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Mobile software vendors (ISVs) who develop software for mobile handsets are competing in an increasingly crowded market; on-device software is being increasingly commoditised, channels to market and mobile operators are a challenge to deal with, and middlemen are always there to take a respectable revenue share. So what are the options for a mobile ISV who’s keen to upsell the value of their software assets ? Here I present a framework of five strategies that mobile ISVs can use. Each strategy is presented in one slide, from one to five. You can download the entire presentation here. Thoughts, comments or suggestions are welcome as always. Andreas.

We recently researched and authored an extensive research paper on the subject of active idle screens; that is, the technology that turns the ‘front page’ of the phone into an ‘active’ real-estate for discovering, searching, promoting and advertising services. I expect the market value of this real-estate to rise very quickly. Why ? Put simply, the idle screen is the start and end of each and every user journey and as such is the prime inventory in the phone. This is uncharted and relatively virgin territory for mobile operators, manufacturers, content providers and newcomer advertisers who are keen to exploit the 1-billion-a-year piece of a real-estate that is more personal than most other consumer electronics toys. Active idle screens (AIS) is a busy market, too. Some 15 vendors are now offering AIS solutions, deployed by over 10 mobile operators to date, with Alltel, Orange, T-Mobile US and Vimpelcom being behind the most innovative and aggressive deployments. The research paper, Activating the Idle Screen: Uncharted Territory was commissioned and published by Informa Telecoms & Media at last month’s Handsets World conference. Before I dig into the findings of the research, here’s some more teasers. Over 1.5 months, George Voulgaris and I interviewed nearly 20 companies: Abaxia, Acrodea, Aditon, Adobe, Amobee, Celltick, Ikivo, IntroMobile, Motorola, Nokia, Onskreen, Openwave, Orange, Qualcomm, Tegic, Webwag, and Zi Corp. Our favourites? Finding out about Nokia’s Ad Connector (Nokia’s big push into advertising) as well as Alltel’s Celltop, and T-Mobile’s MyFaves (the most innovative uses of handset customisation by operators today). Next are some excerpts from this research paper – you can download the full paper here. Why the Idle Screen ? “The idle screen is the starting and finishing point for all tasks associated with a mobile phone; whether making a call, sending a text, checking to see if a voicemail has arrived or downloading a ringtone, the idle screen precedes and concludes the user journey involved in performing each task. As a result, the idle screen has two important properties. Firstly, it is the application within the handset that is visible most often or that is active for the vast majority of the handset s lifetime. Secondly, the idle screen is the least intrusive medium on the handset for presenting informational or promotional messages. As a result, the idle screen has been widely used by mobile operators and handset manufacturers to provide branding elements and static links to mobile services, such as a WAP portal. However, the idle screen need not necessarily be static; In fact, adding interactivity elements into idle screen makes it anything but idle. Indeed, active idle screen solutions can address three real challenges that mobile services and handsets are currently facing, namely: – Handset complexity and featuritis which impacts the ease of use of handsets – Poor access and discovery of mobile services, due to the long click-distances associated with the location of these services. – Inadequate means for service promotion and advertisement” Some history: the idle screen past and present “The active idle screen market has come a long way in the last few years. The market has been led by Abaxia in 2002 and IntroMobile in 2004 who deployed handset-based AIS with operators Orange and SKT respectively. Zi s Qix and Qualcomm s uiOne products were announced in 2005, but only achieved customer wins with idle screen products in 2007. In early 2006, SCREEN3 was first shipped as part of Motorola handsets and later in the year Onskreen secured a deployment with operator Airtel in India. In the SIM-based active idle screen market, Celltick first launched its LiveScreen Media solution with Hutch India in 2002. 2007 is clearly the year when a wave of vendor announcements have hallmarked the establishment of the active idle screen market. Aditon U-Daily, Adobe Flash Home, Nokia Advertising Connector, MobiComp s ActiveTicker, Openwave Mobile Widgets, Tegic T9 Discovery Tool and Webwag s Mobifindit and Mobidgets were all announced in early 2007.” The vendor shoot-out “There are nearly 15 software vendors today who specialise in active idle screen solutions; Abaxia Mobile Desktop, Aditon U-Daily, Adobe Flash Home, Celltick LiveScreen Media, IntroMobile IntroPad, Nokia Ad Connector, Onskreen Fusion, Openwave Mobile Widgets, Qualcomm uiOne (on idle screen), Tegic T9 Discovery Tool, Webwag Mobifindit / Mobidgets and Zi Qix. Access Netfront Dynamic Menu and MobiComp s Active Ticker are further AIS solutions. Last but not least, Amobee produces the Handset API (HAPI) SDK for insertion of interstitial and banner advertisements into handset applications, including the idle screen.” The next table taken from the report compares AIS solutions in terms of deployment track record and features (platform, access method, and promotion capabilities). Each one of these vendors is reviewed in detail in the paper. In this environment it is important to understand the boundaries of the AIS solution space, i.e. which purposes it is best suited for and which it does not address. To accomplish this, it is important to establish a frame of reference across other customisation solutions, namely on-device portals, AIS and skinning solutions, and ascertain what are the defining traits and distinguishing characteristics of each solution space, and last but not least, the points of parity between them.Very few software vendors cover more than one solution space. For example, uiOne can be used to implement deep skinning, on-device store-fronts or idle screen-based promotion solutions. A few on-device portal vendors offer idle screen replacement capabilities, most notably mPortal, whose Springboard ODP client sits on the idle screen of Disney Mobile handsets and Cibenix who had launched an idle screen-based dashboard on some handsets launched by operator ONE in Austria.” The next table compares and contrasts the use cases, revenue sources, technology and other distinguishing characteristics of three approaches: Active Idle Screens vs On-Device Portals vs Themes & Skins. The deployments “To date, Alltel, Vodafone Germany, Orange UK, SKT, T-Mobile US, TMN Portugal and Vimpelcom have deployed some form of AIS products. Of these deployments, it is worth crediting Orange with the highest number of handset shipments with embedded clients, Vimpelcom with the highest number of deployed on-SIM clients, Alltel with the most personalisable active idle screen product and T-Mobile US with the first AIS product designed to boost voice ARPU.” See the research paper for case studies of seven active idle screen product deployments, namely Alltel Celltop, Motorola SCREEN3, Orange Homescreen, S60 Active Idle, SKT 1mm, T-Mobile MyFaves and Vodafone Live! Cast. These case studies cover both manufacturer and operator led AIS deployments, spanning North American, European and Korean markets. The challenges ahead “Despite the flurry of announcements, AIS products are still part of a nascent market, both in terms of technology maturity and the commercial route to market. There are four fundamental challenges all AIS products will have to address: – Idle screen replacement requires integration of the AIS software with tens of relatively inaccessible APIs (application programming interfaces) which are only available to third parties subject to manufacturer approval. This implies that the AIS technology is mostly accessible to companies with strong relationships with handset and operating system vendors. – Deployment remains a challenge for all handset applications. As such AIS solutions will rely on operator backing or manufacturer consent in order to secure distribution volumes. – Any form of pre-sales handset customisation can easily impact the time-to-market. Since active idle screen products imply significant modifications to handset software, AIS solutions have to constantly trade-off the scope of customisation against the time-to-customise. – The idle screen represents the cardinal touch point of the end user with the handset manufacturer brand. As such, handset OEMs are particularly wary of the risk of brand dilution and third party control points that can devalue their business proposition.” Opportunities “As for the future, there is no doubt that the idle screen represents the primary real-estate for service search and promotion. It lies at the confluence of mobile operators, handset manufacturers and media publishers. Within such highly prized territory, it is clear that plenty of opportunities exist, but execution will be challenged by many turf wars. The commercial solutions that will be most successful will be those that reconcile manufacturer interests with those of operators and extend into service providers and media publishers for lucrative revenue share agreements. Moreover, unlike on-device portals, the idle screen will also be used to increase voice ARPU, rather than pure data or advertising revenue.”

The history book of the mobile handset industry has gone through two turbulent chapters to date; the first na ve years of manufacturer rule ended abruptly in late 2002 with the launch on Vodafone Live! and the Orange SPV. In the second chapter, mobile operators in Europe and later in the US seized the upped hand in their dealings with handset suppliers. Without exception, OEMs and ODMs have been willing to produce customised handsets given a minimum purchase volume commitment. Operators had to develop new skills, adapt their organizations, foster multi-year relationships with OEMs and master complex processes of 6-month handset development. To overcome the many challenges existing today, the history book is entering a new chapter; that of container projects. The status quo To date, tier-1 operators have been issuing handset manufacturers with long lists of requirements specifying not only the branding and device settings, but also custom applications that ship with each handset model. For example Vodafone group have been issuing terminal requirements every six months that comprise 4,000+ lines of requirements. The operators motivation for handset customisation has been threefold: – brand devices with the operators’ favourite red, orange, yellow, blue or magenta to (hopefully) increase customer loyalty. – build-in support for operator services such as T-Mobile’s Web ‘n Walk or Verizon’s Get It Now to increase ARPU. – bring services to the ‘front page’ of the user’s attention as with Orange’s Home Screen or Alltel’s Celltop, in order to increase discoverability and accessibility of services, and thereby ARPU. So how has handset customisation been achieved ? Operators have been using three approaches to specifying the handset features and behaviour to handset manufacturers: – use-case-based specification, as with T-Mobile UK’s list of websites that must be rendered and the time-to-render, for compliance with the operator’s Web-n-Walk service. – technology-based specification, as with T-Mobile US’s MyFaves list of technical feature specs that have been reportedly passed to manufacturers for creating the MyFaves experience – vendor-based specification, as with Orange’s preference of the Abaxia Mobile Portal client software on all of its Signature handsets based on Windows and Symbian. Application-based customisation has been becoming a popular among operators – at the Handsets World conference in May Vodafone’s Patrick Chomet presented Vodafone’s new strategy for handset customisation, which includes provisioning four types of applications on handsets: a) a small number of core applications with a ‘deeper’ user experience, b) a full internet browser, c) an on-device portal for browsing and buying content and d) an application launcher and store-front for service discovery. These methodologies have been practiced by tier-1 operators who have had the purchasing power to commit to handset volumes required by handset OEMs in turn for the copious efforts needed to implement the hefty operator specifications. Tier-1 manufacturers have typically demanded 100,000+ volume commitments which are achievable for operators with $7B handset investments per year like Vodafone, but not so for tier-2 operators with one or two millions subscribers. Consider the following two examples: Orange in early 2006 reported that it had convinced five out of its top-10 handset suppliers to support a controversial high-capacity SIM feature, leading the market one year before a similar standard was even adopted in the market, and four years before the (USB) standard is expected to reach mass-market penetration. On the other hand consider the example of a tier-2 Austrian operator who in early 2006 had to discontinue the on-device portal application which had been featuring on the operator’s open OS handsets for almost a year, because of the 4-6 weeks time-to-market delay that was caused by the acceptance testing for each new handset model featuring the software client. This approach to handset specification has been partially succesful. It has taken tier-1 operators 5 years to develop the manufacturer relationships, the technology know-how, the organisational maturity and to master the process that allows them to bundle all their product and service wish-lists into a list of several thousand lines of requirements which is updated every six months. The challenges and the stories of trial and error have been so many that are impossible to list in a single post. We can however summarise the four key issues that are leading to a change of operator strategy: 1. Ensuring that the the time to market remains unchanged for operator-specified handsets vs those that are distributed via independent distributors and retailers (e.g. Carphone Warehouse). According to a Vodafone presentation at Handsets World, it used to take us two years to move from concept to mass-market availability for a Live service . 2. Limiting the costs of interoperability testing (IoT). Typically a handset will require three months of IoT and tens of DHL’ed packages exchanged between the OEM and the operator before the binary image is finalised. The set of several thousand requirements will have to be tested (usually manually) against each handset that is part of the season’s portfolio. 3. Ceasing control of the software suppliers that form part of the operator’s suite of preferred applications that feature on the handset – such as the Opera browser for T-Mobile, Cibenix or SurfKitchen for on-device portal functionality, and PacketVideo for video-streaming functionality. With tier-1 operators across the globe, including Vodafone, Orange, T-Mobile US/UK, Alltel, Verizon, Telstra and Optus who are mandating specific apps to be featured on their ‘signature’ handsets, management of ISV suppliers is of critical importance to operators. This includes not only app specification, but also control of licensing, marketing arrangements and network integration. 4. Platform fragmentation; Vodafone group report that is has to support around 20 software platforms across its handsets today. Container programs: the new chapter As of late 2006, a number of operators globally have embarked on what essentially constitutes the next chapter in the history book of handset customisation: container projects. Containers are platform approach to handset customization; a reference software platform which acts as the container for applications and customization elements and is then retro-fitted onto the operator’s handset portfolio. There is no formal announcements and no common definition of what constitutes a container program for example Microsoft refers to the same concept as the operator defined software image . I believe container programs consist of two pillars: 1. A choice of specific software platforms. Orange, Vodafone, Telefonica, T-Mobile and TIM have all publicly endorsed Nokia s S60 platform as a preferred platform. Vodafone and Orange have gone further to also list Windows Mobile and. Naturally these advanced OSes may constitute only 15% of the operator s user base for 2007. Selecting specific platforms means operators can pre-integrate their preferred applications and settings onto these platforms, which are then ported onto devices. Endorsing a specific platform means that the operator wants to reduce the platform fragmentation across the device sales base, but it does not alone imply a container program. Indeed a second fundamental pillar of a container program is: 2. A fundamental change in the process of managing partners . Up to now, the handset OEM has integrated operator-specified applications into the platform and managed all integration, licensing and testing. With container programs, the operator undertakes licensing of partner applications, integration on its short-listed reference platforms, testing and certification. Simply put the container model is an operator-specific integration layer which sits on the device operating system; the intent of which is to decouple the service deployment lifecycle from the device delivery lifecycle. To better appreciate what this means in the handset value chain, consider the following ‘before’ and ‘after’ diagrams, adapted from Microsoft’s insightful presentation at the recent Handsets World conference in Amsterdam. Presently I m aware of at least two European operators who have embarked on container projects, with one operator planning to launch devices based on this new model in H2 2007. According to Microsoft, there are a total of 5-6 operators working on container projects today. In Korea, this model has been practiced since 2004 with the WiPI layer (originally intended to replace BREW), moving to Japan in 2005 with DoCoMo s MOAP layer (on top of Linux and Symbian), in 2006 with KDDI s BREW-based layer and in 2007 with Softbank s Aplix-based layer. There are a number of advantages to operators in this approach, as mentioned in Microsoft s presentation at the Handsets World conference: – reduced interoperability testing, and therefore reduced time-to-market – lower costs by bringing new ODMs to market without huge investments – higher revenues by faster rollout of new services across the platforms – lower per unit royalties due to aggregate application licensing or buy-out arrangements – better control of OTA updates – better knowledge of software elements Naturally, the challenges are equally noteworthy. Operators have to burden the responsibilities of the system integrator s role, i.e – security and system integrity assurances, – testing and certification of applications – warranties and related liabilities – software license management – manage business failures of partners What next ? Is this new strategy in handset customization going to survive ? I would argue not. Firstly, operators have extremely limited know-how in software (in the same way that handset OEMs don t know how to run networks). Secondly operators are high-inertia organizations where sales cycles are extremely long (typically 12+ months) it s like try to steer a speeding truck without slowing down. Thirdly, operators will find it too costly to run partner application licensing, integration, validation and in-life support and will be feeling the pressure when the OEMs won’t be accepting liability for software-related business failures. In Korea where WIPI has been used as a service layer on handsets for the last 3 years, the challenges are becoming obvious even to the consumers; the general concensus in Korea is that WIPI adds a cost of $30-$40 to the retail price, and delays handset launch. Due to these challenges WIPI is no longer mandatory in the market. The challenges faced by operator container projects is an opportunity for what I call a handset system integrator (HSI): an organization which combines professional services with software know-how (see Teleca, SysOpenDigia and Sasken) and is able to execute container programs on behalf of the operator. I would argue that operators should start outsourcing container projects to HSIs sooner than later. In the meantime, handset OEMs are finding new ways to fight back in the never ending power game for customer control. Here s two: firstly, OEMs are already back into the service business (see Nokia Content Discoverer and Nokia Catalogs who sell post-sales inventory to partner service and application providers). Secondly, Nokia has been known to use a pre-inserted removable card to install its own applications on the handset when the user switches it on for the first time (now that s ingenious!). The mobile industry never seizes to amaze.. Andreas

Welcome to the 75th Carnival of the Mobilists ! This week’s edition is brought to you by Hampus Jakobsson and Andreas Constantinou at the VisionMobile Forum. Lots of good reading this week and some tough choices: as hosts, we ‘ve tried to raise the bar and limit the ‘best of mobile blogging on the web’ to just 10 entries. We shortlisted our favourite posts based on originality of thought and depth of content. Ready to jump on the carrousel of mobile blogging? Here we go! WapReview‘s Dennis has conducted a Local Search Shootout where he extensively tests six local search engines, from Windows Live to Local.com. We were impressed by Dennis’ thorough and sensible methodology for search engine evaluation, where his scoring system awards points for query results, click-distance, features, click-to-call distance, driving or walking directions, saved locations and saved queries. Rightfully wins the Post of the Week title! Our secondrunner is David Beers at Software Everywhere who talks about OSGi and the real Mobile 2.0. David argues that developers shouldn’t have to wait for the Java Community Process, the device makers, and the carriers to get powerful new APIs onto handsets. Instead they should be able to use a component technology like OSGi that allows them to deploy new Java APIs to the handsets themselves and to write applications that discover and use these components immediately. This reminds us of component-based frameworks such as BREW extensions, Open-Plug’s proposed FlexibleWare component framework, and the emerging OMA SCoMo framework. And he is right that OSGi needs a cooler name. David’s post links also to several very good thought pieces on the future of OSGi and Java. The rest of our top-10 picks in no particular order: C. Enrique Ortiz in his article Standardizing location-based services (LBS) has a detailed list of specifications which aim to standardise Geographic information or Geomatics. CEO’s article includes a long list of spatial data infrastructure standards published by the ISO organisation. Looks like a must-read for companies active in mobile LBS services. Ricky Cadden of Symbian Guru asks Why Are Fakes Always Better ? Why can the Noklas and Nokirs crunch out higher-spec’ed phones than Nokia? How can the Meizu MiniOne be so similar yet higher-spec’ed and cheaper than the iPhone ? Perhaps the knock-offs don’t include localisation, distribution, warranty and support as the famed originals ? Or can the Nokias and iPhones command high margins do to their brand? Mobile diva Darla Mack, asks Has Gizmo Project Become The New Skype for S60 Devices? As Darla says, we ‘ve been waiting for the Symbian version of Skype for over a year, while the Gizmo project is already available on the N800, N95, N80ie and E61i. Is Skype on mobile losing out to Gizmo and Fring ? Jason Devitt at SkyDeck talks about the xPhone concept, the dream of being able to roam across the 90+ US operators and the alphabet soup of network technologies. Jason exposes the locked-down world of US operators Sprint and Verizon. He further argues that the wireless industry should adopt Carterfone rules, the series of decisions by the FCC and the courts that allows anyone to launch a landline phone. Let the market be free ! Malcolm Lithgow of Smart Dreaming posts the beginning of his Smart Phone or Mobile Browser thesis, talking about whether smart phones will actually become thin browsers. Malcolm traces the early web history and analyses the bubble of the network computer concept and why it failed. He also looks at the success of the advanced Japan market and its geographical character to explain why it is a singularity to the rest of the mobile world. Ajit Jaokar of Open Gardens fame, presents a conceptual diagram for Mobile 2.0. Ajit introduces some clarity and distinguishes Mobile 2.0 (the evolution of mobile networks where services are network-independent) from Mobile Web 2.0 (which brings Web 2.0 to Mobile devices). A good frame of reference for discussing and building on these previously overused terms. Judy Breck writing at iCommons talks about the future of learning. Judy looks at how quickly young kids learn and rightly argues that in the future learning must use the Internet and mobile connectivity as a platform. Hopefully an area where we ‘ll see lots of innovation coming in. Finally, Ted Wugofski of OJO Mobile asks whether On-Device Portals are about Demand Creation or Demand Drive. Ted argues that ODPs today are about demand creation (consumer’s don’t know ODPs even exist!), whereas in the the next 18 months ODPs will be about demand drive; services like Sprint s On Demand, Handmark s Pocket Express, and Alltel s Celltop will build awareness among users. ODPs are a subject close to heart and we would agree with Ted, provided someone in the industry is brave enough to market ODPs as aggressively as 3G and MMS were marketed. This concludes our roundup of top-10 blog posts at the Carnival of the Mobilists 75. Sorry for those that were missed out, but we tried our best to be fair and objective in our top-10. Couple of final notes: Judy Breck and Russell Buckley of the Carnival are bringing forward a fab idea: Mobilist T-Shirts! Judy and Russell are looking for a volunteer to make the project happen, a good cause and not too onerous a task. So if you enjoy the Carnival, as either a contributor or as a reader, it’s a nice way that you could give something back to the movement. Contact Russell at MobHappy.com if interested. Last but not least, Troy Norcross has set up a simplified submission mechanism for Carnival entries. Use this link when submitting an entry and the article will go directly to the Carnival host of each week, making it easy to both post and review Mobilist entries. Next week, tune in to Greg Clayman at Twofones for the next edition of the Carnival of the Mobilists. Until then, keep blogging and enjoy the ride ! Andreas & Hampus

Adobe s Flash Lite is widely recognized as one of the most pervasive software platforms in the mobile market. It s fast penetrating the market of high-end phones and moving into mass-market phones in 2007 thanks to the Actimagine acquisition. Adobe is also expanding the mobile product line with Flash Home and winning important contracts with 3 Flash Cast operator deployments which were announced in 2007. Here are the facts and figures that provide more detailed peek into the Flash Lite phenomenon. These have been pulled together from Adobe s financial analyst meeting, several briefings with Adobe and other public sources. Adobe $2,58B: Adobe revenue for FY2006, growing at 15% annually 37%: target non-GAAP operating margin for 2007 1.46%: proportion of Mobile & Devices contribution to total revenue for FY2006, which grew to 2.11% in1Q07 16: The number of products launched in March 2007 as part of the CS3 Suite, making this the biggest product launch in Adobe s 25 year history ( InDesign, Photoshop, Illustrator, Acrobat, Flash, Dreamweaver, Fireworks, Contribute, After Effects, Premiere Pro, Soundbooth, Encore, OnLocation, Ultra, Bridge and Device Central) Flash Lite 220M: total Flash-Lite-enabled devices shipped by end of 2006 (includes mobile handsets, PDAs and consumer electronics) 194%: year-on-year growth for Flash-Lite-enabled devices shipped in 2005 and 2006. 200+: mobile handset models with Flash Lite embedded 100+: other embedded device models with Flash Lite embedded 16: Number of handset OEMs who have launched handsets supporting Flash Lite (Fujitsu, Hitachi, Kyocera, LG, Mitsubishi, Motorola, NEC, Nokia, Panasonic, Samsung, Sanyo, Sendo, Sharp, Siemens, Sony Ericsson and Toshiba) 2010: year when Adobe projects that Flash-Lite-enabled cumulative devices shipped with have reached the 1 billion mark 51%: target addressable market for Flash Lite in 2006 (approximate) 72%: target addressable market for Flash Lite in 2007 (approximate, Adobe forecast), based largely on technology acquired from Actimagine $0.20: average Flash Lite per-device royalty fee for 2006 paid by device manufacturers in 4Q06 $0: cost to download Flash Lite player for Symbian and Windows Mobile platforms (although re-distribution is forbidden) Flash Lite in Japan 40%: proportion of Flash Lite-enabled device shipments in Japan for 2006 25%: penetration of Flash Lite handsets in the installed base 70%: penetration of Flash Lite handsets in the sales base Flash Lite Commercial Traction 4: mobile operators actively supporting Flash Lite enabled devices (NTT DoCoMo, KDDI, Softbank, Verizon Wireless) 33: Nokia models shipping with Flash Lite embedded according to Adobe’s website 10-15: approximate number of S40 device models embedding Flash Lite 12: the number of Verizon handsets supporting Flash Lite (from manufacturers LG, Motorola, Samsung) China Mobile and Airtel: mobile operators who are launching Flash Lite content through their WAP portals. Lightmaker: the company who designed the idle screen, dialler and menu applications for the Samsung D900 based on Flash Lite. LG Prada: a designed phone which uses Flash Lite extensively throughout the user interface Flash Lite Technology 1.5MB: size of Flash player for PCs [updated: this is dependent on product packaging – see here for size of Flash player versions 2 through 9] 400K: size of Flash Lite 2 for mobile devices 300K: the target size for Flash Home product, built on Flash Lite (based on the technology acquired from ActImagine) ARM 9 with 32/32MB ROM/RAM running at 150MHz: lowest-spec phone embedding Flash Lite, according to Adobe. BREW extensions: the technology Verizon uses to automatically download and install the Flash Lite player on 12 supporting handsets. Flash Lite 3 Video: the main feature of the next release of Flash Lite 3 May 2007: when Flash Lite 3 is due to be released to handset manufacturers Christmas 2007: when Flash Lite 3 enabled devices will hit the stores. Flash Cast :an on-device portal, client-server product based on Flash Lite. 2005: when Flash Cast was launched DoCoMo i-channel: the only deployment of Flash Cast in the first two years 10 million: the paying subscribers for DoCoMo s i-channel (reached in March 2007, 18 months after service launch) $5: approximate price per user per month for i-channel service $600 million: annualised NTT DoCoMo i-channel subscription revenues 3: The number of mobile operators who announced Flash Cast deployments in 2007 – Chungwa Telecom (Taiwan), Verizon Wireless (US) and Telenor (Sweden) Flash Home :active idle screen product based on Flash Lite Feb 2007: when Flash Home was announced 2H07: when Flash Home code will be released to manufacturers 1H08: when supporting devices are expected to appear in the market 300KB: expected Flash Home code footprint (compared to 400K for Flash Lite 2.0). [updates] Nokia recently announced that its Series 40 5th edition platform will ‘support’ Flash Lite 2.1. Although ‘support’ doesn’t mean ’embed’, Nokia’s announcement marks a transition from embedding Flash Lite on select Series 40 handsets only to platform-wide technology integration across Series 40. It also implies that Adobe trusts that Flash Lite can scale down to mass-market Series 40 handsets, probably thanks to Actimagine’s IP. It will be interesting to observe how Adobe’s per-unit revenues fare over the next year. Comments/suggestions/improvements ? Let me know and I ‘ll add them in. Andreas

SIM cards, the tiny chips that authenticate the subscriber to the network, are a market of 2 billion unit sales per year. A market which is threatened by commoditisation with prices declining by 30-40% year-on-year. And perhaps surprisingly, a market where technology and politics are in continual turmoil. This past week, two identical conferences on the subject of SIM cards revealed the uncertainty that divides the SIM industry during the last 10 years. SIM technology has followed the same path; one where industry participants are divided over standards, control points and overhyped technologies. But with SIM card economics in a dire state, the industry needs alignment, not controversy. SIMpolitics Prague or Berlin ? In the past month, this was the question in the mind of most vendors forming part of the SIM industry. Prague was the location for Informa s SIM Summit, which took place on 24-26 April. Berlin was the location for SIM Alliance s SIMposium, which took place on 24-25 April. Two conferences on identical subjects in different countries, allegedly due to differences of opinion between Informa, the incumbent telecoms conference organiser and the alliance of SIM card OEMs. Dan Balaban of Card Technology Magazine has a detailed write-up of the conference politics at play. The result ? The Prague-Berlin flight route was unusually busy and most companies had to send delegates to both conferences (except for the major SIM card manufacturers who did not attend Informa s event). I attended the SIM Summit, where I chaired two days of the event, and most delegates I spoke to had correspondants on the other conference, not to miss out on any of the important developments. This unfortunate nature of affairs will undoubtedly be remembered as the schism of the SIM industry, one which I would hope is quickly sewn up. The SIM industry, already suffering from rapidly declining profit margins and lack of technological evolution does not need more turf fitting. The divide over conferences this past week is only the tip of the iceberg; technological evolution in the SIM industry has also been hampered by a long-term power struggle. The power struggle behind SIM technology Since the inception of digital mobile telephony, SIMs have been used as a physical token that authenticates the subscriber to the mobile network. The SIM toolkit interface was adopted in 1997 as a standard technology for allowing the SIM to interact with the handset, store contacts in the SIM, present a menu of operator services to the user, and show low-fi text and image popups to the users. A number of technology innovations followed, such as a Javacard application environment, secure SIM storage, more memory (up to 128KB) for storing more contacts, the BIP protocol for SIM communication over TCP/IP channels (GPRS/3G) and the JSR177 protocol for communication between handset Java apps and SIM Javacard apps. This might sound like a lot of technology, and one which opens the door to a range of usage scenarios and value-added applications. It is. The SIM has enabled many innovative applications to date such as m-banking introduced by T-Mobile Czech Republic in 1998, automatic device detection as used by ONE Austria, SIM contacts backup on the network a launched by SFR France, and text promotions as exemplified by Celltick s LiveScreen Media solution. So where s the catch ? The problem is that SIM technologies must be implemented by both the SIM vendors and the handset manufacturer in an interoperable fashion. Mis-alignment of incentives Here lies the problem that s been plaguing the SIM industry since the beginning of the decade: the mis-alignment of incentives between SIM card OEMs and handset manufacturers. On one hand, SIM manufacturers have been keen to promote the technological evolution of their SIM cards (and therefore the price tag). On the other hand handset manufacturer have always been wary of the establishment of the SIM card as a control point of value-added services delivered on the handset. As a result, despite operator pressure in favour of SIM standards, handset OEMs have been producing handsets with poor or inconsistent implementations of the SIM toolkit, and the other SIM technologies. This power struggle has been particularly evident to operators and has nurtured the demand for SIM test houses. This state of affairs was not aided by mobile network operators, even though MNOs would be primary beneficiaries of the SIM s evolution in the technology value chain. The reason is primarily down to organisational psychology. Tier-1 network operators are large, high-inertia and risk averse organisations with a poor track record for commercialising innovations. GSM operators lacked the vision and leadership to invest in new SIM technology, or even publically declare their support for particular SIM technologies. This led to a standstill in terms of the evolution of the role of the SIM. Reviving SIM card technology Consequently up, until 2006 SIM technology seemed stale in comparison to handset technology; 128KB SIM storage compared to several GB of handset storage. 10s of kbits/s for SIM-network communications vs 1000s of kbits/s for handset-network communication. 5MHz SIM smartcard processors vs 200MHz handset processors.Text-only interface for SIM applications vs Flash-like interface for handset applications. This was of particular concern to SIM card OEMs who were keen to upsell the value of the SIM card. The inflexion point came in 2006. SIM card OEMs, faced with declining profit margins pulled together to increase the valuation of the SIM card with a technology breakthrough. In February 2006, virtually all major vendors announced a next-generation SIM card product including Gemplus with .SIM, Axalto with U2 SIM, Oberthur with its GIGantIC card, Giesecke & Devrient with GalaxSIM and Sagem Orga with SIMply XXL. All next-generation SIM cards featured up to 512MB of storage (thanks to replacing NOR with higher-density NAND memory) and high-speed protocols. This evolution would allow a number of promising scenarions, such as storage of multimedia files, DRM tokens and encrypted corporate files, and distribution of operator-customised handset applications through the SIM. Informa’s white paper on High Capacity SIM cards which I wrote last year, provides an extensive analysis of the commercial status of next-generation SIM cards. This was all too good on paper, but again a technology evolution that had to be supported by handset manufacturers. Repeating history, network operators, with the exception of Orange, did not show leadership or invest in this evolution. The ETSI organisation was where the discussion of the standardisation of this high-speed protocol between SIMs and handsets took place. Following a multitude of candidate proposals, patent disputes, continual controversies and uncertainty, the participants agreed to standardise on one protocol; the USB. Two years had passed before this consensus was reached in November 2006, but the worst was yet to come. The choice of USB protocol meant that a significant rengineering effort of the part of handset OEMs (Orange had convinced 5 OEMs in 2006 to implement the MMC protocol, but the choice of USB meant that the momentum was stalled). Coupled with the continuing widespread lack of operator support, most industry observers concede that compliant handsets will not be appearing in the market before 2009, at least in any sufficient volume. So what does this means for the SIM industry ? Faced with declining sales, SIM card OEMs went back to the drawing board. The 3GSM 2007 congress saw two new efforts to revive the value of the SIM card: the use of the BIP protocol to deliver new applications and the use of the SIM within NFC technologies for contactless transaction applications. New SIM technologies in 2007: The quest for the holy grail After several generations of the mobile industry, the quest for enhancing the role of the SIM seems like the quest for the holy grail. Long, uncertain and without a firm goal in sight. At 3GSM this year, marketing around high capacity SIM cards was significantly toned down. Instead, Gemalto (the largest SIM OEM) introduced its line of multimedia-ready SIMs, essentially cards using the same memory capacity, but supporting the BIP (bearer independent protocol), which forms part of the ETSI 11.14 standard. The BIP protocol comes in two flavours: – The BIP client protocol allows the SIM to communicate with the network over 2.5G and 3G data channels, which allows for SIM-resident data to be updated at significantly higher speeds than previously possible. The BIP client protocol is widely implemented (all top-5 OEMs except Samsung support it), but it is a point-to-point protocol (unlike cell broadcast), which cannot be used for mass updates. – The BIP server protocol allows handset applications to communicate with the SIM and access objects stored in the SIM file-system directly. Unfortunately, the BIP server protocol has seen (unsurprisingly) poor support from the part of handset OEMs, with the exception of Sagem, Vitelcom and HTC. The BIP server implementation allows a handset application to load files from the SIM card and enable handset personalisation on SIM insertion (as demonstrated by Abaxia at this year s 3GSM). On-SIM portals can also be realised in this fashion. However the BIP server protocol is not bidirectional and therefore cannot support scenarios where an application stored in the SIM card is auto-installed onto the handset operating system. Hooking the SIM onto NFC applications Perhaps the most talked about future application for the SIM card is as a control point for handset-based NFC applications, such as contactless payments. NFC (near field communications) is a wireless standard launched by NXP (formerly called Philips Semiconductors) and Sony in 2002. There are already several commercial pilots of NFC-enabled handsets around the world and ABI research predicts that around 20% of handsets in 2012 will ship with NFC capabilities. NFC technology can be used to make payments, unlock doors and download content, by simply waving the handset in front of the reader. Clearly, establishing a role within NFC-based applications means big money for mobile operators and SIM card vendors. The GSMA (association of 700+ operators globally) recently mandated the use of the single wire protocol (SWP) for linking the SIM card to the NFC circuitry within the phone. However, there is no agreed technical framework for determining the role of the SIM in NFC applications. At the same time there are far too many players claiming a piece of the lucrative pie of contactless payments, namely card issuers, contactless ticketing providers, mobile operators, handset manufacturers and SIM card OEMs. Undoubtedly, the NFC-related hype that surrounds the SIM industry has a long way to go, given that it will take another five years for NFC-enabled handsets to reach critical mass. Perhaps it s wiser to reflect on the many uses that the SIM can be put to, utilising not tomorrow s, but today s technology, such as T-Mobile s use of the SIM for m-banking applications supported by 80% of banks in the Czech Republic. But not for an industry whose survival depends on demand-creation for next-generation technologies. Andreas

Some things remain true: Markets always shift and the lord giveth and the lord taketh. In the mobile handset industry we have seen Ericsson with 30%+ share of the market and then fall into oblivion before creating a joint venture with Sony and rising like the bird Phoenix. Does anyone remember the impact of the Vodafone terminal specifications to OEMs less than half a decade ago, for which even Nokia bent over backwards in the end? How come this changed so rapidly? Well, consumers change their minds. The industry too shifts between vertical and horizontal structures in a helical pattern. There is always a search for the next killer feature that will lead into a new shift powering market dynamics, but seldom is it a feature that creates that shift in balance but something completely different. Consider first an example from another industry the automotive market. The last few years that market has undergone a feature renaissance , the killer features being environmental impact (look at the success of the Toyota Prius) and localization (i.e. with built in GPS). The previous killer feature was segmenting the car products into clear value propositions like SUVs, family cars, sports cars, etc. Before that it was hardware being able to build cars and ship them over the planet. The shift of the millennium: from hardware to software In the mobile handset industry we saw the shift in market differentiation, from hardware to software some years ago; until the end of 1999 all the big OEMs were more or less focusing on hardware. Technology differentiation was determined by how small you could make the phone, how good network reception you could achieve, and so on. In the beginning of this millennium a shift began; software became much more important. In 1998 Symbian was formed as a partnership between Ericsson, Nokia, Motorola and Psion. In 1999 J2ME was announced. The demand for software engineers surged. It wasn t that hardware didn t matter or that it was commoditized. It wasn t that software hadn t mattered earlier either just that gradually software became more important than hardware. It takes years until we notice the difference, as it takes years to build a good software platform. The next shift: from software to segmentation We saw a similar shift last year, in 2006. In the third quarter of 2006 the average selling price (ASP) for several handset OEMs decreased considerably. Except one; Sony Ericsson who instead increased not only its handset ASP but also its market share. As argued earlier, increasing market share often leads to decreasing ASP, so why was Sony Ericsson an exception? I would argue that Sony Ericsson found the new differentiator: vertical segments. A vertical segment is really just a product proposition that occupies a niche segment of the market. The more niche and targeted you can make any product, the more valuable the target consumer will find it and is thus willing to pay more for it. The core handset differentiation shifts over time and eventually sinks under the value line . The complexity of creating vertical segments Designing a product to appeal to a target customer group as well as possible is important as long as that group is big enough to provide a return on investment. Today mobile handset tailoring and customizing is not an easy task and investments are substantial. There are three essential elements to creating a vertical handset proposition: User Research: finding out what the customer segments want and to translate this into requirements Supply-Demand Prediction and Logistics Handling: balancing supply and demand in a cost efficient and operationally responsive way Product Flexing: to cost efficiently create multiple products according to requirement with minimal impact to time to market, development cost, and bill of material The first two elements are competences taught in most marketing classes, but the third is specific to each (non-commoditized) industry. In the case of the mobile handset industry, this is the hardest part as it takes years to platformize handset software and hardware. Nokia has mastered the top two elements, but for some reason the inside of their phones look the same independently if it is game, business or multimedia that drives the phone. Sony Ericsson on the other hand was able to balance all three to a level which was in part responsible for their increase in handset ASP last year. The next wave of differentiation? Of course there will be a new differentiator when the art of segmentation has been mastered. We are already seeing open source as a threat to the ones that relied on the traditional model of software development. In markets where no new features can be added to the product the value lies in design, brand and product marketing, as is the case in eye-wear and watches. But surely there must be more features to add in mobile handsets, right?! So where should we look for the next wave of differentiation? Undoubtedly OEMs will continue improving handset segmentation and user-centered design. However, I would argue that the next differentiating characteristics in mobile handsets will be delivery of True Personalization and the ability to cater to Multi-Sided Markets. True Personalization True Personalization is really about making the target segment so small that it becomes more or less one person (and I am not talking about ringtones, themes, mobile charms, and stickers). When Japan introduced number portability, many believed that the churn would grow immensely. It didn t, and I think one of the reasons is that DoCoMo had introduced soft walled gardens like personal email and i-mode services that users had attached themselves to earlier. Think about it: If you had to change your email address to move to a Dell, HP or Mac instead of your current IBM/Lenovo, would you change? The OEM that is able to create an identity that resides within your mobile that is easily personalizable by the user and moved to new devices within the same brand, will definitely see less churn. I know a lot of people who don t change phones (even within the brand) because it is such an hassle to configure and move bookmarks, contacts, rss-feeds, contacts, settings, etc, and that some things like sms and email is not even transferable. When the user is able to micro segment and truly personalize her own device she will never switch! Why do you think Nokia created the Nokia LifeBlog? Catering to Multi-Sided Markets Mobile phones will increasingly resemble platforms, but no one in the manufacturing part of the value chain will want a new Wintel, i.e. a singular platform. The manufacturer-operator battle is clear and a dividing line exists between the two the players above this line (operators and service providers) want all handsets to be the same for their applications, services, advertisements, etc. The players below (the handset OEM) don t want to become too platformized and end up like set-top-box manufacturers (I love asking people what the brand or even manufacturer of their set-top box is. Many answer TiVo or some other non-manufacturer; little knowing or caring about that it is built in Taiwan or China. The way forward: handset OEMs are either building services or service platforms of their own, or are creating a flexible white label solution for third parties. Look at Nokia Ad Service, Content Discoverer as well as Motorola s Screen3. Rumors say that Google is having close talks with LG and Samsung, two hardware centric manufacturers, who should watch out for platformization. Why would Motorola not just use uiOne and why does Three remove the Nokia Active Standby? Because being able to enable third parties to monetize the mobile platform, but keeping control of the user experience will be a promising post sales revenue stream. Thoughts? Hampus, TAT

The mobile browser business has been dealt with a swift blow within the space of a week: Teleca announced that it halts investments into renewal of Obigo product , while Openwave is up for sale and is failing at licensing its v7 browser to handset manufacturers. The winner? Open-source browser derivatives based on Web Kit (adapted by Apple and Nokia), which should show up on handsets from the likes of Sony Ericsson within 2007. Browsers beset with challenges Cumulatively, the Openwave and Obigo browser families have to date claimed over 70% of the mobile browser market, with Access browser claiming another 20% of the market. Considering that the mobile industry sees one billion phones ship per year, this is a lot of browsers. Yet, these products have been facing multiple challenges: – mobile handset middleware commands extremely low prices these days; the lower down the software stack you go, the lower the per-device licensing fees. For example, a single ringtone can command a retail price of $3, the same per-device pricing as the Symbian operating system. Browsers and Java virtual machines can only command perhaps one hundredth of that. – Mobile browsers continue to be inherently complex software. Browsers that render street HTML (i.e. malformed web pages, which are pretty common on the Internet) are notoriously difficult to develop and maintain. Yet software for interpreting and rendering web (HTML) pages is becoming decisively commoditised. – The innovation and value-add in mobile browsers lies in add-on features such as zoom and intelligent navigation – for example see Microsoft s Deepfish concept browser and the specs of Nokia s S60 open source-based browser. – There are several open source alternatives to commercial browsers, first and foremost the S60 WebKit, which replaces Nokia s previous closed source efforts and is embedded on all S60 3rd edition handsets. What went wrong with the browser business ? Openwave, Obigo and Acces, the three main mobile browser vendors, had in the last two years tried to reposition their browsers as application environments, but with limited success. Openwave has been the market-leading vendor for mobile browsers with over one billion deployments claimed to date, on handsets from BenQ Siemens, Sanyo, Sharp, Sagem, Motorola, LG, and TCL Alcatel. Openwave was the first and most vocal vendor to reposition its browser product into an application environment. In April 2006 the company announced MIDAS, a software platform combining a rendering (ECMAscript) engine with underlying browser and messaging components to deliver customizable applications to mobile operators. What went wrong ? While Openwave was banking on the purchasing power of mobile operators to demand inclusion of its browser by manufacturers, it chose to sideline its real customers, the handset manufacturers at its own peril. Handset OEMs who previously were disinfatuated with Openwave due to the lack of flexibility in Openwave s bundled browser and messaging components were disincentivised to upgrade to Openwave s v7 browser framework (codenamed Mercury), the basis for MIDAS. Openwave s strategy led to a welcome response from mobile operators; KDDI endorsed Openwave s Mercury browser for its EZweb services in October 2006, while O2 trialled MIDAS as the basis for a unified messaging client in mid 2006. However, MIDAS saw poor reception from the all-important handset OEMs, with only 5 out of 288 phone models embedding the Openwave v7 browser according to Openwave’s website (last updated in September 2006). This is a disappointing track record considering that v7 was announced in February 2003 from the world s leading mobile browser company. With the MIDAS platform strategy failing, Openwave repositioned its portfolio into a product strategy, with 13 product announcements at the recent 3GSM conference in Barcelona. The announcements of the Openwave Mobile Widget, MediaCast and the Openwave Personalization and Profiling System are characteristic of the company s turn towards content delivery services. However, this turn came too late; with OpenWave’s NASDAQ-listed stocks having fallen 50% in the past 12 months, the CEO resigned in late March and the company announced it was putting itself up for sale. For a publically traded company employing 1,300 people across 26 countries, this a major shake-up. Even more so, if you consider that Openwave s decline is a far cry from the year 2000 when the company co-founded the WAP Forum and was instrumental in drafting the WAP specification which spawned the mobile browser business. Openwave’s fortunes bare a similar fate to Obigo. In early April, Teleca announced that it would not be making further investments into the renewal of its Obigo software suite. Obigo includes not only a browser but a media player (SVG, video, audio), messaging (SMS, MMS, EMS, email), content manager, download manager and digital rights management. According to the company, Obigo software has shipped on more than 400 handset models and more than 300 million mobile phones as of July 2006, from manufacturers including BenQ Siemens, Panasonic, Pantech, Samsung, SonyEricsson and Toshiba. Teleca said that the source code associated with Obigo would be opened up to customers “in order to drive the change from a product to a services model.”, according to CBR Online. More than 200 Teleca staff making up the Obigo product unit in Malm and Lund, have been offered voluntary transfer to Sony Ericsson. For in-depth reviews of Openwave s MIDAS and Teleca s Obigo see the free research paper titled Mobile Operating Systems: The New Generation, published in September 2006. The Winner: Open Source The demise of the mobile browser business marks concurrently the first sign of the disruptive power of collaborative software development models based on open source. The most vocal advocate of open source browsers has been Nokia. The Finnish OEM had in the past been developing a proprietary browser for S60. However, with the cost of street HTML browser development rising, Nokia tried three options: – licensing Opera s web browser for its S60-based devices – investing in the Minimo project, a Mozilla browser branch optimised for mobile devices (which turned out to be too resource-hungry and was abandoned) – re-developing its own S60 browser based on the the WebCore and JavaScriptCore components from on Apple s Safari browser (which in turn have been based on KDE’s Konqueror open source browser project). In early 2006 Nokia steered towards the third option and announced the S60WebKit, the engine for Nokia s new S60 web browser, which today ships on all S60 3rd edition handsets. The S60WebKit browser offers advanced features such as mouse-based navigation, page miniatures , visual browser history and AJAX support. Furthermore, Nokia s browser additions are available under the permissive BSD open source license, which allows third parties to use these components for either open or closed source project with very few limitations. What next ? The discontinuation of Obigo and the financial troubles of Openwave should see Nokia s WebKit become adopted by other tier-1 OEMs such as SonyEricsson, who should acquire much of Obigo s browser know-how. The browser business should gradually shift into a professional services model, i.e. optimising and developing value-added features on top of an open source browser core, with Teleca best-placed to capitalise on this trend. I doubt that Access and Opera will be able to sustain their licensing agreements at current levels, given the popularity of low-cost open-source-based alternatives. At the same time, this may be a lesson for the PC industry, too; had Internet Explorer not been bundled within Windows and offered to PC OEMs for free, it would no doubt have been sidestepped by Firefox. Comments, as always, are welcome.

The mobile software industry is never short of challenges. Manufacturers and software vendors are constantly riddled with the question of build vs. buy; should they invest in in-house development of a software component, or license it from a supplier? Ultimately build vs. buy is an investment decision, as it requires investment of either resources or money and so is determined by a multitude of factors. A complex ecosystem of customers and stakeholders affected by software decisions, combined with the many software components in a mobile phone can make the build vs. buy decision a difficult call. Additionally this decision is increasingly complicated by patent and intellectual property rights considerations. It is not coincidental that over half of the top 20 patent filing applicants in 2006 are major mobile handset or equipment manufacturers, according to WIPO (see below). These immensely successful companies obviously see the link between successful intellectual property and patent strategy – so is there a lesson here for software providers? 3. Siemens 4. Nokia 10. Motorola 11. Mitsubishi 12. Qualcomm 13. Huawei 14. Ericsson 15. Fujitsu 16. LG Electronics 18. HP 20. Samsung Unlike the top-20 patent players, most technology companies lack dedicated IP and patent teams. However, tomorrow s successful companies will be those that pay due attention to the increasing importance of these key strategic build vs buy and patent decisions Build vs Buy: decision criteria At the most basic level, the decision whether to build or buy a piece of software comprises some basic factors: 1. Stick to standards? It generally makes sense to implement an industry standard, if one exists, particularly if the standard is accepted and widely used. Differentiation can be achieved by exemplary implementation of a standard, providing you with a means of excelling against your competition. However it should be noted that there are IP risks with implementation of even de-facto industry standards, as with the recent claim successfully brought by Alcatel against Microsoft for infringement of their patents in the MP3 standard. 2. In-house development? Considerations here are your in-house development expertise, prioritisation of the requirement given limited resources and budget availability. If you are developing in a new technology area the decision about whether to build or buy has additional complexities. Assuming that there is no standard industry agreement regarding a new technology (and this is usually the case) it is likely that you will need to either develop your own solution or alternatively look to procure a solution from specific technology experts. Investment in new technologies is increasingly expensive and so you will necessarily be looking for a solution that has the potential to become the dominant solution in the market and ideally reap you profitable revenue returns. The following diagram illustrates the build vs buy trade-offs depending on whether the technology is standardised or new. 3. The complexities of intellectual property rights Not withstanding the generally well acknowledged technical and developmental challenges of new technology areas, there is an additional factor that is generally less well understood by software companies but one that is no less important. It is Intellectual Property Rights (IPR) and patents how these can play out in a new technology development lifecycle. I ‘ll next try to analyse the key IPR issues (although I ‘m not a laywer, so seek advise before acting!). Assuming that a build decision is reached, then there are a number of IPR factors to consider. If you are a mobile software company it would appear prudent to carry out some initial investigations in the technology area to ascertain if others already have essential patents (essential meaning that you cannot implement the technology without them). However this apparently logical decision is not without its own risks. In the US, for example, knowledge that a third party has patents in a technology area that you wish to develop in can potentially give rise to punitive damages (up to three times the normal damages) this is if the courts determine that you wilfully ignored this fact, having had prior knowledge of the fact in the technology development stage. The alternative, to fastidiously ignore what others have done to create and patent your own solution is not without risks either. If you are found to have infringed others patents after having developed the technology, you still run the risk of being litigated against for patent infringement. It may feel as though you are damned if you do infringe patents and damned if you don t! Thorough investigation is definitely preferable to blind ignorance. Assuming that you successfully navigate your way around the patent minefield, there is then the all important objective of achieving adoption of your technology to ensure your investment is successful whilst also ensuring that you retain some exclusivity to the technology to benefit from your first-to-market position. Patenting your solution can give you the security of exclusivity and makes sense in order to protect your investment, but how do you then achieve successful adoption of your technology knowing that others may be put off by your having patents in this area? These objectives, which may initially appear mutually exclusive, can be managed provided you have planned your patent strategy in advance. For example, you could setup (or join) an industry standards body and contribute the essential technology patents thus ensuring a level playing field, at least for the basic implementation. Additionally you may provide additional patents under FRAND terms (fair, reasonable and non-discriminatory terms). Companies who wish to implement technologies in this area, may prefer to license your patents knowing that this then gives them some indemnity regarding their risk of potential infringement. However, at what point in the technology development lifecycle is it appropriate to take this decision and to allow others to either contribute or license your essential patents? Unfortunately there is no one-size-fits-all solution; each decision should be taken with a good understanding of the likely outcomes, benefits and drawbacks. Decisions regarding build vs buy and to patent or not to patent are bread and butter issues for mobile software companies. Whether the importance of these issues registers is another matter. Strategic gains, in the form of revenues and technology leadership (or even domination) can be achieved by either forcing others to acknowledge your patent as an essential one or by preventing competitors from innovating in a specific technology space by virtue of your patents. Nevertheless, there is always the risk that third parties will find an alternative technology implementation that does not require your essential patents, which may prove more successful or, even more worryingly that your technology could be found to be infringing others patents. So whilst build vs. buy decisions may be perceived as generally straight-forward, they are actually complex, strategic product decisions. The technology company that leaves these decisions only to their development or engineering teams may be jeopardising their success more than they are aware. As reiterated by Ikka Rahnasto, Nokia s Vice President for Intellectual Property Rights in a recent WIPO magazine article Our IP strategy is deeply integrated into Nokia s business strategy. the focus has increasingly been on understanding the role of IP in each Nokia business and on improving the return on our technology and IP investmen…IP assets are managed by a centralized IP department reporting to the Chief Strategy Officer, with very close links to Nokia business groups and technology groups to enable full strategic alignment . [updated: Thanks to WapReview for mentioning this post at the Carnival of the Mobilists!]

Handset software is a fascinating topic in the mobile industry, albeit one that is often misunderstood. Application environments like Java, Flash Lite and Qtopia open the world of handset software to developers and allow the handset GUI to be customised. Here I introduce a new taxonomy for application enviroments and explain why seemingly distinct technologies like S60, Widsets, Maemo, Qtopia and Openwave MIDAS are essentially part of the same landscape. [Note: I have updated this article in response to much feedback and comments (thanks Nick, Philippe and Malcolm). Thanks also to Judy Breck maintainer of the Carnival of the Mobilists for selecting this article as post of the week.] Today there are 10s of different tools technologies for opening up handset software to developers and generally those who want to customise the handset GUI in some shape or form. These range from skins designers, to games developers, to operators who want to create a ‘signature’ look & feel spanning the entire user interface. I would argue that application environments include not only Java, as well as environments for creating skins, desktop UIs (a.k.a. idle screens) and core applications (dialler, menu system, email, messaging applications, etc which are entirely different to downloadable applications). Contrary to popular understanding, openness is not an exclusive privilege of open operating systems (OSes) as I argued in a previous research paper. A range of technologies exist to ‘open’ access to the handset software internals, and can be divided in two categories: external and internal application environments. The distinction between external and internal environments is down to several variables: level of functionality exposed to an application, who can access that functionality (certified apps only?), depth of integration (e.g. can you replace core apps such as the dialler and contacts application), when an application can be installed (at the point of manufacture, before the point of sale, or after the point of sale) and who can install the application. 1. External application environments, i.e. those which allow application development and handset customisation after the software has been embedded in the handset ROM. These are generally accessible to external developers, scripters and designers. Examples are: – Nokia’s S60, SonyEricsson’s UIQ, Microsoft’s Windows Mobile and Qualcomm’s BREW, which are advanced platforms. These can also be viewed as external application environments, in that they offer a rich set of APIs for application development and deployment post-load, in other words environments designed for developing downloadable but not core applications. For example companies like DreamSpring have created good contacts replacement applications for UIQ and S60. However such applications are not a complete replacement for core apps (such as the contacts app) since the can only hide the built-in app, and they are not able to access sensitive APIs such as the voice-dialling API as this is hidden by the handset manufacturer. See my comment on this post for further analysis on why S60/UIQ etc are designed as external and not internal app environments. – Open C (POSIX APIs on top of Symbian), which are C/C++ APIs aimed for use by application developers – Java 2 ME (in its myriad forms and extensions), Python for S60, .NET Compact Framework and AppForge, a range of application environments for developers or scripters – Adobe’s Flash Lite aimed at scripters and designers developing graphics-intensive apps. – S60 ActiveIdle, Windows Mobile homescreen framework and Nokia’s Widsets, a range of technologies for allowing developers to customise the UI desktop (aka idle screen) – Nokia’s Carbide.UI theme edition tool for deep skinning of the handset GUI 2. Internal application environments, i.e. those which allow application development and handset customisation before the software has been embedded in handset ROM (and in certain cases during the handset lifetime, too). These are accessible to handset manufacturers, network operators and handset distributors. Examples are: – Openwave MIDAS, a ‘deep’ scripting environment for creating operator-customised applications – SVG players from Ikivo and BitFlash for developing graphics-rich, interactive applications such as Vodafone’s Live! Cast. – TAT’s Cascades, Digital Airways’ Kaleido and Mentor Graphics’ Inflexion (previously NextDevice), which are rapid prototyping tools software frameworks for rapidly creating custom end-to-end user interfaces (i.e. the entire suite of core applications) from scratch. – e-SIM (now part of SKY Mobile Media) and Comneon’s APOXI, which are development tools for building suites of core applications (albeit tools which are more aimed towards engineers than designers). – Trolltech’s Qtopia, Maemo’s Hildon port, ALP’s Hiker, OpenMoko’s application framework, TTPCom’s Ajar and Windows CE app framework, which are sets of C/C++ APIs for creating core applications and managing application communication and lifecycle. In the next diagram I attempt to classify the above application environments in terms of the extent of customisation which they permit and the time at which they can be applied. The x-axes show, the time of customisation is directly related to the barriers to customisation; internal application environments are mostly accessible to the manufacturers and partners, whereas external application environments are accessible to all. Note that the chart is quite extensive but it is still work in progress. The y-axis shows that there are four broad types of customisation that can be applied via application environments: – change of themes and skins across the handset (e.g. Carbide UI theme edition) – development and deployment of downloadable applications (using e.g. S60, UIQ, Windows Mobile, BREW) – replacement of a core application (e.g. replacing the idle screen or contacts app) – core application re-design (redesigning the entire user interface from scratch) This landscape map is very revealing, but still it doesn’t do enough justice to highlight some important parameters of application environments: the cost of customisation, the part of the software stack which a technology provides, and the target addressable market in terms of breadth of device models. Another important parameter is why customisation is applied: this can be to re-enforce branding (and retain customers) or to provide easier discovery of, and access to, new services by operators and third parties. A couple of noteworthy remarks on the map: – Flash Lite is moving from an application environment for downloadable, graphics-intensive apps, to an environment for creating other core applications such as the idle screen and the dialler (see the Samsung D900 implementation for example). – Java is also moving towards enabling development of desktop UIs (aka idle screens) and some core apps, thanks to the capabilities introduced in MIDP3. So what are the trends in application environments? On one hand all ecosystem players, from operators to manufacturers and beyond are striving to reduce the high time-to-market impact of pre-launch customisation. At the same time, external application environments do not reach as far as core applications (desktop UI, dialler, menus, email/calendar/contacts applications, camera application, etc), due to the lack of modular design of most operating systems today (including Symbian/S60 and Windows Mobile, the so-called ‘open’ OSes). Therefore, a number of technologies are being introduced to bring much-needed modularity within application environments, both pre- and post-launch. These range from rapid application creation tools from TAT, Digital Airways and Mentor Graphics, to Open Plug’s FlexibleWare modular software development framework and Red Bend’s Embedded Feature Delivery technology. These technologies will be impacting not only handset development practices, but also making an impact to the consumer market. Within the next year we should hopefully be seeing many more examples of unique GUIs such as Vodafone’s Simply range and B&O’s Serene handset. Thoughts ?

If you were at 3GSM a couple of weeks ago, you would have noticed that the term ODP has become quite widely used. Unlike other unfortunate terms (3G or user experience), on-device portals are used to signify something quite specific and meaningful: the use of specialised device software to deliver portal content and store-front capability (hint: it’s not the browser). ODPs excel compared to WAP browsers on several counts: caching content for zero-wait browsing, integration with handset capabilities and functions (such as graphics and messaging), reducing the click-distance to content, and streamlining content purchasing. On-device portals address the need for increased data revenues not through bigger pipes (read: 3G) or bigger content (read: $20M-content deals), but by improving the user experience in content browsing and purchasing. Content may be king, but the user experience is queen as the mobile industry is finding out. However, the ODP space is literally crammed today. I can count 30 providers of ODP client or client-server products today: Access Netfront Dynamic Menu, Action Engine (still around?), Adobe (FlashCast), Airmedia, Cibenix, Communology (mobile catalogue), Comverse, Crisp Wireless (mLogic platform), Everypoint, Geniem (MediaCast and Superstore), Handmark (Pocket Express), InFusio (nMap), ITfinitiny (2Go), mPortal, MobiComp, Mobinex, Nellymoser (ASAO platform), Nokia (Content Discoverer), Opera Platform, Qualcomm (uiOne), Reporo, RefreshMobile (Mobizines), Streamezzo, SurfKitchen (SurfKit series), Tricastmedia (TWUIK), U-Turn, Volantis (BuzzCast), weComm (wave), Yahoo! Go and UIActive. What a crowded market this is ! If you are an operator shopping for an ODP solution, you can go very far for your money (if you know where to look that is, and this list is certainly a good starting point). So how do ODP vendors differentiate ? Every angle in the book of the-hitchhikers-guide-to-routes-to-market has been tried. You have regional plays (MobiComp in Turkey and Onskreen in India), mobile operator propositions (SurfKitchen, Cibenix, and Comverse), content provider D2C propositions (Refresh Mobile and Nellymoser), MVNO plays (mPortal) and real-time video or data (Streamezzo and Everypoint). With maturity comes wisdom. Most ODP players now realise that they are just offering another content distribution channel (albeit an appealing one), and that value lies on how you integrate handset functionality and personalise the content served. Operator Optus in Australia for example has customised the uiActive client to integrate messaging, presence information and location awareness, serving different content based on the user’s location. More interestingly a nearby value area is emerging; not just selling content, but discovering content through the handset home screen. Introducing Desktop UIs There are a few players in this space which I ‘d call Desktop UI, and it’s heating up pretty quickly. Abaxia’s Mobile portal, Celltick’s LiveScreen and Zi’s Qix are the incumbent desktop UI products, helping the user (and the operator) discover handset features and operator services from the idle screen. But as of the last 3GSM, you can add several more products to this list: Abaxia and Tegic separately announced solutions for finding content and features from the home screen through T9-ish predictive matching (much like Qix). Then you have Korean IntroMobile’s IntroPad, Vocel, Aditon (a PA Consulting spinoff that shows adds on your mobile) and of course FlashHome, the reincarnation of FlashCast with home screen replacement features. You can naturally add the usual suspects to this list – ODP players who also provide homescreen replacement features (Cibenix, SurfKitchen, uiOne, MobiComp, et al). What’s important to understand is that Desktop UI products are fundamentally different to ODPs. DUIs are technically complex (hint: handsets are not designed to have their home screen replaced, because OEMs did not think that was a good idea in the first place). Feature-wise, DUIs are about discovering content, not browsing or selling it. DUIs can also be used to discover common handset functionality (e.g. type R-I-N-G-T from a Qix-like application and you have the options for changing the ringtone or buying a new one. Sames goes for bluetooth, camera.. the list goes on). Last and certainly not least, DUIs are about controlling the most valuable real-estate that ever has and ever will exist on mobile handsets. It’s the primary shelf space (advertisers call it inventory) that content providers are keen to get their hands on. Inventory is the reason Google paid such a ridiculously large sum of money for YouTube. Naturally, manufacturers are not staying out of the game; Nokia has Active Idle, Motorola has Screen 3 and Sony Ericsson is rumoured to be baking it’s own Screen 3 variant. Stay tuned.

One of the simplest and most brilliant ideas I ‘ve read in a while comes from Deloitte’s telecommunications predictions for 2007. This market trends paper argues that instead of trying to cram TV content designed for 32 inch TVs into 2 inch mobile phone screens, mobile operators should monetize by enabling their subscribers to upload videos they ‘ve snapped on their handset to the PC (i.e. the web) and their TV. The Deloitte paper references a Business 2.0 article with more insights and research on the subject of video moblogging. As Business 2.0 puts it: “Sending a clip of Junior’s soccer match to Grandma, it seems, is much cooler than watching the latest ‘mobisode’ of ‘Desperate Housewives’ on a two-inch screen.” This is essentially about bring not TV to the mobile, but mobile to the TV. Let’s call this Reverse Mobile TV (-MTV or minus MTV; kind of a nice wordplay, as it also alludes to turning around the power balance and being your own ‘MTV’ or popular channel). I don’t think the term moblogging (or Nokia’s term lifeblogging) does it enough justice anyway, as blogs are associated with a journal of sequential entries around one theme, whereas mobile TV making is about one-off broadcasting. Startups are keen to monetize on this trend. Veeker allows to you upload videos via MMS and share them (although MMS is a fragile technology with impractical limits for file size – e.g. 300KB in the UK – and very expensive for spontaneous video sharing). Vpod.tv is another service that allows users to create their own TV channel (still in beta, with mobile capabilities unclear). Perhaps Shozu is the most promising attempt at video sharing, since it uses a handset application to upload videos to the web. Naturally, YouTube isn’t sitting around dwindling its thumbs and plans to allow mobile users to send clips to other YouTube members within a 2007 according to a Reuters report in late 2006. [updated] UK operator 3 has launched a service called SeeMe TV since October 2005 that let’s users produce and broadcast their own video clips, although the service does not extend to the web or the living room TV. Getting the recipe right It won’t be easy to reverse mobile TV, in other words to do for mobile phones what the Slingbox is doing for TV [the Slingbox comparison is only part of the solution and might confuse. Reverse mobile TV is about uploading your videos from your phone to your living room and your friends’ living room]. So, to implement it you need handset software, distribution channels, brand & communities, 3G pipes, flat data rates and a home entertainment play. Here’s why: – handset software is needed to instantly upload videos to the internet cloud, over cheap reliable and standardised protocols like IP and unlike MMS. Handset software offers a much more compeling experience for sharing videos and silently uploading or downloading videos. Kind of what on-device portals like Yahoo! Go are to WAP portals. Shozu is a model application in this case and a lesson in the success of product vs platform business models in the mobile industry (Shozu is in fact a product created from the ‘ashes’ of the Cognima synchronisation platform). – distribution channels are essential for getting the handset software bundled and made easily accessible from the handset menu. Distribution and bundling power comes with handset OEMs, mobile operators and media brands, in order of decreasing power (market-depending of course). – brand & communities: Communities are an essential social framework of interaction. Think of YouTube’s video sharing community, eBay’s glue that allows buyers to find sellers and Amazon’s collaborative filtering. Today’s brands build communities and today’s communities build brands (Tomi Ahonen is thought-leader here). – 3G channels: At last! -MTV could be a service that justifies (some) of the billions of investments made on building 3G mobile networks. Mobile video making is spontaneous and therefore uploading or sharing has to be instantaneous – you just can’t expect users to connect their handset via cable to their PCs and load up the right software. Or even wait for 10 mins while the video uploads over a GPRS connection. – flat data rates: easily underestimated by industry insiders who rarely care about their mobile phone bills, flat data rates are essential for realising the -MTV paradigm. US, Japan and some European countries (see ‘3’ in the UK) offer flat data rates. If operators were smarter, they would launch pay-per-use tariffs for video uploading (e.g. uploading a video could cost as much as 2 SMSs), based on IP-based or APN-based charging, in association with the -MTV service provider. – a home entertainment play will enable -MTV service providers to channel made-on-your-mobile videos to your living room, and cross-sell sharing, printing or other content services. This should be on the roadmap of companies like i-mate who launched their home-entertainment products at 3GSM last week. Interestingly, the -MTV concept can not only drive data ARPU for the operators through video uploads but can also drive data downloads, as mobile video makers can broadcast themselves to other phones. Furthermore, as the Deloitte paper puts it “a growing body of amateur content, created on mobiles, is ideal for watching on mobiles”. A good charging model would be per-upload charges for mobile TV producers and flat-rate access for mobile TV consumers (a well-understood model for a two-sided market like -MTV). [updated] Operator 3’s SeeMe TV service charges mobile TV producers the price of an MMS for uploading videos, but rewards them with 1p for every ‘3’ customer that watches their clip – a revenue model variant that has spawned more than 30,000 clips from ‘3’ self-styled TV producers, rewarding popular clips with a total of over 100,000 as of March 2006. The reverse mobile TV concept is unique service offering that can be delivered by mobile operators, ideally those who offer both mobile and fixed/home services and can partner with third party brands/communities to deliver multiple, end-to-end offerings. Now, when can I get it on my phone please ?

With voice ARPU steadily declining and data ARPU undercompensating, network operators should re-examine their data services strategies. On 21 November 2006, Informa Telecoms & Media presented their outlook for the mobile industry in front of a packed audience in central London. The data presented by Informa’s six senior analysts at the event was rather unflattering for network operators. You can check here for the full video of the day’s presentations. A gloomy outlook According to Informa, voice ARPU (average revenue per user) fell from a global average of $19.38 in 2005 to $17.65 in 2006 and is expected to further drop by $1.34 (7.6%) in 2007. At the same time, the much-awaited boost in data service revenues has fell rather short of expectations. From a global average of $2.84 in 2005 data service ARPU dropped to $2.81 in 2006 and is forecast to climb by just $0.07 in 2007, according to Informa. In a nutshell, global voice ARPU is forecast to drop nearly 20 times faster than the rate by which data ARPU will increase in 2007! This outlook is set in the backdrop of hundreds of billions of dollars in network operator investments in 3G licenses, network infrastructure upgrades and megadeals with content providers. Source: snapshot from Informa’s Mobile Industry Outlook One might argue that Informa’s global predictions are overly skewed since they include developing mobile markets. Vodafone’s key performance indicators reveal a similar trend. Across Vodafone’s four main markets (Germany, Italy, Spain, UK), average voice ARPU fell by 7.39% between 2005 and 2006, while data ARPU (including messaging) rose by 3.20% in the same period (although performance across individual countries varies widely). Comparatively, in Spain and the UK voice ARPU dropped by over 3.5 times faster than the rate by which ARPU increased between 2005-6. Oddly, in Germany and Italy, voice ARPU is dropping much (40x) faster than data ARPU is rising (!). The sustained decline in voice ARPU is probably down to a couple of market effects: firstly the global mobile subs base expanding to lower-spending customers and secondly the existence of multiple SIM cards per user (1.29 SIM cards per user globally for 2006, according to Informa). Focus on voice, not data The question is, how should mobile network operators react ? My thesis is that operators should focus their strategy not on achieving small increases in data service revenue, but on how to turn around the tumble in voice ARPU. Operators should do so by banking on the capabilities of data services and the improved user experience offered by handsets applications. In other words, network operators should focus their efforts on data services that support voice services by making voice calls easier, more intuitive and more fun. Examples are T-Mobile’s MyFaves, Zi’s Qix, Comverse’s Visual Voicemail and SK Telecom’s avatar-based videotelephony. T-Mobile US leads the way MyFaves makes it easier and more fun to call. Launched in October 2006, T-Mobile’s MyFaves service offers subscribers unlimited calls to five other numbers (to any network) for a flat monthly fee starting from $39.99. In the case of mobile telephony, five is a magic number; Nokia’s 360 study of phone usage patterns concluded that more than 50% of voice calls and 70% of SMSs go to top 5 contacts. (source: study of S60 users, UK/Germany/France as reported in Sep 06). The unique selling point of MyFaves is that the handset idle screen displays a caroussel of images or avatars of the user’s five favourite contacts. These five contacts can be changed once a month by calling customer services, through the MyFaves application or through a web page. T-Mobile’s service is currently available for the Nokia 6030, 6103, 6133, Samsung t209, t509s, t609, t619, t629, Samsung Trace, Motorola v195s, RAZR v3, v3t, v3i and Blackberry Pearl. The uniqueness of MyFaves stems from the combination of a voice service, a data service and a desktop UI application (desktop UI = the type of application that provides service discovery by replacing the idle screen). The data service (i.e. synchronisation between the desktop UI and the network billing engine) as well as the handset application are intended to boost voice usage, through a 1-click access to calling one of the five contacts. The user can send an SMS or MMS to one of five contacts through the same interface. I wonder what sort of ARPU uplift is T-Mobile witnessing thanks to MyFaves. This is a trully innovative, end-to-end service. I wouldn’t be surprised if T-Mobile country operators in Europe follow the US cousin’s lead. Qix: Making calling easier Zi corp’s Qix is another example of how handset applications can be used to boost voice usage. Qix is a desktop UI application that uses T9-style predictive contact search to bring up contacts based on the keys that the user presses. Simply put, instead of going into the contacts application and typing in the name of the contact, Qix allows the user to find contacts just by pressing keys corresponding to the contact’s name from the idle screen. This drastically reduces the number of clicks needed to call up a contact and is claimed to boost voice usage by 3%. Owners of Windows-Mobile handsets will have used this feature widely, which has been built on the operating systems since v1 (with the launch of SPV in 2002). Unfortunately for Qix, Zi has had too many top management changes in the last 4 years, its operating losses have been doubling on a yearly basis (check the reports) and its device support has been surprisingly poor. On the positive side, I ‘m aware of at least two competing products to Qix which are launching next week at 3GSM. In summary, my thesis is that network operators need to heal their wounds first (the sustained decline in voice ARPU) before dashing into new and risky territory (investments into more data services). There are known recipes (and more innovative ones still sitting on the shelves of R&D teams) for boosting voice usage by employing data services and innovative handset applications. Thoughts ?

Conferences are becoming a booming business in the mobile industry. Besides the incumbent Informa Telecoms & Media, there at least 10 conference organisers such as Visiongain, Jacob Fleming and Osney Media. With conference participation fees starting at 1,000GBP and sponsorship packages at 10 times that, it’s no wonder why. Take Mobile Device Management (MDM) for example. MDM has been a hot topic for conferences since 2006, but is now getting somewhat overdone. There are at least five conferences on MDM taking place in the first half of 2006 from Informa, Jacob Fleming and Visiongain. With big business comes intense competition. Informa who takes pride in being the organiser behind the 3GSM World Congress for the past few years, did not secure the contract for organising 3GSM 2007 which is now organised by the GSM Association themselves. A more interesting twist of the conference saga evolves around the topic of SIM cards. Informa (organisers of SIM Summit) seem to have not reached an agreement with the major SIM card suppliers on the format of the SIM Summit 2007 conference. As a result, the SIMalliance (backed by the top SIM card OEMs i.e. Gemalto, Oberthur, Sagem Orga, Giesecke and Devrient) is organising SIMposium, a major SIM conference on exactly the same dates as the SIM Summit, but in a different country; SIM Summit takes place in Prague on 24-26 April while SIMposium is in Berlin on 24-25 April. If you read through the speaker list of the SIM Summit you ‘ll notice that there is not one presenter from the big SIM manufacturers, which is exactly the unique selling point of the SIMposium. It’s rare that we witness such heavy-handed, uninhibited politics in the mobile industry. As it happens, I ‘m chairing two days of the SIM Summit and I ‘m having difficulty securing briefings with some SIM OEMs. With conference organisers keen on securing sponsors, and attendees keen on quality presentations and solid networking opportunities, there is little doubt that too many conferences on the same subject is not a good thing. But with 10+ players in the conference game, it is certain that organisers will be looking to compete rather than collaborate.