Android as the mobile windows ?

Mobile device planet is definitely shaken these days.

While Android OS market penetration rockets, 4 millions iPhone 4S has been sold in 3 days.
Behind these 2 leaders, other manufacturers are making a lot of announcements and/or promises but the time for long lasting illusions will be soon over :
- Samsung announces a new version of Bada while previous version did not outperform - apparently trying to master its own future after Motorola acquisition by Android's masters,
- Samsung and Apple engage in a patent war rarely seen at this level in Consumer Electronics, arguing about 2001- a space Odyssey,
- Sony wants to buy back Sony-Ericsson - currently loosing ground - to better leverage its strong brand and skills in high end consumer electronics,
- Blackberry faces a 3 day outage while shareholders set pressure for a split of the company,
- Microsoft sold 1.5M phones of Windows Mobile during a quarter (yes, 90 days).

Decisions will come soon but impacts of decisions taken earlier this year could be measured even sooner.
Within 2 weeks, we will get a very good indicator of the chances of Windows Mobile to survive. Nokia will then announce its new series of smartphones based on Windows Mobile. If these new phones are not striking, either through features or through prices, Microsoft can probably bury very deep any ambition on mobile and ... Nokia in the same grave. That would leave Android possibly playing the same role on mobile as the one played by Windows on PC.

During this war between each others, device manufacturers also try expand and eat a part of the cake of network operators.
On one hand, many device manufacturers have engaged in acquisition of companies active in content ecosystem playground, for example to strengthen their content and app stores.
On the other hand, Apple managed to "commoditize" the network more than ever. One of the major breakthroughs of the iPhone 4S is the simultaneous support of CDMA and GSM for the same device. If advantages are not perceived here in Europe, it means that iPhone 4S will be working on both AT&T and Verizon networks. Moreover, after a costly deal (for Sprint obviously !), Apple gives full freedom of network to consumers.
On this page, Apple now present network as a pure commodity - just comparing telco prices and packages - the price of the phone being the same on all networks. They just miss a coverage map to allow better comparison. Any concept of service - provided by network operators - is completely hidden. In US, dumb pipe is not a telco threat any more. It became a fact.

This period is definitely critical within the poker game between all these mobile smartphone vendors.
It's written as a thriller. The name of the killers are quite clear. The uncertainty resides in the name of the victims and especially the order for them to die or give up the market.

Future will say ...

Benoit Quirynen

Green IT : Internet and Telecom players demonstrating everyday a different culture

Today, Facebook announces the "Facebook open compute project". Facebook in fact releases as open source its design of computers and data center which is proven to be very "green" and energy efficient. They actually mention an impressive PUE of 1.07 (meaning 7% losses to transform energy into computing capacity).

Last year, Alcatel-Lucent - a major telecom vendor - launched the "Green Touch" initiatives as a consortium where major telecom operator and vendors join in order to reduce the energy consumption of telecom network. There is a meeting today in Seoul of the consortium. This consortium apparently already demonstrated some results about the way to use and group elements of antennas.

Both initiatives are relevant and interesting, sharing the same positive objective. However, the way to proceed is different and probably reveals that telco world did not yet adopt the practices of this Internet driven decade.

While Alcatel-Lucent initiates a consortium with meetings and plans, Facebook demonstrates a very efficient center in operation and proposes to share their practices in open source mode.
While telco world always plan, sometimes act according to a plan and rarely share, Internet boys sometimes plan, always act and often share, at least for what is not their core business.

Internet boys communicate on what they release while telecom senior guys communicates on what they plan.
Even if the efficiency would be the same, this results in different levels of perception of speed, visibility and ... trust.

Will telco world one day adopt Internet culture ?

Future will say ...

Benoit Quirynen

Amazon sells Android apps - why this move and what's the impact ?

This week, Amazon opened its Android app store.
Why is Amazon moving in this direction ? Is it just for money earned selling these apps ?

There are probably much better reasons for this move.

First, Amazon is by far the most successful Digital Shopping Mall in US and Europe. As any shopping mall, there is no reason why not to sell a product which is sold somewhere else. Amazon can not sell Apple iPhone and IPad apps since Apple behaves as a high end brand, restricting sales in its digital, fully controlled experience iTunes store. It's thus about "one-stop-shopping" and comprehensive digital goods proposition.

Second, through this move, Amazon clearly positions itself in the M-commerce business. Amazon becomes fully relevant for Android mobile users and the market place can collect mobile phones numbers of their current customers or recruit new customers. This critical information added to the Amazon account will further enable the giant to further close the loop, possibly engaging in mobile advertising or couponing.

That leads to the third and probably the main reason. Facebook, Apple, Google and Amazon form the FAGA quatuor heading to the same M-commerce expected nirvana, each attacking from a different angle. Google already partially controls the mobile platform real estate, a very good advertising machine and an emerging cash desk. Apple has a fully controlled platform real estate, an emerging advertising machine and an efficient cash desk. Facebook probably has the most efficient platform real estate, (now even extending to feature phones through latest acquisition), including the most innovative advertising machine and is currently building a cash desk.
Amazon is the king of E-commerce, already having all ingredients online but missing presence on mobile. Through this Android store, Amazon penetrates for a low budget an efficient mobile platform real estate to complement a too small Kindle footprint. Amazon is thus strengthening its position in this FAGA quatuor.

The next question concerns the impact on device vendors and mobile apps ecosystem. Will this help or arm Google ? Does it impact Apple ? What about Amazon selling windows phone 7 apps  or Blackberry apps ?

This Amazon Android app store on one hand is an additional factor demonstrating to consumers the openness of Android ecosystem. It can only thus increase relevance of Android phones. On the other hand, it probably arms Google in its quest to spread its Google Checkout, so important in the FAGA war.

Apple is probably not directly impacted, keeping their closed ecosystem and currently suffering (a lot of people would like to suffer this way) the consequences around censorship and too obvious dominance.
BlackBerry apps mainly concern business and are probably less relevant for both Amazon and Blackberry.

The open question remains for Windows phone and especially in the context the Nokia deal. Nokia stopped its unsuccessful OVI store. Amazon could probably be a good partner for Nokia selling special Windows phone apps. But will Microsoft authorize this or will Seattle monster engage in FAGA war to make it FAGAM ?

Future will say ...

Benoit Quirynen

IPad 2 - price points are set for competitors

Today, Steve Jobs announced the IPad 2, the feature list and the prices for the new device.

The main features are sitting in the engine, except the so expected cameras (front and back) that are now on board. But the most important part is the price which stays the same.

This now shapes the market for till end of 2011.
No one can sell a successful tablet more expensive than IPad 2. The only reason buying another tablet than IPad 2 is a lower price.
Let's make a tour of the challenged tablet vendors:
- Motorola Xoom equiped with Android : similar feature set as IPad 2, probably less powerful CPU, certainly poorer batteries and higher price. This one is xoomed to fail.
- RIM Playbook : poorer features, probably less powerful CPU, certainly poorer batteries, same prices as IPad 2. They can perhaps survive focusing on corporate market but it will be bloody challenging and they will eat their margin anyway through rebates on volume based deals.
- Samsung Galaxy : Samsung announced a 10.1 inch in MWC and will announce a 8.9 inch at CTIA end of March. Since Samsung did not yet publish any price, they still get a chance.

Let's take the positive angle. What could be a competitor of IPad 2?
- a device in the range of 300$ or 300€,
- 9 inches minimum,
- a USB able to plug any USB webcam,
- a USB able to plug any USB dongle, even 3G/4G,
- decent screen (could be less robust),
- decent CPU (even slower than IPad),
- WiFi only,
- Android 3.0 Honeycomb on board.

If nobody shows up, IPad 2 will have 90% market share at the end of 2011.
This will strengthen their domination of which they often abuse.

Who'll be the first ? Medion, ASUS, an EEETablet, Samsung, LG, Nokia (just kidding for the last one).

Future will say.

Benoit

A hype revival of vintage mobile video communication in MWC 2011

Let's get back to 2004, the hype in Mobile World Congress for the first time in Barcelona is about video communication. Thanks to 3G and embedded cameras in the mobile phones, people can proceed to a mobile video call from their device. It's huge. Telecom operators imagine gateways to enable subscribers to proceed with video call between a mobile and a PC to compensate the low numbers of nascent 3G phones. Two years after, this turns to be a failure. Damned, consumers are not using it.

Several reasons have been given at that time : cameras not powerful enough, screen definition too low, requirement of "high quality real time bandwidth", low willingness to use due to high intrusiveness and, finally, too difficult to take a continuous movie of its own image in good condition for the other party (sun, image stability, etc...).

2011, Mobile World Congress, perhaps one of the last time in Barcelona. The hype is back on ... mobile video communication. What can explain the revival ?

Some progress have been done on the technology side, especially on the devices now much more powerful in terms of CPU, screen and camera. Moreover, Skype, which has largely contributed to popular usage PC-2-PC of video, is everyday increasing its penetration on mobile phones.

However, the major factor could be the support of the magician Steve Jobs through Facetime, the video communication service from Apple. US investors suddenly start to poor money in these technologies. Of course, these "dollar cow-boys" did not necessarily participated to the hype 8 years ago since US was still at that time an underdeveloped country in terms of mobile usage, fighting to make CDMA EVDO operational.

Despite device technology evolutions and financial support, some challenge remain on the way to a large penetration of this service on mobile phone. Video communication still is intrusive and image stability did not significantly improve when you have your mobile in your hand.
Another main hurdle - requirement for a high quality network - will still exist for several years. Watching Youtube, users can benefit from buffering in the device, which is not possible with real time communication. This thus requires a continuous quality and bandwidth, which is challenging for a good quality. Just have a look on your device how many times you switch from GPRS (G) to Edge (E) to 3G (3G) to HSDPA (H) and you will see the stability of the data network, especially when you move one meter in your office or when your neighbor starts watching Youtube (because you share the cell data capacity with your neighbors, you like it or not ;-).
Moreover, in terms usage, some analysts state that consumers would use the service to show what is around. Capability to record a video and send it by MMS or email (on smartphones) exists for years. MMS video traffic is very low due to high price for upload of large volume. Imagine the price range when telecom operators want to guarantee a higher quality all along the call.
Finally, since telecom operators face problems with huge data traffic generated by smartphones and USB dongles, they will normally price the video call higher than voice call. Who is willing to pay more for a good quality video call ? It's true that Skype video calls are used on fixed Internet but using video or not is always the same zero price. Willingness to pay is probably the final killer of mobile video communication.
And if some operators would offer video call service at the price of voice calls in order to maintain price of a voice/video call revenues, they would significantly increase their cost without increasing the revenues. Better use this bandwidth to offer more low consumption services.

I had the chance to live the complete previous cycle of mobile video communication. We thought at the beginning that we were very successful since we signed a lot of contracts with major telecom operators but consumers brought us back on earth a bit later.
So, if you are in this business, have fun but do not expect your venture to be funded for a long time. Dollar cow-boys will probably stop soon pooring money in bottomless pit when they will discover the lack of fruits and remaining hurdles of previous experiences.
There are probably much better ideas for new telecom services, focused on low bandwidth for higher profitability of the whole value chain.

Future will say.

Benoit Quirynen

AOL acquires The Huffington Post - capitalism against illusion of freedom

AOL has acquired this week The Huffington Post for $315 millions.

The Huffington Post is a kind of newspaper written by citizen bloggers. AOL expects to sell ad space around what became a popular real estate. As outlined in The Herald Tribune by David Carr, it's funny to see that all these bloggers have created value for Miss Arianna Huffington.

A lot of this content is created by citizens, inspired from other articles in paid newspaper (as this one ;-). Before acquisition, it was difficult to attack a company with no fund. Tomorrow, shooting for the 2.2 $B from AOL market capitalization risks to tease a lot of content providers willing to protect their assets and value their content.

Moreover, now that citizen bloggers know they directly feed advertising revenues of AOL through their posts, they will perhaps not demonstrate the same appetite to contribute ... at least on this particular real estate. Of course, AOL can pay the best contributors but the relationship then becomes commercial with a totally different mindset.

On the other hand, will readers continue to absorb this content the same way since the spirit has evolved ?

Anyway, this move is the demonstration of capitalism against feeling of freedom. And the most cynical is not AOL which pays money but Ms Arianna Huffington who receives money valuing the efforts from a lot of others.

Will citizen bloggers go on supporting this attitude ? Will readers change their behavior ? It's a good test for our whole society.
Future will say.

Benoit Quirynen

Microsoft Surface 2.0 - a "touch screen TV"

In CES 2011 earlier this month, Microsoft demonstrated Samsung SUR40 running Microsoft Surface 2.0.
The technology to capture the hands, fingers or object moves on a 40 inches screen has evolved from cameras to sensitive screens.
The price of this new version still is 6000€+. Even if divided by 2 from previous version, this should prevent usage by consumers.
The most important move however with this version is the possibility to hang the large screen on a wall, coming from horizontal use cases to vertical use cases.

The use cases addressed through the demos in CES were:
- horizontal, combined with NFC, to recognise objects, being Redbull cans for immersive advertising or active coins for "poker like" gaming,
- vertical, for museum to enable visitors exploring a large interactive diaporama.

Limitations of horizontal use cases were already addressed here.

SUR40 hanging on a wall becomes a "touch screen TV". Demo in museum, as presented in CES, limits usage to one single user only. This would mean quite huge investment if a museum wants to support 5-10 simultaneous users as a painting or passive wall paper.
The other case demonstrated in the show tells a story about a bank proposing a draw, forcing customers to come in the bank to know if they win (let's imagine the frustrations).

The Kinect technology looks to me much more appealing for move detection in front of a large screen than Surface. Moreover, Kinect decouples the screen technology from the interactive part, which is more scalable "market wise".

So why not investing all Microsoft money sunk in Surface innovations to make Kinect move detection much more accurate, unbeatable ?
One of the reason could be the big challenge of innovation management. From a team management perspective, it's much easier to start an innovation project than to stop it.

Curious to see the success of Surface 2.0 and/or if a Surface 3.0 version will exist.

To be continued ...

Benoit Quirynen

IPad2 - will definition be twice higher ?

Some rumours about IPad2 state that the screen definition would be twice higher, becoming 2048x1536 instead of 1024x768.

Today, the Wired magazine on IPad already consumes more than 500MB in terms of bandwidth and disk size. Since Wired is often leveraging the full capacity, this could lead to a severe increase (media assets - image and video - take the larger part) in bandwith consumption (for consumers and/or for telcos) as well as on-device disk space (up to 2GB).

All this would only opertae if Apple manages to keep convincing publishers using its tablet after having sucked the customer relationship - as announced on Friday.

To be continued ...

Benoit Quirynen

Telecom - automated tariff optimization as the next improvement in customer relationship

Yesterday, I received two messages from my telecom provider.

The first message was an SMS notification that I reached 50% of volume granted by my data plan. I like this kind of positive message when it's not pushed to often.

The second message was a bill. It's usually not a pleasure to receive a bill but this one was a bit special. In the header, the provider announces that tariff optimization process has been run based on my consumption and the tariff plan that I have selected is still the best one for me.

It is also mentioned that they will automatically run this tariff optimization process every 6 months. The optimization facility was already available before but it was up to the subscriber to run it and to switch tariff. Now, at least the simulation is executed automatically.

Telecom operator considers that it's better to keep an existing subscriber than artificially increase the Average Revenue Per User (ARPU) based on poor customer relationship. Customer loyalty improvement could make a sound difference for the value of the share at the end. I consider it as a good anti-churn tool and a very good move of telecom industry inline with respect of the subscriber. A win-win deal obviously.

What is still missing is a simulation of tariff with offers from competitors. It would have been very nice to add a sentence : "and if you would have selected provider B, you would have paid x € more every month" ... if it's true.

Is "automated cross-provider tariff comparison" the next step in customer relationship improvement ?

To be continued ...

Benoit Quirynen

France : VAT increase can turn to a free IPhone for consumers

In France, government has increased VAT rate on Internet access from 5.5% to 19.6%. Based on this increase, most of telecom operators (Orange, SFR, Bouygues) increase their price to more or less reflect the VAT increase.

However, according to this site (http://eco.rue89.com/2010/12/30/mobiles-internet-et-si-on-resiliait-tous-nos-abonnements-182755), this price increase is considered as a possible breach on contract. Consumers who contracted a package including a mobile phone with a subscription are now allowed to keep the phone, stop the contract and ... re-initiate a new contract possibly including a new phone. So the expensive I-Phone acquired a few weeks ago within the scope of a contract can become yours ... and you can get a new one, restarting a new contract.

That's where sponsoring (or bundling subscription and phones) of mobile phone for recruiting new subscribers of expensive subscriptions or membership can turn to become very expensive for operators.

In a world of expected continuous inflation during next years, telecom operators would be well inspired to better study their pricing, contracts and bundling strategy instead of applying linear changes. As consumers, we should probably be even more careful reading terms and conditions in the future.

All this clearly benefits to mobile phone manufacturers. Apple, Samsung, Nokia and the likes but also Google through Android could accelerate their sales in France beginning of this year if this trick turns to be applied by a lot of consumers.

Price increases are also announced in Belgium. Will the same apply ?

To be continued.

Benoit Quirynen