a major coup.

Wi-fi has been a big winner this year. Try walking down a street in a major city and finding a spot without some form of coverage... difficult at best, but excellent for the consumer and excellent for device manufacturers.

An interesting analysis that shows how completely Apple has penetrated the consumer market – small screen and silver screen!

The bottom line is that no one knows how many Kindle Fires have been sold. All we do know is that it’s a drop in the ocean next to Apple’s 40Mn iPads in 2011.

And mobile operators still think that NFC secure elements will be in the SIM. Good luck with that.

Technology evolution

Flogging a dead horse, news-wise, but it is interesting to see how Symbian share has eroded as cheap Android devices have hit the market. Microsoft is, however, the right partner in crime for NOK in the markets that matter – those that don’t enforce draconian terms of participation and then steal your IP. As a case in point, Nokia’s former Symbian flagship, the N8 was carbon copied in China... running Android...

And lo and behold, here’s an example of how Android has done for Symbian at the base of the market. Wild proliferation of handset features has driven an acceleration of the chip and chipset market and therefore cancelled out Symbian’s advantage over Android in the hardware that can run it (reasonably) effectively. The user experience on these low end devices is pretty terrible, but how long until it’s acceptable?

In my distant past I had my own radio show that went out online and on AM. Back in the day we had a rack of (old) servers, a couple of mixing desks and thousands of pounds of sources. Now all of that can be accomplished from an iPad. Great news for those trying to take cost out of a radio business. Terrible news for those who work behind the scenes.

Satellite broadband is much under-rated, having taken major strides in the last 5 years. As we become more data-obsessed as a society, then the need to be connected in remote places (like 30,000 feet up) becomes more important and therefore more valuable. All that considered, the $400Mn Viasat-1 satellite, with its 100 metre long solar panels, is an impressive piece of technology!

Monday, 12 December 2011

Handset leasing - the £266 question

This morning, O2 announced that it would offer a handset leasing proposition for UK mobile phone customers. Regular readers will recall that I've been thinking about this for a couple of years now and blogged about it in May 2010 (if only I'd talked to O2 about it).

On the specific deal in question, I thought it was worth working out who benefits from this deal. The answer, to put no finer point on it, is O2. Financially, that is.

The total price of 12 months of £55 a month contract is £660, but you have to take off 12*£20 = £240 for the airtime, so the handset cost equates to £440 for a £499 phone, which would be worth £325 in perfect condition after 12 months.

If you stumped up the full amount for the handset then you’d have spent a net of £174 for the device. If you leased from O2 you’ve paid £440, so the effective cost is £266 for a new phone every 12 months. A great model for O2, as they’re effectively pocketing that £266 in addition to their profit on the service.

c.20% of UK smartphone customers get a new handset in a given year. BIG question is how many of those are regular upgraders and own their own device. Perhaps they’d like another payment option? In any case, I think this is a "watch this space" for 2012, what with further big handset and tablet launches coming up from Apple, Samsung, Sony and Nokia.

Friday, 9 December 2011

What I've been reading this week

A short list from me this week as I’ve been travelling and therefore reading on the iPhone!

Breakthrough technology

If Intel can pull this off then it will give them an advantage against ARM in the mobile processor space. Our ability to fab smaller, faster architectures makes it possible to create processors with more tailored computing units, increasing efficiency and therefore decreasing power consumption

I just like satellites – an amazing piece of technology

The baseband processes radio signals and manages the wireless transmissions of a cell. Moving this processing into the cloud will be a trend in network builds in 2012 as operators seek to create more dense, but also more cost-efficient radio networks.

Media business models

I’m perplexed by this judgement too – there are lots of options for obtaining movies in the UK by all sorts of different means. This is a non-exclusive market and doesn’t need legislative or regulatory meddling.

Things are looking bleak for the broadsheet newspaper industry in the UK – the big question now is at what point the stereotypical “white van man” has an iPad rather than a red-top on the dash of the aforementioned van

Although I’m of the opinion that the role of social media in advertising is overstated, there’s no doubt that it occupies plenty of column inches. The infographic is pretty, if nothing else.

Friday, 2 December 2011

November 2011 Africa investment map

$907Mn of investment in African telecoms was announced in November, much of it related to deepening of mobile network capacity in markets where subscriber growth is ongoing. One of those may well be Nigeria, where regulatory action to enforce subscriber registration has led to a reduction in SIM numbers to about 93Mn. Interestingly, this action has co-incided with 5th operator Etisalat pledging to invest in an additional 1,000 basestations next year to take advantage of what now looks like substantial headroom for growth.

What I've been reading this week

I’m firmly of the belief that participants in the TMT industry need to read widely in order to understand the present and future dynamics of the market. To that end, this post is a collection of the articles that have caught my eye this week.

Technology evolution

Tiny steps towards standardised communications in cars, but positive. The big, long term gambit must be to connect the cars themselves together to enhance safety and navigation, while reducing fuel consumption.

More bad news for AMD. This time they’ve compounded the error of creating an architectural dud by alienating the fab that makes said dud (and used to be a part of AMD). The implications are potentially disastrous for AMD’s 2012 and 2013 line ups as switching fabs means redesigning the product. Bad times in Sunnyvale.

The rate of advance of ARM chips is startling, however I wonder whether we’re beginning to get to the point where successive iterations are bringing successively reduced customer benefits. The move from 600MHz to 1GHz was very noticeable, but how much better will 2GHz be then 1.4GHz. In any case, 3D capabilities are rumoured for the next iPad – Galaxy will go head-to-head.

I’m of the opinion that 2012 will be the last year that the magnetic hard disk will outsell solid state alternatives. This hybrid of the two, which retails at $250 for 750GB, represents an intermediate step towards mass market take-up of SSD.

With apologies for the old news (if only by a few weeks), my view on the wi-gear acquisition is that it enables Apple to add Apt-X high definition audio support to the iOS range – whether they’ll also offer a headphone range is unclear. Apple doesn’t have the best track record at providing accessories and benefits from the ecosystem of accessories around its device as they offer physical customisation of the user experience to go with the software customisation that iOS offers.

New business models

I remember being really excited by the potential for location based advertising in 2006, but we were thwarted by the low penetration of the only smartphone that could actually serve it (the Nokia N95, if you remember back that far). Now that smartphones are becoming more ubiquitous and consumers more switched on to the

Indoor mapping is a step towards a much more contextual (and invasive) mobile retail and advertising model. Or, to put it another way, one step closer to Minority Report by giving organisations the ability to manage demand on their media asset management systems by plotting where people are and caching content up close.

Misinformation is the name of the game in the CDN industry, which always reminds of a kitten trying to make itself look like a tiger. Mass market IP-streamed video is still a decade away and 20,000 tiny customers won’t convince me otherwise.

Mobile industry

2G switch off will be a story only for the most advanced operators and economies in the next 5 years. As usual South Korea are at the forefront.

And this is why... consumer acceptance of smartphones makes LTE networks immediately commercially viable, particularly since the cost of acquiring spectrum is so much lower than for 3G. Notable that the UK is not one of the countries included in the 39.

Tuesday, 29 November 2011

Spending Charlie's £100Mn - thoughts on the Chancellor's Autumn Statement

On Tuesday, the UK Government released the Chancellor's Autumn Statement, an important statement of policy at a time when a double dip recession seems increasingly likely (if one believes the doom-laden rantings of the popular press, at least).

In amongst the sensible stuff about public sector pay caps (about time, given the upcoming strike action by middle class, home owning unionists masquerading as "working class" activists) were two statements about the digital economy. Just when you thought the lessons of the risible Digital Britain/ Digital Economy policy failures had been learnt, here comes another misguided governmental attempt to interfere in a functioning commercial market.

The concept is to assign £100Mn for two things:
1) Improving mobile coverage in the UK up to 99% of the population
2) Urban broadband fund to create up to 10 “super-connected cities”

This is a laudable goal, but as usual there’s nothing in the document about how this will be implemented. The super-fast thing is unlikely to be practical in the real world in my view, at least not with £100Mn to spend.

I suspect that the plan will be the usual one - the tax payer will offer grants to BT and Virgin that enable them to make the capital investment in marginal exchanges economically viable. The trouble is that in major cities the investment case is not the problem, it’s just technically very hard. For example, I understand that BT can’t upgrade many London boroughs to Infinity because of the architecture of the London exchange. Likewise, if everyone in the major cities started buying Virgin cable at 100MBit/s, their network would collapse - £100Mn won’t solve that either. Thoughts of fibre are pipe dreams (get it?) – even with universal duct access, it costs about $100,000 per urban mile – raise that to $300,000 if there are no ducts.

In mobile, free urban WiFi is the most likely route to enabling fast mobile broadband access. This is available in lots of cities round the world – Edmonton and Helsinki are two that spring to mind. I suspect the consumer benefit will be quite limited, however, as WiFi contention will render the solution useless in a major UK urban area. Major further question on that is how the operating costs will be covered? If the plan is for cellular, then you again face the problem of what £100Mn buys you. Answer – not a lot!

My fundamental point is that any investment needs to enable a transformational change in the competitiveness of the UK technology industry and/ or create societal benefits. For example, rather than gifting the money to incumbents, why don’t they have X-prize type competitions to fund innovative solutions to maximise the performance of copper networks? Urban wireless, facilitated by high speed WiFi or even
white space networks could also be quite exciting because it enables all of the fancy augmented reality technologies (like Auresma/ Autonomy) and new business models, like scvngr and Foursquare. By making access available for free, you may create an ecosystem of entrepreneurial activity to take advantage. Again, white space networks are one option – wifi might also be good enough, provided the operational realities can be accommodated.

The long term economic benefits of creating a technology industry to exploit that new technology feel much more meaningful than enabling super-high speed file sharing for students. Even then, I remain to be convinced that the examples of high speed networks “creating” technology economies in Korea, Japan and Scandinavia demonstrably show causality between the presence of those networks and the success of their industries. Let’s not forget that the UK already has a thriving Internet economy and are have advanced services and advanced demand for those services. We’re the second country to have OnLive, Lovefilm has been streaming as long as Netflix, etc... I’m therefore not sure what such a tiny amount of money is intended to achieve.

Chances of any scenario in which the money isn’t totally squandered in quangos feel fleetingly small.

Friday, 25 November 2011

What I've been reading this week

New technology

With all the fuss about ARM vs Intel in the PC/ server/ mobile/ any other device market, it’s easy to forget the other alternatives from AMD. Sadly, “Bulldozer” seems to be representative of the speed of their new architecture, not its effect on the competition. Some commentators – like that linked – believe that multithreaded processes in servers will allow AMD to regain ground against Intel. They miss the point – this is a desktop chip and will compete against other desktop chips. Against these, and against server-specific products, it will get annihilated by the competition.

Darknet activities such as this are a core part of the – accidental or deliberate – effort to segment and even weaponise aspects of the Internet.

Breakthrough technology

Given the criticism that some in scientific circles directed at the experimenters for announcing their puzzling results to the wider community, I think this news represents a certain vindication of that decision. Besides the obvious implications of violating the constancy of the speed of light, a really startling thing here is the extreme level of precision that the experimenters can achieve with their apparatus at both ends of the test rig.

This is the cutting edge display technology of 2020 – the challenge now is making it into a product. If that leap can be made, then the societal impact would be immense if used in concert with ever-improving augmented reality capabilities.

Sounds like a fantastic technology, although I’m typically quite sceptical about power generation breakthroughs until they work in the field at an economic price. Solar has been a massive scam from an economic point of view (although there have doubtless been some small environmental benefits), let’s hope these “leaves” both work and are economic.

BBC R&D have produced some impressive innovations over the years, so it’s nice to see that the move to Salford hasn’t yet degraded their creativeness. The Dalek on page 3 is worth looking at, although I disagree that this represents evidence of an Internet of Things. It’s just a toy!

Business models

Even with a startling growth of 58% YoY, Apple’s brand is still well below that of Microsoft or even IBM in the (admittedly slightly false science of) brand value.

Digital media

Tablets are the perfect replacement for the second/ third/ xth TV set, something that’s now being formalised by the TV platform operators.

The wrapping together of content, device and connection has long been touted as the future. With e-readers and tablets it’s finally something that also desirable for consumers.

And finally...

A nicely written view on the worst tech mishaps of 2011. I heartily agree. Favourite quote: “At this point, RIM is like the deadbeat dad who shows up two months after your 17th birthday and presents you with a stuffed animal in a gift bag. Too little, too tone-deaf, too late.”

Friday, 18 November 2011

What I've been reading this week

Business model evolution

Apple’s new patent, if implemented in hardware, represents another nail in the coffin of mobile operators slightly pathetic attempts to monopolise the nascent NFC market. NFC in phones is a neat technology, but frankly offers limited additional customer benefit above conventional payment and access technologies. If payment in particular is such a draw, then the industry should ask itself how much consumers are willing to pay for chip and pin. The answer, in case you’re wondering, is “zero”. More sensible to make this a very minor part of the phone architecture.

And just to ram home the point, news of this collaboration between Intel and Mastercard demonstrates how likely it is that the secure functions of NFC terminals will lie off the SIM card.

New technology

Great that the UK has finally got an LTE network, however it’s real impact is likely to be small, particularly in reducing congestion around the Olympic Games sites. So few LTE devices are in service that only a few roamers from Europe and business users crazy enough to do data roaming with dongles will actually benefit. Still, from little acorns...

If the rumours are true and Apple are going to release a TV next year, then I hope it works as well as this. Amazing what can be done with cheap hardware and a bit of ingenuity.

The graphics capability of a modern PC is quite astounding. What’s more incredible is that this level of quality will be the mainstream within 2 years. Imagine that on your 65” Apple TV.

Not really a surprise that Nokia are seeking to complement their smart phone/ music store product set with a tablet offer...

...Nor that Amazon are going to complement their tablet product with a smart phone. My prediction is that neither vendor will sell more than 1Mn units of their new product in 2012.

Digital media

Mobile marketing is set for a big year in 2012 and consolidation will be a feature of that success. My sources in London agencies tell me that they’re seeing triple digit YoY growth in the developed markets as consumers become more used to receiving and interacting with mobile ads.

If capital availability and governmental incentives remain good for digital business, then the continued high engagement UK citizens have with the Internet can be translated into an escape route from our economic woes. Here’s hoping.

Wednesday, 16 November 2011

Impressions of Tokyo

I’ve just returned from a week in Tokyo. Having just recovered from the jet lag, I thought I’d share some experiences and impressions about media and technology landscape.

The first thing to say is that Tokyo is a beautiful city. It’s very clean and for the most part rather peaceful. This is helped by the nature of the traffic. Besides the ubiquitous Toyota Crown taxis, almost every other car was either a hybrid or a tiny Kei car – a glimpse into the future of European cities as fuel prices rise and taxes on gas guzzlers become ever more punitive.

Beautiful or not, this year’s earthquake has had significant effects on life in the city. Since the well publicised issues with their generation capacity began, Japan has suffered with undersupply of electricity and this is manifest in the fact that none of the offices I went to were using their air conditioning. Something I hadn’t really appreciated is that modern office blocks are so well insulated that even the body heat of those inside create stifling conditions quite rapidly if the climate control isn’t active. One of my clients have even changed the dress code from suit and tie to short sleeve shirt with no tie to improve employee efficacy in these conditions.

I think this is another example of Japanese ingenuity in problem solving. Although some things (lavatories in particular) are ludicrously over-engineered, there’s an appreciation of elegance in Japanese design, which is attractive. Probably why the iPhone was by far the most common handset I saw. Many people even had two of them – one for business, one for personal. A few people still used the traditional flip phones – principally for their cameras and mobile TV capability. It seems that women under 30 are obsessed by their morning horoscopes – available on breakfast TV and therefore on the mobile broadcast service.

On the subject of mobile, Tokyo has a curiously large amount of microwave towers and overhead cable. The locals weren’t sure what these were. My theory is that they substitute for fibre in shared ducts or price capped fibre backhaul, which I doubt NTT is forced to provide in Japan’s rather weak regulatory environment. My second favourite theory on this is that they provide resilience against fibre breakage in the event of an earthquake. Less likely since the orientation of the dishes would seem as vulnerable as a buried cable. If anyone knows, then let me know!

All in all it was a useful trip. As ever, there was much interest about western market paradigms at the media and technology companies I visited, not to mention amongst my colleagues in the Tokyo office. With a bit of luck I’ll be back there soon as I’d be very interested in seeing what the other cities are like – Tokyo was less of a culture shock than I expected. Either that or all this travelling is making me immune!

Friday, 11 November 2011

What I've been reading this week

Here's a few stories that I've found interesting this week from across the digital world.

Digital media

Mobile advertising is clearly a market with much growth in it, particularly in developed markets. I wonder, however at what point this will merge with traditional online and which set of business models will win out.

The headline is slightly misleading, as the volumes required to access the best discounts continue to rise, but the analysis is typically cogent and demonstrates the very small size of the content delivery market worldwide, despite all the hype that surrounds online video.

HTML 5 has really blossomed this year and Adobe’s announcement that Flash is to leave the mobile platform (albeit slowly) illustrates that fact. How long can Microsoft persist with Silverlight?

Breakthrough technology

I find it startling how willing people are to connect with total strangers, before we get to the implications for Facebook’s subscriber numbers of fake accounts. If you consider the classic Turing Test, then this script shows how social networks could enable more human-like interaction with machines. How about a Siri/ “Fakebook” mashup?

Both robotics and 3D-printing are due a massive 2012 as advances in both reduce cost and increase utility – I see these technologies as now being at the same developmental stage as computing was in 1980. All we need is the “PC” to arrive and make them mass-market... The spider goes to show how far and fast walking technologies have come in the last decade.

This kind of molecular animation with electric fields is key to truly smart materials and I’m sure will revolutionise material science over the next quarter century. Sadly medical advances based on it will be a decade or more away thanks to the FDA.

Business model evolution

GM blocks Saab transaction over IP fears. I think 2012 will be a year for this kind of story. Chinese state money has been used to strip IP from many bankrupt corporations over the last decade, which is fair enough and common practice in other industries, however when combined with the other activities and aims of the Chinese government is of deep concern to developed world businesses.

“Green-ness” of supply chains is a rather abstract concept at the best of times and Greenpeace fail to show the huge productivity upside (and therefore resource efficiency improvement) enabled by these company’s technologies, but the dynamics show how companies are moving to make their supply chains more sustainable for commercial reasons – lack of resource availability and increasing energy prices chief among them. The mass market, however, seems certain to remain uninterested.

Wednesday, 9 November 2011

Note from Japan - cyber attacks

I'm on a week-long trip to Japan to visit with some clients. Although not a reason for my trip, a subject that's come up several times is the alarming recent spike in cyber attacks on Japanese companies. One senior executive at a global electronics corporation told me that they were responding to at least one serious attempted breach every day; another - more worryingly a significant player in the defensive industry - reported similar issues.

This goes to show that the recent London conference on cyber security was very topical as this is a global issue, at least for those companies that embrace and participate in market capitalism. There is clear danger of reaching for apocalyptic scenarios when discussing this topic, but I for one am concerned about the threat of cyber warfare perpetrated by China, Russia and others to the world's economic and political security.

The regimes mentioned are not in any way wedded to the market economy - they and their puppet companies participate as far as needed to secure sufficient economic and material power to sustain their internal political objectives. If that means that the innovation engine that powers creative destruction is rendered impotent by endless plagarism then all the better. As the technological advantage of the developed world is eroded, so the real power of emerging regimes becomes all the more manifest. Stagnation of global development is excellent for them, even if it is not the primary objective of their strategy.

And the threat is not just economic - it's bad for profit margins if China copies your jet engine design. It's a whole lot worse if that engine ends up in the back of a Chinese fighter plane over the Spratley Islands.

Governmental intervention would be one way of protecting our system, but history suggests that public sector intervention tends to be too late to have a positive effect. For me, the answer lies in industrial co-operation to protect vital communications networks and secure corporate firewalls. RAND would love the game theory inherent in this problem - it doesn't matter where Liyang gets its engine design from, it's the ability to leap technology generations that kills you. Therefore one breach breaks the entire system. We live or die together!

I think this subject is going to be a major focus for us in the coming years - hopefully we can contribute to a meaningful solution.

Thursday, 3 November 2011

Africa Investments - October 2011

Investment in African telecoms picked up in October after a slow September, with $284Mn announced, principally in mobile, with the exception of Liberia and Sierra Leone receiving World Bank funding to connect themselves to the ACE subsea cable system.

Biggest deal this month was the conclusion of France Telecom's protracted takeover of Congo Chine Telecoms. FT paid $125Mn for DRC's 3rd largest carrier and an additional $71Mn for 2MHz of 1800 and 10MHz of 2100 spectrum to boost capacity - necessary given DRC's 72Mn population, much of which remains unconnected. At $92.6 per subscriber, the deal looks like a good one for FT and further strengthens its grip on Francophone Africa.

Thursday, 27 October 2011

Blackberry Playbook 2.0 O/S delay commentary

Some thoughts on the Playbook 2.0 delay, since it's topical. I think the 2.0 upgrade issue is embarrassing for RIM and will be bad for their relations with the developer community, but it’s a small part of a wider dynamic in the tablet industry. If you look at the distribution of tablet sales so far, it almost exactly follows the distribution of wealth in the population, which suggests that early adopters are buying as a luxury and therefore buying on appearance, brand and reputation as much as they’re buying on the technical features of the platform. Software is definitely a major part of the tablet experience, but actually the Playbook (or Android equivalents) are not significantly more or less user friendly than the iPad in this respect. Where all of the competitors are currently falling down is that they’re taking the iPad on head-to-head with high concept products at the same price point, but without the great marketing and retail experience that Apple offer.

So everyone is playing catch up in the tablet market and they need to shift their efforts a bit. The 7” form factor is a bit cheaper to make, mostly because the screen is such a major component of device cost, so you can offer a high quality device at a £200-£300 price point, rather than a £400-£700 price point. A data point for the price point thought is the mad rush to buy HP Touchpads when the fire sale began. That suggests to me that in some ways, RIM and Samsung had the right product (accepting that the latter was much too expensive), but were too early to market and got the marketing wrong – there wasn’t sufficient hype in the mass market to get take up. This is why I think Amazon will do very well with Fire now that 50Mn units a year are shifting and consumers are aware of the benefits of tablets.

RIM did, of course utterly shoot themselves in the foot by not offering native exchange integration on the Playbook at a time when many enterprises were moving away from Blackberry exclusivity into a hybrid environment and by not offering a 3G version to the type of user that needed it most. A side issue though.

Worth noting that I am a Playbook user as well as an iPad one. I was interviewed on this topic for Which was nice...

Wednesday, 26 October 2011

Nokia finally gets itself in the shop window

Besides a slight naming problem, there were few surprises in the launch of the Lumia 800 at Nokia World today. I was a bit unimpressed by the stage show, which felt very forced, but the hardware looks good and, according to early benchmarks it offers very respectible performance. A few thoughts from me:

I think Nokia should have been more aggressive in its pricing. I'm firmly of the belief that the mass market smartphone customer makes a simple choice. If they can afford an iPhone, then they buy one - its a trusted choice in a rather confusing world, not to mention its status symbol er... status. Those who can't afford iPhone then choose a monthly payment they can afford and go from there. By pricing the 800 at the same point as iPhone, I think NOK are in for an uphill battle. Rebuilding their brand requires shifting a lot of units and becoming the "next best option" after iPhone; not going head to head with Apple just yet. If it was me, I'd have accepted much lower margins in order to make that position easy, at least until the brand can carry the fight again.

The US story is more of the same - hurry up and wait. I noticed that Mr Elop said they'd be launching a portfolio of devices early next year. Presumeably Lumia is part of that and presumeably the lack of CDMA or LTE support at launch means the operator partner will be AT&T and/ or T-Mobile.

Going on the NOK website shows that the UK launch partners will be Vodafone and 3. I've found it hard to locate a place where I can preorder SIM-free, but will persevere so I can get hold of one ASAP.

Navigation features yet again, representative of the restructure of NOK to put Navteq closer to the core of the business. Nokia adocates will doubtless point out that equivalent navigation facilities cost $100 on the iPhone. I personally doubt that this will be a major selling point in developed markets, given that data allowances are relatively generous for mainstream consumers.

For me, the critical launch today was of the Asha range of semi-smart devices, priced sub-$100. I'm very bullish about the sub-$100 smartphone market in general as it offers a logical upgrade path for the 70Mn consumers joining the middle class every year for the next decade. It's therefore a critical thing for Nokia to get right. I worry that Asha is not smart enough to offer a genuine competitor to Huawei's IDEOS range and equivalents from ZTE. But time will tell.

I'll get my hands on the device and hopefully post again... hopefully using it!

Tuesday, 11 October 2011

September Africa telecoms investment map

A slow month for announcements in September, perhaps a result of Ramadan and vacation season in much of the Western world. Only deal of significant note was Airtel's $30Mn purchase of a 3G licence in Rwanda and announcement of $70Mn of additional investment to build the network.

Of the 39 stories on African telecoms, 29 related to mobile access networks, 6 backhaul and 3 to fixed line networks. Outside of basic access, number portability is generating a lot of buzz, with Ghana in particular having notable success in enabling customers to port.

China blocks Google (again)

I found this story remarkable. The Chinese authorities seem to be taking a more and more hardline approach to international businesses and markets, which flies in the face of the "common knowledge" that exposure to free market capitalism will inevitably soften the regime's economic and political control on the economy.

Many of my clients are seeing toughening up of import restrictions, increasing requirements for technology transfer and great efforts being made to replicate or substitute technologies in the ICT space. TD-SCDMA is a great example of the latter, which has been pursued despite its obvious flaws, principally because its use avoids patent payments to foreign enterprises.

I'm increasingly of the believe that technology companies should regard China as less of a market opportunity and more of a threat. I can't believe I've just written that, but I hear too many stories such as the above regarding market shaping and asymettric competition to ignore them. Interesting times.

Thursday, 1 September 2011

August 2011 investments in African telecoms

August was a busier month than July for telecoms investments, with OneDotCom's announcement of $593Mn of investment in a B2B focussed ISP in South Africa trumped by MTN announcing a further billion dollars of network build in Nigeria. The latter market remains the Wild West from a legislative, regulatory and stability point of view, but an economy heavy with the potential of massive population and natural oil wealth continues to prove a draw. Also notable this month was American Tower's $140Mn tower upgrade programme in Ghana - a smaller market, but one that is made attractive day by being the polar opposite of Nigeria in terms of investment readiness.

Friday, 19 August 2011

Impressions of Kenya

I’m writing this post in the departure lounge at Nairobi airport, having spent most of this week in the city meeting various TMT companies. It’s been an eye opening few days, so I thought it’d be worth sharing a few experiences.

The challenge that sub-Saharan Africa faces with infrastructure is apparent the moment you step out of Nairobi’s slightly ramshackle airport and into one of the ubiquitous vans, which almost instantaneously becomes another crawling, hooting part of Nairobi’s quite astounding “traffic”. Traffic is a word that comes up in pretty much every conversation. Kenya has only one major road, which links it to Uganda to the east and Tanzania in the south; teeming with well used trucks, tankers and vans it is as frequently gridlocked as the surface is pot-holed.

“It breaks my Range Rover every time I drive on it” Bob Collymore, CEO of Safaricom told me, before going on to highlight the similar issues the country has with power supply and public transport. The almost total lack of the latter is a tragedy caused by neglect under the previous dictatorship – we drove past the giant and crumpling train yards of Nairobi’s once buzzing central train station, now an elephant’s graveyard of mothballed rolling stock rusting on overgrown grass. There’s no public bus service and inter-city travel is served by the horde of vans that seemed to be frequently involved in minor traffic infractions. Walking seemed to be the primary means of transport for many people, dicing with death next to the chaos on the road. Fixing these basic infrastructure challenges will be a colossal challenge for a country that despite its progress is still cripplingly poor.

There are, however, many signs of progress. The slow crawl along the highway into the city centre passes dozens of new glass-fronted buildings representing the headquarters and distribution hubs of major international corporations. Many refer to Kenya as “Silicon Savannah” and there is a degree of truth to the hyperbole.

In Safaricom (35% owned by Vodafone), they have one of the most innovative telecoms companies in the world. Safaricom’s M-Pesa – used by more than 80% of Kenyans – is the world’s most ubiquitous mobile payment system, if not its most technologically advanced, as Bob Collymore freely admitted. The genius of M-Pesa is in its simplicity and reliability and in Safaricom’s trusted brand status, characteristics that have enabled it to replace cash payment in many industries to greatly increase social wellbeing and industrial flexibility.

In addition to slightly fanciful e-health and more realistic e–government initiatives, the company has a good quality HSDPA network and is deploying some of Africa’s first FTTH to compete directly with Telekom Kenya’s half-a-million PoP fixed access line estate. With 76% market share of Kenya’s 25Mn mobile SIMs it is a surprisingly innovative company and Kenya’s largest. Its competitors are not to be taken lightly either, consisting of India’s Airtel, whose Africa headquarters are in Nairobi, and late entrants Essar and Orange. My estimate for the consumer telecoms market puts it in the $1-1.2Bn range, with another c.$150Mn coming from enterprise services.

Service-wise, 3G coverage in the city and its outskirts was excellent and SMS messages were delivered internationally in short order. International voice was much worse – I could receive calls, but not make them, which was very frustrating. Data connectivity was poor too. I didn’t try 3G because I’d imagine it would be very expensive; Wi-Fi was of good signal strength but struggled to provide high speed.

Even though Africa is now well connected by subsea cables, the paucity of onshore backhaul is apparent in the age it takes to connect to an Exchange server in London. Most businesses from banks to large office blocks had VSAT dishes on their roofs and high towers with microwave dishes were a common sight.

In a brief (and not entirely terrifying) walk in the city I managed to get a sense of some of the device prices. Basic feature phones – mainly by Nokia – retail for about $20. Dual-SIM devices were heavily advertised. More interestingly, a Hauwei Ideos smartphone can be had for 7,999 KES – about $90. I couldn’t play with one, but the Ideos resembles the old O2 XDA – a lozenge shaped fullscreen device with a plastic case. Still, I thought it impressive for the price. Since the market is almost entirely pre-paid, devices at this price point will be key in driving mobile data take-up.

I saw several very large billboards for Nokia E-series devices, but no real evidence that they were big sellers. The Executives I met had high-end Android phones and 3G/ 3GS iPhones. iPads were ubiquitous in that community. Intriguingly, I also saw an advert for a 72” LG LED TV – I don’t think I’ve seen one in any other market I’ve visited this year. This hints at the emergence in Kenya of an oft-seen trend in developing markets – a flat screen TV is often the second technology purchase after a mobile phone. Chatting to local people seemed to confirm this.

To take advantage of the opening of mass market TV consumption, conversion from analogue broadcast to digital is likely in the coming years. DVB will compete with cable, principally supplied by Naspers subsidiary Multichoice and several DTH satellite providers; it’s worth noting that SES Astra are launching 3 new spot beam satellites covering Africa in 2011 and 2012, thereby dramatically increasing transponder capacity.

I haven’t really looked for data on the media market, but my impression was that most of the channels available in the hotel and the couple of office TVs I tried were South African and sports was relatively heavily represented. EPL in particular seems popular, given the number of replica shirts on sale and the coverage in the local newspapers. The local game was represented by only a couple of sidebars, despite the presence of a giant 200,000 seat stadium in Nairobi.

On the subject of newspapers, I picked up a selection, which were of universally poor editorial quality and contained a large number of adverts relative to the UK or USA. I’d liken them more to a local paper in the UK, than to a true national paper. Radio was heavily music-based (the local taxi drivers seemed to particularly enjoy cheesy 80’s and 90’s pop) with the occasional interlude from the DJ in a Radio 1 c. 1996 manner. I didn’t catch any adverts, despite channel hopping for half an hour.

To close with, I met a gentleman from an interesting business called Kencall, which provides outsourced call centre services to international businesses and increasingly to local SMEs. Given the reasonably high level of technology literacy of the population and the fluent local use of English, this type of industry could be a great accelerator of the Silicon Savannah. As with India, answering calls can quickly turn into coding software and launching technologies...

With luck (and a signed contract :)) I’ll be visiting a number of other African countries this year, so I hope to be able to add similar first hand context to the strategy work we’re doing for inbound investors in the Sub-Saharan region.

Tuesday, 9 August 2011

Unrest 140

It would be an understatement to say that we had an interesting night in London: buildings burnt out, 600 arrests (and counting), probably to worst period of unrest in the UK since the 1980s. Without delving into the social context for this upheaval, what fascinated me last night was the way in which the power of the same social media that enabled the Arab Spring was demonstrated on the streets of a major European capital.

Simple tools like BlackBerry Messenger and Twitter allowed an unconnected mass of hooligans to achieve an unprecedented form of self-organised co-ordination and thereby elude the (valiant) efforts of one of the world's best trained police forces. Whenever the police arrived, the mob simply moved on to an undefended area - classic guerilla tactics, but without the classic guerilla command structure. It is not hard to see why Middle Eastern police forces and particularly armies were unable to prevent small civil disturbances spiraling out of control.

There were disturbing parallels between this situation and the scenario described in Adam Roberts' New Model Army - a rigid, command and control based force finds it very difficult to engage one that is entirely fluid. Now, in last night's case one side was totally untrained and therefore unable to resist effectively when cornered, but imagine the effect a small number of trained personnel could have had. There would have been carnage.

It's no wonder that the US Government and military have been pondering the question of how to weaponise social networks in order to achieve regime changes that historically would have required guns and armour. Let's just hope that such rabble rousing techniques do not become tools of terrorists, or last night's events could be a sign of things to come.

Thursday, 4 August 2011

July 2011 telecom investments in Africa

Over the last year I've been engaged on a number of projects in African technology and telecoms. As a result, I've started to compile a database of intra- and inter-continent investment into the networks that will enable the next phase of African growth.

The map shows the location and size of the investments announced in July. As a disclaimer, in some cases (for example, network investment) I have estimated the scale of the investment based on my experiences operating in the territory and in the telecoms industry.

The headline for July is that $790Mn of telecoms investments were announced in the Continent, with mobile ($499Mn) and ISP ($262Mn) the largest vertical markets for investment. Airtel's commitment of $400Mn for upgrades to its cell network in Nigeria was the largest single announcement, demonstrating the company's focus on enhancing the coverage and share of the Zain assets it acquired last year into Africa's largest mobile market.

In home streaming

Neilsen reported yesterday that in home streamers of content in the US under-index on total TV consumption. An interesting comparative data point for the UK comes from the BBC, which has been reporting steadily increasing use of the iPlayer for streaming live TV. In May, 115Mn on-demand streams were delivered by iPlayer, versus 17Mn live streams.

The latter has increased 71% YoY, versus 16% for on-demand. If this trend is mirrored across the market, then perhaps the future is not as bright as anticipated for TV, viewership of which has been increasing steadily and currently stands at about 3.8hrs per person per day.

Friday, 22 July 2011

Nokia, RIM & Google+

It surprises me that Nokia's latest set of poor results have been greeted with such happiness by the markets. A loss of $360Mn and further smartphone share to Apple seems like another nail in their coffin. This time last year I thought that Nokia's position as #1 handset maker was retrievable, but now I'm not so sure. I actually do buy the idea that Windows Phone can be a viable 3rd way against iPhone and Android (how the world has changed - I recall Operators being terrified of Microsoft 5 years ago, now they're willing them on...), however the strategy of announcing Symbian/ Meego's death a year in advance of it's launch seemed utterly crazy.

Perhaps Stephen Elop decided it was best to focus them on one thing and halt the propensity to get distracted that had prevented Nokia succeeding in the preceding years. The trouble is that Nokia's travails are now front page news in the broadsheets, which means that 30-40% of the phone buying population are aware of how inferior its products have become. I know that this is not the mass market, but it is the market for the high Average Selling Price (ASP) devices that Nokia is desperate to sell, as they are by far the most profitable part of the market. Bad times.

RIM is another struggling legacy smartphone provider and seems, like Nokia to be increasingly embattled. It too has failed to produce a viable large screen smartphone and is restricted to the low end of the market. The trouble for RIM is that its core executive users are drifting away into more capable consumer devices - iPhone chief amongst them, as consumerisation begins to take hold in the enterprise. Although Blackberry Messenger is popular amongst teenagers, RIM's grip on the consumer market has always been tenuous...

...and the above makes the Playbook seem like an even more disasterous move. I've been using one for the last fortnight to try it out, so feel able to comment on it. In short, it's too small, too buggy and has no ecosystem of applications to support 2011 business use (here's an excellent run-through of it's issues). The lack of an email application is an unforgiveable omission and demonstrates how out of touch RIM have become. Frankly, it's a total disaster for either business or consumer use and it doesn't surprise me that RIM are rumoured to be considering terminating it.

I thought I'd end on a positive note. I've also been playing with Google+ for a couple of weeks and it's excellent. Much better than Facebook for my needs, mainly since it's not saturated with rubbish applications and poorly targeted adverts. Circles is a simple and sensible idea and the clean interface on browser and phone is great.

It occured to me last night that perhaps we're about to see the natural decline of Facebook begin at this point. Not to zero, certainly, but as with Yahoo at the start of the search & portal era of the Internet, maybe Facebook was the Alpha of mass market social networking, but by failing to innovate sufficiently it has fallen behind the likes of Twitter and now Google. It could even be true that Facebook was a fad that's now passing. Unlikely, but possible. Glad I didn't buy into it at 100Bn...

Monday, 18 July 2011

The price of heavier cars

A great article in Slate about the price of heavier cars in terms of road safety. As a long term driver of small, lightweight vehicles, it makes disturbing reading, even before one considers the environmental damage associated with 2T four wheel drives.

I think that the idea the author proposes of increasing fuel duty to account for the additional health costs makes perfect sense. I fail to understand why in the UK we feel the need to pay for a vehicle licensing body like the DVLA (at the cost of 100's of millions of pounds) to (ineffectively) police road tax, when we could save a huge amount of money and gaurantee compliance by putting additional fees on fuel. Oh, and it would actually target those who pollute the most.

Anyway, back on road safety, I remain really excited by the potential of self-driving in this area, even if it is only allowed on major trunk roads. British roads are quite safe but if one death can be avoided by mass adoption radar cruise control, brake assist and increased vehicle intelligence, then in my mind its worth legislating to make them compulsory. The advantage of smoother driving will also be realised in fewer traffic jams (human beings are terrible at maintaining distance) and therefore increased fuel efficiency. Seems like a more important area for legislation than insisting that everyone has DAB in car.

Killer Apps

A short post from me to day to flag that our new paper on success factors for mobile apps was published last week. Although it's quite a simple piece, the press coverage has been very favourable. Here's a few excerpts:

Sunday Telegraph - Sunday Telegraph
Silicon - Seven ways to stop your mobile app becoming a flop
Guardian - Most branded apps are a flop says Deloitte. But why?
New Media Age -Less than 1% of mobile apps hit 1m download mark
Warc - Branded apps miss the mark
Drum - Location information apps most downloaded, research finds
Computer Weekly - Deloitte: the killer app could be killed off
IT Pro – Smartphone users prefer Angry Birds to brands' application downloads.
Tech eye - Branded apps are a mirage
Inquirer - Nokia and Apple are leading European smartphone usage

Friday, 15 July 2011

The SIMs: unleashed

Some great chat in the office today about the relative merits of the SIM card. I rather boldy claimed that in 3 years no new smartphone on sale would have a SIM card, the technology having been replaced by software SIMs. Needless to say, this view was not universally agreed with! Advocates of mobile operators and mobile banking providers decided that the former would never agree to ship such devices as they disintermediate them and that the latter would hate them for security reasons.

I'm not so sure about either counter-argument, personally. The thing that hardware manufacturers really like about soft-SIM is that it makes it very easy to sell direct to the consumer - no messing about with holding stocks of SIMs, just choose the cheapest monthly deal, connect to iTunes or Android update and 20 seconds later the device is activated. Combined with 2 hour number portability, it really increases customer choice and disintermediates the service provider.

The trouble for operators is that consumers often churn because they can't get the handset they want (data from Deloitte's Mobile Consumer Survey shows that it's the primary reason behind about 20% of churn in developed markets, second only to "current operator too expensive").

Furthermore, operators face a classic Prisoners Dilemma in trying to prevent such devices coming to market: they can each individually decide not to subsidise, but they can't collude and if just one party "betrays" them by offering a subsidy (in the UK, it would likely be Three and/ or T-Mobile) then that party could uplift their market share enormously in just one quarter.

Finally, there's the dawning reality that consumers of smart, high-ASP devices seem increasingly willing to purchase without subsidy. A trend that can only accelerate if and when the EU regulates to prevent operators selling long contracts to consumers. I therefore don't think that there's much operators (in the EU, at least) can do to prevent soft-SIMs coming to market.

On security, I frankly don't buy the advantages of plug in SIMs. The handset electronics are what actually makes the content of the SIM secure, not the carrier vehicle itself and software m-payment systems are well established (I even used Paypal to pay for pizza last week...).

Anyway, you heard it here first - no SIM cards in 3 years...

Friday, 1 July 2011

HMV and the demise of high street music

I can't help but think that the unveiling of HMV's new 'strategy' is the final nail in the coffin for music on the highstreet. Quite how they think that selling high end headphones (a product that couldn't be better suited to online merchants) and competing with the well established live performance players will save their business is beyond me.

For me the future of such retail is in the creation of physical experiences that seamlessly and additively blend with online. For example, the use of augmented reality and near-field technology to enable consumers to sample on the highstreet (or even on the Metro) and receive digitally on any device or promptly to their home.

I've also written before about the role of HMV and equivalents in curating digital content for consumers faced with the unlimited choice of digital. Again, this is curiously missing as a positioning for HMV - imagine being able to walk into their store, sample some branded music, apps or games experiences and have them immediately loaded onto a device at high speed. Better still if I can sample the experience on a portable device, then have the full experience at home on my TV/ console.

Basically, physical media has no role for the impulse buyers who enjoy shopping on the high street, nor do tickets or high-end electronics. The new generation of consumers seems to be increasingly looking for instant gratification followed up by rich long term experiences, hence the success of services like XBox Live, and the recent announcements about the future of Harry Potter. HMV on the other hand are going back to stodgy old box shifting, a strategy I just can't see succeeding.

Monday, 27 June 2011

Ladies & gentlemen, we are floating in (white) space

This Wednesday is an exciting day for anyone who uses mobile data services in the UK. Why? Because on Wednesday the first trials of the White Spaces Coalition's frequency agile fast broadband technology begin in Cambridge. Now that analogue TV is very nearly extinct in the UK we can finally start making use of the spectrum for some economic good, beyond re-runs and reality TV.

To summarise the technology concept, the map of radio spectrum usage isn't a flat continium, but rather a comb with used bands separated by "guard bands" that prevent leakage from one channel into another. Furthermore, usage of the spectrum is inconsistent in different geographical areas, partly for the same technical reason (preventing leakage), partly because not all channels are broadcast nationally.

The upshot is that large portions of the spectrum are unused, which is where the white space radio technology comes in. The radios they use (effectively a modified wi-fi router) use the free channels dynamically, creating a fast network of reasonably long range. An intriguing member of the UK consortium is BSkyB, who bought The Cloud this year and hence have a substantial base of installed hardware off which to base a customer network.

Deployment of such a network would be good and bad news for mobile operators. Good because it offloads some of the pesky low value data traffic that to some extent still clogs their networks (although post-capping, at least customers are paying for it). Bad because this is yet another competitor in the ever-cut throat UK market.

Tuesday, 21 June 2011

India awakening

Just a short post from me - I've just spent the day at a client in Gurgaon, just outside New Delhi. Frankly I was amazed by the tangible sense of progress in the city, which resembles an Indian-flavoured Seoul (with the exception of the typically abysmal India road system). Big tech' names were everywhere, as was glass and steel, which completely dominate the skyline. Compared to the wide boulevards of colonially-styled New Delhi, this was a major shock. I was also very impressed by the ambition of the client in question - a palpable sense of energy and ambition permeated their (very large) corporate headquarters.

Could it be that India is finally emerging from it's 20 year funk and becoming a genuine high tech challenger to China? Let's hope so...

Wednesday, 15 June 2011

How to make an Opel Senator like the Starship Enterprise

Now, I've always had a soft spot for the Vauxhall/ Opel Senator - probably because they were the fearsome steed of the UK's traffic police when I was a lad. I'll also openly admit to being a lapsed/ recovered Trekker. Therefore, this is the coolest thing that I've ever seen. Quite why automobile manufacturers still seem incapable of making a decent in car electronics suite when one geek and a soldering iron can achieve this is rather beyond me...

Friday, 10 June 2011

All out of gum...

So after 15 years in the making, the Duke returns... and he's showing his age. I have to admit a feeling of regret at both the wait and the poor quality of the game: I spent many happy days in front of my Escom Pentium 100 (another long forgotten victim of the dotcom demise) blasting aliens and shooting gum. Perhaps I'll buy it anyway - one star for nostalgia...

Sunday, 22 May 2011

Google's robot car

I know this is old news and I know that it's geeky, but these videos of Google's robot car are awesome!

How the mainstream auto industry can claim that we're 25 years from a commercial self-driving car is beyond me. The benefits in terms of road safety and fuel efficiency are too great to pass up for uninformed or pre-meditated concerns about handing over control of a fast moving lump of metal to a computer. After all, most new cars are "drive-by-wire" - a computer is already between you and the major controls, you're just not aware of it!

Doubtless the cost of laser radar and the computer systems will be substantial, but I wonder whether they're much worse than the battery packs and charging gear of an electric car. Given the hideous compromises in environmental impact and convenience of the latter, perhaps governments should be promoting self-driving rather than "zero-emissions" as a way of reducing carbon emissions? Probably too far fetched - sadly politicians don't dream...

Sunday, 8 May 2011

Effect of the Internet on business models

For reference, the text of a speech I did for an internal meeting. 5 minutes on the effect of the Internet on business models:

"From the 2011 vantage point it is clear that the Internet has had a profound effect on the fortunes of every business, government, NGO and individual in the developed world. And its reach is ever extending: to the deserts of the Sahara, to a billion consumers in China and a billion more in India, not to mention the further billion in the rest of developing Asia, Latin America and Africa.

But it’s not that colossal expansion of scale of influence and the consequent opportunities and challenges for us and our clients that I think we should focus on today, but the even more profound expansion of scope that will accompany the next stage of the Internet’s evolution.
When I think about the effect of the Internet on business models, I see three aspects:
· Polarisation (of success and failure)
· Acceleration (of decisions)
· Diversification (of models)
The rebound from the downturn has demonstrated the structural impact of the Internet on some business models. For example, the Internet has ravaged the traditional classified advertising model for many, but not all the incumbents; it has had little impact on broadcast television, save of course to complement it.

This polarisation is down to the business models that rose up during the first phase of the Internet’s emergence. Companies that appeared in the initial expansion replicated traditional business models, but with the competitive advantages bestowed by the economies of scope and scale that the Internet enabled. Amazon, Yahoo, eBay are all extensions of conventional models. Likewise, the news aggregators that have reduced the newspapers that spawned them are merely faster, leaner replications of the old model. They are to their progenitors what Walmart is to supermarkets – a super-competitor in certain narrow markets, but limited in their societal effect and hence their effect on business models in the macro sense.

Their sometimes overstated ability to service needs faster and cheaper aside, the underlying reason for the polarising effect of the Internet on business models and on businesses is acceleration. By this I mean that the emergence of the Internet and the communications layers that sit on top of it has accelerated the decision-making processes of buyers and of sellers to the point where a product can be launched one day and pulled from sale only weeks later, the victim of the huge and immediate swell of information available to would-be consumers almost immediately after its launch. Microsoft’s ‘Kin’ phone range being a recent example of this effect.

Acceleration is reflected in consumers’ willingness to embrace new technologies, which means that the process from inception to mass adoption can now take place over the span of only a couple of years. The effect is also felt internally in business, where speed of decision making has advanced ahead of the capacity of operating model, processes and talent to keep up, hence massively increasing the stress placed on an organisation’s “heroes” and increasing organisational risk. Acquisitions, in particular could be said to be increasingly driven by knee-jerk reaction to trends that appear (and unfortunately for buyers, disappear) in a matter of months.

The fascinating thing about this hyper-tension that the Internet has created in businesses and in markets is that it in turn has sparked an almost primal imperative to innovate – something that leads to the third theme I’d like to talk about, namely diversification.

In Web 1.0, we had the supplementing of traditional business models through Amazon, eBay, Yahoo, so the effect on business models in the macro sense was quite small. In Web 2.0 things got more interesting, because the consumer voice got louder, news (particularly bad) got louder and spread further. In 2009 and 2010, the Web helped elect Governments. In 2011, we are really feeling the force of the Web – it is helping to topple regimes.

And now we have Web 3.0 – the “influence layer” as I’ve heard it described. This is new and no one has a clear handle on what it means or how important it’ll be. What is possible is that by adding an ability to influence behaviour, something that has polarised business models in a few markets and situations now has the ability (although perhaps personification is not appropriate) to polarise models in the wider world. How much does one have to understand about decision makers in order to change the brand of detergent they buy? What about a car? What about who they vote for? People are more connected and we – and hence the Web – ‘knows’ more than ever about them.

For the first time, the Internet has the ability to impact the models of businesses beyond basic retail, beyond communications. We at Deloitte have played a leading role in the first two generations of the Internet, now we need to lead the third."

Wednesday, 4 May 2011

Farmville for real

The cross over of online and real world continues apace - the UK's National Trust has just announced a real world version of Farmville (although without drugs or bananas) to be played out on the unfortunate residents of a farm in Cambridge. Very Web 3.0...

Tuesday, 3 May 2011

Open source textbooks

Short post, to highlight a great application of open source: school text books. Long a source of massive profits for publishers, primary and secondary school texts have been available on an open source basis from the CK-12 Foundation, Wikibooks and MIT for a number of years now, but with mass acceptance of e-readers and tablet computers now on the horizon, open source texts are becoming a viable option for schools.

What's it worth? Well, 7M children are in education in the UK at any one time - say the average state school spends £25 a year per pupil on texts, that's £175M per year. Clearly there's a capital charge for the computing devices, but I question how long schools will be buying conventional PCs for anyway - surely the PC is as troubled in the education sector as it is in the home and, increasingly, in the workplace.

One for the Government to consider in its spending review, I think. Incidentally, the business case for "Sound and Vision" in the Netherlands is partially based on the economics of replacing paid-for education material with already paid-for video and audio from the Dutch PSBs.