- IN THIS ISSUE:
- * Drummer is a Generation-Y Pure Play
- * Hispanic Online Market is Exploding
- * WebTV Has Potential
- * Ericsson Needs a 3rd Party Developer Strategy
- * Wall Street Pick of the Week
I spent the whole week on the West Coast in meetings. No trade shows for an entire week…
DRUMMER IS A GENERATION-Y PURE PLAY
Sorry, CyberLab East, but New Yorkers from the media industry are moving to Silicon Valley |”because that’s where the money is”. I had in front of me one of the founders of Drummer (name disguised), a branded experience company for the American teenager. Still in his trendy black outfit, this ex-MTV executive had just moved in from New York.
Drummer will become the “MTV of youth communication” by creating a subscription service based on a combination of mobile phones and a web portal. “Communication is more important for generation-Y teens than entertainment.” Self-expression and managing their own identity are characteristic of the new generation teens. Word-of-mouth and high school -centric guerilla marketing are the most effective ways to building user base, not mass marketing. Planned services include voice chat, email, unified messaging, audio broadcasting, voice publishing and some even more exotic innovations. Pre-paid services and private label phones are on the wish list. Is Ericsson going to continue to say no private label business opportunities?
In Sweden there are certainly several startups who want to become the MTV of new media. Some of them have certainly started innovating with wireless services. How to combine the innovativeness in new media and pop music in Sweden and the entrepreneur-friendly environment of Silicon Valley. Call Ericsson? Of course!
HISPANIC ONLINE MARKET IS EXPLODING
Latino households are now purchasing computers at twice the rate of the overall population. They also are connecting to the Internet at record rates. Though only 2% of U.S. Latinos were online in 1994, 15% of Latino households–or an estimated 4.5 million users–were connected in 1998, according to one recent study. Read this excellent article from LA Times. http://www.latimes.com/CNS_DAYS/990622/t000056127.html. Ericsson should solidify its strong presence in Latin America and Spain through aggressive new media partnerships. I welcome the readers in those markets to report if there is anything going on in this respect.
We should act on this opportunity, it is one of the few markets where we are not yet late.
WEB TV HAS POTENTIAL
In the absence of a better hobby, I bought a web TV terminal last Friday and spent a half a day surfing as a couch potato. My preconceived idea on WebTV was that it was a total disaster with Microsoft paying USD 400 million for a dead idea.
The truth is that the new WebTV (USD 250 retail with wireless keyboard) plus with its USD 24.95 per month subscription is a delightful experience, not as a usual Internet service, but as an enhanced TV service. I can imagine a grandmother having her first experience on the Internet with this without tears. Yes, the connection is a slow modem one (56 kbps) and the connection set-up takes time. But the browser-embedded TV window enables viewing a web-based electronic program guide, adding TV favorites and reminders prior to program start. Hook up a digital video camera and follow the instructions on the menu to create your own little digital story of a high-school reunion. See http://community.webtv.net/anttila. Once home networking and broadband access allow an always-on connection with more bandwidth, this thing will find its place in the household budget (and the stories will look more professional).
ERICSSON NEEDS A 3RD PARTY DEVELOPER STRATEGY
One of the gaping holes in our strategy is the lack of clear 3rd party developer program which would draw in external companies to develop the market for our new products and platforms: WAP, EPOC, GPRS, iPulse, e-Services, GSM-on-the-Net, etc. We should make ourselves more attractive to IT and media companies. We should tell the world about the business opportunities which developing for our platforms can offer, through both a physical marcom program and a virtual online presence.
The lead in WAP developer activity has already slipped over to Nokia. Now it’s time to leapfrog the competition and show the breadth of our technology portfolio through a common Ericsson Developer Program!
- WALL STREET PICK OF THE WEEK
Last week Keith Benjamin elaborated on the potential of the hispanic Internet market: “This week we initiated coverage on StarMedia, the leading online network in Latin America, with a Buy rating. With Latin America Internet usage growing significantly, there is a growing need for a full-service network offered in the local languages of Spanish and Portuguese. By being early in establishing the most recognized Internet brand in Latin America, StarMedia appears to have beaten potential U.S.-based competitors like AOL and Yahoo!. In addition, StarMedia announced plans this week to enter the Spanish market, by opening an office in Madrid later this year.” – Keith Benjamin, Sr Internet Analyst, BancBoston Robertson Stephens (http://www.internetstocks.com)
END NOTES – The web screen phone manufacturer InfoGear got USD 12 million from Cisco. Why? I cannot figure out what’s in it for Cisco… Web-based personal information service portal Visto seems to be a winner candidate, the company has now secured a total of USD 38 million. Similar companies: Punch Networks, Click2Send, FusionOne… Ericsson should start worrying about Palm’s aggressive push into the wireless space, the latest move being about integrating AOL email… Softbank confirmed that it will establish a 230 billion yen ($1.89 billion) venture capital fund to invest in Internet startups mostly in the U.S., but also in Japan. Remember we have encouraged Ericsson to get involved with Internet keiretsus such as SoftBANK to foster the growth of the wireless Internet market… The iPulse team should pay attention to emerging communications portals such as Visitalk… SmartRoute traffic information services is a high-potential wireless Internet opportunity… InfoSpace enables current digital cellular subscribers to query and receive Internet content and web services directly on their existing phones… – (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)
- SELECTED THOUGHTFUL READING – Don’t miss the fresh new Economist Internet Survey “The Net Imperative”… Business Week has a cover story on the “Internet Anxiety” of old-line industries… Read the Forbes Magazine cover story on a man Ericsson should work with: Masayoshi Son of SoftBANK… Read about Michael Dell’s latest insights in a USA Today interview… Spend some time going through the Cluetrain Manifesto, the most thoughtful collection of implications of the New Economy on Ericsson’s business… (go to http://webacademy.ericsson.se for links to stories)
That was all for last week, this week I will be in San Francisco attending the WAP Forum meeting. Today I saw the NTT DoCoMo presentation on i-Mode wireless Internet services – impressive!
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This is a weekly newsletter describing the non-confidential part of my work during the past week and how I see market evolution affecting Ericsson (as interpreted my me in my role working for LME/DMA in San Francisco as a business developer with a focus on Internet applications and enablers). The report will be published every Monday. For subscriptions go to http://webacademy.ericsson.se/elists.
