Mobile 2.0 and Emerging Mobile Media Services

In short, there weren’t any “earth shattering” announcements at this year’s 2008 Mobile World Congress (formerly 3GSM). This is consistent with what I had suggested when talking with Jason Ankeny at Fierce Mobile Content prior to the event.

However, we are seeing steady progress and pieces falling into place that will continue to sustain a thriving ecosystem centered around the mobile device. Mobile advertising, music, and TV are all making steady progress and are clearly “real” (i.e., showing early signs of growth and not simply existing in the existential sense of the word).

Of course, there was plenty of “buzz”…

Consolidation: beginning of the end OR being of the beginning

Corporate consolidation
It goes without saying that the Microsoft-Yahoo mating / stalking process was widely discussed. A notable announcement that also related to Microsoft was their $500M acquisition of Danger - the company started by Andy Rubin, who together with Rich Miner, co-founded Android.

We saw the coming-out of Movius (IP Unity meets Glenayre) which was akin to when we saw the successful launch of Motricity some years back at CTIA. Another content industry related announcement was the Mandalay acquisition of Twistbox.

Consolidation of operating systems
It appears that this is the beginning of the end of the highly-fragmented mobile operating system (OS) ecosystem. With Linux taking center stage at this year’s show, it is clear that Linux has a seat at the table going forward. The presence of both Google’s Android and the LiMo foundation was felt throughout the Congress. While Google wasn’t there front and center (e.g., big-booth or big signage), early demonstrations of Android could be found at a number of chip providers’ and handset providers’ booths. LiMo had more of an explicit presence and the demonstrations of LiMo systems were shown, arguably in a more mature form than the Android demos.

Although, it will take over 5 years for this OS consolidation to start to simplify, we will see rapid movement from over 30 operating systems down to a small group. Linux, Symbian and Windows will be around for the foreseeable future. I’d also add that Apple has clearly made a seat for themselves at the Smartphone table, but it is uncertain whether they can make an entry into the feature-phone world of operating systems.

Convergence and context

We are seeing a return of convergence. According to Steve Andrews, BT Group Chief of Mobility and Convergence, “2008 will officially be the year that convergence comes of age”. Whether or not it is co-incidental, this return of convergence (e.g., converged messaging) is happening at the same time the original convergence hype-sters are getting rebooted. Last year, I would have written off companies like Comverse and Openwave, but there is some interesting activity afoot. For example, the original team (Andre Dahan and John Bunyan) behind AT&T’s mMode and the original American Idol voting success is now at the helm of Comverse.

For Nokia, it is all about context. The president and CEO of Nokia, Olli-Pekka Kallasvuo, said that Nokia will “reshape the Internet” by enabling a context-aware Internet. In the same EE Times article, they suggest that Nokia believes they, and not Google, will deliver “operator-independent, cross-platform phones through new software and services.” My recent blog entry entitled “Of Trolls and Droids: on cross-species development and the evolution of mobile tools and platforms” dealt with this topic in more detail.

Content, content, content…

Although we didn’t explicitly hear people asserting that content is king, the positioning statements (e.g., Nokia’s emphasis on context being central) and the sponsored articles in the Mobile World Congress Dailies had a number of related declarations: context is king (Colibria), customer is king (Telecordia), conversation is king (Southwing), etc.

Music
The key areas of content that were discussed last year, music and video, are still center stage. In fact, Billboard noted this leading up to their Backstage event. In Billboard Magazine’s Feb 16 article “Global Mobile: GSMA Mobile World Congress Will Explore International Growth of New Technologies”, Juliana Koranteng noted that music is making solid progress with handset manufacturers releasing more and more music-capable handsets. She also commented on the steady number of wireless music initiatives announced throughout the year that keep music as a key area to watch, e.g., Apple’s iPhone, Omnifone’s Musicstation, Nokia’s investment in the space, Motorola’s purchase of Soundbuzz, , Microsoft acquisition of Musiwave from Openwave.

I can confirm this music trend from my vantage point at Nellymoser as we are powering AT&T’s VIP Access mobile music service and Virgin Mobile’s Headliner mobile music service.

Mobile TV
The content hall (Hall 7) was dominated by Mobile TV providers. We saw the appearance of film celebrities “stumping” for mobile TV and mobile media. Robert Redford spoke at the Billboard Backstage event and Isabella Rossellini was taping a live interview on one of the booths during the event.

While technology fragmentation has stinted growth in a number of the mobile content areas, it is particularly noticeable in Mobile TV. There are very few handsets that have access to overlay networks (e.g., DVB-H, MediaFLO, T-DMB) and furthermore, the content providers have to deal with different deployments of these technologies across different operators and devices.

Advertising
It is clear that many are looking towards mobile advertising to be the saving grace of flattening on-deck operator sales. As with music and TV, advertising is making progress.

Of particular interest at the show was Nokia’s announcement of their own global ad network. Nokia launched their “carrier grade media” which aspires to provide a single marketplace to simplify the buying process within mobile advertising. Also see the Nokia article in the show daily. There was also news that the largest GSMA’s operator members (Vodafone Group, Telefonica, O2 Europe, T-Mobile International, FT-Orange and 3) have formed a mobile advertising measurement working group.

Consumer experience

Even though the iPhone has not seen the take-up internationally that we’ve seen in the U.S. (e.g., the higher-priced Nokia N95 far outsells the iPhone in the U.K.), Apple has left their indelible mark on user experience. To be fair, this lack of traction is likely tied to the iPhone being an EDGE device - all bets are off when the 3G versions hit the market internationally. Regardless, there was a lot of discussion related to how much Internet usage the iPhone was driving in both the states and Europe.

To date, the move from 2.5G to 3G has been underwhelming but it is clear from the show that we are making strong progress towards faster networks (e.g., HSDPA, LTE, WiMax). Certainly faster networks and more capable devices will make better consumer experiences possible.

The concept of personalization and customization as related to consumer experience received steady buzz. For example, Ad Infuse discussed how the user experience gets customized and Openwave argued for distinguishing between ‘participatory’ and ‘anticipatory’ types of personalization. From what I can tell, this is just another way of talking about preference and recommendation.

Widgets could been seen on a number of booths throughout the show. They seem to be used as a proxy for user experience, e.g., rather than directly tackling core user experience and design issues, widgets are offered-up as a short-term solution to the problem. They are clearly becoming a necessary feature for both devices and content offerings and as of the show, Yahoo!, AOL and Microsoft have announced their commitment to open platforms for mobile widget development.

Conclusion

On a personal note, I’d say that moving from Cannes to Barcelona has changed the nature of the show. While I do not miss the taxi lines, I do miss having the social events and congress proximate to one another. Compared with CTIA, both operators and device manufacturers have a fairly strong presence and people come to the Mobile World Congress to do business.

In Part 1, I endeavored to (i) define the various approaches towards the “write once, run everywhere” dilemma, (ii) defined a “stack” as a vehicle for understanding the evolving landscape, and (iii) provided some comments on the recent developments related to Google, Nokia, Microsoft, Adobe and Sun. It can be found here: Of Trolls and Droids: on cross-species development and the evolution of mobile tools and platforms.

In this post (part 2) I will address the evolution and who (i.e., which categories) will likely survive as this plays out.

Setting the stage …

In the last post in this series, I referenced Darcy Wentworth Thompson’s On Growth and Form as a “framing” for the current approach towards the “write once, run everywhere” dilemma (i.e., structural evolution). For consistency, I thought I’d offer another framework for this post. George-Spencer Brown in his book Laws of Form developed a notation of two-element Boolean algebra. I have a proclivity for “sign engineering” (i.e., cognitive ergonomics) and notational systems and maintain a website - logic-alphabet.net - that is dedicated to such pursuits.

Nevertheless, the primary symbol from which Spencer-Brown built his system in “Laws of Form” is the “mark”. The mark denotes the act of making a distinction, i.e., between this and everything that is not this. Making distinctions (i.e., drawing boundaries) are a cornerstone of meaning and understanding.

So as not to further digress, the following post is a set of “distinctions” and taxonomies that I have made and found useful in understanding the evolution of mobile platforms. In full disclosure, since Nellymoser provides a mobile services platform, I have included us in the taxonomies.

A historical proxy - platform evolution

The following is a brief history of the Internet viewed through the evolution of application platforms. I have had the pleasure of spending time with Pete Brumme (co-founder of Silverstream amongst many other credentials). Together, we put together one way to look at the evolution of the Internet:

1993 to 1994 – Put a face out to the market … get a website launched

1995 to 1996 – The Dynamic Web; service different constituents differently; personalization

1997 to 1998 – Transaction Content; do business via the web

1998 to 2000: Not much happened

2000 to 2001 – Multi-device; any device, any time; N-Tier applications running on multiple devices

2001 to 2002 – Web services

Reflecting upon this in hindsight, it is apparent that application platforms have become a necessary staple when deploying any type of rich, interactive web application. Early on, the companies providing the application servers created the applications themselves. Now, any company can create applications based on the application platforms using standard web tools and technologies.

Lens #1

For digital media services, it is useful to make a distinction between publishing and delivery infrastructure.

Companies such as Brightcove and thePlatform provide both publishing and delivery infrastructure.

Companies such as Qualcomm, Nellymoser and Adobe provide both the service infrastructure and application platforms. Similarly, companies such as Orb Networks, MobiTV and Verisign provide both mobile service infrastructure and digital delivery infrastructure.

Thesis:

Operators and content providers (e.g., media companies and publishers) will and should run their business like they run their online businesses. They will continue to have a direct relationship (dialog) with their networked audience and utilize enabling platforms and services. We have seen this move start to take hold in mobile. There is a shift from relying upon indirect relationships with the customers (e.g., via publishers, aggregators and channel enablers) towards utilizing mobile service and application infrastructure and platforms.

Lens #2

Another way to look at this in terms of more specialized “platform” distinctions would be:

Thesis:

There will, and already has been, a general consolidation of platforms. For example, the Web / WAP content management, messaging / SMS platforms and even the rich media platforms will become part of a mobile services platform which itself is part of a larger service delivery platform. The network-aware applications and aspects of content delivery platforms will evolve and will likely become part of application platforms. There will continue to be tools and middleware but the paradigm will be driven by the common, standard web tools and technologies and not the current array of proprietary mobile tools used in ODPs, applications and WAP deployments.

Lens #3

A closer set of distinctions made within the mobile content enablement and delivery space looks something like the following (+/- a bunch of names):

Thesis:

The mobile phone shares some key attributes with both PCs and cable / set-top boxes. For a certain class of phones (i.e., that have suitable screen realestate), the browser will be a core feature set along with things like text messaging and voice. We have seen the power of this with the iPhone. This evolution will be disruptive to a number of mobile companies that are currently taking advantage of temporary disparities that exist (and are rapidly disappearing), e.g., mobile advertising companies and browsers / mobile Internet enablement companies. With set-top boxes the user interface (remote control) is much closer to the mobile phone than a mobile phone is to a mouse and keyboard. As such, the uniqueness of the interface and hence the user experience. This will make the mobile phone, along with other core aspects of mobility (localized, personalized, always-on, every-present) more than just a channel.

Mobile 2.0 Starts to Emerge

Although we’ve seen some early attempts at Mobile 2.0 in 2007, Mobile 2.0 will emerge in 2008. To date, the so-called 2.0 services are either basic, partial access to a Web 2.0 service via a Mobile Internet Browser (i.e., Mobile Web 2.0) or applications that represent one aspect or feature of Web 2.0 such as user-generated content, community, collective intelligence, or rich media. Mobile 2.0 services will emerge in 2008 that finally integrate the social web with the core foundations of mobility – personal, local, always-on and ever-present. Furthermore, these services are based on a new generation of wireless devices that enable rich, interactive services that integrate the full range of mobile consumer touch points including talking, texting, capturing, sending, listening, viewing.

Integrated, Multi-Platform Services

It is the beginning of the end for mobile being treated as a stand-alone channel. Mobile media must and will be integrated into an overall digital experience. Services will be reconceived, manifested and integrated across multiple platforms, instantiated via different forms of access and engagement. Mobile devices will become (i) a vehicle for the discovery of content and services, (ii) a remote-control for all things digital, and (iii) a personalized point of access and distribution for all things digital.

Mobile In-App Advertising

In 2008, we will see a rapid increase of digital advertising techniques derived from the Internet (e.g., search, display-based and video), we will also see the beginning of advertising and sponsorship that is made for mobile. In-application advertising, in which brands, ads and promotions are contextualized and integrated into applications and services are just the beginning. Although in 2007, we saw new types of inventory emerge that integrated commerce (e.g. via recommendations, theming and bundling), we expect to see in 2008 the coupling of relevancy-based engagement with contextual commerce. While search and display-based methods will be the primary revenue sources from mobile advertising in 2008, look for personalized, branded media and unique inventory coming from in-application advertising.

Mobile Content Retailing

Mobile operators will continue to cull the amount of content they offer via their portals and storefronts. Furthermore, operators will adopt digital retailing strategies we’ve seen on the Internet that includes better overall user experience, smarter use of placement and “shelf-space”, and more efficient, personalized commerce engines. They will also look to off-deck content partners to be a significant participant in the growth of mobile content sales.

Golden Age Of Mobile Apps

With the success of Google’s mobile applications (e.g., Gmail, Google Maps, YouTube) and Yahoo! Go, content providers and mobile operators, following the consumers’ lead, are warming up to dedicated applications again for mobile. The verdict is still out whether a browser is the best vehicle for presenting and mediating the 2-inch mobile experience. On higher-end phones, such as the iPhone it is clear that the browser will have a seat at the table. By moving from “closed†operating systems to operating systems with published APIs (e.g, Symbian, Google, Microsoft), applications will be able to provide a much better and deeper integration with the key aspects of the mobile phone (PIM, calendar, camera, location, video), which will enable developers to set a new bar for rich, interactive mobile applications and services that will surpass the experience provided by the mobile browser. There will also be a much richer range of application types, moving well beyond on-device portals and widgets.

New Media Companies will Interact Directly with their Audience

To date, the mobile operators and content providers have dominated the sale of mobile content. The mobile operators provide the dominant vehicles (i.e., portals and storefronts) for enabling consumers to find, access and buy content. The content providers have benefited from both from these operator portals and storefronts as well as 3rd party, off-deck D2C services. In 2008, we will see new media companies (e.g. web companies) move to mobile en masse which will not only create off-deck as the dominant vehicle for discovering mobile content but also radically change the nature of the content and services. The nature of the services will transition from Mobile 1.0 services (i.e., broad-cast services that include ringtones, wallpaper, games, video) to Mobile 2.0 – rich, interactive services that integrate the social web with core aspects of mobility.

Being Open: Growth, Friction or Fragmentation

Although openness will lead to consumers having greater choice - better products and services offered at better price points - open devices and networks will create more fragmentation. And, it is not clear that open access can function as a primary growth driver until other enablers are in place. If you think about the rapid growth of Web 2.0, and think about what will drive “Mobile 2.0″, it will be: (i) ubiquitous mobile broadband access - this will be driven by things like flat-rate pricing, mobile advertising solutions that provide alternatives to premium billing and other compelling consumer propositions of content / service bundles that make services beyond voice and ringtones a “must have”; (ii) frictionless distribution – the ability to easily deploy and distribute services directly to the end-user, off-deck; (iii) affordable, unrestricted access to enabling software platforms ( i.e. tools & technology - the picks and shovels). Web 2.0 services rapidly emerged and thrived because of the ability for any web developer to create and deploy services. Unlike the mobile tools on the market today, creating web applications & services doesn’t necessarily require an advanced degree in engineering.

This is Not Your Father’s Smartphone

In some sense, 2008 will be the liberation (or death depending on your outlook) of the Smartphone as a category. The devices formerly known as Smartphones continue to be a key driver for mobile data usage in general and content / service consumption in particular. We will see continued growth from Windows, RIM and the iPhone in the U.S. and continued strong growth of Symbian internationally. Meanwhile, the distinction between Smartphones and feature phones may be a less important distinction in the coming years. The appearance of the iPhone not only put an end to the Smartphone as we knew it and ushered in a new generation of devices. Nokia, Apple and HTC have raised the bar in terms of user experience and relevant feature-sets.