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[In this state-of-the-nation article, Research Director Andreas Constantinou analyses the App Store status quo, the key building blocks and the dime-a-dozen future for App Stores] In the last 12 months Mobile Application Stores have evolved from hype to mass-adoption and even to currency; building an App Store marketing story can increase your valuation, even if no-one agrees what an App Store is. The mobile industry, from CEOs to developers, is engulfed in an app store hysteria such that everyone (operators, OEMs, and platform wannabees) wants to build one. Yet the long-term reality will be very different; App Stores will become a dime-a-dozen and smart players will need to seek out where they can add and extract the most value, not what app store recipe they can photocopy the fastest. In this article we ‘ll review the present state of the market, the key App Store building blocks and where will the market be heading in two years. What’s in a name? What IS an App Store after all? Is it a developer channel, an on-device apps storefront, a way to deploy applications, or an attempt to copy Apple’s model to the last detail? To understand what App Stores mean we need to trace back into mobile history; BREW, Symbian, Windows Mobile and Palm have long opened APIs to their software platforms, since 2001-2 in fact.. And while technical openness was established 7 years ago, what was lacking all these years was commercial openness; the funnel between external developers and in-market handsets was so thin that very few software players could pass through. It took Symbian six years to reach 10,000 applications, while it took Apple only 6 months (see our earlier analysis). In the first year of operation, Apple’s App Store brought in 65,000+ apps, 100,000 registered developers, 1.5Billion application downloads and availability to consumers across 77 countries through 40 million iPhone and iPod Touch devices sold. What Apple figured is that streamlining the commercial route to market was more important than opening up APIs in a friendly language – and as part of that taking out the middlemen (operators, content aggregators and content retailers) who were eating 60% or more of the retail price. BREW and GetJar have been following along, too, although somewhat limited in terms of operator certification hurdles (in the case of BREW) and lack of on-device integration (in the case of GetJar). In this historical context, it is easy to see that App Stores are a developer-to-consumer merchandising channel; a go-to-market vehicle for allowing developers to distribute and retail their applications directly to the end-consumers, while taking out the middlemen from distribution and retailing. In this sense, mobile app stores are the equivalent of JVC (or any other audio equipment manufacturer) allowing musicians to sell direct to consumers, bypassing labels, distributors and online retailers altogether. Sadly, the music business is more complex that mobile. State of the market – supply and demand Most of the hype today is focused on the short head of the most successful app stores. Below we have profiled the five most prominent app stores today and analysed them in terms of distribution model, installed base, downloads, applications and revenues, which makes for an interesting comparative reading. Note that our Apple app store revenue estimates are at $700M/year, in-between the conservative estimates from Bernstein and the optimistic (statistically-skewed) Admob estimates. [updated: we understand that Handango effectively gives only 30-40% revenue share developers, a figure which has dwindle from the 60-70% that was 3 years ago]. (click to enlarge) The long tail of app store launches is even more interesting. There is no self-respecting mobile player that hasn’t announced their plans to build an app store, across operators/carriers, OEMs, platform and chipset vendors. – operators/carriers: Vodafone, Orange, Telefonica/O2, TIM, T-Mobile, Verizon, Sprint, China Telecom, China Mobile, SK Telecom, KT. – handset OEMs: Apple, Nokia, Sony Ericsson, Samsung, LG, RIM, Palm – platform vendors: Android, Windows Mobile, S60 (Ovi Store) – chipset vendors: Qualcomm, Intel, Mediatek For a slightly deeper dive into the details behind these deployments, Distimo maintains the most extensive comparative table of App Store launches. Naturally, a diverse range of white label app store providers have emerged to cover the demand. We track 19 App Store vendors so far as part of our industry Atlas: Amdocs, Cellmania, Comverse, Ericsson, Everypoint, GetJar, Handango, Handmark, Ideaworks 3D, Javaground, Mobango, PocketGear, Ondeego, OnMobile, Qualcomm, SlideME, Sun Microsystems and Tanla. Specialised vendors are already emerging with Ondeego offering an App Store for enterprise IT and Tanla offering application license management. One of the most integrated offering is from Mediatek – a chipset vendor powering more than 300 million (!) phones shipped each year – which has launched its own App Store powered by Vogins and SkyMobi. This is a white label app store offered as part of the chipset package and where the revenue is shared among the OEM (30-40%), Mediatek, developers and the operator, according to our sources. In a sense this copies the Qualcomm BREW model (chipset + software + services), but in a very different market where the one-stop-shop hardware+software+app has allowed 10-person OEMs to fill the market with knock-off (‘shanzhai’) phones, selling for 1/5th of Nokia prices. Key building blocks To understand the future of app stores one must look not only in their historical evolution, but also in their genetic make-up. We first analysed the key ingredients for building an app store a year ago – and the receipe still stands. In the next diagram we analyse the five key elements of an App Store and their evolution to the next two years. (click to enlarge) As we mentioned, an App store is a developer-to-consumer merchandising channel. As such an App Store is made up of five key building blocks: 1. Developer Market: a process for submission, certification, targeting and pricing of applications. Pre- App Stores, developers had to deal with complex, undocumented & fragmented approaches for app certification and pricing. The developer market, was one of the most important elements introduced with the iTunes Store and the BREW Mobile Shop, in the form of a single website where developers could go for submission, certification, targeting and pricing of their applications. What’s next: we see 10s of developer markets emerge in the next two years. Not only one app store for each OEM, platform and operator consortium (Android, LiMo, OHA, JIL), but App Stores for different consumer segments (enterprise, fashion, kids, elderly, sports, etc). As such we expect the emergence of App Store aggregators, ie entities which will undertake submission and testing of an app against multiple App Store marketplaces. 2. Billing and Settlement: a mechanism for billing, settlement and reporting of application sales. Pre- App Stores, developers had to set up their own billing or use premium SMS with only 10%-50% of the retail price going to developer. Settlement of application revenues used to take weeks or months. App Stores introduced credit-card billing, fast time-to-settlement and a 70% revenue share as the norm. What’s next: we see operator revenue shares harmonizing to the 70% norm towards the developer, and a multitude of revenue models emerging like subscription, gifting/begging and cross-app billing (where the credit paid through one app is valid for use in another app). The harmonization of operator billing will be critical to the adoption of app stores, removing the last consumer hurdle for mass app adoption. 3. Distribution surface: the size of the addressable market for an App Store across handset OEMs, operators/carriers and geographical regions. Pre-App Stores, developers had to distribute apps on region-by-region AND on a handset-by-handset basis – a true fragmentation nightmare. iTunes Store, Ovi Store and the RIM App Center introduced global distribution on a per-platform and per-OEM basis, offering plenty of room for continual growth of app downloads (and second-order growth in the case of Apple). Already the Ovi Store sees traffic from 180+ countries on a daily basis, and this is via user downloads of the Ovi Store with pre-loads on S60 and selected S40 models coming in 4Q09. What’s next: With operator consortia like JIL muscling into to claim App Store territory, we will see global distribution across operators as well as across platforms and OEMs. 4. Delivery & in-life management: the mechanism for app download, silent install, in-place access, app licensing and in-life app management. App delivery is one of the most underestimated building blocks for an App Store, as it’s all about the ‘magic’ happening in the background. Pre-App Stores, users had to download a ringtone or an app, then figure out under which menu this was saved on the handset. Naturally, there was no ability to update the application or apply any rights management to it, leading to rampant side-loading and gradual decline of content value. What’s next: we see application delivery extend beyond B2C towards B2B apps and middleware that can be background- downloaded & installed. This presents opportunities for App Store owners who can monetise on a per-activation/per-unit basis for remote installing of apps, features or bug fixes on behalf of operators, OEMs or enterprise customers. 5. Retailing & Merchandising: application discovery, promotion, as well as premium placement, search and recommendations for applications. Pre- App Stores, developers had to buy and market complex shortcodes or scattered website ads. iTunes et al introduced in-store app discovery, 1-click purchase, in-store promotions and automated recommendations. What’s next: as with all fast moving consumer goods (from detergent to mobile phones), retailing and merchandising is the most important segment of the product lifecycle. As applications become ubiquitous, we see specialized app stores with segment-specific retailing of apps, inventory leasing for app promotions (CPC or per week rental as already seen in the Ovi Store and RIM App Center), social recommendations (your friends bought this app, so you should buy it too) and developer back-channels (allowing the developer to reach out to their customers via App Store facilities). Outlook for App Stores: What the next two years hold We spoke to George Linardos, Nokia’s VP of Product Development for Media and Games who sees the App Store market evolving to the state of the US television networks; i.e. the emergence of a few major cross-regional App Stores followed by 10s or 100s of localized and specialized stores. This a natural evolution in a crowded, commoditizing market and addresses a very important challenge. “Today’s app stores throw the high value apps together with the low value ones into the same pool. The top-10 listings are based on number of downloads in most cases. There needs to be better segmentation, so that high-quality applications can be seen as quality applications”, notes Sebastian-Justus Schmidt, CEO of SPB Software, a software house which makes 6 of the top-10 best selling applications in the Windows Mobile space and has the best selling product across all platforms according to Handango. Indeed, the iTunes Store practice of dividing and conquering among application developers does not create, but destroys value – as can be seen from the continual decline in average app price. Schmitt continues “If you expect to get apps for 1 dollar you will get the quality of 1 dollar”. This observation confirms the necessary emergence of specialized stores; from the cheap & cheerful everything-you-buy-is-1-dollar Store, to the premium Store with perpetual updates and 24 hour customer support for each and every app. Beyond specialized app stores, recommendations will also play a crucial role in merchandising. ‘People who bought this also bought that’ (aka collaborative filtering) and social endorsement (aka social graph mining) will become key to App Store performance, which is why Nokia has hired some of the brightest minds to work on Ovi Store recommendations. Linardos expects to see major new merchandising and recommendation features appear on the Ovi Store in the next 6 months (perhaps in time for MWC 2010?) and sees Nokia’s global marketing machine as one of the key differentiators in Ovi Store. Beyond specialisation in App Stores, we expect to also see co-existence of multiple App Stores within the same handset. This is not just a hypothesis. Already LG and Samsung phones shipping in 4Q09 come with four (!) App Stores co-existing within the same handset; one from the OEM, one from the platform provider (Windows Mobile) and two from the operator (SKT – who has their own device- and web- application stores). In this dime-a-dozen picture of the future App Store market, retailing and merchandising becomes an even more strategic element; where the value is in selecting the ‘best’ apps from each application store and auctioning promotion space (paid-for widget real estate) for these apps on the idle screen. This is where JIL and operators should be focusing, rather than trying to photocopy the Apple recipe. [update:] In response to the many comments, here’s a list of companies who are offering merchandising and recommendations platforms for apps: Apppopular, Appolicious, Appsfire, Chorus, I use this, Mplayit and Yappler. Comments welcome as always. – Andreas follow me on Twitter: @andreascon

And? The survey brought out some very interesting findings – some quite flattering and some honest critique and suggestions to take on board. And as promised, we ‘re announcing 10 participants at the end of this post who have been drawn to each win an Atlas wallchart 🙂 What did you think of VisionMobile? Over 75% of participants found our blog insightful, analytical, thought provoking, original and innovative – which was rewarding to hear. Fortunately no one went for boring, overhyped or outdated being the other options 🙂 Furthermore, we were very happy to hear that over 91% of participants would recommend our blog to others. Thanks everyone! We are hoping that after turning the feedback constructively into action, we will be able to convince even the almost 9% group of Maybe. No pressure though 🙂 Out of the 56 readers who took part in the survey, the majority (over 90%) work within the Mobile Industry with mobile software vendors being the biggest community (almost 45%). In terms of job profiles, most participants work as Product Managers (around 28%), Engineers/Developers (around 26%), as well as in Business Consulting, Business Development and R&D positions (16%). 10% work in the Top Management positions like CTOs/Strategists, CEOs/VPs. In terms of employer profiles, over 25% of participants are in small start-ups; middle sized companies and over 16% in blue-chip organizations. Most importantly, you shared your feedback with us about our articles and gave us plenty of inspiring suggestions… You suggested we write about “how to make money in the mobile software”, identify the “Trendsetters, Thought Leaders and Thinkers” and introduce the “new kids on the block of the Mobile Industry – exciting new Mobile Tech Start Ups”. Exploring the emerging mobile markets in developing countries is another popular request. All points taken on board, and we hope to be launching at least one of these shortly. In terms of mobile technology and innovation, we received some interesting suggestions on topics such as network technologies, Chrome OS, Palm OS, Digital Content Market and Content Transcoding as well as innovation in the low-end handset segment, to name but a few. There is definitely a lot of exciting articles to look forward to! 🙂 And finally! The 10 winners drawn out of the survey participants are JS, Colin P., Igal P., Tom S., Sven K., Carsten S., J Helmig, Andrew G., Jarmo P., Alexandre B. You will receive a separate email from us regarding further steps to arrange the delivery of the Atlas wallcharts. All the best and keep the thoughts coming! – Jana and the VisionMobile team follow us on twitter: @visionmobile

[Mobile payments hold great potential far beyond what we have seen today. Research Director, Andreas Constantinou, looks at why has the Internet lost its value historically and argues that mobile payments stand to bring this lost value back to the Internet] The debate over reversing the loss of value in Internet-based media is long standing. Most observers argue that the Internet has disintermediated the traditional distribution channels, including music labels, news publishers and books. In other words, the Internet bulldozed what was previously the long and bumpy silk road between content publishers and content consumers – and at the same time allowed everyone to become a content producer in what Wired aptly called nanopublishing. At the same time, a more fundamental change has occured. The tsunami of nano and mega content has arrived via the Internet (ie the PC screen), not via the traditional channels like retail stores, music megastores, bookstores, news kiosks or the 7-Eleven across the street. This has had a fundamental impact to the value of the Internet, due to the fact that there is no convenient, ubiquitous payment mechanism to use on the Internet. Let me explain why. To pay for goods like news, information, music or books you go to a retail store, hand over the cash, get your change back, and presto in the equivalent of two clicks you re’ done. Same with a credit card; hand out your VISA, sign here and walk away. All it takes is two clicks. On the contrary, to pay for content arriving via the Internet you need 10s of clicks. Take your credit card, type your name, address (30+ clicks), now enter the 16 (s-i-x-t-e-e-n) digits of your card, don’t forget your expiry date (another f-o-u-r digits), oh and your CVC2 number (another t-h-r-e-e digits). Now let me check all this. And oops by the way your password provided doesn’t match so you have to enter all this again. Not to mention: do I trust this website with my credit card details? The sad truth is, that for any small amount, or as much as you ‘d pay for a newspaper, a magazine or a music CD,  60+ clicks are not worth the bother. In the attention economy of today, each click churns customers. I would argue that its the lack of 1-click, convenient micropayment mechanisms that the Internet lost its value, not ‘pirated’ music, neither the democratisation of publishing. The poor adoption rates of paid-for content incentivised content producers (both the nano- and the mega-) to reduce their price to zero and thus establish a perception that everything accessed on the Internet is free. Yet people are willing to pay for perceived value, not matter how small. Value can be created through convenience, choice, flexibility or customisation, as long as payment mechanism does not stand in the way.  iTunes, Spotify, and the array of paid-for music sites have combined convenience and choice with effortless payment; Spotify brings in around 35% of the digital music sales in Sweden, while 80% of Spotify users said they stopped filesharing. So what does mobile have to do with all this? Here’s the paradox. When applications are freeware or shareware on the Internet, why are people willing to pay $2.5 on average per iPhone application by the bucket-loads bringing Apple’s an estimated $2.4 Billion a year? Why are ringtones costing upwards of $1 when you can Google the same song for free? Why are people willing to pay over 1Euro for texting their vote to the Eurovision song contest or fork out $0.80 for virtual ice cubes on Flirtomatic? Value exists in mobile, but not because mobile operators still run the game; walled gardens have fallen long ago. It’s because mobile phones offer a 1-click convenient way to pay for goods delivered over the mobile channel; applications, ringtones, competitions and social networking services included. And it’s all charged to your mobile phone bill. How more convenient could that be? That’s the part where operators proudly claim that they own the downstream billing relationship to the user. But what they seem to ignore, is that they do NOT own the upstream billing relationship to the millions of content providers, nor the millions of goods providers that operator through non-mobile channels (retail, mail-order, web, etc). This is because mobile operators, sitting comfortably in their ivory castles have imposed extortionate revenue shares (typically 30%-60% of total revenues) with upstream content providers that can be justified not in terms of the value they add, but of the near-monopolistic exclusivity on payments charged to the users’ phone bill. Compare this 30-60% commission with the 2%-4% rates that credit cards charge. Mobile operators have so far failed to seize the upstream billing relationship as they only understand the value of the short head (as opposed to the long tail). How mobile can bring back the value to the Internet Mobile payments are making a big buzz in the industry, especially in developing countries like many parts of the African continent, where traditional banking infrastructure does not exist and mobiles offer an extremely fast and convenient way to exchange money between individuals in rural areas. But mobile payments have an equally important potential in the developed world, in extending upstream billing to content distributed over the Internet. The most visible efforts to extend mobile payments to the Internet are those from iTunes, Google Checkout and Paypal (for purchases through an on-device storefront), and recently Amazon Mobile Payments (for purchases via a web page). All of these efforts are quite limited in terms of both their downstream addressable market and their upstream range of content publishers they have so far integrated with. Mobile operators have a unique and unexploited potential in this game. Think of Internet payments which are authorised by entering your mobile number below the ‘buy now’ button. You get an SMS confirming the amount and the seller, you reply and bingo – in 3-4 ‘clicks’ you ‘re done. Such a payment mechanism is both trusted and ubiquitous. The only element missing from the recipe is reasonable commission rates of the order of 2%-4% charged by credit cards. Indeed, operators can reach where VISA cannot. Vodafone’s Vittorio Colao recently remarked how “mobile accounts are a fantastic payment platform for all digital goods”. There’s a second, slightly more exotic scenario. Consider that Nokia with near-40% handset market share decides to equip all of its mobile phones with NFC capabiliies (NFC chipsets cost $2-$2.5 today and are expected to drop to $1 in 2013 according to this report). If Nokia decides to invest in deploying PC NFC readers under subsidy to Nokia phone buyers, then it has a chance to become a trusted provider of Internet micropayments. Or as Stefan Constantinescu (a Nokia connoisseur) argues in an open letter, Nokia should invest in creating a wireless payment infrastructure in retail stores starting with western and northern Europe, much like DoCoMo did in Japan. Whatever the next 2-3 years hold, mobile payments have great potential for bringing back the lost value to the Internet. Comments welcome as always, – Andreas follow me on twitter

[Android is moving too fast with software releases – too fast for the smartphone ecosystem to follow. At the same time, Android is moving too slow, as CE vendors are taking it outside of its mobile comfort zone with the introduction of form factors from tablets to in-car terminals. Guest author Tsahi Levent-Levi outlines the market forces straining the Android ecosystem and Google, as it moves away from smartphones to additional devices.] Android is all the rage these days. In my meetings and correspondences with consumer electronic vendors around the world it is as if they have totally forgot about the “old“ “embedded operating systems” – pSOS, VxWorks, MontaVista, Nucleus, OSE, or any of the Linux and Unix variants that people have been using for years now. While there are a few Meego strongholds and some Embedded Linux developers, most of the market has shifted to using Android. And it’s not just about mobile phones. It’s televisions. And tablets. And media phones. And set-top-boxes. And DECT phones. And DVRs. And Digital Picture Frames. And In Car navigation and entertainment systems. Every device that has a screen is now a prime suspect for migrating to Android. [poll id=4] Chipset vendors have taken notice of Android. Chipset vendors who aren’t catering for mobile devices had no Android in their near future for plans for early 2011. That was 3 months ago. Today, these chipset vendors are joining the bandwagon and are updating their roadmaps and strategy by embracing Android – they have figured that it is better to join the club than to fight the tide. The Hare: Moving too fast While this is happening, Google is shifting gears. In 2010 they have shortened the release cycles for many of their products and are raising a new challenge to companies who wish to stay ahead of the game and compete in the market. With 5 or 6 releases of their operating system in a single year, it may seem that Google is moving too fast with Android. While that is definitely true, Google and Android are also moving too slow at the same time. If you look at the mobile handset arena, Google is definitely not waiting for anyone. The sheer amount of releases places handset vendors in an uncomfortable position of being unable to follow suit. Sony Ericsson released their Xperia X10 with Android 1.6 on August 2010. Dell out-did them with Dell Aero running Android 1.5 on August 2010. Older devices were launching with Android 2.1: Motorola Droid X released on July 2010 and HTC EVO released on June 2010 are such examples. At the same time, Google has had to cope with different implementations of their API set for developers by the different handset vendors through their CTS (Compatibility Test Suite) program. These changes between Android versions are not only additions – some of them are infrastructure changes that affect developers and break compatibility across versions. Take for example the addition of Stagefright – a new media framework released alongside OpenCore in Android 2.2 – will Google be keeping OpenCore moving forward or will they deprecate it in future releases? Andy Rubin, VP of Mobile Platforms at Google said in an interview that their launch cycle “will probably end up being once a year when things start settling down”. Is that going to happen any time soon with iOS innovations and the introduction of Windows Phone 7? Unlikely. The Tortoise: Moving too slow On the other hand, Google hasn’t been able to address the hockey-stick market demand for the Android platform. Back in 2007, Google created the OHA (Open Handset Alliance) consortium as a governance framework where Google could establish handset compliance requirements and thereby run the show (see their CTS and CDD requirements recently published. Following the same philosophy, they set up Google TV for Android-powered televisions. The next product category that Google will focus on will be tablets. But what about in-car systems, set-top boxes or media phones? Enter the OESF. The OESF (Open Embedded Software Foundation) is an open alliance formed in Japan and active throughout Asia Pacific. It is the first non-Google consortium initiative for Android. Its charter is to define new API sets that cover the products that Google doesn’t. In that regard, the OESF has already introduced its own Market Place SDK and is making strides in areas related to home networking, VoIP communication, security stacks, automotive and more. Google have decided in the past that tablets should be running their Chrome OS – a networked based operating system – and not Android. They also stated that vendors should wait for Honeycomb Android release and not use FroYo or Gingerbread for tablets. Vendors have not been convinced, preferring to use Android instead, with its currently available version. In September 2010, during IFA Berlin , a slew of new Android-based tablets have been introduced: Toshiba Folio 100, E-Noa’s InterPad Android tablet, Elonex eTouch tablet, ViewSonic’s ViewPad 7, Archos’ tablets and Samsung’s Galaxy Tab. Deutsche Bank’s Jonathan Goldberg has compiled a list of 30 tablets planned to launch by the end of this year alone. The Samsung Galaxy Tab released to the market with much fanfare last month is the first Android tablet that comes from a large vendor and backed by Google through its Android Market. This clearly shows Google’s new stance with tablets. The application layout issues that are expected with this tablet due to different resolutions than those available on mobile phones are going to cause headaches to both users and developers in the short term. Factor into it the growing hype in China around Android and we are bound to see innovation happening out of Google’s campuses around Android. Will these issues be solved in Android’s next release – Gingerbread, or only in the one after that – Honeycomb? Will Google try pushing vendors to Chrome OS instead for tablets? These open ended questions show how slow Google is in addressing non-smartphone markets. This issue of form factors is the second dimension of Android’s fragmentation. There are three more dimensions: implementation fragmentation, user experience fragmentation and codebase fragmentation. If Google wants to retain their control over the Android platform, they will need to solve all of these five dimensions of Android fragmentation. The crystal ball Google is moving fast with Android and at the same time are trying to solve fragmentation issues of their platforms: they are working hard on reducing the amount of handsets running older versions of Android, they are trying to solve implementation fragmentation with their CTS suite and they are now focusing on user experience issues. It is not going to be enough. The Android platform has captured CE vendors of all types. Any device requiring a user interface to operate is either moving to Android or will move to Android soon. By ignoring these devices, Google is leaving a wide door open for other vendors and organizations to cater for their needs: the OESF are doing that on the standardization front, while new entrants to this market such as Amazon may become the ones providing the application stores for such devices. At the end of the day, Google will be able to focus and control a relatively small number of form factors: smartphones, televisions and maybe tablets. The rest of the market will be using the Android platform without Google’s direct assistance and control; we should see other application stores enter this market, which is a genuine opportunity for the likes of the Amazon app store (Android-based, white label Kindles, anyone?) and all the other service providers out there to compete with Google’s services on Google’s own home turf. – Tsahi [Tsahi Levent-Levi is Director of Technology and Solution at Radvision. He has been involved with the mobile video telephony market for 8 years, dealing with design, development, standardization, interoperability and marketing of such technologies. You can follow him on twitter or through his personal blog at http://blog.radvision.com/voipsurvivor/.] #Android #chipset #google

[Is Symbian coming to the end of its shelf life? Research Director Andreas Constantinou dissects the motivations behind Nokia’s strategy and why Symbian is getting a new lease of life] Only two short years and four months since it was announced, the Symbian Foundation is shutting down. With it dies Nokia’s second effort at creating a licensable application platform for mobile phones (the first one was S60) and to compete against Android. While Nokia is shunning to make the closure official, the last OEM supporters – Samsung and Sony Ericsson – have officially killed plans for Symbian products (see here and here) and Symbian staff are being given redundancy notices and making career moves on LinkedIn. [update: On November 8, it was announced that Nokia will regain control of the Symbian governance process and that the Symbian Foundation will be reduced to a licensing team] The writing has been on the wall since early 2010, when Nokia took out a €500 million loan to (among other things) help sustain funding into the Symbian Foundation, whose membership fees were due to be renewed in April 2010. Symbian Foundation relied on OEMs shipping handsets to take on the operational costs at the tune of 5 million GBP per OEM. The final blow came with the departure of SyFo’s CEO and co-architect, Lee Williams. The death of Symbian Symbian Ltd., the OEM-backed consortium that funded Symbian development between 1999-2008 had long been suffering from an imbalance of power and poor strategic decision-making. There were three things wrong with Symbian Ltd. Firstly, with Nokia owning 48% of Symbian Ltd. shares, the Finnish OEM had been driving the agenda at Symbian to the detriment of its OEM partners, Secondly, since the UI was severed from the base OS in 2001, Nokia had been squeezing the value out of the Symbian operating system and into its own S60 UI, middleware and applications suite platform. This meant that other OEMs had to spend considerable effort integrating Symbian with their own UIQ or MOAP layers and filling the gaps that Nokia left – effectively leading to handsets which were expensive to build. Thirdly, with the decision to have Symbian baseporting owned by the OEM and not Symbian Ltd, each manufacturer had to spend millions to get Symbian ported onto the hardware platform, in essence reinventing the wheel. While this naturally gave Nokia the edge in producing more Symbian models more often, it meant that for other OEMs most of the budget was spent in baseporting (i.e. getting the phone to work), rather than in differentiation. In 2007 Symbian Ltd. was desperately in need of a major governance re-engineering operation. The coup de grace arrived with the launch of Google’s OHA in November 2007, signaling two major changes in the phone industry: firstly, that open-source development (inspired by mobile Linux) was now supported by a major cash-rich backer, and not an operator consortium (LiMo) or a loose congregation of Linux system integrators and design houses (Azingo, Purple Labs, WindRiver and Montavista). Secondly, that zero royalties were now the norm and operating system development was turning from a revenue generator to a loss leader. With Android changing the rules of the game, Nokia knew that for Symbian to compete in this new world, it had to be both open source and zero royalty. Seven months on from the Android disclosure, Nokia announced that it would be buying the remaining Symbian shares outright, paying up the equivalent of 2.5 years of royalties or 2x the revenues of Symbian Ltd – a paltry evaluation for the top smartphone OS. For Nokia it was a financial and strategic move; it made financial sense because Nokia would slash its Symbian maintenance costs (from 100 million GBP of annual license fees to 5 million GBP of annual membership fees) by sharing the SyFo costs with other OEMs on the board. It made strategic sense because with the ownership change, Nokia convinced Sony Ericsson and DoCoMo to abandon UIQ and MOAP respectively and marginalised Windows Mobile which was still royalty-based. Meanwhile, Nokia could still exert the majority influence into the Symbian roadmap by employing most engineers and most package owners (effectively well into 2010). In retrospect, Nokia failed with both S60 and Symbian Foundation by insisting on a winner-takes-all mentality, i.e. taking roadmap control away from its OEM development partners which long-term destroyed the value in the partnerships. This winner-takes-all-mentality is nothing new; it was already harming Symbian as we had argued back in 2005. The full open sourcing of the Symbian platform in February 2010 or the cute playful new brand did not succeed in stopping neither the developer defection (see our Developed Economics report) or the OEM defection from Symbian. With Nokia shares performing miserably over the last four years, the Finn-led board took the bold decision to oust Olli-Pekka Kallasvuo and bring in a Canadian, Stephen Elop to turn the boat around. 41 days into the job, Elop announced the cutting of 1,800 jobs at Nokia and the adoption of Qt as the main development environment on top of Symbian handsets. For Nokia, Qt presents both an opportunity and a challenge. On one hand it’s the most capable cross-platform application environment today boasting reach across mobile, PC and STB – plus depth with Qt providing a complete API wrapper on top of the native OS (and much wider API coverage than GTK to which it’s often unfairly compared). On the other hand Nokia has notoriously mismanaged the Trolltech acquisition of January 2008, with the troll CEO, CTO and key engineers abandoning ship. Meanwhile, Nokia has created a Qt break across Symbian and MeeGo UIs and not managed to fully deploy Qt on Symbian 2.5 years after the acquisition (note how Qt Mobility APIs are still way incomplete). Long live Symbian With Symbian Foundation soon to be diagnosed dead, the rumours about Nokia replacing Symbian are rampant. Many industry pundits are prognosticating that Nokia will adopt Android – which in 2010 is going stronger than ever – or Windows Phone 7, which comes with the freshest UI since the widget based paradigm popularised by the Jesus phone. Despite the prophecies, Symbian will live on for many years to come. As the French expression goes, Le Roi est mort. Vive le Roi. There are two reasons why Nokia won’t be abandoning Symbian anytime soon. Firstly, Symbian is tightly integrated with Nokia’s variant management process. Nokia is the only OEM that has mastered variant management, i.e. being able to generate 100s of variants (SKUs) at the press of a button. That’s how Nokia can deliver 100s of customised smartphones to operators and retailers around the world. This variant management process is ‘hardcoded’ to Symbian, which means that replacing Symbian would seriously compromise Nokia’s ability to cater to operator requirements around the world and it would seriously hurt its market share. Secondly, Nokia’s economies of scale rely on in-house control of core components, and the operating systems is one of them. If Nokia were to license Windows Phone it would reduce its differentiation to industrial design and Ovi alone. In the case of Android, Nokia would have to branch Android (and to sustain the cost of Android development), port Qt on Android which means another 12+ months for a stable implementation. While this remains a long-term possibility, it is still a gamble when Nokia’s priority should be to focus on killer devices and not a killer OS. Qualcomm’s BREW MP is another candidate but only when Qualcomm has a good developer platform story and that means waiting for BREW MP to launch a web-based platform akin to RIM’s WebWorks. Symbian may no longer be a symbiotic system, but will live within Nokia for many years to come as the workhorse under the hood of Nokia smartphones. The King is dead, long live the King. – Andreas You should follow me on twitter: @andreascon #symbianfoundation #trolltech #google #nokia #qt #lg #motorola #symbian #sonyericsson #Android #samsung

[Smartphones get all the media attention, but it’s feature phones that are still driving the mobile industry. Marketing Manager Matos Kapetanakis examines this unbalanced equation and makes sense of the numbers published in the latest 100 Million Club] Welcome back to the 100 Million Club. This 6th edition of our watchlist tracking successful mobile software companies debunks the smartphone myth and paints a detailed picture behind the 34 software products – from BREW to Webkit  – which have shipped in more than 100 million handsets as of the end of H1 2010. Click here to download the watchlist. Key insights – Despite the hype, smartphone platforms account for less than 20 percent of the 620+ million handsets shipped globally in Q1 and Q2 of 2010. More than 80 percent of total shipments are driven by feature phones, the majority of which use proprietary software platforms. – BlackBerry is now the second smartphone platform, after Symbian, to break the 100M handset barrier. As of the end of June 2010, RIM has sold more than 100 million BlackBerry devices. – A total of 350M handsets have shipped with a WebKit-powered mobile browser up to the end of 2Q10. The biggest contributors to shipments of the open source browser engine are the Series 40 and Symbian OSs, while the steep rise of Android will play a bigger role in WebKit going forward. – Only a handful of mobile software products were shipped in more than 100 million devices during the first half of 2010. Among them are the T9/XT9 text input engines by Nuance, the vRapid Mobile software update engine by Red Bend and the Nucleus real-time OS by Mentor Graphics. – Symbian alone has more shipments in H1 2010 than iOS and Android combined. Moreover, when combined, the Google and Apple mobile operating systems make up less than 20% of Series 40 shipments in Q1 and Q2 2010. What’s new in the Club? In this 6th edition of the 100 Million Club we ‘ve introduced a dedicated watchlist tracking mobile platform shipments. The watchlist comprises of 10 application environment software products, OSs and RTOSs with more than 100 million installations. Our latest members in these categories are the BlackBerry OS by Research in Motion and ThreadX by Express Logic. We have also added media favourites Android, iOS and Windows Phone 7, for comparative purposes, since they are well below the 100 million mark. The Embedded Software Shipments watchlist features 24 products that have been pre-installed in more than 100 million handsets. This latestedition of the club sees the addition of the Media EXP, an audio/video codec and frameworks suite by Aricent and MSIP, a mobile analytics software agent, by Carrier IQ. Click on the image to download the full pdf The smart vs. ‘dumb’ phone equation The impact of smartphones to the industry is way overrated. It’s a little-told secret that smartphones account for only 20% of worldwide handset shipments, a fact we tend to forget in the face of the one-sided media storm that surrounds smartphones. A key observation from the 100 Million Club is that the ‘proprietary’ Nokia’s Series 40 and Qualcomm BREW are shipped in many times more handsets than Android, iOS, BlackBerry even the older Windows Mobile and Symbian OSs. In fact, with 638 million cumulative shipments by the end of Q2 2010, BREW is the most widely deployed licensable mobile operating system. If one considers real-time OSes for application and baseband processors, then the shipments scale to the billions of phones. Click on the image to download the full watchlist So, is Nokia’s Series 40 the most successful OS ever? Not exactly; the handset market is very much dependent on internal OEM platforms, which power more than 45% of total handset shipments for H1 2010. Samsung and LG, ranking 2nd and 3rd in the top-five handset OEM leaderboard, are largely responsible for proprietary platform shipments. Samsung has heavily ramped up smartphone shipments starting in Q2 2010 (which should become visible in H2 results) and is investing in its home-grown Bada platform, a C++ layer on top of its proprietary SHP operating system. LG also hopes to get a larger piece of the smartphone pie, by releasing 20 new smartphone models in 2H10. The 20% share of smartphone shipments is set to grow rapidly driven by two phenomena; firstly the growth of Internet-borne platforms, namely iOS and Android. Secondly, the carrier drive to commission and subsidise smartphone handsets as a differentiating strategy, which is driving the carrier-happy tier-1 OEMs (Motorola, Sony Ericsson, Samsung and LG) to bend over backwards and ramp-up smartphone production. This is unprecedented growth in share of smartphone sales, which was neighbouring at 10 percent back in 2007. The shift of attention of traditional handset OEMs towards smartphones, coupled with the rise of smartphone-only vendors, seems to indicate a balance shift in the smartphone vs. feature phone balance. It might seem a foregone conclusion that that pretty soon we’ll have a majority of smartphones flooding the global market. However, that is not going to happen overnight, i.e. not in the next 3-4 years. Smartphone shipments of traditional OEMs are but a fraction of their overall shipments, while Apple, RIM, HTC and ZTE cannot yet hope to meet the demand of huge, feature phone-dependant, price-sensitive markets, like India and China. Clash of the platform titans In the clash between the more familiar platforms, Symbian and BlackBerry rule over newcomers Android and iPhone’s iOS, in terms of cumulative shipments. But the picture is quite different in terms of growth, where Android has been the clear winner, growing by leaps and bounds (from 100K activations a day in May 2010, to 160K a month later and 200K in August – activations are not the same as sales, but the growth is still impressive). RIM and Apple have seen a healthy increase in their handset sales, while Symbian has suffered a small (~3-4%) decrease in market share between H2 2009 and H1 2010, despite Nokia’s growth in the handset market. However, Symbian’s market share is bound to drop even more, considering the recent decision by Samsung and Sony Ericsson to drop Symbian altogether, as well as Nokia’s choice of MeeGo over Symbian^3 for their latest N-series. Symbian is fast becoming a Nokia-only OS so we should expect the end of the line for the Symbian Foundation within the next few months as well. Where are MeeGo, Chrome OS and webOS in this picture? The short answer is that they are nowhere to be found in mobile devices in the first half of 2010. MeeGo is rumoured to be appearing in Q2 2010 in the market, with Nokia targeting to make first impressions last while facing delays in Qt integration and the departure of key personnel. Chrome OS will most likely be shipped solely in tablets and netbooks, while HP aims at delivering new webOS devices in early 2011. Last but certainly not least, we should not ignore Microsoft’s latest bid for dominance in the mobile industry: Windows Phone 7. The newly released OS has been completely redesigned to offer iPhone-style margins with an Android-style business model, while targeting untapped pockets of Xbox and PC developers instead of making up with Windows Mobile developers who were left with a bitter aftertaste (see our Developer Economics research). Windows Phone 7 already seems to be building momentum, with 9 new models coming to the market in Q4, $500 million in marketing budgets and a tightly integrated hardware and software platform (see our earlier article on Windows Phone for a detailed strategic analysis). Not museum material…yet In summary, smartphones captivate our minds, but it’s still ‘dumb’ phones that we carry around with us. Someday in the foreseeable future, non-touch screen phones will take their place in a telecoms museum (right next to the old, ‘brick’ mobile phones), but that day is not as close as mainstream media have us think. – Matos #meego #ios #qualcomm #openkernellabs #100millionclub #smartphones #nuance #mentorgraphics #lg #motorola #symbian #sonyericsson #Android #windowsphone #Blackberry #handsetmanufacturers #myriad #samsung

[It takes time for your eyes to adjust when you’ve been blind-sighted for so long. Especially if you are an entire industry. Research Director Andreas Constantinou dissects the market of Application Analytics and discusses why it’s the most underhyped market sector in mobile] Application analytics has been one the surprises in the mobile industry radar. It’s a market sector that emerged almost out of the blue in 2009 and became mainstream in just a year, fuelled by the mobile app phenomenon. Why are analytics important? from a developer perspective analytics serve a very simple, practical purpose; that of an optimisation tool that helps increase app downloads and sales. From an OEM and carrier perspective, analytics are a double-edged sword; they offer unprecedented insights into consumer app usage, but they can also leak critical insights to third parties (see the Apple-Flurry dispute). Strategically, application analytics present one of the biggest disruptions on the mobile industry radar; the potential to extract more consumer insights and metrics than can be gleaned through TV, credit cards, loyalty cards and any other medium that has come before. But let’s take things one at a time. The spectrum of mobile analytics Application analytics is only one of the three sectors of mobile analytics. Each sector comes with a different set of participating vendors: – Application Analytics: usage and marketing analytics tools aimed at application developers (e.g. Flurry, Localytics, Motally) – Campaign analytics: usage and marketing analytics tools for mobile web or WAP sites plus campaign optimization tools aimed at media companies (e.g. Amethon, Coremetrics, Omniture, Bango) – Service analytics: platforms for mining network or device data to extract service intelligence aimed at network carriers (e.g. CarrierIQ, Neuralitic, Zokem). The three sectors of mobile analytics differ in terms of probing points, deployment route, sales route, applications and revenue models to name just a few. All in all, mobile analytics is a sector which we expect to see develop over the next 5 years; moreover, it’s probably the most underhyped sector in mobile, as no one can foresee how big analytics is going to get (but certainly many times bigger than TV, billing or other consumer analytics). Back to application analytics now. When researching the landscape of application analytics vendors we came up with an interesting analysis framework; vendors are positioned differently across the user journey, based on their probing points, therefore the metrics that they can gather, and the types of solutions (or ‘intelligence’) that the can deliver, as shown in the next chart. Billing/e-commerce analytics intercept the user journey at the discovery and purchasing touch-points (e.g. Bango, AT Internet). App Store analytics extract data directly from the App Stores (e.g. Distimo). Finally in-app analytics extract data during installation and the application runtime (e.g. Flurry, Localytics, Mobixy). We surveyed the landscape of application analytics vendors in July and August, speaking to Bango, Distimo, Flurry, Localytics, Mobixy and Ubikod. We ‘ve summarised the positioning of these vendors in the matrix below, providing the history, ownership/funding, positioning, products, revenue models and installed base for each vendor. Naturally, there’s lots of vendors that we didn’t have time to cover, namely Motally (now Nokia), Appclix (ex.Mobilytics), Apprupt, webtrends, Adfonic, Google, Medialets, Mobclix, Tapmetrics, Millennial Media, LoopAnalytics, ApSalar, Ivdopia, Mixpanel, appFigures and Eqatec. The comparative table below offers quite a bit of insight into how analytics products from these vendors differ in their background, positioning and revenue models. [click on image for full table] It’s only the beginning Despite the hockey-stick growth, the sector of application analytics is still in its infancy. Some key observations are worth highlighting here. Supply polarisation. There is a very polarized distribution in the installed base with Flurry grabbing more than 95% penetration into iOS and Android apps. At the same time we have negligible penetration for the mass-market of mobile platforms (incl. RIM, Java ME and Symbian). Solution packaging. App analytics solutions are packaged in two very different forms; firstly pure-play vendors offering analytics as a core product (e.g. Localytics, AT Internet, Motally), where first-party hosting, data ownership and tailored metrics are key issues for customers. Secondly, vendors offering analytics as part of an app recommendations, ad or campaign management solution (e.g. Flurry, Mobclix, Medialets), where targeting efficiency is the key issue for customers. Convergence with web analytics: Mobile analytics are converging with their web counterpart. This is happening on the supply side (web analytics firms coming to mobile), the buy side (brands deploying both web and mobile properties) and the user side (as the web and the mobile user journey have many intersecting points) Customer experience analytics is an untapped vertical for app analytics. Purchase decisions, app usage and device monitoring can be leveraged to add unprecedented, granular insight into traditional solutions. Disrupting consumer analytics. The app analytics value will explode as mobile apps penetrate more engagement channels. Set-top-boxes, media boxes, augmented reality apps and online payments will more and more leverage the phone as a remote control or as an experience delivery medium. App analytics will catalyse engagement monitoring in all these channels and in the process disrupting Nielsen’s TV audience measurement business. Snowball effect. App analytics is the “snowball” that will pave the way for all other analytics; for many years companies have seen the benefits of deep behavioural analytics, but never before has the route to market been so straight forward. By piggy backing on app analytics, OEMs and carriers can gain access to the richest customer metrics with the shortest distance to customer purchase decisions and the sales funnel. The “Nielsen” of mobile will be a company with application analytics at the core of its business. In this rapidly evolving market, it is verticals know-how, community-building skills (especially developer communities) and relationships that will determine the real winners and losers. One thing is for certain though; application analytics will bring much-needed transparency and visibility in an industry that has so far been blind-sighted. – Andreas you should follow me on twitter: @andreascon #loopanalytics #millennialmedia #tapmetrics #motally #distimo #bango #mixpanel #google #nokia #localytics #mobixyandubikod #flurry #apprupt #carriers #appfigures #eqatec #webtrends #handsetmanufacturers #Apsalar #appstores #ivdopia #mobclix #adfonic #medialets

[There are 30 tablets coming by Q4 2010, but who is going to buy them? Guest author Jonathan Goldberg, Research Analyst at Deutsche Bank breaks down the supply and demand equation behind the emerging tablet market, and discusses why the impending tablet wave might be a full train arriving at an empty station] This article is also available in Chinese. The key issues The tablet market is opening up, with at least 30 tablets coming by Q4. Here are a few key issues: There are indications of at least 30 tablets coming to market by Q4. And there are reports of at least 80 to be launched in the next six months. There is no hard data available about consumer usage of tablets. This might mean that most of the tablets will be undifferentiated and it is unclear who, if anyone, will buy them. The leading brands in the space this Q4 are Apple, Dell and Samsung. Other major brands are expected to enter the market in 1Q11, including HP Palm, Motorola and RIM Most of the tablets are using Android, but we hear that Google has been trying to discourage many of these projects. They do not support Android for use in tablets with the current Froyo V2.2 of the OS. This means some of the tablets coming this year may lack access to the Android marketplace, Google maps, etc. All of the tablets we have seen run on ARM-based processors. Major suppliers will be Qualcomm for the 3G baseband and integrated applications processors. We have seen tablets using applications processors from Marvell, Nvidia, Samsung and Texas Instruments. There are also a number of designs using silicon from Atheros, Broadcom, Skyworks and Triquint. In theory, this could be good for these vendors, but the looming glut of product may dampen enthusiasm for the category. Pricing will be a key determinant. Most reports peg low-end models at $300 or less. However, there are reports of prices ranging as high as $900. I believe there will be few takers for tablets priced above the iPad. Overall, everyone likes the idea of a tablet, but I think it will take a year or two before the market shapes up. There are just too many devices coming online amid very initial interest from consumers. Eventually, the tablet may become a preferred media consumption device for consumers, filling the gap left by underpowered netbooks. There is likely room for both netbooks and tablets in the market, but it is too early to gauge the size of the tablet market. What’s a tablet? Any discussion on tablets needs to start with a definition. For our purposes, we will define them broadly to include anything that is not a smartphone or a laptop. These devices have no hinge as laptops do, but cannot easily fit in a pocket. This covers considerable ground from e-readers to true tablet computers. Most of the tablets coming to the market today are less mobile than smartphones, but have essentially the same computing power. The iPad is the best example of this. The electronics of an iPad are identical to an iPhone – same processor, same memory. It does have longer battery life, but no one would argue that it is less portable than a phone, since it does not fit in a pocket. These facts seem somewhat incongruous, leading to several interpretations. The first is that with time tablets will see an increase in computing power. In fact, there might be a few of these more powerful tablets in the works for next year. Another interpretation is that Apple has just confused the market, which they can get away with because of the power of their brand. They positioned the iPad to fit into their own product line-up, not to meet industry expectations. It will be interesting to see if any of the tablets coming out later this year have noticeable performance deficiencies, in the form of hang time and slow app loading. A more gloomy interpretation is that this is a dead-end form factor. While I’m more optimistic than that, I believe the OEMs should seriously question what ‘need’ a tablet addresses for consumers. What is the Tablet Market? To better assess the potential for the market, we need to deconstruct it a little. First, it is worth considering who has bought a tablet so far. Then we should consider what they are doing with those devices, and finally compare that to what the devices are capable of. As with all such new products, there is very little hard data available, but here’s what we know so far. Who is buying tablets? So far, there are really two products that fit into this category – the Kindle and the iPad. Amazon has not released any data on Kindle sales, but they continue to roll out new models, so it must be doing well by some internal metric, and most reports indicate Kindle is helping to expand overall book sales by Amazon. Apple has sold over 3 million iPads since its launch last quarter, and Deutsche Bank estimates are at 12 million unit sales for this year. That’s an impressive number for a new product, but a small number relative to everyone else’s expectations for the category. It is still unclear who is buying these. By some estimates, a very large percentage of iPad buyers are already iPhone owners. There is a lot of synergy between the two with easy syncing of content and Apps via iTunes. There is also a lot of anecdotal evidence to suggest that the iPad has broadened the demographic group of iPhone buyers. For instance, some people have bought the device for parents and grandparents, reaching a group who is uninterested in the Apple brand but like the ease of use of the device. What are people doing with tablets? While waiting for further hard data on iPad usage, we can look at iPad developer activity and app downloads as a decent proxy. Developers, for their part, seem very interested in the iPad. In the graph below you can see iPad apps versus iPhone apps, in terms of available apps in iTunes plotted against days since the release of each of the two products. iPad apps have outpaced iPhone apps in growth, although we should take into account that writing an iPad app today is much easier than writing an iPhone app when iOS first got a start, three years ago. According to Distimo, developers for the iPad also seem to be taking advantage of a wider variety of iOS features such as in-app purchases. The Distimo data also shows that as a percentage of apps, games are more prevalent on the iPad than the iPhone. Prices for iPad apps also tend to be higher than comparable (sometimes identical) iPhone apps. From this, we infer that developers see this as a worthwhile market, and possibly one with a superior demographic for paying for software. What it all boils down to is a lack of actual data. While there have been some consumer surveys done on the space by tablet vendors, this is really a virgin market. No one knows what consumers want from a tablet or whether they even want one at all. I am actually somewhat optimistic about the tablet as a concept, but I think the excitement will outpace demand in the near term. There is also a gap between laptops and smartphones, that gap will find interest from some consumers, as was the case with initial excitement for netbooks. Consumers want low-priced computing devices that have larger screens than a phone. This market was artificially capped by Intel and Microsoft who sought to stave off cannibalization of their laptop business. The end result was that consumers lost interest in underpowered netbooks, which struggled to multi-task or play high quality video. The first devices available run iOS and Android, but they will by no means be the only offerings. Google is likely to enter the fray soon with Chrome, an OS originally built for netbooks, but equally applicable for tablets. Google has even made comments that Chrome is the preferred OS for tablets. Beyond this, however, there will be other options. HP will likely have a Palm webOS tablet out soon. Blackberry has announced a new OS for their PlayBook device available early next year. And even MeeGo has to be considered a potential entrant. Although I’m skeptical about this OS’s prospects, many reports indicate that MeeGo is actually very well suited for a larger form factor like a netbook or tablet. Perhaps the only entrant I would not add to the list is Windows 7 (Big windows not Windows Phone), since conventional widom is that this OS is just not suitable to the touch-screen form factors that are quickly becoming standard for this class of device. There is a video making the rounds on the blogosphere that shows how clunky the Windows 7 interface is with touch-screen input. In this year’s race to launch tablets, it seems like few companies have given much thought to the software experience. Most of the companies launching tablets appear to be using Android. This is despite that company’s weak support for Android on this form factor. It appears that many of the Android tablets launching this year will NOT have links to the Android marketplace as the FroYo (2.2) release is not really designed for tablets starting from the screen resolution. I believe Google is encouraging hardware makers to hold of on Android tablets until the Honeycomb release due out next year. This implies that many of the Android-based tablets coming out this year will have very few apps and limited ability to download them. Effectively, these tablets will be large, expensive browsers. Competition The tablet field is expected to be very crowded, from as early as 4Q10. Below is a table compiled from a range of sources, including news reports and blogs. There might be some discrepancies, especially on pricing, but many of these devices have been officially announced. And this list is by no means complete. There is also this user-generated list of Android tablets coming for Christmas. At the time of writing there were 22 models listed. As if that were not enough, here is another list of all 73 tablets rumored or announced so far. In terms of official developments, Samsung has officially launched its Galaxy Tab, RIM has announced its tablet and, most recently, reports emerged on the web that Amazon was preparing its own Android tablet and Android marketplace. A key question will be pricing. There is no seen official word on this, but some press reports indicate the Galaxy Tab device will cost $900+ without a carrier subsidy. As PC World points out many of the tablets coming to the market are charging a premium to the iPad. Maybe Samsung can pull that off, but few other tablets will be able to command a premium to an Apple product. Conclusion: Who benefits from tablets? The answer to that is that there are too many tablets coming to market too soon. With no hard data about consumer usage, it’s likely that most of the products will have a hard time differentiating themselves. This will probably lead to a glut that will mean pricing pressure for most of these vendors. From the component level, the biggest beneficiaries are the screen vendors. Capacitive touch screens are not cheap, and are probably the most expensive component in the bill of materials. So far we have seen few tear-downs of any of these tablets. The iPad BOM is very similar to the iPhone and iPod touch, running an Infineon 3G baseband, Skyworks and Triquint’s front-end modules, and the internally developed Apple A4 processor. It is likely many of the Android tablets are using Qualcomm’s Snapdragon or other MSMs for 3G connectivity. Also, there are reports that tablets makers are trying out Nvidia’s Tegra, TI’s OMAP and Marvell’s Armada for applications processors. Finally, investors will have a hard time tapping into this. On the one hand, price competition from a multitude of Android tablets would imply lots of volume. On the other hand, design wins are not free; they cost upfront engineering resources. A glut of product could lead to inventory back-ups and order declines in Q1. For the time being, my view is that tablet volumes (other than the iPad) are likely to remain small relative to PCs and handsets. Nonetheless, we should expect a shake-up next year as suppliers pick their battles carefully. – Jonathan [Jonathan has been a Research Analyst at Deutsche Bank for 8 years and focuses on wireless technologies and the Mobile Internet. He can be contacted at “jonathan.goldberg (at) db (dot) com”] #ios #nokia #Apple #lg #motorola #Android #windowsphone #hp #chromeos #Blackberry

[Windows Phone 7 has the potential to redraw the smartphone competitive landscape and accelerate the evolution of the mobile value-chain. With the arrival of WP7 just around the corner, VisionMobile Research Partner Michael Vakulenko explains what success of the platform can potentially mean for the industry and why Microsoft’s mobile comeback should be closely watched.] This article is also available in Chinese Just over a year ago I had written how Apple’s iPhone and Google Android will capture leadership positions in the smartphone race, leaving behind all the legacy smartphone operating systems. Indeed, one year later iPhone and Android are confidently cruising ahead on the tailwinds of consumer, operator and developer ecosystem support. Symbian continues to submerge into irrelevance distracted by its venture into open-source waters. The only two handset makers who are members of Symbian Foundation board recently jumped the ship. Both Samsung and Sony Ericsson lately said that they do not plan any new Symbian handsets. Worst yet, major chipset makers are scaling down their efforts to support Symbian. The direction is clear: Symbian is soon to become Nokia-only internal OS hidden behind Qt application framework. RIM is steadily drifting towards mid-, low-end of the smartphone market. Contrary to common perception, enterprise users are no longer the platform’s most important audience. Over half of the subscriber base and 80% of Blackberry growth comes from the consumer space. The reason is the viral effect of Blackberry Messenger application popular with teenage kids and college students. Contrary to Nokia and RIM, Microsoft took proactive approach. Instead of patching the leaking boat of Windows Mobile, the Redmond giant build ground-up a new smartphone platform carefully designed to address challenges presented by iOS and Android. Make no mistake, Microsoft’s primary motivation for Windows Phone aren’t its software licensing fees. The real motivation is the need to protect Microsoft core businesses of Windows and Office product lines. Mobile and smartphones became pervasive. Microsoft must have a convincing mobile story to prevent increasing numbers of users churning to Apple and Google product ecosystems. There are reports claiming that Apple sells just as many computers as Dell to college students. Naturally, a decision to buy a Mac is much more easier for a person already owning an iPhone. A person regularly using GMail or Google Apps on a PC and Android phone is much more prone to dropping Outloook, Word, Excel and PowerPoint in favor of cloud-based alternatives from Google. With absolute majority of Microsoft operating profits coming from licensing of Windows OS and Office applications, the software giant cannot afford losing users to Apple or Google. Both Windows and Office must be augmented by the ‘mobile screen’ to remain competitive. A comeback in the making? Based on pre-release information, Windows Phone 7 has all the necessary ingredients to become a powerful contender in the smartphone race. First, there is clear differentiation thanks to fresh user interface and deep integration with Microsoft on-line services and products. The UI and the interaction model are based on well-received Zune HD Player (funnily enough there is Zune Home app on Android Market, which replicates Zune HD look & feel on Android). Finally we see refreshing departure from icon-based navigation that became de-facto standard following iPhone introduction. The user experience is closely integrated with Windows Live, Xbox Live, Bing Maps cloud services, Zune content platform, together with pervasive Office and Exchange. Microsoft has impressive number of users registered for its on-line services – 360M Hotmail accounts, 299M Messenger accounts, 23M Xbox Live subscriptions. This will certainly help driving Windows Phone adoption. Second, when it comes to developers Microsoft is playing on its home ground leveraging established developer ecosystem and excellent development tools. Windows Phone 7 application development is based on Silverlight UI framework and XNA game runtime. Both are well-known to large number of PC and Xbox developers eager to apply their skills in mobile environment. Consider that Windows Phone 7 Beta SDK was downloaded 200,000 time in just 2 days since its general availability. Instead of wresting developers from iOS and Android platforms,  Microsoft can tap into large pool of loyal .NET and XNA programmers, converting them into an army of mobile developers. Developer monetization is high on Microsoft’s agenda. Windows Phone Marketplace avoids the pitfalls of the competing platforms promising predictable and transparent approval process, lack of handset fragmentation, localization, try-before-buy model, app beta testing program, and tools for active promotion of the content in the Windows Marketplace. Third, operator billing supported by Windows Phone Marketplace will be instrumental in winning operator subsidy and marketing budgets from iPhone and Android. These budgets are critically important for the platform success. Windows Marketplace already supports operator billing for older Windows Mobile platform. This experience will help Microsoft quickly introduce operator billing for growing number of operators. Sure enough, Microsoft can be flexible on splitting 30% of app sales revenue share with operators. Not surprisingly, all five major UK operators will be selling Windows Phone 7 handsets at launch. All these combined with familiar consumer brand and a huge $500M marketing budget (more than 5 times bigger than any previous Windows Mobile launch) makes Windows Phone 7 a convincing entry to the smartphone game. This entry is already supported by a lineup of handset makers from experienced mobile players like Samsung, HTC and LG, to PC specialists like Dell and Asus. So what’s the catch? Windows Phone success will ultimately depend on Microsoft’s ability to execute on the promise. Microsoft will need to deliver solid product experience, prove monetization potential for operators and developers, and keep the momentum by following up with subsequent platform versions. Without these, Windows Phone 7 will only remain a great promise. What will Windows Phone’s success mean for the mobile industry? The mobile industry has radically changed in the recent years. In an industry where the only constant is change, what impact will the success of Windows Phone have on the mobile industry? The hardware specs of leaked Windows Phone handsets from HTC, Samsung, LG, Dell, Asus and Toshiba reveal striking similarity between the models. All are based on QUALCOMM’s Snapdragon chipset. The variations are limited to industrial design, amount of memory, optional physical keyboard and FM radio. Are we entering PC-like era in smartphones, where industry will converge on a small number of hardware configurations? Will we see emergence of ‘Wincomm’ alliance in mobile similar to ‘Wintel’ in PC? Value-chain evolution theory says this is not question of ‘if’, but the question of ‘when’. Windows Phone 7 looks like a natural catalyst for this to happen much sooner than some companies would hope for. This will be great news for low-cost ‘assemblers’ like Dell, Acer and Asus, who lack significant software capabilities and experience. With Windows Phone software and QUALCOMM’s support these companies can readily replicate their PC business models, brands and experience, while thriving on single digit operating margins. To do so, they only need to focus on building hardware platforms for Microsoft software, while leveraging pre-integration with QUALCOMM chips for fast time to market. Microsoft definitely learned from mistakes made with Windows Mobile. This time the approach is closer to the PC model: ODMs are given exact specification of how the hardware platform should look like. From the screen size, to amount of memory, to number of navigation buttons on the device. For low-cost ‘assemblers’ Android proved to be too difficult to productize. Dell Aero is one example, which is four Android versions behind now. Using Windows Phone software will significantly lower barrier to entry on the software side. Paying software licensing fees to Microsoft may prove a better way forward than a crappy product that doesn’t sell. On the other side, these will be very bad news for high-margin branded OEMs like Motorola and Sony Ericsson. Such OEMs will have little chance to protect their business from increasing competition from low-margin assemblers. Adopting Windows Phone won’t help: Microsoft is determined to maintain tight control over the platform and limit OEM differentiation opportunities. Increasing smartphone commoditization accelerated by the entry of low-cost ‘assemblers’ will certainly put strain on today’s leaders, Apple and Google. Apple seems to be well-positioned to keep its positions in the mid-term. But will we see its vertical integration becoming a liability in the next phases of value-chain evolution? The phases where flexibility and customization of commodity products will favour modular solutions. For Google things can quickly get challenging. Android is yet to grow into a recognizable consumer brand being concealed by operator and handset maker brands (e.g. Droid and Sense). What if Android will get squeezed between style-conscious consumers opting for iPhone and masses of mainstream users opting for the comfort of familiar Windows brand? Will we see Android slowing down and struggle outside the group of tech-savvy users? What about mobile operators? Windows Phone success will increase the dominance of non-mobile players in the mobile ecosystem and their control over user experience. The distance between user and operator will inevitably increase, and we will see more and more mobile operators settling on the role of a ‘pipe’ satisfied by getting a share of app and content sale revenues. Tipping the scales of the smarpthone market If successful, Windows Phone 7 will catalyze further shifts in the mobile industry bringing PC-style commoditization and increasing distance between operators and their subscribers. Microsoft and low-cost, PC style ‘assemblers’ will be the main winners driving smartphone price declines. High-margin branded OEMs will have no choice but to look for new ways to create value to operators. This is to snatch critically important subsidy and marketing budgets from Apple and RIM. Apple and Google won’t wait long to make Microsoft’s life harder. Google can be exposed on multiple fronts and finally will have to pay closer attention to operator and developer interests. Things will continue to be interesting in mobile in the foreseeable future. How do you think things will shape up with Windows Phone? Who will be a winner and who will be a loser? – Michael [Michael Vakulenko is a Research Partner at VisionMobile. He has been working in the mobile industry for over 16 years starting his career in wireless in Qualcomm. Michael has experience across many aspects of mobile technologies including handset software, mobile services, network infrastructure and wireless system engineering. He can be reached at michael [/at/] visionmobile.com] #rim #google #nokia #Apple #symbian #windowsmobile #Android #windowsphone #microsoft #handsetmanufacturers #iphone

[In the debate of Flash vs HTML5, has the death of Flash been over exaggerated? Guest author Guilhem Ensuque peeks through thick layers of hype and facts to predict what the future holds for the mobile web]. The last year has seen a flurry of announcements and debate around the rise of HTML5 and the fall of Flash. Some have even gone as far as declaring a “war” between the two, and predicting the “death” of Flash as the outcome. However, as Mark Twain once famously said: “The rumor of my death is an exaggeration”. As we’ll see, the jury is still out as far as the fate of Flash and Adobe are concerned. A brief (abridged) history of the web “HTML5” is the new high-tech industry darling, and not just in the mobile space. It has become a catch-all phrase with little meaning when taken out of context. Before we dig into the debate, it’s worth looking at what is HTML5 and where has it come from. “HTML5” when used as a shorthand, covers of family of web technologies currently being standardised by the W3C and at various implementation stages by browser vendors. The “5” comes from the version increment in the W3C spec number: currently most of the content you read on the web conforms to the HTML specification version 4.01. To understand what has driven the creation of this new version of web standards, we need to look at the evolution of the web in past years. In the 2000s, the web evolved towards more interactivity with the advent of the “Web 2.0” (yet another buzzword) and user-generated content, especially videos uploaded and then streamed over faster ADSL connections. However, the HTML spec did not fundamentally change (apart from an attempt by the W3C to migrate to the stricter XHTML syntax which has seen mixed results in terms of adoption). To cope with HTML4‘s inefficiencies in allowing designers and developers to create interactive “experiences” (i.e. not just documents, but bi-directional “applications” living in your web browser) a number of innovations were introduced : JavaScript, Dynamic HTML and XML HTTP requests (a.k.a. AJAX) as a way to have thick-client app functionality in the browser, enabling users to interact with the web in a read-write fashion (not just read-only) clear separation of page structure in HTML (through heavy use of tags) as well as typoraphy and style in CSS (through an arcane and verbose syntax), leading to more pleasant user experience and richer page contents PHP-scripted and database-powered back-end logic bolted on top web server systems. This e.g. allowed template-driven content management systems like WordPress and Joomla to rise to prominence, fueling the blog revolution. These innovations brought the ability to present vast amounts of data in pretty-looking dynamic web pages which mash-in RSS feeds, emails, blogs, Facebook updates, and tweets, and bringing web pages a step closer to applications. In that era, Flash (or rather the Flash Player) rose to become a ubiquitous browser plug-in for animated graphics and video. At the same time, Flash evolved to provide an out-of-browser Rich Internet Application platform with the AIR runtime and the Flex framework, albeit at a much lower penetration level than the in-browser Flash Player. We are now at the dawn of the 2010s, and the overhaul of the HTML4 spec is long overdue. HTML5 aims to bring back into the core spec of the web the “side” developments of the previous era and improve on them with a heavy focus on web applications. It also aims to lay the foundations enabling the delivery of web content through a new medium: mobile devices, and ultimately the “Internet of Things”. That history is yet to be written, but we can now ponder about its beginnings and the future. So, What is HTML5 Really ? In the context of this new era, the “HTML5” shorthand refers to a family of web standards and browser technologies that span a range of topics: A modernized web markup language: the true-and-only HTMLv5 specification and matching evolution in web browser capabilities. The new syntax includes the tag allowing bitmap manipulation through JavaScript drawing APIs, better support for vector graphics authored in SVG, the tag allowing streamed media playback as simply as embedding images and the streamlining of tag usage. A richer styling language: the Cascaded Style Sheets v3 specifications. CSS3 is now famous for its ability to create rounded corners, but more importantly includes so-called “transforms” allowing graphical effects like moves, rotations, gradients, etc. as well as 3D graphical objects manipulations. Much effort as been put by browser vendor to support hardware acceleration for CSS3 rendering. However, the standard is not yet mature and today requires using prefixes specific to each browser. Application-oriented advancements in the browser, as well as matching JavaScript APIs: the Web Workers offering background and concurrent execution capabilities; a Web Storage allowing simple local data storage and manipulation in XML; and a Web SQL Database  providing the capability to perform SQL queries on large amounts of data stored locally and replicated from a server. Mobile-oriented advancements (not yet finalised in the specs) including JavaScript APIs for Geolocation, Device and File APIs Miscellaneous additions catering for the Semantic Web (microdata), security (cross-domain HTTP requests), and more. To the above set of technologies standardised by the W3C we should add a domain that has sprung out of both proprietary or open-source efforts: high-performance JavaScript runtimes within browsers and JavaScript Application Frameworks. The latter extend the capabilities of the web, turning it into a full-blown client-side application platform much in the same way that UI and application frameworks like Qt or Gtk extend the “bare” Linux OS framebuffer. Such application frameworks include complementary JavaScript APIs, and rely on CSS3 to provide extensive sets of UI controls. Some mobile-specific frameworks (like Phonegap or BONDI, an offspring of the mobile operator community) go as far as providing additional device APIs for smartphone features like messaging or camera, while others provide a rich set of UI controls mimicking the native platform look & feel (more on this later). Why the clash with Flash ? There’s no denying that the capabilities brought forward by the emergence of the HTML5 “family” bring browser runtimes on a par with core capabilities of the Flash Player, which if adopted widely could make Flash redundant. In the eyes of most mobile industry observers, the delays in bringing out a fully-featured Flash Player with acceptable performance on smartphones have played in favour of HTML5. Remember that, as of today, Flash Player v10.1 is only available for high-end smartphones that run the Android version 2.2 operating system. I would estimate that these represent only 1% of the overall smartphone shipments in Q2. This is a far shot from Adobe’s self proclaimed goal of having Flash shipping on 50% of smartphones by 2012 (see my previous article on this topic). Figure: Smartphone Operating Systems – Q2 2010 Shipments share (source: Gartner, Google)CompanyBrowser / OSHTML5 complianceNokiaSymbian S60 5th Ed.7%RIMBlackberry v50%RIMBlackberry v6 (Torch)*69%GoogleAndroid v2.1*50%GoogleAndroid v2.2*59%AppleSafari for iPhone (iOS 4.0)*62%MicrosoftIE Mobile (Winmob 6.5)0%OperaOpera Mini (on iPhone)9% Figure: HTML5 compliance of mobile browsers [some notes on the methodology: HTML5 compliance was carried out using html5test.com. (*) denotes a WebKit-based browser. The Nokia Symbian S60 browser, albeit based on an old version of WebKit, scores poorly in HTML5 compliance tests. I could not test Mozilla Fennec, Palm’s WebOS browser, nor Opera Mobile.Opera Mini is a special case due to server-side rendering.] Making things worse, Apple has stayed firm on its policy to not allow the Flash Player browser plugin on its iOS devices (iPhone, iPad and iPod Touch), preferring to rely on its in-house video streaming capabilities developed within its HTML5-capable WebKit browser core and QuickTime player. And to make things even more complicated, Steve Jobs’ “Thoughts on Flash” have played a key role in fanning the flames of the “Flash is dead, long live HTML5” fire. Moreover, Google’s Android, Palm’s WebOS and, more recently, RIM’s Blackberry also embed web browsers based on WebKit that score very high in terms of HTML5 compliance, as can be seen in the table above. Thanks to WebKit, half of the smartphones being shipped are poised to have the Flash-like capabilities brought by “HTML5” built into their browsers. However, let’s not rush in declaring Flash “dead” and Adobe a company in decline as a result. Does HTML5 matter to Adobe ? HTML5 is actually good for Adobe’s business. Indeed most of Adobe’s revenues do not come from Flash as can be seen by breaking down the Flash product portfolio:: The Flash Professional tool, is the authoring software for creating Flash content. It ships standalone or within the Creative Suite bundle. This is where Adobe makes its money as can be seen from the “Creative Solutions” BU share of the chart on the side (courtesy of Business Insider’s “Chart of the Day” series). Creative Suite also includes the massively popular Dreamweaver web design tool, and Illustrator, a vector graphics design tool, both of which which are now starting to incorporate HTML5/CSS3 design capabilities. Adobe has also hinted that Dreamweaver will be able to convert Flash timeline animations to Javascript/CSS3 code to render those animations in “HTML5” compliant browsers. This means that “HTML5” will not be a threat to Adobe’s main source of revenue. On the contrary, since there are few good commercial web design tools, the rise of “HTML5” will spur demand for Adobe products. The Flash Player: the plug-in is free and is therefore represents  an R&D cost for Adobe. No impact there. One might argue that, if HTML5 were to totally eliminate the need for the Flash Player, it would the positively impact Adobe’s bottom line in the unlikely event the company were to lay off the entire Flash Player team 🙂 The Flash “Platform”: “auxiliary” products that rely on the Flash Player include the Flash Media Server and Flash Access product ranges, licensed to organisations that use Flash to deliver streamed video content (e.g. Hulu, Influxis, Brightcove). The “Platform” also includes the commercial Flash Builder IDE allowing the development of Rich Internet Applications (and the associated free and open-source Flex framework). As can be seen in the chart, these represent a minute proportion of Adobe’s revenue. As we will see further down, these products are not going to disappear overnight due to the emergence of HTML5. However, HTML5 does put competitive pressure on the product management and engineering teams responsible for the Flash Player to out-innovate the evolutions in browser technology. Adobe points out that this is “business as usual for them” as –they say- it was never their intention to fully replace the browser altogether, but rather complement its capabilities with innovative features, and harmonise areas in which standards have been implemented in an inconsistent fashion across browser runtimes. As an engineering-driven company, Adobe aims for Flash to stay one step ahead of HTML5 technology implementations, as it already is today in numerous areas. Indeed, an agile R&D division within a single corporate entity will always be faster than a “snail driven by a committee” as the W3C HTML5 spec bodies have been dubbed by some. Some areas where Adobe is pushing the envelope for the Flash Player include 3D rendering with hardware acceleration, concurrency support, IP TVs and peer-to-peer media delivery. The latter is an interesting transposition of the file-sharing P2P concept; imagine tens of millions of users watching the same live video coverage of the opening ceremony of the 2012 Olympics in London. No server farm or CDN today is capable of sustaining such a peak demand. By allowing instances of the Flash Player across millions of peers to share chunks of the video stream at the edge of the network could be the answer to the problem. Beyond innovation, another aspect to factor in is that HTML5 is still in its early stages of implementation across browsers, with Microsoft’s uber-popular Internet Explorer browser today lacking any form of HTML5 support whilst representing close to 60% of the web user base (see chart below). Even with the IE9 beta improving HTML5 support and other browsers consistently gaining market share it will still take some years before HTML5-capable desktop browsers dominate the installed base. This will justify the existence of Flash in the desktop browser space for years to come and give some leeway to Adobe’s engineering teams in designing more innovative capabilities. Figure: Desktop web browsers users share and level of HTML5 compliance (sources: wikipedia and test conducted with https://www.html5test.com) Reality check: comparing Flash and HTML5 in key areas So how is Flash vs HTML5 faring today? For review purposes we can single-out a few key areas of Flash and HTML5 competition, specifically display advertising, video delivery, games and application development. Display Advertising: a slight advantage for Flash One of the main use cases for Flash (and big source of annoyance to web users) is display advertising. “Display” adverts are animated banners that appear at the top, side or overlaid in front of the web content you. As annoying as they may be, display ads are a necessary evil for the online world since they represent 40% of the revenues that the digital content and e-commerce ecosystems live on. Even Google uses Flash in its DoubleClick Studio rich advert SDK for advertisers. Indeed a point often overlooked is that today’s HTML5 graphical rendering capabilities are at the level of what Flash capabilities were some years ago and CSS3 transforms allowing to design good “eye-candy” are inconsistently supported across browsers. Therefore I would argue that advertisers will hold back from using “HTML5” for display ad creation in the medium term. The lack of proper HTML5/CSS design tools will also delay this technology adoption by design agencies and creative professionals especially within  industry circles where Flash is deeply entrenched. On mobile devices, the situation will be no different. The blue legos now seen on iPad and iPhones may soon be replaced by HTML5 counterparts; or even by iAds. However, as of today, Apple is the only company creating iAds (in the process levying a hefty ad tax) and is reported to be struggling with the demands of advertisers with its in-house HTML5-based ad creation tools and technologies. Video Delivery: advantage for Flash Another area in which “HTML5” has been touted a “Flash killer” is online video delivery. Let’s have a look. As far as basic video playback is concerned, Flash and HTML5’s tag provide the same capabilities, so why not ditch Flash and avoid to end users the (relatively minimal) hassle of installing a plugin? The situation is not as simple as it sounds as the various browser vendors do not yet all support the same video codecs. On one side, Apple and Microsoft are proponents of H.264; Google is pushing its opensource WebM codec (formerly the proprietary VP8 codec that it inherited through the acquisition of On2/Sorenson); and Mozilla and Opera by default supporting the free and opensource Ogg Theora. This poses a challenge to online video publishers like YouTube since they then have to re-encode their content multiple times to support each codec. To end users, this means that videos may not be available in the format supported by their browser. Flash on the other hand, even though it requires videos to be packaged in the FLV container format (not to be confused with encodings like H.264), is available across all desktop browsers and is used as a reliable fallback by “HTML5” web developers i.e. for the 50% or so of IE end-users whose browser can’t render the tag. Furthermore, the Flash Player supports advanced capabilities required by online publishers such as DRM protection (crucial for pay-per-view business models) and picture-in-picture overlay of multiple video sources with alpha-blending (e.g. for e-learning or overlay of contextual adverts). These capabilities may not be offered for years with the tag in HTML5 browsers. Casual Games and Visualizations Flash is the technology that powers some massively popular “casual games” (such as Zynga‘s Farmville or Mafia Wars) played by millions of Facebook users worldwide. It also powers numerous other Facebook applications. There was earlier this year a rumor that Zynga was converting its titles to HTML5 to be able to run on the iPhone and iPad. This turned out not to be true, as it announced at Apple’s WWDC that it had ported Farmville to the iPhone as a native app; which may be interpreted as a sign that “HTML5” was not up to the task. Other “HTML5” demos that have received a lot of media attention are Google’s “bubbles” doodle earlier this month, its experiment with Arcade Fire or a port of Quake to JavaScript using GWT. However, I do not yet see casual games developers or visualization artists migrating “en masse” away from Flash. This may be explained by the fact that those experiments in “HTML5” remain CPU-intensive and RAM-hungry (more than Flash in most cases), while designer-grade tools are lacking, and the fragmentation between browsers makes Flash a lot more dependable. Applications Development: a draw Web app development is another technology domain where the HTML5 family of technologies has been contending with Flash. We have seen earlier that “HTML5” provides most core capabilities needed to run local applications, including code execution, storage and access to the screen. These core capabilities are now complemented by a flurry of web application frameworks that rely on JavaScript / CSS: DoJo, JQuery, MooTools and Sproutcore, to name a few. Google’s Web Toolkit (GWT) represents a particular case since it is a framework + tools package that allows to code a web application in Java and convert it to JavaScript for execution in the browsers (note how Gmail, Buzzz and other Google apps are built with GWT). This abundance of JavaScript frameworks may be encouraging, but also represents a dizzying array of choices for the developer. This diversity limits the degree of industry-wide code reusability and fragments the pool of Javascript app developers into vertical niches. This diversity further plays in favour of Adobe’s own web applications platform AIR (a sibling to the Flash Player) and the associated Flex framework, which uses the Actionscript programming language and allows XML-driven UI design through its MXML language. In my own experience, seasoned developers find ActionScript and MXML a much better programming paradigm than Javascript frameworks in most developer aspects; code reuse, team productivity, tools support, debugging and ease of UI design. In conclusion, the momentum behind web applications thanks to “HTML5”’s core capabilities and associated frameworks may seem unstopable, especially as it is driven by technology behemoths like Google and a large enthusiastic community. However this optimism is mitigated by the lack of developer productivity and the rising popularity of Adobe’s application development technologies. What of the Future ? Based on the earlier analysis, Flash is far from dead today. There are many cases in which Flash will continue to offer a better alternative (worst case a very useful fallback) to “HTML5” technologies due to the fragmentation in new web standards browser support. To the question : “will HTML5 kill Flash?” there is no single answer. It all depends on which use case is considered and in what timescale. On the desktop front, it is the lack of HTML5 capabilities in IE8/9 and their immaturity in all other browsers, that will secure the future of Flash in the medium term. At the same time, Adobe is under pressure from Microsoft, Google and Apple who are betting huge R&D budgets in the development of HTML5-capable browsers and who should be able to out-innovate Adobe in the longer term. On mobile, the Flash Player is still in its infancy, while WebKit-based browsers are sharply rising towards ubiquity (250 million and counting as of end 2009). This gives the “HTML5 camp” an edge today, especially in the area of basic video playback and mobile web applications for which numerous JavaScript/CSS3 mobile frameworks are available. Looking forward however, Flash may still better HTML5 on mobile for use cases like casual games and animated graphics given its greater dependability and its widespread usage today in those communities. Where would you place *your* bet? – Guilhem [Guilhem Ensuque is Director of Product Marketing at OpenPlug. He has more than twelve years of experience in the areas of mobile software and mobile telecoms. Guilhem was a speaker at last year’s Adobe MAX conference. His favorite pastimes (beyond mobile software strategy!) include making his baby daughter smile and sailing his Hobie Cat with his girlfriend. You should follow Guilhem on twitter @gensuque_op] #mobileapps #flashlite #browser #mobiledevelopers #Adobe #developers #flash #mobileapplications

[Android is leading the smartphone revolution in Western Markets. But what about China, the country with the biggest mobile user base? Guest author Hong Wu analyses the state of Android in China – from chipset vendors to software developers – and how the dragon is waking up.] The article is also available in Chinese. HuaQiang Road, ShenZhen, GuangDong, China, an ordinary weekend. At 10 o’clock in the morning, there are few pedestrians around. Sanitation workers are cleaning up hundreds of deserted mobile phone packages and plastic bags near mobile phone supermarkets, along with bundles upon bundles of mobile phone manuals, and even a few dozens of broken CDs, with labels showing clearly the words “HTC” or “SonyEricsson”. Clerks in more than a dozen bank branches on HuaQiang Road and ZhenHua Road are busy refilling cash into their ATMs. In the next 5 hours or so, those bank clerks and ATMs will be responsible for hundreds of millions of Yuan in cash transactions. Yes, cash and stock products are the rules of transaction here. This commercial business district, often called as “HuaQiangBei” (or north of HuaQiang), is the strike-it-rich spot for many poor grassroots classes in ShenZhen. This neighbourhood has become the global hub for consumer electronics. Android has recently become the hot topic within HuaQiangBei district. Sales figures of Android phones have been climbing on a daily basis at YuanWang Digital City. Most of these Android phones use Qualcomm’s chipset, while only a few of them run a chipset that’s made in China. Nearby, at MingTong Digital City, one can find heaps of ShanZhai (山寨) mobile phones on sale (ShanZhai refers to Chinese imitation and pirated brands and goods, particularly electronics). There only a few Android phone models on display, but customers keep coming back asking for more. In the meantime, the software engine that powers ShanZhai smartphones has shifted from Windows Mobile to Android, and most of they are using chipsets that are made in China. A 15-minute drive from HuaQiangBei business district, at CheGongMiao business district, are the headquarters of dozens of mobile phone design companies, who are in the midst of the mobile food chain. On a daily basis, engineers here crank out some very exotic prototype phones using MediaTek’s chipset solutions. Since 2009 when Android caught fire, sales guys from MediaTek, HiSilicon, Rockchip, Actions-Semi, and other chipset vendors are arriving day after day, hoping to sell their solutions and get a piece of the pie from the Android revolution. Once an Android-based white label design is out, the phones will be manufactured in factories at Bao’An ShenZhen and LongGang districts. The plastics are then stamped with the right retail brand stickers, and put on the shelf at the consumer electronics crossroads that is HuaQiangBei. The MediaTek powerhouse MediaTek (MTK) sells between 300 to 400 million chipsets a year for 2G handsets, and is the predominant force behind low cost phones in China. MTK’s foray into the smartphone market began in February 2009 when they released the MT6516 design, at that time based on Windows Mobile 6.5 OS. MT6516 is a dual core solution; the application processor is an ARM 9 running at 416MHz, while the baseband processor is an ARM 7, running at 280MHz, supporting 2G (GSM/EDGE). This solution suffers somewhat in terms of performance when compared to the Qualcomm’s MSM7200, but its BOM is lower. One step up, the MT6516 deluxe version includes a 2.8” QVGA resistive touch screen, 2MP camera, GPS, WiFi, and Bluetooth silicon, with a quoted wholesale price of $90. The basic MT6516 version with no touch screen or camera is quoted at $60. Note that approximately $10 of that quote goes towards the Windows Mobile license fee. In other words, expect prices to go down considerable with an Android design. Despite its market mussle, MediaTek didn’t anticipate that the Android revolution would arrive so soon. For example, MediaTek didn’t join OHA until 2010 while the first MTK Android handsets are just making their first steps into the Chinese market (there is a rumour that a leading Android OEM had earlier veto’ed MTK’s entry into the OHA to avoid price competition). TongXinDa in ShenZhen has been the first ODM to release an Android phone based on MTK’s MT6516 solution, the “TongXinDa TOPS-A1”. The phone boasts unique features such as dual SIM cards (both GSM and CDMA, and both at active states), a dual boot system (Windows Mobile 6.5 and Android 1.6 both stored in ROM) with 256MB RAM and ROM, and a 400×240 screen resolution. The phone ad is shown below (note that the HTC logo is a fake). But these are just the first steps of Android as it awakes the Chinese dragon. The full MTK Android 2.1 solution won’t be out in mass production until the end of 2010. More competition at low-cost Android phones Rockchip, a design vendor based in FuZhou, China, showed its RK28 solution at HongKong Electronics Show in 2010, focusing on Android tablets and smartphones. Rockchip is a homegrown chipset design company which conquered the market of MP3 portable media players with its RK26 and RK27 series. In 2009 Rockchip announced its foray into smartphone business with the RK2808 Android solution, but was not widely adopted due to chip heating problems and performance issues. In a second effort at the smartphone market, Rockchip released its RK2816 solution in 2010, running on an ARM 9 application process at 600Mhz and an NXP baseband chip. The RK28 series is not as tightly integrated as MTK’s MT6516. MTK put both applications and baseband into one single chip, while RK28 used Infineon for their baseband. RK28 series’ advantage lies at its inheritance of multimedia technologies from Rockchip, with hardware decoding of 720p H.264 video. Rockchip’s RK28 design has been taken up by Ramos (Blue Devil) to power an smartphone device under the model name W7. The device runs Android 1.5, sports a 4.8” 800×480 resistive touch screen, and is intended as competitor to iPod Touch, with a focus on video media playback features. BuBuGao is another OEM planning to deliver cheap smartphones using the RK28 solution. In the tablet space, Actions-Semi has been designing a new chipset based on the mISP 74K kernel, running Android 2.1. Marketed under the EBOX moniker, the company aims to head-to-head competition with the iPad with support for H.264, MPEG-4, DivX and Xvid hardware decoding at up to 1080p resolution. Such specs are unheard of among current Android solutions. Around five years ago, phones based on MTK chipset shook up Chinese cellphone market that was dominated by Nokia, Motorola, Samsung and other local brands like Bird, TCL and XiaXin. MTK enabled phones to be sold at very low prices while still boasting advanced features, including exotic ones like eight stereo speakers or 365 days of standby battery life. Today, most local brands are gone, and the remaining few have reverted to using MTK chipsets for their phones. International OEM brands have to slash prices on their mid-end to low-end phones in order to compete in this fierce cellphone market. MTK’s entry into high end smartphones using Android may certainly repeat the history we witnessed five years ago. Android phones running FroYo selling for under $100? Maybe just a few months away. Android Developers in high demand With such a rapid growth of Android-related activities, Android developers are in hot demand today in China. A 2-year Android pro can command up to 20,000 Yuan (close to $3,000) per month; whereas a 10-year J2EE veteran makes probably the same salary if not less. Companies, big and small, are busy scouting for Android talent, but challenged due to the small pool of qualified engineers. At ifanr.com we recently conducted a survey, with the help of the China Android Dev group (over 1,400 members, 18,000 messages, the largest and most active discussion group for Chinese Android developers) to capture the demographics of Android developers in China. Our survey received over 500 valid responses with some revealing insights into the state of Android developers in China: In terms of demographics, over 80% of respondents are between 20 to 30 years old, while another 10% is between 31 to 35 years. These are pretty young and dynamic groups of developers. When asked about how many years of mobile development experience they have, close to 40% are just getting started. And another close to 50% of respondents are within 0-2 years of experience, which is to be expected, given that Android is a two-year-old platform. In terms of their role in Android development, 37% of survey respondents are part time developers, while over 40% are professional developers. Only 10% are students while about 15% are still holding out to see how Android progresses. It’s also worth pointing out that over 60% of respondents are individual developers, a.k.a. one-man teams, while over 90% work in teams made up of less than 50 developers. There are companies with more than 100 developers, mostly likely big telecoms like China Mobile, as well as handset manufacturers and design houses. Given that we targeted Android developers, almost 80% of respondents have developed on Android. We also see healthy shares of iOS, J2ME, Windows Mobile, and Symbian. Based on current trends, we can foresee Android and iOS commanding larger market share going forward, while J2ME, Windows Mobile and Symbian share will shrink further. Over 45% of respondents have not yet published apps on Google’s Android Market. This is mostly because Android Market and Google Checkout do not yet support Chinese regions. This is a well known issue; there is a large number of developers in China wanting to publish apps onto the Market who can’t; for example many of them have to set up an overseas bank account in order to register and pay for the Market registration fee. It’s a major hassle for individual developers, and where hopefully Google has a mitigation to offer in the near future (PayPal integration perhaps?). In terms of revenue models, about two thirds of paid apps are using ad banners, while the other one third are using pay-per-download according to the results of our survey. As for the types of ad networks used, Google AdSense comes out on top with nearly 50% of votes. AdMob comes in second with nearly 30% votes. Wooboo, Youmi, and Casee, ad networks from China, are also making strides here. The level of satisfaction from app revenues is evenly distributed, with 20% of respondents saying they are not doing well and losing money, and 18% saying they are extremely satisfied and doing well or optimistic about the future (the rest 60% is for people who do not make money from apps). In terms of go-to-market channels, Google’s Android Market tops with more than half of the share. China Mobile’s Mobile Market (MM) is also popular among developers. MOTO SHOP4APPS is surprisingly getting 5% (or 10% among the ones submitted). Overall, Android has seen explosive growth in China. More and more developers are joining the ranks daily. However, due to the limitations of Android Market and Google Checkout in China, many developers are turning to alternative markets and payment gateways. In the operator camp, China Mobile is making a big splash trying to woo developers onto its Android-variant, the OMS/OPhone platform. HTC and Motorola are also pushing their own app store agenda. The Android ecosystem in China is still a sleeping dragon, but is waking up day by day. There will be more ad networks, more app stores, and more payment gateways coming out in the foreseeable future before consolidation moves in. Android in China is probably at its most exciting stage right now. – Hong [Hong Wu is a seasoned mobile app developer based in Silicon Valley, US. He’s currently building an awesome product that hopes will make TVs enjoyable again. He’s also a core member of ifanr.com, the leading new media blog site in China that focuses on mobile Internet industry, smartphones, gadgets, and exciting startups in China. You can contact Hong at lordhong /at/ gmail.com or follow @lordhong on Twitter.] #ios #htc #qualcomm #javame #chipset #smartphones #smartphone #symbian #windowsmobile #sonyericsson #Android #windowsphone #mobilesoftware #handsetmanufacturers

[Most major companies have tried engaging their customers through their mobile phones, but not everyone has succeeded. Guest author Guillaume Arth talks mobile brand experience and identifies the steps towards developing a successful mobile strategy] ‘Get into their pockets and you’ll get into their minds’ could be the slogan soon underpinning any new marketing manifesto. Indeed, mobile commerce has become core to the strategy of mainstream brands as it empowers new forms of customer engagement. Mega brands like eBay have taken strides in mobile as an extension of their online presence through mobile websites and applications. eBay’s  iPhone app has already been downloaded 11 million times. The online auction giant expects to make $1.5 billion from mobile this year compared to $600 million in 2009. Retailer brands like Best Buy use apps to offer specific promotions or gifts in the process learning a lot more about customers. Interestingly, traditional media have been quicker to adopt a mobile strategy as many advertising budgets are moving online. Since this summer, the Wall Street Journal, The Times, and Wired magazine (to name a few) have all launched iPad apps signaling a shift in premium print media. Similarly, TV channels like MTV are also embracing interactive, social apps, either designed as companion apps or offline versions of TV content. As reported by Advertising Age recently, brands like MTV  “focus on two approaches to its iOS apps: first, co-viewing apps that capture the social-media chatter around TV and awards shows and second, apps for video on the go”. Moreover, borrowing lessons from Foursquare and Gowalla new types of apps allow you to ‘check in’ to TV shows and movies. A good example of that is the TV chatter app, which enables users to do their own programming and interact with Twitter live streams and post their own. However promising these developments might be we will have to wait another 12 to 18 months to see whether print and broadcast media can truly leverage on mobile. Getting your brand experience right Through their scale and prolonged web presence EBay and Best Buy have successfully faced the challenge of multi-channel integration as well as getting visibility and ‘placement’ of their mobile commerce apps on stores.  For these reasons they still remain exceptions. As a mobile gaming exec put it to me recently, ‘you have to be at least in the top 100 apps on iTunes if you want to make any kind of money. You have to market yourself in a way that can create actual retention, not just hype at the back of a free app’. Indeed, some free apps may enjoy good download stats but those don’t necessarily translate into good reviews and recurring users as the Gucci app recently showed. Some brand strategists argue that it is still ‘early days’ and that a ‘wait-n-see approach’ is more sensible; after all market penetration of higher-end devices like the iPhone and Android-based handsets is still only around 5% of devices sold worldwide in H1 2010. However this figure hides that we are in fact talking about high value, high ARPU customers with the biggest propensity to actually try out a branded mobile app. Additionally with more 150 million smartphones sold we have passed the point of only talking about early adopters. This is now a mass-market phenomenon, which has opened up new and more direct routes to consumers for brands. So how should a brand go about developing a mobile strategy? Before enlisting a highly paid musician to create a DJ-like app experience or hiring a top-notch programmer to start churning out software code, it is important to consider what factors make some apps successful and other mediocre: Firstly, understanding users. A successful app will capture the imagination by being relevant, useful and delightful. Indeed users are prone to quickly veer off to something else in disappointment so understanding what makes them tick is important. After all your brand is trying to take a piece of someone’s busy schedule. Hence pilot first and then scale appropriately. One can draw lessons from successful games that offer a basic, yet addictive experience which is then enhanced with a bigger feature set at a 2nd stage. Then it becomes easier to convince existing users to come back and possibly pay a small premium (a good example of that is ‘Hungry Shark’ part 1 and 2 by Future games of London.) Secondly, a deep understanding of mobile as a medium is essential. No matter how amazing your ideas may be, it is worth keeping in mind that mobile is a tactile, impulsive and intimate medium that doesn’t tolerate too much ‘fuzzing’:  basically users need ‘to get it’ in a matter of seconds and… it needs to work! Taking the brand’s website content and ‘over-specifying’ an app is likely to fail. One can think of the 2010 Roland Garros app whose flawed design, and overly complex feature set probably didn’t achieve much for the tennis brand. Here is a prime example of how a flawed approach to an app can possibly damage a great brand especially when competitors or peers (the other Grand Slam tournaments in this case) have done a much better job. Based on good design guidelines, a mobile app should aim at creating a brand narrative that will work in the mobile context rather than throwing ill-conceived ‘marketing junk’ as one can often read in app reviews. App marketing can be a double-edged sword and because of its immediacy and interactivity, brands must have their ears on the ground, learn and react quickly ensuring negative feedback doesn’t spiral out of control. Thirdly, having a longer-term app roadmap where the mobile brand extension evolves and engages with its customers. The mobile app roadmap should grow gradually and elegantly, adding features and customer engagement opportunities on the way. Brands can build more loyalty by letting their essence shine through the simplicity of its mobile incarnation. Last but not least: pricing. One million free downloads equals to zero direct revenue and too many apps are free making it difficult to solicit direct revenues through branded apps. But revenue shouldn’t be the only goal of a brand-extension strategy; the main goal should be engagement. After all, who would be willing pay for ‘walking into a shop’? One shouldn’t repeat the same mistake as mobile operators portals have done with charging users for just browsing. Providing a ‘free-entry’ experience is an important consideration which can then be followed by a premium (paid-for) experience. Sowing the seeds for deeper customer engagements With mobile, brands can equip themselves with a powerful and interactive marketing platform that forms a key pillar of a ‘multi-touch’, digital media presence. The entry of brands into the mobile domain is being encouraged by four recent developments: 1. A new breed of mobile natives who have greater access, understanding and trust in the mobile medium as a more personal and less ‘mediated’ experience for shopping or entertainment 2. Devices evolve at a very fast pace.  Thanks to the widespread support of XHML/HTML, Java script and CSS, (More than 250m devices now feature the open-source WebKit browser engine, as seen in the 100 Million Club) and greater set of APIs, devices offer richer media experiences: audio, picture, video, social, messaging, location…and the list goes on. 3. The greater availability and affordability of cloud-based technology open source APIs, as well as packaging and rendering solutions for mobile websites, allow new entrants – like brands – in the market (‘BK Render’, a mobile rendering solution from french start-up Backelite is a good example there) 4. The accelerated development of mobile transactions from operator billing to bar coding, I-Tunes, Google checkout, PayPal, NFC and others. ‘Convergence marketing’ is the new frontier At the core of the ‘new mobile economics’ brands and service providers are increasingly empowered to create new experiences and new business models. With the caveat that there is no current “write once, run anywhere”, I argue that brands are better positioned than ever to work around consumer and platform fragmentation through ‘convergent positioning and marketing’. Essentially rather than feeling daunted by technology, it is about looking at what the brand is trying to communicate and push a consistent message across to all users whatever digital medium they are using. Users. Where are they? They are everywhere and ‘ubiquity’ is their destination.  The user journey starts with a phone in each pocket, device connectivity and grows to digital ecosystems spanning across tablet computers, laptops desktops, TVs and many more places tomorrow. This creates a connected environment of opportunities for brands to express and market themselves in new ways, with social apps and blogging leading the way. Costs and barriers to entry to digital are lowering and marketing and retailing of digital goods is becoming mainstream. Further down this new crowded high street, Apple, Google, Samsung and to an extent LG and Sony are embroiled in the battle to conquer our living rooms with internet TV services, through VOD, apps and widgets.  At present, joint communications and Internet TV services are mostly ‘beta’ services on trial with operators including Verizon (US), Sonaecom (Portugal) or KT(South Korea). Orange recently signed a partnership with LG, where Orange provides billing and customer care while LG provides IPTV services. There are also handset apps that act as a remote control – Free.fr in France for example (Free.fr app) – signaling that mobile might take over as the ultimate ‘EPG’ (electronic Programming guide). Currently 10-20% of IPTVs are connected to a broadband going up to 50% with higher broadband penetration. Samsung expects to sell 35 million TVs globally in 2010. In comparison, it took Microsoft 3 years to sell as many Xbox units. As TV remains the most popular consumer electronics device in the home this presents significant opportunities for any IP-based service or a brand looking to market itself through digital. With an installed base of millions it is only a matter of time before mobile app stores users are migrated to the big screen. Apps and mobile services are good place to start for any brand but as we have discussed it is only the beginning. For instance, Nokia recently argued that ‘context devices, rather the apps, will be where the money is’. With the digital switch over completed in most developed markets by 2012, ‘Convergent marketing campaigns’ will soon become a reality. Of course being successful will require adjustments and some juggling with technology but I believe that within 18 months, brands, service providers and advertisers will be at the intersection of a bigger phenomenon than the app stores as digital grows exponentially. Now is the time for any brand to plan and leverage on those exciting developments and – through deeper customer engagement – turn new experiences into new revenue streams. Guillaume. [Guillaume Arth is a mobile media consultant based in London, UK. With more than 10 years of experience in this space, he currently specialises in service strategy, sales and marketing advising large and small organizations. You can contact Guillaume at: g /at/ cozmopolitanmedia.com or you can follow him on Twitter @cozmedia] #mobileapps #smartphones #smartphone #mobilestrategy #branded #pricing #mobileapplications

[With the adoption of SaaS applications, augmented reality, visual recognition and other next-gen phone apps, the smartphone processing model is looking for help from the Cloud. Guest author Vish Nandlall introduces the concept of the Cloud Phone and the technology advances that can make this happen] Are smartphones converging with laptops ? While smartphones enable a rich user experience, there exists an order of magnitude gap in memory, compute power, screen real-estate and battery life relative to the laptop or desktop environment (see table below). This disparity renders the whole question of smartphones vs laptops an apple vs oranges debate. It also begs the question: can the smartphone ever bridge the gap to the laptop?SmatphonesLaptopsApple iPhone 4HTC EVO 4G ASUS G73Jh-A2 Dell Precision M6500 CPUApple A4 @ ~800MHzQualcomm Scorpion @ 1GHzIntel Core i7-720QM @ 2.80GHzIntel Core i7-920XM @ 2.0GHzGPUPowerVR SGX 535Adreno 200N/AN/ARAM512MB LPDDR1 (?)512MB LPDDR14x2GB DDR3-13334x2GB DDR3-1600BatteryIntegrated 5.254WhrRemovable 5.5Whr75Whr90Wh Source: vendor websites As a matter of physics, the mobile and nomadic/tethered platform will always be separated along the silicon power curve – largely driven by physical dimensions. The laptop form factor will simply be able to cool a higher horsepower processor, host a larger screen real-estate and house a larger battery and memory system than a smartphone. Does a smartphone need to be laptop ? Yes it does…or, at least, it soon will. The low-power constraints of mobile devices have been the official Apple argument behind the recent Apple-Adobe feud – and Apple’s acquisition of PA Semi is a further testament to the importance of the hardware optimization in mobile devices. The processing envelope for mobile applications is becoming stretched by the demands of next-generation mobile applications; always-on synchronization of contacts, documents, activities and relationships bound to my time and space; the adoption of Augmented Reality applications by mainstream service providers that pushes AR into a primary ‘window’ of the phone; advanced gesture systems as MIT’s “sixth sense” that combine gesture based interfaces with pattern recognition and projection technology; voice recognition and visual recognition of faces or environments that makes mobile phones an even more intuitive and indispensible remote control of our daily lives.  All these applications require the combination of a smartphone “front-end” and a laptop “back-end” to realise – not to mention having to run multiple applications in parallel. The appearance of these next-gen applications will also create greater responsibilities for the mobile application platform: it is now important to monitor memory leaks and stray processes sucking up power, to detect, isolate and resolve malicious intrusions and private data disclosure, and to manage applications which require high-volume data. So we come back to the question, is there a way to “leapfrog” the compute and memory divide between tethered and mobile devices? The answer, it turns out, may lie in the clouds. Enter the Cloud Phone The concept of a Cloud Phone has been discussed oftentimes, most recently being the topic of research papers by Intel labs and NTT DoCoMo technical review. The concept behind the Cloud Phone is to seamlessly off-load execution from a smartphone to a “cloud” processing cluster. The trick is to avoid having to rewrite all the existing applications to provide this offload capability. This is achieved through creating a virtual instance of the smartphone in the cloud. The following diagram shows basic concept in a nutshell (source: NTT DoCoMo technical review) The Cloud Phone technology has been brought back in vogue is due to advancements in four key areas: Lower cost processing power; Compute resources today are abundant, and data centers have mainstreamed technologies for replicating and migrating execution between and within connected server clusters. Robust technologies for check-pointing and migrating applications; Technologies such as live virtual machine migration and incremental checkpointing have emerged from the classrooms and into production networks. Reduced over-the-air latency; the mobile radio interface presents a challenge in terms of transaction latency. Check-pointing and migration requires latencies on the order of 50-80ms – these round trip times can be achieved through current HSPA, but will become more realistic in next-generation LTE systems. Average latencies in a “flat” LTE network are approximately 50ms at the gateway, which suddenly makes the prospect of hosting the smartphone application on a carrier-operated “cloud” very much a reality. Note that past the gateway, or beyond the carrier network, latencies become much more unmanageable and will easily reach 120ms or more. Mobile Virtualization; this technology offers the ability to decouple the mobile OS and application from the processor and memory architecture, enabling applications and services to be run on “cloud” servers. This has become an area of intensive research in mobile device design, and was covered in an earlier article by OK Lab’s Steve Subar. A cloud execution engine could provide off-loading of smartphone tasks, such as visual recognition, voice recognition, Augmented Reality and pattern recognition applications, effectively overcoming the smartphone hardware and power limitations. This model would also allow key maintenance functions requiring CPU intensive scans to be executed on a virtual smartphone “mirror image” in the cloud. This would also facilitate taint checking and data leak prevention which have been long used in the PC domain to increase system robustness. Another consequence of the Cloud Phone model is that it provides a new “value-add point” for the carrier in the mobile application ecosystem. The low latency limitations will require optimizations at the radio-access network layer implying that the network carrier is best positioned to extract value from the Cloud Phone concept – plus operators can place data centres close to the wireless edge allowing very low latency applications to be realized. This doesn’t rule out a Google entering into the fray – indeed, their acquisition of Agnilux may well signal a strategy to build a proprietary server processor to host such Cloud Phone applications. The raw ingredients for the Cloud Phone are falling into place; more users are driven towards SaaS based phone applications, and HTML5 is being adopted by handset OEMs. There is no shortage of applications waiting to exploit a cloud phone platform: in July alone, 54 augmented reality apps were added to the Apple App Store. Google has also broken ground in the Cloud Phone space with Cloud to Device Messaging which helps developers channel data from the cloud to their applications on Android devices. What other Cloud Phone applications do you see on the horizon? When do you see Cloud Phones reaching the market? – Vish [Vish Nandlall is CTO in the North American market for Ericsson, and has been working in the telecoms  industry for the past 18 years. He was previously CTO for Nortel’s Carrier Networks division overseeing standards and architecture across mobile and wireline product lines. You can read his blog at www.theinvisibleinternet.net] #qualcomm #latency #cloudphone #intel #augmentedreality #virtualisation #docomo #lte #developers #ericsson #mobile

[Who can save Nokia from a tumbling market valuation, declining margins and product failures? Guest author Thucydides Sigs deconstructs Nokia’s culture and explains why an acquisition would be the best next step for Nokia] When CEO Olli-Pekka Kallasvuo took control of Nokia in 2006, the stock was at $25 per share. In late July 2010, the stock was around $8, the same level as in the late nineties. Ouch. In just four years, two thirds of shareholder equity is gone. If  we go a step further, and compare market cap and sales by number of units, we observe an even more disturbing picture: Nokia’s valuation was at $33B on sales of 125M handsets last quarter; the same figures for Motorola were $17B on 12M handsets and for RIM $31B on 10.6M handsets. The math is pretty simple: Nokia is valued almost as much as RIM, but ships 10 times fewer MORE handsets. The trend is not looking good for Nokia. No wonder that we have seen news reports of the board finally looking for a new CEO. Is a CEO change what it takes to fix Nokia? Will it make a difference if a foreigner takes over the proud Finnish company? Is Nokia beyond fixing – a dinosaur who can’t survive the climate change – or is there something that can be done to transform the company? I don’t think Nokia is unfixable. Nokia has a huge potential: amazing global consumer brand, a very strong IP war chest and deep understanding of where the market is heading. Yes, Nokia does know where the market is going and it always has known. From launching the Nokia Communicator in 1996… and attempting to expand into services (Ovi is the latest strategic attempt), Nokia has known where it wanted and needed to go. But the problem has been and still is the execution. The Finnish giant just fails to move and adapt fast enough to the chaotic, rapidly evolving software and internet market. What is holding the execution back? More than anything, it’s the company’s culture. And before I dive into it the details, I have to preemptively apologize; like any discussion of a large corporation or a regional culture, one has to use generalizations. Yes, there are always exceptions, but if we want to analyze the culture we need to resort to generalizations. Some readers might find this offensive. Don’t say you haven’t been warned. Nokia takes great pride in being “Smart, Cold Blooded Vikings.” Thoughtful and tough, strategic and careful, they don’t take chances. They calculate, analyze and think before they react. And “if it takes time, that’s fine”. This is an admirable approach. But as Google’s Shona Brown pointed out in “Competing on the Edge: Strategy as Structured Chaos“, if you try to analyze and manage chaos (or any environment which is rapidly changing in multiple dimensions), that might take a while. Plus, if your analysis takes longer than the rate of change, you are actually moving backward. In the age of fast moving internet and web, the best strategies are coming from the bottom up, and are best developed through experimentation rather than long analytical cycles. This is the antithesis to what the Nokia culture is all about. And to a large extent, the culture goes beyond Nokia; it is deeply rooted in the Finnish way of living. Nokia is a Finnish company and I would argue that you can’t take the Finnish out of Nokia. Yes, some Nokians – especially those who spent parts of their careers in the US – know how to, and often do, operate differently. And in the last re-org some good “Nokia 2.0” people have moved upward. But overall, Nokia is a reflection of the Finnish culture: “Smart, cold blooded”, strategic, cautious, Vikings. This should not reflect as a negative comment on Finns: Just like a camel can’t survive in the arctic and a polar bear will die in the desert, a culture makes a company best suited to a specific kind of environment. Nokia has a great tradition of excellence in manufacturing and mastering logistics through process. This DNA is different – and I argue that it is the anti-thesis – of the Internet & Services culture. The recent rumors about Nokia looking for an outsider, non Finnish CEO are interesting – and a move in the right direction. But will it be enough? I doubt it; either the strong existing culture will change the CEO, or the CEO will leave within a few years. So, is it possible to change Nokia’s culture and save the company? In my opinion, to change such a deeply ingrained culture, a shock treatment is needed. Three things need to happen. First, Nokia needs to be acquired by a foreign entity (Chinese? American?) or a private equity group. With a market cap of $33B, it is a bargain. Just turning it into another Motorola will double the value. And if whoever acquires Nokia succeeds in generating service revenues from those 500M handsets sold each year (and one interesting direction they should explore is mobile payments) the valuation will be in the hundreds of billions. If Nokia were to be acquired it would cause a shock wave throughout the organization, the kind of shockwave that can induce a rapid cultural change. Yes, there will be a lot of resentment among the old-guard Nokians, many of whom will leave, but these are exactly the people who should work in industries that are not as fast paced. And many of the newer Nokians – what we call the Nokia 2.0 execs – who suffer under the existing culture might actually appreciate and support such a move. Second, for Meego (Nokia’s live-or-die bet on a software platform) to become a viable alternative to Android, the Meego executive leadership must physically relocate to Silicon Valley. We hate to admit it, but when it comes to rapid development of software and services, this is where the right culture exists and right talent can be sourced. This physical change will lead to an attitude change that will impact every decision Nokia makes, and all else will follow.  By relocating to the Valley, MeeGo will become more independent from its Finnish roots and will be able to work more effectively with Intel. It would also give the Silicon Valley team something to rally around, and a clear ambitious goal they can focus on – which is how you build effective teams and why all of Nokia’s previous attempts to build high caliber teams in the Valley have failed. Yes, you can have satellite offices in other countries (just like Android does) but there is only one place where the software & services brains should be placed, and it is in Silicon Valley. Third, Nokia’s handset development efforts need to be transformed from a mammoth machine into small, fast moving (9-12 month development cycle) commando units of integrated software, hardware, mechanical and design specialists. The economics of the CE space have changed, and it is now possible to test and create prototypes much faster and cheaper than it used to be. Forget the 24-month planning cycle… let multiple teams come up with contrasting ideas, prototype those and then cherry pick the best ones for market testing and production. It will build a constructive competitive culture that will push everybody forward. Samsung does that today. The Taiwan ODMs do that today. Nokia can and should match up. Nokia is a great company with great assets and some great people working for it. It can be saved from becoming the cold-blooded 21st century dinosaur. For whoever saves Nokia – if they manage to change the culture – a big reward lies ahead. So who will buy Nokia? Comment with your best guess below… -TS [Thucydides Sigs – a pseudonym – has many years of experience juggling computing constraints, mobile software and consumers needs. With that said, imagine listening to a violin sonata not know who the artist is or who composed it. You end up having to listen more carefully in order to make a judgment. He can be reached at thucydides /dot/ sigs [at] gmail [dot] com] #meego #nokia #ollipekkakallasvuo #ovi