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, FT.com 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.