We are now 46 hours into the new reality of the new iPhone 3G and how it will change the competitive landscape.  I have conversed with many of my Apple-evangelist friends who always have the latest on the announcement - including rumors - and who are irritatingly sure that Apple has a genial master plan is doing absolutely nothing wrong implementing it.  Well, this is what all religions tend to do, right?   I agree that the new phone is going to sell beyond the overall 10 million worldwide sales target.  I agree with the evangelists that the enhanced monthly data ARPU and the ($200+?) activation kickback the carrier pays Apple are going to make shareholders in all parties happy.  I agree that the app store has a lot of potential as a revenue generator.  But there is one concern the industry (=carriers) have fought for years now: converting pre-paid users into post-paid users. In the new Apple model there will be less and less technical possibility (according to Apple) and economic incentive to unlock the phones, therefore the model is purely based on a walled garden built around post-paid carrier subscribers.  As an example, Apple has announced that all Latin American countries except Venezuela will be part of the phase 2 launch of the iPhone 3G (totaling 70 countries).  But according to my consulting partner and LatAm expert Carl Gunell only 19% of customers in that region are post-paid.  (Combine this with the fact that gifting a phone will be more difficult if it implies having a credit check done on the gift receiver - a large portion of the expensive phones in developing countries are given as gifts - and you will see how the adoption may be curbed.)  So Apple needs to push the envelope of expanding the postpaid market and here lies its biggest opportunity, nicely aligned with the strategic goal of the carrier partner. Continue reading this post…

I just wanted to throw my two cents into the mix.  Everyone seems to be wanting to know what Apple will announce later today as if they could not just wait and let it happen.  Well, it will sure give indications on where we are going.  Remember, though, that it will give indications on what Apple chooses to launch, not what they have been capable of developing.  I think Apple has set itself a rather modest target of selling 10 million devices this year - this should be well doable now with the new carrier deals worldwide.  The bigger question will be: how will they set themselves in a position to sell 30 million devices in 2009?  We will get indications for that today.  Not everything will be announced - you will need to read through the lines for cues. Continue reading this post…

Today we saw an interesting announcement between Orange and Nokia: the companies are going to integrate their proprietary content services and promote them together.  The co-promotion will be implemented on ten Nokia handsets in Orange’s ’signature range’.  This is exactly what Nokia needs to do - move the operators away from ‘EITHER me OR you’ thinking into ‘BOTH you AND we can do this together’.  This will incres the barrier of entry of other handset vendors as Nokia will soon have significant assets to offer to the carriers when mega-acquisitions such as NAVTEQ will have been integrated into a seamless part of the Nokia machine.  A bigger question will be how the music offering will be differentiated both in terms of technology platform and content so that it is not the ‘me-too’ offering we see today go head-to-head in competition with carriers’ own offerings.

MocoNews today picked up an interesting story on Orange having cut a deal with Facebook and MySpace for free browsing on those sites for their prepaid users.  According to the article, by giving access to those sites for free data cost, Orange is trying to attract more users to their mobile portal.I think this is a move in the right direction from a carrier: riding on the success of a company they cannot fight but rather support and try to extract some juice out of it for their own efforts.  It requires the rare notion from a carrier to recognize that they themselves would not represent the center of the world.  Well done!  I would be curious to know what the deal terms look like. Continue reading this post…

Nokia is probably going to announce yet another stellar quarter on April 17 - unique in the industry where their traditional competition seems to fail - most notably Motorola.  Their 40% market share, a well-oiled product design and manufacturing machine and a $3.6 billion marketing budget will keep them executing well in the direction they pretty much get to choose.  Still two years ago they did not get to choose that direction but were instead penalized by large global carriers such as Vodafone and Orange who felt Nokia was invading their turf.  Hence, Nokia took a step back and positioned themselves as a serf to the mighty carriers.  Now it seems the time has come for Nokia to stop being ‘almost pregnant’ and to fire on all cylinders: the launch of service portal Ovi and the pending acquisition of NAVTEQ are preludes to a bigger plan in the works.  Or is there one? Continue reading this post…

(Disclaimer: I have been part of the journey of this company in 2006 until early 2007 as a bizdev consultant so this serves as a healthy self-criticism.) Sources familiar with the matter today reported that Sonopia has practically ceased operations and laid off all its US staff at the end of March. The company has also reached an amicable resolution with existing marketing partners to transition subscribers it had acquired.

Sonopia was one of the high-flying start-ups of 2007, launching a year ago a service which provided organizations and community an easy way to launch their branded mobile service and to earn an affiliate revenue share while doing so. The model proved to be too ambitious and perhaps ahead of its time on the US market. Boy, don’t these US carriers make things difficult for innovative companies - in this case it was Verizon who was at the critical time just learning the baby-steps of ‘open’… Continue reading this post…

Here I am, I guess it is important to take some time to get into a writing routine and post an entry every day so MEOW gets published as it should.  CTIA is a sick child - the potential is enormous but the carriers have treated it like the Soviets handled the Chernobyl aftermath. Or why would entertainment industry executives come to me and complain that they cannot make any money?  Haven’t they had enough time to learn by now? The market is still way too fragmented and will remain to be so for the next two years.  However, after that we will see some technology consolidation, 4G ramp-up as well as Apple dominance increasing to a level where they start to shape the market.  By the way, Apple was eerily absent from the show - as usual. The Billboard mobile entertainment show on Monday was a disappointment in terms of attendance - there was absolutely no buzz.  The highlight was perhaps Nokia’s keynote by Tero O.  It was refreshing to see that he laid out the right arguments in a fairly convincing way - they were the same arguments (about creating real mobile-centric value add) which we had articulated back in 1999 at Ericsson (and surely at Nokia as well).  It is only now when (a) a vendor is strong enough to execute on the vision despite carrier resistance and (b) the technology pieces are there to really make it happen.  And of course only now We will have to come back to this Nokia overall strategy, it is a very interesting challenge and there are many doubts in the air as to whether they can pull it off…

Yesterday Dee Dutta, CMO of Sony Ericsson was let go. The company had recently given a profit warning indicating a serious missing of targets in Europe. The CMO was busy spending money on a womens’ tennis tournament when the competition took strategic initiatives in a game where Sony should have had a lot of cards to play (music, video and game content). What went wrong? Well, part of it was certainly their ignoring of the low-end product portfolio. Nokia understood early on that Series 60 will prevail over time (as the game is fundamentally about software) but that that urgent battle for marketshare was about creating brand loyalty in entry level phones (youth, developing markets). Sony Ericsson which still seems to be run by the Swedes rather than the Japanse (I am hearing) has traditionally had a culture which favor innovation but also over-engineering. The phones were made to last longer than a German car and the early pioneering products like the R520 in 2000 had features which were only introduced seven years later in the iPhone. How to make money with all that has traditionally been a problem at Ericsson.

To seek clarity of analysis let me turn to my Nordic Oracle again, someone who really understands what is going on:

Continue reading this post…

(Disclaimer: these guys are actually one of my clients - but you have probably not heard of them yet so keep on reading.) Documill, based in Finland, has a search engine server add-on that enables a keyword search over PDF and MS Office document arhives, producing instant page level results. Those results are visualized on a mobile browser along with conventional result format by adding a clickable thumbnail… direct access to the page where the keyword is highlighted. Take a look at their presentation. The applications areas range from legal eDiscovery and call center CRM solutions to searchable ad-supported media archives for non-profit verticals. I am curious to hear what everyone out there thinks of the product. Finland has a reputation of using the reverse American logic in product development: first you develop a product (fine-tuned for over nine years) and only after that you produce the powerpoints. This company can go a long way by developing a story - much smaller ideas have gotten all too much money lately in Silicon Valley.

Oh, and by the way: their core technology can also enable optimized delivery of email attachments on any mobile browser - something the industry has been waiting for a long time.

Reading an interesting piece: Twistbox Entertainment completed a reverse merger with OTC-listed Mandalay Media. Twistbox is the parent company of Waat Media who until very recently were openly promoted as the leading mobile adult content publisher and distributor and the ‘trusted advisor’ of mobile carriers worldwide.  Currently the website is very modest and mentions only that the company is a leader in ‘late-night entertainment’.  Come on - is it really this serious ot be a public company and be involved in adult services???  Anyway, these are great guys who apparently now have also a sizable ‘mainstream’ content business alongside this invisible undercurrent of ‘trusted porn’.

It is interesting that Waat Media took this - perhaps more difficult - route into riches.  For adult companies finding an exit strategy has always been challenging.  An exception was AdultFriendFinder which got recently sold to Penthouse for USD 500 million.  AFF is an amazing story of Dr. Andrew Conru, a university professor who was a true Internet pioneer on the scale of Marc Andreessen and who got to build his company quietly in the middle of Palo Alto VC community and never needed to raise a dime from the VCs.

When there is a will there is a way - but the execution had better be flawless and the riches don’t come without an effort even in the digital/mobile red light zone.