MEOW! Mobile Entertainment Opportunity Watch
by Tapio Anttila

A monthly report with a personal touch from the world creative media capital of  Los Angeles.  Focus on pinpointing opportunities in the mobile media and entertainment area.  Subscribe at:  http://www.anttila.net 

MEOW! Mobile Entertainment Opportunity Watch #5, 2002

November 6, 2002

 

IN THIS ISSUE:

* Nokia:  It's a Numbers' Game

* US Wireless Data Strategies

* Picks from the Mobile 'Hollywood Scene'

* Picks from the World Mobile Scene

Starting the first week of November, the wireless world looks brighter than in a long time.  Despite the sluggish capital spending in infrastructure, we now have a slew of new handsets and genuine excitement around what new type of things you could do with those handsets.  As I have said before, it is important to study what Nokia is doing and why:  their lead tends to validate things just like Microsoft's actions do.  More of that below.

So whose press releases and market research should you believe?  I like I do:  take a hammer, it yourself on the head and try to come up with a fresh thought of your own.  My former boss at Ericsson taught me that lesson: being a lawyer and acting as the SVP of Corporate Strategy he had no choice but to ask 'dumb' questions.  As a result he foresaw Ericsson's problems years before they emerged.  Too bad only few listened to him.

Best regards,

Tapio Anttila

NOKIA: IT'S A NUMBERS GAME

Some bright-minded friends are educating me on the Nokia-Microsoft battle.  It appears that the public is very concerned about how Nokia will be able to match the eventual frontal attack by Microsoft.  Here's what seems to be happening today, though: 

On the Nokia side the camera phone 7650 shipped 600,000 units in 3Q and currently it is selling the entire production from the Oulu factory which is producing at max capacity of 300,000 units per week.  No wonder Anssi Vanjoki said in the press that the model will sell up to 3 million by the end of the year.  In its lifetime - ending perhaps towards June 2003, the 7650 will have sold some 5-6 million units.  Are there any phone models on the US market that have ever sold that many copies worldwide?  Not even the Ericsson T68.

In comes Microsoft and the mighty threat from PocketPC and Smartphone.  According to my sources the mmo2 XDA device has sold 12,000 units so far (out of a committed order of 100,000).  Orange recently launched their Smartphone version SPV at an admittedly attractive price point.  Their goal is rumoured to be to sell 200,000 units by the end of 2003.

So let's be realistic: Microsoft is a great company but Nokia is making a killing here-and-now and solidifying their position further at the expense of SonyEricsson and others.  Any major Microsoft success is 'beyond 2005 stuff' - and even then they will have to fight an 800 pound gorilla who might actually be able to fight back.

US WIRELESS DATA STRATEGIES

US operators are digging a wonderful grave for themselves by setting up proprietary 'silos' and non-interoperable technology roadmaps, as well as by not letting go of their monopoly in the handset and service distribution.  This is a country where one still talks about 'walled gardens' as something desirable by certain operators, a fact that makes a comparison to Castro's Cuba all too tempting (as a thing that fails in the end but refuses to admit it).  An American journalist recently referred to the phenomenon as Wireless 'Homeland Supremacy'.

However, there is some light in this technology jungle as well.  Recently I bought a 1X RTT '3G' subscription from Verizon.  Sprint PCS and Verizon are in full war about the dominance in the data market - something that will leave the GSM operators temporarily (i.e. prior to the arrival of EDGE) eating the dust. The BREW service by Verizon and Qualcomm are performing beautifully for everyone involved: end-user, developer, operator - and Qualcomm.  What I am hearing is that developer support is great, application testing and certification is swift and developers get paid promptly their due revenue shares.  Many application developers have quite rightly seen the opportunity and the time window with BREW.  However, as most industry analysts agree, mobile Java will eventually win with their raw developer coding power - despite the inability of the ailing and reorganizing Sun Microsystems to act as a catalyst to create a functioning ecosystem.

What was even more encouraging in the Verizon's 3G network was the quality of the data part of it.  I drove down 32 minutes on mountain roads in the outskirts of Los Angeles and downloaded 13 MB of data.  That means the average download speed was 54kpbs...  Plus the average speed was 45 mph.  In Verizon's 3G plans, nights and weekend data is 'all you can eat' at $4.99 per month.  All this means that the WLAN hot spot enthusiasts might want to start considering whether sitting on a mountain top and working makes more sense that trying to find the right Starbucks with the WLAN service.  On the other hand, quite frankly I consider most people who use their laptops in public beyond emergencies somewhat socially handicapped.  The real business case for both hotspots and wide area office IT connectivity will emerge when PDA devices (or smart phones) reach the right functionality and price point.  And don't forget Bluetooth is there to enable inexpensive connectivity in that scenario.  Hey, it's your money - please read the following article quoting an anonymous 'dissident' American:

http://www.theregister.co.uk/content/39/27975.html

Let's move on to AT&T Wireless.  Visiting their store is an eye-opening experience.  AT&T is living in a dangerous transitional phase where they are making a network build-out, launching the consumer mMode service and announcing the future dismantling of the legacy enterprise data network overlay (CDPD).  There has to be lots of other qualities in the overall AT&T enterprise offering to keep them in the enterprise business in the first place:  the rack rate prices for data are ridiculously high and the coverage of the GPRS network still poor.  Mainly due to handset limitations, GPRS will not offer data throughput more than 30 kbps (in countries like Finland where it works well).  Therefore AT&T is obliged to follow a consumer strategy (which they chose in the first place), packing more 'excitement' into a kilobyte of data transmitted.  Don't forget that SMS used to produce over $3,000 per MB revenues to the operator (before the price erosion).  Premium SMS is helping to regain the value add in SMS.  Java and MMS are suitable baby steps to bring limited multimedia within the reach of consumer, still retaining profitability from the data transmission perspective.

This shouldn't be all 'Hebrew' to the US mobile industry...

PICKS FROM THE MOBILE 'HOLLYWOOD SCENE'

 News Corporation is orchestrating a move to acquire mobile rights of known brands and entertainment properties.  Looks like they are moving into the content aggregation and syndication business, although the moves so far have been about intra-company licensing.  Anyway, some new development at the bottom-end of the value chain.  http://www.newmediazero.com/nma/story.asp?id=237719

The "studs' lifestyle magazine" Maxim cut a deal with New Line Cinema to brand some of the movies of the studio with the Maxim brand, in a 'presented by Maxim' style.  Soon you will see the same in mobile phones and services:  I am sure the first soft porn mobile products from Virgin and Hutchison 3G will carry a similar 'stamp of approval' to set quality expectations.  http://biz.yahoo.com/rc/021010/media_maxim_1.html

For those of you in New York City:  The Phat Farm designer phones of Russell Simmons should be hitting the shelves over there as we speak.  The phone is a signature version of Motorola i90c and it is selling at a premium for $525.  Surprisingly, no branded services are attached to the phone at this point.  People really seem to be paying for brand affiliation alone! http://biz.yahoo.com/prnews/020917/cgtu037_1.html 

Comdex visitors will never get bored in Las Vegas again! Toronto-based Phantom Fiber is developing a low-latency online gaming/gambling technology with streaming technology, high security and a wireless component.  AOL is said to start selling multiplayer games based on this technology within the next 60 days.  The company told me that Symbian and J2ME platforms are under development, completing the existing PocketPC.  Also they have tested local hotspot gaming in a casino environment. http://www.winneronline.com/articles/october2002/phantomfiber.htm

Morpho Technologies in Irvine is a local company developing reconfigurable DSP cores that might take mobile phones to a whole new level in design flexibility and price points.  Please update me on what else is happening in this area...  http://www.morphotech.com/company.html

Jamdat secures $8 million in funding, most of the money came from Qualcomm which has reportedly tightened its belt significantly in terms of funding application development.  The main competition of Jamdat comes from Sony Pictures whose wireless arm is developing a publishing strategy towards launching a wireless "Sony Channel".  http://www.jamdatmobile.com/html/press20021015.html

PICKS FROM THE WORLD MOBILE SCENE

Vodafonme just announced a deal with Private Media whereby subscribers can receive SMS messages from porn stars.  Soon this will of course be MMS messages and Java services.  The war is on!  www.privatestars.com http://www.privatestars.com/index2.asp  See also Private Media's PDA offering at www.privatepda.com.

Is MMS really going to take off and why would people pay to send pictures to each others?  Sonera in Finland is launching a contest whereby the public can follow the life of selected celebrities (voted by the public through SMS polls).  The subscribers send questions to the celebrity via SMS and received back a 'day the life of...' story by the star in question as a series of MMS messages.  Here is the first celebrity: Harri Koponen, the CEO of Sonera:  http://vapaatila.net/sonera/mms/arkisto_harri.html#.  I believe this is marketing today but a real new form of Mobile Storytelling in the future.

Inspireyourlife Ltd. out of London is launching inspirational mobile services on SMS.  This is the first step towards having Oprah Winfrey and other interactive relationship advisors 'in your pocket'. A subscription of seven inspirational messages over seven days costs GBP 1.50 ($2.35). http://www.inspireyourlife.com/

BBC in the UK shows a great example of building a branded experience around a creative SMS entertainment service to speed up the adoption: Joy of Text.  http://www.bbc.co.uk/joyoftext/

A British dance choreographer has started delivering artists' dance steps coded in an SMS message.  Kids will learn the coding either from their peers or explanations are printed on a CD cover.  A brilliant idea!  http://www.aerodeon.com/press/pr26sept01.html

Color Ring, personalized ring tone service, has become the latest fad in Korea.  The market is expected to grow to $160 million in 2003. As a comparison, ring tone business in the US is still very small:  Yankee Group estimates the revenues to be $50 million for 2003.  http://www.mobileyouth.org/news/mobileyouth608.html

Cityneo, a French startup with a location-based entertainment platform got funded $2.9m.  The concept includes a very cool 'mood-based' location entertainment service.  http://www.cityneo.com/

Right - of course this had to happen...  Zenobyte has launched a photo-manipulation application for the Nokia 7650 phone.  Now you can take a picture of your friend and twist it around depending on how much you like him/her...  This is mobile entertainment.  http://www.zenobyte.com/zenomorph/index.html  

SOUTHERN CALIFORNIA WIRELESS EVENTS CALENDAR

HOLLYWOOD MOBILE ENTERTAINMENT CAREERS

Rio Caraeff at Sony Pictures is looking to fill in a number of mobile entertainment positions while building up his global team. "Essentially we are building out our product development and production groups and are looking to fill our lead product development role and several accompanying production manager and technical producer roles. Strong familiarity with mobile gaming, devices, technologies etc absolutely mandatory. We are also filling a few spots in the UK if you have any talented tech/mobile friends abroad." (JOB DESCRIPTION)

I have opened up a a whole job market on my website - click on this link to get there! (www.anttila.net/meow/jobs/main.htm).

MOBILE ENTERTAINMENT RESOURCES

The ITU Mobile Internet Study - an interesting global perspective on the growth of the Internet and mobile industries: http://www.itu.int/newsroom/press_releases/2002/20.html

* * *

Disclaimer:  Opinions presented herein are those of the undersigned and do not represent the position or message of any company I might be affiliated with.  

Information: tapio@anttila.net 
Site management: tapio@anttila.net 

11 April 2005 21:56