Wednesday, October 21, 2009

Customers Not Included - Ovi, Comes with Music and Knowing Your Limitations

Jason Lackey

The folks over at TelecomTV ran a story about one of Nokia's latest failures, the comes with music debacle. While the Finnish giant had made considerable noise about the service, they found but 691 customers in all of Italy and another 580 in Switzerland. Not very impressive penetration considering that central Europe is Nokia's stomping ground.

Brings to mind a great movie quote from the classic Clint Eastwood flick, Magnum Force where Clint explains "A man's got to know his limitations."

Nokia builds some really good phones. They are well built, solid, quality pieces. They feel good in the hand and for the most part can be easily used with one hand.

Nokia also tries to do services, really really badly. A prime example of this is Ovi, which has been explained to me as an effort schemed up by some sort of finance guy to get the stock price of Nokia up in the stratosphere with software companies instead of down in the hardware ghetto. To be blunt, Ovi sucks. When it was announced with great fanfare and trumpets blazing, I took one of the most popular enterprise smartphones from the Nokia lineup, the E71 (reckon this is probably the pinacle of S60), and visited Ovi. At that time after a bunch of clicking and signing up for various things I eventually got to the point where they told me they didn't have a version for my phone yet.

While it is noble to excel at what you are doing, not everyone is going to be insanely great at everythign they do. Some people are going to suck at some of the things that they try. The solution to that is pretty simple - don't do those things, just concentrate on the things you do well. Very few powerlifters are effective ballerinas, nothing wrong with that, as long as you don't have to watch some hairy bear type prancing around in a tutu. When the brute bear puts on the pink tutu and the dance shoes and tries to pirouette is where dignity goes out the door.

A man's got to know his limitations. Nokia, please get back to basics. Ditch the services, farkles and other nonsense and get back to basics, get back to building great phones.

Tuesday, October 20, 2009

Good News in Tough Times - Deloitte's Technology Fast 500

Jason Lackey

Tough times are the forge of, if not god, then at least the Invisible Hand of Adam Smith. These are tough times indeed, and like fire climax pines, the scorched earth of the valley in a downturn provides fertile soil for startups, which provided the fertilizer of cheap rent and auctionhouse desks and chairs can get a toehold on otherwise rocky soil.

Of course, even in the big fires of the Redwood Forests in California, you don't tend to get scorched earth. While many of the smaller and weaker plants end up returning to the carbon cycle, the bigger and more vigorous redwoods often end up strong as they were before but with less competition for nourishment and light.

At InnoPath, we have been very fortunate through the downturn so far. Sure, things have been rough for many, but in tough times you find the big players are looking for ways to get more from less and that is where our products, Over The Air customer care software, come into the picture. Like snowshoes in a nuclear winter.

Deloitte, a leading audit, consulting, financial advisory and risk management firm is in the job of finding snowshoes, parkas, snow mobiles and other objects useful in nuclear winters. With their expertise across a wide variety of markets and businesses, they are in a unique position to sort the wheat from the chaff, something they do well with their Technology Fast 500 program.

Quoting from the Deloitte website:

Each year companies rally behind innovation, break down obstacles and systematically defy the odds. We salute their efforts with the Technology Fast 500™ program, a ranking of the 500 fastest-growing technology companies in the United States and Canada.

Established in 1997 in California's "Silicon Valley," the program is based on percentage fiscal year revenue growth over a five year period, recognizes all areas of technology — from Internet to life sciences, from computers to semiconductors — and includes both public and private companies.

Anyway, my favorite little software company from Sunnyvale made the list at #238.

Here is the Press Release.

Thursday, October 8, 2009

iPhone in Japan: Storming the Galapagos

Jason Lackey

I recently had the pleasure of spending some time in Japan, a wonderful wonderful place, particularly when you speak the language. Even if you don't speak Japanese, the country is very English friendly, most can speak at least a little bit and very welcoming. That said, reality is often far weirder and more unexpected than whatever you might imagine so being able to parse the protocol does add to the experience.

The picture above probably doesn't remind you much of an Apple store, does it? Then again, perhaps it shouldn't. It wouldn't really be Japan without attractive young women wearing Space: 1999 costumes pushing electronic gear in an overamped, overcrowded frenzy. I don't recall if this was Yodobashi Camera or some similar place, but it was in Akihabara, an odd and peculiar place at the very core of Geek Chic, a place where costume play, manga, anime, maid cafes and all the latest and greatest gadgets, widgets and toys all come together in a frantic mass of churning, burning consumption.

Apple's iPhone, when initially launched in Japan July 10, 2008, was regarded as a lukewarm success at best. It lacked features, it wasn't a portrait formfactor clamshell, no keyboard, no special animated messaging characters. A foreign oddity, a misborn, malformed freak unsuited to survival in the rarified air of the Japanese hyperphones, a gimpy cripple doomed to playground bullying and a life best characterized as traumatic, brutal and short.

Yep, even Wired got on that bandwagon.

However, as seen here: things are less grim for the feisty little scrapper from Cupertino than you might think.

Rankings courtesy of Wireless Watch Japan (thanks for a great site, Lars!)

Yes, of the Top 10 Handsets in Japan, 3 are iPhone variants, including the #1 slot. This is in spite of being on the SoftBank network, a newcomer in a deeply conservative land where many still view Toyota as being a car for an adult but a new, wet behind the ears company like Honda? Bit too new, best for ricer kids, car from an unproven company lacking in history and depth like that.

Wonder what would happen if it was available on DoCoMo and KDDI as well? In France, it seems the answer is about 40% market share.

It is not clear that this would happen in Japan, but it is clear what has happened with SoftBank since the launch of the iPhone.

7/2008: 19.1m total market 103.6m (18.44% share)
1/2009: 20.0m total market 105.8m (18.89% share)
9/2009: 21.1m total market 108.9m (19.37% share)

The Operators Strike Back: The Next Generation of App Stores (Part 3)

Dave Ginsburg

Last week I looked at appstores and smartphone OSs from the standpoint of the developer community, and what it implied for operator support. Today, I take the handset vendor’s perspective. At InnoPath, we call these the OEMs. More-so than an operator, who may need to support multiple platforms to reach all market segments, the handset vendor must take a more focused approach. This is especially true for the 2nd tier smartphone vendors who don’t have the economies of scale. Note the use of the word ‘smartphone.’ It is important, since some of these OEMs may have very large featurephone footprints, but may be marginal players at present in the Open OS space.

Given that RIM, Apple, and for the moment, Palm are vertically integrated, what is the best OS bet for an HTC, Nokia, Samsung, LG, Sony-Ericsson, or one of the up-and-coming Chinese vendors such as ZTE and Huawei? The first imperative is to move off legacy, proprietary platforms. Although these support web browsing, email, and are many times referred to as integrated devices, the application developer community just isn’t there. This could be said for Nucleus, BREW, and OEM proprietary OSs. Samsung, LG, and Sony-Ericsson are all known for devices in this category, though all three have announced their intent to migrate their product lines over the next few years.

The next question is then which of the Open OSs to support. We’ve got Windows Mobile, Symbian, Android, and flavors of Linux such as LiMo and Maemo. Reviewing current OS penetration on the chart below, Symbian, WM, and Android are all major players. In fact, at least one analyst, isuppli (, takes a contrarian view to the prevailing wisdom and suggests that WM will take the #2 spot going forward on the strength of WM7 and vendor support. I’d personally also like to see webOS be made available to other vendors, as an option to Android. I don’t think Palm can build critical mass on their own in the time they have.

Windows Mobile is a bit of an enigma in the marketplace, not only due to confusion regarding 6.5 and 7.0 strategy, but around whether or not Microsoft will deliver an integrated platform. A recent article in Fierce Wireless by Mike Dano ( added fuel to the fire in regard to what is to become of Windows Mobile in the face of handset vendor defection. The flip side of the WM story are the rumored Pink devices ( which could very well be the way that Microsoft regains vertically integrated control of the OS and hardware, successfully demonstrated by Apple and more recently, Palm.

But beyond absolute market share, what is important is application availability, a good proxy for what handsets a consumer will actually go out and buy. This sets the stage for future success, since everyone can build a phone with GPS and a big touchscreen. We’re already seeing the shift in OS dominance, from the legacy to the new, and based on applications and internet use. Just this week AdMob issued its latest update (, showing just how the tide has turned. The iPhone had taken the #1 share (40%) from Symbian (34%), and both Android and webOS had strong showings at 7% and 4% respectively. RIM was at 8% and WM at 4%.

So, application availability should translate into a given OEM’s decision to support a platform (or not). Per the chart below, most vendors are fragmented in their Open OS support, even if they have only a few % of the global smartphone market. Nokia, the largest, is probably the best positioned of the ‘independents’ due to its Symbian experience and up-and-coming Maemo support. The real issue with Nokia has been its inability to counter Apple, even in its home territory of Western Europe. Motorola has taken a more focused course, placing most of its technical and marketing weight behind Android while continuing to support WM due to its strong enterprise footprint. This seems a reasonable approach and from all accounts, the CLIQ is a fine device. They’ve spent their time on matching the hardware to the OS. Unfortunately, this was not the case with HTC’s first generation Android G1, and issue addressed with the Hero.

HTC, best known for Windows Mobile devices, is now doubling down with Android. They can’t walk away from their WM legacy, but if the Hero is any indicator, their Android devices will be successful. That leaves LG, Samsung, and Sony-Ericsson, all three at the bottom of the table below, and all three fragmented in their Open OS strategy at the same time they are transitioning from legacy OSs.

Sony-Ericsson has stated that they must support all three – Symbian, Android, and Windows Mobile – to hit different geographies and market segments. But are they large enough to support the engineering and support base? Samsung and LG, though larger, are still less of a factor in the Open OS space. Samsung and LG, BTW, are also members of LiMo, as evidenced by Vodafone’s 360 announcement highlighting Samsung LiMO devices. The recommendation would be for all three vendors to take a strategic view of their market approach including tiers, geographies, and operator customers and then each prune at least one platform from their roadmap. All three have their own UI approaches. They could apply their engineering resources to perfecting this on one or two platforms, building a user experience that would begin to approach Apple.

As to the Chinese, I don’t see any reason for them to adopt anything other than Android, or in some cases, some other Linux variant. The logic when looking at application support, cost of development, and installed base just isn’t there. It permits them to better focus their development efforts and customer support, and by relying on an easily adaptable OS foundation they will be better able to apply their efforts towards differentiation (i.e., at the UI level as HTC has done with Sense on Android or TouchFlo3D on Windows Mobile) vs OS maintenance and other forms of reinventing the wheel.

Thursday, October 1, 2009

The Operators Strike Back: The Next Generation of App Stores (Part 2)

Dave Ginsburg

(This article originally appeared here on 28 September 2009)

Last week I looked at the App Store phenomenon with a focus on how operators are introducing their next-generation portals.

This week, I’ll couple it with a perspective from the developer community, and what it means for the future success or lack thereof of the various Open OS platforms.

Next week I’ll fold in the handset vendor perspective, discussing whether they should spread their development across multiple platforms, or stick to one or two. Their future success could hang in the balance.

It goes without saying that Apple, in a relatively short time, has garnered the greatest mindshare amongst developers, independent of any perception as to the transparency with the application approval process. Apple has built sufficient momentum with regard to the types of applications available and cost points, including a wide variety of low-cost applications, try-and-buy, and ease of application discovery.

The Android Market in contrast is still on the upswing, and according to Admob, it has a ways to go to compete with Apple. The survey found that 55 percent of Android users have not yet downloaded an application from the store, in contrast to only 23 percent of iPhone users. Admob goes on to state that although the checkout process may be holding back subscribers, the real culprit is the lack of quality applications and mainstream software.

Applications are the outgrowth of a critical mass of developers, and as of August, 2009, the iPhone footprint was 40 times that of Android. More recently, Motorola and others have stated that application organization within the Market requires improvement. The new 1.6 release is expected to address some of these concerns.

The veteran, Symbian, claims the largest development community, but to its disadvantage, applications have traditionally been scattered, mostly handled by legacy operator platforms or 3rd parties. Nokia with its Ovi service and Sony Ericsson with its Play Now Arena are attempting to counter this, but their devices each only hold a portion of an operator’s network, and this varies by geography. In addition, users may not naturally gravitate to their handset vendor for applications as their primary financial relationship is with their operator.

On the operator front, efforts such as Vodafone’s 360 could help facilitate application awareness, but operator offerings do not build platform identity or directly address the developer issue.

At the same time, Symbian itself is in a transition to an open source model, and after the ^4 release, applications will no longer be backward compatible. This too will influence application development. Further confusing the Symbian issue is Nokia’s move to its Linux-based Maemo for some platforms and Sony-Ericsson dividing its loyalty across Symbian, Windows Mobile and Android. Neither vendor may therefore be considered as a proponent for the ultimate Symbian appstore.

Perhaps the Symbian Foundation will rise to the occasion, but at present the foundation’s Horizon initiative is more to act as a publisher to make sure that Symbian applications are available on 3rd party app stores such as Ovi, and the continued comfort of developers working within the framework of the foundation is unknown. This could create further fragmentation vs the centralized models of Apple and Android, as developers may need to maintain financial relationships with multiple operators and handset vendors. Additionally, one would expect that Nokia will begin to develop an application ecosystem around Malmo, influencing the prominence it places on Symbian.

Microsoft is only now launching its Marketplace with Windows Mobile 6.5, while the Blackberry App World launched at CTIA in Spring, 2009 enjoys moderate success. Both Samsung and LG also intend to launch stores in the near future, with both positioned as multi-OS in the same way as Ovi and Sony-Ericsson. Finally, the dark-horse platform with a great deal of promise is Palm’s WebOS, though the developer community is still quite small due to a minimal installed base. Nevertheless, in a short period of time and with minimal device penetration, it has garnered mindshare.

The graphic below helps clarify the various relationships. iPhone and Android developers need only maintain a financial relationship with their respective App Stores, and in the case of Android, will develop to a single, controlled ‘flavor’ despite support from different handset vendors (i.e., HTC, Samsung, Motorola, Sony-Ericsson). Developers for RIM take two paths.

The first is via the branded App Store, and the second is to the operator directly. Here, unless RIM’s App World acts as a strong broker, the developer may need to maintain a relationship with each operator. This of course won’t scale. However, development itself is still contained based on strong RIM device guidelines.

Development for Windows Mobile is more complicated. Although Microsoft has announced the Marketplace, it will take time to develop. The developer therefore must maintain a relationship with one or more operators, and at the same time the handset vendors who are launching their own storefronts. Design guidelines may also be more flexible than RIM or Apple, so a developer may need to be cognizant of handset vendor specific implementations. If successful, the Marketplace option could be the best path for the developer.

Symbian is more complex and fragmented, with no strong storefront or broker with the exception of the foundation’s Horizon. The developer at present must maintain a financial relationship with multiple handset vendors as well as with multiple operators. In addition, the various flavors of S60 result in software fragmentation, and the emergence of the foundation only adds to the confusion. Clearly, a better solution along the lines of the Windows Marketplace is required.

Here's a graphic display that I call "The Developer’s Conundrum: Application Development Ecosystems":

Separate from developer support, how do the various OSs stack up with regard to their UI, browser, and vendor support? Credit Suisse recently released a report (Smart Phones...Smarter Investments, Aug 31, 2009) looking at the smartphone market, as well as vendor and OS strengths and weaknesses. As expected, when taking the OS view, Apple is Number 1. Palm’s new webOS is 2nd, though limited in deployment, has some of the same advantages as to the UI and browser, as does Android, which is at 3. In fact, both platforms are close in the ranking and if market adoption was included, Android would be ahead. RIM, Symbian, and Windows Mobile all trail, within a few points of each other. The chart reaffirms the position that Android is the strongest ‘open’ OS (i.e., applications not controlled by a single entity as is the case with Apple). As I mentioned, next week I’ll look at how this compares to the vendor view. So what are the impacts on the developer community?

Ideally, an operator would embrace those platforms that combine large developer communities with ease of implementation. In addition to hardware design and usability, customers no longer wish to be limited to the traditional operator-controlled walled-garden and will seek out those devices with the widest application variety. Other than the iPhone, Android seems to be best positioned here for the mass market and in fact is a more open ecosystem. The success of Blackberry’s App World, Microsoft’s Marketplace, or the Symbian Horizon approach is too early to determine, though they could be more viable within an operator-controlled store. This is the approach Blackberry is taking with Verizon’s V CAST Apps Store as described last week.

Focusing on a small number of platforms will also help the operator or handset to focus its engineering, marketing, and support resources, and will also help to build loyalty by creating a critical mass of supporters . This is the path taken by the more successful operators, and given recent confusion over whether Verizon Wireless will or will not carry the Palm Pre, it is obviously top-of-mind.

Take a look at these Credit Suisse smartphone OS rankings:

Edited by Michael Dinan