if connected

This video is a reminder that Apple is not the only company with a controversial business model and practices. Here’s the Onion’s absolutely wonderful take on Google’s ecosystem. It’s not new but this is a must watch for anyone interested in smartphones.

Apple focuses on delivering the best customer experience but with tight central control, while Google offers much for free — Chrome browser, Android, Gmail, search, Picasa, docs — in return for supporting an advertising-based business model.

New Google Phone Service Whispers Targeted Ads Directly Into Users’ Ears

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Today we heard about the latest additions to Apple’s product empire. Today, we saw the latest extensions of the ecosystem that Nokia CEO Stephen Elop referred to in his eloquent burning platform memo:-

“Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”

He was right that this is more than a fight between individual products like mobile handsets.

“The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.”

But ecosystem is far too weak a word. It implies that all a company like Apple, Microsoft or Google must do is to find a fertile field with favourable weather and let their product seeds grow. If that were enough, Google would not be struggling to foster more than a handful of Android tablet apps, and Apple wouldn’t be sitting on over 90,000 iPad-optimised apps. The difference in app quantity and quality would be much narrower.

Today at WWDC we see how the Apple ecosystem is run. It has a leader, a philosophy, a business model, a model of customer identity. All of these things are critical for success. Switching back to the fertile field metaphor: Apple adds a lot more to the ecosystem than simply choosing suitable environmental conditions for software and hardware to prosper. And, those extra ingredients are why Elop is wrong, or at least not sufficiently visionary in his memo. This is a far greater clash than one between ecosystems. More later when the fuss over WWDC has died down a little.

This era is so much more than just a ‘Post PC’ age. Numerous other devices are being sidelined too as both their reasons to exist and their business models are disrupted.

Yes, we have switched from a unipolar PC world to a multipolar device era where smartphones, eReaders, tablets, connected TVs and many other smart connected devices are finally becoming viable. In this new digital era the PC remains extremely important. In every country, household PC penetration is rising, even in countries such as the Netherlands, Denmark and Sweden where PC penetration is already 92%, 87% and 87% respectively. [Source: Eurobarometer 335, E-Communications Household Survey, European Union].

Yet despite this continued success, the PC is still being sidelined.

The most significant innovations are now happening outside of the PC market. Even at Microsoft, the major user experience innovations that will be incorporated into the upcoming PC OS, Windows 8, were pioneered on Microsoft’s smartphone OS, Windows Phone 7, or on the xBox360 games console.

For those companies that lost out in the PC era, like Apple, it’s useful to market this era as a ‘Post PC’ one as that re-defines the market battlefield in a way that favours the strengths of their products: around highly mobile iOS-powered iPhones and iPads, rather than Windows PCs. Steve Jobs successfully changed the battlefield in just this way with his speeches about the iPad in early 2010. Yet Apple continues to innovate with its traditional computer products with imminent launch of iCloud and Mac OS X Lion.

So, when Apple talks about ‘Post PC’ what Apple really means is that this will be a ‘Post Windows’ future.

But whether we call this Post Windows’ or ‘Post PC’ both terms are too narrow a view of the innovative disruption that is transforming the Internet, consumer electronics, media, advertising, navigation, retailing, and almost every aspect of life.

It’s not just the PC that’s being sidelined. Numerous devices are becoming obsolescent as they too are disrupted, so this new era is also:

• Post Phone — Mobile phones are now routinely smart and consumers often choose to buy a phone that is not the best phone but instead choose a mobile handset with the best apps, Facebook access and Internet browsing delivered with a great user experience. If call quality, signal reception, and battery life were the key factors for consumers buying phones then Nokia’s market position would not be in free fall.
• Post Print — Paper books, magazines and newspapers are being replaced by digital distribution and business models on PC-accessible websites, eReaders, smartphones and tablets.
• Post TV — The TV set is no longer the only way to watch TV. Increasingly, it’s not even the main way. Traditional broadcasters are offering live and recorded TV programmes on their own websites or through special services such as Netflix, Hulu, iPlayer or many others. People are choosing what device to watch TV on based upon whatever screen is most convenient. Old metrics such as the number of TV sets per household are irrelevant. Instead, the new metrics are how many TV-capable screens does each person have available, what size is that screen — from very small such as on a smartphone, to enormous living room projectors — and is it mobile and usable at any time of the day or night wherever that person is?
• Post disc — Music, TV, software and games used to be distributed on physical media. With the arrival of digital games distribution systems such as Valve’s Steam or OnLive, streaming video and music subscriptions, people no longer need optical disk drives. The latest generation of light laptop computers forego that drive. Games consoles and home music systems will go the same way soon.

Those that are talking about ‘Post PC’ are right that this is a new digital era. We’re long past ‘Web 2.0′ but the term ‘Post PC’ does not describe this new era adequately. It’s so much more. It’s post so many many devices, business models, and companies.

In a future post I will set out how to describe this new era.

This post was originally published on my Forrester blog.

Today, Nokia announces its first netbook, called the Nokia Booklet 3G (press release, Nokia blog post). Like all netbooks, the Nokia Booklet 3G is essentially a miniature laptop PC and has more capability in common with the PC than with handheld devices like mobile phones. Despite misinformed advance speculation, the Booklet will run Windows and has an impressive claimed battery life of 12 hours.

In the flesh, the Booklet 3G has a neat modern design and a modern metallic appearance case. The screen and keyboard are both relatively large and well-proportioned.

Mobile operators are increasingly looking to extend their early successes in the mobile broadband market. This is the Booklet’s key differentiator: unlike almost all other netbooks, Nokia’s has an internal mobile broadband card with a SIM slot. Other netbooks rely on external USB mobile broadband modems for Internet access. The presence of this internal wireless modem is why the Booklet 3G is a natural extension to Nokia’s traditional phone handset product range.

Unlike most of Nokia’s key phone handset rivals — such as Samsung, LG, Apple — Nokia does not sell laptops today, and so is in danger of being outflanked by other handset makers that do offer laptops. Nokia will use the Booklet to support their operator customers and discourage them from taking rival handset makers’ netbooks.

Nokia’s challenge with the Booklet 3G will be how to communicate the offering in the market. Over the last couple of months Nokia has had to rebut repeated rumours which are at odds with its current strategy. The name of this netbook, the “Booklet” makes the device sound more like a MID or Internet tablet running a custom version of Linux, rather than the contemporary Windows netbook PC that is the Booklet. Additionally, Nokia now faces new and different competitors for the Booklet that are strong in the laptop PC space such as Dell, HP and Sony that are weak or non-existent players in mobile phones.

Nokia’s first Netbook deserves to do well. But Nokia must work hard to gain traction in this new product category.

Further reading:-

Refining Mobile Broadband Strategy In The Netbook Era

The Mobile Broadband Future – Tactics to Position On-the-Go Mobile Broadband for PCs

Apparently the Palm Pre sends information about a users’ location, apps usage, and other diagnostics remotely to Palm every day. As the Palm Pre offers over the air software updates, Palm can alter the behaviour of the phone at any time during a users’ mobile contract.

The Pre isn’t alone in limiting what features a connected device’s owner may control:

• Cable and satellite TV providers routinely upgrade and change the functionality of their customers’ set-top boxes remotely and without asking permission first.
• Phones sold with contracts are routinely locked to that operator which limits the ease with which for people may re-sell phones that they own. (Although the practice of long contracts of this type is limited by law in countries such as Belgium and Denmark).
• The iPhone has the ability to report where it is without the current person holding it knowing — that’s what the find my iPhone function on MobileMe offers. Android phones with Google Latitude set up behave in a similar fashion
• Amazon’s Kindle eBook Reader enables Amazon to remotely delete books and other items from the device.
• Modern games consoles, PCs, even Blu Ray players could enable firms similar power over devices that consumers own as all of those devices now routinely have Internet connectivity.

In the analogue world, when someone bought a TV set it was theirs to do with as they wished. People that bought books, videos or records had de facto complete ownership, regardless of the more limited copyright declaration printed on a book’s inside cover or on a record sleeve.

Just as we’ve seen a clash between consumer expectations of digital content ownership — that’s resulted in the end of digital rights management (DRM) for digital music sales — we are about to see a series of clashes around device ownership and privacy. But this will be more complex to resolve as more players are involved, and it will be harder for consumers to see what is really happening under the bonnet.

Nokia is in danger of trying to execute on a strategy that is spread too thin. The story today about Microsoft office arriving on Nokia phones joins yesterday’s piece in the FT Germany that Nokia plans to replace Symbian in its high end phones with Linux-based Maemo. Last month, a story appeared about Nokia offering Android-based phones — swiftly denied — that appeared to miss out on Nokia’s long term Maemo strategy. Beyond phones, Nokia has invested enormous resources into Ovi (maps & nagivation, digital music sales, email, media sharing, and the app store).

I struggle to see what benefit Microsoft Office will deliver on Nokia phones. Word, Excel and the rest are niche applications on mobile phones. Few use them as anything other than a document viewer even on those devices where the implementation is good. A better approach for Nokia would be to improve and enrich their phones’ Exchange support to improve email folder access and group calendaring. Perhaps, Office on Nokia is destined for a different class of device — a netbook — if so, Nokia must take care to avoid irrelevance.

Nokia must quickly revive its execution in core business areas such as high end Internet phones. Those devices may be small beer today, relatively, but they are tomorrow’s mid range phones, and next months’ entry level. If Nokia loses that high end Internet phone battle today it cedes its future.

Maemo should be a critical part of Nokia’s Internet phone strategy. It should be the device and software component of Nokia’s shift to Internet thinking and business models. And, given the pressure from rivals — Google & Android, Apple iPhone, Palm’s Pre, even Windows Mobile — the sooner Nokia brings new mobile phones to market that deliver a step change improvement in people’s experience of Nokia phones, the better.

Forrester clients will know I’ve analysed Maemo’s rise several times over the past couple of years — please get in touch for advice — most noticeably in these two reports:

“The N810′s importance is vastly greater than the niche, savvy, youth audience, to which it will appeal or that small sales of previous tablets indicate. With the Internet tablet range, Nokia is incubating both desktop-quality technologies, and a new business model that is independent of the constraints of the traditional mobile value chain.” Nokia Embraces the Whole Internet with the N810, November 2007.

“The Maemo-based tablets are a strategic play by Nokia. They are one of the most visible MIDs currently available. As Forrester advises, they deliver a strong communication and navigation application focus. With the extension of the platform to include cellular radio standards, future models threaten to replace high-end Internet-centric mobile phones.” Nokia to Evolve the Internet Tablet Range to Include Mobile Telephony, December 2008.

At the time of the acquisition (Voices not Eyeballs: Ebay Buys Skype) I wrote that Skype’s purchase price was astonishing. This was, by the way, one of the reasons I drew the comparison between that 1990s metric of eyeballs and Skype’s voices.

Now that Skype is being written down, I imagine the naysayers will again attack Skype.

They ignore several realities:
1. Skype has a business model, and one that is independent of advertising.
2. Skype generates revenues. [Clients- please ask us for details on which consumers are paying for Skype's services.]
3. Skype’s cost base is designed to be uniquely low, due to its (largely) decentralised voice network that uses p2p technology.
4. Skype reports it has doubled its registered user base in the US in the last year.
5. Despite the write down, Skype’s paper value on eBay’s books remains enormous.

Bottom line:- While eBay overpaid, and the hoped for synergies with auctions and Paypal have not delivered upon the lofty expectations implicit in eBay’s purchase price, Skype may yet prove to be a profitable business in the long run.

Again, to draw that 1990s analogy, there are a number of successful Internet businesses alive and strong today, that struggled for a time in 2000-2002.