Tuesday, January 27, 2009
The mobile applications and content market to date clearly demonstrates the long tail theory espoused by author Chris Anderson. No one application dominates the market and with 15,000 available for one device alone, the choice is considerable. The long tail model appears to be successful, even for the smallest developer.
Big challenges are device compatibility (multiple formats), delivery, pricing and billing and success clearly lies in getting all these essential ingredients right. Challenges clearly for most players coming up with app stores are - a large device portfolio (including need to support legacy devices), lack of a delivery channel with broad traction and no alternative to operator billing which results in the lion's share of revenues being kept by operators.
Competition in store? Vendors realise that the download store is a key battleground
23/01/2009 - by Tony Poulos, Telecom TV
Mobile phone vendors are lining up to open versions of Apple's Appstore, but have they understood the key reasons why Apple's offering has generated such an enthusiastic following from both users and developers?
Apple recently reached a milestone delivering 500 million iPhone applications via its Appstore. It has managed to foster the development of over 15,000 applications since July 2008, mostly original, and some ported from other devices. Microsoft has announced that it will be launching its own version of the Appstore, Skymarket, at next month’s Mobile World Congress in Barcelona. Strangely enough, there will be another service called Skybox (strangely resembling Apple’s MobileMe), a cloud service that will allow smartphone users to back-up, restore, sync and share data.
RIM, maker of the BlackBerry, doesn’t want to be left behind either. It has opened its own application storefront for developer submissions and is slated to be ready for sales to the public in March. Let’s not forget Palm which recently opened ‘The Palm Software Store’ that allows users to download applications to devices running on both its own operating system and Windows Mobile. It opened with over 5,000 applications, more than 20 per cent of them free.
Google will be allowing paid-for programs into the Android Market sometime in this first quarter, as promised when the online store was launched last year. Developers have remained lukewarm about Android (about 500 apps released), partly because they cannot charge for software in the Market, but there should be a wider range of apps released once they can generate revenue.
The sceptics amongst us, especially those with iPhones, must be wondering where they would be now if Apple hadn’t entered the mobile device arena. If you are any sort of mobile technophile and have a reasonably good memory you will recall that in the recent past you could only buy applications from online content providers such as Handango or telco operators and that each time you paid for an application or content you were in fear that it may not download completely or even work on your device. Then came the agony that accompanied any change or upgrade of handset - what if your favourite app did not work on the new platform?
The mobile applications and content market to date clearly demonstrates the long tail theory espoused by author Chris Anderson. No one application dominates the market and with 15,000 available for one device alone, the choice is considerable. The long tail model appears to be successful, even for the smallest developer. It is because of this ‘long tail’ that it is difficult to determine exactly how many apps are actually sold worldwide for all mobile devices. Sure, the analysts will give us endless increasing projections and estimates but how are the numbers actually verified? Apple is proud to show off its numbers as a mark of success, but not all players seem so keen.
It is all well and good that Microsoft, RIM, Palm and to a lesser extent, Google are entering the application fray but they are likely to suffer the same problems that mobile operators and content aggregators have faced. The biggest issue is multiple formats. Having a common operating system does not guarantee that an application will work the same on every device. Slight nuances like screen size, memory, processor type, input methods, proprietary overlays, Java versions and OS release versions can all impact whether any single applications will work properly on a device, Microsoft Windows Mobile being the most affected by all of these.
While Android only has one or two identical devices and software versions on the market, this may not be such an issue, but this is not likely to remain static as more handset vendors join the platform. The traditional handset suppliers, like Nokia and SonyEricsson, seem content with music and games offerings from third parties.
Delivery remains the second biggest issue. Apple has mastered this via iTunes, already well accepted by iPod users, and the dual ability to download or update apps via wireless access. The selection and delivery is consistent and this is very much appreciated by customers, even if it is proprietary.
Delivery varies dramatically the further you stray from the big name stores already mentioned, with telco operators appearing to have the greatest problems, mainly because of the large variation in handsets their subscribers buy. iPhones are still the only devices that have a common standard OS on all versions that is updated automatically by the vendor.
That makes application development a breeze and minimises the number of dissatisfied customers buying apps for non-compliant devices. All other apps vendors will find this feature hard to match. Delivery issues and payments disputes are the bane of most service providers and contribute dramatically to the number of complaints to call centres.
As always, money (not prestige) is the biggest issue (and driver) in the apps space. Mobile network operators have, without doubt the best billing and payments mechanisms in place. The majority of mobile users worldwide pay in advance for their service and this pre-paid model is the envy of all other retailers.
These operators ‘own’ their customers and can easily sell them apps and content because they have the money already! The subscribers just select what they want and, presto, its ready for download. Only problem is, they demand a very high share of margin for providing the customer and the payment mechanism for the content and app providers.
Fifty to 80 per cent retention by them is not uncommon, leaving little for the developers. The operators also have a good argument. Because of the issues previously stated above there is a disproportionate amount of cost involved with customer care and refunds.
When Apple came along with its iTunes model with built-in auto-payment mechanism it immediately captured a big share of app sales worldwide. Pundits will argue that the iPhone market is pretty small overall and only people with money can afford an iPhone. Exactly! Those 13.7 million iPhone users buy an average of 82.5 million apps per month which are paid for with credit card information stored on iTunes.
Apple gives developers a whopping 70 per cent of the take and they keep the rest. The platform must be well and truly paid for by now and the only overhead is the small fee levied by credit card companies. Google has offered its developers the same margin. RIM is giving its developer an extra 10 per cent and is working closely with PayPal to develop a payment mechanism that should work smoothly.
So, the money is an issue. How much to charge for apps, how much to share with others and how to get the money from the customer?
If you are a network operator, your worst fears of just becoming ‘a big, fat pipe’ are being realised. Why would developers and aggregators offer you their content when you want to keep the biggest share of it? Why would your customers choose your content when they can find it in multiple locations elsewhere and probably cheaper?
Why would the dedicated app stores coming online want to share any revenue with operators when their customers can go to them direct? Apart from that massive pre-paid market which has limited spend and traditionally low ARPU, is an investment in apps and content delivery really viable?
It is unlikely that any single mobile operator worldwide has delivered anywhere near the 500 million Apple has in six months. On the other hand, wouldn’t the content providers like the opportunity to reach that extra pre-paid market via the operators’ unparallelled billing and micropayments infrastructure?
We now see a market that is acquiring a mobile handset not so much for its feature set but for its availability of applications. The handset vendors now see apps as a value added service that has the potential to increase flagging revenues from handset sales. Those quickest to adapt will most likely survive. Who knows what will pan out in the next six months? If it is anything like the last six, only a fool would dare to predict!
Monday, January 19, 2009
Spotify shows a lot of promise--so much so that the music piracy-focused blog sees it as a viable alternative to downloading pirated songs for free.
The drawbacks -
- Its a streaming service (songs only available you're online and connected to it)
- It doesn't work with portable music devices, so you can't take the songs with you
- Since songs aren't downloaded to your hard drive, they're not in your collection along with the rest of your music.Going back and forth between a local library and a centralized library like Spotify would be annoying
Music streaming service Spotify wins early fans
January 3, 2009 6:34 PM PST
Move over, Pandora. There's a new music service in town--well, in some towns anyway.
TorrentFreak has an in-depth write-up of a new music streaming service called Spotify, which shows an awful lot of promise--so much so that the music piracy-focused blog sees it as a viable alternative to downloading pirated songs for free.
Spotify is a lean, downloadable application that lets users stream music instantly from its library--a library built with the blessing of EMI Music, Sony BMG, Universal Music Group, Warner Music Group, and some smaller record labels. That, of course, begs the question: how does it make money? Spotify offers two ways to use its service, a free service sponsored by ads, and a paid subscription service.
Once downloaded, the service allows users to search its music catalog by artist, genre, or title, and stream the tracks on-demand any number of times.
One of the cooler features is the ability to create and share playlists (a la the now-defunct Muxtape). And the service recently added the ability to scrobble the songs you listen to through Spotify on Last.fm.
That's the good news. Now for the bad news: It isn't officially available in the U.S. yet (though a Digg commenter did provide a way for people to try it out Stateside, at least temporarily). Right now it can be accessed in the UK, Germany, France, Italy, Spain, Finland, Norway, and Sweden. And the company plans to roll out its service to new markets in 2009, according to its Web site.
Judging from comments on TorrentFreak, Digg, and TechCrunch, the service seems to have impressed people who have tried it with its speed, usability, and depth of songs (though it's taken dings for sound quality, frequency of commercials, and lack of portability). I haven't had a chance to try it out yet, but as a music fan who got pretty fed up with the repetition of songs on Pandora's artist radio stations over the holiday break, I think this looks very promising.
As for TorrentFreak's claims that Spotify is so good that it might stop piracy in its tracks, I'm skeptical. This is a streaming service, so the songs are only available to you when you're online and connected to it. It doesn't work with portable music devices, so you can't take the songs with you on the subway or to the gym (or, for me, drop it into the iPod dock hooked up to my stereo). And since the songs aren't downloaded to your hard drive, they're not in your grand collection along with the rest of your music. Spotify might have a decent-size library, but it doesn't have all the songs I've ripped from vinyl, or the latest album from a favorite local band that happens not to have signed with a label yet. Going back and forth between a local library and a centralized library like Spotify would be annoying.
Having everything in one place and being able to take it with you wherever you go is the goal for any music fan. And until Spotify offers that ability, I don't see it magically wiping out music piracy altogether. But it does appear that this group is on the right track, from the perspective of music fans, bands, and music labels.
Spotify: free, legal music (honest)
The PC Pro office is agog this afternoon. We’ve stumbled across Spotify - a genuinely free, legal music service that gives you unlimited streams of pretty much any track or album you can think of from the big four music labels and we’re all left wondering: what’s the catch?
All you have to do is register with the site (use this link, don’t go through the homepage, or else your name will simply be added to the waiting list) and download the desktop software, which is a mere 1.5MB.
Once installed, you’ll be presented with a piece of software that looks so similar to iTunes, I’d be amazed if Apple’s lawyers aren’t already ordering Havana cigars in anticipation. Pop the name of any band, track or album into the search box, and you’ll be presented with an impressive list of matching tracks, any of which can be played almost instantaneously with a double-click. Others can be added to the queue with a right-click.
There doesn’t seem to be any limit to the amount of times you can listen to a song - whole albums are seemingly up for grabs. Like iTunes itself, Spotify has struck deals with all the major record labels, and the only missing mainstream albums are the usual hold-outs: The Beatles, Pink Floyd, The Grumbleweeds.
So how the Charlie Dickens are they making this pay? Every 20 minutes or so, in between tracks, you get hit with a short advert. So far, I’ve had Moira Stewart reminding me to get my tax return in on time and a reminder about claiming child benefit. Literally taking with one hand and giving with the other.
Spotify offers day passes for 99p or monthly subscriptions for £9.99 if you want to avoid the ads and pick up a few extra features. Nothing worth paying for, in my opinion, so I’m hoping the Government advertising is enough to keep this brilliant service in the black.
One word of caution: delve into the preferences menu and you’ll see that Spotify creates a local cache. It’s set to steal no more than 10% of your free disk space, but you can reduce that quota if you wish. And before you go hunting out that cache in anticipation of a shedload of free MP3s being stored on your PC, forget it: we’ve already looked, and they weren’t that naive.
Vodafone Tests 16Mbps Mobile Data Download SpeedsCellular News, January 15, 2009
Vodafone Spain says that it has successfully trialled an evolution of mobile broadband technology achieving actual peak data download rates of up to 16 Mbps. The high speed data connection was achieved during field trials of HSPA+ 64QAM technology on the Spainish network.
Vodafone now plans to trial mobile broadband data connections with peak rates of up to 21Mbps early in 2009 using HSPA+ MIMO functionality.
The company said that if the trials prove a success, it plans to make this technology available in selected commercial networks.
"Successfully demonstrating a live HSPA+ high speed connection has been a key milestone in continuing to build confidence in this new technology," said Andy MacLeod, Global Networks Director of Vodafone. "The results show that HSPA+ technology is well placed to further enhance our customers' mobile broadband experience through the evolution of our existing 3G networks."
Vodafone worked in with Ericsson and Qualcomm for the trials.
HSPA+ technology is the next evolutionary step in the (3G) HSPA roadmap and increases performance through the use of a more advanced modulation technique called 64QAM. Performance can be enhanced further through the use of multiple antennae on both base stations and data devices (Multiple Input Multiple Output - MIMO).
Both 64QAM and MIMO features require new HSPA+ mobile broadband devices. Vodafone is working with its device vendors on the trialing, testing and validation of these devices ready for commercial availability.
Interesting data on Mobile TV viewership trends
plans introduce the service in major markets including
taking advantage of the
advanced wireless services.
According to MediaFLO, the Semi-Annual Wireless Industry Survey from industry body the CTIA, mobile TV viewership increased 103% over thedaily average during this year’s US Open golf championship playoff, while FLO TV’s Olympics channel, available on AT&T Mobile TV, was the most-watched channel on the AT&T Mobile TV service during the live
Olympics coverage. Meanwhile, live coverage of Hurricane Ike helped increase viewership by 31% during the storm,
while on election day, FLO TV subscribers spent an average of 22% more time watching TV on their phones,
the company said.
Thursday, January 15, 2009
Nortel files for 'Chapter 11' creditor protection14/01/2009 - by Ian Scales
In an echo of the last telecoms recession of 2001 when the dread words 'Chapter 11' were much in evidence, Nortel Networks has today filed for bankruptcy protection. The move means that it gets some legal breathing space (short of administration) to restructure and re-order its finances. The move is an almost inevitable culmination of months of speculation over the fate of the Canada-based company, once counted amongst the top 5 or so global telecoms equipment vendors and capitalised at tens of billions of dollars at the peak of the last boom in the late 1990s. But Nortel failed to recover from that crash and now the global recession has delivered a second blow, with a $3.4 billion loss in the third financial quarter of 2008 and a share price drop of 97 per cent over the year. Nortel became a sub-dollar stock last month and was de-listed from the New York Stock Exchange and, as the misery continued, other companies entered the frame to buy its more attractive parts (see - Radware now suitor of choice to buy part of Nortel, but Huawei waits in the wings).
"Nortel must be put on a sound financial footing once and for all," said Nortel President and CEO Mike Zafirovski. "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be."
Nortel affiliates in Asia, including LG Nortel and in the Caribbean and Latin America, as well as the Nortel Government Solutions business, are not included in the proceedings and are expected to continue to operate normally, the company said.
The move is an almost inevitable culmination of months of speculation over the fate of the Canada-based company, once counted amongst the top 5 or so global telecoms equipment vendors and capitalised at tens of billions of dollars at the peak of the last boom in the late 1990s.
But Nortel failed to recover from that crash and now the global recession has delivered a second blow, with a $3.4 billion loss in the third financial quarter of 2008 and a share price drop of 97 per cent over the year.
Nortel became a sub-dollar stock last month and was de-listed from the New York Stock Exchange and, as the misery continued, other companies entered the frame to buy its more attractive parts (see - Radware now suitor of choice to buy part of Nortel, but Huawei waits in the wings).
Slowly but surely moving to a DRM free world. Still not clear what the music biz model is likely to evolve to especially in emerging markets rampant with piracy
Apple cuts copy protection and prices on iTunes
Apple's Macworld finale includes end of copy protection on iTunes, bigger Macbook Pro
Jessica Mintz, AP News
Jan 06, 2009
Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.
In Apple's final appearance at the Macworld trade show, Apple's top marketing executive, Philip Schiller, said Tuesday that iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously made all songs sell for 99 cents.
Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management," or DRM, technology that limits people's ability to copy songs or move them to multiple computers. Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library will be available that way.
While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection. Amazon.com Inc. started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.
Schiller also announced that iPhone 3G users will be able to buy songs from the iTunes store using the cellular data network. Previously, iPhone users could shop for tunes when connected to a Wi-Fi hot spot.
The iTunes changes marked the highlights of Schiller's run as a stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone. Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.
Apple shares slipped $1.56, or 1.7 percent, to close at $93.02.
Schiller got a warm welcome from the attendees — who packed the convention hall despite the pall cast over the industry by the economic downturn — especially at the start of his talk, when he thanked them for showing up despite Jobs' notable absence. He ran seamlessly through his 90-minute presentation, getting applause and oohs from the audience, varying little from the format of slides and demos established by Jobs. And like Jobs, he gushed about Apple's products being the best in the world.
"Phil did an exceptionally good job in representing Apple," said Tim Bajarin, president of technology analyst group Creative Strategies Inc.
Lower iTunes prices were Apple's only nod to the recession — and an oblique one at that, as record labels have been asking for years to set varying song prices. Rather than an inexpensive new Mac to lure budget-conscious buyers, Schiller unveiled a new $2,800 Macbook Pro laptop with a 17-inch screen and the sleek aluminum casing the company debuted with the super-thin Macbook Air.
He also unwrapped new versions of two software packages for Macs, including the iLife multimedia programs. For instance, iPhoto '09 can recognize faces and sort photos based on who's in them. GarageBand '09 includes videotaped, interactive music lessons given by Sting and other musicians. Apple added more professional video editing features to iMovie '09.
Apple's answer to Microsoft Corp.'s Office productivity suite, called iWork, also got a makeover, including zippy new ways to add animation between slides in the Keynote presentation software. And Apple unveiled a "beta" test version of a Web site for sharing documents, iWork.com. Unlike Google Inc.'s online documents program, however, Apple's version does not allow people to edit documents in a Web browser.
Apple said the thin new 17-inch aluminum-cased Macbook Pro, which joins an existing 15-inch model, will start shipping at the end of January. Perhaps the biggest twist is the laptop's battery, which is designed to last longer on each charge — up to seven or eight hours — and work after more charges than older batteries. But like Apple's iPod and the super-slim Macbook Air, the battery will be sealed inside and the owners won't be able to remove and replace it themselves. Instead, they'll have to spend $179 to have an Apple store expert swap in a new one.
Jobs' decision not to attend Macworld sparked a new round of fears that the CEO, a survivor of pancreatic cancer who has seemed gaunt in recent appearances, was in worsening health. To put the questions to rest, Jobs said Monday he is getting treatment for a hormone imbalance that caused him to lose weight, and urged Macworld attendees to relax and enjoy the show.
And after the Tuesday keynote, in which nothing purely new was disclosed, the company's decision to substitute veteran salesman Schiller for master showman Jobs seemed even less questionable.