On Monday, we were lucky enough to have the opportunity to sit down with Thea Chard of Xconomy.com, and talk all things Dashwire, Apple vs. Android, and the future of the smartphone market.
Check out the in-depth article here. Thanks, Thea!
Archive for the ‘What We’re Thinking’ Category
Dashwire and Xconomy Talk Smartphone Shop
August 19, 2010Connected Services: The New Battleground to Own the Customer Relationship
October 5, 2009
The biggest companies in the mobile ecosystem are investing billions in the mobile-web Connected Services space, or the software and synchronization services to connect and deliver innovative user experiences on the phone, web and PC, in an effort to build direct relationships with customers.
As mobile phones have become mobile computers, and are constantly capturing our lives, the four horsemen – Apple, Microsoft, Google and Nokia – are all aggressively moving to secure a stronghold through the core operating system and services largely based on synchronization in a market that ships more “mobile computers” annually than there are traditional computers in the world.
Device makers and mobile operators around the world face a number of new challenges with the rise of open mobile operating systems and the associated application stores. Consumer demand for smartphone capabilities and the promise of data revenue to offset the decline in voice is enticing, but what has caught some wireless companies off guard in their attempts to meet customer demand is how they manage openness in a way that doesn’t cause them to lose the direct connection with the customer.
DEVICE MAKERS
Apple’s entrance and rapid growth has fundamentally shifted the landscape in the industry. Apple is focused on a triple pronged attack strategy with Mac OS X, iTunes and MobileMe. As a result, a battleground has emerged between Apple, Microsoft, Google, and Nokia, each of whom is investing heavily in assets to compete.
If you’re a device maker who is not Apple, you have a challenge in how you differentiate your offering, win mindshare, and customer loyalty vs. a $99 iPhone 3G, or $199 3Gs. Device manufacturers looking to combat the Apple challenge have three software choices: Symbian, Windows Mobile, or Android. Building a proprietary mobile operating system is no longer feasible to compete in a world where developers are key to its success. Apple is not going to license and neither is RIM. Palm WebOS is a potential licensed platform depending on how successful sales of Pre/Pixi and other iterations go in the next 6 months, but at the moment, Symbian (Nokia), Windows Mobile (Microsoft) and Android (Google) control the open mobile operating systems that device manufacturers can license to compete in the market. Because Windows Mobile doesn’t support the level of deep user interface customization, and Symbian S60 is a bit of legacy operating system that is hard to differentiate from what Nokia ships, we are seeing more device makers choosing Android. The added complexity for device maker differentiation on top of the app ecosystem that is specific to a platform, is how to deal with the services that come with their choice of Symbian (Nokia Ovi), Windows Mobile (Microsoft MyPhone, Marketplace), or Android (Google Sync services); services that allow these companies to create direct connections to customers, help build loyalty and capture revenue.
Device makers are ramping quickly to support delivery of mobile-web connected services. Nokia (Ovi), Motorola (MOTOBLUR) and HTC (TouchFlo 3D, Sense and social contact cards), have all staffed up with talented software developers to help them differentiate with cool services beyond just simple user interfaces on top of the mobile operating systems on which they are betting.
As the largest global manufacturer of mobile computers, Nokia is making the move to shift its entire company to be able to compete with software services. With over $10B invested in Ovi (including Navteq acquisition), this transition is being driven by its CEO, Olli-Pekka Kallusvuo. OPK recently stated during Nokia’s Q2 earnings call (16 July 2009): “We are setting 6 month targets that will take us to 300M active users [Ovi services] by end of 2011. This call reflects the first step towards success as a mobile solutions company. It measures our success in acquiring, retaining and deepening customer relationships which is the new battleground in this evolving industry.” Nokia has even gone on record to state that it will break out the number of services attached to each smartphone beginning with its Q3 call.
MOBILE OPERATORS
If you’re a mobile operator, including those that sell the iPhone, you have a challenge in differentiating your network and devices, and that becomes more difficult with each open mobile phone that you ship unless you have a strategy to create and deliver innovative services across your smartphone (not feature phone) portfolio. While AT&T loves having exclusivity on the iPhone in the US market, the cost is not only beefing up the network to support the data, but a tolerance to lose the direct customer connection to iTunes and MobileMe, a move that has emboldened others in the industry to aspire for the same type of customer relationship. There are many exciting opportunities for operators to leverage Connected Services.
One example of how an operator is dealing with this shift is Vodafone. Vodafone recently announced Vodafone 360, what is essentially the Vodafone Live concept of branded services, repackaged for the current generation of smartphones and social networks via the help of software leadership (Pieter Knook, formerly of MSFT and Windows Mobile) and companies Vodafone acquired around synchronization of user content, social networking and location (Zyb and Wayfinder) to deliver mobile and web experiences. Another example of an operator strategy to differentiate is T-Mobile USA. T-Mobile USA has said it will differentiate on Android, and the G1, MyTouch3G, and upcoming Motorola CLIQ support that mission. T-Mobile’s approach is interesting because according to an interview with CTO, Cole Brodeman, “each device will be focused on a different consumer segment…There’s a couple of paths you can take: You can partner close with Google, and it has Google brand sprinkled throughout, and then there’s the carrier and handset initiative—and non-Google based innovation. We are going to take both paths to market, and you’ll see different elements sprinkled in.” The CLIQ will be a hot phone with MOTOBLUR, the new social networking integration that Motorola has added to Android as its primary differentiator, and it will hit a consumer segment that will be excited for what it offers. The reality however is that Motorola will provide MOTOBLUR (and other device makers will provide their flavor of differentiation) on all their Android (or other platform) phones, and many operators will assort, making differentiation beyond exclusive device deals difficult.
The mobile operators face a challenge of how to harness and act upon the threat of disintermediation being caused by each open mobile phone that it sells. On the one hand, consumer demand for smartphones must be met, and increased revenue per user with data plans is a good thing. On the other hand, every time a store sells a Windows Mobile phone, that customer can sign up for Microsoft MyPhone and build a direct connection with Microsoft. A sale of a Nokia phone means a customer can sign up for Ovi and build a direct connection with Nokia. With an Android phone from Google, a user can’t even get to the main screen without entering a Google username and password, and at that point Google is building the relationship with the customer as it captures data. And obviously the same is true of an iPhone sale, as users sign up for iTunes and MobileMe, two services where the operator is cut out. One could argue the operators should just let the software companies innovate , and instead of getting into the mix, continue to focus on tying up exclusives, phone sales and increasing revenue per month, while making sure the networks can support the increase in data traffic. For the consumer, that may be welcome, especially if an operator doesn’t come to the table with something awesome. But because the mobile phone is such a personal part of everyday life, and the data shows people replace their phones at least every 18 months, consumers are unlikely to want their data trapped in a service from say Microsoft if it means they have to continue buying only Windows Mobile phones to access their data and benefit from the value the service provides.
CONCLUSION
Device makers, mobile operators, retailers, and developers are eying the tremendous opportunities made possible by mobile-web Connected Services. Whether it is the chance to build a social network around the users’ mobile address book; create real-time sharing experiences between phones, computers, and the web on a level well beyond what MMS was designed to deliver; a chance to build an “iTunes Genius”-like feature to help users select themes, apps, rings and monthly plans based on usage; to sell applications; to target and deliver interactive location-based advertising; help increase the switching costs as the iPhone/iTunes/MobileMe service combo has demonstrated; and sell more phones and boost revenue per user, the significant investments being made in mobile-web Connected Services are a strategic bet that will pay dividends if companies are successful in building direct customer relationships, and ultimately, direct monetization.
At Dashwire, we believe innovative connected services can be delivered not just as siloed services to a particular platform, but across the various open mobile phone platforms. Our shift to offer DASHWORKS, a Connected Services platform, is our belief that we can help other companies thru licensed software to accelerate innovation for consumers around the world regardless of operator or device manufacturer.
- The Mobile Social Graph – Where Software Companies are Going
- Connected Services – The Next Wave of Mobile Phone Computing
THE MOBILE SOCIAL GRAPH – Where Software Companies are Going
December 17, 2008The emerging trend from software companies focused on open mobile operating systems is to capture network value from the phone address book, with cloud offerings accessible from the PC web and mobile phone. The address book on the phone has traditionally been a place to input and access contacts and phone numbers for dialing while on the go. It wasn’t a destination, but a useful resource that once accessed, would allow a user to launch a communication channel. With the growth of social networks, it was realized that the mobile phone address book was perhaps more accurately described as a user’s real social network, and there was huge opportunity to monetize that if you could build out the largest mobile social graph.
Windows Live gets credit for being one of the first in the market to integrate presence and link to photos from within the native address book application on a mobile phone, but Jaiku was the first to make popular. The Jaiku experience brought in presence and required a user to access from a separate, connected address book application on the phone. Many people believe the Jaiku acquisition by Google was to get its own version of Twitter for a fraction of the cost, but I wouldn’t dismiss the power of the mobile network address book and how Google could leverage as it looks to further enhance Android and its cloud services in v2 and v3. Even Jaiku founder, Jyri Engeström, may be signaling that is the case.
ZYB, a company purchased by Vodafone in May of 2008 for approximately $50M USD, has been focused on building out a network address book accessible from the PC web and mobile phone client based on mapping contact relationships from a phone.
With the iPhone, it’s amazing to look at how the Facebook and Yahoo OneConnect applications can actually replace the native address book on the phone, while leveraging the network they have built online for users. Instead of simply finding a phone number and address within the contact card, you can see status, recent photos, and access all native communication function directly from within these cloud-based address books, or mobile social networks.
The Android operating system from Google is perhaps the most obvious signal from any of the giant software companies that they want a relationship with the consumer on the phone and online through cloud services on the PC web. The initial setup of the T-Mobile G1 requires a user to input a Google username and password to sync with Google contacts, calendar and gmail. Once that point is crossed, the customer relationship is with Google, not the operator, and what was commonly referred to in the 1990s with the rise of the internet vis-a-vis brick-and-mortar, as “disintermediation” is now being applied to the mobile industry with the rise of open operating systems.
There is no doubt that Google, Microsoft, and Apple recognize the strategic importance of disintermediation value that connected services offer, particularly around the mobile phone address book and PC online services that can be built around it, but in the traditional mobile phone industry, surprisingly there are only three companies who have publicly indicated they are serious about this market. The first is Vodafone with the acquisition of ZYB. The second is Nokia, with its OVI services. Two weeks ago at Nokia World, Niklas Savander, the day 2 keynote speaker said that Nokia had the opportunity to build the world’s largest social graph based on the volume of phones (about 450M annually) and average of 100 contacts per phone. The third is RIM, who is talking a seemingly opposite approach to help the operators reduce its exposure to disintermediation.
As the Economist noted last week in an article on Nokia’s OVI strategy, the connected services market is finally taking off. Companies without a strategy will be left unable to differentiate their phones & networks, suffer the challenges of disintermediation, and surrender the billions in revenue that this market will create as software innovators like Dashwire power the new generation of connected consumer, social and business services across open mobile operating systems.
Connected Services: The Next Wave of Mobile Phone Computing
May 28, 2008The world has hot phone hardware. Fast carrier networks. And phone software that continues to enable more functionality and experiences. The promise of wireless innovation and scenarios that people imagined back in the dot com era is real, and today we’re seeing the emergence of connected apps and integrated experiences, and it’s why we’re fired up about what we are building at Dashwire.
The mobile phone is constantly recording life – and people take it with them everywhere because it connects them to family, friends, information and helps them capture what’s important. People are also spending a lot of time online, as the computer continues to play a more important role in connecting people and information. Morgan Stanley’s recent web trends report indicated that approximately 40% of global time spent online is for communication and social networks. There is an intersection that’s taking place – and a huge opportunity – to seamlessly bridge these two worlds by integrating mobile and web content and communication, and making it easy for people, and that’s what we’re focused on at Dashwire.
We believe cross platform open (meaning building our solution to work across as many smart phone platforms) solutions offer the biggest value creation opportunity in the industry. Dashwire works today for Windows Mobile 5.0, 6 and 6.1 phones and soon will work on Symbian and BlackBerry, increasing the number of people that can realize the full value of our service to over 150M+ in a market that is continuing to grow rapidly, and according to IDC, is expected to have an install base of 1B by 2011.
There are very few companies who aren’t 800lb gorillas in the industry today with cross platform connected service offerings for consumers because it’s expensive and difficult (server and mobile code), many were too early and flamed out, and VC investors have largely shied away over the past few years as a result of what they saw with investments they or others made in the past. Apple set the new bar with the mobile browser, and as it continues to improve, many companies will just build inexpensive browser apps, but believe a native thin-client app is a base requirement, and software that goes deep into the phone operating system and integrates to solve customer problems and deliver superior offline and online experiences across platforms will be the major creators of value for mobile connected services.
Companies looking to deliver value as part of the next wave of mobile should be focused exclusively on building experiences for smartphone users (Windows Mobile, Symbian, BlackBerry, iPhone, Android, Linux) with the understanding that a) consumers not businesses are driving growth in this market; b) these users are more likely to have a data plan; c) if you really want to go through the pain of getting your app to work on feature phones, work with the mobile operators to include your spec into their device maker requirements document to get the broadest coverage; and d) the phone is being replaced by users approximately every 18 months, and at that point there will be more smartphones to choose from, and people aren’t necessarily going to be brand loyal in their next purchase, so cross platform support enables you to have a more likely chance of keeping them as a customer.
The big dogs have started moving their ships in the right direction toward connected services – Nokia, Microsoft, Google, Apple, Yahoo – and have resources and the ambition to build the future. When these companies bet billions on the next wave, both technically and with business development and marketing dollars to drive awareness, user adoption and growth, companies that deliver value on top of the platforms and services they are building will be poised to bring experiences to life in new ways for hundreds of millions to several billions of users. And that’s where companies like Dashwire come into play. I will be posting on a few cool start ups in addition to Dashwire that are helping to drive mobile services in a future post.
Below is a quick breakdown of what the 800lb gorillas are pulling together from a services perspective, and why their moves today are setting in motion the future of phone services:
I. Nokia
Last August, Nokia unveiled its OVI brand and strategy, and believe the vision shared publicly is the most compelling of the 800lb club in terms of focus on connected services for mobile phone users. OVI is a group of services for S60 users that offer PC, web and mobile experiences. Even with 40% of the global phone market and devices like the N95, Nokia recognized that selling hardware alone into mobile operators and direct to consumer was no longer going to be enough to maintain its market share against the software companies invading its turf, and that raising the bar with a new strategy of connected services would enhance the value of the overall communication and mobile experience.
Nokia has invested big dollars to back its move to become a services business and assembled a promising line up with OVI around media sharing (Twango), maps (NAVTEQ and gate5), music (Loudeye), and gaming (N-Gage) for its S60 phones, and expect them to roll out on S40, and if really smart, non-Nokia platforms to leverage its services infrastructure. Vodafone and Orange are the two heavy hitters who have announced support for OVI, the Orange news coming a few days after Vodafone acquired ZYB, a potential asset Vodafone can use to compete against OVI, so we’ll see how it plays out.
II. Microsoft
(disclaimer – I used to work in Windows Mobile and believe will continue to gain market share). Microsoft, like BlackBerry, has nailed the enterprise server value proposition of connected mobile services in bringing email, calendar, contacts and tasks to the phone. The value that business users have enjoyed is something that consumers would enjoy too, but they don’t have an IT manager or use Outlook.
The recent acquisition of Danger with its mobile client and carrier-grade server infrastructure is a sign that Microsoft is serious about connected mobile services, and that they are finally going to shift toward consumer. They have to. Competing against BlackBerry in the enterprise space with Windows Mobile is great and they should do it, but even BlackBerry is focused on expanding its market to consumers with Pearl and Curve, and Symbian still commands about 70% of the global smartphone market. Microsoft’s device maker partners are working over-time to differentiate on top of the phone operating system to deliver more consumer experiences – the HTC Touch Diamond being the most recent and best example of a clear push to deliver unique value for consumers.
Windows Live Local, Windows Live Mobile, SPOT on phone, are cool apps and good start, and highlight efforts by the Windows Live team to deliver for Symbian and BlackBerry as well as Windows Mobile. Expect the trend of supporting more platforms to continue for Microsoft, and will be interesting to follow whether the Danger deal translates to compelling services for consumers.
III. Google
The big news from Google on the mobile front over the last year has been Android, its mobile phone operating system platform that will possibly ship on at least one phone before the end of 2008, and its lobbying of the FCC to sell open spectrum.
Google has tons of cloud services (Gmail, Google Calendar, Picassa, Docs, Orkut, Open Social, Search, GrandCentral, etc) that it can integrate with Android (Andy Rubin, who runs the Android platform at Google, has services ingrained in his thinking as a co-founder of Danger) and it’s platform has been highlighted to developers as a way to easily build connected services, a contrast from Apple’s current approach with its SDK strategy. How it evolves and where advertising fits into the mix should become more evident in 2008/09.
What’s interesting today is Google Mobile product efforts to deliver value across phone platforms. The Google Mobile team is similar to Windows Live in that they are separate from the core OS team (Windows Mobile, Android). Google has offerings for Windows Mobile, Symbian, BlackBerry, iPhone, and has taken a broad look at the market to deliver value. Google Maps, the Gmail client and Search homescreen plug-ins are great additions to enhance your phone, and are examples of thin clients that pull in data from the web. Like Nokia and Microsoft, even Google, who most would believe from the spectrum auction as viewing the mobile operators as roadblocks, has started to work with them, but it will only be up to a certain point unless the operators start moving faster or if Google fails to build huge consumer demand for Android like Apple has done with iPhone.
Google has also pulled together an interesting suite of mobile related companies/technologies through recent acquisitions of GrandCentral and Jaiku, and how these fit into its strategy are key questions as it looks to pull together its mobile connected services story.
IV. Yahoo
When Christian Lindholm was at Yahoo, they were able to deliver Yahoo Go!, first for S60 and then Window Mobile. That was the first real connected app that I enjoyed trialing, with mail, contact, and calendar sync to Yahoo cloud services. Yahoo Go! 2.0 moved away from native apps to a unified Java-based offering to gain consistent UI across the different handsets. To me, it became less interesting in the fact it wasn’t integrated with the native applications on the phone, but it offered some neat experiences. Where they are going with 3.0 and the widgets based offering seems like Widsets with nicer UI, but we’ll see. If OneConnect, Yahoo’s online social address book, moves out of demoware state, it could be hot. Yahoo has made a clear choice to focus on the handset experience vs. unifying something for users on the web as well, an approach that believe could hurt them unless they cut deals with device makers to integrate its services into the native apps on the phone.
V. Apple
Apple gets credit obviously for iPhone and awareness it drove for smartphones and their capabilities, but it also gets credit for kicking its competitors and the industry into gear by breaking the mold and cutting an amazing deal with Cingular (now A&T Mobility) to forego the usual 200-plus page requirements document, avoided branding and negotiated the most aggressive financial terms that have Nokia, Microsoft, and Google evaluating their strategies. iTunes sync and service integration is seamless and tough to argue because it works well, and USB is still the best way to transfer 16GB of media to a mobile device, but I am waiting for Apple to have a .mac version of a connected iPhone service integrated into the device – not an if, but when question. Purchasing iTunes content including apps OTA is where everything is going with iPhone 2.0, and extending further to the cloud is the next step. The most interesting sign of change for the wireless industry is that Apple services for the wireless space are all Apple branded, something that many companies are following closely.
iPhone is on the roadmap for a Dashwire client, but we, like many other developers, need Apple to support running background apps like the leading smartphone operating systems. The fact they don’t is being masked by the iPhone halo effect, and is not only unfortunate for developers, but for consumers that would enjoy using the services those companies can imagine bringing to iPhone. Once Apple delivers on this capability for developers, we’ll build a hot Dashwire experience for iPhone users.
Conclusion
If the big dogs are betting on the future of mobile communication and services, it stands to reason that to participate in this opportunity, supporting their platforms and customers with differentiated experiences is the right bet because as we know, seeing the big ship start to move creates lots of time to speed past, build something hot, and have it ready when the ship sails. At Dashwire, we will support as many smartphone platforms with a deeply integrated mobile client to solve tough customer and industry problems and make it seamless for customers to get the most out of their phone, the data it captures, and the web and communications we facilitate in-and-out of the phone.
We’re excited to be a participant in this exciting world of connected mobile services, and expect for Dashwire to deliver big things. Stay tuned.
