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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Transforming mobile industry

I read the following quote from Olli-Pekka Kallasvuo, Nokia CEO, in InformationWeek:

"The industry as whole is in the middle of a transformation, and it's a very exciting time," said Kallasvuo. "It's moving from a device industry to an experience industry, and we're making a conscious long-term effort to capitalize on that."

It is so true that it inspired me to write a summary on how things have changed in the "smarter" segment of mobile sector (read: smartphones) lately. Let me recap what was the situation in the near past and then talk about how things are changing recently.

In the classic device manufacturer - network operator - user triangle the roles were as follows (simplified version): user purchases mobile phone from network operator (or elsewhere) and uses those services that are primarily provided by the network operator. The manufacturer never gets any money after purchase and the user  is often unhappy with the content/quality of provided (value-added) services.

This is now about to change. The two most important changes (as I see it) are that 1: the above triangle is "rectangularized" by an old/new member of the value chain, a separate content/service provider and 2: that device manufacturers such as Nokia and Apple OR operating system vendors such as Microsoft and Google want to get money after sales, too: they'd like to enter services business. As to point #1, not as if content providers hadn't been present so far, however, the means to access content and the capabilities of devices have not been ideal so far to say the least. As for point #2, there are two reasons why manufacturers would like to enter services business (take it over from operators?): first, there's a great demand from users to consume content that operators have not been good at providing and second, there's great money in it. Apple and Google are very good at providing services now they'd like to be involved in adding new means (i.e. phones) to accessing their services. Whereas Nokia and Microsoft are both in a strong position in smartphone market and naturally they'd like to get more money out of the whole business.

Another aspect in the new business model is whether or not shall mobile OS vendors require license fee for their software to be included in shipping devices. I'm talking about free and open-source mobile OSes, like mobile Linux. Although mobile Linux stacks have not gained so much popularity in the past years, they still do attract manufacturers wishing to lower their bill-of-materials (BOM). Google Android and the new Symbian (Foundation) OS are another two good examples for "license-fee-free software stacks" and Windows Mobile is for fee-based. iPhone's Mac OS X cannot be mentioned here, since Apple doesn't allow anyone to license their software stack, but make everything on their own.

How do mobile OS vendors pamper their developers?

• Of course, with a free SDK to develop on. Most of them can be used only on Windows (except iPhone on Mac OS X), true emulation is available on Windows Mobile and iPhone, where development is done on the same platform as the target platform,
• Free tools for development. Unfortunately not everything can be done with these tools, but you have to pay for their fee-based version should you need to use more advanced features (e.g. on-device debugging in Carbide.C++),
• Signing your own installation package is mandatory for both iPhone and Nokia S60 phones, but not on Windows Mobile and Android. Latter advocates that the user is always capable of making proper decisions on security-related questions and it does not restrict the availability of 3rd-party applications by requiring signature. As Symbian's David Wood put it: let's see what operators will say on it.
• As to developer support, old players are in the best position here: there's a great community support for Windows Mobile developers as well as materials to train themselves. The same is true for people who are developing for Nokia phones. Whereas the first non-beta Android SDK has just been introduced (you can imagine the level of support Google provides at such an early stage), not to mention Apple who wanted developers to sign an NDA that essentially prevents free information flow, writing books on development, etc. This has changed recently, since Apple finally scrapped their iPhone NDA and promised a new contract with less restrictions. Note: if Apple hadn't made this step they would have lost the majority of their developers.
  
• Developers reward programs (MVP from Microsoft, Forum Nokia Champion program from Nokia), fee-based support for ISVs willing to pay for advanced services, webinars, trainings, books, etc.
• Stores to capitalize on applications, themes, etc.

As to the stores mentioned above,

• Apple's (in)famous App Store acts as a central distribution channel for 3rd-party applications. Unfortunately, Apple keeps this place under such a strict control that bitters lots of developers' life who simply don't understand why their programs can't be sold just because they're similar to the built-in applications. On the other hand, Apple keeps only 30% of revenue making App Store more compelling than lots of rival portals, such as Handango.
  
• Having introduced T-Mobile G1 a few weeks ago, Google has also thought that it was a wise idea to create their own Android Market, a market place for downloading Android applications. What is surprising, though, is that Google is not planning to capitalize on sold applications, but expects mainly freebies to populate this place. It wouldn't be Handango if they didn't make the best out of this situation: why not use Handango to get some money for your Android app? It's also worth noting that Google, similarly to Apple, will be able to remove any 3rd-party applications (downloaded from Android Market) from Android-powered handsets if those applications turn out to violate developer distribution agreement.
• Nokia already has their Software Market, however, things might change with the start of Symbian Foundation next year: as Antony Edwards from Symbian put it "[they're]  pushing hard for a ensuring a zero, or a close as possible to zero, cost to the software vendor: so no cut of revenue for the Foundation".
• Finally, Microsoft hasn't maintained their own single portal that ISVs could use for selling their 3rd-party applications, but people had to (and still have to!) use other providers. This article shows what one can conclude from job postings: with the coming of new devices based on Windows Mobile 7 a new portal, SkyMarket will also come in Q1 2009.

Nokia is very keen on transforming from being a device manufacturer to an "internet company". Their Ovi and Mosh are two examples of already launched services, which they just want to further improve with Instant Messaging (by buying OZ Communications) and Comes with Music. On the other hand, whilst strengthening their services portfolio they restructure their businesses so that they focus less on own product development (selling Nokia IntelliSync). Sometimes lowering the prices raises the revenue - wonder how the recent price cut will work out. It's especially important that since  more and more people own Nokia devices, it increases after-sales revenue, too.

I've been already thinking on what Microsoft's reaction will be to open source and then found the answer: Steve Ballmer doesn't understand what's good in open source for Symbian and Google and anyway they won't get into handset business as long as they can make a lot of money from software only.

What they've started to work on lately, which you might have already heard of in the news, is 'Windows Cloud' OS. This idea is not new at all, however, it might affect the way how people use their mobile phones today: all you need is a portable device with a tiny display, some computing power and a good browser (you can call it 'smartphone') plus a good connection to the "cloud". Data, business logic, resource intensive heavy computation - all done on remote server(s) and you get only the result to your handset. I wrote 'this idea' was not new, however, what is new is Microsoft's patent on sharing device resources. Now this one is really new, but I don't know how much I can expect from it in real life - what it shows you, though, that it would be too early to write Microsoft off. Side-note: let me recommend you Ajit Jaokar's thought-provoking blog on how network operators could make use of cloud computing.

One more point to add to why M$ is not to enter the handset business today: HTC, designer & manufacturer of feature-rich phones, says that although they can see the potential in Android devices they do belive that Android and Windows Mobile complements each other.

As to Android, it's amazing to read about the ambitious plan to reach 4% US market share by the end of 2008. If that's so easy with a single device, a not perfect software and hardware AND suppose that they will achieve it - may I ask how on Earth Nokia could not do the same?

Anyway, I found a great analysis over at Telco 2.0 on the strategic impact of Google's first handset on the mobile industry. I especially liked the statements, such as "increasingly intense competition with new entrants who are willing to change the rules" and "the world in which handset manufacturers crammed the latest technology into devices simply for the sake of having the best specification sheet and operators flogged them to consumers on the basis of megapixels and memory is changing" and finally "it has been fascinating to watch ‘old school’ industry commentators pick apart the technicalities of the G1 spec sheet and Android platform, all the while forgeting to look at this announcement through the customer’s eyes".

Finally, some words about other members of the mobile industry whom we don't hear much about (well, at least I haven't lately).

• Sony Ericsson has rationalised their R&D investment recently. This move, however, didn't prevent them from announcing a new run-time environment, called Capuchin, mixing Java ME and Adobe Flash Lite technologies. SE is eyed-up on Android, too, not only Windows Mobile (Xperia X1) and Symbian so this along with Capuchin will make their way to follow Nokia's approach by offering lots of alternatives for mobile software development.
• Motorola is also interested in Android, so much that they are building-up a team of 350 people to develop on Android.
• Samsung is not interested in anything else but manufacturing. This will not make their position stronger in today's competing market.
  

That's all for now about mobile industry news, thanks for reading so far!

All comments are welcome,

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Samsung Mobile Innovator - Yet another Symbian developer site

You might have heard of that Samsung has just kicked-off their new portal for mobile application developers. It's advertised as a great entry point for Symbian developers wishing to develop for Samsung devices based on this operating system. I'm not sure if other platforms will be covered by this site, too.

What I'm asking now, however, is if it's really worth increasing the fragmentation of Symbian development portals that are already present today. You know, I recall when I was involved in a cross-platform mobile development project and it really frustrated me that I had to check Forum Nokia, Sony Ericsson Developer World, uiq.com and Symbian DevNet to see what people said about nasty problems, their solutions and be sure that nothing has escaped my attention (well, I could never be sure about that).

I can see that Samsung might come out with such great features and services that will be very useful to the developer community in general. What I don't understand, though, is with Symbian Foundation (SF) starting early next year why doesn't SF kicks-off their own developer portal into which Samsung could integrate its own services. In an ideal world Symbian developers would just remember a single URL where they could find answers for all their questions. A powerful search engine could do magic, you know. Symbian Foundation gives a good opportunity to unify existing resources into one and I can't see why Samsung didn't realize this.

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Brief status report about smartphone market, mid-2008

Having followed the news of mobile industry in the past week, I thought it would be worth collecting some articles in a single post to see things from a bird's view, thus having a better overview on what's been going on lately on smartphone market.

RIM has been getting stronger in US market and Palm is unhappy with that. Although Palm's popularity had started to fall even before Apple entered mobile phone market, the new iPhone has just "helped" to boost the process. As to Apple, new countries have confirmed August launch enabling iPhone (3G) to gain bigger popularity and increasing its market share in other countries than US. In addition, the name of iPhone Nano has appeared again whispering words about the introduction of this device still this year. Apple is on its way to become stronger and stronger, but they're still in the "Other" segment of mobile devices according to ABI Research. And if Apple is making tsunami "from the bottom", Nokia is doing the same from the top with their price cut - I wouldn't like to be the stuffing in this sandwich.

It seems that we're living the time of foundations: this time it's LiMo that has picked up 11 new members to become stronger in the fight against Google OHA and Symbian Foundation. With the first LiMo handsets out, I wonder how they can catch up with industry leader Symbian, the also very powerful Windows Mobile and the likes. I did not mention Android deliberately, because to me it still exists only on "paper".

As to the creator of Windows Mobile, it's already well-known that Microsoft's Silverlight will come to S60. What is rumoured now, though, that Zune would also be available on Nokia devices. Zune clearly a competitor to Nokia's Ovi - will M$ and Nokia ever join their forces to fight against their newest pretender? I bet Apple will never open MobileMe to non-Mac device owners.

A new feature has been introduced on Ovi.com, namely file sharing, a fee-based storage option. Files on Ovi is a similar service to MobileMe's iDisk. As to MobileMe, the transition from .Mac to MobileMe was not as smooth as Apple had hoped. As Apple CEO, Steve Jobs, said "It was a mistake to launch MobileMe at the same time as iPhone 3G, iPhone 2.0 software and the App Store". Well, although lots of people already think that Apple can only teach things to other players in mobile arena, I stronly believe that the opposite is also true.

Finally, let me recommend an article that well-deserved the title of post of the week at Carnival of Mobilists. The great post written by Andreas Constantinou from Vision Mobile was definitely a very useful foundation of this article.

Interesting times we're living,

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Symbian and Nokia wrestling about voting rights?

It's obvious that it's not in everybody's interest to let Nokia gain more control over Symbian - not the OS, but Foundation this time. It's a fact that Symbian was (or still is?) owned ~48% by Nokia. As part of the announcement of making Symbian OS open-source it also came to light that voting rights will be according to the number of Symbian Foundation-based mobile phones shipped. And since Nokia has shipped more than 70% of Symbian-powered devices so far, it puts them into a more powerful position than they've been before.

As I said it's obvious that not everybody likes it from those companies who are on the same ship with Nokia. The surprising bit is that even somebody at a power position at Symbian thinks this way AND make comments on this in public. John Forsyth said that he's "worried this asymmetry will mean the community doesn't grow in the appropriate way." His suggestions include "clean-room culture" and a one company-one vote system. Naturally Nokia won't accept latter after spending lots of money on Symbian - they made Symbian successful, they invested the most in it and now at the turning point of Symbian's life they'd like to take the opportunity to increase their influence on it, too.

Wonder what John thought about this when sharing his opinion in public. Perhaps we can read something about it in his blog in the future...

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