Mobile video: Is there a there there?[Reposted due to a correction. Sorry if you get this twice on your feed.]I recently I spent a couple of days at the Global Mobility Roundtable, an annual conference that brings together mobile-related academics and a selection of people from the mobile industry. This year's conference was in Los Angeles, so it also drew a number of attendees and speakers from the major entertainment firms. It turned into a kind of a mobile meets entertainment event, and the results were interesting. Mostly, they underlined how far we still need to go in bridging the gaps between the tech industry, mobile, and entertainment.There's a lot of information to cover, so I'm breaking this post into two parts: mobile video in this part, and in part two the status of mobile data in general and the relationship between Hollywood and the operators.Is there a pony in the stable? If so, it's a very small pony.*There was a lot of disagreement about whether mobile video will take off, which may be just as well because the economics of it are seriously dodgy. It's not certain that users really want it, no one knows whether the revenue will come from sponsors or from user fees, and even if video does take off, it's not at all clear that the mobile operators can deliver it without bankrupting themselves.Other than that, the prospects look great.One panelist compared the situation in mobile video to a company running a health club: they want to sell a lot of memberships, but they don't want anyone to actually use the facility.The information below is drawn from a series of different sessions I attended. I've mashed them together so I could organize the information by topic. All quotes are as accurate as I could make them. They are definitely correct as to message, but I probably missed a few words here and there.Who wants mobile video? A segment of the market.There are plenty of people in the industry who are enthusiastic about mobile video. One presenter quoted Rob Hyatt, executive director of mobile content at Cingular, as saying, "Watching video on cell phones could eventually easily surpass [demand for games, ringtones, and wallpapers], to reach 100% of the population." That's pretty remarkable, since even SMS doesn't reach 100% of the mobile population yet. (You can find the original quote from BusinessWeek
here).Telephia, a mobile industry research firm, reported that revenue from mobile video is growing rapidly, from $35m in Q3 2006 to $146m in Q1 2007. In that same period, the number of mobile subscribers in the US using video services grew from 5.7 million to 8.4 million (for comparison, there are 77 million MMS users and 148 million SMS users). The Telephia numbers imply that revenue per video user has grown from $2 per month to $5.80. Unfortunately, they didn't give any details on which particular services are growing.The base is still very small, so it's dangerous to extrapolate from those numbers. But they're definitely hopeful. A number of other speakers were much less optimistic, though.At the conference, USC presented the results of the sixth annual Worldwide Mobile Data Services study. It showed that about 30% of 18-24 year olds and 20% of 25-34 year olds in the US felt that video downloads to mobiles were an important feature, about the same percentage as wanted games on their mobiles. That's nice, but not the universal usage that Cingular talked about.Sanjay Pothen, CEO of Pliq (a mobile video production company), claimed that 44% of mobile users are interested in mobile video -- but only 4% are willing to pay for it. That's the typical pattern for mobile data features -- most people don't want them if they have to pay anything for them.Frank Chindamo, CEO of Fun Little Movies, which produces short video for Sprint, asked the audience how many people in the audience had Sprint phones. About five people raised their hands. "If you all subscribe, that will double our revenue for next month," he joked. [For the record, Frank asked me to make clear that he was only joking; he says he's actually quite happy with the Sprint relationship.]Is the glass half full or half empty? As I've said before, I think there's abundant evidence that the market for all mobile data products is highly segmented, and we need to learn to make money from products that appeal to ten or fifteen percent of the users. I heard nothing at the conference to change that view.But overall demand for mobile video is just the beginning of the story...What sort of video will people watch on mobiles?This one is still very much undecided. The usual assumption is that because short video is popular on the Web, it'll also be popular on mobiles. For example, Funny Little Movies is creating original short animated films for mobiles. (The place is run by a USC film professor who has his students create a lot of the content.)Pothen of Pliq said the ideal sort of video for mobile is neither short individual clips (like YouTube) or long-form video (like a TV show), but chunked content -- an engaging story told in two-minute segments. He said excerpts from reality shows can work well -- highlights from America Idol, for instance. But original content seems to be his main target: soap operas, telenovelas, and cooking for young women, comedies and dramas for young men. The goal is to get people hooked by an ongoing story so they'll keep coming back to watch every segment.Derek Brose, SVP of business development for Paramount Digital, was also excited about short video. He said the company is cutting all its movies into clips of different lengths, for various mobile usages. Two second clips -- something like Harrison Ford saying, "trust me" -- are for embedding in an MMS message. Twenty second clips are for use in ringtones. Two minute clips are for streaming your favorite scene from a movie. Paramount's goal is to teach consumers a variety of different things that they can do with mobile video.But some people were skeptical about the prospects for short video on mobiles. Bill Sanders, VP of mobile programming at Sony Pictures, said that in Japan people are watching broadcast TV shows on their mobiles rather than short video streamed over 3G. He said 3G in Japan is great for certain kinds of applications, such as e-wallet. But he said data is priced so high that streaming video barely exists on 3G at all.
"The only thing you find in 3G is porn, because it's the only form of video where people will pay $10 for three minutes of content." --Bill Sanders, SonyUSC's mobile survey also strongly implied that the biggest demand is for broadcast TV. More than 40% of users said they thought that was the most interesting type of video for a mobile, compared to about 20% for short video.David Tilson of Case Western University supported that view. He said that in a UK test of DVB-H (a broadcast video standard for mobiles), users watched three hours a week of television on their mobiles, with viewing concentrated in the lunch break and commute hours. That's very intriguing, because it implies that mobile video might add new television viewers at times when people don't usually watch TV. Unfortunately, the users were not charged anything in the test, so it's very hard to tell how much usage mobile TV would get if operators started charging for it.I have no clue what the answer is on this question. People may say they prefer broadcast television just because that's what they're used to. Their actual purchase behavior might be very different. I think price will make a huge difference in adoption, which brings us to the next subject...Who will pay for mobile video?You've got two choices -- users pay, or advertisers pay. There are good arguments on both sides.Sanjay Pothen of Pliq made an interesting case for having the advertisers pay. Since his company is involved in that business, his argument was not a surprise, but it was still interesting.Pothen claims that neither paid nor ad-supported video are taking off today in the mobile world. As I noted above, he said few users are willing to pay for video, which stops the user-funded scenario right there. But ad-supported video is also problematic on both PCs and mobiles because users are not very tolerant of watching even a short commercial in order to see a two minute video. So what Pliq does is build the sponsor into the video itself, through placement and other promotion within the video.Pothen said advertisers are willing to pay significant sponsorship fees for these videos. He wouldn't go into details on his financials, but someone I talked to privately said the revenue can be dollars per viewer for a three-minute video. That's impressive, and far more than you could charge a viewer for a few minutes of video.Unfortunately, Pothen said, the operators want to take 50% of the revenue from these videos. He said that's not acceptable, that the revenue split should be more like 20% of revenue to the operator. "If we work in collaboration and the walled garden is down, we're willing to create original content (for mobiles)....We can drive mass adoption." But he said that won't happen in the current revenue situation.My take: I don't think it has to be one or the other. Apple's selling a lot of video downloads to iPods, and that won't just dry up. But I think it's going to be very hard to make paid downloads the leading mobile video product, because they'll be competing with free video from places like YouTube, and because ad-supported TV teaches people to expect their television for free. Besides, if advertisers really are willing to pay dollars per viewer, there's no need to make people pay.The revenue split is an ongoing problem in every mobile data category. There's no immediate solution, at least in the US. I think we're stuck in a chicken and egg situation in which the revenue split discourages the kind of programming investment that might drive a lot of usage, thereby justifying a more generous split.That may be just as well, though, because video might break the mobile networks if it did take off.Can mobile video be delivered?This was the most disturbing topic of all. Even if we can find the right users, the right product, and the right pricing scheme, most of today's 3G networks are not well suited to delivering video.Tilson of Case Western quoted some very sobering statistics on the economics of mobile video. He said one megabyte of data delivered as SMS messages yields £268 of revenue to an operator in the UK. That same megabyte delivered as video yields 20 pence of revenue, roughly 1/1000 the revenue. Of course, a single user of video is much more likely to consume a meg of data than is an SMS user, so the billing per user might still be fairly good. But video quickly exceeds the capacity of a typical 3G data network. He said no more than six viewers per cell can watch video at one time, and if 40% of users on a typical 3G system watched six minutes of video a day, they would saturate the entire network.Hardly the basis for achieving Cingular's dream of 100% viewership.Some of the operators at the conference confirmed this perspective. Francois Thenoz, Director of Strategic Marketing at Orange, said it takes seven minutes to download a 60-90 second video clip on a standard 3G network. 3G "evolved" takes 90 seconds (so you can just about stream in real time). The CDMA 1X network I use to connect my notebook PC is a lot faster, but GSM is the standard for most of the world, so his point was that in most places the wireless network simply isn't ready for video.Higher-capacity networks are in development, of course. But Tilson said that in the UK, spectrum for a DVB-H wireless video system won't be available until 2102 at the earliest. That implies that for the next five years, mobile video in the UK is more of a science experiment than a serious commercial project.In the US, the functional equivalent of DVB-H is MediaFlo, which is already deployed in Verizon's VCast system. MediaFlo transmits video one way, using a separate wireless signal, so it gets around the network saturation problems you get in 3G. Similar systems are already being used in Japan and Korea, and reportedly account for most of the mobile video usage there.A drawback of the broadcast technologies is that they're not streamed on demand. You watch whatever's been programmed at that time. It's like a cable television system, but with far fewer channels. Tilson said one driver of mobile video usage is the availability of a lot of different programming, so limits on the number of channels might eventually restrict usage.The other challenge for broadcast systems like MediaFlo is that they compete with people using SlingBox or similar products to retransmit their home cable television signals to their mobile devices. "Why get HBO Mobile when you can already get HBO home slinged to your phone?" asked Sanders of Sony. He pointed out that the Three network in the UK is bundling Sling services with its flat-rate 3G service offering."Three is like an airline that just bought a bunch of 777s and now they're flying with a bunch of empty seats," replied Brose of Paramount. He claimed that Three has to be betting that video usage will grow slowly enough that faster data networks will be available before the usage of video saturates the network.The "encoding nightmare"Then there's the question of standards. Unlike the PC, there aren't one or two video standards for mobiles. Because of the huge array of different screen sizes and software environments, a company that wants to stream video to mobiles supposedly needs to encode it in up to 150 different formats (seriously, that's the figure I was given by a couple of people). An executive I talked to called this the "encoding nightmare." Some companies are starting to offer server appliances that encode the video in real-time from one or a few base formats. But this adds expense to the business model, and real-time encoding is not as high-quality as pre-encoded video, especially if you're trying to compress the video heavily -- which is exactly what operators need to do in order to conserve bandwidth.What does it all mean?I think there's a role for mobile video, but considering the limits on user interest, and the huge technical and business challenges, it's not going to be the great horizontal application that drives the mobile data market. At best, it'll be a nice add-on for entertainment-focused users who want video in addition to their MP3s and games._______________*This is a reference to an old joke about a boy who desperately wanted a pony. One day he saw a stable stall full of manure, and began furiously shoveling it out. "What are you doing?" his parents asked. "Well," the boy replied, "with all this manure, I figure there has to be a pony in here somewhere."
Posted by Michael Mace at 11:50 PM
Permalink. 8 comments. Click here to read post with comments. Labels:
applications,
entertainment,
GMR,
mobile,
mobile data,
operators,
videoGood deal: Palm's new ownershipSeveral people have asked what I thought of the recent change in ownership at Palm. I don't have any inside information, so all I can do is speculate like everyone else, and try to apply the lessons I've learned from working at other companies.Overall, I'm very happy for the folks at Palm, and cautiously hopeful about what this might mean for the company's prospects. I think this outcome is a lot more encouraging than any of the buyout rumors that were floated in the last few months. Palm's new part-owners clearly understand the value of systems design, which is Palm's biggest potential advantage in the market. I think we really need another great systems company to challenge Apple, and I would love to see Palm step up to that task.Although a purchase by a Motorola or Nokia would have been very entertaining from a soap opera perspective, they don't really understand systems design, and it's very likely that they would have digested Palm without a trace. I'm reminded of a joke we used to tell at Apple in the 1990s when there were rumors that IBM would buy the company:
Q: "What do you get when you combine Apple and IBM?"A: "IBM."The other buyout option what was circulating, a full purchase by private capital, would have left the company independent, but with a load of debt that might have been crippling. Hardware companies must have a big reserve of cash to fund inventory and tide them over if they launch an unsuccessful product. I don't pretend to understand all the terms of the Elevation deal (they're wickedly complex), but from my perspective it looks like the financials aren't crippling. I am a little worried about Palm's cash levels, though; a lot of their current cash is going into the stockholder payout.A couple of other thoughts on the impact of the deal:Bye-bye 3Com. Palm gets three very well respected people for its board, and removes Eric Benhamou, the last vestige of the 3Com legacy. Somewhere I have a photo of the Palm and PalmSource combined management teams from just before the two companies were separated. The photo includes everyone in the company from Mr. Benhamou down to senior directors. That was about 30+ people. Every single one of them is now gone. So if you didn't like Palm's management back then, you should take another look at the company because it's now 100% different.Irresponsible speculation about politics. After a change like this, the standard sport in Silicon Valley is to speculate about what it means for the job status of the people involved. In that vein, the thing to ask is, "Who's running Palm in the long run?" The weirdest part of the whole Elevation deal is the arrival of Jon Rubinstein as both Chairman of the Board of Palm and head of product development. As Chairman, Jon is technically the boss of Palm CEO Ed Colligan. As head of product development, Jon technically reports to Ed. So Jon is kind of his own second-level manager.That feels...unstable.Palm seems to now have a surplus of product leaders. Jon is in charge of product development, Jeff Hawkins is the designated product visionary, and marketing SVP Brodie Keast is supposed to control the product road map, according to the press release Palm issued when he was hired. It's hard to picture a car with three steering wheels. Who will really be in charge? In the conference call Palm said that Jon would be the execution guy and Jeff the visionary. "The combination of those two guys is one of the most dynamic... combinations on the planet." Maybe. Any organization structure can work if the people involved get along well, and I presume they would not have made this arrangement unless they were all comfortable they could work together. So good for them and best wishes.But if you want to be a cynic, you'd speculate that Jon probably didn't leave Apple just to be the head of engineering execution at a much smaller company. You wonder if the current situation is just a stage in a longer-term changing of the guards at Palm. I don't have any evidence that's the case, and I am not trying to start any rumors. But when you see a nonstandard reporting structure like this, it usually triggers speculation that another shoe is going to drop later.Only time will tell.What's the effect on products? That's the most important question, and it's impossible to answer at this time. Hardware product development usually takes 18-24 months, so the earliest Jon could change the Palm road map would be very late 2008. But that's the middle of the Christmas selling season, and you can't announce products then. So realistically, the Rubinstein product era doesn't start until spring 2009.In the meantime, there's a lot he can do to make the development of the currently-planned products be more efficient and predictable. Palm has said publicly on numerous occasions that its on-time product delivery needs to improve, and presumably Jon can help with that.But personally, I think Palm's bigger problem has been its lack of innovative new product designs. Unless Palm has a bunch of surprise products already in development, it will take quite a while to turn around the product road map._____________________Thanks to Twofones for including last week's post on the Palm Foleo in the latest Carnival of the Mobilists (
link).
Posted by Michael Mace at 10:55 PM
Permalink. 4 comments. Click here to read post with comments. Labels:
apple,
motorola,
nokia,
PalmPalm Foleo: It's a PC, dummyWow, what an interesting day this was in the mobile and web world:--Apple hinted that it will allow third party developers to add applications to the iPhone, potentially overcoming one of the device's biggest shortcomings (
link).--Google announced Gears, an open source project to enable web apps to work offline -- injecting Google into the growing effort to make PC operating systems irrelevant, and linking Google with Adobe (
link).--Livescribe previewed its pen computing device, the latest in a long series of efforts to turn Anoto's pen sensing technology into a commercially viable product (Livescribe
link, Anoto
background).And oh yeah, Palm finally announced Jeff Hawkins' secret project, the Foleo.A lot of the online commentary on the Foleo hasn't been enthusiastic. Engadget called it the "Foolio" (
link). Ars Technica's article was headlined, "Palm officially out of ideas, debuts 1990s palmtop concept" (
link). The discussion on the Palm Entrepreneurs Forum (an e-mail list for Palm application developers) was more balanced between admirers and detractors, but even there a lot of people were very lukewarm.I think a lot of this is Palm's fault. They're trying to position the Foleo as a "mobile companion,"* a device that smartphone users can carry with them when they need a keyboard and bigger screen. In other words, it's for a small subset of the smartphone market, which itself is a small subset of the phone market. A niche inside a niche. The Stowaway keyboard folks should worry.But I don't think the Foleo really is a "mobile companion." Back when I started to work at Palm (before the turn of the century) one of the old veterans of the company pulled me aside and passed along a little wisdom. "Michael," he told me, "Ya gotta think in terms of real estate. If you're in another device's real estate, you're competing with that device. Palm lives in your pocket; it competes with other things that go in your pocket. If you get bigger than the pocket, you're living in the briefcase, and you're competing with the notebook computer."Foleo lives in the briefcase. It's displacing the notebook computer from your bag. I don't care what they call it, I don't care if Palm fully realizes it yet, but the fact is that Foleo's a notebook computer.More to the point, Foleo is the most significant new consumer PC platform introduced in the US since the Macintosh. All you Linux heads who have been asking for a true consumer Linux PC, you finally got your wish.Wow. That's kind of cool. It may be crazy, but it's a craziness I like. Palm has reimagined the PC for the wireless Internet era, simplifying and stripping away everything they thought was no longer necessary. So since most people carry a phone, you use the phone as your wireless modem. The device also has no hard drive. Since everything is stored in flash RAM, you never actually shut it down -- you just turn off the power, and when you turn it on again all your data and apps are still there, waiting for you. This is normal in a handheld, but it's long overdue in a PC.
"Desktops and laptops were too large, expensive, complex. You're not going to build billions of these complex machines, you build mobile computers....But it became clear the smartphone wasn't going to fill that role....You need a full size screen and keyboard." --Jeff Hawkins, quoted in EngadgetHow well will the Foleo sell?I don't know. It's not the product I would have built (my long wait for an
info pad continues). The most successful mobile devices in the last decade have been specialized products that solve one problem for one type of customer -- iPod plays music for entertainment hounds, GameBoy plays games, BlackBerry does e-mail, Palm Pilot does your calendar, etc. The Foleo flies in the face of that. Although Palm talked a lot about e-mail today, the device also has a browser built in, and clearly has ambitions to be a general-purpose computer. I think we should judge Foleo on those terms, not by measuring it against other products we all imagined or wanted. Here are a couple of quick thoughts, and I'll probably post more in a few days after I've had more time to think about it...Palm can now succeed even if Treo fails. Palm implied that the Foleo will be able to work with any smartphone, not just the Treo. This potentially gives Palm a larger market, and also sidesteps the operators, since Foleo can be sold through consumer electronics stores. Palm execs have been very public in saying that they are happier selling through retail rather than through operators, so today they must feel a little bit liberated.Beware the Windows CE factor. I have seen many products very similar to Foleo fail over the years, and that worries me a lot. For years Microsoft and the Windows CE hardware companies produced a series of sub-notebooks that looked eerily like the Foleo. Like Foleo, you were supposed to use them to do light browsing and e-mail. They all died quickly, mostly because they looked so much like Windows that people expected them to run Windows apps. When people didn't get the full Windows experience, there was an immediate backlash.Foleo's a little different because it doesn't pretend to be any flavor of Windows. But the hardware design looks an awful lot like a Windows PC, and that's going to create the wrong impression. Maybe Foleo looks nicer in person, but in the photos it looks like an anonymous gray box, disturbingly like a Dell subnotebook. It doesn't seem to have the lust-inducing look of the Treo 600, let alone the Palm V. I wish they'd made the case more distinctive, or at least a different color, because then people might expect different things from it.Success probably depends on the apps. Like other PCs, Foleo doesn't do all that much out of the box. It apparently comes with Documents to Go (a well respected suite of Office apps, ported from Palm OS), an e-mail client, and a browser. That's all nice, but it's definitely not enough to make me put down my notebook computer. I think Foleo will eventually live or die based on whether it attracts a lot of third party applications that do interesting things you can't do with a notebook PC.Palm has been evangelizing a number of developers to create apps for Foleo, but for some strange reason it excluded them from the Foleo announcement today. Instead, the announcements are going to be dribbled out one by one over the next few weeks and months. I presume the idea was that they'd create a sense of momentum, but I think instead what Palm did is make today's announcement less impactful than it could have been.That means we haven't heard the full Foleo announcement yet. There's more to come from the third parties. We won't be able to really judge the device until we see the totality of what it'll do at launch.My bottom line, based on what I know today: As a standalone mobile data device, the Foleo is uninspiring. As a potential challenger to the notebook PC, I want to believe, but the proof will be in the third party apps._______________*By the way, the term "mobile companion" is perilously close to "PC Companion," one of Microsoft's early terms for Windows CE devices. The phrase gives me hives, but I think that's just me.
Posted by Michael Mace at 11:19 PM
Permalink. 25 comments. Click here to read post with comments. Labels:
devices,
foleo,
google,
info pad,
iphone,
Palm,
smartphone,
treoNokia, the computer company?Ten years from now, Nokia's going to be the subject of an interesting business case study. It'll either be the stirring story of a company at the height of its power that had the courage to challenge its deepest beliefs. Or it'll be the cautionary tale of a company that had it all and blew it.Nokia says it's planning for what comes after the mobile phone.I've heard this from Nokia before, but I always used to think it was posturing. Companies say that sort of thing all the time -- "we're looking for the next big growth driver" or something like that, meaning they plan to keep doing all the same stuff they do today but also desperately hope they can grow another line of business alongside it. That's typical in business; you try to have your cake and eat it too.But after hearing several senior Nokia people repeat the message over the last couple of months, I've started to believe they're saying something different. Don't get me wrong, I'm not trying to say they are about to abandon mobile phones. But I think they sincerely believe that business won't last forever, and they're starting to lay the groundwork for what will replace it.The message really hit home last month, when I heard it from Nokia CTO Tero Ojanpera and Bob Iannucci, head of Nokia Research Center, at a Nokia strategy briefing in Silicon Valley. Iannucci pointed out that Nokia started as a paper mill and has a history of completely changing its industry from time to time -- from rubber boots to monitors to mobile phones. He said it is once again "a company in transition to the next phase." That next phase is mobile computing.Not smartphones, not converged devices, but full-on mobile computers intended to replace both PCs and mobile phones. Nokia says it expects these devices to eventually sell in the billions of units, and to become the world's dominant means of accessing the Internet.Even though these future devices will still be mobile, if you take all of Nokia's statements at face value the changes from mobile phones will be so extensive that it's fair to call it a new business.The fact that Nokia's even talking about this is a remarkable change. Five years ago, Microsoft was charging hard in mobile and the big topic of discussion was how could a company like Nokia possibly defend itself. Now Nokia's talking about how it will put the PC industry out to pasture, and oh by the way take over the Internet as well.Although the goal is almost insanely ambitious, I can't say that Nokia is wrong to try. Mobile phones are gradually becoming a commodity. The biggest unit growth is in low-end phones, a strength for Nokia because of its volumes and efficiencies. But even Nokia managers will tell you that creating low-end products in a saturating market is not a fun business. It certainly won't produce the sort of growth and margins that investors expect.Nokia's not predicting the instant death of the mobile phone business. It's a very large and divisionalized company, and I'm sure big chunks of Nokia are hell-bent on staying a mobile phone company forever. But it sounds like the senior management feels the mobile phone business is becoming uninteresting, and they want to get started on the next thing before the current business rides off into a long Nordic sunset. The hard part is implementingBecoming a mobile computing company is a lot harder than talking about it. The mobile phone world is based on managed competition, in which operators, handset vendors, and governments create shared standards even as they compete. It's a closed circle in which new features flow down from the top like molasses running down a cake of ice, driven by fiat from the leading vendors.The computing world is much more Darwinian. Barriers to entry are lower, and innovation often flows up from the smallest players. Companies compete in something that resembles a free-for-all, with the marketplace choosing winners.So what Nokia's talking about is not just a change in product design. It's more like a wholesale remaking of the company's culture, processes, and partnerships. The advantage of this for Nokia is that if it successfully makes the transition, it will have put everyone else in the mobile phone industry -- handset vendors and operators -- at a permanent disadvantage, unless they can make the same wrenching transition.The disadvantage is that the change is pretty darned wrenching for Nokia as well.Nokia seems to understand at least some of the changes it has to make in order to be a computing company. Iannucci acknowledged that the "Internet model" of product development is to create and ship products first, and then bother about standards later (if at all).He said Nokia's research labs, formerly fairly closed, have re-oriented themselves to work collaboratively with universities and other parties in the industry. The collaboration part is essential because "we can no longer fuel...internally" the amount of technology the company has to develop now that it wants to be a computing company. Thus the briefing in California -- they want to be a part of the peculiar hive mind we call Silicon Valley.The transition will be awkwardOne amusing example was when a Nokia speaker solicited feedback from the audience on what barriers to success they see in the mobile marketplace.A VC shot up his hand: "Operators."Dead silence for a second. Then the Nokia speaker asked uncomfortably, "what in particular about operators?"And you had to laugh a bit, because the question didn't really need to be explained. What the questioner meant was: "we want the operators dead; are you going to help make that happen?" Everyone in the room knew that. Nokia knew that. The question was a test of Nokia's seriousness.Nokia didn't exactly pass the test. They won't answer that question on stage because it creates too many political issues for the current mobile phone business. So what could have been a nice bonding moment between Nokia and the Silicon Valley folks degenerated into a carefully nuanced spiel about "we're working together to address many issues" and bland verbiage like that. They ended the Q&A soon after.Lesson: If you want to bond with somebody, be prepared to discuss the issues they care about. And don't ask for feedback unless you're prepared to answer tough questions.Next stepsHere are some other issues that I think Nokia will need to work through if it really wants to bond with Silicon Valley.Get real about the role of mobile computing. As far as I can tell, Nokia's hoping that the mobile computer will literally replace PCs. I think that's both naive and unnecessarily limiting to Nokia's prospects. Mobile usage is a different paradigm from personal computing. You use a PC in a long sessions at a static location; you use a mobile while on the go, in places where a PC isn't convenient. That different usage pattern means the users are likely to have different requirements and different expectations for mobiles than they have for PCs. If Nokia tries to just make mini-PCs, it's probably going to end up with products that don't deliver on the great new stuff that mobile computing can really do.To give a rough analogy, if the mobile phone companies had focused only on making land lines mobile, would they have ever invented SMS?Nurture developer communities. Nokia has a very extensive developer support organization, but I'm not yet seeing the sort of broad-scale evangelism -- developer recruitment -- that an Apple or Microsoft practices. To really win over the best developers, it's not enough to just make their development tasks easy, you have to make sure they have the opportunity to make money. No one's doing that well in the mobile space today. Including Nokia.The mobile software companies continue to flail around trying to figure out which company can build a business opportunity worth committing to. The opportunity is there for Nokia, but it has to invest in building the market.Manage Adobe vs. Microsoft vs. Sun. Nokia said it's working very closely with Adobe on Apollo, the new software operating layer derived from Flash and Acrobat. The implication is that Nokia will distribute the mobile version of Apollo on its phones, just as it distributes Flash today.There are two potential downsides to this. The first is that Adobe might lose -- it's facing strong competition from Microsoft's Silverlight, and apparently from a revamped version of mobile Java from Sun (I'm planning to write about that one in the future). If one of the others wins, Nokia might end up deeply committed to a failing standard.The second danger is that Adobe might win, leaving Nokia at the mercy of a mobile software standard controlled by a different company. Replacing the Microsoft monopoly with an Adobe monopoly would be delightful for Adobe, but it isn't going to feel like much of a win for Nokia.Learn to design solutions, not gadgets. I think this is Nokia's biggest challenge. The most popular mobile computing products so far have been integrated hardware-software systems aimed at a single usage: GameBoy, iPod, BlackBerry, and of course the mobile phone itself. Nokia hasn't been notably good at designing this sort of integrated system. In fact, its most prominent effort so far, the nGage, was an epic failure on the scale of the Edsel and the presidential campaign of Michael Dukakis.But if Nokia really wants to be a mobile computing company, this is a skill it absolutely must learn. It is an incredibly hard change for Nokia, because computing systems design requires a very strong culture of product managers who understand the customer and have dictatorial control over the features and interface of the product. A good computing system is a product of idiosyncratic vision. Collectivist Nokia, with its endless conversations and responsibility fragmented across dozens of teams, is in a terrible situation to pull this off. Frankly, I'm skeptical that they can do it. But on the other hand, if they can turn a pulp mill into a mobile phone company, would you really bet against them?
Posted by Michael Mace at 10:50 PM
Permalink. 21 comments. Click here to read post with comments. Labels:
Apollo,
blackberry,
convergence,
developers,
mobile data,
nokia,
smartphonesApple's industrial design: The value of a decisive bastard with good tasteThere's a splendid article in MIT's Technology Review on
The Secret of Apple Design. It confirms a lot of what I've always thought about Apple's industrial design prowess but couldn't put into words.The article argues that Steve Jobs improved Apple's industrial design not because he's a great designer, but because he protects the work of the company's designers from being watered down by committees and compromises.In the article, former Apple design director Bob Brunner (himself a fantastic designer) describes what happened at Apple before Jobs' return:
"The businessman wants to create something for everyone, which leads to products that are middle of the road.... It becomes about consensus, and that's why you rarely see the spark of genius."But the issue's more than just decisiveness vs. bureaucracy. I think Steve Jobs also has very good taste in hardware. I watched the Apple industrial design folks up close for almost ten years, under both Brunner and Jonathan Ive. The groups produced a huge variety of product concepts, ranging from sublime to downright ugly. The bureaucracy pre-Jobs (including, alas, myself) generally picked designs that were nice but prudent -- easy to produce, low risk, not too expensive.Steve Jobs picks the pretty ones. The ones your average risk-averse business manager would look at and say, "gee, that's nice, but..."Steve sometimes goes overboard (remember the G4 Cube, a triumph of gorgeous shape over practicality; or the magnesium fetish of the NeXT computer?). And I think his taste in software interfaces isn't as good as his taste in hardware, which is why the current Mac interface is (in my opinion) tarted up like a teenage girl just learning to apply makeup.But Steve usually chooses very well in hardware -- and even when he does make a mistake, since he's Steve no one can punish him for it.Steve envyI've been trying to figure out what lesson this gives to CEOs at other companies who are jealous of Apple's gross margins. The obvious (and useless) advice is that you need to have taste as good as Steve Jobs, and trust your gut. The trouble is that most of us don't have the design taste of Steve, we have the design taste of Larry King.
Yikes.There is another alternative. Hire someone with good taste, and then back their choices vigorously when everyone else tries to compromise them. Go watch the movie Amadeus. If you can't be a Mozart, be a Salieri -- recognize and use the genius in others.
