If the battle royale between Google and Apple for dominance in smartphones feels vaguely familiar, then you’re probably as old as I am.  Back in the 1980s, Apple and Microsoft fought for dominance of computer operating systems. As today, they took opposite approaches: Apple maintained tight control over its operating system and hardware, forcing would-be partners through a tight licensing regime. Microsoft let any computer hardware license MS-DOS and later Windows…for a price.

Apple ended up selling superior, easy-to-use products. Microsoft ended up dominating the PC market and almost driving Apple out of business, despite its infinitely more buggy product.

In mobile, Apple again has complete control of a leading hardware platform (the iPhone) and is setting tough standards for anyone who wants to build apps. It’s restricting the iPhone to just one cellular network, AT&T. Google is giving its Android software away to all comers on any cellular network for free, betting that increased mobile Internet usage will give it the same dominance in the nascent mobile advertising market it has on the Web.

It puts in a new perspective NPD’s recent report that Androids outsold iPhones in the first quarter (28% to 21% of the smartphone market, with BlackBerry at 36%). You can dispute NPD’s figures, as Apple did. But you can’t dispute that Google’s made huge inroads in a very short time. 

No doubt, Steve Jobs (who’s even older than me) remembers all too well how he was almost done in by Microsoft. Since he surely won’t start licensing iPhone software, he only has two ways to maintain or grow marketshare in the U.S.: constantly introduce new products (such as this summer’s iPhone upgrade); and expand beyond AT&T’s creaky network to Verizon and the other carriers. Google, meanwhile, just needs to tweak its software and sign deals. 

It’s tempting to give Google the upper hand in this battle. But then, it would have been tempting to anticipate Apple’s demise in the 1980s, too.

Posted under Michael's Blog

If anyone doubted the smartphones are the future, iPhone profits should set those doubts to rest.  Apple became the most profitable handset vendor in the world in the third quarter of 2009, surpassing Nokia for the first time, according to Strategy Analytics.

Apple logged an estimated $1.6 billion in iPhone sales, compared with $1.2 billion for Nokia.

The figures validate two points: first, consumers are clearly willing to pay premiums on their phones if they feel they’re getting value (Nokia typically services the lower-end market); second, that value derives from the ability to run hundreds of data apps on their phones, just as they can on their computers.

We’re not yet at the point where voice is just one of many applications the average consumer looks for in a phone. But you can see it coming.

Posted under Michael's Blog

If you think mobile social video is a no-go in the U.S., you might consider Itsmy.com, which claims 2.5 million users of its personal broadcasting service worldwide, with half of them American.

The site ((http://m.itsmy.com on
your mobile phone) lets anyone with a video-enabled mobile phone create
their own mobile “TV show” for free and share it with other friends,
family or love prospects.

The company’s fixed Internet site is bare-bones and unapologetically devoid of uploading capabilities.

“We are convinced that we don’t need an Internet site for our users,” says Sabine Irrgang, COO of Munich-based GoFresh, which owns Itsmy.com. “Many are not interested, or they don’t even have a computer.”       MORE

Posted under Michael's Blog

MobiTV unveiled Mobi4Biz at the CTIA conference in San Francisco this week, the first in a planned series of TV channel mashups that will allow the mobile television company to repurpose mainstream TV for specific vertical markets. The new “channel of channels” — set to launch initially in late October exclusively on AT&T’s forthcoming BlackBerry Bold – will include video-on-demand, customizable stock tickers, andbreaking news from Fox Business, CNBC, Bloomberg and TheStreet.com.  MORE

Posted under Michael's Blog

Nokia is rolling out a new “all-you-can-eat” music service this week in the U.K. that’s a prototype for a service it plans to roll out worldwide.  “Comes with Music”, currently marketed only by U.K. retailer Carphone Warehouse,  lets users download as much music for one year on their Nokia phones as they want –and port it to their computers –, but there’s  a catch: they can’t move the music from their devices or their computers. If they want to add more songs after the year, they have to buy a new device.

Nokia will cover the royalties it’s paying to three of the four major labels by adding a surcharge to the phones, according to officials at the CTIA wireless show in San Francisco. They insisted the service is not an experiment, but a prelude to what will soon be offered in the U.S. They didn’t specify a time frame.

Any expansion of the service could be problematic for Nokia’s relationship with wireless carriers, who are rolling out their own competitive music services.

Posted under Michael's Blog

Nokia and Sony BMG’s announcement today that buyers of select Nokia phones will get complete access to the Sony BMG’s entire music catalog is a model that’s likely to be repeated over and over in the years ahead.

Financial details weren’t disclosed. But presumably Nokia — which signed a similar deal a similar deal with Universal Music Group earlier this year — is paying a hefty licensing fee for this interesting marketing vehicle: $20 (my number) for every phone sold? Not a bad idea.

Traditionally, music executives have decried the idea of allowing their songs to be "loss leaders" for other products, arguing that music is "devalued" if customers don’t pay for it. They’ve now suffered enough pain that any payment mechanism has to look attractive.

This one still has holes: users can’t burn the songs to CDs or iTunes, the two most popular ways of listening to digital music. But they do get to keep the music they download after 12 months.

If you think about it, there aren’t too many consumers products that wouldn’t work for free music downloads, so long as consumer products companies are willing to pay the freight — and the labels take the plunge.

See Also

• Sony BMG joins Universal in offering catalog on Nokia phones

Posted under Uncategorized

In recent years, NBC Universal’s mobile strategy has focused largely on helping carriers get its content to consumers.

Now that strategy is subtly changing.

Carrier partnerships are still "critical to what we do," Salil Dalvi, NBC Universal’s general manager for wireless said at yesterday’s Mobile Entertainment Summit. "But we also think we need to go out to market with great integration between web, TV networks and mobile phone."

Take NBC’s hit show Heroes.  This year, fans have had a series of new cross-platform ways to interact with the program, including  a toll-free number for the fictitious paper company Primatech Paper revealed during the Jan. 22 episode; and the launch of a dedicated WAP site designed to give them "two-screen" interaction with the content, including downloads and texting campaigns.

At the same time, the linear show can also be viewed on the NBC2Go channel on Verizon and soon AT&T.

The campaign points to how video and other rich media content will increasingly move beyond the closed decks of mobile carriers to the mobile Internet.

Until now, U.S. carriers have kept tight control of mobile content on their networks, fearing that allowing third parties to freely create their own mobile services will cut them out of the revenue stream.

That attitude means that "content owners do not see majority of money that goes to carriers", Dalvi notes, contrasting with the much more equitable split programmers get in cable or satellite. 

It creates a disincentive for Hollywood studios to make their content available on mobile — to say nothing of small, mobile-only content creators struggling just to survive.

The burgeoning off-deck revenue of European carriers suggests that American operators’ fears of being locked out of the mobile content chain are groundless. They may end up with a smaller piece of the pie. But the pie will be orders of magnitude greater if they loosen their grip.

See Also

• NBC’s Hero Site
• NBCU rolls out Digital2Go mobile initiative
• Mobile Entertainment Summit

Posted under Uncategorized

AT&T’s purchase of Aloha Partners puts Verizon’s mobile TV launch squarely in its cross-hairs.

Verizon uses Qualcomm’s competitive MediaFlo technology, which already broadcasts shows like "60 Minutes" and "CSI: New York" in more than 32 markets.

Aloha’s HiWire unit has quietly acquired 700 mhz spectrum in 281 markets covering more than 196 million while attention has focused on two other players: Verizon and its V Cast Mobile TV service; and Modeo, which scrapped plans for its own digital TV service over the summer.

Aloha’s acquisition would allow AT&T to leapfrog directly from its relatively slow network to broadcast-quality TV on mobile handsets.

Like all new mobile technologies, mobile TV’s consumer uptake will be slow. Mobile TV requires a new chip to be implanted in handsets, essentially turning them into tiny TVs capable of showing near-broadcast quality programming.

So both Verizon and AT&T will need to both order new specially-designed handsets and sell consumers on mobile TV. They’ll also face the task of differentiating the services from existing "TV" on cellphones, which operate off of the mobile Internet.

MediaFlo and Aloha’s DVbH technology operate on broadcast TV’s so-called "one-to-many" principle: consumers receive one signal that scales to millions of people without a cost increase.

Existing mobile video is "one-to-one", meaning every customer gets their own customized video stream. That means millions of people using the carriers’ existing mobile video services might cost more than they earn for the operators — potentially even crashing their networks.

AT&T says it may still decide to use Aloha’s spectrum for voice or data services. But its hard to believe that a company that’s invested billions of dollars in terrestrial IPTV services won’t grab this tailor-made opportunity in mobile. 

See Also

• AT&T Buys Aloha Wireless Spectrum
• AT&T Ends Aloha’s DTV Plans
• Verizon Fall DTV Line-Up
• iHollywood Forum’s IPTV World conference

Posted under Uncategorized

As Sprint’s Chief Executive Gary Forsee departs to mollify investors incensed over the company’s loss of "high value" customers, I offer the sad tale of my $1,700 Sprint bill.

"How could this have happened?" I frantically asked the customer service representative recently.

"Well, we sent you out a new Treo 700p to replace your malfunctioning one (you’ve already sent back three, I notice) and you never sent back the old one,"

"Yes, I did," I said.

"Well, you didn’t send back your children’s phones after we sent you new ones to replace them." 

"Yes, I did."

"Hmmm…. I see you went way over your allotted minutes".

"I have 4,500 minutes! How’s that possible?"

"It looks like you made a lot of calls in areas not serviced by Sprint."

"I thought I had nationwide coverage."

"Yes, sir, but if we don’t serve an area, you may have to pay for roaming on another carrier. Here’s another factor: your son apparently spent $150 using the Internet."

"He is supposed to have unlimited Internet!"

"We can take care of that, sir. I can reduce that to $15."

"What about the $400 carried over from previous bills?"

"I would have to research that, sir. I’m sorry, but my computer just went down."

"I’ve just about had it with you guys. I’m going to T-Mobile."

"I’m sorry to hear that, sir. Is there any other way I can provide you with excellent service?"

See Also

• Sprint Nextel Chief Steps Down

Posted under Uncategorized

On Oct. 22, hundreds of wireless developers  will converge for a preview of Navteq’s annual LBS Challenge, a kind of American Idol competition for creators of location-based services.

Last year, the creator of digital mapping and navigational software lauded obscure companies like Senda, a fleet management solution; SharpMind, which provides "location-relevant" information for travellers; and TikGames, which engages gamers in a worldwide search for "stolen artifacts."

If GPS on cellphones takes off, those companies may not be obscure much longer. Which explains why Nokia announced today it was willing to pay an astonishing $8.1 billion for Navteq.

For as long as I’ve been running mobile conferences, people have been predicting that GPS will be huge. You know: you’re driving by Starbucks and you get an ad for coffee mysteriously appearing on your phone. Kind of like the "order pizzas over the Internet" of yesteryear.

The technology has been modestly successful in Europe and Asia, but a complete dud thus far in the U.S. — except for some enterprising car rental companies that hawk GPS-enabled Nextel phones.

GPS phones and services are awaiting the kind of promotional muscle that finally turned Bluetooth headsets from geeky oddities to emblems of hip.

Nokia clearly believes the tide is finally about to turn for location-based mobile applications. If so, its $8.1 billion acquisition of Navteq will someday look — well, not exactly cheap, but at least better than Nokia’s stock drop today might suggest.

See Also

• Nokia Buys Software Maker for $8.1 Billion

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