Ok, so the hot news are cooliing off and we all had a chance to check out Mobile YouTube by now. It’s time to call the Jury back in and get an interim verdict. My first impression of the service was awesome. It looked good, worked well on my 3G Nokia E61. Sure, the content is handpicked and handicapped, but it’s still a good start. The main issue I had with it was with the fact it’s still not working well on too many operators and devices.

Itay Gissin discussed Mobile YouTube in our HooQs blog this morning and tried to understand whether it’s just a mobile version of the “Internet YouTube” or the other way around - a new “YouTube approach” to mobile media.  His conclusion, with which I agree, is that it’s a bit of both.

Starting with the good news. The most refreshing element of the new service is that it is Internet based and operator independent. In other words, it gives on deck portals a well deserved kick in the butt:

“Good news - No client needed, just come and get it with any Internet 3G phone! That’s exactly what this industry needed for a long time - an Internet giant meaning business & leveraging the Web’s open model on the mobile industry. Most other Internet content players view the operators as the “plug number” in their broken revenue model, trying to sell OPC (Other People’s Content) in traditional content models, overlooking the end-consumer reluctance to pay premium for content mobility.“

These are indeed great news and such that will help drive the industry much faster. After all, everyone looks at Google and YouTube when it comes to taking risks these days. Operators have realized by now they need to channel Internet content and not reinvent it, and such a move from such a significant player definetely helps drive the point. There are a couple of hard core issues though.

The first one is availability. Mobile YouTube is streaming based, a decision that can be probably attributed to legal caution. The video files are transcoded to 3GP format which means no iPhone, Windows Mobile or Blackberry. Streaming video is not a trivial end user feature and is still dependent on operator practices, proper device configuration and overall device support. Sticking to streaming video means that roughly 2 out of 3 potential 3G users are out of the game, without them even understanding why. The 3GP format is less of an issue and I expect YouTube to cover those other formats soon enough.

The second issue is the content itself. On the Internet, YouTube is a key media website, fitting well in the rich user environment. On mobile, users need better reasons to enter, not to say stick to a mobile portal. Mobile video is a different experience than Internet video. It involves more difficult navigation and has a price tag associated with it. The secret sauce of a successful mobile portal is made up of easy access and versatile content - variable sources, credible news, mobile use cases and so forth. YouTube is a part of that, but cannot cover the basic need by itself. As Itay summarizes:

“When I am on my mobile, I normally have a minute. Maybe two. The only way I will choose to go on the internet is if I know I am 2-3 clicks away from something that will Hook me up, and will be unique & forward-worthy. For that to happen, content sources will have to be much more varied than a YouTube. A community system will have to be working for me - Scouring the web, fetching content, filtering it for mobile consumption, connecting me with peers’ content, and more.”

Couldn’t agree more.

      

IT DOESN’T HAVE TO BE THIS WAY

Aner’s insights from MEM2007 zoom in on the transitional phase the mobile industry is going through. The company I co-founded (TriPlay) recently launched an internet-mobile service (SyncSpace) with an Israeli operator and if there was one highlight to this whole process is that “westbound” mobile operators are sailing in uncharted territory. Here are a few key points I learned that highlight some challenges I came across (far from the complete list which could fill a book):

1. Target audience - there is no doubt that the market leaders on the demand side for web-mobile service are young people (ages 15-25 and we know that even 15 might not be young enough). They breath mobile services, consume content and eat up data services like no other target group. How is this a problem? Because WE - the mobile/internet start-up’ists, the VC partner, executives at large corporates, ALL of us who define, create, build and fund related companies and services are at least twice that age.

How can we be sure we are creating the right service?

Solution - Talk , talk, talk to them, get feedback, have them involved in your development process. Don’t force your vision on them and expect them to comply. If you don’t expect to find out at launch that you are simply not cool enough, that you have given them far too little credit and that you don’t really cater to their need.

About a year ago I read through a fascinating 200 pages research paper focusing on mobile youth. The ONE sentence I still remember a year later is that “Messaging services that fail to reinforce peer groups offer little beyond their initial novelty value to youth“. This is true for any service - there is tendency to seek technological breakthrough with less thought invested in the real life scenarios it supposed to serve. Bottom line - focus on value first, technology second.

2. Mobile operator corporate culture - analyze the typical headcount at any mobile operator and you will find that most are experienced MOBILE professionals who know a lot about mobile but less about web services, content and entertainment. Yesterday’s mission for the mobile was to ‘connect people’ by voice. Today’s Mission is about connection, voice or data and content. Tomorrow - the mobile will be an ‘IP gateway’ through which the users ‘mobile life’ will be enabled. Where mobility is the focus and not the mobile device.

The mobile device will be the users’ setop-box, entertainment and multimedia device as well as the voice/data communicator. These offerings are not only technologically diversified across platforms but also combine different schools of thought on how to launch new services. The words BETA, rapid development, on the fly, viral and other funky web 2.0ish words contradict mobile operator’s mentality. I don’t believe they need to change their skin but some of the attributes that go hand in hand with creating successful businesses in the web and entertainment industries will have to meld into their corporate culture.

Since this is not an overnight revolution, I expect this to be solved over time. Some interesting times ahead for management, HR units in the mobile operator world as well as their supporting industries. Service providers too will have to go through this metamorphoses. One that will reflect the new role the mobile device has in the future world.

3. beta? Don’t be surprised if you get this reaction. Telco’s are not used to running beta, not to mention the famous Google’s “perpetual beta” mode. Beta mean you are tolerant to bugs, open to user feedback and ready to change requirements if the market says you should. Telco’s heritage is simply different. The good old ‘telco grade’ means that when you pick up the phone (old fixed line phone) you hear a dialing tone - no ifs and buts. Web 2.0 user services launch way before they are fully tested for mass market usage. By definition they are not built for scalability and reliability from day one. They launch in beta, make mistakes, learn, fix and invest in scalability when the market demand forces them do so. When the ‘worlds collide’ this will have to change.

Mobile operators launching web-mobile services will not be able to apply this ‘telco grade’ mentality from day one. If they do they will always lag with services and not be perceived by their users as providing them with ‘edgy’ services. If users find their telco is introducing web- mobile services months and even years after independent players do they will find that the leading target users are already engaged with a different ‘off-deck’ solution. Scalability will not be an issue then since no users will use them to begin with.

Nonetheless they don’t have to be complete 37signals’ type cavaliers and mange their projects on IM chats, no meetings and launch. Somewhere in the middle would do.

4. The handset factor - most of the PC’s in the world are about the same, same OS (windows), same browser (Firefox/Explorer), same keyboard, strong memory, big screen, sit on one network - the PC internet is WWW etc etc. In the mobile world the ball game is totally different. A highly diverse OS environment - J2ME, Symbian, Brew, Windows; Countless different browsers, different screen size, open garden / closed garden (E.G Verizon) etc etc. Therefore creating a smooth, unified, simple, reliable and more important PREDICTABLE mobile experience is a mammoth task. Solution - focus on your initial target audience - what OS are they on? what devices serve them, what are the future devices - don’t try to capture all at once. Define an acceptable experience, aim for the core and spread.

On a more macro level ‘the industry’ better get its act together and start to pin point preferred OS’s, browsers etc. and not let this jungle take over. There is no doubt that when the environment will be more standard, a plethora of new services will evolve.
5. AJAX (Web 2.0) meets WML / XHTML (Mobile 0.5 ) - not a problem! The mobile and PC web experiences are not meant to be the same. Stop raping the mobile phone with overly rich ‘web like experience’. On the mobile it is highly important to focus on simple and fast flows so not having the rich PC environment is not as big disadvantage as you think. A good and simple WAP page, can provide the required experience. In any case just like I mentioned above - focus on value (and now I am adding..) usability first and technology second. All in all exciting times are ahead. The paradigm shift I am seeing is that the mobile device will be my ‘handy’ extension to my mobile life…which can be used and enjoyed on the mobile device but has extensions on the PC and TV as well. As such, when designing such services one needs to think of the three dimensional ‘fused’ world we live in, serving real life / valuable scenarios and NOT focus on connecting two or three technological dots.

      

In my humble opinion headlines such as ‘The death of web radio?” or “The last days of internet radio?” are nothing but the opposite of what will turn out to be the actual result. If I had to give a 10 year outlook, my guess is that the government agency behind this current farce (CRB) has more to fear about its long term existence than web radio does. And that is (probably) the very reason it has chosen the weakest rival possible to try to prove there is a reason tax payer money funds their activity.

This was their last mistake. The nail that will seal their coffin. Ten years from now when the whole DRM / Copy Rights / Royalties issues will be solved using a completely private, voluntary and extremely efficient systems - historians will view this current battle as being the one that lead to the turn around in public awareness. Talk about choosing your battles right….not!

If they raised the royalties by so much as a penny, they would have made much more. If they could actually develop a business model that makes sense that would have even contributed something. But greed and power have caused greater empires and ceasars to fall and this will be no exception.

The public has awakened, the battle may seem lost, but its far from it. No government agency or corporate bureaucrat can stop a swell of change like the internet is creating. Not in radio, not in TV broadcast or elsewhere.

What is the end game for this? Kill the Internet radio? In an early stage industry there is so much more money on the supply side. Do us a favor, get your act together and create the opportunity. Wanna talk about making money? Get music actually heard, then tax the royalties from referrals to Amazon and iTunes. That makes so much commercial sense. This is synergy. This is convergence.

If you stick to this greedy pricing structure then you would ultimately:

1. Collect less taxes

2. Drive media outside the territory / industry

3. Get everyone to focus beating the system rather then on working with it

4. Lower incentive to develop technology, services and probably future royalty eco-systems.

Government wrath has never done any good other then get more conscripts in a time of war. Even then if it fights the right/just wars people will volunteer.

In 1610 the establishment didn’t like the fact Galileo published an account of his telescopic observations of the moons of Jupiter, using this observation to argue in favor of the sun-centered Copernican theory of the universe against the dominant earth-centered Ptolemaic and Aristotelian theories.

In 1614, from the pulpit of Santa Maria Novella, Father Tommaso Caccini denounced Galileo’s opinions on the motion of the Earth, judging them dangerous and close to heresy. Ultimately landing Galileo under house arrest.

In todays terms exhadurated royalty increases are the equivalent of putting internet radio under house arrest. Its not day light execution but the target is supposed to fade away.

I got a news flash for the bureaucrats - Father Tommaso Caccini won the battle but lost the war - you will too!

To learn more and and voice your opinion go to www.savenetradio.org

if you are still not convinced, read Tim’s plea (Pandora’s founder)

      

Before you read this post be so kind as and take our quick test survey on your mobile. Simply surf to:

de.mobiode.mobi

Before pointing out that “this can easily be done on the web, why the hell is he sending me to my mobile?”, bare with me, this has educational value. My only disclaimer is that proper use of the system would also mean receiving the link directly on your phone, but I guess the cost of sending messages was a factor.

What you experienced took me 5 minutes to set up.

Mobiode lets you create a survey and publish it in seconds. This is not new. The neat thing about Mobiode’s service is the following:

The surveys are adapted to WAP and therefore allow you to distribute the survey/poll to any mobile. This way you can reach your customers outside of their usually PC settings.
And on top of this:

1. Its extremely easy to set up the survey
2. There is a basic account that lets you publish one survey at a time for free. Not a money back guarantee. Not a 30 day trial. Free.

If this weren’t simple the whole package would not be worth it. While Mobiode doesn’t look as smooth or schique as 37signals, the execution is just as simple. And it makes all the difference.

I opened an account in seconds. Created a survey. Sent it (to myself first) and then to friends and collected the stats. No hassle, no complications, no ‘read the fine print’ - just did it.

The ability to connect to your users on their mobile and gain feedback in such a simple manner is of high value.

I recommend taking a look.

      

CTIA fueled some significant mobile news this week as Google, Nokia and Yahoo are about to crash helmets over the next mobile killer app.

Google has made a couple of significant steps this week. The more significant announcement came on Monday, as a strategic deal with LG was announced. Mike Evant reports that Google and LG will preinstall Google Maps, Gmail and Blogger on a wide variety of LG phones, making it a no brainer for carriers to ship and for users to try.

In addition, YouTube will be launching a mobile site as soon as the exclusivity period with Verizon Wireless expires. Unlike the Verizon version which is client based, the mobile YouTube will be WAP based. It will be interesting to see how YouTube deals with video streaming issues across different carriers, networks and devices. All in all a “two punch strategy”, Google for text and YouTube for video, could end up being very effective.

Nokia has not kept quiet. Unwired view is telling us about Nokia’s patent bound semantic visual search engine, screen shots and further explanation of the search process is provided. Katie Fehrenbacher speculates about the natural synergy with Nokia’s camera phones and if half the rumors are true, Google will soon have to go back to protecting home turf, at least when it comes to search innovation.

Yahoo has not kept silent and may very well be making the most concrete steps to date. The introduction of Mobile OneSearch is a promising mass market step, taking search to every internet enabled phone. Yahoo already offers Yahoo Go, the full blown Yahoo experience, to the high end, and together with OneSearch a comprehensive strategy seems to be forming. 

These seemingly little steps are very significant for a number of reasons. Such proactive steps by handset manufacturers and web titans take the carriers further out of the “next killer app” equation. In addition, these provide indication that search, rich content discovery and messaging are the areas where the leading players look for the next killer app. Search has never been carrier territory and carriers have struggled with putting together winning propositions around content. On the other hand carriers do make a lot of money from content and tons of money from messaging. The battle over who owns what asset is definitely not over, but this time, I believe, the space is mature enough to focus on the criteria for splitting the larger pie rather than fighting over who gets to burn it.

      

GigaOM reports that Symbian is about to announce a significant upgrade to its operating system on Monday at CTIA. According to ABI Research, Symbian held a commanding 73% market share of the loosely defined Smart-phone market in 2006, resulting in about 50 Million shipments. 

Improvements include battery and memory management, camera and multimedia enhancements and the introduction of transparent and automatic roaming between WiFi and 3G. MobHappy brings the full details.

The upgrade is very significant for a number of reasons. Symbian is reaching out of the Smartphone niche. The multimedia boost, for example, is clearly a consumer focus. Push email and Voip are communication apps and not “business apps” anymore. Symbian is slowly but surely building an attractive and real consumer position, realizing that the higher end market would pay a little more for high quality feature phone.

The introduction of transparent WiFi - 3G roaming is even more significant. While full handset OEM support is needed, this has the potential of making operator independent mobile internet actually usable. Very few users actually bother with switching networks on an ongoing basis. Making the switch automatic would not only reduce costs for the end user, it would also break a wide open hole in the walled garden. And this does not only apply to browsing but to the very core - phone calls. Now, I don’t see Mobile VOIP going mainstream very soon, but I definitely see a gradual uptake, mostly by the cream of the crop from an operator point of view - the travelling professionals.  

How will Operators deal with this? Good question. So far everybody’s happy with the containment of Symbian devices as “Smartphones”. It makes it easy for everyone to avoid a clash. Some operators force vendors to take off the WiFi feature for now (Cingular and Nokia E62 for example). Some put a more constructive focus on upgrading their 3G networks. In any case, it’s all a prelude to the unavoidable reshuffle of the mobile universe.

      

I have Joost on my computer and it’s practically a new world wonder. Finally, a TV app that looks great and works even better. The user experience is absolutely flawless - sexy, simple, cool. It blends the benefits of TV and Computer interaction very well and the quality of the video itself is the best I have seen. Even the inserted ads don’t look intrusive, perhaps because we are all so used to ad-raping by network TV by now. These folks are doing something right. 

But will it succeed? I see one, huge, problem. It can’t be used at work! And what is the only place left without TV access? That’s right. Work!

Let’s take a look at the successful viral apps of the last decade - Instant Messaging, P2P File Sharing, Skype, Blogging. All have one great thing in common - we can safely use them at work. I am not referring to IT security because most of us couldn’t care less about IT security. I am referring to job security. The ability to play hookie without getting caught. IM and Kazaa could simply run in the background and consume very sporadic attention. You can download a file and write a post without drawing the attention of your roommates, or worse, of your boss. And you can minimize all in a split second if someone walks behind your back.

Can you do that with Joost? Nope. TV is TV. It takes up your attention and it’s intrusive to the environment. Wearing headphones is possible in some places, but then the detachment from the environment is so complete one cannot really sit back and enjoy without keeping an eye on the door. This practically means Joost will hardly be used at work but at home. Except that at home we have a great alternative already - a 30+ inch TV with gazillions of channels.

Which means the premier target audience, for now at least, are kids playing in their room behind closed doors, assuming they have attention span left to squeeze between MySpace, TV and PlayStation. While I don’t underestimate the huge potential of that target audience, I don’t think it’s up to par with the wide audience and virgin attention span IM, Kazaa or Skype enjoyed.

Then again, Joost has all the right ingredients. P2P technology is definitely mature enough for Video on Demand. You couldn’t ask for better founders - both in terms of technology and of marketing. We are all really, really tired of outdated TV content distribution models and Joost will have no trouble at all getting a first time look by any reasonable user.

They should be smart enough to have a plan for that problem too. I am just curious to see what that is.

      

My buddy Ofer Kalisky referred me to, Musicovery, a BEAUTIFUL Interactive Music Discovery site. I have no idea who the people behind the company are (the corporate identity is hidden), but the creators seem both smart and fun loving!

Musicovery is an open, web radio service. You begin your journey with a navigation widget that helps you pinpoint your starting point according to genre, mood, and era. The widget itself is beautiful, but the real kick is when you start listening. The interactive music map is really cool and intuitive. I keep on playing with it.

Oh, the business model… It kind of looks simple as well. Referrals to Amazon and iTunes for purchasing.

Is simple beautiful or what?

      

It so happens that I won’t have access to a TV screen tonight. I’m looking for a way to watch superbowl XLI using the internet and my laptop - any idea?

My Prediction? 27-10 in favor of Payton Manning and the Colts.

      

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.

      

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!

      

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.

      

Finally…..

Hey, I think they waited so long, now it needs to come out equipped with a camera also. No multimedia device can be without one …hope that won’t delay the plans to 2008

      

I just returned from a four day trip with the family. That is my family, myself and 2.5 suitcases full of unneeded luggage (the notorious “Dump the Closet” system which sucks in mainly woman - you don’t choose what the kids are going to wear so you just bring their closet).

Anyway, I took my 4mpx Canon and the Nokia N73 equipped with a 3.2mpx camera with me. Before this vacation it the thought of leaving the Canon at home was inconceivable. I used to own a Sony Eriscsson with a 2mpx camera, which was very cool, but not nearly a real camera. Pictures were OK but once less then optimal lighting conditions set in the quality diminished quickly.

Not so with the N73.

When you say “camera phone”, you usually don’t mean a camera but a phone with a cool add-on. With the N73 this is not the case. Equipped with 1G memory card, I took 10’s of photos, a few short videos and came back a happy camper. The Canon didn’t even leave the hotel room. You can always use Picasa or Photoshop to apply your own special touch, but its really not necessary. Look at the below…honestly…does it look like a phone took that photo?

Press photo to see larger version

The N73 and the SonyErricson k800i make an important mark in the age of convergence. A Camera Phone (CP) TURN to Camera and a Phone (CAAP). The AA nuance is not trivial. This means I will probably not upgrade my 4mpx Canon rather prefer an upgraded release of any CAAP that will be equipped with a better lens. True - camera’s are not dead but pocket cameras are dying. For us, casual snappers that fill our Picasa / Flickr web albums with loads of senseless family, friends, you name it moments….a CAAP generation will be the obvious choice.

Now where do I see the regular digital camera market going? First of all it’s about innovation. A wi-fi phone, a super slim phone (that doesn’t hurt lens quality) Anything to make it super cool and worthy of carrying it alongside my CAAP. I can imagine more JV’s in the likes of SonyErricson - A NokiaNikon etc. is not something that would surprise me. In the same way the iPod has to be equipped with a 20G-40G memory for me to consider it over my …once again phone. Here too the manufactures will have to keep on their toes and provide extra value over an above a developing CAAP category.

Whichever way you look at it…the chasm has been crossed. Long live the CAAPs….

      

Last week I wrote about the future of Mobile Instant Messaging. Montreal based OZ is taking the next step. Following Pete Cashmore’s exclusive yesterday, OZ announced its new product - mobile social networks:

 

“OZ, the leading mobile messaging solution provider, today announced its mobile social networking product. With over 400 million social networking users around the world, this solution will enable consumers to easily access the most popular social networking sites on their mobile phones. …

Apparently, the OZ new product will support Social Networking sites such as Flickr, Bebo, MySpace, YouTube, Blogger. The product will be available to carriers during Q1 of 2007. OZ carrier customers, including Sprint-Nextel, Cingular Wireless and T-Mobile are expected to be the prime beneficiaries.

For OZ this is a great move although not one without hurdles. Mobilizing social networks is the natural next step for mobile IM and Email - two products nearing exhaustion in terms of consumer potential. This is definitely the right direction for OZ in terms of increasing value to existing and new customers.

It does present a few challenges though. For start, having a client is nice but a commercial agreement must be reached between each carrier and each social network before deployment can take place. Having the client provides an edge, but no immediate business.  I certainly hope YouTube, Flickr and Bebo won’t choke the market as AOL, MSN and Yahoo did and that they will grant content and licensing rights to 3rd party developers. This will make OZ a reseller which is what OZ is really aiming at. Still, I imagine MySpace and Flickr will at least try to deal with Cingular, Sprint and T-Mobile directly and therefore limit OZ’s value to deployment only. In addition, I assume their mobile divisions will launch mobile 3rd party programs that will allow other enablers to step in and compete.

The other significant challenge is with the client itself. It will be really challenging to package Flickr, YouTube and MySpace into one Java client and to support video, audio, commenting and so forth. I have a feeling the experience won’t be that good and that a lot of ideals will need to be compromised. The services are very media savvy and require incorporation of too different flows. Unlike IM or Email, there is less of an immediate communication benefit here and less of “rational” incentive to download, so the user experience must rock.

At the bottom line, it’s early and I believe the market is still up for grabs. OZ, however, has taken a crucial first step, not for the first time. They have done it once with Mobile IM, putting a lot of weight on the need for AIM / MSN / Yahoo multiheaded client, a gamble that has paid off big time. Let’s see who else joins the party and how.

      

No.

Or more precisely: Definite “No!” if you’re a web start up. Simple ”No!” if you’re YouTube or Skype. Selectively if you’re Verizon Wireless. Yes if you’re Nokia.

For web start ups it’s a dead end, and not one I see opening anytime soon. 

The industry has been debating the mobile clients forever. Java for Mobile (J2ME) was supposed to make it easy ages ago - portable across devices, universal, safe. Ya right.

So did downloading servers, OTA (over the air delivery) standards, new APIS, self installers… We are almost 10 years and gazillions of dollars later and progress has been marginal at best. People download ringtones and sometimes games, they don’t download true mobile applications.

There are two major huge problems that prevent 3rd party mobile clients from reaching mass market users. The first and major problem is behavioral. People just don’t download software to their mobile phone. They may download stuff that doesn’t look like software, but not software in the true sense. What is it that makes people download ringtones, sometimes games, but not mobile Skype or Google Maps or MSN IM? Good question.

My experience shows that people see IM, Skype and Maps as features, and that they still expect communication features to come “with the phone”.  In most cases they can’t really tell whether the feature was provided by the carrier or by the phone manufacturer. They certainly don’t care. Then there is the scary factor. Downloading a mobile application is an action performed in uncharted territory for most people. It involves hacking the phone, installing something in a very unfamiliar environment, going through all sorts of warning messages, messing up with the most important accessory they have and risking a lot of rollback time. Nah-uh!

Oliver Starr from Mobile Crunch has summarized it beautifully:

“I had the opportunity to look at a substantial number of companies planning on operating in the mobile space… In short I’ve spent an awful lot of time directly engaged in the mobile sector and most of that time focused on mobile applications.

I can tell you honestly that I would never simply come out and bash a company based upon a show of hands – even one from a technology conference like Under the Radar. However, what you don’t know is that I have been posing the same question; “By a show of hands, how many people here have downloaded something to their mobile handset that was neither a ring tone nor a wall paper?” Every time I’ve spoken at an event for the last two years. That is to say that I’ve asked thousands of people this same question across dozens of events over a period of years.

In any case, across all the conferences I’ve spoken at and all the audiences I’ve queried the MOST I’ve ever had answer in the affirmative was at the Under the Radar Conference recently and even then the total was under five percent of the attendees.”

I personally trust first hand show of hands very much. It is definitely an indication.

The other major problem is technical. Deploying a mobile client across a wide variety of mobile phones is one via Dolorosa. It’s usually hard to get it working properly on one. But then there are hundreds of different devices out there. This makes it not easy even for players of the magnitude of Skype, YouTube and Google. Even they don’t just do it. Om Malik picked up a WSJ piece on Skype’s Chief Executive Officer Niklas Zennstrom dealing with this very issue. When they discuss the mobile future of Skype, Niklas admits that it’s simply too damn difficult:

“When we begun developing the mobile phone version we didn’t realize the number of technical obstacles. It is challenging and is taking much longer than expected,”

Om then goes on and lists the technical problems Skype face which are very generic. In a nutshell, most Mobile applications require CPU that halts the phone, consume bandwidth that is still too scarce and if that’s not enough they go on and kill the batteries. Again, I couldn’t agree more.

Some players are capable of deploying mobile clients. Verizon, for example, is deploying millions of clients using it’s GetItNow platform. This doesn’t mean web service providers should do this at home. The key is a captive user base and a narrow range of problems, a combination only few Tier 1 carriers can claim. Verizon’s user base is one asset even Google is jealous of - captive access to 50 million paying subscribers. Verizon then narrowed the domain by selecting a single application platform (BREW) that is mature enough to be a true ecosystem. Finally, they built a marketing program that actually works.

Moreover. With a huge user base, porting investments per device make sense. Still, even Verizon preloads strategic applications to the phone before the point of sale, because as friendly and as robust the catalog can be, most people still find downloading an application too challenging.

How many players do you know who can pull that off? Not many. So what do you do as a start up?

You stand the best chance if your service does not require any installation or manipulation of the mobile device. If your value can be delivered via SMS, WAP, Streaming or any other mechanism the phone is naturally provisioned to do, you’re far better off. If a client is an absolute must then you should (again agreeing with Oliver Pratt) give it for free and get it on a carrier’s deck. YouTube is going to find out they can’t go anywhere without Verizon. MSN and AOL found that out long ago. Skype already outsources the problem to niche providers such as iSkoot and EQO - players that are focused on mobile enablement and that only. To them it makes sense and the giants, assuming they are smart enough and with reasonable egos, will leave it to them.

Most web services, however, will either stay on the mobile web or die trying to distribute a mobile client.

      

Chad Hurley stirred a lot of waves in the OgivlyOne Digital Media Summit last week. His statement about YouTube “having something for mobile devices” in 2007 was way overblown, including the expected coverage by Techrunch, MobileCrunch, Red Herring and CNET. 

While Marshal Kirpatrick as well as other writers claim it’s hard to believe YouTube and Google will miss out on 2007, I differ. Well, sort of. I do believe YouTube will “have something for mobile devices in 2007″, but I do not believe they will have something MEANINGFUL for mobile devices within that time frame.

Why? Two main reasons.

Google and YouTube have a merger to complete. With all due respect to Chad Hurley, he has other issues to deal with now. The DMCA riddle is not nearly solved yet, Chad should spend a lot of time prepping for the inevitable journey in the legal labyrinth. Then there is  a hell of complicated business environment to figure out and execute on. After all, now there is a price tag to justify, not just romance. So who will really finance user generated content? How? What is the real CPM? Will the users really like it? what will competitors do? All these are strategic and real, near term, challenges Google and YouTube face before they can really address the mobile market. The of course there are corporate politics, huge pressure to grow and expand, press, analysts….and these will take more than 14 months.

Then there is the mobile market. YouTube can easily create a mobile interface. Granted. They can also write a mobile client or two and get additional coverage by the blogosphere. Big deal. But in order to establish real mobile presence they need to work through operators. They need to forge business deals with competing operators, align with interests of the mobile food chain, pick strategic partners, integrate their products and test them on a variety of devices, forge a few media and billing partnerships and deliver a usable product users really like.

Network operators have not figured out what to do with Google and YouTube just yet. They need to feel comfortable and protect their core value and they move rather slowly. They also happen to own the keys to mass market distribution, at least as far 2007 is concerned. And if Chad Hurley thinks he can deliver a mobile product in 14 months he should think again. He won’t.

Now I do think YouTube will go mobile, just like I know Google will continue down that path. I just think it will take much longer time and will require a smarter, more complicated strategy. What I am confident of, however, is that it presents a good opportunity for middle-ware players and service providers who can bring the two worlds, internet and mobile, together.

      

Over the past month I have tested the Nokia E61 (reviewed here earlier)…concluded I don’t like it and have started using the N73 instead. Bottom line (for the N73) - too smart, too slow, I like it but it’s definitely not an “off the shelf” product.

What is true for real life (spouse, friends, job) is true for technology as well - expectation is an important factor of interaction. If I know what to expect, my full mindset shifts accordingly. Over the years I have tested (and created) many, less then perfect products, some of which I loved. When I know I should ignore the imperfections and focus on the core, the context remains the right context. THAT’S what beta is for (what’s up Google?). The “Beta” label puts everything in perspective. It signifies the recognition that this is still work in progress and that comments are welcomed. Once you go live - imperfections are much less excusable. Google realized (but abuses) the fact that Beta have a romantic marketing side to it. Participating in a beta makes you feel unique, involved and excited about being first.

The Nokia N73 should have been released in beta and this is why:
• Its sluggish, sluggish, sluggish - it makes you feel like you are working with a bad web service. This is simply unacceptable. Reminds me of my first car, a beautiful yet completely unreliable Alpha Romeo.
• Switch from idle mode to active - phone hangs for 5-10 seconds. Select gallery - wait 5 seconds. Press End instead of Back to go stop and action - hangs. Open a text message - wait 5-10 seconds (sometime more)….its bad, bad, bad.
• Loading a phone with smart features is nice, but implementing them into every single flow - not advised. Every time I select a contact I have to select whether I want to make a video call or voice. Common - give me a break - is my name James Bond???

• Camera - 3.2 Mega Pixel is awesome, but don’t throw out your regular cameras just yet. The camera is great for better then normal lighting conditions, but in a closed room it reminds you that there is still a lot of work to be done on convergence of cameras and phones. None the less, this is the least of my worries and actually one of the biggest sweet spots of this whole early release fiasco.

What could have turned this around? Label it Nokia N73beta If I had this phone with a beta label I would be showing it off left and right. Forgiving all the little things mentioned above. After all its beta - focus on the core - its loaded with features, the smartest phone I have ever had. Incredible screen, slick looking. I could always make these video calls to Q to pretend I am a covert agent working for a start up. Beta…makes all the difference.

a few notes about the Nokia E61 Aner raved about (and why I didn’t like it):
• Its too wide - those few millimeters more than the Motorola Q or Blackberry make all the difference. Very awkward to hold while talking.
• Round corners, guys! Holding a wide phone is one thing but when the corners are not round (or round enough) it’s really not comfortable. Notice how the Blackberry’s corners are rounder and smaller at bottom end. The folks there understand what holding a mini computer over your ear is about..and made it more comfortable. Nokia has yet to learn.
• Tight qwerty. QWERTY keyboard is good but making it too tight looses the edge. I found my not so big but above average fingers where hitting wrong keys. I type faster using T9. Again - Motorola Q and Blackberry buttons are much smaller but better spaced. Very big difference.
• Lack of camera - I realize the enterprise models need to be camera less. This is something I realized in hind sight. Camera phones are important to me…if a phone doesn’t have them I’d prefer the model with. Motorola Q seems like a much better pick.

      

I traded in my RAZR V3 and got the Nokia E61 this week. The E61 is heavily promoted by Orange and I couldn’t resist the QWERTY keyboard.

The bottom line is that I love it! I loved the RAZR as well, but the V3 fat boy wasn’t really it, and the Q is not a GSM phone. The E61 is the first REAL smart phone I see from Nokia. The previous Symbian based ones were featured phones, not smart phones. The E61 is WiFi enabled (huge plus!), has a wide QWERTY keyboard (a must!) and despite it’s size fits rather well into a pocket. Email works like a charm, but the real surprise was the browser! Rich HTML, smart mobile centric navigation, escellent screen resolution. Mobile browsing is actually fun and easy! Way to go!

It seems like the PDA days are over. Smart phones have won the battle and that’s good news for Nokia and bad news for Microsoft. As Russel Buckley summarizes well:

“The last bastion for the PDA is the US, with over 50% of worldwide sales. Maybe, that’s why Microsoft think the battle of Palm v Windows is even vaguely relevant to the big picture. As I wrote over a year ago, it’s like two bald, old men, fighting over a comb. Even Palm seem to have realised this today.

Next target for the mobile is the stand alone MP3 player, about to be consigned to a historical curiosity, as one of the fastest product life cycles - from launch to extinction -ever to be launched.”

      

I participated as panelist at this year’s Journey by Ernst & Young and Globes in Tel Aviv. The panel, which was organized by Eyal Kishon from Genesis was about The Future of Mobile Applications. Everybody agreed that the near term (2 years) primary focus of the industry is with mobile content. Getting it off the ground and further used, through additional services and through fine tuning existing services. It’s the longer term focus that got us puzzled a bit.

I, personally, feel very strongly about 2 future directions for the mobile industry.

The first one is personal entertainment. Phones and MP3/Video players WILL converge eventually and the walled gardens will continue to erode. People will face the need to manage mobile media from a variety of sources and then access it on their mobile in a number of ways. The spaghetti of content (user generated vs. commercial), media types, DRM, standards, media delivery alternatives and business models is guaranteed to produce some very successful start-ups.

The second growth area is with mobile commerce. I do believe that in not so long, I will be able to flag a product a like, scan it’s barcode (or RFID) with the phone’s camera, get multiple price offers directly at my phone, pick one and have it delivered with a click of a button. Oh yeah, I will also get a discount from my operator for making a purchase and settling it through my phone bill.

That’s right,  Operators are about to become the new age retail chains, but that’s not where it ends. I don’t think a Walmart MVNO is a far fetched concept. I happen to think billing relationships happens to be the Operator’s most valuable assets. With Operators turning to supermarkets, it is only natural retails chains will look to level the plain field. And why not? If Walmart offered a sponsored mobile phone and then put on top a discount for purchases made via the phone, don’t you think they have just as good a case as Disney or ESPN?

      

This essay / post is about a theory that has been gathering dust in my drawer for a while. A recent post by Philip Wilkinson in Crowdstorm’s blog “The Feature War in Social Shopping” made some of my crusty memory cells spring to action…yada, yada, yada - I am writing this post. Its still work in progress but I prefer releasing these raw thoughts and creating a discussion rather then to continue to dwell in this with myself. Once completed I believe it may offer a different way to analyze current trends, services, consumer psychology in the digital consumer industry.

What is Digital Zen?

Digital Device:A device that can read, write, store and transmit information

Zen: enlightenment that can be attained through meditation, self-contemplation.

Thus, Digital Zen can be defined as a feeling of calm and satisfaction, attained by using digital devices to help live life. No fuss, complications, frustrations, where is the dam manual?, what format does this support? Need to restart, Its only for Windows, Its not available in this network etc. etc. Rather use the most basic intuition to operate, upgrade and connect.

The Digital Life Scale

The digital life scale is a theoretical map that describes different stages a person my be in vis-a-vis his interaction with digital products and services. Not just one product or service but rather his over all experience, expectation level, satisfaction level and most important digital life journey.

STAGE #1 - Digital Denial
Won’t use digital devices, don’t want to use them, feels the world is too dependent on them and wants to live like ‘it used to be’.

STAGE #2 - Digital Puberty
Start using digital devices and services such as cell phone and email and feel contempt. Some people at this stage are not hungry for more and others, out of positive experiences look to grow their usage.

STAGE #3 Digital Life

A regular consumer / user of digital products and services. From music storage devices, emails, IM’s and PDA’s – the digital life feels connected …yet at times not effective and time consuming.

STAGE# 4 Digital Zen

A state of mind that is NOT possible to achieve today (please write to me if you think otherwise, have experienced it yourself or know someone who does). This is only possible when all devices communicate and allow seamless transfer of information. This is the place where technology should be….a place where it serves you instead of you servicing it. As can be seen by the graph below, digital zen is not a quantum leap from digital life but the delta to get there is the x factor many companies and industries pursue endlessly.

Another benefit of being in the ‘Zen Zone’ is the fact you reached a plateau. There is progress but its not characterized by rapid changes for good or for bad. Its where the digital environment blends flawlessly into a users life.

A change in the technological environment (or just growing old and becoming out of it) may throw you back into a digital imbalance stage (the next downturn level) which, in turn, forces you to climb back again or just give up.

STAGE# 5 Digital Overload

When a good thing turns bad. Too many connections trying to provide services that are not useful and are too complicated and operate. When you spend too much time thinking what to do instead of just doing it. People in this stage often revert back to Digital Puberty because that seems to be the place where they can remain in control OR progress back to ‘regular’ digital life leaving the pursue of Zen to others.

Personally I am currently living a Digital Life with Zen far out of site. Windows, Apple, GSM, CDMA, MP3, WMV are all but in the way. And that is just on the OS/ network side..what about usability and reliability?, still a long way to go.

      

There seems to be a wave of new releases among social networks, putting together yet another serious attempt at positioning competitiveness along the mobile axis. Treemo launched a well built mobile-focused social network. I tried Treemo and it works well, if you excuse the delivery of Video clips to mobile devices via MMS vs. via streaming. I personally don’t find a 6 second truncated video clip very entertaining, and I am still looking for the streaming options to be supported. Right now, the major holdback is with operators open infrastructure, or lack there of, but the evidence from DocoMo, Japan clearly supports this direction.

Wadja is also bankng on mobile features, offering free SMS to members of it’s network. I agree wth Pete Cashmore that this is not enough and that Facebook and MySpace already covered that base.

What I find much more intriguing is the potential for subject oriented, vertical, social networks. A genuine common passion is a much better sticking glue then a feature, any feature, and a start up cannot win a feature war with MySpace. Social networks that successfully aggregate people with a real common interest are verticals that I believe can develop to stay, but they need to be built in fundamentally different way then the horizontal ones.

      

As YouTube acquisition rumors surface every month or so I can’t help but wonder - is the king butt naked again or is there something in YouTube I just don’t see?

Don’t get me wrong, I like YouTube. I admit I don’t visit very often, but I get a lot of emails with links to YouTube instead of with attachments and that’s cool. Sometimes I follow the links to the main site and I love it’s layout and functionality. YouTube blends content searching, browsing and sharing in a way that saves a lot of footwork and bandwidth to the end user. However it’s main value is with personalized and personal INTERNET content sharing. Not TV. Same old (and conceptually free) Internet Content. That has value, of course, but nowhere near what some Internet TV visionaries associate with YouTube. I doubt that it’s the kind of value that can ever justify the huge (and recurring!) investment in storage and bandwidth.

People argue that YouTube supposedly pioneers “modern Internet TV penetration”. Ok… Many people wait for YouTube to “realize the new advertising model”, one that will finally take Internet TV to the next step and make personal content a money machine.

I don’t see it happening. YouTube is, at best, a dominant content sharing play. At the flip side it could gradually become a pile of trash and drift towards the “dark side” of the Internet.  YouTube’s challenge is with reaching the earlier. In any case there is no way I can see a serious TV play emerging.

For an Intranet TV play to be interesting, it needs to contain TV ingredients - qualified content that is reliably renewed on somewhat of an expected schedule. More importantly, it needs to offer at least a few hits. Right now it’s still about bloopers and cliplets. Stuff that promotes TV and not stuff that replaces it. When real channels - commercial or personal - will start broadcasting through YouTube that will be a very positive sign.

Then there is the advertising riddle. Sure, YouTube are spending millions a month on infrastructure, but wait ’till they start monetizing the content with targeted video advertising! Right? Wrong! Attaching video ads contextually like broadcast TV has been doing for ages is a long way from happening on the Internet. And video ads, like other forms of advertising, are effective when they reach a qualified, known, target audience. ESPN Motion viewers are qualified. YouTube visitors are not. With YouTube the distribution and context is so eclectic, it will take years to figure out an ecosystem and roll out the necessary tools. Google and Yahoo are so much better positioned to harvest that market when that happens and chances are YouTube, unless acquired, will only pave the way.

So my novice advice to YouTube is simple. If your only strategy is exit, take a good offer when you see one!

      

Desktop SMS was the flavor of the month for a brief period in 2002. it’s back! Or is it?

Marshal Kirkpatrick of TechCrunch writes about the new feature from txtDrop - a web based, Myspace plugin, which offers sending SMS to a MySpace user free of charge. Oliver Starr adds more depth in MobileCrunch. There seems to be an inflation of Web based SMS services flying around. Unfortunately I find most of these services very mediocre. Some of these services may score well within a niche, but I personally think Web<-->SMS services must have the following “traits” in order to hit the minimum benchmark required for massive breakthrough:

1. Complete, 2 way, Web to Mobile and back conversations.

2. International, Operator Agnostic delivery (enough with the “limited to US and Canada” disclaimer).

3. Intelligent Routing between Web and Mobile - messages that need to reach the web should reach the web. Messages that need to reach the mobile should reach the mobile. Smart companies will figure out when and how to route each message.

4. Spam and Privacy Protection - At any cost, user data should not be exposed (definitely not “sold”).

5. Reliability - currently, most web based SMS services do not guarantee delivery. In many case, the messages are indeed not delivered. When the service is free most providers tend to excuse themselves. the users don’t.

6. Price - Messages need to be free to the extent possible. When not free, billing should be through an existing billing relationship (phone bill, Paypal, definitely not pulling out the credit card again).

7. Media - web content is rich. Text messages are textual. Routing Media from the web to the mobile could turn out to be a key differentiator. Available technology is still a little raw, but it’s getting there.

(The last one may not be mandatory, but the rest definitely are).