Up pops Microsoft

As if by magic, Microsoft appear in the news just as I was musing that they had been very quiet. They have a number of research projects underway that fall under the ‘platforms’ umbrella (an admittedly very vague remit). Midori is the name currently given to a concept that MS are examining that is to make their OS a little bit more amorphous. Or, in my opinion, to try and make it more adaptable and more likely to be on mobile devices – running on traditional PC architectures and also the ARM chipsets that are on so many phones:

Several sources have continued to chip away at the Midori story, piecing together critical portions of the overall Midori strategy, here, but in one fell swoop, Worthington snatched the limelight by landing what we shall call “the goods,” an internal document Microsoft has closely guarded.

According to Worthington, “Midori is an offshoot of Microsoft Research’s Singularity operating system, the tools and libraries of which are completely managed code. Midori is designed to run directly on native hardware (x86, x64 and ARM), be hosted on the Windows Hyper-V hypervisor, or even be hosted by a Windows process.”

…

Microsoft has other goodies in store, too. Midori is also critical to Microsoft’s cloud computing strategy.

Taken from here.

Service Platforms: The high ground in the battle for a mobile future?

Let me start with the mobile operators’ perspective…

“The economics of 3G mobile are simple, but cruel. How much ARPU per Megabyte can I get? Voice – the so-called commodity – delivers 30p to £1 per Megabyte. By comparison, a low quality, 30 minute video generates 9 pence per Megabyte. In this environment, other applications have to deliver higher ARPU per Mb to replace the voice revenues. Today, only low-bandwidth, short video content, the Mobisode, Mobiphoto, or ad or novel application delivers that. All else is burning cash.”

– from “Digital Britain: FT Broadcasting and New Media Conference” speech by Stephen Carter, CEO of Ofcom, March 2005

**ARPU = Average Revenue Per User

There may be lots of funky new techology since 2005, but the underlying market of mobile comms hasn’t changed so much. As aluded to in my post regarding i-Mode, voice traffic – plain old phone calls – has become a commodity and by far the most important innovation is the short message service (texting).

Texts may also be a commodity, but they are wrapped up and bundled and sold with shiny devices and offeres and the average person has no appreciation of the concept of price-per-bit. Make no mistake about it, texting is the communications equivalent of the goose that laid the golden egg.

I can’t for one minute pretend this is news. It isn’t analysis, nor is it enlightening. With companies like Vodafone making a tidy profit it is quite clear that the operators already have their ‘killer app’. Add in the fact that the market that these operators exist is a natural oligopoly and one would be forgiven for thinking that everything is rosy.

If everything was so rosy, then why do operators contribute to research into new technologies? The answer isn’t so much about the new technologies, it’s more about the new markets and new revenue systems. They aren’t looking to do the existing tasks better (well – of course they are, but let’s assume they aren’t) – voice and text are commodities after all – they are looking for more than the killer app; they are looking for the killer platform.

With that in mind, the real future market that the mobile operator is after is the platform in a techologically-converged user experience enhancing environment.

It isn’t just the mobile phone operators either. The term ‘mobile phone’ isn’t such a great term here; we should be thinking of mobile computers that have commoditized communications ability (voice & text – herein described as V&T)…

Portals, Platforms, and Proscenia

• Google: They have been moving into mobile devices for some time: their search and mail technology have been ported to many mobile platforms (as well as the usual web browser format). The major move by Google so far has been the new operating system Android – clearly this is meant to be a basis for their software suite which you can bet will involve pervasive content management and context-aware services {and an advertising-based revenue model} .
• Apple : The iPhone was a great big flag in the sand for Apple. It’s not the fact that it is a great high-end device that is extremely desirable – other manufacturers have phones that have great features too. It is the movement of an operating system and associated software into the mobile device market – like a pincer movement of the iPod and the MacBook. Enter MobileMe : Apple’s pervasive content system.
• Vodafone: Using web services with their Live! portal and encouraging user created applications and content through their Betavine site.
• SonyEricsson: The walkman brand is being used to elevate SE devices into music players and the Cybershot brand is being used in a similar fashion for devices with cameras. Linking the device innovations is the PlayNow Arena platform. This is the font where SonyEricsson will be looking to provide users with various multimedia & management services.
• Nokia: Buying control of the Symbian operating system may be the major strategic move of Nokia but there have been a whole host of ’supporting cast’ that have been acquired over the past 3 years: Twango {a content sharing and social networking}, Avvenu {remote PC access from mobile devices}, LoudEye {music}, Enpocket {advertising}. No doubt these firms are contributing in some fashion to Nokia’s ‘umbrella’ services called Ovi.

I haven’t mentioned Microsoft, have I?

Nokia & Qualcomm Resolution?

Nokia and Qualcomm appear to be about to resolve their patent dispute

Is it just me or are Nokia strategically manoeuvring at the moment (buying Symbian, resolving dispute…)?

The failure of i-Mode and our expectations of old…

I came across an article from almost exactly a year ago on the UK tech website The Register with a comment about the failure of i-Mode.

The reason that I find it interesting is that my undergraduate dissertation was on the “Socio-economic and technical aspects of 3G”. I argued that mobile video calling was going to fail due to lack of demand and the UK licences for 3G were very expensive -the auction structure meant that the 5 licences sold for about £22Billion. (Justification by the economists of Oxford University can be found here)

At the time of the auctions (late 1999, early 2000), there were many technical journals (such as IEEE Personal Communications, IEEE Communications Magazine, IEEE Transactions on Wireless Communications etc.) that were full of tremendous promises of data rates for UMTS and WCDMA and CDMA2000 and also for EDGE. The new bandwidths available would transform our mobile world.

I suggest that our world has not been transformed by new mobile transmission capabilities**. We are at the stage now where we can get the wireless bandwidth out of our mobile devices and we still use them for texting and voice calls. Even during my dissertation there were cries of “Where is the ‘Killer’ App?”.

My opinion is that the killer application is the one that brings groups of devices together and a user has their capabilities at their disposal in the sort of way that makes them more than the sum of their parts. There needs to be two conditions for this to happen though: i) users need to have a collection of devices, and ii) these devices need a common platform or a common application.

As drastic as this may seem, I think that until these conditions are met, the non-Japanese cultures will be texting and voice-calling and services such as i-Mode will continue to fail.

**Note: An important point here is that the focus is on the transmission capabilities – not the ‘gadget’ quality of the device. There are some tremendous bits of kit out there masquerading as telephones – with cameras, music and video players, games machines and so on. Not one of these applications has come close to generating the kind of revenue for operators that texting does.

The UK Mobile Operators (A brief history)

There are five cellular/mobile operators in the UK: Orange, Vodafone, T-Mobile, O2, and 3. The first four hold licences to operate GSM (2G) services and UMTS (3G) services; 3 hold a licence to operate UMTS services.

Here is the quick version (try to keep up!):

3 are owned by Hutchison; before 3 started trading, Hutchison had previously owned and founded Orange. Hutchison sold Orange in 1994 to Mannesmann AG.
Vodafone are part of Vodafone Group, who were founded as part of Racal Telecom in 1983 – becoming Vodafone properly in 1991. They bought Mannesmann in 1994 but had to sell off the Orange part due to the regulation of competition; France Telecom now own Orange and are using its strong brand identity for other parts of its business.
T-Mobile is a mobile network operator that is a subsidiary of the German Deutches Telekom. T-Mobile bought the previous mobile operator, One2One in 2001.
O2 was formed from BT Cellnet (the result of a demerger from UK telecoms operator BT). O2 (then known as mmO2) was purchased in 2006 by Spanish telecoms operator Telefonica, which has since used the O2 brand as a catch-all for other services (much like Orange/FT).

So:

• Orange – France Telecom (France)
• T-Mobile – Deutches Telekom (Germany)
• O2 – Telefonica (Spain)
• Vodafone – Vodafone Group (UK)
• 3 – Hutchison Whampoa (China)

A little more detail to follow.

Emerging Markets

An article on Emerging Markets by Neil Clavin, in Vodafone’s online magazine Receiver, highlights how important the non-Western populations are (if that is the right term) to the mobile operators, device manufacturers, and general technology presence in these nations.

This is a fascinating subject to me as I am fully entrenched in the usage, and research, of mobile devices as an enhancement to my life, or someone that has a lifestyle similar to me (a young professional, technology literate, certain amount of disposable cash – essentially a relatively luxury lifestyle in world terms). It is clear that is not the only viewpoint to have!

The article also links to avery interesting presentation by Jan Chipchase of Nokia entitled “Literacy, Communication & Design“. Here is a video of the accompanying talk at the LIFT ‘07 Conference:

{A Powerpoint version of the slides can be found here}

Someone Else’s Thoughts on Nokia’s Strategy

Justin Mullins over at New Scientist considers the Google-Nokia/Symbian dynamic :
“Why Google Doesn’t Need Symbian“

Organisation of Nokia (I)

Nokia, the mobile device and service company, has a very interesting model of internal organisation. The hierarchy appears quite flat; there are many teams of a relatively small size and they all perform in a pseudo-competitive manner.

The company is very large (about 60-70k employees) with eight broad ‘umbrelllas’: the Group Executive, Devices, Services & Software, Markets, Nokia-Siemens, NAVTEQ, the Corporate Development Office, and Corporate Functions.

Thoughts on Nokia’s Strategy

Two interesting developments for the company were the closure of the device plant in Bochum and the move to acquire rights to the Symbian platform. The former is ostensibly down to a row over government subsidy but perhaps it can be interpreted as a sign that Nokia is strategically repositioning itself for in the long term. The Sybian acquisition is evidence of this as it is clear that Nokia is not happy with being the world-leading producer of mobile devices. Perhaps the device market is seen as a difficult market in the future with expensive device development…

That brings us to shades of old battle between IBM and Microsoft; hardware versus platform. Nobody wants to be stuck in the hole that IBM found themselves back in the day. This time however we have a number of candidates vying for that all-important “platform of the masses” status, with MS Windows, Google’s Android, and Symbian as the main players (there others, like Linux variants such as Maemo).