When the "Twitter buying Summize" rumors first appeared I wrote this post:
Twitter is a service that I do not use, but others love it. However, Twitter (or Twitter plus Summize) could become a very useful mobile search engine (for recommendations) or real-time “mobile social DA.” What I mean by social DA, as in directory assistance, is a distributed base of users who substitute for the function of directory assistance.
Rather than the self-indulgent string of “tweets” (I’m in the car, I’m now getting out of the car, I’m now opening the front door . . .) one could ask the community for local recommendations. Alternatively, if an engine like Summize could filter out the “noise” among the tweets it might create a very valuable database of content that could be accessed on the go.
Now that the acquisition has been confirmed (for an estimated $15 million), this is the path that I believe the company must pursue to really become useful. In addition, a searchable archive of recommendations would enable the service to broaden its appeal.
There are several advertising scenarios, but that all probably revolve around contextual and geographically targeted ads.
Bolstered by its recent acquisition of M:Metrics, comScore put out new mobile usage figures for May 2008:
Note the discrepancy between the iPhone population and the general market. Competitor Nielsen says that 40 million U.S. mobile subscribers (15.6%) access the Internet on mobile phones at least once per month.
Apple announced today that it had sold a million iPhones in three days (globally). It also announced 10 million applications downloads since last Thursday.
We've cataloged more than 55 applications (roughly 10%) that leverage the iPhone's location awareness capability. But we're just at the beginning of these services We've grouped them into the following categories:
This is just a survey and not reviews of all these applications. However, it's interesting to see what's there and what's missing from this initial group of LBS apps.
Click here to view the findings. Note: this is a very large file (9 MB).
There have been so many stories since the Friday release of iPhone 3G it's dizzying: the lines, the European sales, the software update glitches, the rapturous reviews of the Apps Store and so on. Even as they curse the iPhone all Apple's competitors owe the company a debt of gratitude for helping to build awareness of the mobile Internet and giving the industry the kick in the pants (and shock) it needed.
(Lines at the Apple Store in SF on Friday)
Amid all this TechCrunch and GigaOm are speculating about the potential (re)emergence of a branded Google phone or "GPhone," based on a snippet of a quote that appeared in an article from MediaWeek/Hollywood Reporter this past week:
The trio of Google execs also used the opportunity to talk about the inroads the company is making with its own branded mobile phone as a replacement for the iPhone, as well as the Chinese market and how they're treated there -- and even Google's inhouse educational programs and the salaries and potential of teachers.
The writer was probably talking about Android and not a GPhone. But there almost certainly will be Google branded phones in the market after Android phones finally make their debut. Now what does "Google branded" mean exactly? It could mean one or both of two things. The Google software is prominent enough that the phone is primarily identified with Google (something akin to how Micorosft promotes Windows Mobile). Alternatively it could mean a specially designed handset (as TechCrunch posits) that bears the Google name. (This latter scenario is probable but more complicated for Google from a competitive standpoint.)
Google developed Android and brought together the Open Handset Alliance (OHA) so that it could help move the whole industry forward and indirectly advance its own position in mobile (see, "Will Google Dominate the Mobile Web?"). If mobile usage and search rise, so will Google is the logic here. That is a fair assumption.
Android is fundamentally about scale on a global basis, which is one of the primary values and drivers in Google's thinking about products. But the company, recognizing the success of the iPhone, has always also considered its own branded phone. It has never shut the door on this possibility. Here's a summary of Google CEO Eric Schmidt's remarks during the conference call held to announce Android and the OHA in November, 2007:
ES: Imagine not just one Gphone, but a thousand Gphones as a result of the partnerships … the many other people who will be joining the open initiative. We forgot to tell you that it’s available next week, and the terms are the broadest in the industry.
ES: We are not announcing a Google phone.
Q: Eric, I want to go back to the Gphone–what’s the deal?
ES: The deal is we don’t pre-announce products… if there were to be a Gphone, it would run Android…”
Thus I would imagine we'll see varying degrees of "GPhones," depending on the prominence of Google software and Google services. But I would also image the company will bring out a phone that has the word "Google" on the plastic casing that houses the chips and software.
A GPhone and Carriers: Verizon and AT&T have "opened up" to allow third-party phones on their networks. This would permit a GPhone, which almost certainly wouldn't be sold by Verizon -- although potentially by competitors such as T-Mobile, which has already promised Android phones this year -- to operate on the major U.S. carrier networks.
Recall that Google bid in the US 700MHz spectrum auction to help "unlock" the U.S. carrier grip on wireless spectrum access. Google continues to work on mobile broadband access through the "White Spaces Coalition."The company is also an investor in the Sprint/Clearwire WiMax initiative. All these efforts to gain direct access to mobile broadband further point to the possibility of Google-branded hardware devices.
A branded GPhone is thus be all but guaranteed a home on U.S. carrier networks or alternative networks. In Europe a GPhone could be immediately introduced across networks.
Google is making a bid to be the "front door to the mobile Internet," at least on the iPhone, with the launch of a new Google Mobile App. It provides search suggestions and is positioned as a navigational tool on the iPhone, with one-click access to other Google products (e.g., GMail, Calendar, etc.). It also employs Google's "My Location" triangulation feature to enable faster results without the need to enter a geographic keyword/modifier.
In our recent report, Will Google Dominate the Mobile Web?, we speculated about whether Google and search would become central to the mobile Internet user experience or whether alternative experiences and applications would render search a "secondary tool."
Clients can see the report here.
There will be a ton of stories coming out about location-based applications and the iPhone over the next week. Beyond the privacy issues, the underlying question is: what's the business model and/or how will they be supported? The facile answer is "advertising."
There's a longer and more nuanced discussion called for, but at a crude level of generalization most marketers aren't yet set up to take advantage of the targeting precision that these apps may offer.
The iTunes store offers many iPhone apps for free but some cost money. But these are one-time purchases. That's a model that may be viable and sustainable over time:
Chart and data analysis: Pinchmedia
By contrast carrier subscription products like VZ Navigator will fade over time, unless they're quite superior vs. free substitutes. I'm guessing that at best subscription apps like this will retain market share (or grow slightly) at worst they'll see their models almost completely undermined in a couple of years.
Yet it's going to be very hard -- absent a sophisticated ad network or networks with generous rev shares for developers and publishers -- to support mobile applications with advertising. A few users (even thousands) won't generate enough page views or clicks to trigger meaningful revenue. Thus I would lament the end of the subscription model as a revenue strategy for mobile.
We'll see what happens.
AdMob, among others, has been reaping the benefits of iPhone usage growth. AdMob operates an iPhone specific ad network in addition to a more general mobile ad network. Here are some metrics and data provided by the company (which track general iPhone usage trends):
Additional data from the company's release:
As recent Nielsen Mobile data reflect, the US has emerged as the top "mobile Internet" country:
The US, UK and Italy are leaders in mobile Internet penetration. 15.6 percent of mobile subscribers in the US, 12.9 percent of subscribers in the UK and 11.9 percent in Italy actively use the mobile Internet turning to mobile phones.
We believe mobile Internet has reached a critical mass as an advertising medium in the US. As of May 2008, there were 40 million active users of the mobile Internet in the US, with individual sites that attract millions of unique users. This provides scalable marketing potential with demographic breadth.
The AdMob metrics above reflect a medium with significant reach even though the iPhone is just a fraction of the installed base of cellphone users.
Here are screens from a Jaguar AdMob campaign:
Here's a demo of the Where iPhone app on YouTube.
Where is just one of a growing number of applications with "friend finder" or awareness capability (Brightkite, Loopt, Whrrl, etc.). This capability will taking getting used to and raises privacy issues for consumers who will have to learn how to negotiate this new "cultural" arena.
The apps store has launched on the most recent version of iTunes. There are tons of apps (500 approx), most of which appear to be free. Here are some screen captures:
I haven't counted all the location-aware apps but there are a range of them.
As we've argued in the past its the applications and software that will ultimate distance the iPhone from capable imitators and would be "iPhone Killers." We'll see if Blackberry and Android can build up a similar developer ecosystem and set of applications.
Publishers are generally struggling with Apple's fetish for control. At the opposite end Android will exercise almost no control over apps developed for the platform, when it finally goes live.
Alltel is going to be promoting ChaCha's mobile answers. Here's the press release:
Alltel customers need quick and concise answers to questions they may have while on the go, and we believe that ChaCha’s mobile answers services provides the right amount of information mobile users need,” said Craig Kirkland, vice president of messaging and voice services for Alltel Wireless. “We’re delighted to work with ChaCha, and our mobile users will be thrilled with the fun and user-friendly ChaCha mobile answers service.”
Verizon has acquired Alltel (for $28 billion). So that may lead to expansion of the deal to Verizon.