MEOW! Blog» 3G

Cash Is King

ChairmanMEOW! — Mon, 26 Oct 2009 16:43:59 +0000

Apple had $34.1 billion cash end of September or $38/share. That’s up from $31b and $34/share last quarter.

Anyone could have forecast this cash (it was $32/share beginning of this year). Back in March when the stock traded at $78 or 2x cash Apple was being valued at $40 in forward earnings or 6x TTM EPS.

Yes, you heard that right. Six times earnings for a company growing 30%.

Those were the days.

Apple’s Real Opportunity is in Financing Post-Paid Conversions

ChairmanMEOW! — Wed, 11 Jun 2008 16:43:55 +0000

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. Apple, like any electronics retailer uses a number of financing instruments to extend credit to consumers and businesses alike. Imagine if Apple would suddenly turn around and present to the carriers a plan to share the credit risk among those prospective subscribers who are within the best 25% of carrier’s disqualified credit applicants and at the same time among the better half of Apple’s own customers in terms of purchase history, loyalty and credit worthiness. Apple could bring those customers to the table and enable them to pass the credit check. The ticket to the consumer would be to remain in good standing with their Apple financing plan or face a penalty.Other handset vendors have neither the retail presence nor the product portfolio (or both) to compete in this manner. My conclusion is that this is an inevitable move for Apple and that they have already taken a position towards this direction by dropping the data revenue share and exclusivity ambitions for a more constructive goal of expanding post-paid user base for carriers.

CTIA Fall 2007 – can things get more boring?

ChairmanMEOW! — Mon, 22 Oct 2007 19:45:16 +0000

Just came back from CTIA in San Francisco. The show was rather uneventful and got me down with real Finnish melancholy. Why is the US mobile market so much behind the rest of the world in the freedom of innovation? Why are the carriers still holding onto their monopolistic grip of the market? One thing is for sure: they are offering a wonderful breeding ground for future mobile challengers such as Apple and Google to grow in their home market. There is such a huge pent-up demand to improve your mobile user experience in the US that 3 million iPhones will be sold this year. That is a huge number for a product which still is too crippled in many ways to compete on the market in its own right. But people are longing for a change and they buy into a story that promises that change. Well done, Steve Jobs! (Although I don’t think you are a god after all, we will still see you make some even silly mistakes.)

But on the US mobile content market we are living a transitional phase: the first hype cycle is over. Some companies got sold for a lot of money and then failed in execution (pretty much anything the Japanese investors touched). Some others are on their way to oblivion – disappearing after having for too long banked on the carrier market dominance holding, something which will eventually come crumbling down. Then you have those mainly European originated D2C mobile content companies like Thumbplay which had the right timing are were skilled enough to execute well. The only downside there is that they come to the market in a phase where the traditional mobile content market (ring tones and other personalization media) will start to loose both market interest and monetization capability.

The US mobile market is in a ‘post-soviet trauma stage’. There are too many ineffiencies and too much fragmentation for the market to grow as rapidly as it should with the scale economies this huge country offers. We will need to wait for the infrastructure layer to get more harmonized and the Internet companies get more market momentum and only then – probably in 4-5 years – will we see some hockey-stick growth.

MEOW! Mobile Entertainment Opportunity Watch #2, 2006

ChairmanMEOW! — Tue, 18 Apr 2006 06:27:36 +0000

The winter has passed fast living in the ‘fast lane’ with the mobile industry doing extremely well. Hopefully the young ones will believe me when I say that this all will come to an end at some point. Cycles have not gone anywhere, they still exist. Wise are those who are holding a sustainable job 18 months from now. Having said that, there are many underlying conditions that enable a prolonged sustainable growth and extend venture capitalists horizon and patience to keep us all sucking the nectar. The biggest of them all is the fact that the broadband infrastructure is finally being used for what it was conceived for and multimedia is finally coming of age. I spent early March making a cumbersome transition from T-Mobile to Cingular. I believe the time is ripe to experience the revamped Cingular service portfolio which is characterized by newly discovered openness and a solid roadmap towards broadband services like HSDPA. Moreover, now I can finally buy all those mobile content items available via PSMS – hopefully, crossing your fingers is always useful if you live in the U.S.A. Two weeks into the transition I have almost got my WAP settings to work, spent hours frustrated on the phone with Cingular customer support and I will expect major issues with fraudulent billing from T-Mobile as a result of canceling my subscription. I am getting more and more warm to the idea of a ‘luxury MVNO’ like VOCE who will offer a high-end service experience at a premium. Having been a Starwood Platinum member for some years I can appreciate what a concierge service can do for you: you call one 800 number and stuff just works, painlessly and according to your priorities.

Warmest regards,

Tapio Anttila
www.anttila.net

3GSM – PREPARING TO MAKE MULTIMEDIA RELEVANT

3GSM in Barcelona was bigger than even I could have imagined – it is encouraging to see the magnitude and momentum behind the industry and the launches of new network generations. In my opinion the big news is the arrival of 3.5G network upgrades – and not the much-hyped mobile TV. Being a user of Verizon’s EVDO on a laptop and having tried Cingular’s new HSDPA in San Francisco I can tell you that first of all I see no reason to chase down WiFi hotspots any longer. It is all about quality of service meeting my expectations, being able to do what I need to do seamlessly and forgetting the tools I am using. HSDPA is a clear step forward from EVDO in laptop use: web browsing is really snappy and comparable to a WiFi-broadband experience. 2007 will be the big year of HSDPA and the majority of the GSM networks in the developed world will be upgraded to it. Funnily enough, W-CDMA as its first incarnation turned out to be a almost a commercial non-event.

Now the remaining question is where to find usage for phone-based applications of those broadband services? Even though laptops will increasingly reach the masses and even though they will certainly increasingly exploit flat-fee based mobile broadband services, they will not create a mass market for mobile services in the foreseeable future. In fact, they might gain competition when purpose-built connected devices and network computing will gain ground. Could the solution be seamlessly performing real-time push media, stuff like Everypoint (http://www.everypoint.com/) whom Yahoo Mobile just partnered with for FIFA World Cup 2006 mobile service? Let’s not forget among all this mobile TV hype that faster networks will make conventional data services work fast enough for non-technical users to be impressed – that’s why even WAP services are experiencing a renaissance…

Having said all that, it looks like mobile multimedia is getting more traction than I can imagine from a personal experience (am I getting old perhaps?). My friends at WiderThan are running the Verizon mobile music platform and they say the numbers are very promising and beyond all expectations.

What else was there then at 3GSM? You know, I am losing my ability to monitor startups and figure out which ones have a chance of survival. We are back in the era of VC-funded startups and the market is flooded with business plans 90% of which are going to die in the next shakeout. For example, the market is now flooded with mobile social software startups. Which ones of those will survice and prosper? All I can say that it is a relevant and sustainable phenomenon and MySpace certainly will survive. By the way, in many ways Myspace IS the American SMS phenomenon. The young generation had to roll their own digital culture, they refused to accept something from marketers (SMS). Well, they did adopt it but MySpace is the breeding ground of youth culture these days.

GDC MOBILE – PROBABLY THE BEST MOBILE EVENT IN THE WORLD

I attended GDC Mobile in San Jose and I cannot stop admiring how good an event Rob Tercek has been able to develop out of it. The sessions are informative and in some cases a real crash course to the state-of-the-art in mobile gaming. A case in point was the traditional presentation of the best in mobile game innovation by David ‘DC’ Collier and Matthew Bellows, a highly informative look into the latest stuff particularly from Japan. Please ask DC for the presentation URL: d3ntaku@gmail.com.

One of the leading themes was “made for mobile”, the need to develop content separately for the mobile platform. It is great to see Hollywood finally embracing this wholeheartedly. It is partly a result of mobile content now being seen as a major future revenue generator: Hollywood executives usually see all the right things when they can afford to come out from the hiding. Ricci Rukavina, the mobile studio head at Disney gave a brilliant presentation on the topic.

Overall, I really recommend you make GDC Mobile part of your travel plans for March 2007!

CTIA – THE SHOW WAR CONTINUES

CTIA in Las Vegas more ‘business as usual’ – the tide seems to raise all the boats. Unlike at 3GSM, the CTIA show floor had content companies and networking hardware companies mixed in happy disharmony. The mobile industry in the US is still relatively speaking less focused on content as they need to finish the war on all levels of infrastructure technology. In Europe the infrastructure is a given and the focus is on innovating for the end user.

The mobile content shows MECCA and MES continue the war for trying to kill each other. I attended both shows this time and I have to say both were useful – but what a waste of opportunity to split the audience this way! MECCA had a far better program and better organization but MES was more intimate and offered better networking opportunities.

Among the conference program there were presentations of the ‘untouchables’ – the heads of wireless data for US carriers. Michael Gallelli of T-Mobile confirmed (with enthusiasm) my earlier observation that the US mobile market at the moment is all about personalization and colorful faceplates. Jim Ryan of Cingular gave an animated presentation highlighting the traction on the US wireless market (according to him Cingular is nr 3 in the world in wireless data revenue). He went on to cheer the crowds by repeating what I heard an Openwave executive say three years ago: United States is not lagging behind in wireless innovation. That’s nonsense. The rate of adoption is high and US is catching up but just yesterday I heard from a developer how much more advanced Brazilian developers are because ‘it seems they have done most things already three years ago’. US is an import market and the carriers are well aware of that. It will actually continue be an import market until the pace of innovation in the US is so much fueled by VC money and those start-ups so well grounded that they can compete for carriers’ attention. That will take at least another year.

MOTOROLA RAZR – ANOTHER PIECE OF FINNISH INNOVATION?

Actually I am not sure I would want to credit this to my countrymen, RAZR is actually not that great of a phone… But the urban legend is out there – from quite reliable sources – that the Motorola RAZR technical hardware design was originally done in Heinola, Finland at the facilities of a global contract designer-manufacturer Flextronics. The design was then offered to Nokia who refused it mainly based on logistical problems associated with the manufacturing process for this type of a slim design where the components are stacked one after the other horizontally. After that Motorola saw the light and picked up the design, raising certainly some eyebrows in the Nokia organization.

SOME COOL COMPANIES

ShoZu. I met with Marc Brown, CEO of Buzznet. Buzznet is getting good traction for their affinity-based blogging service and mark demoed to me the photo-blogging service of their partner Shozu. Its thick-client approach seems to enable a more seamless blogging experience with faster interaction with content and with lots of uploading and downloading happening in the background. I need to get this on my phone and try it out. http://www.shozu.com/portal/ - http://www.buzznet.com/

Inmobia. The Danish company is focusing among other things on mobile content on emerging markets such as Africa. We have all heard about the buzzing Latin American market but making money with logos in Lagos… http://www.inmobia.com/

Cellfish Media. Lagardere Active changed its name to CellFish (I think this name would suite better a carrier, though… it sounds like ’selfish’…). Hmmm… a closer look at the press release reveals that the name is meant to highlight consumers’ thrive to express themselves. Never mind the name, this company is executing a very innovative brand strategy with solid investment behind and it is bearing fruit. The company is also organizing all international units to be managed from the New York office. This is the first time a non-US media company moves their headquarters into the US – the relative importance of the US market is certainly growing. http://www.cellfish.com/

BreakDesign. The South-African interactive design firm is focusing on mobile and particularly on FlashLite. They have created a very compelling UI customization partnership with a Swedish clothing brand and Nokia – I think we will see a lot more initiatives like this. Also, talking to people in the industry it sounds like FlashLite is starting to get traction within the carrier community even outside Japan. I am an advisor to a FlashLite-focused developer Omega Mobile (www.omegamobile.com), another good source to get you started with a FlashLite strategy. www.breakdesign.com – Emma Kaye, CEO – emma@breakdesign.com

GREAT GUYS & GALS OF THE INDUSTRY

Jaron Millner. This young gentleman has developed and is running most of the mobile interactive TV operations (a.k.a. participation TV) in Finland. His expertise would be really valuable in the US market – hopefully someone will hire him soon. Finland is roughly three years ahead of the United States in this area and another Finnish company IndigoTV (www.indigo.tv) is already launching a pioneering mobile-centric interactive show in New York City. Contact: jaron.millner@luukku.com

Troy Evans. It looks like Macromedia’s FlashLite guru Troy did not stay very long at Airmedia, now he is at Nokia as a Sr Manager, Branded Content. Nokia might be increasing their push into FlashLite content soon… Contact: troy.evans@nokia.com

Doug Britt. You may wonder how to get in touch with the much-hyped US MVNO Helio without possessing Korean language skills and cultural sensibilities… Well, the right person might be Doug Britt who started there as Sr. Business Development Director. Contact: dbritt@helio.com

Mario Tapia. No, we are not related but he seems to be a great guy. Mario recently started at Disney Mobile, heading up their content strategy. He comes to Disney from Playboy (who partnered with the unfortunate DIJJI) so he is poised to get a very different career experience this time around. I would say un-learning some things will be useful. Contact: mario.tapia@disney.com

EVENTS, BLOGS & SOURCES

MEM06. Just a heads up, this show in London on May 24-25 will probably be worth it, my friends who attended last year were very happy – this time around it should be even better. I might go there to see how Europe is doing. http://www.mem06.com/

Christoffer Andersson, a resident mobile guru and executive at Ericsson has launched together with his colleagues his second book on mobile applications development. Called “Mobile Media Applications – from Concept to Cash”, the book is available on Amazon and has a companion blog at http://www.mobilemediaapplications.com.

My favorite news sources: I have only time for two these days: www.moconews.net and www.digitalmediawire.com. That will get you covered.

Of other news sources you should notice Wireless Watch Japan (http://www.wirelesswatch.jp/).

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Disclaimer: Opinions presented herein are those of the undersigned and do not represent the position or message of any company I might be affiliated with.

MEOW! Mobile Entertainment Opportunity Watch #1, 2006

ChairmanMEOW! — Fri, 10 Feb 2006 07:45:55 +0000

The New Year is starting with a bang and many of us are gearing up for a successful 3GSM in Barcelona next week. The glacier is starting to finally melt and there are some major new technologies and application areas starting to take off. Many of those were invented in the late 90s when I was still at Ericsson and it kind of takes that usual 5-7 years… It is even more encouraging if one tries to predict how 3GSM 2007 will look like and how much the industry will have changed by then. One of the big changes will be the deployment and adoption of HSDPA, the fast version of UMTS technology which will give you a “WiFi-like experience” in laptop use. I tried it out recently in Cingular’s network and I have to say finally I have something good to say about Cingular: the performance is clearly better than EVDO – I totally concur with Walt Mossberg in his earlier analysis and comparison. Now Cingular just has to get it out in more than 16 cities in the US – and the world has to follow during the next year or so. We might really see HSDPA widely deployed in the world by February 2007. I believe the carriers have to make the upgrades as soon as possible because let’s face it, the first generation WCDMA networks are not up to the challenge to provide the end users enough value. What else? I have gained recently a few new insights into how the mobile industry works from a customer service and ecommerce fulfillment perspective. I needed to buy for my project the wonderful Nokia 770 Internet Tablet. What a great device – check it out: www.nokiausa.com/770. It is so popular it is sold out everywhere else except at the Nokia web store in the United States. That is probably because the whole service experience by Nokia is so poorly planned and executed that nobody would want to go there even if they knew about it (it is sold out on Amazon here). In 2006 we are now pretty used to a great online shopping experience by companies like Amazon. And in comes a newbie like Nokia who never dared to sell anything directly to the consumer in fear of alienating the almighty carrier. So I buy the device and call back a week later to find out they have them in stock but I should have called in to verify my identity! The staff shows no emotion, no flexibility, no service-mindedness whatsoever. Then I ask whether I am talking to a Nokia employee or an outsource service. They are Nokia employees. That’s the problem right there: all Nokia needed to do to do this right was to copy what Amazon has done instead of pissing people off and damaging their brand. It is the only device Nokia sells directly to consumers in the US. I heard the fight within Nokia was fierce to get past the internal resistance and to prevent this product being killed before it hit the market. It’s the usual story – people don’t innovate unless they have to… Not in design, manufacturing, distribution, you name it. Nokia is run under the gun of stock analysts expecting conservative behavior and flawless execution for high volumes. New innovation needs new structures, risk-taking, spin-offs, agility. We saw this at Ericsson some seven years ago, it’s an old story.

Warmest regards,

Tapio Anttila
www.anttila.net

3D AS A WEB SERVICE

I usually don’t write about my own projects but as these are certainly interesting to the wider community…

First of all, I am in the midst of a wireless strategy project for Mental Images, a leader in the area of 3D visualization software. (And not only is it a cool company but it also enables me to use the coolest email address: tapio@mental.com!) The company has developed a product called RealityServer which enables realtime interactive rendering of photorealistic 3D visualizations. In an optimal setting of high bandwidth and low latency networking (starting from UMTS/HSDPA…) this enables a highly scalable way to compute “3D video” in realtime and make it available on handsets and any devices capable of running merely a browser.

I would encourage you to review our presentation which we will keep available at least another two weeks under this URL: http://presentation.realityserver.com/rs-ssp.pdf (USER ID: pre, PASSWORD: sentation)

This approach is opposed to but also complementary to the trend of adding more computing power into handsets and specialized hardware and software for 3D rendering. If you were able to make available an equivalent highly scalable web service of this kind, adoption rates would be a lot faster, given the immediate availability of service-capable handsets.

Now the first questions needs to be answered first, though: what are the most attractive usage scenarios for this type of a technology? What is the mass-market application that can create a market quickly? There are lots of potential applications in design, construction, navigation and other productivity-related uses but what would be the potential uses in entertainment? I would very much like to hear your opinion after reviewing the presentation.

The first thing that comes to my mind is launching parts of a future feature film (with lots of synthetic 3D material) in advance of the movie launch on the Internet as an interactive game or an interactive world, enabling sneak previews of the movie and gravitating towards introducing more promotional elements prior to the box-office launch. The service could be a revenue-generating entity and it would naturally accumulate a user community, forming a direct B2C relationship to also measure the responsiveness of the various marketing programs. In fact, this is quite a lot in line with what James Cameron has announced doing with his future Sci-Fi movie “Project 880″. http://www.businessweek.com/magazine/content/06_07/b3971073.htm

Looking forward to your insights.

OFFSHORE SERVICES IN MOBILE CONTENT DEVELOPMENT

Another of my projects evolves around a supporting a Danish mobile development services company Touchlink Mobile with operations in Ukraine (www.touchlink-mobile.com). I am building up their business development office in North America.

I firmly believe that we are entering a fast and sustainable growth phase in the area of mobile content. Fast-maturing technologies will ensure that new generations of services will be introduced in large volumes by the majority of companies in the media and entertainment industry. This will simply mean that there will be a shortage of development resources who will be able to fulfill all those needs with sufficient quality. That will push a lot of the development into leading offshore development countries such as India, China and Russia, creating price pressure and limiting the competitiveness of those services. We can already see India becoming a relatively expensive market and some Western companies start reducing their investment there. This dynamic creates opportunities for those countries who have yet to enter the market seriously – such as Ukraine, the former center of the Soviet Space Program and home to a highly educated workforce in the country of 48 million people.

So what are the issues that prevent companies outsourcing their development to a country where invoicing cost of a skilled man-hour is around $25-30? The often-cited reasons are 1) fear of IPR theft, 2) poor delivery on-time and 3) quality issues. How can those issues be tackled in the best possible manner to secure that companies can give to offshore development not only simple routine procedures such as porting and QA but even entire development projects of a major 3D mobile game title? I am in the process of finding the right answers and I have to say I am very excited about the opportunity. After all, the Ukrainian market is in the proximity of the advanced Western European markets and offers e.g. a nationwide CDMA/BREW network. I believe that with Western management overlay we will be able to guarantee good service and improve our clients’ competitiveness tremendously.

I am curious to hear your views on the subject and whether you are ready to consider mobile development outsourcing.

So that was my little project update – somewhat self-promotional, for sure, but I need to pay for the newsletter hosting fees;-). I promise I will revert to my usual provocative mode for the remainder of 2006…

SOME COOL COMPANIES

Floating World Media is launching a true cross-media program to teach US high- and middle school kids US history and civics. This is a major undertaking spanning over various media such as TV, DVD, games and – mobile. As I am not an expert in neither US history nor civics I thought some of the readers might be better suited to take the opportunity and help build the mobile part. Please contact Kris Nybakken at kristof@newtonsecond.com. http://www.newtonsecond.com/bios.php?name=kris

The guys from ThumbJive (http://thumbjive.com) are applying their knowhow in wireless product design and development to a new mobile advertising venture – mVertex. The company is seeking an investment partner to help bring the product to market this summer. The core intellectual property is an innovative patent-pending method for integrating interactive advertising into wireless entertainment. Through the mVertex system, content providers will have new revenue opportunities from advertisers, and mobile subscribers will have low cost access to high quality games and lifestyle products. daniel@thumbjive.com

HeadZup is creating comic strips for video phones and iPods and feeding carriers with that sought-after data traffic and revenue. The idea is rather original (and it is rather hard to figure out from the website what they actually do): end-users use a camera phone upside down and build a funny mask around their mouth and chin to record a funny blurb. You may want to try this rather in the privacy of your home but I have to say the idea is great! http://www.headzup.tv/makezup.php. Please contact John Shay for the company presentation: john@headzup.tv.

BlogStar will be launching at 3GSM in Barcelona a celebrity mobile blogging site where A-list celebrities have actually committed contributing to stories. In the words of the folks at BlogStar “For now, BlogStar is the only place Jessica Simpson and Nick Lachey can be found together.” The company is the brain child of Ted Field a well-known Hollywood mogul and founder of Interscope Records. http://www.blogstar.com/index.php

Dai-Biao. Duane Kennedy is launching a company to bring hip-hop culture and music to the Chinese market – including mobile content. http://www.dai-biao.com/ duane@dai-biao.com

GREAT GUYS & GALS OF THE INDUSTRY

Vesku Paananen, the inventor of ringtones works for Microsoft as their mobile evangelist. vesku@microsoft.com

Jim Beddows. Microsoft seems to be hiring also mobile media executives, Jim just started a gig there heading up MSN video business. jim.beddows@microsoft.com

Seth Skolnik, VP of Digital Media at Paramount left the company and is looking for new entrepreneurial opportunities. seth@skolnik.org.

Steve Hartford started as Director of Product Marketing at Visage Mobile. Visage seems to be doing well and Steve is one of the bright young stars in the industry. shartford@visagemobile.com

Andreas Lieber has recently started as a Senior Consultant at Detecon in the SF Bay Area. Andreas used to head up portal services at T-Mobile in Europe so he is two years ahead of everyone else in the Bay Area . andreas.lieber@detecon.com

EVENTS, BLOGS & SOURCES

Wireless Scandinavia resource and community site opened by John Strand from Strand Consultants – learn all about wireless companies in the Viking Territory! http://www.wirelessscandinavia.com/sw153.asp

My favorite news sources: I have only time for two these days: www.moconews.net and www.digitalmediawire.com. That will get you covered.

Of other news sources you should notice Wireless Watch Japan (http://www.wirelesswatch.jp/).

* * *

Disclaimer: Opinions presented herein are those of the undersigned and do not represent the position or message of any company I might be affiliated with.

MEOW! Mobile Entertainment Opportunity Watch #10, 2005

ChairmanMEOW! — Fri, 30 Dec 2005 07:54:50 +0000

It was in November 2005 – I was at a bar in Kiev, Ukraine. I am on a business trip in a land of Bentleys and a missing middle-class. Around 2am a young lady sitting at the bar looks at me between puffs from her waterpipe and clearly wants to say something. I approach her and she tries to say something but I don’t understand. She pulls out her new and fancy Samsung multimedia phone. She types something on the screen and shows it to me. Quite dumbfounded I grasp the situation and answer back the same way. She has some family photos on the phone, we check them out. She has funny video clips of herself plus some downloaded comedy clips and we watch those. Honestly, she had that funny video clip where the cat gets mangled in the ceiling fan, remember? She had it on her phone! The phone had all her life on it! She lives through it. Her maneuvering the keypad is fast like a lightning when she jumps between menus and enters text. We are in Ukraine, a third-world country. She’s deaf-and-dumb. Her name is... Anina. Returning to the US I continue to communicate with her via text messaging. Suddenly there is an interoperability issue, I receive her messages but she does not receive mine. She has no email. I cannot call her and talk to her because she would not hear. T-Mobile, you’re killing me!

So now I know two Aninas: one in Kiev and one in Paris (www.anina.net), both mobile bloggers in their own way. Should I call Jim Jarmusch and suggest a sequel to his 1991 movie Night on Earth (http://www.imdb.com/title/tt0102536/)? It would be called Night on Earth: Five Aninas, Five Cities, Blogging for Life. Now I just need to find three more Aninas…

I took a break in writing the newsletter, I felt there was little to say that had not already been said. If you read www.moconews.net and www.digitalmediawire.com you pretty much know what’s going on. The need to give a personal perspective through blogging is there but I need to give the industry some time to make new mistakes…

I believe 2006 will be a terrific year for the mobile industry. Most things follow the logic of ketchup being tricked out of a bottle: you first try every possible technique in vain and then suddenly it will all just start flowing on your plate without any visible reason. There is still a lot of hype on the market, let’s all try to measure the temperature.

Best wishes for a Successful 2006!

Warmest regards,

Tapio Anttila
www.anttila.net

MY 2006 PREDICTIONS

Here are some sentiments and predictions as to what might happen on the market before the end of 2006, particularly on the US market.

1) Mobile video and many other new services continue to be over-hyped. The theme of the 2005 holiday season for the mobile industry in the US was… colorful faceplates. The pink RAZR of T-Mobile. There was a craze about suddenly having a wealth of options to the boring silver line of products that had been shipping before. Forget all the hype about mobile video, this Christmas market was really that of colorful faceplates! Next holiday season in December 2006 will not be about mobile video, either, because mobile video over cellular will not scale. There will be something else, a bit less sexy but probably something a bit more technical than faceplates. How about WAP?

2) Original programming will start to flourish. In 2006 top Hollywood talent will sign up for production of innovative mobile entertainment. A prelude of this in 2005 was the announcement of AMP’D mobile signing up the producers of such Emmy-winning show like The Simpsons and Real World. In many regards I consider this to be the most significant announcement in 2005 - it show that the creative elements in Hollywood are getting involved. While in Finland I heard rumors that Nokia would be discussing production of a Nokia-funded mobile movie together with the producer of Mr and Mrs Smith. Angelina Jolie and Brad Pitt were supposed to be visiting Finland, too bad I missed them…;-).

3) iTunes will develop into a competitive media delivery platform to mobile phones. I believe the marketing savvy of Apple will help build iTunes into a serious contender (on the US market) as a media delivery platform. Down the road Apple will of course launch also smartphones (better than the one out there now) that enable the iTunes functionality. Apple might very well be the surprise performer on the mobile content market in 2006. They recently ditched their iTunes ringtone offering (according to rumors) but we should not count them out, quite the contrary. It is not a good idea to ignore a great marketer in a market were more or less everyone else lack that competence.

4) The bubble will grow slower. There are signs of the VC investment frenzy and M&A activity calming down a bit: M&A valuations have actually come down significantly from the height of the hype which can perhaps be defined as the $90m Airborne acquisition by Cybird. Materialized revenue multiples have since been systematically at a lower level. Silicon Valley is still throwing money at mobile startups and VCs are sending me emails like “we are going to give these guys $10 million, do you think young people would use this service?”. Maybe they will come to their senses and the bursting of the bubble will be a silent puff. Unlike in 2000, there is a real market to build upon this time around, both on the mobile and broadband wireline side of the market.

5) Content rating requirements by carriers will slow down market growth. There were some reports from the recent Mobile Marketing Association (http://www.mmaglobal.com/) meeting that indicated that content ratings will be implied by all US carriers and that all content will need to be PG-13 until those ratings are in place. I feel that there will be a lot of regulatory activity going down and some of it is well justified. In any case it will dramatically hamper the commercial short-term potential of ‘racier’ material prepared for sale or planned to be made available as mobile marketing campaigns.

There are also some aspects of the market I don’t have a great visibility into or a strong opinion on at this point. It will be interesting to see how the following things will pan out:

1) MVNOs. It is probably too early to say even by December 2006 how successful they will be. There are MVNOs like VOCE Wireless who have a very strong story on paper – focusing on carriers’ most lucrative customers is not a bad idea. There are companies like SK-Earthlink who have so much financial resources behind ($400m+) that their short-term success is an irrelevant question. AMP’D Mobile seems to have a good deal momentum going, particularly after the investment from MTV. It is perhaps harder to see the immediate success of Disney’s two MVNOs (Disney and ESPN).

2) Filling the gaps, lifestyle programming. There is a strong emerging focus on the market to discover and build content offerings for niche lifestyles. For example, content programming efforts of Forum Nokia have a solid entertainment industry focus under the leadership of George Linardos. Infospace says they have as one of their focus area the new fashionable trend of megachurches and religious programming in general. Lots of smaller companies are popping up: in the wellness lifestyle at least Omstream (www.omstream.com) and Buddha Mobile (to be launched) will be focusing on mobile content for the “generic-spiritual” lifestyle. A startup in San Francisco (to be called Mobile Endorphin) will focus on “alternative lifestyles”, such as tattoos, piercings, fetishes to name a few. The big question is whether these services will find a big enough audience and whether carriers will have any interest to support them. Of course here the emerging off-deck distribution channels will offer a viable alternative.

3) Mobile web services. I cannot help mentioning this emerging trend which promises to make it a lot easier to launch carrier and handset vendor independent services in the future. On the broadband side one of the major announcements in 2005 was the web services initiative of Realnetworks. Now I can enjoy my Rhapsody music service through a browser plug-in on my Mac-Mini even though Apple has refused to make the service available as it competes with iTunes. This is where the next big battle will be on mobile content and Google (as the nouveau Microsoft challenger) will lead the charge.

SOME COOL COMPANIES

ZoGo. Launching virally in the New York area, ZoGo focuses on anonymous voice dating. Through a web/WAP interface a user can browse profiles and launch an anonymous call request. If accepted, an anonymous premium rate call will be connected. A great idea! www.zogo.com

BurnLounge. BurnLounge is to music what HerbaLife is for dieting. While that might be a slightly sarcastic comparison we are talking about similar things. Here is a multilevel marketing model applied to music and awaiting its mobile strategy… www.burnlounge.com

MobilePlay. Mobileplay has launched a new advertising-driven service that allows consumers with personal digital assistants and smart phones to download free games, news, weather updates, and other content. Free sounds always good – maybe this will help kick-start the market. www.mobileplay.com

DIJJI. Dwango USA disassociated themselves from the Japanese mother and were renamed DIJJI (sounds a lot like ‘ditch-it’…). The company has been in the ropes for some time and in the next three months it might become the first casualty in the mobile content game – unless they get extra funding like Summus did. A not-so-cool company. www.dijji.com

GREAT GUYS & GALS OF THE INDUSTRY

Joe Hurd. The guy who launched Friendster’s mobile service in Asia is looking. Until very recently, he was the VP of BD and GM, International at Friendster, where he monetized the social networking company’s operations in SE Asia. He is looking to help the next hot mobile content startup expand internationally. You can reach him at jhurd@katamagroup.com.

Paul Palmieri. Again? Well, I just met with Paul ‘Soprano’ Palmieri who was until recently the most feared character in the US wireless industry (on behalf of Verizon). I can tell that Paul is now one of the big proponents of the off-deck model in mobile content business. He kinda reminds me of this 60’s stalinist student in Finland who later in life became the CEO of the largest bank and the richest man in the country… paul.palmieri@actawireless.com

RECRUITING

WAAT Media: WAAT, the leading mobile adult services company is looking at bringing on someone to help manage all of their off-deck psms activites in North America (and potentially abroad) – not so much from a sales perspective but from an operational and account management one. Please contact Dave Waldman (dave@waat.com).

EVENTS, BLOGS & SOURCES

Consumer Electronics Show is approaching next week in Las Vegas. 150,000 people… together with AVN Adult Entertainment Expo. Lots of reasons for a mobile professional to be in Las Vegas next week. I am going there for Victor Harwood’s Game Power & Mobile Entertainment (part of the Digital Hollywood series of events). It will be a great event – see you there! http://www.digitalhollywood.com/GamePower06.html

My favorite news sources: I have only time for two these days: www.moconews.net and www.digitalmediawire.com. That will get you covered.

Of other news sources you should notice Wireless Watch Japan (http://www.wirelesswatch.jp/).

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Disclaimer: Opinions presented herein are those of the undersigned and do not represent the position or message of any company I might be affiliated with.