Sunday, July 10, 2005

7 good reasons why Apple will launch an MVNO

MVNO is hot in the US. Russell points out quite a few examples while claims that the Cupertino giant is planning to roll out its own soon.

While I don't think that an MVNO strategy is appropriate to many of the big brands, it makes perfect sense why Apple should do it.

Here are 7 good reasons:

  1. Apple is an existing strong customer brand, familiar to the masses. Not only that, but people are already used to purchasing Apple hardware (iPod, PowerBook), as well as services (iTunes tracks, etc.). Many people I know admitted that their main motivation for purchasing an iPod was the design of the hardware. Guess what? What's the main selling point of mobile phones today? Think about the RAZR!
  2. The iPod's main challenger is the mobile phone. They all failed. The iPod is to the portable digital music player market what the Nutella is to the chocolate-hazelnut spread market (in Europe at least): many people are trying to compete, imitate, but the dominance is set for a while. Once the hard drive player business was conquered, Apple launched the Shuffle to go after the remaining Flash memory player market. But these standalone Flash based players are starting to face what standalone digital cameras have been facing: the market is getting largely shared with mobile phones. As a next step, Apple HAS to get involved in this business.
  3. The iTunes phone experience. This year is supposed to be the year of mobile music, and here we are, July 10 and still no sign of the Motorola iTunes phone announced a while ago. Om mentioned that it should now be on the way to hit Cingular stores, but the revenue share over song tracks is probably the sensitive part. iTunes makes almost no margin on tracks, but instead get the extra bucks out of the iPod. So how does this translate into mobile? Apple will share their 2 or 3 cents with the carrier? Does not make any sense. Songs may have to be more expensive, but then what is the incentive for users to download songs over-the-air, rather than waiting until they come back home? Launching an iPhone will allow Apple to make the extra cash out of the hardware, and therefore apply their usual strategy. Its partnership with Motorola should in theory allow them to sell to operators, but if they launch an MVNO, they become their own customers, and will be able to avoid similar ready-but-can-not-be-launched scenarios.
  4. Allow different usages. I think there would be different products for different needs. Apple certainly doesn't want to let its iPod on the side, so synching will be king. At least two types of devices make sense here: the iPod capable of downloading tracks by itself (or why not receiving phone calls, who needs a keypad these days beside text messaging?), as well as the iPhone capable of playing songs in a way that they can be synched with your iPod. In this last scenario, you can download your song track using your phone, which automatically gets stored on your iPod, and your favorite track list on your iPod gets automatically duplicated on your phone.
  5. Podcasting and tracks downloading. What is the difference between podcasting and song tracks downloading? One tends to have a more limited life time while it requires a more frequent connection. Think about it. I am sure plenty of people don't bother synching their iPod with their Mac/PC more than once a week, while Podcasting by nature has a more frequent need. And Podcasting is now fully part of Apple strategy if you look at the latest version of iTunes. I recently heard about KDDI's latest way to optimize its network bandwidth. Instead of having most of its users download news, videos, and other content during peak times (let's say 8am to 10am), they deliver the content over the night before, depending on which channel users subscribe to. There is also an advantage doing so: there is a good chance your device will be plugged in, so no battery issue here. Even if there is a high chance you may have a PC or Mac always next to you at home, I am sure it still has a lot of value (I sometimes check my emails with my phone while at home, so I don't bother turning on my laptop).
  6. Apple is already working on mobile. Job postings, and also their recent launch of Apple Store Mobile in Japan are some examples.
  7. The future: MediaFlo, DVB-H and WiMax. Broacast solutions such as MediaFlo and DVB-H, would be ideal to get podcasting on iPods, iPhones, or whatever you want to call their product line. Also, if WiMax gets launched sooner than later, it could allow this over-the-air download. If I believe these solutions are more long term, Apple should select a MVNO partner who is planning to offer one of them.
So will it be the "There is one more thing" that Jobs will talk about during MacWorld 2006? We'll see!

Friday, March 25, 2005

The Long Tail for mobile content

Last October, I read - with great interest - the article about The Long Tail written by Chris Anderson, the day where Russell Beattie told me about it, and I thought it was the one of the most interesting thing I had read for a while. Russell and I discussed about how The Long Tail could be applied to the mobile industry, and surprisingly I haven't read too much about it so I felt I should post something.

No, the Long Tail isn't only a buzz word you may use to catch the attention of a VC in order to get some funding, along with "vertical search", "tags" and "RSS". It is about opening your eyes to what the new economy has really to offer, and exploring the unknown boundaries of the digitalization of media and entertainement and the way they can be distributed. It is about being finally allowed to consider the customer as unique with his own taste and pushing away the idea of putting them in some kind of marketing categories. Market segmentation will always be there (TV commercials haven't got an unlimited duration as opposed to the Long Tail catalogue), but the marketing rules are no more driven by the physical world with its own rules.

Chris Anderson does a great job explaining how the Long Tail can be applied to digital media. But let's focus on mobile for a minute. We have two types of content for cell phones. Let's call them "basic content" - including ringtones, wallpapers, avatars, etc. - and applications which require programming skills, such as games.

Now what does make a difference between traditional digital media and mobile content? A huge part of this mobile content is actually not portable across devices. And it is especially true for applications since you have to deal with the platform, versioning, screen size, supported
APIs, etc. So what does that mean for our Long Tail here? It simply means that it is more complex to build up unlimited catalogues for mobile content than for more traditional media. Your mp3 song will be played anywhere, whereas your mobile game will only work with this specific phone... See where I am coming from?

Now let's think about the opportunities. As a service provider, the way you implement the Long Tail for recommending mobile content may have an even bigger impact than on the Web. Think about search. You may look into the top 10 to 20 results when you type a request on Google using your desktop, whereas you may not scroll down to more than 3 to 5 results when you use your mobile. Mobile search is more demanding than Web search, since you don't want to browse tons of results. For the same reasons, companies applying The Long Tail for mobile should better do a great job when recommending the relevent content to each user.

Tuesday, March 08, 2005

My 3 favorite mobile services right now

There are a few mobile applications available out there that I am really into right now, and I wanted to share them with you. I have been showing them to some people at Mobile Monday last night and I felt some of you might be interested.

I am currently using an Orange SPV C500 (smartphone known as the Audiovox SMT5600 in the US) but the following apps and services not exclusive to the Windows Mobile platform.

Instant Messaging
Agile Messenger is simply the best IM client I have ever used... You can connect to your MSN, Yahoo, ICQ, AOL, etc. and the last version is awesome since you can do Push2Talk either your friends are on their cell phone or PC. You can also upload pictures and share them during your session. Brilliant. Since Agile Messenger is using http, there is no service fee specific to mobile (MSN and Yahoo usually charge for their mobile access).

Mobile Radio
Virgin Radio just launched their mobile service, and I tried streaming the radio using Windows Media Player, and it is terrific! According to Russ, the client is very good, but you don't even have to install anything and it works great. So cool to listen to the latest Stereophonics' this morning while driving my car, since the tune is not played by any US radio station as far as I know.

Mobile TV
This is something I have been super impressed by lately: TV on your mobile, but without any limitation when it comes to number of frames per second, without the need of installing a client - once again Windows Media Player does a great job here - and it is totally enjoyable by the average customer I think. On this demo, you can access only to a few channels including CNBC and the Weather Channel. Smart Video is the company behind this product and what is impressive is the quality you get while using a simple GPRS network, not 3G, not even EDGE!

The best part is the fact that all these services are free! It doesn't cost me a single dime using them, and since I have an unlimited data plan for $5 per month, this is such a great deal! Think about that, $5 a month and you get unlimited IM, unlimited radio, and unlimited TV!

I have to say that I am a little bit skepticle about mobile TV over a cellular wireless network, since there are some scalability issues for a wireless operator, and that's why Korean and Japanese carriers have been pushing for TV brodcast access such as satellite. After initial services such as MobiTV, the US industry will be using digital boradcasting solutions such as Qualcomm's Media Flo and DVB-H. Now we are talking about high resolution TV on the cell phones, so you can even read the headlines scrolling at the bottom of CNN!

And during that time SMS still counts for 76% of mobile data revenues for wireless operators in Western Europe, and overall few people are using data services... I guess I must fit in the "early adopter" category then ;-)