By Marek Pawlowski (PMN), Thibaut Rouffineau (Wireless Industry Partnership), Lisa Whelan (SocializeMobilize.com), Andreas Constantinou (VisionMobile) and Matt Lewis (ARCChart).

Marek Pawlowski, Editorial Director at PMN and founder of the MEX Conference, begins by examining the role of the mobile phone in a future of multi-platform experiences:

There is an old cliche rolled out time and again at mobile industry conferences: “You never leave your house without your wallet, keys…and mobile phone.” It is, of course, meant to remind us how indispensable handsets have become to our daily lives (and, perhaps, by extension, reassure all those in the mobile industry that, not only are their jobs secure, but they are meaningfully engaged in providing a significant service to humanity!).

A recent BBC documentary about the lifecycle of mobiles (’The Life and Death of a Mobile Phone‘, BBC4, 5th October 2009) provided an insight into just how attached users have become to their phones, with many of the people interviewed confessing to never turning off their handset - even when they were asleep - and never letting it leave their sight. The level of attachment exhibited by the interview subjects was quite remarkable.

This places the mobile phone in an interesting position. By virtue of its ubiquity, it is the digital device we spend the most time with every day and the one we are most likely to trust and respond to. What then will be the role of the mobile phone in tying together the myriad digital platforms which fill our lives?

The number of digital assets and devices owned by the average human is growing daily. The volume of emails, texts, videos, photos and music files to which each individual can lay claim is exploding. So too is the number of places we store this information. If we look just at one type of data - say, photos - we find that an average individual may have a collection of photos on their camera phone, as well as several albums downloaded to their PC from their digital camera. If they’re truly at the cutting edge, they may even have some images stored on a network-attached storage (NAS) device and beamed wirelessly to digital photo frames around their house. The same scenario of multiple storage locations and multiple access devices is also true of other data types, from email messages to videos.

This model is both unsustainable and undesirable for the human mind. The complexity of keeping track of where we have stored what and how best we can access it will lead to an apathy induced by our natural fear of cognitive effort. We are already starting to see the first signs of this as digital pioneers, those who have led the charge into a world of multiple social networking accounts, PCs, MP3 players, consoles and phones, start to kick-back against the information overload they have brought upon themselves. When we undertook research with more than 700 people in digital industry during the planning stages for our next MEX Conference (2nd/3rd December 2009), it was eye-opening to hear how many people working in the technology business feel overwhelmed by the very devices they have themselves created.

As an industry which has developed the phone - the most widespread computing and communications device in this multi-platform future - the mobile business has a responsibility to sit in the driving seat of delivering great user experience across all of the digital platforms in our lives. Crucially, the industry faces the challenge of combining the diverse range of devices in users’ lives - from PC to phone to interactive TV - into an experience genuinely greater than the sum of its parts.

Thibaut Rouffineau of the Wireless Industry Partnership (WIP), picks up the story and suggests possible strategies the mobile industry may adopt for delivering multi-platform services:

The rush of the mobile industry towards ’services’ rather than devices is a clear indicator of the solution most feel will become the glue between the devices, hoping for a good old style horizontal integration to solve the fragmentation.

Based on previous examples, the type of services to be offered are pretty obvious: single identity and single sign-on valid across all devices, universal storage to synch-up all devices and storage media, billing platform for universal one click payment, universal recommendation and preference engine.

Unfortunately the mobile industry has rather poor track records when it comes to reducing fragmentation, whether horizontally or vertically.

It basically knows 2 models: ‘king making’ and the operator association

King making is quite simple, the number one player in the space acquires or adopts a technology and sways the balance in the ‘right’ direction; for example, cameras, GPS and navigation. Simple but more and more difficult as the industry becomes more and more competitive, furthermore there is no killer technology to be adopted today that would solve the problem.

The operator association approach (e.g. UMTS Forum or GSMA) is pretty good at getting all to walk in the ‘correct and unified direction’, but the time involved, the size of the issue, the number of solutions to explore and the club approach would make such an association impossible.

And thus it’s no surprise to any observer of things mobile that most disruptions (or chasm crossings) in the past few years have come from outside the mobile world: Apple for touchscreen and application purchase, Google for open source & mobile cloud services. It thus appears, based on past analysis, that the only credible way forward is the arrival of a new player in the market to solve this issue.

So what kind of new player could this be…

1. A vertical player moving out its niche… The name Apple obviously jumps to mind as a company which will solve this fragmentation challenge for you if you can pay the price to buy the entire Jobsfolio of ‘i-catching’ products. Can Apple now go mainstream with more than the iPod and the iPhone? Let’s not doubt it.
2. A horizontal web service player extending into mobile… This sounds like a familiar reality called Google. In an industry known for its ability to constantly fragment and micro-segment, doubts are possible but isn’t Google too big to fail?
3. A new universal remote control provider using a phone-type device… Previous attempts in TV / VCR / PDAs have shown the limits of this model relying on massive testing by the supplier, long set-up by the user and the general failure to encompass the variety of environment one interacts with.
4. A neuro-controlled headset controlling standard interfaces on various devices… Hardware is now available from Emotiv for those willing to try…definitely promising.
5. An identity service provider able to aggregate little by little all individual preferences, behaviors and automate activities such as payment, authentication etc in a secure way. An option sought after by many.
6. A new digital ad agency specializing in multi-screen media buy. Once again, a sought after option…

However the past is not always a good adviser for the future…another famous saying at conferences!.

In a time of personalisation and increased multi-tasking, vertical or horizontal integration might not be the best way to deal with fragmentation anymore. Rather we could look to a world of standards, where defragmentation or user experience creation is a personal matter rather than an industry matter; where each individual is both in charge and empowered to make their own choices around what matters and what doesn’t; what they want to explore in its complexity and what they only want to deal with at a superficial level. From this perspective the industry winners will be those who can embed in their products standards, co-creation, a notion of variable complexity and the necessary need for multi-platform.

Lisa Whelan, founder of SocializeMobilize.com and a business development, strategy and marketing consultant, delves deeper into what multi-channel services mean for user psychology and the desire for simplicity:

At the crux of this challenge for the mobile industry is finding a way to proactively address consumers’ needs, without overwhelming consumers with choice. Different people have different needs. And, yet presenting users with too much choice isn’t necessarily a good thing, nor is it even particularly advantageous to mobile companies.

From a user’s perspective, choice often means complication, and in the eyes of the consumer, simple often wins out over complex - even when it means fewer features.

As humans, we like the ‘idea’ of choice, but we often find it difficult to make decisions when were offered too much choice (a state known as ‘analysis paralysis’). In theory, more choice should be a good thing for consumers, but when it comes to mobile technology, I believe users buy a phone to reduce the complication in their life - not add to it.

When it comes to mobile phones, as long as our basic needs are addressed, most of us are happy - even if we aren’t offered a huge amount of choice about how that happens. By ‘basic’, I mean being able to communicate and share, be it through voice calls, emails, or social networks, organize (calendar), and to a lesser extent, be entertained, on the go, for an adequate period of time (i.e. long battery life). The rest is gravy.

Take for example the Palm, Inc. (at the time, PalmOne) vs. RIM battle of the early to mid 2000s. The Palm Treo could run thousands of applications - including a handful of 3rd party push email clients (Good, Seven, Visto and more). In contrast, RIM offered fewer mobile applications for the Blackberry and one push email client - it’s own, pre-loaded client. Which company ultimately saw better uptake of push email and remains one of the leading OEMs? RIM. In retrospect, it seems that Palm may have offered its users too many choices, rather than recommending a single push email app that executed well. The result was consumer ‘analysis paralysis’ and increased market fragmentation.

Take as another example the iPhone. Unconfirmed reports estimate the total number of applications on the Apple App Store at 100,000, but how many of those 100,000 applications are being downloaded more than 6 weeks after their initial release? Most of the developers I know are saying that the average app life cycle is just 4 to 6 weeks without a product refresh. Only a few apps continue to be popular after their initial launch, leading me to believe there are only a few apps that people consistently find they ‘need’.

According to research conducted by mobile analytics vendor Flurry, over a 90 day period, the apps used most frequently and for the longest period of time immediately after download fell into one of four categories - from lowest to highest - health and fitness, weather, reference and news. In contrast, entertainment, social networking, travel and sports apps were used the least frequently and were rarely used past 45 days.

So, what then will be the role of the mobile phone in tying together the myriad digital platforms that fill our lives? It all depends on which digital platforms become the most essential to consumers over time. If a large enough group of consumers decide that they need access to a specific group of digital mediums from their mobile phone, the growing eco-system of software developers will respond organically. As app store owners continue to improve merchandising, discovery, and behavioral targeting, more and more, consumers will be shown the apps and services that most effectively address their specific needs, rather than being burdened with too many choices.

Matt Lewis, Managing Director at mobile industry analysis firm ARCChart, discusses what the architecture might look like for multi-platform services and expands on the role of the next generation address book in tying it all together:

At the heart of any strategy to improve the user experience in a multi-device paradigm sits the mobile cloud. While the term ‘cloud’ is a relatively new addition to the industry vernacular, it’s easy to understand the concept it references.

The range of devices and services with which users now engage often store information remotely, off-device. In essence, the cloud simply refers to the off-device storage of this information on a remotely located server, which can be tapped into with a variety of front-end applications - a browser, widget, dedicated app, picture frame or any client providing a window into the information and allowing data to be added, edited and removed.

Photos provide a simple example of the mobile cloud. Several digital cameras on the market now have the capability to automatically upload photographs directly to photo sharing sites like Flickr, using the camera’s embedded Wi-Fi capability. The user may then access these photos on their PC through a browser; or on their phone through a dedicated application (which may offer rich photo editing features); or their laptop screensaver maybe be configured to run a slideshow of the images held in their photo sharing account. All these devices and applications are accessing content by simply tapping into the cloud.

The cloud has grown organically and the approach to storing and accessing the data is more or less specific to each content/service provider. However, it is conceivable that as cloud services become more engrained, and consumers demand the ability to export and share files and media between different providers, the industry will move towards a more structured approach, defining specific storage, access and synchronisation standards. SyncML is one standard which already exists and which may evolve to address the entire cloud.

SyncML is commonly viewed as a method to synchronise contact and calendar information and the migration of the phonebook off the phone and into the cloud will perhaps be one of the most important user experience boosts in the multi-platform world - this is the advent of the Phonebook 2.0.

User are gradually becoming overwhelmed by the number of disparate lists of contacts, or phonebooks, they are now managing. A quick count of my own phonebooks shows the tally is eight:

1. Mobile phone (on-device)
2. Corporate phonebook
3. Email address book
4. Facebook
5. LinkedIn
6. Windows Messenger
7. Skype
8. Twitter

Throw in a couple more social networks or IM communities and it’s easy to see how some users are juggling in excess of ten separate phonebooks, and the number is expected to grow as more services promote the sharing of content within and across communities. Often, individual contacts are repeated across several phonebooks - for example, a close friend is likely to appear in the contact list on the phone, Facebook, LinkedIn, Messenger, Skype and Twitter. The same person is repeated in all phonebooks as if each instance is a unique contact.

All these services already exist in the cloud, in that they are accessible remotely from different devices and applications and can be updated and edited from each. The problem is that each phonebook exist as a separate silo.

The objective of the phonebook 2.0 is to aggregate all these disparate contact lists within the cloud, providing a single window into a user’s entire phonebook portfolio. The phonebook 2.0 identifies repeated individuals and amalgamates their credentials from each service into a single phonebook entry, providing a one-stop view.

It is easy to see how such an approach not only enriches the user experience by greatly simplifying contact management, but the aggregated information is of far greater value than in its disparate format

Take, for example, presence. Many social and IM networks provide an indication of presence, showing the real-time status of an individual in terms of their usage of the service (online, offline, away etc.). Aggregated in phonebook 2.0, presence supplies more granular information, identifying the services on which someone can, or cannot, be reached. Add to that a location facility, and the value of phonebook 2.0 ratchets up another notch. As social networks roll-out location tracking features to their users, the aggregated phonebook will become a vital tool for engaging with professional and social communities based on geography.

The question now becomes: who will become the phonebook gatekeeper, provisioning the aggregated phonebook service to end users? Will it be carriers, the handset makers or OS providers; or will it be the social networks or portal players like Google and Yahoo? Or will an independent third-party spot the opportunity?

Andreas Constantinou, Research Director and founder of VisionMobile, explains how multi-platform services will need a deep understanding of users’ total context and behaviour:

Information overload will necessitate more than filtering or search; intelligent, contextually relevant recommendations that take into account our long term habits and our short term topics of interest, to suggest information, music, events or activities which are relevant. Beyond recommendation, new forms of communication will allow us to interact with many more people in the same space of time - forms of communication that are today unimaginable, in the same way that Twitter and Google Wave were unimaginable 5 years ago.

What do you think? We’d love to hear your views on this essay and you can help to advance the debate on multi-platform user experience by contributing a comment to the blog.

In the last 12 months Mobile Application Stores have evolved from hype to mass-adoption and even to currency; building an App Store marketing story can increase your valuation, even if no-one agrees what an App Store is. The mobile industry, from CEOs to developers, is engulfed in an app store hysteria such that everyone (operators, OEMs, and platform wannabees) wants to build one.

Yet the long-term reality will be very different; App Stores will become a dime-a-dozen and smart players will need to seek out where they can add and extract the most value, not what app store recipe they can photocopy the fastest. In this article we ‘ll review the present state of the market, the key App Store building blocks and where will the market be heading in two years.

What’s in a name?
What IS an App Store after all? Is it a developer channel, an on-device apps storefront, a way to deploy applications, or an attempt to copy Apple’s model to the last detail?

To understand what App Stores mean we need to trace back into mobile history; BREW, Symbian, Windows Mobile and Palm have long opened APIs to their software platforms, since 2001-2 in fact.. And while technical openness was established 7 years ago, what was lacking all these years was commercial openness; the funnel between external developers and in-market handsets was so thin that very few software players could pass through. It took Symbian six years to reach 10,000 applications, while it took Apple only 6 months (see our earlier analysis). In the first year of operation, Apple’s App Store brought in 65,000+ apps, 100,000 registered developers, 1.5Billion application downloads and availability to consumers across 77 countries through 40 million iPhone and iPod Touch devices sold.

What Apple figured is that streamlining the commercial route to market was more important than opening up APIs in a friendly language - and as part of that taking out the middlemen (operators, content aggregators and content retailers) who were eating 60% or more of the retail price. BREW and GetJar have been following along, too, although somewhat limited in terms of operator certification hurdles (in the case of BREW) and lack of on-device integration (in the case of GetJar).

In this historical context, it is easy to see that App Stores are a developer-to-consumer merchandising channel; a go-to-market vehicle for allowing developers to distribute and retail their applications directly to the end-consumers, while taking out the middlemen from distribution and retailing. In this sense, mobile app stores are the equivalent of JVC (or any other audio equipment manufacturer) allowing musicians to sell direct to consumers, bypassing labels, distributors and online retailers altogether. Sadly, the music business is more complex that mobile.

State of the market - supply and demand
Most of the hype today is focused on the short head of the most successful app stores. Below we have profiled the five most prominent app stores today and analysed them in terms of distribution model, installed base, downloads, applications and revenues, which makes for an interesting comparative reading. Note that our Apple app store revenue estimates are at $700M/year, in-between the conservative estimates from Bernstein and the optimistic (statistically-skewed) Admob estimates.

(click to enlarge)

The long tail of app store launches is even more interesting. There is no self-respecting mobile player that hasn’t announced their plans to build an app store, across operators/carriers, OEMs, platform and chipset vendors.
- operators/carriers: Vodafone, Orange, Telefonica/O2, TIM, T-Mobile, Verizon, Sprint, China Telecom, China Mobile, SK Telecom, KT.
- handset OEMs: Apple, Nokia, Sony Ericsson, Samsung, LG, RIM, Palm
- platform vendors: Android, Windows Mobile, S60 (Ovi Store)
- chipset vendors: Qualcomm, Intel, Mediatek

For a slightly deeper dive into the details behind these deployments, Distimo maintains the most extensive comparative table of App Store launches.

Naturally, a diverse range of white label app store providers have emerged to cover the demand. We track 19 App Store vendors so far as part of our industry Atlas: Amdocs, Cellmania, Comverse, Ericsson, Everypoint, GetJar, Handango, Handmark, Ideaworks 3D, Javaground, Mobango, PocketGear, Ondeego, OnMobile, Qualcomm, SlideME, Sun Microsystems and Tanla. Specialised vendors are already emerging with Ondeego offering an App Store for enterprise IT and Tanla offering application license management.

One of the most integrated offering is from Mediatek - a chipset vendor powering more than 300 million (!) phones shipped each year - which has launched its own App Store powered by Vogins and SkyMobi. This is a white label app store offered as part of the chipset package and where the revenue is shared among the OEM (30-40%), Mediatek, developers and the operator, according to our sources. In a sense this copies the Qualcomm BREW model (chipset + software + services), but in a very different market where the one-stop-shop hardware+software+app has allowed 10-person OEMs to fill the market with knock-off (’shanzhai’) phones, selling for 1/5th of Nokia prices.

Key building blocks
To understand the future of app stores one must look not only in their historical evolution, but also in their genetic make-up.

We first analysed the key ingredients for building an app store a year ago – and the receipe still stands. In the next diagram we analyse the five key elements of an App Store and their evolution to the next two years.

(click to enlarge)

As we mentioned, an App store is a developer-to-consumer merchandising channel. As such an App Store is made up of five key building blocks:

1. Developer Market: a process for submission, certification, targeting and pricing of applications. Pre- App Stores, developers had to deal with complex, undocumented & fragmented approaches for app certification and pricing. The developer market, was one of the most important elements introduced with the iTunes Store and the BREW Mobile Shop, in the form of a single website where developers could go for submission, certification, targeting and pricing of their applications.

What’s next: we see 10s of developer markets emerge in the next two years. Not only one app store for each OEM, platform and operator consortium (Android, LiMo, OHA, JIL), but App Stores for different consumer segments (enterprise, fashion, kids, elderly, sports, etc). As such we expect the emergence of App Store aggregators, ie entities which will undertake submission and testing of an app against multiple App Store marketplaces.

2. Billing and Settlement: a mechanism for billing, settlement and reporting of application sales. Pre- App Stores, developers had to set up their own billing or use premium SMS with only 10%-50% of the retail price going to developer. Settlement of application revenues used to take weeks or months. App Stores introduced credit-card billing, fast time-to-settlement and a 70% revenue share as the norm.

What’s next: we see operator revenue shares harmonizing to the 70% norm towards the developer, and a multitude of revenue models emerging like subscription, gifting/begging and cross-app billing (where the credit paid through one app is valid for use in another app). The harmonization of operator billing will be critical to the adoption of app stores, removing the last consumer hurdle for mass app adoption.

3. Distribution surface: the size of the addressable market for an App Store across handset OEMs, operators/carriers and geographical regions. Pre-App Stores, developers had to distribute apps on region-by-region AND on a handset-by-handset basis – a true fragmentation nightmare. iTunes Store, Ovi Store and the RIM App Center introduced global distribution on a per-platform and per-OEM basis, offering plenty of room for continual growth of app downloads (and second-order growth in the case of Apple). Already the Ovi Store sees traffic from 180+ countries on a daily basis, and this is via user downloads of the Ovi Store with pre-loads on S60 and selected S40 models coming in 4Q09.

What’s next: With operator consortia like JIL muscling into to claim App Store territory, we will see global distribution across operators as well as across platforms and OEMs.

4. Delivery & in-life management: the mechanism for app download, silent install, in-place access, app licensing and in-life app management. App delivery is one of the most underestimated building blocks for an App Store, as it’s all about the ‘magic’ happening in the background. Pre-App Stores, users had to download a ringtone or an app, then figure out under which menu this was saved on the handset. Naturally, there was no ability to update the application or apply any rights management to it, leading to rampant side-loading and gradual decline of content value.

What’s next: we see application delivery extend beyond B2C towards B2B apps and middleware that can be background- downloaded & installed. This presents opportunities for App Store owners who can monetise on a per-activation/per-unit basis for remote installing of apps, features or bug fixes on behalf of operators, OEMs or enterprise customers.

5. Retailing & Merchandising: application discovery, promotion, as well as premium placement, search and recommendations for applications. Pre- App Stores, developers had to buy and market complex shortcodes or scattered website ads. iTunes et al introduced in-store app discovery, 1-click purchase, in-store promotions and automated recommendations.

What’s next: as with all fast moving consumer goods (from detergent to mobile phones), retailing and merchandising is the most important segment of the product lifecycle. As applications become ubiquitous, we see specialized app stores with segment-specific retailing of apps, inventory leasing for app promotions (CPC or per week rental as already seen in the Ovi Store and RIM App Center), social recommendations (your friends bought this app, so you should buy it too) and developer back-channels (allowing the developer to reach out to their customers via App Store facilities).

Outlook for App Stores: What the next two years hold
We spoke to George Linardos, Nokia’s VP of Product Development for Media and Games who sees the App Store market evolving to the state of the US television networks; i.e. the emergence of a few major cross-regional App Stores followed by 10s or 100s of localized and specialized stores.

This a natural evolution in a crowded, commoditizing market and addresses a very important challenge. “Today’s app stores throw the high value apps together with the low value ones into the same pool. The top-10 listings are based on number of downloads in most cases. There needs to be better segmentation, so that high-quality applications can be seen as quality applications”, notes Sebastian-Justus Schmidt, CEO of SPB Software, a software house which makes 6 of the top-10 best selling applications in the Windows Mobile space and has the best selling product across all platforms according to Handango.

Indeed, the iTunes Store practice of dividing and conquering among application developers does not create, but destroys value – as can be seen from the continual decline in average app price. Schmitt continues “If you expect to get apps for 1 dollar you will get the quality of 1 dollar”. This observation confirms the necessary emergence of specialized stores; from the cheap & cheerful everything-you-buy-is-1-dollar Store, to the premium Store with perpetual updates and 24 hour customer support for each and every app.

Beyond specialized app stores, recommendations will also play a crucial role in merchandising. ‘People who bought this also bought that’ (aka collaborative filtering) and social endorsement (aka social graph mining) will become key to App Store performance, which is why Nokia has hired some of the brightest minds to work on Ovi Store recommendations. Linardos expects to see major new merchandising and recommendation features appear on the Ovi Store in the next 6 months (perhaps in time for MWC 2010?) and sees Nokia’s global marketing machine as one of the key differentiators in Ovi Store.

Beyond specialisation in App Stores, we expect to also see co-existence of multiple App Stores within the same handset. This is not just a hypothesis. Already LG and Samsung phones shipping in 4Q09 come with four (!) App Stores co-existing within the same handset; one from the OEM, one from the platform provider (Windows Mobile) and two from the operator (SKT - who has their own device- and web- application stores). In this dime-a-dozen picture of the future App Store market, retailing and merchandising becomes an even more strategic element; where the value is in selecting the ‘best’ apps from each application store and auctioning promotion space (paid-for widget real estate) for these apps on the idle screen. This is where JIL and operators should be focusing, rather than trying to photocopy the Apple recipe.

Comments welcome as always.

- Andreas
follow me on Twitter: @andreascon

And? The survey brought out some very interesting findings – some quite flattering and some honest critique and suggestions to take on board.

And as promised, we ‘re announcing 10 participants at the end of this post who have been drawn to each win an Atlas wallchart

What did you think of VisionMobile?
Over 75% of participants found our blog insightful, analytical, thought provoking, original and innovative – which was rewarding to hear. Fortunately no one went for boring, overhyped or outdated being the other options

Furthermore, we were very happy to hear that over 91% of participants would recommend our blog to others. Thanks everyone!

We are hoping that after turning the feedback constructively into action, we will be able to convince even the almost 9% group of Maybe. No pressure though

Out of the 56 readers who took part in the survey, the majority (over 90%) work within the Mobile Industry with mobile software vendors being the biggest community (almost 45%). In terms of job profiles, most participants work as Product Managers (around 28%), Engineers/Developers (around 26%), as well as in Business Consulting, Business Development and R&D positions (16%). 10% work in the Top Management positions like CTOs/Strategists, CEOs/VPs.

In terms of employer profiles, over 25% of participants are in small start-ups; middle sized companies and over 16% in blue-chip organizations.

Most importantly, you shared your feedback with us about our articles and gave us plenty of inspiring suggestions…

You suggested we write about “how to make money in the mobile software”, identify the “Trendsetters, Thought Leaders and Thinkers” and introduce the “new kids on the block of the Mobile Industry - exciting new Mobile Tech Start Ups”. Exploring the emerging mobile markets in developing countries is another popular request. All points taken on board, and we hope to be launching at least one of these shortly.

In terms of mobile technology and innovation, we received some interesting suggestions on topics such as network technologies, Chrome OS, Palm OS, Digital Content Market and Content Transcoding as well as innovation in the low-end handset segment, to name but a few.

There is definitely a lot of exciting articles to look forward to!

And finally! The 10 winners drawn out of the survey participants are JS, Colin P., Igal P., Tom S., Sven K., Carsten S., J Helmig, Andrew G., Jarmo P., Alexandre B. You will receive a separate email from us regarding further steps to arrange the delivery of the Atlas wallcharts.

All the best and keep the thoughts coming!

- Jana and the VisionMobile team
follow us on twitter: @visionmobile

The debate over reversing the loss of value in Internet-based media is long standing. Most observers argue that the Internet has disintermediated the traditional distribution channels, including music labels, news publishers and books. In other words, the Internet bulldozed what was previously the long and bumpy silk road between content publishers and content consumers - and at the same time allowed everyone to become a content producer in what Wired aptly called nanopublishing.

At the same time, a more fundamental change has occured. The tsunami of nano and mega content has arrived via the Internet (ie the PC screen), not via the traditional channels like retail stores, music megastores, bookstores, news kiosks or the 7-Eleven across the street. This has had a fundamental impact to the value of the Internet, due to the fact that there is no convenient, ubiquitous payment mechanism to use on the Internet.

Let me explain why. To pay for goods like news, information, music or books you go to a retail store, hand over the cash, get your change back, and presto in the equivalent of two clicks you re’ done. Same with a credit card; hand out your VISA, sign here and walk away. All it takes is two clicks.

On the contrary, to pay for content arriving via the Internet you need 10s of clicks. Take your credit card, type your name, address (30+ clicks), now enter the 16 (s-i-x-t-e-e-n) digits of your card, don’t forget your expiry date (another f-o-u-r digits), oh and your CVC2 number (another t-h-r-e-e digits). Now let me check all this. And oops by the way your password provided doesn’t match so you have to enter all this again. Not to mention: do I trust this website with my credit card details? The sad truth is, that for any small amount, or as much as you ‘d pay for a newspaper, a magazine or a music CD,  60+ clicks are not worth the bother.

In the attention economy of today, each click churns customers. I would argue that its the lack of 1-click, convenient micropayment mechanisms that the Internet lost its value, not ‘pirated’ music, neither the democratisation of publishing. The poor adoption rates of paid-for content incentivised content producers (both the nano- and the mega-) to reduce their price to zero and thus establish a perception that everything accessed on the Internet is free.

Yet people are willing to pay for perceived value, not matter how small. Value can be created through convenience, choice, flexibility or customisation, as long as payment mechanism does not stand in the way.  iTunes, Spotify, and the array of paid-for music sites have combined convenience and choice with effortless payment; Spotify brings in around 35% of the digital music sales in Sweden, while 80% of Spotify users said they stopped filesharing.

So what does mobile have to do with all this?
Here’s the paradox. When applications are freeware or shareware on the Internet, why are people willing to pay $2.5 on average per iPhone application by the bucket-loads bringing Apple’s an estimated $2.4 Billion a year? Why are ringtones costing upwards of $1 when you can Google the same song for free? Why are people willing to pay over 1Euro for texting their vote to the Eurovision song contest or fork out $0.80 for virtual ice cubes on Flirtomatic?

Value exists in mobile, but not because mobile operators still run the game; walled gardens have fallen long ago. It’s because mobile phones offer a 1-click convenient way to pay for goods delivered over the mobile channel; applications, ringtones, competitions and social networking services included. And it’s all charged to your mobile phone bill. How more convenient could that be?

That’s the part where operators proudly claim that they own the downstream billing relationship to the user. But what they seem to ignore, is that they do NOT own the upstream billing relationship to the millions of content providers, nor the millions of goods providers that operator through non-mobile channels (retail, mail-order, web, etc). This is because mobile operators, sitting comfortably in their ivory castles have imposed extortionate revenue shares (typically 30%-60% of total revenues) with upstream content providers that can be justified not in terms of the value they add, but of the near-monopolistic exclusivity on payments charged to the users’ phone bill. Compare this 30-60% commission with the 2%-4% rates that credit cards charge. Mobile operators have so far failed to seize the upstream billing relationship as they only understand the value of the short head (as opposed to the long tail).

How mobile can bring back the value to the Internet
Mobile payments are making a big buzz in the industry, especially in developing countries like many parts of the African continent, where traditional banking infrastructure does not exist and mobiles offer an extremely fast and convenient way to exchange money between individuals in rural areas. But mobile payments have an equally important potential in the developed world, in extending upstream billing to content distributed over the Internet.

The most visible efforts to extend mobile payments to the Internet are those from iTunes, Google Checkout and Paypal (for purchases through an on-device storefront), and recently Amazon Mobile Payments (for purchases via a web page). All of these efforts are quite limited in terms of both their downstream addressable market and their upstream range of content publishers they have so far integrated with.

Mobile operators have a unique and unexploited potential in this game. Think of Internet payments which are authorised by entering your mobile number below the ‘buy now’ button. You get an SMS confirming the amount and the seller, you reply and bingo - in 3-4 ‘clicks’ you ‘re done. Such a payment mechanism is both trusted and ubiquitous. The only element missing from the recipe is reasonable commission rates of the order of 2%-4% charged by credit cards. Indeed, operators can reach where VISA cannot. Vodafone’s Vittorio Colao recently remarked how “mobile accounts are a fantastic payment platform for all digital goods”.

There’s a second, slightly more exotic scenario. Consider that Nokia with near-40% handset market share decides to equip all of its mobile phones with NFC capabiliies (NFC chipsets cost $2-$2.5 today and are expected to drop to $1 in 2013 according to this report). If Nokia decides to invest in deploying PC NFC readers under subsidy to Nokia phone buyers, then it has a chance to become a trusted provider of Internet micropayments. Or as Stefan Constantinescu (a Nokia connoisseur) argues in an open letter, Nokia should invest in creating a wireless payment infrastructure in retail stores starting with western and northern Europe, much like DoCoMo did in Japan.

Whatever the next 2-3 years hold, mobile payments have great potential for bringing back the lost value to the Internet.

Comments welcome as always,

- Andreas
follow me on twitter

Economics is an area of continuous research, both academic and industrial. Once in a while, new revenue models or new markets surface, which are followed by a string of industry capital movements. Take for example new revenue models being pioneered in the Internet like the cost-per-follower (ie being paid based on how many people are following you on twitter) or in the mobile domain (pay-per-app-activation when B2B provisioning applications on a device). New markets are continually formed around new solution types; in the fast-moving mobile industry for example, App Stores,  Social Addressbooks and Service Analytics are  new solution markets which emerged only in the last two years.

What’s more interesting is when entire new economies emerge, ie new systems for creating value and monetising from that value. I would argue that in the last few years we have been witnessing the creation of Augmented Economics, ie the economy formed by superimposing value on top of our physical world. But let me take a step back to explain.

There’s been a lot of buzz recently around augmented reality browsers. These browsers bring augmented reality to the mass market; now you can scan through the surroundings through your phone’s camera and see information superimposed, from advertising to siteseeing in real time. Augmented reality browsers have been made possible in a mass market sense thanks to the GPS and compass sensors  first appearing within Android and iPhone devices. The value in augmented reality browsing is in the connection between the physical world (what the camera captures) and the commercial information that is displayed on top. Already a number of startups have emerged to capture value in augmented reality browsers like Metaio, Total Immersion, Zugara, Layar, Mobilizy and Tonchidot (see here for a detailed review of augmented reality startups)

In a sense, Facebook is no different. Facebook is a platform that overlays virtual games and applications on top of the people profiles and mesh of relationships that exist in the physical world. Facebook is indeed a connecting platform between the physical world and 1000s of virtual worlds created by third parties. Facebook monetises through on-site ads for now, and moving to off-site ads, self-service ads and virtual goods which is expected to increase ARPU (average revenue per user) from $0.25 to $0.50 according to Fred Wilson, a prominent VC.

Flirtomatic, a popular mobile dating service in the UK, Germany and USA, monetises by offering social capital for sale. Flirtomatic allows users to buy social capital; users can send virtual ice cubes, auction themselves to the top of the service homepage, or even buy Ego services so they can eliminate bad ratings on their profile or bend the voting rules (see here for a good review of the service by Tomi Ahonen). Flirtomatic again monetises by bonding together the physical world with the virtual world where users can defy physics.

There’s lots more examples.
- Monopoly City Streets creates capital by allow users to buy virtual real-estate (viewable only through your browser) in exchange for real money.

- Cyworld, Everquest, World of Warcraft and Second Life are virtual worlds which monetise by subscriptions, virtual goods, virtual currency exchanges and ads by physical world brands. Fortune reported that the market in China for virtual goods is larger than the market for online advertising with Tencent, China’s largest messaging+Avatar+social networking service, generating $1 billion  in revenues in 2008, 90% of which is from virtual goods, as cited in the Business Model Database.

- A barcode (or QR Code, Data Matrix and Ezcode)  allows a mobile device to connect a physical product in a store or a poster in the train station to a wealth of online information, such as where the product ingredients came from, or when is the next train (the Economist has a good update on the commercialisation of 2D codes). Again monetisation is by providing the connection between physical and virtual worlds.

- Anoto, a Swedish company, produces technology to connect a digital pen with the origin of the paper that it’s writing on. For example, by writing on a business card, you can send that to the contact directly, or by writing on a recruitment form, you can have your job application dispatched immediately. Anoto monetises by acting as the link between the physical world (pen and paper) and the virtual world (that of service providers of business information, recruiters, etc).

There’s probably lots more examples where companies have formed connections between the physical world and countless virtual worlds. And as Clayton Christensen et al argue in Skate to Where the Money Will Be, those who control the interdependent links in a value chain capture the most profit. In other words, the platform that links the physical with the virtual worlds stands to profit the most.

It’s amazing how value can be created out of thin air.. in this case creating social capital that allows users to ‘augment’ the physics of the real world (time, money or influence). And as S Schaffer said the next Google might be a physical world connection company. That’s the world of Augmented Economics.

Looking forward to your comments,

- Andreas
follow me on Twitter: @andreascon

For years, mobile network operators have invested billions of dollars in networks, subsidized phones and targeted marketing campaigns. Yet they have neglected one of the most used applications on the mobile phone: the address book.

Recent events such as the launch of the INQ1 phone by 3, the acquisition of Zyb by Vodafone and the acquisition Cellity by Nokia, seem to prove that operators are finally beginning to appreciate the importance of the address book.  The boring address book is about to be rebooted with social address book services.

So, what is a social address book service and why are contacts so important? Who are the market players and why is this all happening now?

Behind the social address book
Network-based address book services are not really new. Back in 2004, Orange UK launched a network address book with Voxmobili allowing mobile synchronization of contacts and calendar events with a Web-based service. While initially a niche market, those services are now widely deployed and most of the Tier-1 operators provide a mobile synchronization or backup service. Those solutions are usually based on the OMA DS SyncML protocol and are integrated within the mobile operator infrastructure.

A social address book (SAB) is an online service which allows end-users to save their mobile contacts, synchronize them and link them up with their social network profiles. The contacts are no longer static, as they display presence, location and status updates. A social address book is usually coupled with a new mobile address book application, a type of ‘phonebook 2.0‘ which similarly transforms static contacts into a Skype-like buddy list. The company I worked for, Voxmobili (recently acquired by OnMobile), developed last year a product called (simply) Phonebook 2.0, and which happens to be one of the Google ADC 1 finalists.

Why is the mobile address book so important?
Along with the other core applications like the idle screen, the dialer, the call logs or the inbox, the mobile address book is one of the most frequently used applications on the phone. The address book is:

• The central enabler of voice and messaging. In a previous article, The Mechanics behind the Mobile User Interface, Andreas Constantinou clearly presented the place of the address book in user’s journey, where most calls are initiated from the address book.
• The ultimate retention tool. The mobile address book is the most precious vault of people’s life-long connections and relationships. While it is relatively easy to build an internet address book from email messages, it is much more difficult to retrieve a mobile address book in case of phone loss. The social address book service ensures that contact information follows the mobile subscribers, not the SIM cards or handsets. T-Mobile US with the MyFaves and Contacts service has executed this strategy amazingly well.
• At the heart of customer relationship. New mobile players such as Apple and Google are taking a piece of customer relationship from the operators. By integrating Facebook, Linkedin, GTalk and MSN into the address book, the operators have the opportunity to be back at the center of customer’s attention.

Who are involved in this new market?
The social address book landscape is one of the most fascinating in the industry as all the major players seem to be involved: mobile operators, handset manufacturers, internet giants, white-label solution providers and Silicon Valley start-ups:

• Mobile operators: 3 was the first operator to launch a phonebook 2.0 application with the INQ 1 phone. They will not remain alone very long. A video leaked on Techcrunch UK about a service called People that Vodafone is about to launch.
• Internet giants: Google and Microsoft have also launched synchronization services with Google Sync and MyPhone. Those services started from their webmail services, they introduced a while ago presence and lately synchronization of those contacts. Google also added location with Google Latitude and launched (quite silently) Google Profile. As usual, Google is launching services which are not initially completely integrated but we can already see where they are going.
• Internet service provider: Comcast acquired Plaxo last year. They are now putting a social address book in the center of their online services.
• Handset manufacturers: Apple has developed its own MobileMe service. Some rumors talk about a possible social networking app within iTunes. In turn, Nokia launched OVI Contacts and acquired cellity. They are also launching a quite impressive Maemo-based phone, the N900, with Lifecasting. HTC has launched a phonebook 2.0 integrated to the Hero, while Palm provides the Synergy service which links all contacts in a single view on its Pre device.
• B2C start-ups: Many start-ups like Skydeck are in this space. We can find mature ones like Plaxo and smaller ones like ZYB and cellity. Most of them have already been acquired. Given the big players involved, I doubt there will manage to grow significantly their user base if they remain independent.
• White-label network address book providers [updated]: Here we can find Colibria, Critical Path , Funambol , FusionOne and OnMobile . FusionOne powers the Verizon service, Funambol provides the Earthlink and AOL solutions while OnMobile is behind the Orange , Telstra , T-Mobile and Turkcell services.

Apart from those actors, the mobile industry has started several new standards initiatives. The OMA is working on the CAB (Converged Address Book) specification and the GSMA has released the RCS (Rich Communication Suite) specification. RCS is now a live commercial service in South Korea with KT, LG Telecom and SK Telecom providing an interoperable service.

Why is this happening now?
The success of Facebook and Skype has shown that people-centric services are highly in demand by end-users. The idea of transforming a static list of phone numbers into a convenient view of relationships has become natural.

Technology is another important factor. The synchronization protocols (SyncML or Exchange Active Sync) are mature and widely deployed while mobile platforms are much more open. For instance, on Android, all applications are created equal which means that any developer can create their own flavor of address book. The Internet platform is also more open than ever: social networking sites, Webmail and even Skype provide rich API allowing an easy integration.

Who will own the address book?
There is no simple answer. There will be competitions and “coopetitions” between operators, handset manufacturers, social networking sites and webmail providers to control it. Some handset manufacturers and small operators won’t even try to enter this game, while some others will play an important role.
I believe that in the long run, this service will benefit the end-users. They will still own their data, they will enjoy a much simpler communication experience, they will never lose their life-long connections and they will be able to use their contacts across multiple devices and multiple applications.

Looking forward to your comments.

- Florent

[Florent Stroppa is Product Director at OnMobile, the largest mobile VAS provider in India. He previously worked as Director of Product Management at Voxmobili, a Paris-based company specialized in social address books and synchronization solutions for mobile operators.]

Since our very first blog post in January 2005 (Symbian: only one way to go) the blog readership has grown immensely - for example, the most popular posts have exceeded 10,000 reads, like the The Mobile Application Store phenomenon, The significance of Google’s Android and Flash Lite: Facts and Figures.

Readers to the blog have grown steadily to around 2,100 readers as of July 2009 as you can see from the graph below. There’s some jitter due to the way Feedburner is measuring blog readers (you can see the live count on the blog sidebar, too).

Website visitors have been increasing continually, too, averaging over 7,000 unique visitors per month, as of July 2009. A key part of this has been ensuring high quality of articles; although at the expense of posting new articles only once every week or so.

Who’s behind the VisionMobile community?
There’s tons more stats we could dig up, but we were missing a key aspect: who are the readers of the blog? Who is behind the VisionMobile community and what do they want to see on our site?

- Blog readers 2,000+ via RSS and email
- Unique visitors/month: 7,000+, driven by content and twitter referrals
- Reader profile: industry insiders, bloggers, developers?

Community survey
There’s lot’s more to ask, from You that is, the reader. Are we covering the topics of interest to you? Can we be improving our analysis and articles? Is there a report that you’d like to see us working on? Does our content really match our audience?

Help us map the community by spending 60 seconds filling in our survey.

As an incentive, we are running a draw for five free Mobile Industry Atlas wallcharts for survey participants. The survey will close on Wednesday 30 September and we will notify the winner by email.

What will we do with the results?
We’ll take your feedback seriously. If there is something that we are not doing right, we’ll address these points constructively. We’ll also publish the results of the survey so that you can also get a better idea of the who else in your community is visiting this site.

So - help us map the community by completing the community survey.

Thanks - and keep the conversation going,

- Vanessa

In just two years smartphones have transformed from a niche product category to a fast growing segment playing key role in competitive struggle between mobile and Internet giants. According to Gartner, smartphone sales grew healthy 27%, while overall cell phone sales declined 6% in Q2 2009.

The unprecedented success of iPhone changed market requirements almost overnight; today smartphones are all about smooth delivery of digital content, applications and Web 2.0 services.

Coming from very different backgrounds, BlackBerry OS, Windows Mobile and Symbian/S60 were designed to achieve very different product objectives, being it a business productivity tool or a unified platform for wide range of high-end phones. Yet these software platforms will require radical improvements to compete with iPhone and Android, and ground-up design for the mobile Internet age.

BlackBerry OS is part of an end-to-end mobile messaging solution developed by RIM for the enterprise market. It was designed to integrate with enterprise collaboration systems, provide state-of-the-art security and operate over low-bandwidth 2.5G cellular networks.

Windows Mobile evolved as a variant of the Pocket PC operating system, adding a cellular phone to the PDA. Windows Mobile was conceived as a companion product for Microsoft Windows operating systems and Office application suites.

Symbian OS together with ‘Series 60’ user interface powers Nokia’s high-end phones. It was designed to provide consistent software platform for very broad range of Nokia phones - From souped-up feature phones like 6120 to multimedia power-phones like N96 and business-oriented phones like E71. As a result, Symbian/S60 is skewed towards phone functions, really being a good mobile phone with multimedia capabilities and supporting downloadable applications.

We will return to the legacy platforms later in the discussion, but in general, legacy smartphone platforms do a decent job in their respective “comfort zones”. Nonetheless, when taken out of their natural environment they fall far behind in comparison to iPhone and Android. These modern platforms were designed for new market requirements without constraints of legacy code or backwards compatibility considerations.

iPhone and Android
While technically very different, iPhone and Android share many common traits. Both are designed as true multi-purpose devices fulfilling a wide spectrum of business and personal use cases. The user interface of these software platforms relies on relatively large touch-screens with gesture-based controls, designed for device personalization, easy discovery, delivery and consumption of content, application and services.

Downloadable applications further extend the spectrum of possibilities with the device. iPhone and Android offer software development environments allowing fast and easy creation of wide array of novel applications from turning the device into a musical instrument to location-based collaboration services and augmented reality systems.

High-speed 3G networks and Wi-Fi connectivity finally brought Web applications to mobile devices. iPhone and Android are equipped with powerful state-of-the art Web browsers based on the open source WebKit engine. Moreover, iPhone and Android browsers provide constantly improving support for emerging HTML5 standard, which brings capabilities of Web applications even closer to capabilities of applications installed on the device. This includes JavaScript performance improvements, location services and offline capabilities which are critically important on mobile devices.

There is wide gap between modern and legacy smartphone platforms in all these areas, calling for radical improvements to the legacy platforms. This gap cannot be closed by just user interface face-lifts, launching application stores or even going open source.

Blackberry
BlackBerry is recognized for its user interface optimized for email and productivity applications. It, however, showed its limitations on BlackBerry Storm – Not such a successful touchscreen “iPhone killer”.

The BlackBerry application environment is based on the J2ME framework with proprietary extensions by RIM. The J2ME framework was originally designed for feature phones and as such restricts access to device capabilities available to applications. Proprietary extensions introduced by RIM to J2ME further deepen fragmentation and lack of compatibility characteristic of the J2ME environment.

BlackBerry is a closed platform tightly integrated with BlackBerry Enterprise Server (BES). For example, there are six different methods for an application to open up an Internet connection. Instead of going to the open Internet, most of them end up traversing BES in the enterprise data center. While this approach makes perfect sense for many enterprise use cases, it does not necessary work well for the open Internet. Furthermore, BlackBerry platform utilizes proprietary Web browser, which obviously slows down adoption of latest Web technologies by the BlackBerry platform.

Taking the BlackBerry platform out of its natural habitat of corporate messaging stretches capabilities of the architecture. Without significant improvements and openness in application and Web services frameworks, BlackBerry will find it difficult to complete with iPhone and Android outside of its established customer target segment.

Windows Mobile
Upcoming Windows Mobile 6.5 (Windows Phone by its new moniker) promises much-needed user interface improvements and a better Web browser. Unfortunately, the new version of Windows Mobile is still based on the same outdated version of Windows CE kernel, which was responsible for the lack of stability and responsiveness plaguing previous versions of the platform. Windows CE 5 limits applications to 32MB of memory per application and is restricted to 32 total processes in the system.

The Windows Mobile application environment is based on WIN32 and .NET Compact programming interfaces. While well understood and supported by software developers, these programming interfaces represent scaled-down versions of interfaces designed for Windows on PC. This environment is too complex and outdated compared to modern programming and mobile application paradigms.

All in all, Windows Mobile 6.5 appears to be an incremental stopgap solution. Presumably, the next major Windows Mobile version will leverage know-how gained by Microsoft with the acquisition of Danger, and provide long-term response from Microsoft to smartphone challenges. The big question is when will it come to the market?

Symbian/S60
Nokia’s Symbian/S60 user interface is infamous for its complexity and is optimized for making voice calls. It can greatly benefit from basic usability enhancements in practically everything else. For example, there is absolutely no reason why placing an application shortcut on the home screen requires going through nine (!) menu layers, or setting a meeting date cannot be done through a calendar widget. (disclaimer: I own Nokia E71).

Symbian/S60 offers multiple choices for application developers: Native Symbian code, J2ME, Flash Lite, Web Runtime and even Python scripting. None of these choices is great by itself - each has its own limitations and compatibility issues. Native programming has a steep learning curve and unnecessary complex signing procedures, while J2ME and the Web Runtime are too limited for modern applications.

Whilst the S60 Web browser is also based on WebKit engine, it is slow and lacks HTML5 capabilities supported by iPhone and Android.

Moreover, Nokia’s decision to open Symbian/S60 source has stalled development of the platform. It will be very difficult for Nokia and its partners to make major improvements to the platform in parallel to moving the platform to an open source model.

Summary
iPhone and Android set new standards and, at least in the medium term, will continue to lead the way in all major areas of smartphone software. There are no quick fixes for legacy platforms and it will take considerable time and massive R&D resources for RIM, Microsoft and Nokia to break from limitations of their product architectures and legacy code.

It will be great to continue this discussion on the future of the smartphone software platforms in the blog comments. Your feedback is much appreciated.

- Michael

[Michael Vakulenko has been working in the mobile industry for over 15 years starting his career in wireless in Qualcomm. Throughout his career he gained broad experience in many aspects of mobile technologies including handset software, mobile services, network infrastructure and wireless system engineering. Today Michael consults and provides expert training to established and start-up companies, and can be reached at michaelv [/at/] WaveCompass.com ]

Openness is a much-misunderstood word; a kind of good-will moniker to which people attach an impressive variety of definitions; open source code, open standards, open handsets, openness as in transparency, shared roadmaps, open APIs, open route to market… It’s a very forgiving term as far as definitions go.

One of the industry’s favourite facets of openness is of course open source. For the past three years we ‘ve researching open source here at VisionMobile, partly because of our training course, and partly out of a drive to understand what this all means for the industry.

Lots of software vendors and consortia have embraced open source in some form or other; Symbian Foundation, LiMo Foundation, OHA/Android, Nokia Qt, Nokia Maemo, WebKit, GTK, Eclipse IDE, Sun phoneME and Funambol are the main efforts that have hit the limelight.

So what is open source ?
Open source licensed software carries four basic freedoms; the right to access (source code), modify, distribute and contribute to the software. These freedoms have been embodied in the key licenses – GPL, LGPL, APL, EPL, MPL, BSD and MIT – which are used in the vast majority of open source projects. The licenses in turn determine the rights and obligations that use of the source code carries. Unsurprisingly, strong copyleft licenses (read: GPL) are rarely used in mobile products, due to the OEM concerns for downstream liabilities.

But what’s often missed in open source discussions is how open source licenses tell only half the story.

Licenses typically govern control of the source code. But in the mobile industry, source code and products are two very different things. For example; while you can play with Android source code to your heart’s content, are the latest code check-ins publicly visible ? You can peak at Symbian Foundation’s EPL-licensed source code, but who arbitrates what changes go into Symbian? You can buy a LiMo-compliant handset, but as a LiMo member can you expect LiMo handsets to ship with your source code contributions ? You can create your own WebKit-based browser, but why is it so difficult to get your contributions back into the ‘tip of the tree’?

It turns out there’s often no ‘official’ answer to these questions, and when there is, the answer is a resounding No. Indeed, there are 10s of questions you could be asking to these ‘open’ projects or products, and none of these is within the bounds of the open source software license; they are in the small print or what’s known as the governance model.

We ‘ve long been tracking the who’s who of mobile open source; what’s most interesting is how the popular open source projects (Android, Symbian, LiMo et al) map in terms of the spectrum of licenses and governance models. We ‘ve done that as part of our training course, and you can peek at the summary in the next chart:

The picture that emerges is one where :
- open source licenses (the large print that covers source control) are widely used, converged and well understood, while
- governance models (the small print that governs product control) are proprietary, diverging and poorly understood

Governance models can be simplified to indicate the democracy of influence on an open source product; on one end of the spectrum are autonomous communities where opinion leaders influence the direction of the product (see Linux), while on the other end are single-sponsor communities where the product roadmap is influenced by a single company.

In reality, things are much more complicated. There have been many attempts at classifying governance models (most notably the work of West and O’Mahony), but there is really no universal dictionary, no certification body, and an excessive amount of  ‘openness’ marketing hype to help obscure rather than enlighten the mobile industry.

Governance models are in effect multi-dimensional; how do you control access to a product, determine influence mechanisms, or manage IP rights? Here’s a few questions you should be asking to assess the openness of a product’s governance model (in particular, think Android, Symbian and LiMo when asking these questions):
- Are code check-ins publically accessible (and on a realtime basis) ?
- Is the product roadmap publically available (and how far does it stretch) ?
- Are any of the above accessible to members only ? Are there any fees or contractual commitments (NDAs, etc) required for members?
- Who has access to check-in code (and what is the process for check-ins) ?
- What is the arbitration process in case there is a conflict between two contributions to the source code ?
- Who has the authority to release code and binaries (and how is the release schedule determined)?
- Who gets to decide if a contributed component is optional or mandatory (downstream influence)?
- How is the roadmap formed ? What is the process and who has voting rights ?
- Are IP rights (patents, copyrights, etc) of contributions maintained or automatically transferred?
- Are there any support implications for parties who contribute source code ?
- Are there any safe harbour provisions for contributors to the source code ?

What this industry needs is not more marketing hype, but more education and clarity on governance models, and a benchmark - an openness index - for determining the true transparency of an open source product, and for pushing the corporate sponsors to play fair. We have been quietly working towards developing an openness index and are keen to hear from companies who want to make this happen.

Governance is one of the most understated topics in the ‘open’ mobile industry today, yet one of the most fundamental in the direction where the industry will be taking.

Open is the new Closed. For now.

- Andreas
twitter: @andreascon

We recently published a report on the Active Idle Screen market (available here) as part of our Atlas research; in this post I ‘ll highlight some of the most interesting conclusions.

The market of idle screen (aka home screen or phonetop) solutions has grown considerably; in 2002-2006 it was kick-started by active idle screen (AIS) vendors like Abaxia, Cibenix and Celltick and tier-1 operators like Orange; in 2007-2009 it has been capitalised by Apple, HTC, Samsung, LG and increasingly Nokia, Android and Windows Mobile; In 2010-2011 we believe that the idle screen will be elevated into precious real-estate divided across the handset OEM, operator and service providers, led by Nokia.

The role of AIS vendors in an evolving market
Today active idle screen (AIS) solutions are available from Abaxia, ACCESS, Celltick, Cibenix, Insprit, Nuance, and SurfKitchen. mPortal, PointUI and SPB Software have also built custom AIS solutions.

The active idle screen market can easily be dismissed as a rapidly shrinking one; idle screen customisation technology is becoming a commodity platform feature while handset OEMs are moving in to claim that same territory. But that would be rushing into conclusions.

AIS vendors act as the commercial matchmakers across the disparate camps of network operators and mobile handset manufacturers; operators will always be looking to go a step further in differentiating on the most premium real estate on the handset, i.e. beyond what is available out of the box. For example, some AIS vendors are starting to offer post-sales idle screen management that is not yet available by OEMs.

Moreover, as global operators manage regional device customisation requirements more centrally, so the need for AIS vendors will increase as the one-stop agent between the operator group and the manufacturers.

European Tier-1 operators like Orange, T-Mobile and Vodafone are developing or have already developed 100-200 people internal software development teams, but we don’t see this as denting the demand for AIS solutions much; operator know-how on successfully delivering software solutions across OEMs is still painfully scarse and their learning curve is slow.

Naturally, AIS vendors will also have to morph and adapt in response to the times. Revenue models are shifting clearly away from per-unit royalties for all pre-load software (i.e. embedded in ROM before the handset is shipped). Software vendors, including AIS vendors will have to follow suit. As such, the more successful AIS solutions will be those that monetise through per-active-user or per inventory (primarily CPA or time-based) revenue models, which are better aligned with the interests of operators and ad publishers.

In order to extract value during the post-sales phase, AIS vendors will have to add value in service delivery, service update, user profiling or targeting; here the fundamental premise holds: you can only extract value where you add value.

Moreover, AIS vendors will have to move away from selling platform enablers to offering vertical solutions, managed and hosted on behalf of the operator. Such vertical solutions can be built around innovative applications like ‘signature’ user interactions, intelligent search, service storefronts, phonebook 2.0, inventory analytics, and the idle screen as a ‘feudal system’.

I ‘ll next discuss these key applications that we believe will be hitting idle screens from 2009.

Key applications: innovation on the idle screen
During the last few years we have seen the idle screen function as a launchpad for device functionality, service discovery, advertising and contacts search. Such product features are now becoming commonplace amongst AIS vendor offerings. As technology is becoming less of a differentiating characteristic, we are seeing many new innovative applications surface.

Signature interaction paradigms: the increase of handset functionality and applications put unhealthy demands on the idle screen for information compression. How can you cram 100s of features on a screen 2.4 x 4.5 inches? Answer: by innovating with new user interaction paradigms.
We have seen user interaction paradigms evolve from soft key, to 4-way navigation, to gesture-based navigation with the Apple iPhone and Palm Pre. Interaction paradigms are particularly important when navigating dense information and this is where we believe there is considerable demand for innovation on the idle screen.

Clever interaction paradigms involving sensors (e.g. accelerometer, compass and tilt sensors) will help in two important ways; firstly by adding multiple dimensions to the otherwise 2-dimensional idle screen; and secondly by allowing OEMs and operators to create differentiating and potentially exclusive user interaction paradigms. This will be an area of intense research in the next 5 years.

Service storefront: The icon grid is becoming the de facto user interaction paradigm for both smartphones and feature phones. Placed on the idle-screen this icon grid paradigm is ideally suited for discovering and accessing new services; a paradigm lovingly associated with widgets.

We believe that the icon grid paradigm will be increasingly used to implement service storefronts, where each operator service is associated with a icon that links to a web or WAP service or even displays service status as part of the same icon. The service store will revolutionise service discovery and delivery - think of the 100s of services today available via USSD, premium SMS and WAP that can tomorrow be exposed as icons or widgets. It will also allow service updates to be reflected on the service store much like the number of unread messages shows up on a Facebook iPhone icon; this should allow service usage to be extended way beyond the famous honeymoon period.

Intelligent search: The idle screen is the starting point for all user journeys; it is therefore natural for the idle screen to provide shortcuts into functionality that is used most frequently, such as search - whether it is for contacts, voicemail summaries, free minutes remaining, where’s-my-nearest, what’s my Facebook status and many more creative search scenarios. We believe that the idle screen is ideally placed to aggregate all such information from third party sources in the internet cloud, the network and the device.

Phonebook 2.0: as the starting point of every user journey, the idle-screen is also the pivotal point for placing the phonebook. We therefore see the idle screen merging in phonebook 2.0 functionality, i.e. integrating not only contacts, but also their location, presence and social networking status. Already, predictive phone book search from the idle screen is becoming commonplace in smartphones such as Nokia E-series and Windows Mobile devices but also feature phones such as Sony Ericsson K, W and C series models. The transition to phonebook 2.0 is the logical next step.

Inventory analytics: it is well known that the idle screen is the most valuable real estate for ad inventory. What is less known is that as the starting point for each user task, the idle screen can track the beginning and end of every user journey, whether it is browsing a web site, looking up a contact, making a call or sending a text message. As such, the idle screen is the pivotal point for capturing usage analytics and therefore attaching richer profiling and segmentation information to the inventory. This implies a boost for the CPCs and CPAs on the idle screen,which are already at the highest valuation across the handset.

The idle screen as a feudal system: Up until the Middle Ages, the land tenure and political structure in Europe was build around the concept of feuds; pieces of land owned and maintained independently. The idle screen has traditionally been a piece of real-estate that is near-impossible to divide  up for the lack of a standard measurement unit; it is common for handset OEMs and operators to hold months-long disputes on the placement of this service or that Start button on the idle screen.

Interestingly, the icon grid paradigm, popularised in the notion of widgets, can be used to divide the real estate of the idle screen into distinct areas owned by different parties (OEMs and operators), much like land is divided up in a feudal system.

Such a paradigm is made possible thanks to a new standard unit of measurement - a single icon - for dividing idle screen real-estate. We are seeing idle screen solutions such as Nokia’s Home Screen adopt this approach.

More importantly this will lead to innovative revenue models where the idle screen real estate can be leased or sold by impression, length of time or active usage. This will allow handset OEMs to trade ‘land’ for a higher handset wholesale price, for a per-icon/per-month lease or a revenue share off operator services.

Who will own the screen?
And so we come to the perennial question: who will own the idle screen?

Following DoCoMo, SKT, Orange and Vodafone we see all European Tier-1 operators issue RFIs for idle screen solutions, expanding to tier-1 operators in Latin America and the Middle East. These Tier-1 operators will want to leverage their purchasing power to deliver differentiation and accelerated service discovery on the idle screen.

Tier-2 and Tier-3 operators will also be opting to customise the idle screen, thanks to variant management (off-the-shelf device customisation) options available by the OEM, starting with Nokia’s S60, Series 40 and Android devices. The big winner at the end of the day will be the user. A clear trend appearing is the move away from operator-centric customisation to user-centric personalisation. The idle screen will be no exception, where we see the widget paradigms favour user personalisation.

In the long run, the idle screen, much like the customer’s wallet, will not be owned by any single party, but shared. In this economy, best placed are those who provide the technology platform and commercial brokering for service delivery on the idle screen and leasing of real-estate among multiple parties.

What’s more, ownership and leasing will not be just about pre-load deals, but about post-sales management of the idle screen. We argue that, what will be important is owning the in-the-hands experience, not the out-of-the-box experience. It is the post-sales idle screen management where sustainable value and revenue will be coming from.

Long term, we envisage that ownership of the idle screen will become as elementary as customer ownership; as ubiquitous as handset branding; and as important a monetisation tool as handset accessories.

Comments welcome as always.

- Andreas