Apple iPhone: Whats next?

Apple rise to glory has been fast and furious! In time, i think it would be given a "cult" brand status for its pathbreaking technologies and designs whether be the Macintosh, Apple Mac Book, iPod or iPhone! The iPhone has been around since June 2007. One year and a quarter and a refresh version later, the iPhone buzz is only become stronger, louder everywhere! It has redefined the smartphone category with its design appeal, intutive UI and backend service elements (Music and applications).

Apples performance in 2008 US Smartphone market has been explosive. It spearheaded a 68% increase in the smartphone sales by growing 101% Year on year. RIM also did amazing by outgrowing the market at 88% growth! Apple beats its iPhone shipments and sales targets both in US and all over the world! Basis the Iphone shipment numbers, Apple has also cornered a 1.16% share of the world handset sales in 2008.

However, 2009 will be different! A period of slow growth (4 to 5%: IDC forecast) because of the economic slowdown and a maturing market could make things difficult. Smartphone growth will depend upon the operato's abaility to subsidize these devices and developers continuously producing "killer" applications!

http://seekingalpha.com/article/118993-canaccord-three-new-iphones-expected-in-2009

This year I Phone is expected to come up with three new iPhones: a 32 Gig iPhone in the first half, a low cost 2.5G iPhone for the developing markets such as India and China and a smaller version iPhone Nano at $99! Also expect the China Mobile Chinese iPhone variant by first quarter 2009 and a gaming iPhone by first half 2009 (with Etisalat!)

While the plans are good and knowing Apple, it would deliver more than what it promises, i would still believe that sometime this year, Apple will need to look at the "look" of the iPhone. A similar looking phone in various avatars is not a winning proposition for long! You just need to look at Motorola and its Razr for answers! (Razr,Razr 2, Razr D&C, Razr Gold etc etc...)

Online Application stores: Fad or a Necessity?

Apple did it with a good measure and great success for their online application store, which has generated interest both in consumer and developer communities. After the Apple App Store began reporting monumental numbers, however, there was a significant shift; suddenly, those responsible with making the handsets tick wanted to be the ones vending the wares. Google launched its application store for Android in August 2008. http://www.mobilecrunch.com/2009/02/04/not-every-company-needs-an-app-store/

RIM BlackBerry will now be launching its application store, Blackberry Applications, in March 2009. http://www.cbc.ca/technology/story/2008/10/21/tech-rim.html

Not wishing to stay away from the party, Nokia has also announced the launch of its application store, Nokia Applications! http://www.techcrunch.com/2009/02/08/nokia-shaping-up-to-launch-its-very-own-app-store/

Nokia Applications is not a new thing alltogether but a "old wine new bottle" phenomenon. Nokia has owned developer communities in Nokia forums and the Zook - Nokia Search tie up is a resultant of developer - Nokia partnership! Nokia would only look to refurnish the Nokia Forum and re brand it as Nokia Apps!

Palm is also debuting its application store Apps Catalogue with Pre, its new OS! And so is Samsung with its mobile applications marketplace! http://applications.samsungmobile.com/en/gbp/index.html The developers are going to have a party! The only biggie missing from this party is Microsoft, who presently are more engaged in release of Windows 7!

With all these race to finish application stores debuting one after the other, it feels that a application store is suddenly a trend now! It is fashionable to own a application store. So it would seem. In the future, other vendors could also open up their application stores!

The rationale for these stores is to provide the consumers of their higher end services more applications to experience their products better. With Apple it seemed to create the loyalty glue in terms of the Apple's music stores! There is money to be made from the application stores business model!

However, it is important from the vendors perspective, if you are starting an application outlet, you need to be at the reins of the platform as well. Without having your own platform, your work can be copied on the same platform for other vendors. There is no differentiating factor left! Suddenly you will have many venddors peddling the same content and messing up the market place, segmenting it and creating rapid commoditization!

Thus it makes sense for vendors like Apple, Nokia, Google, Microsoft, Palm and RIM to launch their online apps stores. Samsung however would not have any huge justification on building a apps store on what is a Nokia property!

Open Source: Microsoft's anti thesis

Legend (not confirmed reports) has it Bill Gates had remarked "The internet is just a passing fad" in a Microsoft press conference in late 1995. Then there is this famous "The Internet? We are not interested in it" attributed to Bill Gates, 1993. "640K ought to be enough for anybody." - said Bill Gates in 1981. Source: http://en.wikiquote.org/wiki/Talk:Bill_Gates
The idea here is not to belittle Gates. He is what he is and the significance of his contribution cannot be over looked (nerds, rookies and champions put together)

However, the internet has not been Microsoft forte and it has been playing catching up mostly. (The best example is the take over of MSN-Hotmail)!

Heres the latest on the OS front for microsoft. The latest to catch on is Ubuntu http://en.wikipedia.org/wiki/Ubuntu, a free and open source software owned by South African entrepreneur Mark Shuttleworth. What this allows OEMs is that they can develop Desktop, Notebook and netbook systems without having to pay the Windows License fees and undercutting the windows powered systems! Simply hook up --> Get an IM client --> Use web based services and voila.. there you are! The Ubuntus and Linuxes of the world coupled with a depressed economy and dissatisfaction of Windows usage are putting Microsoft in a tight place!

The battle between the Legacy systems and the open source development is gathering some momentum and the odds look stacked against the Redmond giant

Nokia 5800: Reading Beyond the 1 million mark!

Nokia has not measured up well in Smartphone competition lately. The successes have been few and far between. The last major splash was E 71, which recieved a good response from certain parts of the market. The only other Nokia smartphone that has been on the scene is N 95 8GB. Apart from these two N 85, N 79, E 66 and N 96 have not been the major quakers of the Smartphone scene!

In line with the recession market, Nokia's results were a tad dissapointing in Q4, 2008 and apart from the market share loss, a major criticism it faced was the lack of a good smartphone portfolio. Understandably, Nokia would desire 5800 (code named Tube), its iPhone answer to do well! There has been some major marketing and PR effort behind the Tube, which was launched in late 2008! For Nokia, a lot rides on this phone before N 97, takes centrestage, in the summer of 2009.

It was in this context that i was baffled when i read new sreports of Nokia shipping out 1 million 5800 in 3 months of launch!

http://www.hardwarezone.com/news/view.php?id=12603&cid=9

http://www.mobilemonday.net/news/nokia-5800-xpressmusic-shipments-reach-1-million

http://www.nokia.com/A4136001?newsid=1284621

http://www.slashphone.com/nokia-5800-xpressmusic-shipments-reach-1-million-milestone-284257

That is some feat, considering that 36.5 million Smartphones sold in Q3, 2008 (Gartner UK). A million phones is 3% Smartphone market share from one model! Nokia in Q3,2008 shipped a little over 15 million smartphones. A million 5800s is some number. If that be true, then one can expect Nokia upturning tables and smartphone market shares in Q1, 2009. It would be a tribute again to Nokia's ability to replicate a trend and making a platform out of it and selling it cheap to take it to the masses!

However, if this be a channel and customer upstocking gambit, then there are considerable risks involved. It would be walking back and undoing of Nokia's lean supply chain strategem. The channels and customers could clog up which would have a back lash specially in a downturn economy. Consider this, a quarter of the smart phone volumes come from US (9.2 million smart phones sold in US, 36.5 million smart phones world over). Nokia 5800 has no US footprint in terms of a carrier and would sell at $500 from stores! Demand world over is likely to slacken even more and there are more smart phone vendors out there trying for their piece of the cake!

So, while Nokia has shown confidence on the product by shipping a million units, there may yet be many pitfalls!It could be the make or break for the world no 1!

It took Apple 74 days to get to 1 million iPhones. If Nokia is to be believed, 5800 Tube is doing as much in almost same time. We will await the results!

Operating systems: The Big Squeeze

http://www.infoworld.com/article/09/02/09/06FE-shrinking-operating-system_3.html

Those huge operating systems are citadels of the past! Most of the major OS vendors are designing their next versions of OSs with a smaller footprint! So now, the software concept revolves around JeOS (pronounced "juice"), the Just Enough OS, even as hardware goes mobile like Celio RedFly, an 8-inch screen and keyboard device running applications off a smartphone via a USB or a Bluetooth connection. Thus, this is an era of squeeze for the massive operating systems!

The rationale behind the squeeze is simple: Why do you have to fit a Ferrari 10 cylinder 450 BHP engine when all you require is a Tata Nano in performance!

Reason 1. A smaller code base is easier to develop and manage than a larger one!

Reason 2. Computing has graduated from mainframes, desktops and lap tops to Smart phones, Notebooks and PDAs. Thus hardware resources are also limiting!

The two reasons stated above make the case for a smaller OS a difficult thing to ignore!

To quote Ephraim Schwartz, "Today, Microsoft's Windows Mobile is a separate code base from the desktop Windows, while Apple's iPhone OS is a both a subset of and extension of the Mac OS. In both cases, that adds a lot of work for their companies and for application developers. And it means that customers must support an unwieldy number of operating systems."

Reason 3. The other obvious advantage is that a smaller OS reduces the memory footprint. This reduces the number of applications opened at boot, it reduces memory space usage, reduces battery drainage and in consumer term is effective and fast!

Thus, major OS vendors are designing the next versions of their OS -- Windows 7, Linux in its many distributions, and Mac OS X 10.6, aka Snow Leopard -- with a smaller footprint.

Reason 4: Mobile devices have a greater dependence on the browser! Thus the OS shrinks giving up much of its role to the browser!

Reason5: Web 2.0 is a liberating medium! There was a time when no one thought that feature rich applications would sit anywhere but the OS. (example Adobe Photoshop). However with Adobe Photoshop migrating to Photoshop.com and Photoshop Express (a web 2.0 application), do you really need to load Adobe on your system? Do you need that OS?

Interestingly, Microsoft is in denial over the seizure in dominance of the OS trend. However, the course of lfe and development, being Darwinian (evolution), companies will have to adapt or die as virtualization, cloud computing, the explosion of unique devices, and the desire for more efficient, less costly operating systems all drive the next generation of business users toward smaller, less costly, and more efficient operating environments

Online storage providers shutting down operations!

In what is seen as desperate move to trim portfolio and cut costs, AoL and now Yahoo are shutting down their online storage applications. Consider this:

Yahoo Briefcase was Yahoo's 10 year old online storage program. However, it never gained as much traction as Yahoo mail, messenger or Flickr. Within days of taking over, Yahoo CEO Carol Bartz has issued a March 30 Deadline to take Yahoo Briefcase out. More pay offs, Pay cuts and salary freezes are expected from Yahoo on the employee account as well.

Aol XDrive will see the "sunset" according to its EVP, Kevin Conroy. Quoting Conroy, "consumer storage products haven’t gained sufficient traction in the marketplace or the monetization levels necessary to offset the high cost of their operation..". Interestingly while Flickr is Yahoo's blue eyed baby, the same service from AOL, AOL pictures will be facing closure!

Analysts cite following reasons behind the "curtains down" on these free online storage applications:

1. The revenue from online advertising will not sustain the storage businesses on a stand alone basis. Thus these services are considered to be a drag on the P&L accounts of the company.

2. The cost of maintaining several backups of server files is the reason for these companies to reel under such severe pain.

3. Increased competition from MSN Sky drive and new age sites ziddu, megaupload, 4 shared!

4. People are accessing online storage sites through variety of softwares thus the decline in page views is further putting pressure on advertising dollars

5. Legal cost of suits because of illegal activities and misuse by members!

The implication for consumers is that next time you have to choose a storage site, please look for a reliable one else you would be shuffling around site to site as one after another storage sites shut down!

The cost of Online Ads in terms of consumer experience and satisfaction

http://www.watblog.com/2009/02/05/would-you-wait-for-a-website-to-load-for-more-than-4-seconds/#comment-14833
Eklavya Bhattacharya, Portal head, Contest2win.com has a point regarding speed, user experience and satisfaction in the web world!

Google ran an experiment where they increased the number of search results to thirty per page. Traffic and revenue from Google searchers in the experimental group dropped by 20%.
Why did that happen? Didn’t users want more?
Well Google found an uncontrolled variable.The page with 10 results took 0.4 seconds to generate. The page with 30 results took 0.9 seconds.
Half a second delay caused a 20% drop in traffic. Half a second delay killed user satisfaction.

Amazon.com had a similar experience…They tried delaying the page in increments of 100 milliseconds and found that even very small delays would result in substantial and costly drops in revenue.

A recent report comparing the service efficacies between Search Engines, Goolge, Yahoo and MSN. The result was that Google is as a favourite by many users because of its simplicity of the pristine front end. Its simple, easy to understand and use, intuitive and “light”. It gives the feeling of simplicity and earnestness. MSN and Yahoo have a lot of other elements and frames in the page, which make them slower and don’t give them the pristine feeling! Thus a single frame, pure white search page with only a few other pointers in Google outscores the heavily loaded MSN and Yahoo search engines many times over. That Google has made an internet empire out of serving the needs of consumers by email service, unlimited data and photo store, blogs and adwords is another thing altogether different.

Point i try to make here is, banners and pull page pop ups and peeling ads on the page may be a great "eyeball catching" places which gets the mothersite ad revenues. However, it is equally important, that the ad revenue lure doesnot reduce the customer experience in terms of page loading time, graphics, distorting the view and obstructing information on the page of the original website. These seriously hamper the customer experience! While older users may still decide to stick through because theyhave lot to loose not coming to the website, new comers may not take such a favourable view of the website. Thus one has to balance/ tarde off these aspects in online advertising with consumer experience.