Hardware

US Smartphone Price Ceiling Now $199

Sprint launched the Treo Pro in the US market. What was the price? It was $199 (subsidized) of course. The iPhone is $199, the G1 is $179 and so on. Thus, a practical matter, the ceiling for smartphones (w/subsidy) is sub-$200.

Any phone that tries to enter the market charging more than that will not see any volume sales. The Treo Pro itself may not see volume at Sprint as many people wait for the Pre, coming in the next couple months apparently. 

Treo Pro

Here Come the Connected (Non-Phone) Devices

A trio of articles makes me write this post about the emergence of IP-connected devices that aren't phones, one of my favorite things to think (and write) about. But first, stepping back a couple of years ago, there was the Nokia Internet tablet. People were skeptical: why would someone want a "smartphone" that wasn't a phone?

Then came the iPod Touch, the Kindle and the out-of-nowhere success of netbooks. Now the range of devices will potentially broaden. Accordingly, here are the pieces I mentioned: 

Each of these discusses a range of new devices that diverge somewhat from the conventional "form factor" of phones and/or netbooks. From a pure gadget standpoint, it's fun to contemplate them. But how will they be connected and will they appeal to consumers? What will they cost?

But the connectivity is the fundamental issue as I see it.

Sprint wholesaling its network in the US is one way that these devices may be connected to the Internet, in the same way it does with the Kindle. The danger here is that a data-only plan with one of these devices and Skype or Truphone turns it into an inexpensive mobile phone. That might inhibit Sprint to some degree. 

But AT&T (and O2 in the UK) have already launched a netbook + two year contract model. Indeed, that's another way to go. Yet another option is the White Spaces broadband project. But it probably won't offer access on a commercial basis for at least a couple of years. 

I'm struck by how frequently I can get on a network for free with my iPod Touch -- though not as often as perhaps I'd like. However, as I've said before, once the connection issue is resolved lots of interesting mobile internet devices can emerge that aren't phones or PCs exactly. 

Perhaps we're entering a new period of hardware design creativity that will render the "gray boxes" of the past totally obsolete. 

Amazon Selling Android G1 for $97

Amazingly, Amazon is selling the Android/T-Mobile G1 for $97 with a two-year contract (new subscribers). While this could simply be a bid for new business by T-Mobile, the radical price drop could also signal the near-term arrival of the successor G2 phone, which has no physical keyboard and is generally considered more elegant than the G1.

The G2/Magic is being released by Vodafone in the UK but there's no official US release date. Both are made by HTC.

Here are the Amazon screenshots:

Amazon offer re G1

Picture 10

Quick Look at Gartner's 2008 Q4 and FY Smartphone Numbers

Yesterday Gartner released its Q4 smartphone shipment estimates. According to the release:

Global sales of smartphones for 2008 reached 139.3 million devices, up 13.9 per cent compared with 2007.

As a proportion of all mobile device sales, smartphones remained stable at 12 per cent in the fourth quarter of 2008, from 11 per cent in the fourth quarter of 2007. Samsung entered the top five vendors ranking for the first time (see Table 1), replacing Sharp. RIM recorded an increase in sales both sequentially and year-over-year, while Nokia's volumes continued to fall.

Symbian's share of the global market decreased to 47.1 per cent in the fourth quarter of 2008, down from its 2007 share of 62.3 per cent (see Table 3) ... Meanwhile, RIM successfully grew its year-on-year share of the global smartphone market to 19.5 per cent from 10.9 per cent. Gartner estimated that Android smartphones accounted for 20 per cent of total Linux sales in the fourth quarter of 2008.

In the fourth quarter of 2008, Microsoft's share of the global smartphone market improved sequentially, with unit sales up 16 per cent over 3Q08. This was mainly driven by the popularity of Samsung Omnia and touchscreen products from HTC. Sales of Linux-based smartphones were up by 19 per cent year-over-year, mainly through Android-based smartphones being available through T-Mobile during the fourth quarter of 2008.

The smarphone penetration figures are consistent with our own surveys of mobile users, showing about 12%-13% penetration of the overall market. Because smartphones are so closely tied to mobile Internet usage their adoption is a key variable across a range of fronts, including mobile advertising.

Of course the economy and pricing are other key variables. However, I expect that within five years the market will see about 20% - 25% penetration by smartphones. That would mean something approaching 70 million smartphones in the US market. 

Windows Mobile is hanging in there, because of the volume of devices in the market. Gartner attibutes its success to "the popularity of Samsung Omnia and touchscreen products from HTC." It would be interesting to look a little deeper at the motivations of the buyers of these devices. Is Windows Mobile something they're affirmatively seeking or does it happen to be the OS on the device they're interested in buying? My guess right now is that it's closer to the latter scenario for many people. But that's pure speculation. 

BlackBerry is "on a tear" as they say, without any signs of slowing. And Android seems to be gaining steam. The question surrounding Android is: when will more phones be released? Android is perhaps the most direct competitor and threat to Windows Mobile as it proliferates across carriers and handsets. 

Here are the Garnter tables:

Gartner Q4 OSGartner Q4 vendorGartner FY by OSGartner FY by vendor

New iPod Shuffle With VoiceOver

Apple has released a third-generation iPod Shuffle, the smallest of its portable music devices. Among the new features is VoiceOver, a text-to-speech capability that can tell the listener the name of the song or artist, ability to navigate playlists, or hear status information such as battery life. According to Apple, the new iPod Shuffle is multi-lingual and can speak up to 14 languages.

VoiceOver is already found on the Mac OS X operating system as a built-in accessibility feature for the visually impaired. And in November 2008, VoiceOver was included in an update for iTunes. Because it doesn't include a visual screen or multi-touch technology, the Shuffle is a perfect candidate for speech services. But the fact that Apple is taking strides to highlight the speech capability for the iPod Shuffle underscores the value and form function for voice navigation on mobile devices.

How Low Can PC Prices Go?

BusinessWeek somewhat rhetorically asks "How Low Can PC Prices Go?" The answer is zero or $0, provided there's a two-year contract. That offer has already been floated in the US and in Europe on a trial basis.

Wireless carriers in Europe and the U.S. are starting to offer netbooks to their customers for little money up front or even for free with a monthly wireless data contract. Retailer RadioShack already sells an Acer Aspire One netbook with a two-year AT&T contract for $150. That's $50 less than the cheapest Apple iPhone from AT&T. 

It's a very interesting time in the hardware world, with Apple apparently set to release a pseudo netbook (or tablet), Android set to move into non-phone segments and a range of efforts to broaden connectivity (e.g., the US White Spaces initiative). There's also an impending wireless operator price war.

What devices will consumers opt for; will it be smartphones or netbooks with connectivity (or both) and what will cannibalize what? Stay tuned. As I've argued in the past, if the connection problem is solved (along the lines of the netbook + wireless contract or Kindle with built-in access) we'll see an explosion of devices that offer Internet access. 

A few years from now the $1500+ prices that still exist for many laptops may seem absurdly high. Regardless, the back of the PC pricing model is now all but broken for consumers. 

ShopSavvy Integrates Skyhook Location Tools

Last week Big in Japan, creator of the barcode scanning Android app ShopSavvy, announced that it had integrated the Skyhook location awareness suite of tools. The G1 has built-in GPS but the Skyhook tools will be used to augment that and better provide location-related data that facilitates delivery of nearby store inventory information.

ShopSavvy crawls for data and works with Krillion to provide local product inventory. 

ShopSavvy in action

Other mobile providers of local inventory data include NearbyNow and TheFind (which gets data from NearbyNow). In-store price comparisons and local inventory lookups are going to be increasingly popular as smartphones continue to grow share. 

However ShopSavvy in the US is currently unique; there is no comparable barcode scanning app today for the iPhone, WinMo, Symbian or BlackBerry. Yet we can expect to see much more use of the camera as a search tool across smartphones in the future -- with barcodes, QR codes, etc. And many of those codes will likely be embedded in traditional media: magazines, newspapers, outdoor.

From a usability standpoint this "camera search" capability is roughly akin to voice interfaces in a way, expediting the retrieval and return of information. 

Is the iPhone Vulnerable to Substitution by Palm Pre?

Here's the notion being floated by Roger McNamee, co-founder of Elevation Partners, which owns 39% of Palm:

"If you bought the first iPhone, you bought it because you wanted the coolest product on the market,” said McNamee, 52. “Your two-year contract has just expired. Look around. Tell me what they’re going to buy.”

Of course the answer is the Pre now, in McNamee's mind. Indeed, his public argument is that once these initial iPhone contracts are up people are going to switch from AT&T to Sprint to get the Pre. 

We'll see whether McNamee's prediction is accurate but I just don't think it is. The Pre has prevented me, a Sprint subscriber, from defecting to AT&T to get the iPhone but it's unlikely to lure people from AT&T in anything like the numbers that the iPhone has driven for AT&T. 

Yes, the Pre is exciting as a handset but it's not the iPhone and doesn't have the software marketplace, notwithstanding the Palm apps market, that the Apple device does. It's also true that the market and consumers are not in the same place they were two years ago. The iPhone has moved beyond fashion statement into functional device or gaming platfrom or whatever. People are attached to those phones.

Two years is a lifetime in the mobile market.

Android has so far not caused many subscriber defections to T-Mobile in the US. And though the Pre looks to be a sexier and better integrated device it's likely to have a similarly limited impact on other carriers' subscribers. (The Android G2/Magic is coming too, which could affect Pre sales.) We might see movement among Sprint's customers from other devices to the Pre; it's much more likely, for example, that Windows Mobile will suffer. Apple iPhone owners en masse are not going to abandon it for the Palm handset. 

Sprint's battered brand is also a potential problem for Pre sales, although Sprint hopes Pre will help reinvigorate the brand. If everyone involved really wanted to ensure the success of the Pre and maybe lure some new customers to Sprint the way to do it is to aggressively discount the device upon launch to <$150 or <$100. Alternatively Sprint could offer a special, discounted voice/data plan for the Pre. 

If the carrier is tentative about pricing it may not get the momentum out of the gate it needs to make the Pre a success. Pre as "fashion statement" (see McNamee's comments) requires rapid adoption and related buzz.

If the iPhone didn't exist perhaps all this would be different. But it does; and so competitors must do more to attract customers than might've been the case a couple years ago before the Apple handset. 

The Pre has essentially been set up to be the "savior" of Palm by financial analysts and the media. If it fails to live up to what are now lofty and fairly unreasonable sales expectations, fueled in part by comments such as McNamee's, it could have the opposite effect and cause investors to flee the company. 

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Related: Juniper Research predicts "by 2013, around 23% of all new mobile phones will be smartphones." That's a reasonable and perhaps even conservative forecast, I believe. 

Update: Palm, recognizing how damaging high expecations can be for the company, sought to qualify and distance itself from McNamee's inflated predictions.

iPhone's Mobile Web Share 10x Larger than Nearest Rival

It's difficult to accept this on the face of it: the iPhone's share of mobile Internet usage is roughly 10 times larger than its nearest smartphone rival, Windows Mobile. That's according to Net Applications.

There should be some gains in the coming quarters by Android, BlackBerry, Palm (via the Pre) and Windows Mobile. But, if these numbers are correct, the lead that the iPhone holds right now is dramatic.

Net Applications mobile web share

Source: Net Applications (3/09)

Part of this is device usability and part of this is self-selection. People buy the iPhone in part to access the mobile Internet -- and then they do.

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Related: In-Stat forecasts that smartphones will capture 20% of the US handset market by 2013. Right now they're about 13% (ish). I think that more "feature phones" will gain smartphone capabilities and we'll actually see higher penetration than In-Stat is predicting.

By the same token I think the ceiling for smartphone penetration in the US is about 40% in the medium term. But there will be other mobile devices that enable users to access the Internet that may take over for smartphones in some demographic segments.

Sprint Asserts 'Stability' but Shows More Subscriber Losses

US carrier Sprint asserted in its earnings report and presentation that the carrier had stabilized and cited a number of areas of improved performance. However, it also reported these numbers:

  • The company served 49.3 million customers at the end of 2008, compared to 53.8 million at the end of 2007. The credit quality of our customer base improved every quarter in 2008, and prime customers represent almost 84% of the post-paid base, compared to 79% a year ago.
  • For the quarter, total wireless customers declined by a net 1.3 million, including losses of 1.1 million post-paid customers and 314,000 prepaid users, which was slightly offset by a 146,000 increase in the number of wholesale and affiliate subscribers.

Sprint has the best 3G network (though people may not believe that) and is the most competitive when it comes to pricing. However Sprint continues to lose a million wireless customers a quarter, for a total of 4.5 million customers lost last year. The chief beneficiaries of Sprint's defections appear to be AT&T and Verizon.   

Sprint faces challenges on a number of fronts and no single factor can be blamed for these defections. Sprint's brand as a whole is wounded. A history of poor customer service (though that's changing) and the absence of competitive handsets are all contributing. Sprint may say the Instinct is competitive or claim the HTC Touch Pro is compelling -- not so. 

The Palm Pre is supposed to make its appearance relatively soon and Samsung is supposed to come out with an Android phone for Sprint at some point this year. Sprint needs these handsets pretty desperately to return some "sizzle" to its relatively unimpressive handset lineup (although BlackBerry fans can find plenty of offerings). It may also need to cut prices (again) to get attention and/or retain customers. 

In my particular case only the promise of one of these new handsets -- Windows 6.5 won't be out until later this year --  is holding me back from an AT&T defection.

Nokia News from Barcelona: Maps, Ovi Apps and Skype

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.

Ovi

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. 

HTC Android Vodafone 'Magic' Is Better than G1

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. 

 G2

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.

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Image above and video are from Gizmodo

Netbooks, MIDs to Further Erode PC Sales

There are two emerging threats to Microsoft's traditional PC businesses: the growth of netbooks and potential replacement of Windows OS's on those devices by Linux or Android. Traditional PC sales are faltering in the recession (off 8% according to Microsoft's last earnings call) but netbooks have been on a tear because of their inexpensive price tag. (Apple has said it "can't" build a <$500 computer.)

Microsoft is trying to put Windows on most netbooks and has succeed in doing so across the leading OEMs. However, Android is going to begin a netbook push and chipmaker Nvidia wants to make $99 mobile Internet devices (MIDs):

NVIDIA Corporation, the inventor of the graphics processor, today introduced a new platform, based on the NVIDIA® Tegra™ 600 Series computer-on-a-chip that enables a $99, always-on, always-connected HD mobile internet device (MID) that can go days between battery charges.

This platform will enable OEMs to quickly build and bring to market devices that carriers can offer for as low as $99 —bringing broadband connectivity and all of the Web’s HD content to the masses.

The Acer Aspire has already hit that $99 "price point" but with a two-year contact with AT&T for the IP connectivity. Netbooks have become enormously popular because of how comparatively inexpensive they are. 

These low prices, <$500 (and probably <$300), are likely to continue and further erode the traditional PC market. (If not it will be because of very aggressive pricing by PC OEMs). Indeed, PC sales will likely be squeezed by a growing array MIDs/netbooks and maybe increasingly powerful smartphones.

The challenge and issue for Microsoft is whether it will be able command the same market share on those MIDs as it historically has enjoyed in the conventional PC market. The "cloud computing" model implied by the sale of netbooks makes local software less necessary -- and the machines don't have the memory to support it to the same degree. Beyond this there's the question of how much can be charged for Office and the Windows OS -- at <$300 pricing or, worse, $99 margins will be squeezed badly. 

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Related: Android’s progress elevates Google’s mobile aspirations . . . and Orange to sell LG watchphone this year in EU markets. 

LG watchphone

Netbook maker Acer's new smartphones are out but nothing special to write home about.

Nokia Working on "Facebook Phones"?

Motorola's forthcoming Android-based phone -- theoretically due out this year -- is supposed to have some sort of social networking angle. But, reportedly, Facebook and Nokia are talking about how to more deeply integrate the social networking site into Nokia handsets.

From the Wall Street Journal earlier this week:

Facebook and Nokia are discussing a partnership that would embed parts of the social network into some Nokia phones, people familiar with the matter said. Financial terms of the potential deal couldn't be learned, nor was it clear how many of Nokia's devices would be included.

Under one alternative, contact information stored in Facebook would be integrated with the phone's address book: When users looked up a contact, they could see whether their Facebook friends were logged on, send them messages and post comments on their profile pages.

Talks between the companies have been going on for months, and it is unclear whether an agreement will be reached, these people said. Nokia is deciding whether it wants to team up with an established Web player like Facebook, based in Palo Alto, Calif., or to build a social network from the ground up, said people familiar with the talks.

Facebook has claimed 25 million users in mobile and will have widgets or other forms of integration across scores of handsets. Therefore it's not clear whether a marginally improved Facebook experience on Nokia handsets will do much for Nokia's competitive position. 

Nokia might want to consider buying the social network instead. It spent $8 billion for NAVTEQ and might be able to pick up Facebook for about half that amount (probably not though). A Nokia social network, as opposed to a social layer on other Nokia products, is likely to fail. 

A better model for the company is Google Latitude, which Nokia could try and duplicate as a layer on top of its mapping service. 

Smartphones Are the Future, but Will Remain a Minority

The smartphone segment is the only area of mobile hardware sales not contracting right now. That explains the recent financial performance of Apple and, to some degree, RIM vs. other OEMs.

But how many smartphones are there in the US? Our data reflect that the current ownership of smartphones is about 12% of the overall market. comScore shows something similar, although their numbers put it at about 10% - 11% depending on the base. 

Predicting the future of the mobile Internet and handsets has become harder because we're starting to see more devices and consumer options out there. For example, will some consumers opt for netbooks rather than smartphones? Will the Kindle become an Internet-access device? Will we see a range of interesting new Android-powered tablets or other MIDs that consumers use for mobile Internet access? 

The market is rapidly evolving and quite fluid right now.

One can easily imagine that within five years roughly 30% to 40% of the mobile subscriber market will be constituted by smartphones. That could grow larger or faster if lower priced devices (e.g., $99 iPhone) materialize and data plans become cheaper as well. 

As more people adopt smartphones and dataplans the mobile Internet grows -- ipso facto.  Conversely, smartphone sales could stall if a range of reasonably priced non-phone mobile Internet devices become widely available. 

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See also: Sprint may launch WiMax-enabled Android phone next year. 

Handset News: Samsung Delays Android Handset, Garmin-Asus Nüvifone Pics

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:

Garmin M20

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. 

Voice Activating GSMA Mobile World Congress

Next week, Opus Research expects voice-activated services to assume a more prominent role at the GSMA Mobile World Congress. Then again, I feel like we say this every year. Then, when it’s all over, I write the obligatory survey of the exhibitors, presentations, products and services that make use of speech processing technologies for service delivery.

This year will be the same in many ways. Voice services, in general, will take a back seat to some of the more high-profile, glamorous and lucrative services. These include SMS-texting, downloading ringtones, gaming, navigation and ultimately watching (or sharing) video entertainment. But that "backseat" analogy is quite inaccurate. Voice as an input modality is taking on an increasingly important role in front of the most popular services. In short, if it works on a wireless phone, it is easier to access by speaking. Let's not forget that, although they increasingly act like computers, personal navigation systems, MP3 Players, game consoles, and wireless handsets are, at base, phones.

Blame it on iPhone and Blackberry
The multiplicity of applications and services made available through iPhones, G1's and other touch-screen smartphones are made possible by simplifying the process of product ordering and service initiation. The addictive nature of the "Crackberry" is due in some part to the simplicity of retrieving and originating both business and personal email. Frequent users are likely to do more with their phones. They will add new services, download more content or media and, most importantly, stay loyal to their carrier.

Voice-activation, by simplifying order entry and service initiation on the majority of wireless devices, should be in the driver's seat, not the backseat of any mobile conference. Below, using Nuance Voice Control 2.0 as an example, I further dramatize my point.

Say a Command: The Conversational Dialtone
Conversational access to mobile content and services is a winning proposition for wireless operators, device makers and content providers. Nuance Voice Command 2.0 (NVC 2.0) expands the roster of services that can be initiated by responding to the simple prompt: "Say a command." It integrates the broadly circulated V-Suite, which has been managed and refined by Nuance since the acquisition of VoiceSignal in May 2007, with Open Voice Search, largely based on technology, resources and business relationship acquired in late 2006 with MobileVoiceControl.

Today, a small set of high-end phones -- exemplified by the Apple iPhone, RIM Blackberry, T-Moble's G1 and other touchscreen-enabled models -- serve as showcases for a large and growing inventory of "apps" made available through carrier-run storefronts. Given that 80% of mobile subscribers are without smartphones, the coverage of popular capabilities in the press amplifies the mystique surrounding mobile search, dictation and a growing list of speech-initiated services.

Looking back nearly a decade, VoiceSignal's business development group aggressively pursued relationships with wireless device makers. As a result, by Nuance's estimation, V-Suite is available to 300 million mobile subscribers around the world. Early instantiations of V-Suite powered voice dialing on hundreds of millions of handsets. NVC 2.0 makes the services that are most popular among owners of smartphones available to the "rest of" wireless subscribers.

Sweets from the Suite
NVC 2.0 provides access to a suite of services and capabilities directly from the "idle screen" of virtually any feature phone. In response to the prompt "Say a command," mobile subscribers can initiate:

  • Voice activated dialing - Classic “Call Mom!”
  • Free-form Web search - To populate the search box in popular search engines
  • SMS, text messaging - Including a toggle between address information and content. Initiator can say, "Send text to Derek Top (pause); Hey Derek, I’ve just emailed my advisory on Nuance Voice Control."
  • Navigation and driving directions - Location-aware phones can respond to the simple command like "Get directions to 400 California Street, San Francisco, CA"
  • Conversational e-commerce - Search or shop for music and other content: "Find 'Whatever You Like' by T.I."
  • Mobile game playing - At least for speech-initiation of games, such as "Go to Zuma"
  • Participating in social media activities, through an incantation such as, "Go to Twitter"

These capabilities are built into the product suite today, in terms of command and control. Integration with dictation and "free-form Web search" will be promoted more aggressively in the market in the next 3-6 months.

The Importance of Being Device Agnostic
Service delivery customarily requires close coordination and cooperation among mobile phone makers (both OEMs and ODMs), mobile operators and content providers. By contrast, NVC 2.0 is called "device agnostic" by Nuance management. In terms of competition, Vlingo has many of the speech-initiated capabilities but, to date, works only on the Apple iPhone and selected RIM Blackberries.

Speech-to-text transcription specialists like SpinVox, Jott, PhoneTag (formerly Simulscribe), Vlingo and Yap are positioned as voice front-ends to popular mobile services. Search king Google has also put the seal of approval on voice input, initially for iPhone users but fanning out to other smartphones. To date, with the exception of the peripatetic SpinVox spin machine, none of them has done much to raise their profiles among the population of mobile subscribers at large.

With more than 8,000 delegates and a broad waterfront of topics to cover, the GSMA Mobile World Congress may not be the best venue to raise speech's profile. But, thanks to efforts by Nuance, its partners and its competitors, we expect speech-initiated services to take on a higher profile in the coming months. Soon, the clock will start on major marketing and service delivery efforts by Nuance and carriers around the world. The message being that the general mobile public (not just smartphone owners) wants ready access to popular services. And for the vast majority of phones (i.e. those lacking touchscreens and operating systems) voice-activation is the most convenient access method.

Will eBooks on iPhone & Android Stall Kindle?

If the "Classics" app is any indication, an eBook reading experience on the iPhone can be pretty good. Now Google and Amazon have both announced that they're going to be putting thousands of books on the iPhone and Android platforms. The NY Times rounds up the announcements. You can read the Google announcement from last week here.

Overall eBook reading is gathering steam, aided by the popularity of Kindle and the emergence of the iPod as a viable eBook reader. Google and Amazon's announcements will further boost the trend. 

This morning Amazon announced Kindle 2.0 -- a much improved but incomplete device. But will the broad emergence of smartphones as eBook readers -- especially the iPhone/iPod Touch -- stall Kindle sales? Kindle isn't a phone and it isn't an Internet access device. It's a specialized newspaper, blog and book reader.

If I already have an iPhone am I likely to buy a Kindle? It's not clear that the new device will be a major success. But with the ability to access the Internet (or emphasis of that feature) and/or the ability to play video I believe it would become a true bestseller. 

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Related: Plastic Logic plans to introduce its own, larger eBook/newspaper reader. The NY Times has the story

Kindle 2.0 Launches: Improved but Still Not Internet Ready

So Kindle 2.0 was announced this morning. It looks like a giant white iPod Touch with a physical keyboard. Here are the "new and improved" bullets from the release:

  • New Slim and Sleek Design
  • New Crisper, Faster Display
  • New 2 GB Memory Holds Over 1,500 Books
  • 25% Longer Battery Life
  • New Instant Dictionary Lookup
  • New Experimental Read-To-Me Feature (Text to Speech -- awkward but interesting)
  • Still Wireless, Still No PC, Still No Hunting for Wi-Fi Hot Spots
  • Automatically Syncs With Original Kindle, Kindle 2, and future devices
  • Earth’s Biggest E-book Store Keeps Expanding, Plus New Stephen King Exclusive

This is much better that its predecessor it appears. But it's still missing the opportunity to become a "MID" (mobile Internet device). You can see a informal video here or the official video here.

French Court Upholds 'No iPhone Exclusivity' for Orange in France

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.