On Google's move in navigation

It's been announced a couple of days ago that turn-by-turn GPS navigation would be supported soon on devices based on Android 2.0 platform. Free of charge. The new Google Maps Navigation offers free turn-by-turn navigation garnished with Google's core business (search by voice and in plain English, search along route) and existing services (traffic, satellite and street views) for Android devices.

I was shocked to hear this news. The two biggest map data providers, Tele Atlas and Navteq, have been acquired a few years ago, former for $2.9bn by TomTom latter for $8.1bn by Nokia. Their main revenue sources were licensed map data and value added services e.g. turn-by-turn navigation. Since Google uses either its own map data or one that is freely available, I think I told everything: they do whatever they want. It is still unknown how Google will monetize on the new service - other than ruining competitors -, but advertisement seems to be a very likely option.

On a related note, I found Bill Gurley's article on Less than free business model quite interesting. Briefly, Google offers Android to OEMs free of royalty, even more, they pay ad split to them. In other words, it's not only that OEMs don't have to pay, but on the contrary, they will get paid. One of the commenters of this article gave a hint on another business model that Google may try to follow: don't bother with ads, but offer a package to navigation device makers, news agencies, automakers, roadside advertisers, etc. A package that is based on continuously updated traffic data that can be used to provide always optimal routing information.

How can competitors react on Google's move? Without own map data it's very difficult to compete with someone who's giving away the same service that we are selling.

• Stefan from IntoMobile suggested that Nokia should make map data free and wait for the flood of new mapping services - let's see what innovation will result in. Not a bad idea, but would leave Nokia in a bit of passive role, wouldn't it?
• The other option could be to do the same as Google may do in the future: sell a package instead of showing ads (see above). Why Nokia? Because it has maps data. Which platform? It's rather Maemo than Symbian - we're talking not only about mobile phones, but other embedded devices, too.
• Finally, the third option is advertising and provide free service. Who? Microsoft doesn't have own map data, but has Bing and Yahoo! search, which is a good basis for advertising. Whereas Nokia doesn't have search, but has maps data (I told you that Nokia should have bought Yahoo!). Perhaps these companies should form an alliance?

Looking forward to your comments,

Tote

Smartphone market share, 2008

Gartner released their statistics about worldwide smartphone sales, which contains useful information not only the previous quarter (Q4 2008), but the whole past year. I'd like to share the following two figures with you:

Comments:

• Nokia is still #1, but it's market position is seriously challenged by RIM, Apple and HTC.
• Even Apple is suffering from decreased sales in Q4, but that didn't prevent them from being ranked as the third vendor by sales.

Comments:

• Symbian had lived better days a year ago, but it's still a bit more than 50% of smartphones that runs this operating system.
• RIM and Mac OS X performed exceptionally well even during the tough economical situation.
• Although the share of Windows Mobile shrank a bit, it still maintains its third position. Only blinds can't see that not for long.

Finally, some words on regional sales:

• Dramatic increase (69%) is experienced in sales of smartphone in North-America, which now accounts for 20% of mobile phones in this region. Carriers are agressively pushing data plans that is beneficial for vendors, too, offering vertical mobile solutions from hardware manufacturing to providing developer SDKs to cloud services.
• While overall device sales dropped, Asia/Pacific recorded a 2.3% growth in smartphone sales.
• EMEA region were up by only 2%, Western-Europe sales increased by 9.6%. Samsung drove sales in 2008 with Omnia as its most successful product.

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Predictions for 2009

I'm only a little bit more experienced in predicting future trends than I was last year, still I'd like to continue what I started a year ago. Who knows, maybe I'll be at least as right as I was last year?

Let's start with reviewing what I wrote previously and what really happened in 2008:

• I commented on ad-driven content and how much e.g. Google depends on operators in allowing their users to use the Internet at a fair price on their mobile. Well, it was only a concern that I raised, but Google's (and Apple's) move was brilliant: they showed that it is not impossible to change the rules. What I really mean is that both companies have their phones offered by network operators with a flat-rate data tariff (it's according to the agreement between the handset vendors and operators), which is really the way for free Internet usage.
• As to NFC, I disagreed with the statement of one of my fellow champions, Paul Coulton, that 2008 would be the year for the rise of this technology. I now think that I was right in this question: this technology had so many challenges (let it be technical or political between banks and operators, for example) that 2008 would have been too early for the rise.
• Touch - I have only seen the hype around Apple's new phone at the time of writing my previous prediction, but even the early signs were enough to predict that other manufacturers will try to copy Apple's success. I was right in this, but of course, having only this new feature is not enough for success, though obviously is a mandatory component in the recipe of success.
• As for Java and that it would be becoming more popular again on mobile platforms, to be honest I can't see any measurable change today. Okay, Android development environment requires mostly this knowledge (not to mention Brew), however, this platform is yet too young to have significant influence on Java's success.
• Awakening of North-America to smartphones: it DID happen. People on that continent has finally realized that there are other features that a mobile phone can offer, there are other services that they can use with their favourite gadget, and in general there is much more that they can do with their cell phone that they could ever imagine. And since North-America is in a very strong position when it comes to technology, the awakening of people living there will surely give a boost to innovation and further spread of smartphones.
• Finally, I wrote that manufacturers who really think in big will not only sell phones, but also provide Internet services to users. This has also become true, although this will be a never-ending process currently with two-kinds of players: one that has already proven on service-front (e.g. Apple, Google) and the other which is already a recognized brand in mobile (e.g. Nokia).

What will happen in 2009?

• Most importantly: the trend will continue for smartphones to become a commodity. Despite the financial crisis more and more people buy smartphones as they become more affordable (mostly due to binding contracts, though prices get lower, too) and once users get used to advanced features they'll be reluctant to give up using them.
• As to advanced smartphones with binding contracts, the two newcomers, Apple and Google, managed to achieve that their devices are sold in a contract with flat-rate data tariff. The obvious effect of this is that users will use the internet much more and will be online for much longer.
• More services will become available, their integration is a key factor for handset vendors (Nokia: Life Tools, Comes With Music, Mobile e-mail and mail on Ovi, etc.; iTunes & MobileMe for Apple; Zune for Microsoft; GMail, Calendar, Docs, etc. for Android-powered phones, etc.). Thanks to these services network operators will be in a worse position to fight for users who not only purchase phones and pay monthly subscription-fee, but also willing to pay for additional services.
• Touch still rules with such innovative ideas as gloves, multiple devices to share their resources, etc. Even more, touch display will not remain a smartphone-only feature, but other devices in the lower-segments will also be equipped with it (e.g. Nokia's first feature phone on Chinese market: http://www.mobilemonday.net/news/nokia-announces-shows-chinese-touchscreen-phone).
• 3^rd-party apps and app stores: we'll see the introduction of new and re-newed application stores with client integration. Commercial software can be downloaded as well as freeware, revenue share will be more advantageous for developers than it's been so far. The fact that handset vendors are providing their application stores, too, will cause hard times for such independent players as Handango, for example. On the other hand, the obvious advantage of these regular providers will not really disappear: the variety of mobile handsets for which they offer content is much bigger than the coverage of any of the new stores will ever be.
• NFC - it seems the time has come for this buzzword to become more popular. In last November, GSM Association called for Pay-Buy-Mobile handsets so that NFC technology be built into commercially available mobile handsets from mid-2009.
• Android phones spread all over the world: we have already heard about the second handset that Kogan, an Australian company will ship this January, but rumours have been told about HTC, Huawei and other companies, too, that there will be other phones based on this platform.
• Nokia finally to gain more market share in North-America thanks to AT&T for seeing lots of potential in Symbian to become the main smartphone OS in their portfolio
• Use of mobile phones in new areas: Nokia Life Tools for users at the bottom of the pyramid (mid-range, low-end phones mainly), Nokia Home Control Center for advanced users who wish their smart home to be controlled by their smartphone, etc.
• Transforming smartphone market shares: Motorola, Palm getting weaker (former betting on Android, latter introducing yet another proprietary system), RIM, Sony Ericsson "to survive" (RIM closed a surprisingly good 3th quarter in 2008; Sony Ericsson is also giving a try to Android), Apple getting strong (iPhone Nano in the queue), Samsung remaining strong (very innovative company challenging Nokia, the leader, all the time), although Nokia's position gets slightly weaker, it still remains the most dominant player (one of the most versatile players in this arena with lots of innovation in different areas of mobile space), Microsoft to struggle (has any one of you heard anything about them lately?).
• Open-source model to gain ground - license-free handsets, free development environments, high inspiration for developers & tech companies to help each other, etc.
• LTE - let's return to 4G and LTE next year, okay?
• WiMAX - don't expect mass adoption of this technology in mobile phones yet (though pioneers have already appeared in 2008)
• Mobile TV - the future is still foggy: which standard to follow (DVB-H or DVB-T?), will people buy this service at all, etc.
  

Did I miss something? Sure. Can you correct me in anything I wrote? Anything to add? Please do! Thanks!

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Nokia should buy Yahoo?

It's already known to most people that Yahoo! is in big financial trouble. Even worse, they were tried to be bought by a company (Microsoft) they didn't want to sell themselves to. They successfully fought against that attempt, however, their value was much higher at that time than what it is today. They were even "helped" to survive by a company that they normally call a competitor (Google). But this help didn't last long as Google was afraid of the consequences of a deeper relationship with Yahoo! (i.e. antitrust).

Now Yahoo! has an even bigger problem with much lower valuation. That, among others, inspired telecoms.com to speculate on whether it would be worth for Nokia to buy Yahoo!. Besides the fact that financially it would be a good deal for Nokia, they would even win a very popular brand (especially in the US!) for themselves. And all this along with that Yahoo! is very strong in (web) services would make their position much stronger against Google, Microsoft, Apple and the likes.

Putting aside the negligible fact that there's a world-wide financial crisis lately is this option not worth considering?

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Update: El Reg reported that Nokia CEO Olli-Pekka Kallasvuo had answered this question during MWC 2008 saying 'no' to a possible acquisition of Yahoo!.