Friday Apple got a taste of the love it should expect from the cellphone market. LG made the new Prada device official and as many noted, it looks a lot like the iPhone.  

Check out the following on YouTube. I also found these pics on TechCee, a good gadget comparison blog:

Read a full comparative analysis here and here.  

I never subscribed to the “Apple religion” and do not envision myself buying an iPhone or a Powerbook anytime soon. If was upbeat after Steve Job’s presentation at Mac World, it is refreshing to see that handset manufacturers are not falling behind.

Apple expects a 50% profit margin and substantial penetration into a market that turns around a billion device a year. I don’t see it happening. The main reasons are

(a) Better positioned competitors like LG, Nokia, Sony Ericsson, Samsung and even Motorola

(b) Deep and new dependency on carrier networks for distribution, a dependency that impacts end user reach, geographical coverage, pricing, service bundles and customization.

(c) Inability to create a real technical advantage (see a good analysis on RedOrbit). Apple does not have real experience in making cellphones and they are going to learn how important that experience is.

Indeed, now that the standing ovation is over, we start seeing great devices and a lot of iPhone backlash. Prada is a fantastic brand and unlike the Nokia Vertu it is expected to be somewhat affordable. The initial end user price point is at $780, higher than the $500 and $600 iPhones but the figure lies and I expect the LG Prada ending up costing much less. LG enjoys economies of scale and can offer a lower overall price point. It also enjoys an 6% or so market share already.

Some argue that the fundamental problem of the iPhone is that it has a split personality. It’s not a Smart phone because Smart Phones are about services and openness. It’s not an MP3 player because it has a better alternative - the good old iPod. It’s not the ultimate accessory because it’s too big. So what exactly is it?

Personally, I prefer to associate myself with Prada than with Apple, but that’s just me. Now let’s see what Sony Ericsson and Nokia come up with.

Or better yet, Gucci and Georgio Armani!

      

I’m developing a growing addiction to Podcasting. While blog reading can become tiring, I simply enjoy listening to Podcasts. As a matter of fact, I am listening to Seth Godin articulating about small being the new big as I am writing this particular entry.

I have been looking for a cool mobile app that would let me browse and hear podcasts during rush hour traffic. Podcasts work well with a PC. They are also a natural fit for iPod, but with one HUGE caveat - the requirement for two separate decisions - online (to download) and offline (to listen). Live mobile access to podcasts seems like a natural requirement for me, but so far I haven’t been able to find any good service and would appreciate some good pointers.

Oh yeah, Marketing Voices, Podtech and Entrepreneurship are great podcasting starting points for Web 2.0 Marketers, gadget lovers and Entrepreneuers. Trasncripts are porvided with most of the sessions.

      

Shai Tsur of Giza Venture Capital has launched the quasi official Giza blog lately. A well written and edited blog that doesn’t shy away from controversial subjects and critical angles. In recent posts, Shai took note of 2 interesting posts written by Torsten Jacobi called Is the VC Model Broken and by Advisor Garage called To VC or not to VC. Both posts discuss the complexities VCs and Start up-ists face when they look to breed. Worth reading.

Almost every start-up-ist faces the “VC or Angel” question in the early stage. While angels and VCs are different, there is no single recipe describing who should go with who and at what stage. It is worth noting that early stage start-up-ist have a higher tendency of ending up with an angel investment. I have heard many theories regarding why that’s happening and all of them seem true. My humble contribution to the discussion is as follows:

1. Early stage is about intuition. At the early stage, it’s more about intuition than about anything. It’s not about “the management” or about “the size of the opportunity” or “the goto market plan”. It is all about the specific founder(s) and what the angel believe they can do. The company is destined to flip over backwards as it kick starts - switch models, sectors, approaches, perhaps even people. While the VC applies intuition as well it also has a deal flow system - more analysis prone and longer to execute through, therefore representing a much better fit for better established companies or for better established ideas. 

2. Primary Motivation. Start-up-ists and angels are more aligned when it comes to the motivation in the early stage. A start-up-ist does not see a $250M exit as a precondition to starting a business. The questions are much simpler - do we see an opportunity? can we build a profitable or innovative business around it? Can we identify with it? Can it all POTENITALLY become really big? The angel usually has the profile that identifies.

3. Speed. At the early stage the start-up-ist’s urge is to quit whatever she is doing and dedicate herself to the new start up as soon as possible. Turns out that angels usually have a built in, quicker decision making cycle.

That being said, I don’t think the VC model is broken or that VCs don’t fit the early stage. I do think, however, that it is very hard for a VC to compete with angels in a space such as early stage, web 2.0 investments and that it’s doubly difficult for a start-up to qualify in that environment.

VC “quick launch” programs have been formed over the last couple of years in order to create an insulated, early stage, environment within the VC. It is too early to tell whether this model works out, as most programs still involve some sort of a traditional deal flow and as Angels are more experienced in “smelling” early stage opportunities, at least for now.

      

iSee thy iphone and iThink
Will my iWallet weather in iBlink

iDream thy iPod iHave will stretch
and into an iPhone will iMiracle create

Hey Steve iHope, iDream thy truth become
iDesire thy iPhone to be my one.

iHope thy wait will be iShort
iPatience can not uphold

Oh thy iPhone what have you done
An iChild and iDiot I have become

When you look at the iPhone, whatever you think about it - one thing can’t be ignored:

THE DESIGN IS NOT JUST THE SURFACE, ITS IN THE TOTALITY OF THE PRODUCT.

Noone can escape that notion. Just like fractals, the closer you look, the more evident the design DNA is.

Take the Motorola razor, the winner of numerous design awards and undoubtedly the phone that saved Motorola. The design of the clam shell is unique, the phone’s dimensions are impressive but when you look beyond the skin its shortcomings are in abundance - Motorola have failed to expand innovative physical design to the other ‘parts’ of the phone. Motorola traditionally deliver one of the worst graphical user interfaces of any mobile phone on the market today. There is a total disconnect between the shell (literally speaking) and the inside.

The revolution that Apple brings to the mobile phone industry is its TOTALITY, and its not ‘clam’ deep.

I sometimes look at the Razor with all its awards and think that Motorola might have fluked it.

Why? because it was inconsistent with anything they did in the past, because ever since they did it, their biggest innovation has been to change its colors, because its all about the clam and not about the GUI. It’s a very good design fluke.

Is the iPhone a fluke?

All of the lame prophets (myself included) of the iPhone imagined an iPod with a keyboard. We took two existing bricks (phone and music player) and imagined how they looked after a head on clash.

Apple’s approach was different. To come up with what we see today there must have been such a revisit to the whole concept of the cell phone, that the WHY’s must have been flying left and right. Why keyboard, why right, left,center key - why, why, why. And when the pieces were put back together (with talent of course) the outcome is as great as the guts it took to do it.

Nokia, Motorola, Samsung and company had more resources and time to focus on phones and yet what we see every year is an iteration on the year before. And when they do come up with something innovative (Razor shape), its good enough for them, they’ll take care of more innovation next year/release/model. They (mostly) treat mobile phones as plastic commodities that need better screen resolution and memory for the next release. in contrast and much like the iTune-iPod symbiotic relationship, iPhone is not only about the inside and out, they planed a whole eco-system.

Apple has yet to prove the iPhone is a big seller, have yet to prove its reliability as a cell phone, have yet to prove their sustainability in the mobile industry - that is in their future. What they have proved is that design and engineering should be and are meant to be one of the same. That separating the two creates less than perfect results.

Design is not king - Design-geneering is.

      

Ok, so the iPhone is here (read what Mike Arrington and Scott Karp had to say about it). Gil and I both predicted it (duh!) so the first good news is that one monkey is off or backs.

But what does the iPhone really mean?

The real news is that the iPhone is really an innovative converged device. It has a unique user interface (the back light is sensitive to the holding angle, for example). The interface is not the traditional iPod interface but one much further developed, including a touch screen and a virtual keyboard. Oh yes, the iPhone also comes with a 2.0 megapixel camera and a WiFi connection. A truly converged media device. Wow.

the second good news is that Apple did not co-brand the device with a handset manufacturer. We all remember the Motorola-Apple ROKR disaster although we all wish to forget. The iPhone, in order to really stand out, looks rightfully like a one stop Apple shop.

Now it’s time for the bad news. The iPhone is simply too damn expensive. $499 for 4GB and $599 for 8GB is not a mainstream device. This means that by the time the iPhone will be offered by a wide variety of carriers we will start seeing much more cost effective alternatives. Mike Arrington took a note of it as well, comparing the iPhone to professional handhelds such as the Treo and Blackberry:

“Once again, Apple CEO Steve Jobs wowed the crowds like no one else can. In his 9 am keynote at MacWorld in San Francisco this morning, Jobs announced the new iPhone cell phone. From the description in appears to be a game changing device, and the public markets seem to agree. As of the time of this writing, Apple stock is up over 7% for the day. Competitor Research in Motion (Blackberry) is down over 6%, wiping $2 billion dollars in market cap off the table. Palm, maker of the Treo, is also down, nearly 6%.”

The iPhone is a WiFi powered device but is currently only offered by Cingular. I’m not sure I understand Apple’s strategy by not offering it directly to consumers as well, but I guess Cingular has put some constraints on that for now. If selling mobile devices directly to consumers makes sense, iPhone is the one that should be carrying that flag. 

I haven’t changed my mind about the potential of the iPhone. Apple will be very happy with selling 50 Million a year, but that figure is marginal in the overall mobile device space. I expect the converged media-phone market to be dominated by Nokia et al, but it’s good to see Apple pulling the market forward.

And yes, I want one!

      

I have very recently joined a new start up in the field of personal media. I won’t talk too much about it because it’s still a bit early to talk, but you can check out my updated linkedin profile. I am obviously very excited about it!

As a start-up-ist (”entrepreneur” is so overused…) I really enjoy good guidance and even criticism. There are many blogs that provide good (and free) advice, but very few of them provide first hand case studies.  I keep going back to Nisan Gabbay’s Start-Up Review, an excellent blog and a must read for start-up executives. It features relevant case studies with a lot of insight, as opposed to a “do this and don’t do that” laundry list.

This week the featured piece is about Grouper.com. I have personally been visiting Grouper from time to time but was not aware of their history. Grouper managed to change their technology and business around, compete and win on 2 parallel fronts and score an $65M exit to Sony. Oh, and they have done it all with no more then $4M in total financing. 

True perception of reality, rational analysis and good execution skills make decision making easy. I certainly draw inspiration from the companies Nisan features on his blog.

      

Deadpool, fuckedcompany, bubble bubble bubble…say “natural selection, stupid”
That sums up what I have to say about all this deadpool mania. This start up is closing, the other one is cutting down, the third is cutting costs….”oh my god, the burst is imminent”.

My theory is that if everyone is raising money, hiring, launching successful ventures, making money, listing on the NASDAQ, showing double digit CAGR year after year….Then we are in La La land and the end is probably near.

However, when unsuccessful ventures close down, cut costs or simply loose to a better competitors - that is what I call natural selection. Using Wikipedia, it sounds like this:

“the process by which individual organisms [replace with: companies ] with favorable traits [replace with: features/ service / community] are more likely to survive and reproduce [replace with: spin off / grow / make money/get bought by Google ] than those with unfavorable traits [ replace with: bad execution / unlucky].

Natural selection is healthy. It makes sure that players that are there in the long run are the better ones. It makes sure that the ones that have been around make adjustments to the everchanging enviroment and not sell you the same thing over and over.

So say thank you to all those ‘deadpools’, they made the ones who are still around probably a notch better.

      

Whether it was their intention or not, the “GUI statement” is a defining theme for the new Microsoft spinout social network.

Every flow, from the registration, navigation to the opening of a new window, is different than what you have been used to. For the first few minutes I felt like I landed in widget land. I am not implying this is bad, it just takes a while to adjust to.

A few notes from my brief first impression:

1. Taking a brave GUI direction has its hitches. I once got totally lost in my lateral browsing trip and since there was no traditional use of the browsers’ back and forward keys it was hard to get oriented. I finally pressed “home” and had to guess my way back to someone else’s page. Suggestion - if you are doing an application that is totally based on flash provide a ‘path memory’ or some other type of ‘bread crumb’ mechanism.

2. Free form windows do provide freedom and personalization options that are beyond the boring drag and drop options offered by Netvibes or other me2.0 website around, but in extreme cases there were so many of them (widgets) open that i got dizzy (or maybe I’m getting old).

3. First time run - an often underestimated process was thought of very well, maybe too well. I got to the stage where I wanted to just start and the website still took me by hand from one point to the next.

4. Eco-system - bought myself a nice background for 0.40 Waller cents. I could see this picking up. If Second Life got people buying virtual real estate for money why not here

5. Advertising free environment - in the words of Kozmo Kramer “Its very refreshing..”

6. Question - what’s the plan for mobile? i think all social networks today need to plan for mobile access and interaction. Mobile is part of our life - it needs to be part of my social network.

My recap is as follows:

I have personally been part of many projects that wanted to take a leap, planned a leap, sketched a leap but eventually just didn’t do it. There are always 1000 reason why not - “people are not used to it”, “the CEO doesn’t like it”, “we don’t want to be first”, “its great but lets do the regular version and leave that for future versions (which are never done), “lets do the funky design in a special tab we’ll call “the lab” and on and on - you name it, the excuse exists.

What I really like about Wallop is the guts! The guts to try something new, the guts do to it all the way and not half assed, the guts to leave advertising out and build a whole eco-system/marketplace before they have critical mass, the guts to create a currency (Wallers), translating to the bottom line of the guts to do what you think rocks and go all the way.

To often these days we see great companies that churn out mediocre products because consensus had to be reached up in the management clouds. This could very much have been the reason for spinning out of Microsoft.

Being bold will not however buy you success, just like a party, the success of a social network is not all about the surroundings…but rather “Who’s in da’house” - The setting is great…lets see who they invite.

kudos to Karl, Sean and the rest of the team, this is a rocking start - good luck!

      

Katie Fehrenbacher of GigaOM reports about Modeo going into a “beta commercial launch” in NYC this coming week. Modeo has been hyping their DVB-H (Digital Video Broadcasting-Handheld) platform for a while but have suffered a set back when their CEO recently bailed. Still, Modeo represents the “open network” school, working with open platforms and handset manufacturers on a “standard mobile broadcasting” service that will enable operators and MVNOs launch their tailor made audio and video portfolio. Modeo is using radio frequencies, so in theory they can bypass the operators and ISPs altogether by working with handset manufacturers directly. No wonder Nokia has been their primary target.

On the other hand, Qualcomm is launching MediaFLO with Verizon this month. Qualcomm has traditionally equipped CDMA operators with more complete service delivery platforms which enable operators like Verizon build a sustainable advantage. While MediaFLO will probably not allow as much freedom and will be create an operational dependency on Qualcomm, it will relieve the operator of many project, product and operational decisions and challenges.

This is very similar to the “J2ME vs. BREW” debate. While J2ME is open, standards driven, universal and you name it platform, BREW has produced substantially more downloads per subscriber. Neither Nokia nor Vodafone have been able to match the Qualcomm / Verizon GetItNow success. History proves that operators prefer managing a catalog and enjoying economies of scale over building tailor made value add platforms. I don’t see this changing with interactive video and audio, on the contrary.

      

Now that we are officially in 2007 it’s time to take a retrospective and nostalgic look at the year that has just ended. I loved 2006. I’ve been waiting for such an eclectic, romantic and fruitful year like this one forever, or so at least it seems.

Here are my top picks for what made 2006 the year it was:

1. YouTube. Cynicism, criticism and skepticism aside, YouTube is rapidly redefining global journalism. And it’s totally not just about bloopers. If you missed Saddam’s execution or if you need a few more Borat highlights - YouTube is where the good old editors can be bypassed. MetaCafe et al are great, but the historic landmark rightfully belongs with YouTube.

2. MySpace. This is a trap because I personally can’t stand MySpace. I personally trashed MySpace a few times in this blog. Still, I can only admire what MySpace has become for music. Independent talents do not need to kiss some pompous A&R ass anymore and they have MySpace to thank for that!

3. Zoho, Clarizen and yes, Google too, that have finally begun to transfer office apps from the monopolistic hands of Microsoft to the world wide web. It’s only the beginning, but Gates and Balmer sweat and for a good reason.

4. Open source, Linux, FireFox, mySQL, PHP…. whatever the old schoolers claim about the negative impact of “free”, there is more money for us in a competitive environment then in one controlled by Oracle, Microsoft, SAP and IBM.

5. George Michael’s 25 Live tour. At the age of 43 and after 25 years in the business, George Michael remains one of my favorite muzes. You can make serious music and real serious statements without taking yourself too seriously. Hey Sting, watch and listen!