Month: February 2007

If you were at 3GSM a couple of weeks ago, you would have noticed that the term ODP has become quite widely used. Unlike other unfortunate terms (3G or user experience), on-device portals are used to signify something quite specific and meaningful: the use of specialised device software to deliver portal content and store-front capability (hint: it’s not the browser).

ODPs excel compared to WAP browsers on several counts: caching content for zero-wait browsing, integration with handset capabilities and functions (such as graphics and messaging), reducing the click-distance to content, and streamlining content purchasing. On-device portals address the need for increased data revenues not through bigger pipes (read: 3G) or bigger content (read: $20M-content deals), but by improving the user experience in content browsing and purchasing. Content may be king, but the user experience is queen as the mobile industry is finding out.

However, the ODP space is literally crammed today. I can count 30 providers of ODP client or client-server products today: Access Netfront Dynamic Menu, Action Engine (still around?), Adobe (FlashCast), Airmedia, Cibenix, Communology (mobile catalogue), Comverse, Crisp Wireless (mLogic platform), Everypoint, Geniem (MediaCast and Superstore), Handmark (Pocket Express), InFusio (nMap), ITfinitiny (2Go), mPortal, MobiComp, Mobinex, Nellymoser (ASAO platform), Nokia (Content Discoverer), Opera Platform, Qualcomm (uiOne), Reporo, RefreshMobile (Mobizines), Streamezzo, SurfKitchen (SurfKit series), Tricastmedia (TWUIK), U-Turn, Volantis (BuzzCast), weComm (wave), Yahoo! Go and UIActive.

What a crowded market this is ! If you are an operator shopping for an ODP solution, you can go very far for your money (if you know where to look that is, and this list is certainly a good starting point).

So how do ODP vendors differentiate ? Every angle in the book of the-hitchhikers-guide-to-routes-to-market has been tried. You have regional plays (MobiComp in Turkey and Onskreen in India), mobile operator propositions (SurfKitchen, Cibenix, and Comverse), content provider D2C propositions (Refresh Mobile and Nellymoser), MVNO plays (mPortal) and real-time video or data (Streamezzo and Everypoint).

With maturity comes wisdom. Most ODP players now realise that they are just offering another content distribution channel (albeit an appealing one), and that value lies on how you integrate handset functionality and personalise the content served. Operator Optus in Australia for example has customised the uiActive client to integrate messaging, presence information and location awareness, serving different content based on the user’s location.

More interestingly a nearby value area is emerging; not just selling content, but discovering content through the handset home screen.

Introducing Desktop UIs

There are a few players in this space which I ‘d call Desktop UI, and it’s heating up pretty quickly. Abaxia’s Mobile portal, Celltick’s LiveScreen and Zi’s Qix are the incumbent desktop UI products, helping the user (and the operator) discover handset features and operator services from the idle screen. But as of the last 3GSM, you can add several more products to this list: Abaxia and Tegic separately announced solutions for finding content and features from the home screen through T9-ish predictive matching (much like Qix). Then you have Korean IntroMobile’s IntroPad, Vocel, Aditon (a PA Consulting spinoff that shows adds on your mobile) and of course FlashHome, the reincarnation of FlashCast with home screen replacement features. You can naturally add the usual suspects to this list – ODP players who also provide homescreen replacement features (Cibenix, SurfKitchen, uiOne, MobiComp, et al).

What’s important to understand is that Desktop UI products are fundamentally different to ODPs. DUIs are technically complex (hint: handsets are not designed to have their home screen replaced, because OEMs did not think that was a good idea in the first place). Feature-wise, DUIs are about discovering content, not browsing or selling it. DUIs can also be used to discover common handset functionality (e.g. type R-I-N-G-T from a Qix-like application and you have the options for changing the ringtone or buying a new one. Sames goes for bluetooth, camera.. the list goes on).

Last and certainly not least, DUIs are about controlling the most valuable real-estate that ever has and ever will exist on mobile handsets. It’s the primary shelf space (advertisers call it inventory) that content providers are keen to get their hands on. Inventory is the reason Google paid such a ridiculously large sum of money for YouTube. Naturally, manufacturers are not staying out of the game; Nokia has Active Idle, Motorola has Screen 3 and Sony Ericsson is rumoured to be baking it’s own Screen 3 variant.

Stay tuned.

One of the simplest and most brilliant ideas I ‘ve read in a while comes from Deloitte’s telecommunications predictions for 2007. This market trends paper argues that instead of trying to cram TV content designed for 32 inch TVs into 2 inch mobile phone screens, mobile operators should monetize by enabling their subscribers to upload videos they ‘ve snapped on their handset to the PC (i.e. the web) and their TV. The Deloitte paper references a Business 2.0 article with more insights and research on the subject of video moblogging. As Business 2.0 puts it:

“Sending a clip of Junior’s soccer match to Grandma, it seems, is much cooler than watching the latest ‘mobisode’ of ‘Desperate Housewives’ on a two-inch screen.”

This is essentially about bring not TV to the mobile, but mobile to the TV. Let’s call this Reverse Mobile TV (-MTV or minus MTV; kind of a nice wordplay, as it also alludes to turning around the power balance and being your own ‘MTV’ or popular channel). I don’t think the term moblogging (or Nokia’s term lifeblogging) does it enough justice anyway, as blogs are associated with a journal of sequential entries around one theme, whereas mobile TV making is about one-off broadcasting.

Startups are keen to monetize on this trend. Veeker allows to you upload videos via MMS and share them (although MMS is a fragile technology with impractical limits for file size – e.g. 300KB in the UK – and very expensive for spontaneous video sharing). Vpod.tv is another service that allows users to create their own TV channel (still in beta, with mobile capabilities unclear). Perhaps Shozu is the most promising attempt at video sharing, since it uses a handset application to upload videos to the web. Naturally, YouTube isn’t sitting around dwindling its thumbs and plans to allow mobile users to send clips to other YouTube members within a 2007 according to a Reuters report in late 2006. [updated] UK operator 3 has launched a service called SeeMe TV since October 2005 that let’s users produce and broadcast their own video clips, although the service does not extend to the web or the living room TV.

Getting the recipe right

It won’t be easy to reverse mobile TV, in other words to do for mobile phones what the Slingbox is doing for TV [the Slingbox comparison is only part of the solution and might confuse. Reverse mobile TV is about uploading your videos from your phone to your living room and your friends’ living room]. So, to implement it you need handset software, distribution channels, brand & communities, 3G pipes, flat data rates and a home entertainment play. Here’s why:

– handset software is needed to instantly upload videos to the internet cloud, over cheap reliable and standardised protocols like IP and unlike MMS. Handset software offers a much more compeling experience for sharing videos and silently uploading or downloading videos. Kind of what on-device portals like Yahoo! Go are to WAP portals. Shozu is a model application in this case and a lesson in the success of product vs platform business models in the mobile industry (Shozu is in fact a product created from the ‘ashes’ of the Cognima synchronisation platform).

– distribution channels are essential for getting the handset software bundled and made easily accessible from the handset menu. Distribution and bundling power comes with handset OEMs, mobile operators and media brands, in order of decreasing power (market-depending of course).

– brand & communities: Communities are an essential social framework of interaction. Think of YouTube’s video sharing community, eBay’s glue that allows buyers to find sellers and Amazon’s collaborative filtering. Today’s brands build communities and today’s communities build brands (Tomi Ahonen is thought-leader here).

– 3G channels: At last! -MTV could be a service that justifies (some) of the billions of investments made on building 3G mobile networks. Mobile video making is spontaneous and therefore uploading or sharing has to be instantaneous – you just can’t expect users to connect their handset via cable to their PCs and load up the right software. Or even wait for 10 mins while the video uploads over a GPRS connection.

– flat data rates: easily underestimated by industry insiders who rarely care about their mobile phone bills, flat data rates are essential for realising the -MTV paradigm. US, Japan and some European countries (see ‘3’ in the UK) offer flat data rates. If operators were smarter, they would launch pay-per-use tariffs for video uploading (e.g. uploading a video could cost as much as 2 SMSs), based on IP-based or APN-based charging, in association with the -MTV service provider.

– a home entertainment play will enable -MTV service providers to channel made-on-your-mobile videos to your living room, and cross-sell sharing, printing or other content services. This should be on the roadmap of companies like i-mate who launched their home-entertainment products at 3GSM last week.

Interestingly, the -MTV concept can not only drive data ARPU for the operators through video uploads but can also drive data downloads, as mobile video makers can broadcast themselves to other phones. Furthermore, as the Deloitte paper puts it “a growing body of amateur content, created on mobiles, is ideal for watching on mobiles”. A good charging model would be per-upload charges for mobile TV producers and flat-rate access for mobile TV consumers (a well-understood model for a two-sided market like -MTV). [updated] Operator 3’s SeeMe TV service charges mobile TV producers the price of an MMS for uploading videos, but rewards them with 1p for every ‘3’ customer that watches their clip – a revenue model variant that has spawned more than 30,000 clips from ‘3’ self-styled TV producers, rewarding popular clips with a total of over 100,000 as of March 2006.

The reverse mobile TV concept is unique service offering that can be delivered by mobile operators, ideally those who offer both mobile and fixed/home services and can partner with third party brands/communities to deliver multiple, end-to-end offerings.

Now, when can I get it on my phone please ?

With voice ARPU steadily declining and data ARPU undercompensating, network operators should re-examine their data services strategies.

On 21 November 2006, Informa Telecoms & Media presented their outlook for the mobile industry in front of a packed audience in central London. The data presented by Informa’s six senior analysts at the event was rather unflattering for network operators. You can check here for the full video of the day’s presentations.

A gloomy outlook
According to Informa, voice ARPU (average revenue per user) fell from a global average of $19.38 in 2005 to $17.65 in 2006 and is expected to further drop by $1.34 (7.6%) in 2007. At the same time, the much-awaited boost in data service revenues has fell rather short of expectations. From a global average of $2.84 in 2005 data service ARPU dropped to $2.81 in 2006 and is forecast to climb by just $0.07 in 2007, according to Informa.

In a nutshell, global voice ARPU is forecast to drop nearly 20 times faster than the rate by which data ARPU will increase in 2007! This outlook is set in the backdrop of hundreds of billions of dollars in network operator investments in 3G licenses, network infrastructure upgrades and megadeals with content providers.

Source: snapshot from Informa’s Mobile Industry Outlook

One might argue that Informa’s global predictions are overly skewed since they include developing mobile markets. Vodafone’s key performance indicators reveal a similar trend. Across Vodafone’s four main markets (Germany, Italy, Spain, UK), average voice ARPU fell by 7.39% between 2005 and 2006, while data ARPU (including messaging) rose by 3.20% in the same period (although performance across individual countries varies widely). Comparatively, in Spain and the UK voice ARPU dropped by over 3.5 times faster than the rate by which ARPU increased between 2005-6. Oddly, in Germany and Italy, voice ARPU is dropping much (40x) faster than data ARPU is rising (!).

The sustained decline in voice ARPU is probably down to a couple of market effects: firstly the global mobile subs base expanding to lower-spending customers and secondly the existence of multiple SIM cards per user (1.29 SIM cards per user globally for 2006, according to Informa).

Focus on voice, not data
The question is, how should mobile network operators react ? My thesis is that operators should focus their strategy not on achieving small increases in data service revenue, but on how to turn around the tumble in voice ARPU. Operators should do so by banking on the capabilities of data services and the improved user experience offered by handsets applications.

In other words, network operators should focus their efforts on data services that support voice services by making voice calls easier, more intuitive and more fun. Examples are T-Mobile’s MyFaves, Zi’s Qix, Comverse’s Visual Voicemail and SK Telecom’s avatar-based videotelephony.

T-Mobile US leads the way
MyFaves makes it easier and more fun to call. Launched in October 2006, T-Mobile’s MyFaves service offers subscribers unlimited calls to five other numbers (to any network) for a flat monthly fee starting from $39.99. In the case of mobile telephony, five is a magic number; Nokia’s 360 study of phone usage patterns concluded that more than 50% of voice calls and 70% of SMSs go to top 5 contacts. (source: study of S60 users, UK/Germany/France as reported in Sep 06).

The unique selling point of MyFaves is that the handset idle screen displays a caroussel of images or avatars of the user’s five favourite contacts. These five contacts can be changed once a month by calling customer services, through the MyFaves application or through a web page. T-Mobile’s service is currently available for the Nokia 6030, 6103, 6133, Samsung t209, t509s, t609, t619, t629, Samsung Trace, Motorola v195s, RAZR v3, v3t, v3i and Blackberry Pearl.

The uniqueness of MyFaves stems from the combination of a voice service, a data service and a desktop UI application (desktop UI = the type of application that provides service discovery by replacing the idle screen). The data service (i.e. synchronisation between the desktop UI and the network billing engine) as well as the handset application are intended to boost voice usage, through a 1-click access to calling one of the five contacts. The user can send an SMS or MMS to one of five contacts through the same interface. I wonder what sort of ARPU uplift is T-Mobile witnessing thanks to MyFaves.

This is a trully innovative, end-to-end service. I wouldn’t be surprised if T-Mobile country operators in Europe follow the US cousin’s lead.

Qix: Making calling easier
Zi corp’s Qix is another example of how handset applications can be used to boost voice usage. Qix is a desktop UI application that uses T9-style predictive contact search to bring up contacts based on the keys that the user presses. Simply put, instead of going into the contacts application and typing in the name of the contact, Qix allows the user to find contacts just by pressing keys corresponding to the contact’s name from the idle screen. This drastically reduces the number of clicks needed to call up a contact and is claimed to boost voice usage by 3%. Owners of Windows-Mobile handsets will have used this feature widely, which has been built on the operating systems since v1 (with the launch of SPV in 2002).

Unfortunately for Qix, Zi has had too many top management changes in the last 4 years, its operating losses have been doubling on a yearly basis (check the reports) and its device support has been surprisingly poor. On the positive side, I ‘m aware of at least two competing products to Qix which are launching next week at 3GSM.

In summary, my thesis is that network operators need to heal their wounds first (the sustained decline in voice ARPU) before dashing into new and risky territory (investments into more data services). There are known recipes (and more innovative ones still sitting on the shelves of R&D teams) for boosting voice usage by employing data services and innovative handset applications.

Thoughts ?

Conferences are becoming a booming business in the mobile industry. Besides the incumbent Informa Telecoms & Media, there at least 10 conference organisers such as Visiongain, Jacob Fleming and Osney Media. With conference participation fees starting at 1,000GBP and sponsorship packages at 10 times that, it’s no wonder why.

Take Mobile Device Management (MDM) for example. MDM has been a hot topic for conferences since 2006, but is now getting somewhat overdone. There are at least five conferences on MDM taking place in the first half of 2006 from Informa, Jacob Fleming and Visiongain.

With big business comes intense competition. Informa who takes pride in being the organiser behind the 3GSM World Congress for the past few years, did not secure the contract for organising 3GSM 2007 which is now organised by the GSM Association themselves.

A more interesting twist of the conference saga evolves around the topic of SIM cards. Informa (organisers of SIM Summit) seem to have not reached an agreement with the major SIM card suppliers on the format of the SIM Summit 2007 conference. As a result, the SIMalliance (backed by the top SIM card OEMs i.e. Gemalto, Oberthur, Sagem Orga, Giesecke and Devrient) is organising SIMposium, a major SIM conference on exactly the same dates as the SIM Summit, but in a different country; SIM Summit takes place in Prague on 24-26 April while SIMposium is in Berlin on 24-25 April. If you read through the speaker list of the SIM Summit you ‘ll notice that there is not one presenter from the big SIM manufacturers, which is exactly the unique selling point of the SIMposium. It’s rare that we witness such heavy-handed, uninhibited politics in the mobile industry. As it happens, I ‘m chairing two days of the SIM Summit and I ‘m having difficulty securing briefings with some SIM OEMs.

With conference organisers keen on securing sponsors, and attendees keen on quality presentations and solid networking opportunities, there is little doubt that too many conferences on the same subject is not a good thing. But with 10+ players in the conference game, it is certain that organisers will be looking to compete rather than collaborate.