I follow Volker’s thinking on his blog and its always a great read .. as is the carnival he hosted this week – Carnival of the mobilists no 222 at Volker Hirsch’s blog
Is it Game over for Google’s Nexus one / Direct to consumer strategy and if so, what can we learn from it?
May 8, 2010 By
As media reports would suggest, it could be game over for Google’s direct to consumer Nexus One strategy
I was watching Nexus One very carefully especially it’s direct to consumer implications considering my emphasis on the Open Gardens philosophy. By all accounts, the reception has been luke warm and as the fierce wireless article says, when it is available, Nexus one is not in its original incarnation (through a direct to consumer web site), rather it is sold and distributed through Operators – making it similar to any other phone
So .. What does it mean for the industry as a whole?
Nexus One put Google directly in competition (and indeed conflict) with other handset vendors who adopted Android. So, in that context, I see Nexus One as an experiment and in Google showing what is potentially possible. This is similar to Google strategy of acquiring spectrum Google: Spectrum bid goal was openness, not winning.
These goals are commendable but also commercial in keeping up with the Google business model of advertising(more people use more content and more that content is linked- annotated , the better the advertising model works as long as Google can capture meta data for that content). That philosophy applies to spectrum as it applies to phones .. Others benefit (and some lose) and the customer gets services which they could never dream of before(example Google maps and Google street view)
Whatever you can say about that vision, it certainly works .. And it customers like it ..
This last bit ‘customers like it’ probably explains the Nexus One status ..
In other words, I see it as an experiment which customers(as of today) did not get (and don’t like as such) since they had nothing ‘special’ to look forward to
Remember that the Web players like Google , Facebook, Twitter and Apple are nothing without their customer fan base(a lesson telcos learnt only too late after the proverbial horse had well and truly bolted from the stable)
There are many factors already discussed such as ‘support’ by email only for Nexus one, iPhone comparison, not understanding the consumer device market and the experimentation angle ..
However, I would like to add two things to this:
a) Apple succeeded to some extent by the direct billing (through iTunes) which is a sort of direct to consumer strategy. That worked because they had the customer on their side by providing a truly superior product in the iPhone. To get concessions from Operators, we need a truly superior product – which Nexus One was not and nor were the many offerings from Nokia(which explains Nokia’s current soul searching).
In other words, the customer is the main driver. If you want to get Operators to change their strategies, get the customer on your side first.. That did not happen with Nexus One.
b) The second point is more subtle. There needs to be ONE main factor for the switch. It’s hard to convince customers about MANY benefits. One BIG benefit which MATTERS for customers will do. Most of us had hotmail accounts. Many of us(including me) switched to gmail in a big way. Why? It was more than ‘Google’. For me, gmail has one BIG feature which literally gave me something very valuable .. TIME .. And that’s the SPAM filter. Nothing else comes even close to it. That alone was enough to justify the move.
So, to conclude, I see Nexus one as an experiment .. But a valuable one in Openness where we can all learn the value of serving the customer.
Update
I just read this great blog from Irving Wladawsky-Berger Customer centric capitalism. I have long followed Irving’s thinking and while not directly related to this post, it does demonstrate the significance of value of putting the customer at the centre of the value chain
Msearchgroove PODCAST: App Store Marketing Basics; What Options Do Developers & Operators Really Have?
May 1, 2010 By
Msearchgroove has a good podcast on App Store Marketing Basics; What Options Do Developers & Operators Really Have?
Peggy has been a great supporter and a business partner for us .. and she says nice things about our CTIA Mobile Web and apps conference in LasVegas – 
The link has interviews and podcasts from many great sources. Have a look HERE
App Store Marketing Basics; What Options Do Developers & Operators Really Have?
Carnival of the mobilists no 221 at mobi Enthusiast
May 1, 2010 By
Delayed due to travels as usual! But better late than never
Carnival of the mobilists no 221 at mobi Enthusiast blog. HOLLY KOLMAN does a great job as a first time host!
Fixed line demise: Could we be wrong after all?
May 1, 2010 By
This could be a very interesting blog .. and I must admit I got caught by surprise ..
I spent the last week in Washington DC at the at the transatlantic week in Washington DC
.
It was an occasion to meet some of the very clued on folk I have the had the pleasure of knowing for a while.
Chatham house rules means I can’t attribute this – but here was a very interesting comment: In Japan, as we get to better and better MOBILE internet speeds and bandwidth, we need FIXED lines more!!
The reason was: Mobile has a practical limit .. you need the fixed to bring data as close to the customer as possible and thereby take the load off mobile ..
This caught me by surprise and goes against all the conventional industry wisdom I have seen so far ..
Conventional thinking in the West says that people are replacing fixed lines by Mobile only ..
But I can see the point .. and it comes from someone who knows the space in Japan from first hand experience ..
Nor is this only about ‘offload’
There is a subtle point though which I elaborate(thanks to Chetan Sharma who also confirmed my query by email)
I am talking more than pure offload (which is fine of course) but more about the strategy of using the fixed to come as close to the customer. I see it more as a conscious choice to go fixed where possible and mobile only after.
Thus, when you start thinking mobile and fixed as one network, you can start designing the network accordingly. So nations who have much deeper fiber infrastructure are going to be ahead.
And of course those who are able to create such links between fixed and mobile i.e. mere existence of a fiber network is not enough but rather the ability to design the network as one entity
This creates a new use case for fixed .. Dean Bubley added at forumoxford ..
However, I do expect many fiber installations to be “open” for wholesale provision to multiple mobile network operators to exploit. This may need to be mandated by regulators (i.e. structural separation in fixed), or it may happen “naturally” (eg BT OpenReach / Wholesale). I certainly agree that mobile operators will be “anchor tenants” helping to justify the costs of fibre build-out.
Indeed, this was the point of my post .. curiously enough I have not seen this view being articulated in the industry. This could be one of the important solutions to the data deluge problem .. and coming from someone with deep knowledge of Japanese policy/deployment strategy .. it is significant
Even in emerging markets, as they start to consume mobile data, they will need fixed to complement it ..
Thoughts?
Image source: roaps.com
Saxophone ..
May 1, 2010 By
Long tail devices – excellent analysis from fiercewireless: For Nokia, RIM and others, the innovation window is closing fast
May 1, 2010 By
This is excellent analysis and I totally agree with it and something I have long been saying – there is simply too much choice and as early as Aug 2008 I pointed this out at a talk in Amsterdam when I spoke of Long tail devices and let a 1000 devices bloom ..
source: For Nokia, RIM and others, the innovation window is closing fast
The key is: from the article above -
“Part of the dilemma for the big and established guys is exactly that,” said CCS Insight analyst John Jackson. “They’re big and established.” It’s hard to shift entrenched market positions because it’s time and resource intensive, he said.
This is not to say that smaller players that are also innovating in smartphones are having an easier time. Dulaney said that OEMs such as Motorola (NASDAQ: MOT) and Sony Ericsson are customizing Android, which can be effective, but also brings risks. “And if you’re not inherently proven as a software developer, odds are you’re not going to do that well,” he said.
The bottom line is that the real threat to major OEMs that are trying to innovate in smartphones comes from companies such as Dell and Acer–firms rushing headlong into smartphone development. “You have a set of market conditions that are ripe for exploitation by companies like Dell who don’t have a legacy business they and their shareholders rely on quarter to quarter,” Jackson said. Such players are well-capitalized and can leverage their manufacturing resources, free of the obligation to ship volumes and attain high margins in order to survive.
So far, the market impact of these small players has been negligible. Nokia is still the worldwide leader in smartphones, thanks to Symbian’s reach.
Apple’s iPhone juggernaut continues to chug along. RIM is still the smartphone king in North America.
Yet with each passing quarter and year, the pressure will mount on established players to increase their pace of innovation. As the leaks of Dell’s Android and Windows Phone plans show, the company means business. These new players are poised to upend the traditional market, or at the least make life difficult for the big OEMs.
