That’s some food for thought – what will the mobile handset market look like in the future? What do you think?

Apple used to be the User’s White Knight. Always putting the user first offering unprecedented ease of use and beauty. This seems to have come to a grinding halt in the recent move to reject the launch of Google Voice in the AppStore. It woudl not be too much of a wild guess to assume that At&t has a part in this decision. In an open competitive market this should not really be possible. So how did they think? Why was Skype for iPhone approved?

An other question I find worth mulling over is; what is it At&t and Apple are so afraid of? Do they feel they have a weak position in the mobile ecosystem? Do they not believe in the strengths of what they deliver jointly and independently? If it was At&t pushing this decision, what is it Apple is afraid of? They cannot possibly be depending on At&t to sell and distribute the iPhone. With the current success I am sure any of the other US carriers would sign a deal with Apple and let Google Voice up on the AppStore as well. After all Google Voice is not the only player creating a disruptive change in telecommunications. Players like Rebtel and Skydeck are well at it togethere with scores more.

To me carriers risk ending up in the same reactice panic struck place where the record labels are today. They build walls (and dig their own graves) by protecting their old revenue streams by legal fights instead of deliver stuff in a way that consumers actually want it.

As if the Google Voice decision is not enough. Apple also wants to more or less criminalise “jailbreaking” your iPhone so you can install other apps than the ones on the AppStore. Threat to the national security is the reason in a letter to the Copyright Office. Supposedly base stations can be knocked out by cyber terrorists. Why not do as we have done with the internet so far? Protect what needs protecting instead of shutting down the internet?

It will be interesting to follow the story as it unwinds. Next case will be the very much anticipated Spotify client for the iPhone. It is ready to go, just waiting for that rubber stamp from Apple.

Anyway, now you know why I have been silent for a few days. The thing on my mind fora  good while now has been the AppStore craze. I think it is fabulous that Apple has sold 1 billion apps. But I think it’s madness for each and every one to give up their day-job in order to become an iPhone App developer (or any other platform with a newly opened appstore for that matter). Apple has been quick to use a few lucky ones as showcases of one-man shows that have had success. It is great and they really deserve it. What I am saying is that they are not the majority.

The underlying problem is still there and the appstores are just a new pain killer, possibly doing the job better than other things before them. The problem is the fragmentation in platforms. The lowest common denominator in mobile today is SMS. But it has its limitations in creating exciting experiences other than flirt SMS from that gorgeous girl on campus or delivering sports scores live.

After that we have browser based services, or mobile internet services formerly known as WAP services. It’s getting messy, but it is still manageable.

When we come to apps the fragmentations really sets in. And the entry cost to the game starts to be prohibitive. Some developers I talk to claim that they see costs as high as 50 000 USD to launch one new game app on a major US carrier. This is of course driven by demands to cover every handset ever sold by the carrier (well, almost).

The costs are dropping with the AppStores. Seems like Ovi store is the cheapest entry ticket at the moment, but it is also the most recent player with an unproven distribution power, and they are currently cutting down on resources in this area, even though they claim Ovi is becoming the platform for all their new service business to consumers. Read more about that in this Washington Post article.

So if you’re going the appstore route, think twice an make sure you do your homework. We are after all in a business with low value purchases and thin margins, so volume will always be key. And the appstores are getting crowded fast. You need to have a pretty strong marketing budget bhind you to get your app in front of real prospective buyers.

Good luck and see you next week!

The thing is though, you gotta have good stuff in them stores. And guess what, there are only that many different apps and derivatives of them you can market. In this great post  by Timothy Hay we see one side of that. The funds set up about a year ago to fuel the growth of apps have slowed down the investment pace. This makes perfect sense. Since these funds are normal VC funds and not government grants they will not fund any guy with an idea and the iPhone SDK downloaded to their laptop. Matt Murphy at Kleiner Perkins Caufield & Byers and the other VC guys are still in the VC game. Finding the next Google or twitter. Not clogging the pipes in these various app stores with more of the same. 

What effects can we expect then? The loss of the near monopoly position in distribution that the mobile carriers have had is becoming more obvious. Just in the last few weeks more of my partners at the big mobile carriers content groups are talking about widgets, on-device-portals, preloaded app with attached flexible billing more than the portal. Off the record comments like \”I don\’t care about the portal anymore. It is all about getting stuff in front of the consumer in all possible ways\”, are on my record. 

App Store the new black? No, but a great catalyst for the next phase of the mobile content/app/web/expereince industry.

I see that as a sign of maturity for our industry. As in any industry that matures each party specialise more and try to build on their competitive advantages. Mobile operators have made huge strides in this direction as well. They have practically given up to become the DreamWorks for mobile content and apps. Their USP is pretty weak compared to the entertainment industry. But EMI or the Guardian are not that strong in offering access to the internet, do the billing or provide localisation data either.

Lynette Luna at Fierce Wireless develops this theme very well in her recent post. Just as I mentioned the other day there are some anomalies hanging around though. Hope that some encounters and discussions outside the MWC09 bubble will make Nokia and some others scrap some plans that just seem a bit too far away from their core. Even though the mobile internet is new, cool, hip and part of a paradigm shift normal business and marketing laws (and even gravity!) applies. Few think Nokia or Samsung when they think social networking. But as a tool to get to the social network of choice Nokia, Samsung and all the others have a great opportunity to be in the game.

However efforts like Ovi Store and others (thanks Steve Jobs for letting the Genie out of the bottle). The Ovi publisher model copying Apple’s 70/30 model makes a case for content developers to actually develop new innovative services instead of porting licensed properties to mobile. On the distribution side Ovi also has the potential for mass market reach, even though downloading a store app to the phone before I can purchase things over the air seems a huge impediment. Is this really going to be the case? I am looking for more details following yesterday’s announcement at the Nokia press gathering at MWC09 in Barcelona.

Another observation to support the statement that the industry is maturing is the growth in the B2B mobile solutions niche. We see mobile solutions companies beyond premium sms providers is growing their business across the board. Maybe some caution is relevant if we include mobile advertising. But the general trend that existing media businesses are mobilising themselves seems to be valid. Here the companies that depend less on advertsing revenue are the ones I expect to take the lead out of the recession. In a short few years I am convinced we will be baffled over how primitive and insecure our baby the mobile web was back in 2009. Yes, I remain the optimist.

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Had some time over the holidays to walk through the AppStore with my iPhone. Found a few gems. This is not a “best iPhone apps of the year” post though.

My point is how smooth and easy the entire discovery and purchase experience is. There is second to none of all other channels for mobile apps that can compete. This makes me excited if we can get better discovery and shopping experiences for all mobile handsets. After all the iPhone ecosystem is a pretty closed system. Herein lies my skepticism. 10 m handsets is little in a world of 4 billion mobile users. How do we expand this to the “free mobile world”?

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For my own businesses though I find it much more useful to run a few off the charts what-if scenarios. Then you are ready when something whacky happens. So these days I think in terms of “so what if so and so happened out of the blue, what would we do? What would Superman do?”.

Here are my  five scenarios  to be prepared for in 2009. If you know what you would do if any of these things happened you are little better prepared than the rest of the pack.

1. Nokia looses the top positions in handsets to Android and open source OS based phones (and yes the iPhone as well of course).

Well, I consider Palm and maybe even Motorola already dead. Call me a cynic if you like. Even by picking Nokia this one is almost qualifying as an extrapolation of current events and maybe the least bold scenario. The real effect here would be increased competition in the mobile entertainment space. The reason being that it speeds up the convergence between “the two Internets” – the mobile and PC experienced internet. Since competitive advantage in our industry is based on skills in how to overcome the fragmentation in technologies and non-compatibilities. I.e. we have learnt how to tweak and short cut in an ecosystem that is very rudimentary no to say flawed. As the ecosystem improves and turns into a normal operating space as the Internet for PCs is already alot of our special mobile skills are worth nothing. Zero. Zilch. So make sure you can offer experiences that stand out when the user experience shoots up. Get the customer base to grow fast so you have a tribe of loyal followers.

2. Major mobile network operator goes bust.

Why not? There are some serious refinancing of debt needed this year among many MNO’s in Europe and North America. Will they manage to get through the year? We have heard abot cost cutting and staff reductions for the last three months now and I take it that we will hear more. When it comes to government bailouts, I truly hope there will be none if a telco knocked on the government’s door. There is a difference from saving a vital function in society (moving money around) from saving a company that makes less than it can produce the service for. Especially when there are eager competitors in every market that could provide the service without interruption (almost), should a player go bust. Implications? You might loose that lucrative MNO contract when your customer goes bust, and they might drag you down as well if they have large unpaid bills they owe you. This is more or less practice by the large operators to first of all have 90 days payment terms and then pay late on top of that. If you are in a growth situation with a MNO and your service/game sells really well and expands, the light in the end of the tunnel might be an oncoming train. That revenue you booked might not materialise. Action: Clear up your accounts receiveable and get paid or pull the service. At least play hardball to let your customer understand that they must have mistaken you for a bank.

3. Research reports really prove that mobile phone radiation is a real health hazard.

No we are getting into the real earthquake-like scenarios. Say that the NIH or some other serious institution can prove that a) the radiation from phones and base stations are seriously altering human tissue and b) old research has been tampered with driven by commercial interests and some of the manufacturers’ CEOs will stand trial for this deception. Implication: Severe drop in mobile phone use. Fixed broadband explodes.

Fixed telephony revival. We start to plan our day again instead of “I’ll text you when I’m there” lifestyle we live today. Mobile phones with an airplane mode are still used for off-line things like playing games once downloaded or transferred from PC to phone. Action: Start a recycling business for mobile phones.

4. All mobile content becomes free before the advertisers are ready to pay for the advertising needed to fund the industry.

Back to a safer prediction maybe. We have seen alot of free ad-funded models for mobile in the last 6 months. In my business I have tested a few myself. It is defenitely a model that makes sense and will prevail. The problem is that we have been double-whacked here. The big advertisers were not convinced at the time when the financial crisis reached its climax in the autumn of 2008. So now there are sites, services and ad agencies chasing very few ad dollars for their things. Some had already made a 100% commitment to the consumers for a free service. Implication: In 2009 you can probably not run a profitable business on a free ad-funded model. Action: If you have the financial strength, optimise the business and hold on to the cash as much as you can. Evangelise the advertising world. Join up with ad-agencies and ad networks to to this. If you need to make a profit sooner rather than later to survive, add premium features, find banner swaps for no-cash customer acquisitions, Evangelise as mentioned above. Or, call it quits and start from scratch with the money you have left. Maybe a credit collection firm?

5. A major government is overthrown  by a grassroots movement using the mobile phone as primary tool.

If Obama could win an election with digital media as a large piece in the puzzle, why not do the opposite. Here I think of much of the developing world where we easily find a few governments that should go if the countries in question are to thrive. Common to these countries is that the penetration of mobile phones are far higher than PC internet access penetration. Implication: Revival of democracy and citizen engagement and empowerment to organise, debate and finally make their will heard. Action: Pick a country, go there and start building the service and team. Might not pay your mortgage today, but if you can live off your savings for a while you are in for something to talk to your grandchildren about. It is all about leaving the world a tiny bit better than you found it.

2009 is already a week old, are you prepared?!

Let me know what you think. But make those contingency plans first. Make up your own what-ifs and make sure you know how to act if they become reality.

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For this very matter we have been very slow in developing any apps over at Acemob. We focus mainly on browser based services to be able to offer the right balance of great experience and a viable model for us. Being bootstrapped we have to earn the money we want to spend, and we have rents to pay and families to feed. But I would love to release cool apps as well but that takes some guts these days. If there was more transparency and clarity around the AppStore process and average cost to launch something there it would help. I agree with Michael as well that a proper ecosystem would probably give a huge boost to invention as well.

Happy Friday all!

Alot of questions. Important ones though. Help me out here and share what you know. I will share everything I find out.