MEOW! Mobile
Entertainment Opportunity Watch A monthly report with a personal touch from the world media capitals Los Angeles and New York City. Focus on pinpointing opportunities in the mobile media and entertainment area. Subscribe at: http://www.anttila.net |
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MEOW! Mobile Entertainment Opportunity Watch #1, 2002 January 6, 2002 Happy New Year to all my readers! This year will be full of challenges but also plenty of new products are maturing for market introduction. We will see whether the key players now understand what they don't understand - that's been the problem before. I have made a new year's resolution to stick to my publishing schedule so you should be receiving the newsletter regularly from now on. By the way, the place where also your friends and colleagues can subscribe is my website at www.anttila.net. WHAT'S IN THE CARDS FOR 2002? On top of reading a lot and talking to industry friends, I live by gut feeling more than anything else. If you ask me to forecast what we will see on the mobile market world-wide in 2002 and where we will be at the end of the year I would spit out the following guesstimates: Generally speaking the first half of 2002 will be painful, nothing new really hits the market. A lot of preparatory work is taking place behind the scenes but very little will translate into action at the cash register. Look for LOTS of product announcements between February 18 and March 29 when the three largest mobile communication trade shows (GSM World, CeBIT and CTIA) and JavaOne hit the ground. But almost no new product will be shipping immediately (a Nokia Java phone might be an exception). We will see plenty of new devices with Java, color screens and some signs of operators and manufacturers starting to understand service packaging and application development. As we know, GPRS remains mostly in a limbo pre-launch state due to the lack of those two things. That will hopefully change towards 3Q02. The latter part of the year will be busy. There is a lot of pent-up demand to buy new devices and people are waiting for cool product features (color screens, polyphonic ring tones) rather than more bandwidth. By Christmas the industry will probably have had enough time to fix a right market message and applications for GPRS, thus saving it from a similar failure WAP had in the past. In the US we should have solid CDMA 2000 1XRTT sales going by the Christmas season. But the US market has a lot of catching up to do: starting to sell to the corporate market in a recession with poor network coverage is nothing to envy about. The consumer market is still in its infancy and the AWS/Cingular GSM deployments won't happen in time to have any real impact in 2002. Nothing more exciting? Industry consolidation will continue and Vodafone might 'make a difference' and dump its stake in Verizon to someone and buy into Cingular instead, thus securing a global harmonized GSM platform. Also, Telefonica Moviles might take over BT's mm02 which would certainly make Queen Elisabeth I turn in her grave. Don't have too high expectations for the European i-mode launch, I feel it is going to have marginal success. Regarding 3G, I have now a new 'bible' which I follow and which I preach until my ex-colleagues from Ericsson or elsewhere prove it wrong. According to the CS First Boston report "G-Whiz: Ten Reasons why 3G is delayed" (Sept 2001) the mass market phase of WCDMA starts in 2006, leading into a "3G Nirvana" around 2008. The gap between 2004 and 2006 poses operators serious problems in terms of product lifecycle management and revenue growth. Anyway, 2002 will be an important year for heuristic network optimization on all those pre-commercial networks and that learning will be reused in 2003 deployments. We shall see whether Hutchinson will stick to their ambitious market launch by the end of 2002 - looks rather unrealistic. Bluetooth? Yeah, slowly. Maybe faster in 2003. 802.11 WLAN? 802.11b will be a marginal success, especially as a public infrastructure. Wait for 802.11a and the year 2003 or even 2004. Location-based services? No significant traction this year. m-Commerce? Definitely one day but we are still early. WILL NOKIA REMAIN INVINCIBLE? I recently visited the large Nokia customer and partner event in Barcelona. One gets easily impressed by the 1,100 visitors from all over the world. The presentations were generally very informative and they reflected well the year 2002 focus areas that Nokia as a market leader has defined for the industry: xHTML, Java and MMS. All the presentations and webcasts are on the web: http://www.nokia.com/nmic/presentations.html. One to recommend: watch the keynote webcast of Anssi Vanjoki, the SVP of Marketing - it gives you a fresh picture of where the market REALLY is going. Nokia is a master of timing. My Nokia friends tell me that timing is indeed the key message on management training courses. After failing miserably on the WAP front with the first product launch Nokia has decided to have others make the mistakes and move in with huge volumes when interoperability and other problems have been sorted out. The big question is the strategy of Club Nokia and how and when the company is going to tackle the inevitable conflict with its operator customers. In December 2000 investment bank Evli estimated in a report that in 2005, 11 percent of Nokia's revenues and 28 percent of their operating profit will come from Club Nokia (!). They are gearing up their Asian and American launches and they will eventually face fierce competition from Vizzavi and other entities who seek to expand internationally with a standardized, 'franchised' mobile portal concept. To put things in perspective, rumours tell Club Nokia has more members than AOL. Club Nokia will also end up being a 'double-whammy' because it can also be used in handset negotiations with the operator to keep the prices high on the operator supply side. Through its Club Nokia customer database, Nokia simply knows more about a particular end-user segment in a given country and can offer free consulting to support operator (or retailer) handset sales. Nokia is an expert in 'wait-and-suffocate' tactics. It outmaneuvered most of its handset competitors and now it needs to break the operators' backbone. It is in the interests of Nokia to grow the market slower at this point in order to weaken operators towards consolidation. Weaker operators are more likely to accept the "Club Nokia for Operators" service concept. Also, by working with Nokia, a weaker operator (acquisition candidate) will faster adopt the Nokia mobile portal concept which is more interoperable with other operators' portals (the acquiror). Nokia's problems start when the multinational operators really get their portal partners match the Nokia initiative. Vizzavi, owned by Vodafone and Vivendi Universal, has reportedly gotten their act together and is on the right path to become a player. Earlier it was competing internally with Vodafone Multimedia and showing other rather typical signs of the 'mating of elephants'. And then there is of course Microsoft. Microsoft is Nokia's number one enemy and vice versa. I watched the Nokia Conference webcasts and was obliged to download RealPlayer even if I had sworn in front of the ancient Finnish gods that I would never do it again - no Windows Media player version available. When Finns resist something, it becomes something absolute, another Soviet Union. The recently founded Liberty Alliance which is to challenge Microsoft's Passport technology was reportedly founded by Sun Microsystems. The truth of the matter is that to me it was Nokia driving Liberty Alliance, not Sun. And why doesn't Nokia have a better strategy for the enterprise market, why put 90% of the effort on the consumer side? Because Nokia does not want to have frontal war with Microsoft on their turf before growing stronger. Therefore it is better for Nokia if the enterprise market follows the consumer market. The corporate culture at Nokia is still a mystery to me. I hear conflicting stories about highly supportive and free atmosphere and on the other hand people executing with high stress and without stopping to look neither back nor to the sides. I always use the 1995 story when Jorma Ollila was reportedly introduced to the web. He was said to have ordered bluntly 'I want Nokia to have a website within four months'. And Nokia had a website within four months. On the same issue Ericsson had probably more ftp servers and Unix culture in the company but the 'dialogue' around revamping the website took some two years or so - the philosophical phase of the discussion, that is. Partnering with Finns? A developer wishing to work with Nokia perhaps? Well, do your pitch and throw in some abbreviations from the European standards bodies. If you get a blank stare or they simply vanish it's a 'no', if you get a 'yes' it means yes. Usually you don't hear elaborations. You don't have to learn Finnish, though. Partnering with the Swedes - like Ericsson? Send in someone who speaks Swedish, otherwise you will have a good time but you never create the necessary consensus. Wanna sell your company to Ericsson? Sell 5 percent to another Swede first...;-) NEWS FROM THE MOBILE BRANDING PROJECT I am progressing steadily in my endeavors to become sort of an expert in mobile branding. Currently I am reading a Finnish book called "Relationship Experience Design". The main message of the book is that customer is no longer an object but instead a subject (big news, huh?), an active participant in value creation. Given that over 90 % of wireless data revenues today are from SMS, we can easily see that end users play an incredibly active role in using brands as platforms to create new culture. Sounds perhaps naive to engineers but remember that marketing does matter: there are companies who become the Starbucks of their industry and others who remain 'Coffee, Bagels & More'. Looks like mobile branding will be a fascinating area to tackle as it will, in the relatively near future, become an integral part of the consumer market and consumer marketing. I have received some feedback regarding my 'mobile lifestyle brand hunt'. I will post a note from Ruth Brännvall on my website (thanks, Ruth). I appreciate the support and hopefully I will soon receive more suggestions. QUICK TAKES I don't want the newsletter to become too long so just one note: just bought my Ericsson T68 while in Finland. This is a cool phone! All my American readers: if you want your friends to die from envy, go get one of these (for example on Ebay for around $450). Color screen, GPRS, Bluetooth, triband, MMS capable - everything except perhaps a speaker phone would have been nice. Battery life: over a week now in standby with light SMS use on the Cingular network and still ticking. FOR FURTHER READING Go to the website at www.anttila.net for online version of the newsletter and the embedded hyperlinks.
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Latest changes: 11 April 2005 21:56 |
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