All posts in Intermittent Signal

Intermittent Signal: Google Buys Motorola. Nothing Silly About It

By Mark Watson

Every year the “quiet” news period, lovingly called “the silly season” by hacks because of all the puff press releases companies try and get them to write while there’s a dearth of “hard news,” gets shorter and shorter. This year, it’s been almost non-existent. However, as I drove to work yesterday, the sky clear and blue, the roads almost empty of other cars, something in my bones told me this was it – the start of a (two-week) silly season. No more hacking scandals, riots, mass murders, and certainly no more big technology company announcements.

Needless to say, I was wrong. At the strange time of 12:30 p.m. BST (7:30 a.m. EDT ) the news broke that Google was purchasing Motorola Mobility for $40 a share – $12.5bn in total. (Incidentally, the purchase amount was set at 63 percent over the stock price, meaning that Google enjoyed a big discount when the Motorola shares collapsed on the back of the company’s bad earnings report.) Here’s my take on what the acquisition might mean:

Intermittent Signal: Can Anyone Take the Bite Out of Apple?

By Mark Watson

Apple versus the rest of the world:



Record quarterly revenues of $28.57 posted at the end of its fiscal Q3.

Cash reserves greater than the yearly earnings of 128 countries.

A market value greater than that of Microsoft and Intel combined.

Producer of 75 percent of the tablets sold in 2010, and the likely market leader until 2015.

Can anyone stop Apple now?

Intermittent Signal: Brits Lag on Mobile Banking

Sixty-nine percent of UK mobile banking consumers worry about its security. And UK banks are slow to change the tide.

By Mark Watson

Last week, Antenna rode into town. London town, to be precise. Antenna CEO Jim Hemmer, its CMO Jim Somers, and I, met to talk about mobile banking (I make this sound like a big deal; they came over from New Jersey, and I had to come all the way from Guildford, Jewel of the South.) And we came armed – with a pedigree (our already-delivered mobile solutions for ING Direct, RBS, Garanti, among others) – and with fresh consumer research from YouGov, which polled over 2,000 adults in the UK on their mobile banking habits on our behalf. Jim Somers details the U.S. findings in his post.

While in town, we met journalists (follow this link to read about what happened when Reuters met with Jim Hemmer), and analysts, as well as senior executives from almost all of the major UK banks at a round-table event, which we and IDC organized at Pewterer’s Hall, the home of the Worshipful Company of Pewterers. Such halls are scattered around the city of London. (Basically, if you were manufacturing or trading in fifteenth-century England, you got a fancy organizational title and your own hall.)

Here are the results of the consumer research:

Intermittent Signal: Nokia is Going ‘Round in Circles

By Mark Watson

Way back in February of this year (three months is a long time in the mobile industry and several lifetimes if you’re a Nokia investor) I reviewed that company’s tie-up with Microsoft in an article entitled, “Hello Team Nokia, I’m the New Captain. WE’RE SINKING! TO THE LIFEBOATS EVERYONE!”

My contention, back in those bleak midwinter days, was that embracing a new operating system (specifically, Windows Phone 7) would not help Nokia solve its three biggest problems as recorded by CEO/Captain Elop:

Losing on brand and user experience to Apple at the top of the market.
Losing on price and capability to Android phones in the rest of the smartphone market.
Losing on price to emerging suppliers in the feature phone market.

Three months on, Android is going from strength to strength (I suggested in February that Nokia would have been better off taking Android and then investing heavily in putting a branded, exclusive user experience on top of it), Windows Phone 7’s market share is falling (it’s dropped by almost 50 pecent year on year), and the Nokia freefall continues. The child being eaten by the revolution now is Nokia’s mobile content brand, Ovi.

According to the BBC, the company will be selling music, games, and apps content under the Nokia name from now on. According to Nokia Ovi blog editor Pino Bonetti, who broke the news, the changeover will enable the company to “leverage the high value of the Nokia master brand to better support future plans to deliver disruptive and compelling mobile experiences globally.” In other words, the four-year-old brand did not distinguish itself enough in the marketplace to make supporting its continued existence worthwhile – probably because, as Pocket-Lint editor Stuart Miles has commented, “they [Nokia] created a brand out of something that did not need to be branded.”

So what’s next? The interesting rumor going around is that Nokia is planning to sell off its mobile phone business to Microsoft as well. Pinch of salt taken, one wonders what would be left of Nokia if this happened, and whether this was the plan all along? Trojan horses, and all that. And was the Skype acquisition a precursor to creating a Microsoft power trio focused on delivering the complete mobile experience, from hardware to software to voice?

On my way to work each day I pass the Headquarters of Vertu, Nokia’s top-of-the-line vanity phone range. Ironically, the building itself sits on a roundabout with a sign on it saying, “Sponsor this Roundabout.” As things stand at the moment, Nokia—going round and round like a ship in a whirlpool—hasn’t managed to find one either.

 

Mark Watson the former EVP of Technology & Engineering at Antenna and former CEO of Volantis Systems, during which time he blogged frequently for Mobile Masters. 

Intermittent Signal: App Store Wars

By Mark Watson

Even the most casual readers of the technology press cannot have failed to notice that app stores seem to be opening on every corner of the internet at the moment.

First there was Amazon making a big splash with the opening of their Android app store.

Soon after, Barnes & Noble announced they would be following suit.

Then RIM confirmed that their forthcoming Blackberry Playbook device would be able to run Android Apps, in the process proving that sometimes the rumour-mongers aren’t just…mongering.

At this point Samsung were obviously feeling somewhat left out of the headlines because they announced that their own app store had reached a milestone: 100 million downloads.
Meanwhile, Ovi, MeeGo App Store, and Blackberry App World continue to grow (probably while making odd sucking noises that can only be heard in Apple HQ) and businesses are waking up to the possibility of opening their own mobile application stores powered by white-label solutions.

What you’ve probably noticed about the above summary of recent app store news, is that none of it featured Apple’s App Store (a name Apple has been able to trademark). Apart from the occasional story about censorship on Steve Jobs’ stroke of genius/cash-cow (and a controversy over the amount of commission Apple takes on in-app subscriptions), the Apple App Store has been forced to give ground to its Android-selling competitors in the news. Furthermore, the balance of coverage is a reflection both of Android’s vibrancy and the degree to which Apple’s unique selling point has been weakened. It is highly plausible that today’s consumers are no longer worried about missing out on the app experience if they buy a device not born in Cupertino.

Intermittent Signal: Royal Wedding Goes Mobile

By Mark Watson

Unless you’ve been living under a pretty big rock for the last three months you’ll know that the eyes of the world will be turning towards Britain this Friday when Prince William will marry Catherine Middleton. The wedding, which will take place at Westminster Abbey, will be a fabulously expensive affair, but is also expected to generate up to £1bn from extra tourist revenues and sales of memorabilia. Even conservative estimates put the likely television/online audience of the wedding above 1 billion people around the planet and hundreds of thousands more are expected to line the route between Westminster Abbey and Buckingham Palace.

According to a survey conducted by Antenna earlier this year, 1 in 4 British and 1 in 5 US consumers are using the mobile internet on a daily basis. With the mobile internet increasingly taking on a role more like that of the internet internet, it is a fair bet that the mobile internet will play a big part in the way the public views Friday’s pomp and circumstance. In all likelihood, the Royal Wedding will be the biggest mobile internet ‘event’ of all time, with users streaming video of the ceremony, sharing pictures, using social media like Twitter and Facebook to commentate on the event in tandem with their friends, and of course, texting and making phone calls about it.

If you need any further proof about the public’s willingness to ‘mobilize’ the Royal Wedding, check out the number of third-party mobile applications that have been built to celebrate on the nuptials; at present there are 68 such applications for the iPhone alone and another 30 for the Android platform! Needless to say these apps offer wildly different experiences – from keeping up with the news via BBC America’s Royal Insider to watching a cartoon of the story of the couple’s relationship to enjoying the sight of a rather irreverent pair of ‘Wills & Kate bouncing heads’.

Hello Team Nokia, I’m the New Captain. WE’RE SINKING! TO THE LIFEBOATS EVERYONE!

By Mark Watson

In 2008, Peter Knook left a 17 year career at Microsoft to take charge of Vodafone’s mobile Internet strategy. One of the things he brought with him, obviously, was his Microsoft rolodex (or whatever rolodex abstraction is currently used in Windows). Vodafone could engage directly with Microsoft for mutual competitive advantage and finally pull ahead of the pack in the field of mobile data services. And that, ladies and gentlemen, is why we’re all now using mobile versions of Windows. Sorry, got carried away there: Mr. Knook left Vodafone in September 2010.

By coincidence, also in September 2010, former Microsoft executive Stephen Elop joined Nokia to become their CEO (the first non-Finn to do so). He used up his honeymoon period to effectively brand his company not fit for purpose in an internal memo that was ‘leaked’ earlier this week: ‘Hello, I’m the new captain. WE’RE SINKING! TO THE LIFEBOATS EVERYONE!’ OK I’m paraphrasing. Here is what the memo actually said:

‘…the platform is on fire, we don’t have any lifeboats, everyone jump into the freezing oil filled water.’

To which he should have added: ‘Where we’ll be picked up by a massive liner which luckily has no passengers on it. And is also slowly sinking.’ Extended metaphor ends.

No sooner said than done. At today’s Nokia conference we got the official word – the much anticipated announcement that Nokia is jettisoning many of its previous strategies in favor of Windows Phone 7.

Does this actually make sense? Reaction from analysts has been, by and large, underwhelming.

Nokia is, per the ‘leaked’ memo…

  • Losing on brand and user experience to Apple at the top of the market
  • Losing on price and capability to Android phones in the rest of the smartphone market
  • Losing on price to emerging suppliers in the feature phone market

The solution to the above, in my humble opinion, is not necessarily to go off and find a new operating system. Even less so to find an existing but so far not very successful one. Nokia seems to have got awfully hung up about operating systems, because the press seems to see that as the fulcrum of conflict in the market. It isn’t.

To show how important Apple thinks operating systems are, the OSX Mac operating system, which provided the basis of iOS, is ultimately based on BSD UNIX, and the UNIX operating system dates back to the early 1970s. Android is based on Linux (ironically, designed by a Finn named Linus Torvalds), a re-implementation of, yes, once again, UNIX. If operating systems were so important, developers would be looking for one which was younger than their parents.

The real competitive focus surrounds innovation in the industrial design of the user experience, of the hardware, and the interaction between the two. These are areas where Nokia needs to be independently successful, not dependent on partners.

The critical success factors in this market strike me as the following:

  • A compelling user experience
  • Hardware features
  • Hardware pricing
  • Brand reliability
  • Exclusivity of content or experience

A company which was trying to succeed would be innovating in several or all of these areas. Nokia isn’t going to inherit a compelling user experience from Microsoft, and probably isn’t going to be able to control that interface either. Equally, Nokia is going to be dependent on Microsoft support of any hardware innovations they introduce.

Surely Nokia would have been better off taking Android and then investing heavily in putting a branded, exclusive user experience on top of it, linked to hardware innovation around new features, cost and reliability. To be honest, they missed a trick on this a while ago – they should have merged Symbian with Android and moved the develop dollars into industrial design.

The remaining straw to which one might cling is around what kind of content and applications Microsoft can bring to bear that nobody else can access. This strikes me as falling into two separate areas: one, primarily around Office (which is where Mr. Elop came from) and another around the Xbox platform. Tablet devices, especially, are going to require Office applications, but these won’t be full-fledged versions of the desktop apps, and in fact the main requirement will be that they can read and write Office formats, which many other applications can now do. There may be mileage in Exchange support, not for mail (which is easy) but for diary & calendar (which can be fiendishly complicated).

I’m not sure what the touted access to the Xbox community gives – to run a brief thought experiment, how is an exclusive and successful property such as Mass Effect (developed by Bioware, which was acquired by Microsoft some time ago) going to play on the smartphone or even a tablet? The answer is that it is going to be something completely different (if it crosses over at all) but with a similar name; but Nokia might have been better served by an exclusive relationship with, say, Hasbro, for the kind of games properties that might play on mobile.

Finally, from a financial point of view, it’s not clear that this really saves Nokia any money. Can it just drop its existing commitments on Symbian, or its partnership agreements on MeeGo? Do either of them really cost enough money to impact the margin on global phone sales? Probably the only real solutions on price competitiveness sit in the far more mundane world of tooling and locations for phone manufacture and components supply. As a profits fix, this is heaping all the eggs into the basket of believing Windows Phone 7 is going substantially increase the number of phones sold, i.e. a fix which is almost all dependent on the revenue side. And, re-reading the first part of that previous sentence, it doesn’t feel terrifically convincing.

This is why, following the sounding of the klaxons at Nokia a few days ago, many analysts have greeted this announcement with a resounding ‘ho hum.’ I fear that, once again, this is not the dawn of a new age where we all end up using mobile versions of Windows.

Mark Watson the former EVP of Technology & Engineering at Antenna and former CEO of Volantis Systems, during which time he blogged frequently for Mobile Masters.