Category Archives: Apple

A Perfect Storm in Barcelona

At the Mobile World Congress last week in Barcelona, three companies dominated the show.  The mobile industry is on fire, yet two of those companies weren’t there, though their presence was felt everywhere.

Apple – doesn’t do shows like MWC – but what they have done to the industry is provide a tremendous catalyst for innovation.   Apple’s iPhone, introduced only three years ago, has transformed how handhelds look and function.   They have given the industry a kick up the backside and smartphone innovation has accelerated.  LG’s 3D Optimus phone is an example.  No Blues Brothers glasses needed to view stunning 3D videos.  Apple’s iPad, introduced just 8 months ago, has legitimized the tablet, and though the Far Eastern manufacturers had plenty of tablets before, suddenly there was a buzz on their stands as punters were eager to get their hands on the latest tablet wares.  Tablets stand astride the traditional PC channel and the mobile channel and the two industries have now collided.

Google.  Though Android was only released as an open source license mobile operating system just over two years ago, Android smartphones now have the largest share of all smartphone O/S’s.  Smartphone and tablet demand is driven by whether or not the latest version of Android is supported on devices.  The Android section off Hall 8 was heaving. It was by far, the noisiest, most crowded area of the entire show, and that buzz didn’t let up until the final whistle.  Apple should take note.

Facebook wasn’t there, though Google’s YouTube was.  Both have transformed the mobile industry.  It doesn’t matter whether you are a service provider, a phone manufacturer, a backhaul equipment vendor or a manufacturer of power equipment. You are feeling the effects of consumers capsizing the capacity of networks .  YouTube is boosting data traffic and Facebook and IM are driving signalling traffic as well as data traffic.

Whether you are a farmer in Kenya or an executive in the City, few would argue that mobile communications is transforming lives and the mobile industry is being transformed faster than ever.

 

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Filed under Apple, Google, Social Networks

Fragmentation in the mobile market

At last week’s Web 2.0 Summit in San Francisco, Morgan Stanley’s Mary Meeker gave an insightful talk on the economy and internet trends.   She asserts that the mobile internet will be bigger than most people think.  Her slides are here with the ones on internet trends beginning on page 28.  Let’s look a little more closely at the complex, rapidly morphing telecoms market – where the action is now largely in mobile devices.   For a pithy overview of the telecoms industry, allow me to copy from that industry’s changes as cited by the eComm conference in Amsterdam that is concluding today:

• Telecom is becoming software
• Today’s model of the telephony and SMS cash-cows will significantly dry up long-term
• “Phones” are becoming general purpose always-on computers
• A march is underway to change how spectrum is allocated and utilised
• Applications innovation is being democratised
• The media industry is converging with personal communications
• Internet-style ecosystems are starting to pressurise the traditional value chain
• Search engines and computer manufactures are encroaching into the space
• App downloads; media content and even communication streams are increasingly routing-around operator’s billing systems
• The telecom kingdom is fragmenting daily.

What is a supplier to do?   Let’s look at smartphone operating systems and the Symbian operating system in particular, backed by the likes of Nokia, Sony Ericsson and Samsung, and as of this year,  an open source venture.  Speaking on the subject of innovation at a London’s  Symbian SEE 2009 show yesterday, noted author Geoffrey Moore declared that the only recourse for members of the Symbian ecosystem  is to copy as fast as they can the innovations made by Google and Apple, commoditize those innovations, and use Symbian’s huge installed footprint to turn the tables on its competitors – or lose share to Google and/or Apple.  In other words, copy Microsoft’s strategy when faced with the upstart Netscape and use its platform to commoditize and integrate its competitors’ functionality. His slides are here.

Moore also predicts that there will only be one winner amongst smartphone mobile operating systems.  He expects that within two or three years we will see which one will reach a critical tipping point. In Symbian’s favour, Google he said is disadvantaged by attention deficit syndrome – it keeps on innovating and has trouble concentrating on anything long enough outside its core advertising/search business.   Apple he claims prefers to occupy prestige brand positions.   Microsoft has problems breaking out of blue collar mobility.

Whilst copying competitor innovations and leveraging a huge installed base may help guard aganst some encroachment, I am not so sure we will see a consolidation in the near term.   I suspect mobile ISV’s will continue to have to port to several OS’s for the next decade if they want to grow from tens of millions of dollars turnover to hundreds.   Mobile infrastructures vary widely between regions and consumer profiles.  Where Japanese demand high sophistication, developing countries need inexpensive basics.   An elderly person is likely to use a different handset to that of a much younger facebook, YouTube addict.  The sheer size of the smartphone market, diversity in use types and supporting infrastructures have made it possible for different mobile business ecosystems to thrive, unlike the simpler and smaller early PC era that Moore often cites.  There is room in the mobile market for diverse approaches, devices and ecosystems – so fragmentation will probably continue for at least a few more years.

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Filed under Apple, Google, Microsoft, Sony

Microsoft’s new direct retail channel

Two weeks ago, Microsoft announced that it had hired David Porter, a veteran of DreamWorks Animation and WalMart as their corporate vice president of Retail Stores.  Just as Sony announced it would close its flagship PlayStation store in San Francisco, Microsoft decides to follow Apple’s well developed path by opening up its own retail channel, at least in the US.  Coincidentally, it was in the very same centre as the ill fated Sony store that Microsoft ran its own store from 1999 till 2001.

As part of the Vista launch last year, the company had already experimented with the store in a store concept once so often finds in department store cosmetics.    Apple hit on a successful formula that supported the notions of simplicity, personality and flair, in an accessible, come try me, environment.  They are destinations that Mac fans flock to.  They were developed as Apple’s response to a lack of control over its indirect retail channel.  Now Apple has 251 stores across the world with plans this year to grow that by 10%.  The stores are a source of comfort to their consumers, places where they can have problems easily sorted out. Microsoft has much broader, more well- developed indirect channels and a much more complex product portfolio that requires third party hardware platforms. It faces the same challenge of control Apple had, yet in an ecosystem where so many variables are beyond Microsoft’s control even in retail.  Does this mean that Microsoft will also risk producing or labelling a Microsoft PC?

If the company can develop its positive personality through a friendly, accessible, cool retail environment, then its entire channel stands to benefit but it is a bold and risky move.

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Filed under Apple, Direct, Microsoft, Retail, Sony