It's a potentially good deal for Wikipedia and may lead to some revenues for the cash-starved organization but do users really want Wikipedia on their mobile phones? France Telecom, whose mobile brand is Orange, has done a deal with the non-profit Wikimedia foundation (which owns Wikipedia). That deal will provide Wikipedia content to Orange's PC portals (makes sense here) and mobile phones (not so much sense in my view).
Orange subscribers will gain access to co-branded Orange-Wikipedia content. There will also be specific content "channels" and mobile widgets. Any ads associated with the pages will provide Wikipedia with some unspecified portion of the revenue.
The deal apparently will roll out in the near term in the UK, Spain and France and in other countries over time.
Wikipedia does have a mobile site:
I suppose as a source of factual information or trivia on the go it would be useful, but the generally lengthy and often heavily footnoted articles are particularly ill-suited to the mobile use case.
Update: Here's the press release and the following site contains a video that offers some additional background on the deal. To the extent that Orange and WikiMedia collaborate to develop experiences that specifically contemplate the limitations of mobile handsets they might be able to overcome my critique above. But it remains the case that what users can and are willing to do online is quite different in many cases than on mobile handsets. On mobile, I'm looking for quick facts and information as a basic matter. Longer-form content I will generally leave to the larger screen on the PC.
As netbooks and forthcoming IP-connected tablets gain adoption, however, some of these mobile-specific concerns and issues disappear.
Price remains one the barriers to mobile Internet adoption. Still only a minority of users have data plans that permit unlimited mobile Internet access. In the US carrier competition is the thing that might/will drive the cost of data plans down. But in Europe, the European Parliament is imposing more consumer-friendly pricing on the carriers:
The European Parliament Wednesday voted to adopt a new law cutting European roaming prices for text messages and Internet use by more than 60%.
The price cuts will come into effect by July 1.
From the beginning of the summer the price of sending text messages will have to fall to 11 eurocents from 28 eurocents. Meanwhile, the new rules dictate that the cost of surfing the Internet or downloading movies with a mobile device while abroad will be capped on the wholesale level at EUR1 for each megabyte downloaded, compared with an average wholesale price of EUR1.68 a megabyte currently. The data caps will continue until the price reaches 50 cents by July 2011.
Parliament also voted to extend price cuts on making roaming voice calls, limiting them to 35 eurocents a minute by July 2011 from 46 eurocents. Receiving voice calls when abroad will be cut to 11 eurocents by 2011 from 22 eurocents.
These moves should promote greater mobile Internet usage in the affected EU countries.
Nokia announced its Q1 numbers, which look pretty bad, but are better than lowered analyst expectations. Sales fell 27% and net profits were down a staggering 90%. Nokia still has a 37% global handset market share, which is unchanged from Q4 and down two points from a year ago.
The economy and intensifying competition are the culprits.
In the press release, Nokia CEO Olli-Pekka Kallasvuo said:
I am especially pleased with the performance of our first mass market touch product, the Nokia 5800 XpressMusic. Together with Comes With Music, it is a great example of Nokia providing solutions that consumers value.
Dubbed the "poor-man's iPhone," the 5800 is cheaper than its rival. As we argued yesterday that strategy is likely the key to any hope of market share gains in the US.
Nokia has struggled to get back in the game in the US market, despite being the largest handset OEM in the world. It's almost certain that Nokia cannot beat the iPhone in terms of usability or mobile Internet experience. It's also unlikely that apps developers will come to its aid either.
So how can it compete? In a word: price. I've been thinking that the camera was a way for Nokia to compete but at the opposite end, building cheaper "good enough" smartphones may enable Nokia to gain a foothold in the US market again.
Nokia introduced the 5800, its first touch screen phone, only late last year, but analysts said the lower price helps it beat iPhone sales in the Middle East, Eastern Europe and Asia, and there has been strong demand also in developed markets . . .
"Outside the US market, it is emerging as 'the poor man's iPhone' - a device with clunky and old-fashioned software, but much cheaper price, better camera quality, lower weight and far superior stand-by time," he said.
A lower-priced iPhone is widely expected and some of the "phone" and battery problems with the iPhone may be corrected with an expected new handset in June. But at least in theory this is the strategy for Nokia as it tries to get back into the US market.
Here's a video demo of the 5800 in action.
Global accounting and consulting firm KPMG surveyed mobile consumers in 19 countries and collected a range of data regarding attitudes toward mobile advertising, content and services. Some of the findings are contrary to the "consumers are hostile to mobile advertising" narrative and related figures that have come out in the recent past. In particular Nielsen found the following (as paraphrased in a Citibank research note):
In the U.S. 68% of mobile data users are opposed to mobile Internet ads, even if those ads subsidize a portion of their mobile bills. Only 8% feel mobile ads are trustworthy, and 87% are not open to mobile ads even if those ads are relevant to their interests. However, in Europe, users are more open to mobile ads – In France, Italy and Spain, 41%, 52% and 54% would be receptive to mobile ads if they lowered their bills.
The KPMG "global Consumers and Convergence survey" produced the following highlights:
The Nielsen data quoted above argue that EU residents are more open to mobile ads. But results can also be dramatically impacted by the way questions about mobile advertising are framed. If consumers see an obvious benefit or a way to avoid costs, many of them will embrance advertising. If the questions are framed in a way that emphases the ad rather than the benefit, they're less inclined to accept it -- or even overtly hostile toward it.
A study commissioned by IT and business services company Logica offers some interesting findings about mobile Internet usage in the UK. The results were released last month and were based on a survey of 1,000 mobile users. Here are, verbatim, some of the top-level findings:
There were also these findings:
Grain of salt time:
Beyond what's stated here I know nothing about the methodolgy used or the sample. I'm struck by the finding: "40% of consumers admit 'heavy' usage of mobile internet." What does "heavy" mean exactly? Regardless, this finding cannot be generalized to the whole UK user population -- 40% are not currently "heavy" mobile Internet users.
That makes the rest of these findings suspect on some level. However, all survey data should be seen as directional and not an exact reflection of the larger market.
The finding that states 41% of respondents would be interested in targeted mobile ads is, in that sense, directionally suggestive of greater acceptance of mobile advertising -- especially among more experienced or heavier mobile users. LMS data show this correlation.
The response that the recession would not change mobile usage patterns is generally supported by other third party data. There are indications that in the US some segments of the market are more price sensitive and some people have switched from post-paid to pre-paid offerings -- especially given some of the "deals" that are in the US market (e.g., Boost nd MetroPCS unlimited plans).
Finally, the "77% will switch operator . . ." finding shows the danger that if carriers don't figure out "value-added" offerings they're well on their way to the "dumb pipe" scenario.
Skype said that in the two days following release, last week, of its first iPhone app there were roughly a million downloads. This indicates both the strength of the Skype brand and the fact that it has a huge installed base of users. But it also reflects the desire for cheaper calling options, especially internationally.
Several carriers appear to be digging in their heels and trying to block usage of Skype on their networks: AT&T in the US (it works on Wi-Fi but not 3G), Rogers in Canada and T-Mobile in Germany. However an advocacy group has asked the US FCC to determine whether the exclusion of Skype from the AT&T network is legal.
An AT&T spokesman was quoted in a Wall Street Journal article resonding to the complaint:
"Customers are free to download and use the apps they want, but we have no obligation—nor should we have—to facilitate or subsidize our competitors' businesses."
This captures the carriers' fears about Skype and how VoIP may erode revenues in certain sectors over time.
We can debate the merits of this statement but it's arguably the case that Palm's WebOS and Pre handset are the first truly worthy rival to the iPhone. Google and Microsoft would undoubtedly object to that. Unfortunately I wasn't able to see Windows 6.5 in action at CTIA so I can't say firsthand whether it represents a significant advance over 6.1. While generally regarded as an improvement over 6.1 in the reviews I've seen, it's also largely seen as a stop-gap measure until 7 can come out next year (probably late next year).
Back to the Pre. There are way too many expectations for the new handset. It will be a success but probably not at the level to meet the over-hyped expectations and those expectations create problems for Palm and its market valuation. If initial Pre handset sales don't put the company on an express train toward higher revenues, investors will probably say goodbye.
But that creates a buying opportunity for someone like Microsoft. Windows Mobile has been around for a very long time and there are millions of devices that run it, with Samsung, LG and HTC, among others, committed to release millions more Windows Mobile devices in the near future. (One Windows Mobile device that looked cool but offered a disappointing experience in my short time with it at CTIA was the Samsung Mondi.)
But Microsoft is in unfamiliar territory with Windows Mobile now. Its desktop monopoly isn't helping it in mobile and the rise of RIM (the enterprise leader), the iPhone (the consumer leader) and now the open-source Android (the worthy insurgent) threaten to squeeze the OS and potentially marginalize it over time. Rather than the iPhone or RIM, Android may be the real threat to Windows Mobile longer term.
Redmond would need to swallow its pride in seeking to acquire Palm and that may prevent a serious look at the struggling company. It would be an admission that Windows Mobile isn't sufficiently competitive. Microsoft engineers absolutely believe not only that their product is competitive but also that it can win in the mobile space.
However I believe that if Microsoft wants to be truly competitive it needs to take a close look at potentially buying Palm. Microsoft might not want to be perceived to be competitive with its OEM partners via such a move. But it could incorporate WebOS or just swap out most of Windows Mobile for WebOS and not make hardware devices.
Will Microsoft acquire Palm? I doubt it. But if not, the company needs to take some dramatic steps in the near term to ensure that it doesn't become a kind of also-ran in mobile.
Related: RIM posts dramatic results, says now there are 25 million BlackBerry subscribers.
As it has done with US iPhone users, comScore has released data on iPhone users and their behavior in the UK. Here is the chart:
As with their US cohort, iPhone users outpace other smartphone users in all areas and by huge margins traditional mobile phone users. For example, almost 80% of iPhone owners access the mobile Internet vs. 19.8% of conventional mobile phone users.
Demographics (per comScore): 75% are males, mostly between the ages of 18-44. Smartphone ownership also typically skews male in the UK, with males comprising 65 per cent of the audience.
Here are the "top 10" site lists for the US and UK:
Yahoo!'s decline should be of concern to the company and should encourage Yahoo! to get its new Yahoo! Mobile app/site into the market as soon as possible.
As with the AdMob data, this represents the Opera mobile/mini universe and is not necessarily identical to the "mobile Internet. However, directionally it's going to be accurate.
In the US there's more texting going on than talking. A couple of years ago people would not necessarily have predicted SMS would overtake voice at any time, let alone in just two years. But it happened.
The same question must now be asked of mobile data vs. voice. According to a Fierce Wireless summary of several different articles and reports, T-Mobile UK now sees 25% of its new customers signing up for mobile broadband services. Data revenues for carriers are growing much more quickly than voice revenues.
Pricing is a lever than can further accelarate growth in data adoption, especially if there's a price war.
It's going to take more than a couple years, but eventually we're likely to see penetration levels for data well above 50% in the US and in the West, as people see the mobile Internet no longer as a luxury but as a necessity.
This was the path for the PC Internet as well: a novelty that only a few had in the beginning and then a necessity as more and more people went online. And once you start using the mobile Internet, especially on the iPhone, it's impossible to imagine being without it.
Between Opera and AdMob we continue to get great, regular reports about mobile usage on the ground and from around the globe. Last night Opera released its latest "State of the Mobile Web" report for January, 2009.
Here are some of the interesting bits about top countries in terms of growth and usage frequency, as well as top sites visited in several countries.
These site rankings are based on Opera data and not necessarily representative of all mobile Web usage (in particular they don't represent iPhone usage). However Opera's browsers cut across handset platforms are are widely used around the world. These data are thus drawn from many thousands of users in each country.
Yahoo! has incorporated the Opera Mini browser into its Yahoo! Mobile client download.
There were a slew of announcements from Nokia at Barcelona this week. Here's a rundown:
The Finland-based OEM announced, as expected, its version of the iTunes apps store: the Ovi Store. It offers some interesting and intelligent twists: personalization and recommendations from friends, as well as location sensitivity. The rev share between Nokia and developers is the same 70-30 split as the iTunes store.
The company also announced new GPS enabled phones integrated with Nokia Maps (NAVTEQ).
Skype announced a deal with Nokia to preload the VoIP software on Nokia/Symbian smartphones:
Under the terms of the cooperation, Skype will be integrated into Nokia devices, starting with the Nokia Nseries. The Nokia N97 flagship device will be the first to incorporate the Skype experience in the 3rd quarter of 2009.
The Skype experience will be part of the address book of the Nokia N97, enabling presence - seeing when Skype contacts are online - as well as instant messaging. Nokia N97 owners around the world will also be able to use 3G and WLAN to easily make and receive free Skype-to-Skype voice calls, in addition to low-cost Skype calls to landlines and mobile devices.
Quality issues notwithstanding, Skype stands to gain hugely from adoption by mobile users as a way to circumvent the cost of voice plans, especially in Europe. Skype is also working with other handset OEMs.
In general, however, improved VoIP on mobile phones is a development that may eventually put price pressure on carrier voice plans. Because of quality, however, that day is not yet at hand.
Nokia and Qualcomm announced a deal to work on "advanced mobile devices" with Qualcomm chipsets targeting North America, one of Nokia's weakest markets.
But the apps store/Ovi store was the focus of the week for Nokia. Everyone now has an apps store: Apple, Android, Windows Mobile, RIM, Palm and Nokia/Symbian. It has become "table stakes" in the smartphone market. Accordingly the Nokia/Ovi apps store is unlikely to lure people away from BlackBerry or the iPhone. But it remains to be seen how all the hardware and software variables (operator pricing is another) play out competitively over time.
In 2009 we may see as many as four or five Android phones in the market (from Samsung, Dell, HTC, others). But the only ones currently come from HTC, which early today introduced the Vodafone "Magic." The Magic/G2 has no physical keyboard but appears to be a leap forward from the G1 (it offers video also). It also looks sleeker and more polished too.
There's no word on a US version right now.
Here's a video that shows the device in action including its virtual keyboard, which still doesn't exist for the G1 in the US. T-Mobile recently introduced the G1 in Europe. However, depending on pricing, the Magic is likely to win and trump the T-Mobile G1 in a head-to-head competition.
In the US, the G1 doesn't seem to have won many new subscriptions for T-Mobile, although it gained a lot of press for the carrier and may have prevented subscriber defections to AT&T for the iPhone.
All operators will likely have their Android devices eventually (even multiple devices), much like BlackBerry.
Image above and video are from Gizmodo.
Long ago recognizing that smartphones were encroaching on the PND segment, Garmin decided to make its own smartphone to cover its bases and diversify. Accordingly Garmin has teamed with ASUSTeK Computer Inc. to make the handsets, two of which will be previewed at next week's Mobile World Congress event.
The first of those phones, the Garmin-Asus nüvifone M20, looks like this:
It's apparently going to be a Windows Mobile 6.1 phone, but there are suggestions that there will also be an Android phone. The G60 is the other forthcoming model. Both come with car mounts so they can function as conventional PNDs while you're driving.
The question is whether such a device is novel enough to attract buyers. Price is also a significant issue. It remains to be seen how much they cost. It's unlikely that consumers will see this as offering double the value or "two devices in one."
Meanwhile Samsung has reportedly pushed to the second half its intended launch of an Android phone. According to a Sumsung marketing executive quoted in the Guardian:
[T]here will be no Android phone at the show, but they are "planning internally" for a release in the second half of the year. [Mobile devince marking head Younghee Lee] said the company is in negotiations with a number of operators about taking a Samsung-designed Android phone.
In the US, Sprint is scheduled to offer that Samsung Android phone. So its delay is not good news for the struggling carrier. However excitement surrounding the Palm Pre will potentially mitigate the impact of a delay in the Samsung Android phone.
The following are some highlights from AdMob's January Mobile Metrics report.
The company exposes some data on growing WiFi usage among device owners accessing sites in AdMob's network:
These data may reflect that these states/locations have the most developed infrastructure, combined with early adopters.
Here are selected graphics and charts that I pulled from the report:
Consistent with the text above, AdMob data show that the iPhone and iPod Touch over index on their network vs. their penetration in the European market. This is entirely consistent with the other data in the market showing much greater usage of the mobile Internet among iPhone owners.
Interestingly, in the chart below global iPhone requests are somewhat flat while iPod Touch requests have grown. This reflects the rise in iPod Touch ownership:
There are probably two "constituencies" out there that own the iPod Touch. There are those who have it primarily as an iPod and for whom the mobile Internet and applications represent a secondary emphasis; then there are those who purchased it as an iPhone equivalent because they didn't want to switch to AT&T.
The following shows mobile OS representation in AdMob's US network:
In terms of changes vs. December the above chart reflects 2% growth in Apple OS share and a single point loss by Windows Mobile and Palm. Everything else is flat.
The tiny Nokia/Symbian US market share, as well as the EU OS numbers above, have got to be a continuing worry to the company. By contrast, Nokia sold over a million units of its new "Tube" Xpress Music 5800 phones in Europe last month. The phone is Nokia's first touch-screen device but carries a price tag of $400 (unclear if there will be a subsidy when it enters the US later this month). It's popuarity is partly the result of a free year of music.
However, as Wired points out, at a price that exceeds the iPhone, iPod Touch, Android phones and probably the Pre, it's very unlikely to gain much traction in the US market. Meanwhile the Palm Pre (also potentially a $400 phone) may well be heavily subsidized by Sprint to jumpstart sales. Sprint has roughly six months (according to speculation) as the exclusive distributor of the device.
Smartphones that cost more than about $300 are going to have difficulty competing in the US market. If subsidized handsets will need to come in at around $200 to compete -- the pricing established by iPhone 3G and matched by the Android G1.
There are again rumors of a $99 "entry level" iPhone. While there may be some version of the truth hidden within the rumors, it's unlikely that they're true as presented. Apple has jealously guarded its brand and has repeatedly refused to make low-cost products for fear of reduced quality. In addition, its relatively inexpensive Mini has had only mixed success.
Note: AdMob's data are not necessarily representative of the entire market (they are drawn from publishers and usage of sites in the AdMob network). However, the AdMob data are directionally representative.
The operator-iPhone exclusivity deals are having a tough time in Europe. First there was the litigation between T-Mobile and Vodafone over T-Mobile's exclusive iPhone deal in Germany. Subsequently Vodafone became an iPhone distributor in 10 countries. The two events may or may not be related.
In France there has been similar litigation over France Telecom's (Orange's) exclusive iPhone deal with Apple. In December it was found to be a violation of French law by regulators. Now an appeals court in France has upheld the decision:
National competition regulators suspended the five-year exclusive sales deal between iPhone manufacturer Apple and France Telecom's mobile arm Orange on December 17. Both Apple and Orange had appealed the ruling.
A spokesman for Orange told AFP it would seek to overturn the ruling before France's high court of appeal, the Cour de Cassation.
Rival operator Bouygues Telecom filed suit against Orange before the French competition council in September, and was joined by France's third main mobile carrier SFR and the French consumer rights group UFC-Que Choisir.
Both Bouygues and SFR welcomed the ruling and said they hoped soon to be able to offer the iPhone in their stores, saying talks were underway with Apple to finalise distribution agreements.
Even though Apple was a party to the appeal in support of exclusivity it's actually in Apple's long term interest that the iPhone be distributed widely through multiple, non-exclusive operator relationships. Exclusivity limits the potential penetration of the device.
I believe that the US market would see several million more unit sales were it not for AT&T exclusivity.
Quattro Wireless announced on Friday that it has expanded globally "to Western Europe, Australia, New Zealand, South Africa and Asia. Quattro will now accept Internationally-focused, and country-specific publishers and advertisers into its network."
We're in a period where competitive mobile ad networks are rapidly trying to create reach and scale, boost the quality of ad inventory and build out their ability to target specific platforms such as the iPhone and/or Android. A year or so ago, there was a "first wave" of mobile ad network acquisitions (i.e., Enpocket-Nokia, ScreenTonic-Microsoft, ThirdScreen-AOL) but there will inevitably be another (perhaps spurred by global ad agencies) at some point in the next couple of years.
Depending on how you define "ad network," there are between 25 to 40 major ones operating on the Internet today. That state of affairs is partly responsible for the glut of display inventory that has brought down CPM prices. The US domestic mobile market can't support (right now) anywhere near that many competitors. Consequently only the largest and/or those with specific niche audiences will be able to survive.
The Mobile World Congress in Barcelona is less than two weeks away. Like CES or CTIA there are tons of announcements that will come out of the show. But Microsoft is expected to announce a range of mobile upgrades. Considerable virtual ink is being spilled over the various rumors and speculation. To recap, here's what's likely:
Microsoft is developing some smartphone reference implementations. These implementations are taking the form of multiple smartphone chassis (at least one of which is powered by Nvidia processors).
Think of what Microsoft is doing in phones as similar to what it has done in the PC market. Microsoft often develops reference implementations and encourages PC makers that they build PCs that adhere to a set of reference guidelines/specifications.
From one of my sources, who requested anonymity: “The (Zune phone) chassis 1 spec is challenging the manufacturers to come up with something that will please customers.” This source said Microsoft was pitting a handful of cell-phone makers against one another to come up with the best implementation of the spec.
From what I’ve heard, Microsoft is focusing most of its reference efforts around the Windows Mobile 7 platform.
Despite Windows Mobile unit sales, which are considerable, all these announcements represent a form of catch up to the iPhone, Android, BlackBerry (to some degree) and the Palm Pre. And mobile is a much more risky, much less certain endeavor for Microsoft than the PC universe where it's much more firmly in control.
As mentioned in a previous post, I spoke with Microsoft's Scott Howe recently. He stressed to me the value of "convergence" for Microsoft on the advertiser side: bringing lots of media together in an easy-to-buy platform -- including mobile.
On the consumer side Microsoft is pushing a similar idea of a single experience across devices: TV, PC and mobile. Some of the announcements at Mobile World Congress will undoubtedly flesh out that vision through the prism of Windows Mobile.