From Mobile to TV: The companion screens opportunity and the role of apps

[The latest trend in app development is targeting companion screens, as a way to bridge a multi-screen experience. Guest author Peggy Allbright investigates the future of app development on companion screens -and TV apps in particular – and discusses how TV advertising has found a whole new screen to engage users on.]

The Future of TV Apps

TV applications are opening up a new business frontier for the mobile industry. But we are still in the most nascent phases of the TV app industry’s formation and it needs to evolve on many fronts. Fortunately, early startup activities are revealing some of the roles that devices, apps, developers, merchandising and advertising can play in this industry, as we’ll see in this article.

The industry is well aware that consumers want to be engaged with their devices while watching TV and that many consumers are beginning to use mobile devices and apps as interactive “companions” to supplement the TV viewing experience.  New research released by Google in August provides some of the latest data to characterize this trend. Google found that in a typical day, 77% of television viewers use a second device, such as a tablet, smartphone or PC, while watching TV. More than one-fifth (22%) of these consumers are using the TV and their second device in ways that complement each other, even if it is only a simple search related to the live TV programming.

Continue reading From Mobile to TV: The companion screens opportunity and the role of apps

BlackBerry: A Dual Personality Disorder?

[RIM is torn between two very different market segments: Enterprise mobile messaging and text-addicted consumers. Amidst troubling signs for RIM’s future, the company needs to reconcile its dual personality. VisionMobile Research Partner Michael Vakulenko explains why RIM needs to create separate product experiences for business users and consumers and analyses the possibilities.]

BlackBerry: A dual personality disorder?

It’s hardly news today that RIM is at the verge of losing its smartphone leadership. Analysts dog-pile on the company downgrading the stock amidst declining smartphone market shareincreasing subscriber acquisition costs, increasing competition from Apple and a slew of Android handsets from tens of OEMs.

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A lot has changed since RIM earned its success on providing mobile push-email to enterprises. Today RIM serves two distinct market segments: enterprise users and text-addicted consumers.

Contrary to common perception, enterprise market is no longer RIM’s largest market. Back in June 2009 the company reported in that 80% of the growth came from consumers. Today in fact more than half of BlackBerry active users are consumers. Who are these people?

BlackBerry was conceived as a messaging device with optimized user interface and physical keyboard being its primary advantages. These advantages found warm reception in the hands of text-addicted youth, who according to Nielsen are sending on average 3,339 texts (SMS) a month in the US.

SMS is not the only way to socialize using BlackBerry. BlackBerry Messenger (BBM) is a proprietary instant messaging application running on BlackBerry smartphones. BBM uses BlackBerry PIN programed in the device to identify BBM users. The application supports avatars, groups, photo sharing, voice notes and reading the PIN using bar code. Because of the device-specific BlackBerry PIN, BBM has strong viral effect. A person must have a BlackBerry device to participate in the social network formed around BBM. As of May 2010, BBM had about 22.5 million users, representing close to 50% penetration across a total subscription base of 46 million subscribers.

In countries like Saudi Arabia and the United Arab Emirates, about 90% of BlackBerry owners use the BBM service – a figure which concerned government authorities, which weren’t able to intercept BBM communications. In the UK and France BBM is one of the main drivers for BlackBerry device sales. In Netherlands, Venezuela, Indonesia and Thailand users put the bar code of their BlackBerry PIN on their business cards, t-shirts or even swimwear.

A Personality Dilemma
Consumer success is great news for RIM. It is however increasingly difficult for RIM to maneuver between its established high-margin enterprise market, and the less familiar lower-margin consumer market. RIM will risk loosing both markets to competition, if it continues to serve them with the same brand and product portfolio. Enterprise users have very different and often conflicting expectations compared to the enthusiasts of message-based socializing:

– Cost is important factor for many text-addicts. Many of them are young or live in developing counties. A BlackBerry price tag in the pre-paid range has significant allure for this segment. For example, Carphone Warehouse sells BlackBerry Curve 8520 for £129.95 (more than $200) with a Pay-as-You-Go plan. On the enterprise side, the last thing that a high-flying executive wants is to use a smartphone associated with a cheapy, “smartphone-for-the-rest-of-us” brand (for example see this T-Mobile commercial)

– Many text-addicts buy BlackBerry because they don’t like touch screen. If they would, many of them would be buying iPhone or Android phones. Instead they prefer a device with physical keyboard and optimized for one-handed operation. On the enterprise side, touch screen is important to compete against high-end iPhone, iPad and Android devices.

– Text-addicts need texting, instant messaging and integration with popular social networks.  Enterprise users need emphasis on email, PDA functions, synchronization, MS Office compatibility and device management.

– Security is a big issue in the enterprise, while many consumers don’t know how to spell it – as demonstrated by the wide adoption of Facebook, despite privacy issues.

Is RIM putting its R&D cycles and money in the right places? No – RIM seems to be gravitating towards the convenient and familiar enterprise segment playing catchup with Apple. RIM acquired DataWiz, maker of MS Office compatibility software, in September 2010; Introduced high-end touch screen model, BlackBerry Torch, in August 2010; and recently announced PlayBook tablet squarely aimed at the enterprise market.
There is very little in the recent RIM product announcements to bolster confidence in the company’s historical smartphone leadership. New developments are mostly about catching up with Apple, without introducing anything significantly new and relevant for RIM’s devoted user base.

A Gordian Solution
Instead of chasing Apple, RIM shall build on its advantages and focus on unique needs of its devoted user base. The first step would be separating its product portfolio into enterprise and consumer product lines. This will free consumer products of unnecessary burden and complexity, while keeping enterprise products focused on productivity and security.

The second step would be enhancing the BlackBerry Product Experience (PX) by building up the social features of BBM on the consumer side and beefing up on the proven push-infrastructure, security and team collaboration features on the enterprise side.
Today, competition in the mobile industry shapes around Experience Ecosystems comprising of connected devices, applications, services and communities. New Product Experiences based on connected services should be the focus for RIM’s innovation. Here’s how RIM could create service-based product differentiation for future versions of BlackBerry devices.

Location-based games have proved to be very popular, especially with RIM’s consumer demographics. Foursquare, a company developing a smartphone check-in service, reached a valuation of $125M having just 1.8 Million users and 27 Employees.

Compare this with RIM who has over 20 Million users in their BBM network. Why can’t RIM build its own checkin service on top of BBM, exclusive to BlackBerry devices? Adding location context to BBM messaging will greatly enhance social interaction of the platform’s users. Moreover, check-in apps show strong advertising potential. With 20 Million BBM users RIM could create new revenue streams for itself and mobile operators.

Even compulsive texters use the phone once in a while, but for them voice call is often a part of a longer conversation taking place using multiple means of communication. RIM could integrate voice calling with BBM making voice part of a wider social context. Users would enjoy better communication experience, while operators would be happy to see users consuming more voice minutes.

Business users use their devices in rather different context from consumers. Many of them are mobile and depend on collaborating with their colleagues remotely. BlackBerry-based team collaboration could become a killer app and differentiator for such users. Real-time activity updates, multiparty discussions, wikis, collaborative task lists have all enjoyed success on the Internet as shown by Teambox, Yammer, 37 signals and long list of other Internet collaboration startups. Why not integrate information sharing tools and video calling into the operating system making BlackBerry indispensable not only for email, but for team collaboration?

The Clock is Ticking
In order to keep its position in the smartphone market RIM needs to create separate Product Experiences for consumer and business users, and focus on innovation in connected services.

RIM doesn’t have much time for experiments with the PlayBook tablet, or on internal debates about replacing the vintage BlackBerry OS with the more capable QNX OS. The mobile market continues to evolve rapidly: Apple is making steady progress in improving enterprise readiness of its products, prompting mass defections of enterprise users to more appealing iPhone and iPad devices. At the same time, Android is spreading into low-cost smartphones threatening to displace BBM with Internet-based alternatives.

What do you think RIM should do to keep its smartphone leadership position?

– Michael

[Michael Vakulenko is a Research Partner at VisionMobile. He has been working in the mobile industry for over 16 years starting his career in wireless in Qualcomm. Michael has experience across many aspects of mobile technologies including handset software, mobile services, network infrastructure and wireless system engineering. He can be reached at michael [/at/] visionmobile.com]

Smart < feature phones = the unbalanced equation (100 Million Club series)

[Smartphones get all the media attention, but it’s feature phones that are still driving the mobile industry. Marketing Manager Matos Kapetanakis examines this unbalanced equation and makes sense of the numbers published in the latest 100 Million Club]

100 Million Club - Smart < feature phones: the unbalanced equation

Welcome back to the 100 Million Club. This 6th edition of our watchlist tracking successful mobile software companies debunks the smartphone myth and paints a detailed picture behind the 34 software products – from BREW to Webkit  – which have shipped in more than 100 million handsets as of the end of H1 2010. Click here to download the watchlist.

Key insights
– Despite the hype, smartphone platforms account for less than 20 percent of the 620+ million handsets shipped globally in Q1 and Q2 of 2010. More than 80 percent of total shipments are driven by feature phones, the majority of which use proprietary software platforms.

– BlackBerry is now the second smartphone platform, after Symbian, to break the 100M handset barrier. As of the end of June 2010, RIM has sold more than 100 million BlackBerry devices.

– A total of 350M handsets have shipped with a WebKit-powered mobile browser up to the end of 2Q10. The biggest contributors to shipments of the open source browser engine are the Series 40 and Symbian OSs, while the steep rise of Android will play a bigger role in WebKit going forward.

– Only a handful of mobile software products were shipped in more than 100 million devices during the first half of 2010. Among them are the T9/XT9 text input engines by Nuance, the vRapid Mobile software update engine by Red Bend and the Nucleus real-time OS by Mentor Graphics.

– Symbian alone has more shipments in H1 2010 than iOS and Android combined. Moreover, when combined, the Google and Apple mobile operating systems make up less than 20% of Series 40 shipments in Q1 and Q2 2010.

What’s new in the Club?
In this 6th edition of the 100 Million Club we ‘ve introduced a dedicated watchlist tracking mobile platform shipments.

The watchlist comprises of 10 application environment software products, OSs and RTOSs with more than 100 million installations. Our latest members in these categories are the BlackBerry OS by Research in Motion and ThreadX by Express Logic. We have also added media favourites Android, iOS and Windows Phone 7, for comparative purposes, since they are well below the 100 million mark.

The Embedded Software Shipments watchlist features 24 products that have been pre-installed in more than 100 million handsets. This latestedition of the club sees the addition of the Media EXP, an audio/video codec and frameworks suite by Aricent and MSIP, a mobile analytics software agent, by Carrier IQ.

100 Million Club - 1H10 - Mobile Platform Shipments
Click on the image to download the full pdf

The smart vs. ‘dumb’ phone equation
The impact of smartphones to the industry is way overrated. It’s a little-told secret that smartphones account for only 20% of worldwide handset shipments, a fact we tend to forget in the face of the one-sided media storm that surrounds smartphones. A key observation from the 100 Million Club is that the ‘proprietary’ Nokia’s Series 40 and Qualcomm BREW are shipped in many times more handsets than Android, iOS, BlackBerry even the older Windows Mobile and Symbian OSs. In fact, with 638 million cumulative shipments by the end of Q2 2010, BREW is the most widely deployed licensable mobile operating system. If one considers real-time OSes for application and baseband processors, then the shipments scale to the billions of phones.

OS, RTOS shipments H1 2010
Click on the image to download the full watchlist

So, is Nokia’s Series 40 the most successful OS ever? Not exactly; the handset market is very much dependent on internal OEM platforms, which power more than 45% of total handset shipments for H1 2010. Samsung and LG, ranking 2nd and 3rd in the top-five handset OEM leaderboard, are largely responsible for proprietary platform shipments. Samsung has heavily ramped up smartphone shipments starting in Q2 2010 (which should become visible in H2 results) and is investing in its home-grown Bada platform, a C++ layer on top of its proprietary SHP operating system. LG also hopes to get a larger piece of the smartphone pie, by releasing 20 new smartphone models in 2H10.

The 20% share of smartphone shipments is set to grow rapidly driven by two phenomena; firstly the growth of Internet-borne platforms, namely iOS and Android. Secondly, the carrier drive to commission and subsidise smartphone handsets as a differentiating strategy, which is driving the carrier-happy tier-1 OEMs (Motorola, Sony Ericsson, Samsung and LG) to bend over backwards and ramp-up smartphone production. This is unprecedented growth in share of smartphone sales, which was neighbouring at 10 percent back in 2007.

The shift of attention of traditional handset OEMs towards smartphones, coupled with the rise of smartphone-only vendors, seems to indicate a balance shift in the smartphone vs. feature phone balance. It might seem a foregone conclusion that that pretty soon we’ll have a majority of smartphones flooding the global market. However, that is not going to happen overnight, i.e. not in the next 3-4 years. Smartphone shipments of traditional OEMs are but a fraction of their overall shipments, while Apple, RIM, HTC and ZTE cannot yet hope to meet the demand of huge, feature phone-dependant, price-sensitive markets, like India and China.

Clash of the platform titans
In the clash between the more familiar platforms, Symbian and BlackBerry rule over newcomers Android and iPhone’s iOS, in terms of cumulative shipments. But the picture is quite different in terms of growth, where Android has been the clear winner, growing by leaps and bounds (from 100K activations a day in May 2010, to 160K a month later and 200K in August – activations are not the same as sales, but the growth is still impressive). RIM and Apple have seen a healthy increase in their handset sales, while Symbian has suffered a small (~3-4%) decrease in market share between H2 2009 and H1 2010, despite Nokia’s growth in the handset market. However, Symbian’s market share is bound to drop even more, considering the recent decision by Samsung and Sony Ericsson to drop Symbian altogether, as well as Nokia’s choice of MeeGo over Symbian^3 for their latest N-series. Symbian is fast becoming a Nokia-only OS so we should expect the end of the line for the Symbian Foundation within the next few months as well.

Where are MeeGo, Chrome OS and webOS in this picture? The short answer is that they are nowhere to be found in mobile devices in the first half of 2010. MeeGo is rumoured to be appearing in Q2 2010 in the market, with Nokia targeting to make first impressions last while facing delays in Qt integration and the departure of key personnel. Chrome OS will most likely be shipped solely in tablets and netbooks, while HP aims at delivering new webOS devices in early 2011.

Last but certainly not least, we should not ignore Microsoft’s latest bid for dominance in the mobile industry: Windows Phone 7. The newly released OS has been completely redesigned to offer iPhone-style margins with an Android-style business model, while targeting untapped pockets of Xbox and PC developers instead of making up with Windows Mobile developers who were left with a bitter aftertaste (see our Developer Economics research). Windows Phone 7 already seems to be building momentum, with 9 new models coming to the market in Q4, $500 million in marketing budgets and a tightly integrated hardware and software platform (see our earlier article on Windows Phone for a detailed strategic analysis).

Not museum material…yet
In summary, smartphones captivate our minds, but it’s still ‘dumb’ phones that we carry around with us. Someday in the foreseeable future, non-touch screen phones will take their place in a telecoms museum (right next to the old, ‘brick’ mobile phones), but that day is not as close as mainstream media have us think.

– Matos

Waking the Dragon: The Rise of Android in China

[Android is leading the smartphone revolution in Western Markets. But what about China, the country with the biggest mobile user base? Guest author Hong Wu analyses the state of Android in China – from chipset vendors to software developers – and how the dragon is waking up.]
The article is also available in Chinese.

The Rise of Android in China

HuaQiang Road, ShenZhen, GuangDong, China, an ordinary weekend.

At 10 o’clock in the morning, there are few pedestrians around. Sanitation workers are cleaning up hundreds of deserted mobile phone packages and plastic bags near mobile phone supermarkets, along with bundles upon bundles of mobile phone manuals, and even a few dozens of broken CDs, with labels showing clearly the words “HTC” or “SonyEricsson”.

Clerks in more than a dozen bank branches on HuaQiang Road and ZhenHua Road are busy refilling cash into their ATMs. In the next 5 hours or so, those bank clerks and ATMs will be responsible for hundreds of millions of Yuan in cash transactions. Yes, cash and stock products are the rules of transaction here. This commercial business district, often called as “HuaQiangBei” (or north of HuaQiang), is the strike-it-rich spot for many poor grassroots classes in ShenZhen. This neighbourhood has become the global hub for consumer electronics.

Android has recently become the hot topic within HuaQiangBei district. Sales figures of Android phones have been climbing on a daily basis at YuanWang Digital City. Most of these Android phones use Qualcomm’s chipset, while only a few of them run a chipset that’s made in China.

Nearby, at MingTong Digital City, one can find heaps of ShanZhai (山寨) mobile phones on sale (ShanZhai refers to Chinese imitation and pirated brands and goods, particularly electronics). There only a few Android phone models on display, but customers keep coming back asking for more. In the meantime, the software engine that powers ShanZhai smartphones has shifted from Windows Mobile to Android, and most of they are using chipsets that are made in China.

A 15-minute drive from HuaQiangBei business district, at CheGongMiao business district, are the headquarters of dozens of mobile phone design companies, who are in the midst of the mobile food chain. On a daily basis, engineers here crank out some very exotic prototype phones using MediaTek’s chipset solutions. Since 2009 when Android caught fire, sales guys from MediaTek, HiSilicon, Rockchip, Actions-Semi, and other chipset vendors are arriving day after day, hoping to sell their solutions and get a piece of the pie from the Android revolution.

Once an Android-based white label design is out, the phones will be manufactured in factories at Bao’An ShenZhen and LongGang districts. The plastics are then stamped with the right retail brand stickers, and put on the shelf at the consumer electronics crossroads that is HuaQiangBei.

The MediaTek powerhouse

MediaTek (MTK) sells between 300 to 400 million chipsets a year for 2G handsets, and is the predominant force behind low cost phones in China. MTK’s foray into the smartphone market began in February 2009 when they released the MT6516 design, at that time based on Windows Mobile 6.5 OS. MT6516 is a dual core solution; the application processor is an ARM 9 running at 416MHz, while the baseband processor is an ARM 7, running at 280MHz, supporting 2G (GSM/EDGE). This solution suffers somewhat in terms of performance when compared to the Qualcomm’s MSM7200, but its BOM is lower.

One step up, the MT6516 deluxe version includes a 2.8” QVGA resistive touch screen, 2MP camera, GPS, WiFi, and Bluetooth silicon, with a quoted wholesale price of $90. The basic MT6516 version with no touch screen or camera is quoted at $60. Note that approximately $10 of that quote goes towards the Windows Mobile license fee. In other words, expect prices to go down considerable with an Android design.

Despite its market mussle, MediaTek didn’t anticipate that the Android revolution would arrive so soon. For example, MediaTek didn’t join OHA until 2010 while the first MTK Android handsets are just making their first steps into the Chinese market (there is a rumour that a leading Android OEM had earlier veto’ed MTK’s entry into the OHA to avoid price competition).

TongXinDa in ShenZhen has been the first ODM to release an Android phone based on MTK’s MT6516 solution, the “TongXinDa TOPS-A1”. The phone boasts unique features such as dual SIM cards (both GSM and CDMA, and both at active states), a dual boot system (Windows Mobile 6.5 and Android 1.6 both stored in ROM) with 256MB RAM and ROM, and a 400×240 screen resolution. The phone ad is shown below (note that the HTC logo is a fake).

But these are just the first steps of Android as it awakes the Chinese dragon. The full MTK Android 2.1 solution won’t be out in mass production until the end of 2010.

More competition at low-cost Android phones

Rockchip, a design vendor based in FuZhou, China, showed its RK28 solution at HongKong Electronics Show in 2010, focusing on Android tablets and smartphones.

Rockchip is a homegrown chipset design company which conquered the market of MP3 portable media players with its RK26 and RK27 series. In 2009 Rockchip announced its foray into smartphone business with the RK2808 Android solution, but was not widely adopted due to chip heating problems and performance issues.

In a second effort at the smartphone market, Rockchip released its RK2816 solution in 2010, running on an ARM 9 application process at 600Mhz and an NXP baseband chip. The RK28 series is not as tightly integrated as MTK’s MT6516. MTK put both applications and baseband into one single chip, while RK28 used Infineon for their baseband. RK28 series’ advantage lies at its inheritance of multimedia technologies from Rockchip, with hardware decoding of 720p H.264 video.

Rockchip’s RK28 design has been taken up by Ramos (Blue Devil) to power an smartphone device under the model name W7. The device runs Android 1.5, sports a 4.8” 800×480 resistive touch screen, and is intended as competitor to iPod Touch, with a focus on video media playback features. BuBuGao is another OEM planning to deliver cheap smartphones using the RK28 solution.

In the tablet space, Actions-Semi has been designing a new chipset based on the mISP 74K kernel, running Android 2.1. Marketed under the EBOX moniker, the company aims to head-to-head competition with the iPad with support for H.264, MPEG-4, DivX and Xvid hardware decoding at up to 1080p resolution. Such specs are unheard of among current Android solutions.

Around five years ago, phones based on MTK chipset shook up Chinese cellphone market that was dominated by Nokia, Motorola, Samsung and other local brands like Bird, TCL and XiaXin. MTK enabled phones to be sold at very low prices while still boasting advanced features, including exotic ones like eight stereo speakers or 365 days of standby battery life.

Today, most local brands are gone, and the remaining few have reverted to using MTK chipsets for their phones. International OEM brands have to slash prices on their mid-end to low-end phones in order to compete in this fierce cellphone market. MTK’s entry into high end smartphones using Android may certainly repeat the history we witnessed five years ago. Android phones running FroYo selling for under $100? Maybe just a few months away.

Android Developers in high demand

With such a rapid growth of Android-related activities, Android developers are in hot demand today in China. A 2-year Android pro can command up to 20,000 Yuan (close to $3,000) per month; whereas a 10-year J2EE veteran makes probably the same salary if not less. Companies, big and small, are busy scouting for Android talent, but challenged due to the small pool of qualified engineers.

At ifanr.com we recently conducted a survey, with the help of the China Android Dev group (over 1,400 members, 18,000 messages, the largest and most active discussion group for Chinese Android developers) to capture the demographics of Android developers in China. Our survey received over 500 valid responses with some revealing insights into the state of Android developers in China:

In terms of demographics, over 80% of respondents are between 20 to 30 years old, while another 10% is between 31 to 35 years. These are pretty young and dynamic groups of developers.

When asked about how many years of mobile development experience they have, close to 40% are just getting started. And another close to 50% of respondents are within 0-2 years of experience, which is to be expected, given that Android is a two-year-old platform.

In terms of their role in Android development, 37% of survey respondents are part time developers, while over 40% are professional developers. Only 10% are students while about 15% are still holding out to see how Android progresses.

It’s also worth pointing out that over 60% of respondents are individual developers, a.k.a. one-man teams, while over 90% work in teams made up of less than 50 developers. There are companies with more than 100 developers, mostly likely big telecoms like China Mobile, as well as handset manufacturers and design houses.

Given that we targeted Android developers, almost 80% of respondents have developed on Android. We also see healthy shares of iOS, J2ME, Windows Mobile, and Symbian. Based on current trends, we can foresee Android and iOS commanding larger market share going forward, while J2ME, Windows Mobile and Symbian share will shrink further.

Over 45% of respondents have not yet published apps on Google’s Android Market. This is mostly because Android Market and Google Checkout do not yet support Chinese regions. This is a well known issue; there is a large number of developers in China wanting to publish apps onto the Market who can’t; for example many of them have to set up an overseas bank account in order to register and pay for the Market registration fee. It’s a major hassle for individual developers, and where hopefully Google has a mitigation to offer in the near future (PayPal integration perhaps?).

In terms of revenue models, about two thirds of paid apps are using ad banners, while the other one third are using pay-per-download according to the results of our survey. As for the types of ad networks used, Google AdSense comes out on top with nearly 50% of votes. AdMob comes in second with nearly 30% votes. Wooboo, Youmi, and Casee, ad networks from China, are also making strides here.

The level of satisfaction from app revenues is evenly distributed, with 20% of respondents saying they are not doing well and losing money, and 18% saying they are extremely satisfied and doing well or optimistic about the future (the rest 60% is for people who do not make money from apps).

In terms of go-to-market channels, Google’s Android Market tops with more than half of the share. China Mobile’s Mobile Market (MM) is also popular among developers. MOTO SHOP4APPS is surprisingly getting 5% (or 10% among the ones submitted).

Overall, Android has seen explosive growth in China. More and more developers are joining the ranks daily. However, due to the limitations of Android Market and Google Checkout in China, many developers are turning to alternative markets and payment gateways.

In the operator camp, China Mobile is making a big splash trying to woo developers onto its Android-variant, the OMS/OPhone platform. HTC and Motorola are also pushing their own app store agenda.

The Android ecosystem in China is still a sleeping dragon, but is waking up day by day. There will be more ad networks, more app stores, and more payment gateways coming out in the foreseeable future before consolidation moves in. Android in China is probably at its most exciting stage right now.

– Hong

[Hong Wu is a seasoned mobile app developer based in Silicon Valley, US. He’s currently building an awesome product that hopes will make TVs enjoyable again. He’s also a core member of ifanr.com, the leading new media blog site in China that focuses on mobile Internet industry, smartphones, gadgets, and exciting startups in China. You can contact Hong at lordhong /at/ gmail.com or follow @lordhong on Twitter.]

The recipe for a successful mobile strategy for your brand

[Most major companies have tried engaging their customers through their mobile phones, but not everyone has succeeded. Guest author Guillaume Arth talks mobile brand experience and identifies the steps towards developing a successful mobile strategy]

Creating the right mobile strategy for your brand

‘Get into their pockets and you’ll get into their minds’ could be the slogan soon underpinning any new marketing manifesto. Indeed, mobile commerce has become core to the strategy of mainstream brands as it empowers new forms of customer engagement.

Mega brands like eBay have taken strides in mobile as an extension of their online presence through mobile websites and applications. eBay’s  iPhone app has already been downloaded 11 million times. The online auction giant expects to make $1.5 billion from mobile this year compared to $600 million in 2009. Retailer brands like Best Buy use apps to offer specific promotions or gifts in the process learning a lot more about customers.

Interestingly, traditional media have been quicker to adopt a mobile strategy as many advertising budgets are moving online. Since this summer, the Wall Street Journal, The Times, and Wired magazine (to name a few) have all launched iPad apps signaling a shift in premium print media. Similarly, TV channels like MTV are also embracing interactive, social apps, either designed as companion apps or offline versions of TV content. As reported by Advertising Age recently, brands like MTV  “focus on two approaches to its iOS apps: first, co-viewing apps that capture the social-media chatter around TV and awards shows and second, apps for video on the go”.

Moreover, borrowing lessons from Foursquare and Gowalla new types of apps allow you to ‘check in’ to TV shows and movies. A good example of that is the TV chatter app, which enables users to do their own programming and interact with Twitter live streams and post their own.

However promising these developments might be we will have to wait another 12 to 18 months to see whether print and broadcast media can truly leverage on mobile.

Getting your brand experience right

Through their scale and prolonged web presence EBay and Best Buy have successfully faced the challenge of multi-channel integration as well as getting visibility and ‘placement’ of their mobile commerce apps on stores.  For these reasons they still remain exceptions. As a mobile gaming exec put it to me recently, ‘you have to be at least in the top 100 apps on iTunes if you want to make any kind of money. You have to market yourself in a way that can create actual retention, not just hype at the back of a free app’.

Indeed, some free apps may enjoy good download stats but those don’t necessarily translate into good reviews and recurring users as the Gucci app recently showed.

Some brand strategists argue that it is still ‘early days’ and that a ‘wait-n-see approach’ is more sensible; after all market penetration of higher-end devices like the iPhone and Android-based handsets is still only around 5% of devices sold worldwide in H1 2010. However this figure hides that we are in fact talking about high value, high ARPU customers with the biggest propensity to actually try out a branded mobile app. Additionally with more 150 million smartphones sold we have passed the point of only talking about early adopters. This is now a mass-market phenomenon, which has opened up new and more direct routes to consumers for brands.

So how should a brand go about developing a mobile strategy?

Before enlisting a highly paid musician to create a DJ-like app experience or hiring a top-notch programmer to start churning out software code, it is important to consider what factors make some apps successful and other mediocre:

Firstly, understanding users. A successful app will capture the imagination by being relevant, useful and delightful. Indeed users are prone to quickly veer off to something else in disappointment so understanding what makes them tick is important. After all your brand is trying to take a piece of someone’s busy schedule. Hence pilot first and then scale appropriately. One can draw lessons from successful games that offer a basic, yet addictive experience which is then enhanced with a bigger feature set at a 2nd stage. Then it becomes easier to convince existing users to come back and possibly pay a small premium (a good example of that is ‘Hungry Shark’ part 1 and 2 by Future games of London.)

Secondly, a deep understanding of mobile as a medium is essential. No matter how amazing your ideas may be, it is worth keeping in mind that mobile is a tactile, impulsive and intimate medium that doesn’t tolerate too much ‘fuzzing’:  basically users need ‘to get it’ in a matter of seconds and… it needs to work! Taking the brand’s website content and ‘over-specifying’ an app is likely to fail. One can think of the 2010 Roland Garros app whose flawed design, and overly complex feature set probably didn’t achieve much for the tennis brand. Here is a prime example of how a flawed approach to an app can possibly damage a great brand especially when competitors or peers (the other Grand Slam tournaments in this case) have done a much better job.

Based on good design guidelines, a mobile app should aim at creating a brand narrative that will work in the mobile context rather than throwing ill-conceived ‘marketing junk’ as one can often read in app reviews. App marketing can be a double-edged sword and because of its immediacy and interactivity, brands must have their ears on the ground, learn and react quickly ensuring negative feedback doesn’t spiral out of control.

Thirdly, having a longer-term app roadmap where the mobile brand extension evolves and engages with its customers. The mobile app roadmap should grow gradually and elegantly, adding features and customer engagement opportunities on the way. Brands can build more loyalty by letting their essence shine through the simplicity of its mobile incarnation.

Last but not least: pricing. One million free downloads equals to zero direct revenue and too many apps are free making it difficult to solicit direct revenues through branded apps. But revenue shouldn’t be the only goal of a brand-extension strategy; the main goal should be engagement. After all, who would be willing pay for ‘walking into a shop’? One shouldn’t repeat the same mistake as mobile operators portals have done with charging users for just browsing. Providing a ‘free-entry’ experience is an important consideration which can then be followed by a premium (paid-for) experience.

Sowing the seeds for deeper customer engagements

With mobile, brands can equip themselves with a powerful and interactive marketing platform that forms a key pillar of a ‘multi-touch’, digital media presence. The entry of brands into the mobile domain is being encouraged by four recent developments:

1. A new breed of mobile natives who have greater access, understanding and trust in the mobile medium as a more personal and less ‘mediated’ experience for shopping or entertainment

2. Devices evolve at a very fast pace.  Thanks to the widespread support of XHML/HTML, Java script and CSS, (More than 250m devices now feature the open-source WebKit browser engine, as seen in the 100 Million Club) and greater set of APIs, devices offer richer media experiences: audio, picture, video, social, messaging, location…and the list goes on.

3. The greater availability and affordability of cloud-based technology open source APIs, as well as packaging and rendering solutions for mobile websites, allow new entrants – like brands – in the market (‘BK Render’, a mobile rendering solution from french start-up Backelite is a good example there)

4. The accelerated development of mobile transactions from operator billing to bar coding, I-Tunes, Google checkout, PayPal, NFC and others.

‘Convergence marketing’ is the new frontier

At the core of the ‘new mobile economics’ brands and service providers are increasingly empowered to create new experiences and new business models. With the caveat that there is no current “write once, run anywhere”, I argue that brands are better positioned than ever to work around consumer and platform fragmentation through ‘convergent positioning and marketing’. Essentially rather than feeling daunted by technology, it is about looking at what the brand is trying to communicate and push a consistent message across to all users whatever digital medium they are using.

Users. Where are they? They are everywhere and ‘ubiquity’ is their destination.  The user journey starts with a phone in each pocket, device connectivity and grows to digital ecosystems spanning across tablet computers, laptops desktops, TVs and many more places tomorrow. This creates a connected environment of opportunities for brands to express and market themselves in new ways, with social apps and blogging leading the way. Costs and barriers to entry to digital are lowering and marketing and retailing of digital goods is becoming mainstream.

Further down this new crowded high street, Apple, Google, Samsung and to an extent LG and Sony are embroiled in the battle to conquer our living rooms with internet TV services, through VOD, apps and widgets.  At present, joint communications and Internet TV services are mostly ‘beta’ services on trial with operators including Verizon (US), Sonaecom (Portugal) or KT(South Korea). Orange recently signed a partnership with LG, where Orange provides billing and customer care while LG provides IPTV services.

There are also handset apps that act as a remote control – Free.fr in France for example (Free.fr app) – signaling that mobile might take over as the ultimate ‘EPG’ (electronic Programming guide). Currently 10-20% of IPTVs are connected to a broadband going up to 50% with higher broadband penetration. Samsung expects to sell 35 million TVs globally in 2010. In comparison, it took Microsoft 3 years to sell as many Xbox units. As TV remains the most popular consumer electronics device in the home this presents significant opportunities for any IP-based service or a brand looking to market itself through digital. With an installed base of millions it is only a matter of time before mobile app stores users are migrated to the big screen.

Apps and mobile services are good place to start for any brand but as we have discussed it is only the beginning. For instance, Nokia recently argued that ‘context devices, rather the apps, will be where the money is’.

With the digital switch over completed in most developed markets by 2012, ‘Convergent marketing campaigns’ will soon become a reality. Of course being successful will require adjustments and some juggling with technology but I believe that within 18 months, brands, service providers and advertisers will be at the intersection of a bigger phenomenon than the app stores as digital grows exponentially.

Now is the time for any brand to plan and leverage on those exciting developments and – through deeper customer engagement – turn new experiences into new revenue streams.

Guillaume.

[Guillaume Arth is a mobile media consultant based in London, UK. With more than 10 years of experience in this space, he currently specialises in service strategy, sales and marketing advising large and small organizations. You can contact Guillaume at: g /at/ cozmopolitanmedia.com or you can follow him on Twitter @cozmedia]

Mobile Virtualization – Coming to a Smartphone Near You

[mobile virtualisation is an underhyped yet far-reaching technology. Guest author Steve Subar looks at virtualisation and how the technology will be elemental in enabling mass-market smartphones]


Imagine one phone with two personalities – one to fit your personal life, the other for business.  Instead of carrying around two or more devices, you’d be able to access multiple virtual phones on a single handset.

This article introduces mobile virtualization and the range of its use cases, with implications that span from silicon to smartphones to shrink-wrapped software to operator services.  It also expands upon two key applications: building mass-market smartphones, and enabling secure mobile services.

What is Mobile Virtualization?
Virtualization is new to mobile, but established in the data center, fundamental in cloud computing and increasingly popular on the desktop.

Mobile Virtualization lets handset OEMs, operators/carriers and end-users get more out of mobile hardware.  It decouples mobile OSes and applications from the hardware they run on, enabling secure applications and services on less expensive devices today and deployment on advanced hardware tomorrow.

Virtualization provides a secure, isolated environment for operating systems that is indistinguishable from “bare” hardware. This environment is called a virtual machine (VM), and acts as a container for guest software. A software layer called a hypervisor provides the virtual machine environment and manages virtual machine resources.

Resources and performance of mobile devices differ markedly from data center blades and desktops. So do business requirements. Mobile virtualization is different from virtualization used in enterprise and personal computing in several ways:
Hardware Support: mobile virtualization focuses on silicon deployed in mobile handsets, primarily ARM architecture CPUs.  By contrast, most enterprise and desktop-hosted virtualization targets versions of the Intel Architecture.  Moreover, Intel and AMD augment server and desktop CPUs with virtualization support functions, in contrast to silicon in phones that does not (yet) include these capabilities
Guest Software: Data center and Cloud virtualization usually hosts multiple instances of a single guest OS:  thousands of Windows or Linux VMs.  Desktop-hosted virtualization usually invokes just one.  Mobile virtualization involves running multiple, diverse guest platforms: applications OSes (Android, Linux or Symbian), low-level RTOSes for baseband processing and other system chores, and also lightweight environments for specialized processing (shared device drivers, security code, etc.).
Performance: enterprise virtualization strives for maximum throughput for guest software loads.  Mobile virtualization must also enable real-time response for latency-sensitive baseband and multimedia processing on resource-constrained mobile silicon.
Suppliers: enterprise virtualization is dominated by offerings from VMware, Microsoft, IBM and Citrix and supported by open source projects like Xen and KVM.  VMware and Parallels supply the desktop-hosted market.  While several vendors field embedded virtualization technology (Wind River, Greenhills) only a few focus on mobile virtualization – VirtualLogix, Trango (now part of VMware) and Open Kernel Labs.

Use Cases
Mobile virtualization is a flexible technology with a range of use cases:
– BYOD: lets you Bring Your Own Device to work, and switch among multiple virtualized environments, isolating personal and corporate applications and data.
– Chipset Consolidation: merging multiple CPUs into a single processor running application and baseband stacks, to reduce BOM costs and simplify design. Lower BOM costs could enable a new wave of mass-market smartphones, shipping in greater numbers and driving growth in data traffic and ARPUs.
– Legacy Software Support: in a new handset design, running unmodified, previous-generation software (e.g., a pre-certified baseband stack) in its own virtual machine
– Security: using multiple VMs to isolate software stacks from one another, e.g., securing mobile payments or protecting programs used to access business-critical enterprise assets from untrusted open OSes and software
– Multicore Support: managing available processor cores and mapping physical CPU resources onto “virtual CPUs” running actual software loads
– Energy Management: shutting down CPU cores when they are not needed and migrating running guests to remaining core(s)
– MNO Branded Services – using secured VMs to host operator-branded services
– Mobile-to-Enterprise Virtualization (M2E): – using secured VMs to host enterprise applications and provide access to business-critical corporate assets, e.g., hosting the Citrix Connector to access a virtual enterprise desktop
– Rapid Deployment: let OEMs and operators/carriers launch new versions of existing devices and rollout new services offerings on existing mobile hardware

Most mobile OEMs and operators/carriers look to mobile virtualization to address a combination of use cases.  Let’s examine two of particular interest:  mass-market smartphones and secure services:

Mass-Market Smartphones
Smartphones increasingly drive the global mobile ecosystem. According to Gartner, total mobile phone shipments in 2009 surpassed 1.2 billion, of which 172.4 million units were smartphones, an uptick of 23.8% over 2008.

Smartphones are critical to the fortunes of mobile OEMS, MNOs, chipset suppliers, and providers of applications and services – they drive data traffic, improve hardware margins, expand silicon design-wins, and drive software sales through app stores to increase post-load revenues.  However, broader adoption of smartphones has been slowed by retail pricing of smart handsets and cost of accompanying data plans.

A mass-market smartphone offers smartphone capabilities at a feature-phone price point. To deliver such a high-functioning yet low-cost device, OEMs must deploy a full-featured open OS and applications on more modest mobile hardware.

Current smartphones utilize high-end chipsets with dedicated CPUs for application and baseband processing. This approach contrasts with featurephones, where both stacks run on a single CPU and simpler embedded OS (Real-time operating system – RTOS).

Virtualization enables OEMs to build smartphones with less expensive single-core chipsets (see figure).  Such chipsets can also enable using lower-cost components for other functions (display, battery, etc.) not compatible with high-end mobile silicon.

The mass-market smartphone is more than just a concept touted by visionaries. Real devices have been delivered, such the Motorola Evoke QA4, with more to come.

Secure Services
Mobile virtualization also facilitates a range secure services, enabling enterprise-grade security on standard handsets. Virtualization can help secure mobile platforms, applications, and services by keeping trusted software to a bare minimum – the hypervisor itself and carefully chosen additional components – and then isolating them from threats arising from vulnerabilities and faults existing in today’s complex software stacks.
Virtual machines, containing a bare minimum of essential software, can be dedicated to secure services. A single phone could contain a virtual machine optimized for execution of secure services, deployed side-by-side with other mobile software, with practically no incremental BOM costs.

Secure service examples include:
– Isolating software for mobile payments and banking
– Hosting secure access to private medical records
– Providing a platform for secure access to business-critical corporate data (as in BYOD and M2E above)
– Enabling secure voice calling by isolating VoIP stacks from open OSes

Building mass-market smartphones and deploying secure services with virtualization are complementary use cases and emphasize doing more with less:  virtualization enables deployment of smartphone capabilities on lower-cost hardware; it also makes possible the introduction of new secure services on currently-available mobile devices.

Overcoming Challenges to Adoption
As illustrated above, mobile virtualization offers a flexible solution to many design and deployment issues for devices and services on them.  Despite its many use cases and successful deployment in products shipping in volume, mobile virtualization faces systemic challenges to even broader use:
– Perception of the technology as a viable alternative to legacy solutions, e.g,. a software solution to delivering lower BOM costs or to providing security
– Concerns about performance overhead
– The need to integrate mobile hypervisor as pre-load software, on a per-device basis (as opposed to post-load, application-style deployment)

These challenges are gradually being overcome;  mobile OEMs and operators/carriers are increasingly attracted to the use of virtualization to bring down the cost of Android devices, while recent performance benchmarks at key OEMs have tempered concerns about the performance overheads.

Mobile virtualization has been shipping in mobile phones since 2009. Despite challenges to adoption, the mobile/wireless ecosystem is turning its attention to this flexible technology, especially to bring down the cost of building and buying smartphones.  Coupled with emerging needs to provide secure services on mobile devices, mobile virtualization should play a key role in the deployment of the next 500 million phones.

– Steve

[Steve Subar is the President and CEO of Open Kernel Labs, a mobile virtualization firm]