A nice double message from a store in Vietnam – a christmas tree made of recycled phones.

On that note: Happy Holidays!

2011 was a busy year for Mobiletribe and we have now set the table for a very exciting 2012. Part of the plan is to increase our visibility for the blog and the exciting projects we have in development. Watch this space!

Well in my mind,  we are finally seeing less hyperbole and more realistic estimates. There is a point in the Juniper report that is key though. The cost of mobile data. We are seeing flat rate “all you can eat” offers becoming the norm. This is great to drive consumer adaptation. However, there is a huge conflict brewing here with “all you can eat” packages and increased use of data from more data consuming services like video for instance. At some point the production cost will be more than the revenue. The operators have created a dilemma for themselves in a way. We should not stop at the mobile network operator though. The network infrstructure suppliers have a stake in this as well. As does creative network sharing deals among the operators.

Get me right here, I am a huge fan of consumer friendly business. Not only for the consumers sake, but for the sake of building profitable companies. It all starts with the consumer who pays the bill at the end of the day. We do need cheap data traffic with a high degree of transparency. But no ecosystem survives if one link fails. So here we need to find good suitable pricing models. Wholesale data traffic sold from operator to content provider who in his turn sets a price for the service that includes the data traffic. At CTIA these arguments were elaborated upon by Andrew Bud of mBlox in a very clear way. 

The long and short of it is that we will see growth in mobile entertainment through this recession and beyond. The rate of growth will very much depend on an orchestrated effort from all participants in the ecosystem to help lowering the production cost and allowing for transparent profitable models all the way so we together can deliver attractive services at price points were get mass adoption.

Norman Lewis of Wireless Grids asked this brilliant question in the header – Why do we make phone calls? He wants us to look at the social meaning of communication, not only the function. I guess we can say it is a fancy way of saying that the experience is what counts. But it is interesting to put this in the framework of business models as well. We need to have business models that match this view of the social meaning of comminication, the models need to extend beyond the communication instance itself. In one sense flat fee monthly recurring billing is one model that fits this quite well. At least it is a transparent way. At times maybe a bit blunt for the real valuation of each instance when I use a service. Still, it gives you as a consumer the ability to make an active choice – “does this service give me an experience that I think is worth at least what I pay each month for it?”. 

At the core of this thinking is of course the reason why we all have a phone – to communicate with others. The killer app is voice, then comes text. All the other things in the so called mobile internet (hey, why do we say that? It’s the same internet accessed by a mobile device, anyway where was I?) are having a tough time to compete. Historically it has been on the grounds of technical complexity. It has been far too difficult to do anything else than placing a call on a mobile phone. Then when you managed to surf to a mobile site, it turned out you got robbed when you used mobile data. But that has changed. We are not in an all that bad shape today. It is easier and cheaper (often at fixed cost. I am a friend of transparency as you can see) to use the phone for apps and browsing. There are numerous improvements to be made, but we are going the right direction at an accelerated speed.

Back to the question, why do we make phone calls? For all of us developing expereinces for the mobile – be it a mobile marketing campaign, a corporate mobile site, a new community or a casual game – think why would someone use this service? What is the value here? Hear me out, I know you are going “Duhh!!” now. But let’s be honest, when we work in an industry where the legacy mindset has been to market technologies and slap on applications just because they are technically possible to deliver, we should be a bit humble here.

I’ll end with a bow to Seth Godin who recently had a good post on marketing and product development and which comes first. Basically he states that all good products start with great marketing thinking first – then you build the product/service.

So here’s your homework. In no more than half a page asnwer this question about a project you are working on right now: “Why would someone find this new mobile service valuable and worthwhile their time and money?”.

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!

Fragmentation is a major hurdle in this case. Young small (and often quite weak financially) developers try to conquer a world that is dysfunctional. The paradox is quite simple: On one hand you can create a much nicer end-user experience with an application. But on the other hand the distribution of the same application is close to impossible in many cases.

In the case of java applications you need to port to all sorts of devices and all the handset specific quirks. Already there even a tough use of the 80/20 rule can cost you more than the application will ever make. Then you need to get placement on handsets and portals for your app. That will cost you even more.

The harsh sounding conclusion made by Mr. Mace and his fellows is that you have to go with the solution that has the best working distribution and business model. Not the best product/offer to the end user. It is a fairly sad fact, but a reality if you have the notion of living off your hard development work.

This is a rule I have lived by for quite some years with the odd exception. The main thing is that it works most times. In my recent venture, Acemob, we have been cash flow positive from day one in our 1 year long life.

There are niches where you will have enough buyers or motivation from other parties to make a java application work. We see this in the gaming segment, even though many companies in that segment struggle as well.

Well, to finish off on the bright side (it is the end of the week after all and I would hate to ruin your weekend) – WAP/xhtml works these days! The mobile internet experience is not bad at all and flat rates are being offered by most mobile operators. So with the mind sharpened by the restrictions inherent in developing browsing services for mobile phones, there are plenty of opportunities out there. Go get them!

Who provides the biggest obstacle to bringing social networking to the mobile?

Mobile Network Operators: 43%

Service Providers: 27%

Content Developers: 12%

Mobile device manufacturers: 12%

Publishers: 3%

Other: 3%

Two observations:

1. MNO’s need pull their weight here. Age and ID verification and flat fee data traffic should be the key ones in order for the masses to come. Walled garden approach and exlusive deals with web-based social networking sites are counter productive and the ones going down this road will soon realise and open up.

2. Service providers and content developers rank surprisingly high. So are there not good enough services out there today? Is this a sign of the limitations and challenges inherent in just porting a web service to mobile? I am intrigued by this and I will keep investigating this more.

Stay tuned for the continuation. If you have any leads let me know here!