Android and Mobile Update from Eric Schmidt

Google CEO Eric Schmidt gave the closing keynote address at the IFA consumer electronics event in Berlin yesterday morning. His full speech is online here. During the course of the keynote, which included presentations by two other Google employees (about Google TV, Google Translate and Street View), he exposed the following information about mobile and Android: 

  • "One in three queries from smartphones is about where I am" (location)
  • Google mobile search traffic grew 50% in first half of 2010
  • Search queries coming from Android handsets has "tripled" in 2010
  • 200,000 Android activations daily; 60 devices, 21 OEM partners, 59 carriers, 49 countries
  • 25% of Android-based searches in the US market are initiated by voice
  • Mobile is growing eight times faster than the PC Web a decade ago
  • YouTube has 160 million mobile views per day

Beyond the obvious Android and broader mobile growth story the voice search statistic above is striking and so is the figure "one in three queries from smartphones" is local.

Microsoft, Nokia Hoping for US Smartphone Success with New Operating Systems, Handsets

As Windows Phone 7, as its now called, prepares to launch perhaps as early as next month, everyone is waiting to see whether the new OS will revive Microsoft's smartphone fortunes. An early CNET review was mixed but mostly positive:

After more than a month of living with Windows Phone 7, I have to say, Microsoft's new phone operating system is starting to grow on me . . . [T]here are hidden delights. In the past week I've found the cursor, voice recognition, and other things that I missed in my first days playing with the phone. . . Most of what I don't like about Windows Phone 7 traces back to the fact that this is--despite its polish--what amounts to a new first try for Microsoft . . .

I suspect that will be the general tone of subsequent Windows Phone 7 reviews: this feature is great, this is not, etc. Will there be enough positive to get consumers excited? And what about pricing? That will be critical. You can expect that any two-year contract phone will come in under $199. If it doesn't it's DOA from a consumer standpoint.

Meanwhile Nokia is looking to its N8 (and other forthcoming) models to "answer the iPhone" and establish new smartphone momentum. The N8 uses Symbian 3 with the first MeeGo product to come before the end of the year. The N8 has a 12 megapixel camera and Flash support. It may well arrest Nokia's smartphone slide in Europe but it's unlikely to see much success in the US market with Apple, Google and RIM too well established and with too many advantages. 

Nokia needs to offer lower-priced smart devices in the US to reestablish its brand and then move into higher-end handsets. That isn't to suggest that it shouldn't compete at the high end; shareholders are demanding it. But the N8 or another "flagship" device -- unless it's incredibly good -- it unlikely to gain much traction in the US market. 

Still it would be good to see Microsoft and Nokia do well with their new devices. More competition is better for consumers and the market as a whole. 

Nokia Buys Analytics Firm Motally

As is being widely reported, Nokia has bought San Francisco-based mobile analytics firm Motally. According to the press release:

Nokia (NYSE: NOK) today announced it has signed an agreement to acquire Motally Inc., a privately-held US-based company. Motally's mobile analytics service offers in-application tracking and reporting, and is designed to enable developers and publishers to optimize the development of their mobile applications through increased understanding of how users engage. The service offering is planned to be adapted for Qt, Symbian, Meego and Java developers, and Nokia plans to continue serving Motally's existing customer base.

"The acquisition underpins Nokia's drive to deliver in-application and mobile web browsing analytics to Ovi's growing, global eco-system of developers and publishers, enabling partners to better connect with their customers and optimize and monetize their offering," said Marco Argenti, Vice President, Media, Nokia.

This appears to be a pretty straightforward effort to bring analytics to the Ovi store for developers. The company offers both mobile Web and app analytics.

Terms of the deal were not disclosed. Motally was founded in 2008 and has eight employees. 

The Americanization of Nokia

An article in today's NY Times discusses three how three Americans are now in key positions at Nokia: Mary T. McDowell, Jo Harlow and Richard Green. In particular the piece focuses on McDowell, Nokia's "chief development officer." The idea is that these and perhaps other Americans to come will help revive Nokia's high-end smartphone business especially in the US.

Nokia is still by far the dominant OEM globally but has a declining share in the US market. Along those lines, here's a statement in the piece, attributed to McDowell, that's not entirely accurate in my opinion:

She added that Nokia’s problems in the United States stemmed from its failure to work closely with U.S. mobile operators to tailor devices to their needs, rather than from any shortcomings in the phones themselves. 

Nokia's failure to work with carriers is perhaps one of the critical explanatory variables behind its current US predicament. However the user experience is definitely part of the challenge Nokia faces in the US.

Unless the company makes super-affordable, "good enough" smartphones and/or dramatically improves its user experience overall Nokia won't see any gains in the US. Around the world, especially in developing countries, it's a very different story; Nokia dominates.

Yet Android poses a serious threat to Nokia in those developing markets over time. Nokia has been almost exclusively focused on finding an "answer to the iPhone." But as I've argued before it's really Android that Nokia should worry about globally. 

I would argue that the US market is an important market to Nokia not because of revenues but because it's now the smartphone leader and much of the "coverage" is driven by what's happening here. There's more symbolic value here for Nokia in succeeding or failing.

Nokia's failures in the US may also reveal "cultural" issues within the company that need to be addressed. It may be something of a useful mirror that Nokia should use to diagnose those internal questions and problems. I'm not sure that simply having Americans in key positions is the answer. 

After all, Microsoft, which faces its own significant hurdles in the mobile market, is an American company. 

Nokia Builds Mobile Craigslist for Developing Countries

There have been other mobile classifieds marketplaces but none with the potential heft of Nokia. Craigslist has many associated third party apps on the iPhone that mobilize its listings content; eBay of course has had great success in mobile, to name two big names. 

Nokia has now created Listings, a sales and services marketplace aimed right now at the developing world. It's only available in India during the beta test. 

The downloadable app features several categories of information:

  • Buy & Sell – Find or post items for sale
  • Jobs – Find or post a job
  • Local Services – Access or advertise services such as auto repairs, driver services, plumbers, etc.

The success of such a service is all about penetration and inventory. If lots of people use the service it could become quite successful and potentially generate meaningful revenue on a global basis. User experience is key but more important is getting the listings content into the system so that users show up.

The service is also more likely to succeed in countries where there aren't already established online marketplaces, which means developing nations primarily. Yet if the content is there and the UX is good enough it could potentially compete elsewhere in world, in Europe perhaps.

Amobee Consolidates European Relationships, Forms Huge Network

There are a number of giant, global mobile advertising companies or "platforms" emerging. Beyond the big brands, Google, Yahoo, Microsoft, there are Velti, inMobi and Amobee. Of the latter three, Velti and Amobee are more similarly situated, while inMobi is an ad network doing ad sales directly. 

Today Amobee announced that "it has been appointed by Gruner + Jahr Electronic Media Sales (G+J EMS) to represent 75% of premium mobile content in Germany. Amobee will become the exclusive partner in mobile advertising, serving billions of ads impressions per month." 

Amobee explains that Germany is the "largest single-country mobile ad marketplace" in Europe. The company also claims that it can, through its carrier partners and publishers, "reach around 1 in 7 mobile users on the planet every day."

Previously Amobee acquired mobile ad agencey RingRing Media. The company says its ultimate goal is to create "the industry’s largest mobile advertising exchange dedicated to connecting publishers, advertising agencies and brands to premium inventory in real-time, on a global scale."

There are many other mobile ad "exchanges" and ad mediators in the market, including AdMarvel, Smaato, Nexage, Mobclix and others. Over the next year the mobile ad market is ripe for M&A as major players try and build more global scale. US-based mobile ad network Millennial Media has indicated it may try and go public.


Related: Nexage announces major platform upgrade for optimized mobile ad mediation & optimization.

Survey: 'Antennagate' May Hurt Apple in EU

On the recent Apple earnings call there were a couple of questions about "Antennagate" and whether the controversy had hurt Apple sales or demand for the iPhone 4. The company said that it had not been hurt and that demand remained very strong -- so strong that there's a 21 day wait to get the handset in the US.

It appeared that Apple had "dodged a bullet." But perhaps not so fast. As the device heads to markets outside the US there may be reason to believe the negative PR could dampen interest.

A recent online survey of 2,089 UK adults (7/16-7/19), conducted by Opinium Research, suggests that some potential UK consumers may stay away:

  • 57% said they had no intention of buying the device.
  • 26% of UK consumers are less likely to move to an iPhone 4
  • 45% of iPhone 3GS owners said "they were less likely to buy or upgrade to an iPhone 4"

There are differences between attitudes and behavior, between what people say and then later what they actually do. Then there's the question of how many of the 57% wouldn't have bought an iPhone anyway. Well the table above says that 15% of that 57% are current iPhone owners/users.

Regardless of the precise figures, these numbers and the sentiment behind them should worry Apple and could translate into less than expected iPhone 4 sales in the UK and elsewhere in Europe perhaps. 

Opera: State of Mobile Web, June 2010

The latest Opera report is out. The focus of the report this month is on Africa and the World Cup. Opera said it had 59.4 million users of the Opera Mini globally. I'm now using it on my Android Evo at least as much as the native browser (which often tries to send me to the carrier portal annoyingly).

Below are the top sites and handsets for China, the UK and US. The iPhone is now the top handset in both the UK and US, while Nokia continues to dominate in the aggregate.

Compare the data from roughly a year ago, July, 2009. While there is some shuffling among the top sites (e.g, MySpace has gone from #3 to #10 in the US) the data reflect mostly the same top 10 in these countries over the past year. 

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iPhone 4 World Tour: 17 More Countries Friday

Apple has announced that on Friday (July 30) the iPhone will be available in 17 more countries:

Australia, Austria, Belgium, Canada, Denmark, Finland, Hong Kong, Ireland, Italy, Luxembourg, Netherlands, Norway, New Zealand, Singapore, Spain, Sweden and Switzerland. iPhone 4 will be available for purchase through Apple’s retail and online stores and Apple® Authorized Resellers. 

Here's Apple CFO Peter Oppenheimer discussing iPhone 4 sales on last week's earnings call:

We were very pleased with iPhone sales of 8.4 million, including over 1.7 million iPhone’s 4s in the initial five countries where it was launched. This represents 61% year-over-year growth and is considerably higher than IDCs latest published estimate of 38% growth for the global Smart Phone market overall in the June quarter . . .

Recognized revenue from iPhone handset sales, accessory sales and carrier payments was $5.33 billion during the quarter compared to $3.06 billion in the year-ago quarter, an increase of 74%. The sales value of iPhones alone was about $5 billion, which yields an ASP of about $595.

At the end of the June quarter, we had iPhone distribution with 154 carriers in 88 countries. We continued to experience very strong year-over-year growth, particularly in Asia, Europe and Japan. Additionally, we continued to be very pleased with strong sales growth from both long-standing and new carrier partners. During the quarter, we surpassed cumulative sales of 100 million iOS devices.

During the earnings call Q&A there were questions about iPhone returns and "Antennagate." Here's the gist of what was said by Apple:

Gene Munster – Piper Jaffray

And just last question and I will turn it over. Since the issues with the antenna have you seen any changes in demand or what changes have you seen in demand for iPhone 4?

Tim Cook

We are, Gene, let me be very clear on this. We are selling every unit we can make currently.

Some people credit Apple with distracting from the iPhone's antenna design by roping other handsets into the controversy. While tech journalists and bloggers debate the validity of these comparisons the public doesn't seem as interested.

Anecodtoally I've heard a few consumers hesitate because of press accounts they've read or seen regarding the iPhone 4's antenna problems. But the sales figures apparently indicate that demand is still extremely high. But most of these sales happened before Antennagate. We'll see what happens internationally now.

Nokia Looking for Its Howard Stringer

Sir Howard Stringer was the first non-Japanese CEO of Sony Corporation. He's still the CEO of course. The company felt at the time of Stringer's recruitment that it needed an "outsider" to run things. So may be the case with Nokia, which is now reportedly seeking to replace current CEO Olli-Pekka Kallasvuo -- perhaps by the end of the month. 

According to the Wall Street Journal the company is actively considering Americans among others: 

The CEO of a major U.S. high-tech company recently spurned Nokia's approach after meeting with Chairman Jorma Ollila, because the candidate wasn't interested in moving to Finland, this person said. Nokia also has flown in at least one other U.S. based executive to interview for the CEO job, the person said.

The company may feel that it needs someone from the US to help make gains in what has become the world's most important smartphone market.

While investors continue to grouse that Nokia "still has no answer for the iPhone," it arguably should be more concerned about Android's potentia gains in developing markets and ability to compete across the board with Nokia. Apple will only compete at the high end. 

Nokia is the dominant mobile phone OEM in the world; however in the US it has a limited presence and almost no share in the smartphone segment. 


Survey: Europeans Not Doing 'mCommerce'

Research firm Forrester conducted a survey of European mobile users and found -- few surprises here -- that most respondents are not transacting on mobile devices. Here are the high-level datapoints:

  • A mere 2% of respondents reported purchasing products from their mobile phone and only 5% are actually interested in doing so.
  • Only 16% of online buyers have used their mobile phone for a shopping-related activity such as researching products, checking on the status of an order, or locating a nearby store to buy a specific product. 
  • Italian, Swedish, and UK online buyers have warmed up the most to mobile commerce.

The firm says, however, its earlier survey data show more engagment with these activities among smartphone users:

28% of European iPhone owners research products for purchase, while 13% of them report purchasing products via mobile at least monthly

Compare this to earlier Insight Express (US) data, which show much higher levels of smartphone activity in stores:

Screen shot 2010-07-07 at 11.19.50 AM

Source: Insight Express, June 2010 (n=1300 US mobile phone users)

In addition, recent Compete data show heavy smartphone usage to find local stores/businesses:

  • Nearly one in three smartphone owners has called or stopped into a local business after finding it using a local search application.
  • In Q1 alone, close to a third of Android and iPhone owners discovered at least two new businesses that they were not previously aware of as a result of using local search applications.

We discussed in the past that a major obstacle to so-called "mCommerce" is the need to enter 16 digit credit card numbers on a tiny screen. Even a smartphone screen is very awkward. Stored credit card numbers with trusted online etailers (e.g., Amazon) or payment platforms will fuel mobile-online purchases by removing the credit-card-entry fricition. 

Mobile "commerce" should not be confused with mobile "shopping" or use of phone for shopping purposes. Smartphone owners, as the IE data above suggest, are using their handsets extensively in stores and in the shopping process on the go.


Two earlier US-based surveys show more interest in mCommerce among mobile users than the Forrester survey data:

iOS v. Android, but What about the Others?

The media keep focusing on the "battle" between iPhone and Android. But the mobile platform and handset market is not winner-take-all. There's room for more than two players to succeed in the US and internationally. This is a key point made by Google itself several times now. 

But how many platforms and smartphone operating systems can the market support exactly?

The following charts reflect OS representation on AdMob's global network. (AdMob does not equal the mobile Internet or mobile handsets more broadly, but there's a directional correspondence between mobile Internet trends and what AdMob shows in its metrics reports.)

If you consider the chart immediately above, what you see is that the "mobile Internet" (on AdMob's network) is dominated by iOS, followed by Android in North America and Western Europe. In other regions Nokia is a major player or dominant. Despite its large, installed base RIM is barely present on this chart.

RIM of course sells more smartphones than anyone in North America. However its mobile Internet usage data and overall user experience lag competitors. BlackBerry 6 seeks to change that.  

There aren't going to be five viable global smartphone platforms. There might be four, but it's more likely three. Those will vary, as the chart above suggests, on a geographic basis, with the two "constants" across regions likely to be Android and the iPhone.

Given the scathing criticque that an InfoWorld writer offered of Windows 7 (after a demo), it's quite possible that Microsoft might not be among the winners:

The bottom line is this: Windows Phone 7 is a pale imitation of the 2007-era iPhone. It's as if Microsoft decided in summer 2007 to copy the iPhone and has shut its developers in a bunker ever since, so they don't realize that several years have passed, that the iPhone has advanced, and that competitors such as Google Android and Palm WebOS have also pushed the needle forward. 

We'll have to wait and see how accurate this very harsh review is later this year when the handsets hit the market. But the Kin debacle is not a good sign for Redmond. 

In the US smartphone market, it's currently a three-way race between iPhone, Android and RIM. In Europe it's likely to be iPhone, Android and Nokia. Other platforms may simply not have the scale and (developer) mindshare to compete. Several developer surveys certainly suggest this as well. 

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 Source: Appcelerator (6/10)

Skype Promoting Mobile Usage

I got the following email from Skype this morning trying to encourage me to claim a "Skype to go" number and use Skype on my mobile phone.

The problem is that while there's a financial incentive to use Skype for international calling the quality isn't good enough yet for every day domestic calling over 3G. If that quality improves as 4G networks roll out there could be increasing use of Skype as a primary telco on mobiles.

However Skype can be used quite nicely on the iPad to turn that device into a phone. 

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That sort of potential disruption is a reason that most carriers won't offer unlimited data-only plans. 

inMobi Gains $8 Million, Challenges AdMob

inMobi announced earlier this morning that it had raised $8 million in funding for a total of roughly $15 million.The company began in India in 2007 as "mKhoj." It launched in the US formally last month.

Many people in the industry haven't heard of inMobi yet it's the largest ad network globally other than Google-AdMob. Now inMobil is seeking to take AdMob's place as the leading independent mobile ad network. 

The company says that it has "16.9 billion impressions monthly reaching 179 million consumers in 108 countries." Clients include Reebok, Microsoft, Nokia, Sony Ericsson, Quaker Oats, Yamaha, Barclays, and Yahoo.

Source: inMobi internal traffic data

American employees of the company include former Yahoo VP Anne Frisbie, now head of inMobi North America and James Lamberti, formerly SVP of comScore, now VP of global marketing for the company. I spoke to both yesterday and they stressed to me that inMobi had a technology platform and scalability advantage over the majority of its competitors. They also said that it was best positioned among the independent networks -- inMobi is an ad network working directly with clients rather than a mediator or exchange -- in the Google vs. Apple advertising battle. 

Lamberti said that inMobi would be releasing some very interesting data soon, which caused us to talk about mobile data more broadly. Both Frisbee and Lamberti criticized the quality of the third party mobile data available and the comScore and Nielsen methodologies. They said that GroundTruth probably had the best data in the US market but that it was incomplete.

Frisbee said that once you get out of the US and Europe (to a degree) third party data are not available as a general matter. 

What's impressive is the way that inMobi has scaled globally in a relatively short time frame. Velti and Amobee, using somewhat different models, aspire to the same global scale and reach. 

With Google having bought AdMob that leaves Yahoo and Microsoft as potential buyers of ad networks. However, in addition, the major advertising holding companies, many of which have acquired small mobile agencies, are also potential acquirors of mobile ad networks and exchanges. Then there are the carriers . . . but they're unlikely to play directly in mobile advertising despite their past flirtations.

Holy Crap: 1.7 Million iPhones Out the Door

Apple announced this morning that last week's launch of the iPhone 4 generated sales of 1.7 million, higher than the most bullish estimates:

Apple today announced that it has sold over 1.7 million of its iPhone® 4 through Saturday, June 26, just three days after its launch on June 24. The new iPhone 4 features FaceTime, which makes video calling as easy as one tap, and Apple’s new Retina display, the highest resolution display ever built into a phone, resulting in stunning text, images and video. 

According to survey data, however, more than three-fourths of these early sales (at least in the US) are from existing iPhone owners upgrading:

  • 77% of the iPhone 4 buyers were upgrading from a previous version vs 56% in 2009
  • Only 16% of buyers were switchers to AT&T from another carrier, down from the previous year 

If the device were available from other carriers sales volume might have been 2X this.

There are many surveys that indicate pent up demand in the US for an iPhone from carriers other than AT&T. Accordingly, a new online survey (n=4,000 adults in the US, Canada and UK) about features that iPhone owners would like to see revealed the following: 

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Among current and potential future smartphone users, 39% of US respondents indicated they wanted other carrier choices. It's not clear how many of these respondents are current iPhone owners. But it confirms the point I made above that Apple continues to lose sales by remaining faithful to AT&T in the US.

Opera: 'Nighttime is Prime-Time' for Mobile

Opera has released its most recent State of the Mobile Web report. In addition to the usual country specific data, Opera also examined usage patterns to see when usage was heaviest. The company found that it was roughly the evening hours from 8 p.m. to midnight. However it would false to draw the conclusion that other hours saw little or no usage.

According to Opera: 

  • The highest level of Opera Mini use is at the tail end of the day – from 8 p.m. to midnight. That said, users in the United Kingdom are just as likely to browse on their phones between 8 a.m. and noon.
  • There is little difference in data consumption between weekdays and weekends.
  • The least amount of mobile browsing is done in the early morning (when most people are asleep), between midnight and 8 a.m.
  • In general, evening browsing (between 4 p.m. and midnight) is more common than daytime browsing (between 8 a.m. and 4 p.m.), except perhaps in China and the United Kingdom where daytime/evening usage is about even.

A recent report from ad agency Interpublic subsidiary Initiaitve shows some trends that are parallel but distinct in some respects. Based on a consumer survey (n=8,000) in multiple countries the agency found: 

  • 60% of mobile Internet access/usage is happening in the home and, in general, mobile Internet use happens throughout the day
  • Giving new meaning to the phrase "mobile first," 30% of smartphone users start their day with mobile internet and 45% end with it. 
  • The heaviest smartphone-driven Internet usage happens in the evening (for 64% of respondents) -- at home
  • Consumers are also using the mobile Internet while they're doing other things: TV, radio, PC, print media.

(emphasis added.)

Here are the "top" charts from Opera for the UK, US and China. The iPhone is the top device for Opera in the UK and US and Google is the top site in both countries according to Opera.

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Interestingly is still on the list despite Google having "pulled out" of China officially. 

Is RIM the New Nokia?

What I mean by that headline is the following: Is RIM, the dominant smartphone vendor in the US market, about to see its fortunes decline as it fails to compete with the leaders and innovators in the segment?

Despite a very strong first fiscal quarter, there's a perception that BlackBerry is lagging and will have trouble regaining momentum. According to the company's quarterly results, released yesterday, Q1 sales increased approximately 24%, but still missed analysts' consensus estimates. The company had revenues of $4.24 billion but analysts wanted more. The company announced a stock repurchase program to keep share prices stable. 

RIM co-Chief Executive Jim Balsillie has said that the company will be introducing new devices that will make it more competitive with the iPhone and Android handsets. These include a potential tablet and the forthcoming "Torch," which will have both a touch-screen and slide-out keyboard.

Reportedly BlackBerry App World is now seeing roughly a million downloads daily. However, RIM lags both the iPhone and Android and has the most expensive apps. It's also a platform that less than 40% of developers are focused on.

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Let's be clear RIM is unlikely to be able to produce an "iPhone killer."

What it needs to aim for is a "good enough" alternative to the iPhone -- a version of its current phones that offer the beloved keyboard functionality and a better Web experience that what's currently available. (RIM has vowed to develop a better browser.) The company needs to focus on loyalty and retention. Indeed, BlackBerry user loyalty lags Android but especially the iPhone.

If the company moves too much in the direction of aping the iPhone it's unlikely to best the Apple device and will suffer for the comparison. But because it has won in the enterprise it needs to maintain and strengthen those features that make the handset appealing to corporate IT decision makers as well as building out enough consumer functionality to keep it generally competitive.

Ironically many younger, heavy SMS users, like RIM's handsets because of the keyboard. As they move "up market" and seek mobile-Internet enabled devices they are likely to abandon RIM unless the company can create a better mobile Web experience. 

iPhone Mania Goes Global

From Tokyo to San Francisco, there are lines aplenty on iPhone 4 launch day. Here is some of the coverage and video:

  • TechCrunch with live video from the line in San Francisco.
  • An account of being online in London last night from CNet UK.
  • Business Insider has photos from different Apple stores around the world. 

In Paris at the Louvre Apple store:

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Credit: SAI

Video from New York and London:

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More coverage:

Google Brings Nav to More Countries, Maps to GM, Upstart App Offers Free Nav to iPhone

Google is making its mobile Navigation app available in more countries, throughout Europe: Austria, Belgium, Canada, Denmark, France, Germany, Italy, the Netherlands, Portugal, Spain, and Switzerland. It's voice guided and offers voice search. In a related development, Google expanded the number of European languages for Google Voice Search. 

Google's free Navigation (which works well) has not yet come to the iPhone, whether for technical or competitive reasons. However a new free app from Berlin-Germany based Skobbler offers free turn by turn navigation on the iPhone. I haven't used it so can't comment on its quality. It uses OpenStreetMap for base data. 

Finally, Google Maps are now a part of GM's OnStar functionality. Users can email directions from PC-based Google Maps to select GM cars. Ford has also integrated Google Maps into its Sync system and will allow users to send directions to Sync from the PC or smartphones. Sync was co-developed with Microsoft so I would expect comparable functionality for Bing. 

Will Microsoft Tag Mainstream 2D Barcodes?

In Japan and elsewhere in Asia 2D barcodes (QR codes) are widely used. They also have momentum in Europe. However, despite a range of efforts, they're largely unknown to mobile users in the US. I suspect that within two or three years, however, they will be mainstream in this country.

The virtue of QR codes is that they can connect "the real world" to dynamic information and the Internet. Magazines, outdoor ads, websites, real-estate signage and other marketing can use barcodes to provide offers, additional information and so on. The can also track performance of those media. It's very similar to how SMS can connect traditional media and marketing with the digital world. However QR codes only require that users capture an image of the code graphic. Yet they also require a software download. 

Consumers with smartphones are getting accustomed to scanning conventional UPC codes in stores for product information. It's just a hop, skip and a jump to QR codes (or some version of them). And Microsoft Tag could become the driver of that mainstream scenario.

Last week Microsoft said it was making the Tag technology available to anyone that wanted to utilize it for free:

Today we’re announcing that Tag is coming out of beta and that basic use of Tags will be free of charge. This means you will be able to generate and use Tags that link to our standard scenarios, such as linking directly to webpages, and use the reader application at no cost. By simply going to, you can create Tags and deliver rich interactive experiences on mobile phones, track your Tags, and read about how companies such as Conde Nast and others are using Tag. 

An interesting use case explained in the Microsoft blog post I quote from above describes how Tags are being placed on public monuments in Amsterdam:

Amsterdam became the second world city with a Tag-led tour, with Tags on monuments, museums, restaurants, bars, and other landmarks. The Mall of America, in Minnesota, has announced plans to use Tag to help enhance customer engagement and give retailers an interactive tool to promote their products. 

The challenge to 2D barcode adoption in the US is the lack of standardization; there's no single universal code in use and not enough installed users. It's a bit of the old "chicken and egg problem." Microsoft hopes to popularize Tags and overcome that problem by making them free, as well as the consumer software necessary to read them. 

Facebook is also potentially going to introduce QR codes (although the use cases aren't yet clear). But if any site has the capacity to educate users about a technology it's problem them.