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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.

If you haven’t been to the Carnival of the Mobilists before, you should give it a spin. Every week the Carnival is hosting a page-long summary of the best of mobile blogging on the web, a one-stop destination for catching up on what’s been happening in the world of mobile phones and wireless services. The Carnival enjoys a faithful community of frequent bloggers who keep the carrousel spinning – mostly industry insiders and analysts – and is compiled each week by a different member of this vibrant community. The Carnival is an exemplary, self-sustained collection of informal but highly informational blogging, thriving on quality reporting and educated opinion that in turn warrants peer recognition and blogosphere visibility. Here at the VisionMobile Forum we have been fortunate to have been featured in the Carnival several times in the last few months, most notably on: A thesis on operator strategy titled Operators: Service Pipes or Bit-Pipes?, which won post-of the-week honours at C. Enrique Ortiz Mobility Weblog and is currently at the top of the shortlisted entries for best post of November 2006 Hampus’ inspirational User interfaces and soft walled gardens of tomorrow mentioned by David Beers on Software Everywhere An opinionated piece on why Motorola’s AJAR is set to follow in Nokia’s S60 footsteps mentioned at Golden Swamp A Linux market analysis titled Mapping mobile Linux: from Lego bricks to castles mentioned at Xen Mendelsohn’s Xelllular Identity The analysis of Customisation vs Personalisation which won post-of-the-week honours over at Tarek’s blog and finally Prioritize: Take over the world or Enjoy good margins, mentioned at All About Symbian Cheers to the Carnival ! Andreas P.S. The Forum is back online after suffering some downtime over the past weekend. Lesson learned: dependable support from web hosts is hard to find. Hopefully our new home will live up to its reputation.

Understanding users can’t buy content if they can’t find it, an increasing number of mobile operators and content providers are scrambling to offer mobile search capabilities as well as an array of tools that will encourage users to explore more of the content at their fingertips. The raft of recent announcements, involving tier-1 mobile operators and market giants such as Google, Yahoo!, Microsoft and a growing number of white-label search providers, including InfoSpace, Fast Search & Transfer, Medio Systems and JumpTap, as well as mobile search platform provider, Mobile Content Networks (MCN), shows carriers and content companies are clearly excited about mobile search. But operators that merely retrofit Web search solutions for the mobile Internet ultimately short change themselves and their users. Popular Web search engines such as Google are fatally flawed. They were designed to treat all searches – and searchers – equal. While the approach consistently delivers the same list of links in response to key words, it fails to recognize the need of individual searchers for relevant results that really matter. Push vs pull business models More importantly, such search schemes patently ignore the shift in the business model from user-pull to content-push. Pull is built on the premise that users know what they want and are prepared to go look for it. That’s quite an assumption when it comes to fast-paced content such as entertainment and multimedia which changes faster than users can keep up. The pull model also ignores the rise of empowered customers who increasingly expect – even demand – content and services consistently tailored to their individual needs and in tune with their lifestyles and life stages. The new paradigm is personalized content-push based on a deep understanding of the individual’s purchases, passions and past click-behavior. It’s even more compelling if the technology can learn users’ likes and dislikes over time to dynamically and consistently deliver the right content mix. The message is getting through, which is why this year will see the usual suspects experimenting with techniques and technologies to deliver personalized mobile search. Perhaps the most vocal on the market is Yahoo!. Personalized search and relevant results are concepts that run like a leitmotiv through the company’s new product offer and its future roadmap. A prime example of this new direction is Yahoo! oneSearch, a Web 2.0-type search engine picks up on users’ intent, intuits the information they want and then presents the relevant content, grouped by subject, in synopsis form. A sports search on oneSearch, for example, will return a relevant bundle of scores from a team’s most recent game, along with game schedules, team rosters, photos, local results, and so on. Adding user choice to the mix While search does assist in delivering a better end-user experience, the much more lucrative business opportunity may be in combining search, personalization and recommendation to provide users personalized and relevant results – as well as the tools to discover other content they might not have otherwise known existed. An increasing number of vendors are clued into recommendations and are lining up to wield the power of the analytics they generate. Some, like Medio Systems, are borrowing from the Amazon.com approach to suggest content on the basis of the individual user’s past preferences or on the basis of what a user’s peers consumed, or both. Others including MyStrands, Gracenote and ChoiceStream, making the transition from online to mobile, have cleverly combined their music recommender capabilities and social networking to help users connect with both content and the like-minded members of their community who share the same tastes. Indeed, the sheer variety of personalization and recommendation solutions enables a multiplicity of business models the mobile industry is only beginning to explore. Moving forward, personalization and recommendation will be must-have features of mobile content services. mPortal, for example, creates personalized recommendations based on users’ billing records, download history and purchase habits. The company is taking this analysis to the next level, drilling down in the customer data to create ‘content referrals’, and so allow users to share content tips with their friends and family. Given the highly personalized nature of the mobile phone and the way people use it, there is a high probability that people will buy content and services if they know a friend – and not an operator – is making the suggestion. It’s clearly in operators’ interests to deliver effective and targeted commerce experiences to their customers. While recommendations based on customer information such as page views and downloads will be an important part of this strategy, it will be the recommendations from the tight-knit communities users know and trust that clinch the sale.

Mobile Linux is a fascinating topic. As an operating system for mobile handsets, Linux commands responses ranging across dismissal, FUD (fear, uncertainty and doubt) and admiration. Mobile Linux is often dismissed as an immature operating system for handsets, being sometimes likened to Lego bricks, i.e. a loose set of components that comes nowhere near a complete product. FUD comes about when companies consider the repercussions of GPL licenses (note: the Linux kernel is licensed under GPL v2) which are sometimes likened to IPR contamination. At the same time, Linux as the basis for handset operating systems must be admired for its market penetration, particularly in Japan and China. For 3Q06 Canalys estimates Linux to be powering close to 40% of the smartphones shipped in China and Japan, second only to Symbian. However, it should be noted that Linux-based mobile operating systems are far more than Lego bricks today. In fact what is emerging is a clear taxonomy of Linux vendor offerings, which I would separate in five types, ranging from support packages, to complete handset products. A) Linux support packages (LSPs): these consist of the Linux kernel, hardware drivers and core OS functionality. LSPs are today provided by the incumbent MontaVista and the newer WindRiver (of VxWorks fame). The vendors provide LSPs with integration and professional services to help manufacturers like Motorola, NEC and Panasonic go to market with Linux-based handsets more quickly. Other manufacturers like Nokia (see 770 and N800) have opted to build their own Linux-based OS distribution from scratch, with the help of external communities. B) Complete software stacks: In 2006 a number of vendors announced complete software stacks based on Linux, combining an LSP with an application framework, graphics subsystem, middleware libraries and core applications. Following the incumbent Korean vendor Mizi Research and Chinese HOpen, Trolltech followed with Greensuite and ALP (Access Linux Platform) announced their offering. C) Productised software stacks: while a complete software stack may include all the software code a handset manufacturer needs, it still lacks interoperability testing, operator acceptance testing and other integration services which today are offered by A la Mobile, Aplix (with their BTO product) and Celunite which is still in stealth mode. D) Moving a step further towards productisation, a range of vendors today offer complete hardware and software design services for Linux-based handsets. PurpleLabs, SysOpenDigia, Elektrobit, Cellon and Flextronics combine a Linux-based software stack with a hardware design optimised for Linux that can be licensed by the handset manufacturer and taken to market. E) Finally, a new type of vendor has emerged that combines white-label hardware and software productisation with marketing and distribution: the example here is FIC, the Taiwan-based vendor who made the headlines in late 2006 with their OpenMoko fully open Linux platform. FIC produces Linux-based handsets both under its own brand, as well as under white-label business model. For reviews of mobile Linux vendors such as MontaVista, A la Mobile, Trolltech and Mizi Research, you can downlad a white paper I wrote recently titled: Mobile Operating Systems: The New Generation. Conclusively the mobile Linux market today consists of the entire gamut of offerings from LSPs (the Lego bricks) to complete Linux-based handset products (the castles). Undoubtedly, this market is still very volatile and competitive. Chipset vendors are increasingly pre-packaging their own LSPs with their hardware reference designs, manufacturers are in some case in-sourcing and in other cases outsouring Linux operating systems for their handsets. Finally operators like Orange and Vodafone are promising commitment to Linux platforms, while industry consortiums such as the X-foundation are hoping to provide a route to market for Linux-handsets. Amidst the turmoil of volatility of vendor offerings and the hype of market demand, one can only refer to the age-old rhetoric: watch this space. Thoughts ?