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Archive for the ‘iphone’ Category

Have you ever stop to think why Microsoft’s platform has a larger market share than Apple’s despite Apple having a better product? Why did Google gain market share compared to Yahoo and Microsoft? The answer is the same – Microsoft and Google made money for themselves but also created opportunities for developers to make money off of their platforms.

The rules of the game have not changed. Let us look at three popular platforms of today – Facebook, iPhone and Twitter. Facebook made money for itself while iPhone made money not just for itself but for its developers while Twitter makes money for its developers without making any money for itself.

Monetization on facebook, iPhone and twitter

Monetization on facebook, iPhone and twitter

Facebook was the first social networking site with an open platform, which attracted many developers; this increased Facebook’s popularity at the cost of then popular myspace. Facebook made money for itself but didn’t offer an opportunity for developers to make money directly off of its platform even though many developers have managed to use it as a good indirect channel for marketing and sales. It still remains popular, but is not the most preferred platform for the developer community anymore. So unless the Facebook platform offers a direct monetization opportunity for developers, it will not stay the most popular social networking site.

Apple’s iPhone platform was the first mobile platform that enabled software developers to easily make money with a clear 70-30 monetization model; this increased its popularity. Now, with a long waiting list of developers trying to get their applications certified, I hope Apple does something before other platforms start to gain the attention of developers.

Twitter is the only platform that has never made money for itself but offers many opportunities for its developer community to make money. Twitter’s altruistic behavior is one of the many reasons for its popularity; I just hope Twitter itself soon figures out a way to make money lest others that depend on its existence for revenue may have to look elsewhere.

What is your experience? Share your stories on which platform have you made more money on? Which platform is the most monetization friendly?

R. Paul Singh

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It is widely believed that with the success of Apple App Stores and launch of new App Stores from all of the handset manufacturers, mobile operators have no role to play in VAS markets. (For the purpose of this article we will only look at applications that need data channel whether it is GPRS, EDGE or UMC and specifically exclude WAP and SMS type services.) The statement above has different applicability depending on the type of handsets and the markets.

The pricing for any data applications = Application subscription fee (one time or monthly) + data charges.

As long as mobile operators hold the key to data charges they will continue to have a role to play in the Mobile VAS market.

For  Android, Blackberry,iPhone,  and Windows Mobile phones, mobile operators have much less control because:

  • Generally some minimum data bandwidth is included with the basic service and so leverage of data pricing from mobile operator is non-existent
  • Users of these phones tend to be more savvy about uploading apps over the air and using it
  • Users of these phones are more likely to own a credit card; a currency for buying from App Stores

In addition, mobile operator have very little leverage in markets where:

  • Aggressive unlimited data plans have been offered like in the US where $20 buys you unlimited data plan on most phones
  • SMS spamming of users by the operator is not acceptable like in the US and some Western European markets
  • WAP portals of mobile operators never really attracted a whole lot of attention from its users like in case of AT&T in the USA

So, is there any market where mobile operators have leverage? Look at the case of a photo and video sharing application on a Nokia N Series phone. If a user uploads about 20MB worth of media a month and is charged per MB, the cost adds up and user is unlikely to use the app from Nokia’s Ovi App Store when their monthly bill arrives or when their pre-paid account dries out. This is where an operator can offer a zero rated plan and charge a fixed price for the app irrespective of the data usage.

Bottom line is mobile operators can continue to play a role in VAS markets where:

  • They can control and bundle data and app pricing in a unique way
  • When the app extends to wider phone types and choices beyond iPhone, Blackberry and Windows Mobile. Examples include Nokia Series 60, Series 40, Sony Ericsson and others
  • Credit cards are not readily available and Pre-paid is the dominant platform as operators can act as currency brokers
  • Can access and get their users to act in a cost efficient way like SMS and WAP
  • Mobile operators subsidize handsets and can bundle any app wherein discovery problem can be addressed inexpensively

So before pundits declare death of operator VAS markets they need to look at each individual market before making a generalized statement based on iPhone App Store or only the US market.

I invite you to share your experiences from different markets here for others to learn from!

R. Paul Singh

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One of the significant news from MWC 2009 (mobile world congress) was the culmination of rumors with official announcements of app stores. Now we have a long list of Application Stores including:

Why is this significant for the Mobile VAS (mobile value added services) market?

Until now, Mobile markets have suffered from 3Ds:

  • Distribution
  • Discovery
  • Dollars or whatever Currency you prefer

Theses announcements solve two of the problems -  that of Distribution and Dollars.

With smartphone sales estimated at over 60M units in 2008, it is clear that software developers only working on smartphone now have access to a large market. Should VAS developers even bother with lower-end phones? We will tackle this in a later blog.

How did we reach the 60M units number – based on many articles and estimates with the best one from Eric Zeman at Information Week.  Here is the breakdown which may cause many arguments and surprise many:

  • Apple shipped 14M in 2008
  • Microsoft shipped 20M in 2008 – yes more than Apple
  • Nokia shipped 18M in 2008 with N and E-Series counted as smartphone
  • RIMM shipped close to 14M in 2008 of Blackberry Curve and up

With an average price of $20 per application/application pack for the life of smartphone, there is room for many $100M software companies in the mobile VAS space with focus only on smartphone. No need to have large expensive sales forces calling on many mobile operators worldwide as distribution is now possible from the app stores which in most cases give 70% of the revenue to software developers rather than 20-50% which operators are giving to the software developers. So what does this mean for Mobile Operators – relegation to being a dumb pipe or? Of course, it is different for different geographies – we will tackle that in a later blog.

Now comes the third problem something that has plagued most application stores including that of facebook, myspace and hi5. Yes that is the problem of discovery and this is where virality, usefulness and marketing becomes ever more important. We will tackle this in the next blog.

R. Paul Singh

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The rising star of 2008 was IPhone which turned the mobile world upside down not just because of its sleek interface or first usable mobile web but also because of availability of numerous applications in every category. Google, with its Android, took the distant second spot but expect to see more from it in 2009. There were many also ran – all the way from LiMO to various proprietary J2ME implementations. Yes, I am talking about the mobile industry and the advent of three new operating systems in 2008.

There is a school of thought that there may not be room for any new mobile operating systems in 2009. The fact is there are already three new operating systems expected in 2009. Palm WebOS already kicked off the new year with lots of press articles. Symbian Foundation and Qualcomm’s BREW Mobile Platform are expected to be finally released in 2009.
Bottom line is Defragmentation in the mobile industry is here to stay.

How many new operating system will mobile industry get in 2009? Tell me what you think?

R. Paul Singh

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From newspapers to magazines, from the internet to the television, all attention is on Obama – the undeclared winner of the race before it is even over. Oops! I meant the Apple iPhone. Then there is McCain struggling to get attention, despite having all the experience in the world – kind of like Nokia.

The parallels don’t stop here. Message of change with not much talk of substance is what defines Obama and the iPhone. Of course, Obama’s message is sexy and attracts a lot of attention from the youth market and many foreigners – even the ones that can’t vote. It’s the same story with the iPhone, a riveting sex appeal and deafening attention from the world over, including from the ones that can neither buy nor afford it. McCain, on the other hand, keeps talking of his experience, like Nokia, vocalizing their extensive knowledge and experience of the mobile industry.

Let’s now turn our attention to the mobile industry and look beyond the hype at an attempt to uncover the real deal behind the Nokia/iPhone war. Nokia makes phones for the masses and so, for comparison purposes, Nokia’s higher-end ‘N series’ phones, like the N82, N95, should be compared with the iPhone.

What is the basic purpose of a phone? To make calls anywhere, anyplace. If you call someone from your address book, probably both phones provide a similar experience. However, my test of a phone is to make calls with one hand while driving and when I put both of these phones to test, the iPhone failed me while most phones with keypads like Nokia worked well. Having a standard RCA phone jack gives us the flexibility to buy headphones of any type – Apple does a good job by equipping the iPhone with the jack, and finally Nokia is learning and standardizing on it. Wearing headphones in both ears has been deemed illegal in many states before the current cell phone laws came into effect. In the case of the iPhone, the way in which headsets are packaged, most users tend to wear headphones in both ears which may be illegal in many states. Nokia, and many others, who had this advantage are giving it up by packaging stereo headsets. Voice quality, although subjective, is surely somewhat better with Nokia’s headset than with the iPhone. Now, on to using the iPhone away from your home network – Yes, you can use AT&T and pay as much as two dollars per minute, but if you want to unlock your iPhone and use the local SIM of the country that you are visiting, don’t expect help from AT&T, which it seems to provide for other phones.

Web browsing is a new purpose introduced by iPhone, with all previous attempts being sub-optimal. There is no doubt that Apple wins here, hands down from every other vendor. Needless to say, with iTunes and iPod’s success, the iPhone offers a much superior experience. Unfortunately, with the limited memory on the iPhone, I wouldn’t use the iPhone any more than I’d use my iPod Shuffle.

Email is another function that the Blackberry streamlined, and just like the iPhone excelled at Web browsing. Needless to say, the Blackberry is the king of the email functionality hill, and the iPhone has a long way to go to catch up. In addition, the absence of a real keypad ensures the sad fact that the iPhone may never be able to catch up on email functionality. Nokia did well on its E Series, although its N Series experience can only be termed sub-optimal.

Five mega pixel cameras and great branded lenses are the hallmark of Nokia’s new phones, including the N95. The iPhone, however, has a long way to get there, but more pictures are being taken per phone by iPhone users because of the bigger screen size and the pictures just look better on the iPhone screen. However, don’t try shooting a video with the iPhone yet, since it doesn’t support that feature, while many low end phones already come equipped with that capability.

The part that really surprised me was the attention that the Apple developer kit and other third party software got from the media. Hello! Symbian (and hence Nokia) has had one of the best developer kits in the industry for a long time and have applications in the thousands available. True, Nokia and Symbian failed in hyping it up, but the fact is that Apple came fashionably late to this party and simply stole the show. Apple has created a revenue model for its software developers, and Nokia needs to learn while it fruitlessly tries to be Google rather than making money for its developers, and hence, for itself.

Extensibility is another area where the iPhone gets zero marks. I’m shocked at how little has been written about it in the press. You can’t replace the battery yourself and the memory is not extendable either since that’s how Apple chose to differentiate its models. On the other hand, most other phones come with a removable battery that you can buy anywhere. Memory is also pretty much standardized in the form of MicroSD cards for most phones. Oh yes, if you want to charge your iPhone without a PC/Mac, be ready to shell out another $20 for the charger, since Apple chose not to supply one.

R. Paul Singh
President & CEO
PixSense.com

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