Mobile musings and wireless wanderings

Mobile 2.0 Starts to Emerge

Although we’ve seen some early attempts at Mobile 2.0 in 2007, Mobile 2.0 will emerge in 2008. To date, the so-called 2.0 services are either basic, partial access to a Web 2.0 service via a Mobile Internet Browser (i.e., Mobile Web 2.0) or applications that represent one aspect or feature of Web 2.0 such as user-generated content, community, collective intelligence, or rich media. Mobile 2.0 services will emerge in 2008 that finally integrate the social web with the core foundations of mobility – personal, local, always-on and ever-present. Furthermore, these services are based on a new generation of wireless devices that enable rich, interactive services that integrate the full range of mobile consumer touch points including talking, texting, capturing, sending, listening, viewing.

Integrated, Multi-Platform Services

It is the beginning of the end for mobile being treated as a stand-alone channel. Mobile media must and will be integrated into an overall digital experience. Services will be reconceived, manifested and integrated across multiple platforms, instantiated via different forms of access and engagement. Mobile devices will become (i) a vehicle for the discovery of content and services, (ii) a remote-control for all things digital, and (iii) a personalized point of access and distribution for all things digital.

Mobile In-App Advertising

In 2008, we will see a rapid increase of digital advertising techniques derived from the Internet (e.g., search, display-based and video), we will also see the beginning of advertising and sponsorship that is made for mobile. In-application advertising, in which brands, ads and promotions are contextualized and integrated into applications and services are just the beginning. Although in 2007, we saw new types of inventory emerge that integrated commerce (e.g. via recommendations, theming and bundling), we expect to see in 2008 the coupling of relevancy-based engagement with contextual commerce. While search and display-based methods will be the primary revenue sources from mobile advertising in 2008, look for personalized, branded media and unique inventory coming from in-application advertising.

Mobile Content Retailing

Mobile operators will continue to cull the amount of content they offer via their portals and storefronts. Furthermore, operators will adopt digital retailing strategies we’ve seen on the Internet that includes better overall user experience, smarter use of placement and “shelf-space”, and more efficient, personalized commerce engines. They will also look to off-deck content partners to be a significant participant in the growth of mobile content sales.

Golden Age Of Mobile Apps

With the success of Google’s mobile applications (e.g., Gmail, Google Maps, YouTube) and Yahoo! Go, content providers and mobile operators, following the consumers’ lead, are warming up to dedicated applications again for mobile. The verdict is still out whether a browser is the best vehicle for presenting and mediating the 2-inch mobile experience. On higher-end phones, such as the iPhone it is clear that the browser will have a seat at the table. By moving from “closed” operating systems to operating systems with published APIs (e.g, Symbian, Google, Microsoft), applications will be able to provide a much better and deeper integration with the key aspects of the mobile phone (PIM, calendar, camera, location, video), which will enable developers to set a new bar for rich, interactive mobile applications and services that will surpass the experience provided by the mobile browser. There will also be a much richer range of application types, moving well beyond on-device portals and widgets.

New Media Companies will Interact Directly with their Audience

To date, the mobile operators and content providers have dominated the sale of mobile content. The mobile operators provide the dominant vehicles (i.e., portals and storefronts) for enabling consumers to find, access and buy content. The content providers have benefited from both from these operator portals and storefronts as well as 3rd party, off-deck D2C services. In 2008, we will see new media companies (e.g. web companies) move to mobile en masse which will not only create off-deck as the dominant vehicle for discovering mobile content but also radically change the nature of the content and services. The nature of the services will transition from Mobile 1.0 services (i.e., broad-cast services that include ringtones, wallpaper, games, video) to Mobile 2.0 – rich, interactive services that integrate the social web with core aspects of mobility.

Being Open: Growth, Friction or Fragmentation

Although openness will lead to consumers having greater choice - better products and services offered at better price points - open devices and networks will create more fragmentation. And, it is not clear that open access can function as a primary growth driver until other enablers are in place. If you think about the rapid growth of Web 2.0, and think about what will drive “Mobile 2.0″, it will be: (i) ubiquitous mobile broadband access - this will be driven by things like flat-rate pricing, mobile advertising solutions that provide alternatives to premium billing and other compelling consumer propositions of content / service bundles that make services beyond voice and ringtones a “must have”; (ii) frictionless distribution – the ability to easily deploy and distribute services directly to the end-user, off-deck; (iii) affordable, unrestricted access to enabling software platforms ( i.e. tools & technology - the picks and shovels). Web 2.0 services rapidly emerged and thrived because of the ability for any web developer to create and deploy services. Unlike the mobile tools on the market today, creating web applications & services doesn’t necessarily require an advanced degree in engineering.

This is Not Your Father’s Smartphone

In some sense, 2008 will be the liberation (or death depending on your outlook) of the Smartphone as a category. The devices formerly known as Smartphones continue to be a key driver for mobile data usage in general and content / service consumption in particular. We will see continued growth from Windows, RIM and the iPhone in the U.S. and continued strong growth of Symbian internationally. Meanwhile, the distinction between Smartphones and feature phones may be a less important distinction in the coming years. The appearance of the iPhone not only put an end to the Smartphone as we knew it and ushered in a new generation of devices. Nokia, Apple and HTC have raised the bar in terms of user experience and relevant feature-sets.

In November of 2006, I made the following predictions about mobile content and services for 2007. I thought reviewing them would keep me honest while making my 2008 predictions.

Will the Real Aggregator Please Standup?

As media and entertainment companies are taking their content both directly to carriers or directly (off-deck) to consumers, pure play content aggregators will be pushed out of the market. InfoSpace and Motricity were just the start of that trend, which will become stronger in 2007. The “real” aggregators (aka broadcast networks and publishers) will take up this position. For example, TV networks such as CBS, NBC, FOX, HBO and ABC have always functioned as content aggregators as well as both programmers and branded destinations. They will increasingly take center stage in 2007 on par with carriers.
We have certainly seen a number of examples this year of many publishers doing direct deals with carriers and not going through aggregators (e.g., directly licensing video content and branded services). Furthermore, publishers are aggressively launching WAP / Mobile Internet destinations for a number of their brands. A symbolic indicator of this is that Zingy – one of the early mobile content aggregators – announced they were getting out of the content aggregation business. While Motricity purchased InfoSpace’s content business, they also have taken a number of steps towards diversifying their ability to be more of a content enabler than solely an aggregator (e.g., buying Gold Pocket, M7 and focusing more on aspects to optimize commerce such as merchandising and personalization).

When it comes to media, search is a feature not an application

When you turn on your television or open iTunes, you do not want an empty screen with a search box. Media & content are much more conducive to discovery - navigation driven, browsing environment. Search will certainly be a utility feature for rapidly finding content, but consumers want to have a personalized “directed navigation” discovery experience that shows them what is popular, what is new, as well as recommendations on what else they would like. Look for new media, music and TV discovery applications and services in 2007 that are rich, interactive environments which make it easy for consumers to find, try, buy, share and enjoy content on mobile phones.
Discovery remains to be a key area of focus. Alltel’s launch of Celltop has demonstrated the importance of a rich discovery, navigation environment that is easy to use in driving commerce. Search has primarily been driven in mobile by being tied to recommendation and personalization engines. It is a must-have feature in mobile portals and storefronts but it has not become the primary “start screen” that we saw on the PC.

Look out for the 21st century media network

The 20th century has been dominated by mass linear broadcast networks (radio, television). Towards the end of the century we saw the emergence of “on-demand” networks (cable, broadband). Now we are seeing media production and distribution of content move from “supernodes” (broadcasters) to the edge of the networks where both carriers and media companies will enable consumers to create and enjoy content directly from the edge of the network - the mobile phone. Traditional mobile platform and infrastructure providers that deliver “static” content are not equipped to handle the requirements of the next-generation of digital lifestyles that expect on-demand, interactive, community-based experiences. There is no option but to engage the networked consumer. Next-generation platforms are required that enable rich, interactive experiences that are two-way and not simply non-interactive linear broadcasts. Next-generation platforms will engage end-users with user-generated content, community (message boards, blogs), interactivity (voting, rating, polling), viral (send to friend) and rich media (video, audio, dynamic text / image feeds). Look for the emergence of “actant networks” - next-generation democratized media networks.
We have certainly seen indicators of the importance of mobile phones in enabling consumers to be the producers and distributors of mobile content. Companies like InterCasting Corporation and mywaves. Although we are seeing a number of the pieces emerge, it will take a number of years for the wireless industry to shift from a communication network to an actant network.

Mobile Advertising: Interruption vs. Engagement

This next year will actually see more advertising on mobile, but with a conscious effort not to turn away consumers. There will be an increased focus on delivering advertising outside the traditional banner model with a focus on adding value to the consumer; interruption vs. engagement. This is still the Wild West so no one is quite sure as to the model. Look for more play, but with a drive to keep the Average Joe tuned in and not off. Mobile advertising is certainly more a matter of when than if. Keep in mind that mobile is really a hybrid between both Cable and Internet business models. Multiple revenue models will thrive including ad-based / sponsored, premium subscription services and micro-payments / commerce. Look for new types of inventory to emerge underpinned by contextual commerce coupled with relevancy-based engaging mobile media experiences.
We are just seeing new types of inventory and engagement methods emerging. This prediction did not really come about in 2007 although 2007 will likely be seen as a key tipping point in the acceleration of mobile advertising. Third Screen sold to AOL, Enpocket to Nokia, and over 25 companies received venture funding around mobile advertising business models. As such, we are seeing companies deploying search and screen-based (i.e., WAP banners) advertising solutions. A majority of the revenue is still being generated from mobile marketing (e.g., SMS direct marketing campaigns). The Screen-based advertising market will likely end up being less than $50M in 2007. Accordingly, other forms of engagement are still in much earlier stages to make an impact in the overall mobile advertising market, e.g., video, rich media, in-app advertising.

Consumer Proposition: What do they want?

The user experience is still the defining driver in the success of mobile initiatives. User interface, navigation design and time to content are important, but to maximize revenue the consumer value proposition needs to fit. The existing consumer brand expectations and values need to be reinforced and differentiated via mobile. You can expect the appearance of rich, interactive, network-based, on-demand mobile applications that enable consumers to find, try, buy, share and enjoy more content.
There are two examples that make this case. The Apple iPhone and the Yahoo! Go on-device portal. Apple’s iPhone demonstrated that user experience is paramount in mobile and we have yet to see the full ripple-effect of Apple having raised the bar in this regard. Yahoo! Go is an early indicator of the importance of offering consumers “rich, interactive, network-based, on-demand mobile applications”. And, finally, I believe that the Google Android initiative arguably goes back to user experience. After surveying the mobile landscape, Google realized that the user experience was poor overall. Before they can leverage their search and ad platforms in mobile, they needed to first set up the conditions so that a compelling user experience was possible.

Conquering the Fragmentation Barrier

Mobile media distribution and delivery is many times more fragmented than the Internet and cable (e.g., various head-in formats). There are 1,000s of phones, 100s of network configurations and dozens of media formats. Standing between the media companies and consumers is a fragmented wall of content formats, mobile phone types and wireless networks. Currently due to these constraints and the device / network complexity, media companies are simply licensing bits of their content to carriers who are only able to make it available to a fraction of the population. Media companies and carriers do not have a solution to this complex problem. They recognize that in order for mobile content to evolve from an emerging opportunity / potential into a business; new distribution platforms and their ability to reach a majority of consumers with great user experiences are required. Who can truly provide the richest experience to the most number of consumers? This coming year will unmask the fakers in this category.
Fragmentation still remains a key problem. Unfortunately, opening up networks and devices is going to compound this problem. For the consumer this will represent more choice in terms of devices and service offerings. At the same time, it may cause more frustration since there will be very few service and content offerings that are available widely on all devices.

Mobile DIY / UGC: Who is watching out for the Teens and Tweens?

As user-generated content increases in mobile, YouTube etc, age verification and content vetting will become a hot topic in the US wireless arena as more teens and pre-teens access content on mobile phones. Who is monitoring the content and how confident will parents feel about the safeguards? Wireless service providers will be much more stringent in acting as a gateway to the type of content that they will permit their customers to interact with on their networks.
This remains an issue. Mobile operators have a trusted relationship with their subscribers and remain cautious in what content is offered to who and under what conditions. Despite the bad press coming out about the demise of MVNO’s such as ESPN and Amp’d, there are some examples of MVNO’s that are addressing the needs of specific constituents rather than assuming that content offerings alone will solve the problem. We are seeing innovation and great solutions to this problem coming from Virgin Mobile and Kajeet For exmple, Kajeet provides a solution that is compelling to tweens with the safeguards parents would expect.

It is clear that recent initiatives by Apple and Google are an effort to create an untethered version of the Internet. Under the guise of “openness”, often a euphemism for a change of control, speculation about their intent and various iniatives has captured everyone’s imagination. For Apple, openness will enable them to reproduce their vertically integrated, end-to-end hardware and service offerings within mobile. For Google, openness will enable them to reproduce their position as the core search and advertising platform. This will certainly have positive ramifications for Internet companies vying to gain a foothold in the mobile ecosystem and extend their reach to consumers while they are on the go. It is yet to be determined if this is a win for the consumer in particular, and the telecommunications industry in general. Either way, it is an important step forward.

The impact of these changes can only be measured once we have an understanding of how many consumers and networks this will reach, i.e., the impact will be substantial if you have a large number of subscribers that have access to low cost, open devices enabled by open networks. Worse case, we end up with two new Smartphone platforms to compete with Microsoft, Palm, Symbian, RIM and UIQ. Best case, we see rapid convergence of networked media and services over a common IP network across a wide range of devices, mobile, PC and others.

These recent wave of announcements around openness raise a key question about the impact of open source as well open devices & operating systems will have on the mobile ecosystem.

Open networks, gardens and locked devices

While open gardens have been widely discussed on the Open Gardens blog , there are several key distinctions that are often confused by the media when discussing open networks and their impact. I mentioned two examples of type of control mobile operators maintain in a previous post Mobile 2.0 – when and how . The main points were that (1) mobile operators have relied upon decks (i.e. “portals”) as their primary vehicle for marketing and distributing their premium mobile content, and (2) given that their data networks are considered a scarce, limited and costly resource, they are quite protective when enabling off-deck rich media content such as full video streaming and downloads. The confusion stems from the fact that developers sometimes believe that if they are not in the carriers “deck” (i.e., listing / portal) then they are “blocked” from distributing a mobile application or service. The confusion also stems from the fact that each mobile operator restricts and blocks different types of content. At this point in time, in the U.S. you can get personalization content (i.e., ringtones, wallpapers, games, SMS infotainment) from off-deck providers with support for all the major carriers. The “muddy” areas surround rich media such as mobile TV, radio, video on-demand, music streaming and downloads. The restrictions also are dependent upon the nature of the device (e.g., you are able to do RTSP streaming on certain Smartphones on certain carriers but not on feature phones), the type of delivery mechanism (e.g., you are able to have videos clips delivered off-deck via MMS but not via applications or media players), and by the particular network (e.g., Verizon’s dependency on BREW prohibits their ability to do off-deck applications).

In order to gauge the extent of the openness, we need to consider the varying ways that devices and networks can be restricted. These restrictions limit the extent to which “openness” can truly have an impact on the ecosystem. The nature and type of restrictions include technical, economic, legal and social.

1. Open platforms - whether third-party developers have access to the device, operating systems and middleware application programming interfaces (APIs). Currently, over 90% of the mobile phones world-wide use proprietary operating systems with numerous undocumented and protected APIs.
2. Open development - whether third-party developers can develop services without relying upon the mobile operators and device manufacturers for certification, verification, and / or signing.
3. Open distribution – whether content providers and companies can directly market and deliver applications and services to the consumer without having explicit approval from the network operator. Furthermore, without the fear of being blocked or shut-down.
4. Open, yet locked – the degree to which the devices are decoupled from the network, i.e., whether they are unlocked and capable of being run on other nature by virtue of simply changing SIM cards.
5. Open, yet non-standard – how standard or readily understandable / useable is the open interface or platform. If a particular device or platform is open, yet requires 2-3 years of training to understand how to create and develop using them, then the fact that it is open becomes secondary.
6. Open, yet proprietary - whether third-party developers have a viable marketplace and opportunity to capitalize on their efforts. Often, companies offer documented, open APIs to their proprietary platforms, which encourages development, but then extort a significant toll on the developer when their products are services are taken to market.

Open source

The open source stack is well known in the Internet community: operating systems (Linux), databases (MySQL), app servers & middleware (JBOSS), PHP (Ruby on Rails), development tools (Eclipse), web servers (Apache), and security (OpenSSL). It is clear that this has led to a rich and robust collection of software that is openly available for developers to create and deploy applications and services. If the conditions are right, open source initiatives can be a highly participatory creation and production process that leads to innovative, high-quality software and services.

As Krishna Rangarajan at AllianceBernstein has noted some key features of open source projects (OSS) projects. First, “the highly distributed nature of development of an OSS project typically necessitates a highly modular architecture, meaning that the software is composed of a number of smaller, self contained components that are designed to work together, each of which is simpler to develop and test. Second, he notes that it is also easier to detect and fix bugs within an OSS project due to the sheer number of programmers and users looking at and testing the code. Third, “OSS is subject to a very transparent peer review process, in a meritocratic community”, a process that is common in scientific communities and engineering environments, but doesn’t really exist in software development due to the penchant to protect trade secrets, intellectual property and the know how, show how.

Two questions come to mind when we consider the impact that a significant open source project would on the mobile operating systems: First, it begs the question of what would an open source operating system look like? Consider that due to the lack of a standard operating system in mobile – of ~240 million subs in the U.S. less than 10 million of their phones use Microsoft, RIM, Symbian or Palm – there is thriving middleware. Runtime environments like Sun’s J2ME and Qualcomm’s BREW have enabled developers to create and deploy applications and third-parties across a wide range of proprietary operating systems. One could imagine that there are real opportunities to integrate such middleware more tightly with the operating system and have better access to core phone capabilities that are often not accessible in a common way through J2ME across devices. Second, what impact would this have on the current operating system providers? It would seem that in 3-5 years, you would end up with Microsoft, Google and Apple as the dominant providers with RIM, UIQ, Symbian and Palm waning. More importantly, would an open source mobile operating system create an opportunity to have an OS that is available on phones that are not Smartphones, e.g., phones that are considered feature-phones like that RAZR.

Google and [insert carrier here]

Assuming that Google launches on [insert carrier here], what impact would this have on accelerating the openness of the mobile ecosystem?

1. Open source – even if the operating system and elements of the phone’s middleware are open source, there is a lot of room for both the ODMs and the mobile operators to add and create proprietary features. This presumes that multiple ODMs choose to create devices based on a Google operating system.
2. Open device – assuming that the operating system is open source then it would most likely mean that third-party developers would be able to create applications for the device since languages will be open and available, and presumably the third-party developer tools to create applications in those languages. This still leaves a lot of room for the mobile operator and ODM to excerpt control through the certification and signing process (i.e., to handle security concerns), through the pre-loading process and through the custom & likely proprietary add-ons that are created around the operating system. For example, operators will likely retain control over the location information and personal subscriber information regardless of whether the device is open in terms of application creation and installation.
3. Open network – a subscriber with a Google-enabled phone would presumably be able to access web sites and content outside of the mobile operators “deck”. This would be much like what the current Blackberry or Palm users are able to do with the exception that Google may have a better browser.
4. Open, and unlocked – although third-parties would be able to create applications for the phone and the subscriber would be able to access their content and services without going directly through mobile operator’s portal, they may not be able to take their phone to another network. While this is possible and is recently being mandated, it is likely that these capabilities will have more to do with the ODM that builds devices around the Google operating system than it does with Google. An ODM may or may not choose to support both GSM and CDMA in the same device.

A final note that is worth mentioning is that a number of open platforms and open source initiatives in mobile have not led to thriving marketplaces. As industry veteran and Nellymoser co-founder Roy Joseph has noted “I have yet to see, in the highly competitive mobile consumer marketplace, open systems that make money. Building blocks maybe, but never a finished palace”. I expect this to be the case with these recent industry announcements. Both Apple and Google will push the mobile industry towards more open platforms and devices and even networks if things go well, but it will be up to the developers to innovate and create viable new services that take into account (1) the forthcoming open devices and networks and (2) the unique capabilities offered by the mobile phone – personalized, localized and interactive experiences underpinned by content, connectivity and communication.

This post is a follow-on to my last post Mobile 2.0 - what and how in which I introduce the key drivers for Mobile 2.0: ubquitous mobile broadband data connectivity, open & frictionless distribution and mobile rich Internet application (RIA) platforms. This post will mainly focus on the state of rich Internet application platforms as they relate to mobile and to some extent the role of the mobile Internet browser.

In terms of market acceptance, it seems to be clear that the front-runners in the RIA platform space are Adobe and Microsoft, AJAX (supported by Google). Here is my take on how they are starting to play out in mobile.

Adobe FlashLite, FlashCast with Flex

Adobe is clearly the leader with regards to having an established developer / designer community and having the widest install base of full RIA clients. Whereas Microsoft has the additional weight of having to drive adoption of Windows within mobile, Adobe is set on defending the position and reach of Flash. FlashLite is actively used on carriers like DoCoMo in Japan.

We are just starting to see the early entrance of Flash in N. America with Verizon shipping FlashLite on their high-end phones. Currently, you can only deploy Flash-based mobile RIAs either via Verizon (aka through Qualcomm and then through Verizon) or on a small number of smart phones off-deck. There are roughly 10-15 million Verizon phones that have some version of FlashLite. You currently can only access Flash as a BREW extension, which means you must become a BREW developer and pay the NTSL certification fees and share revenue with both Qualcomm and Verizon. FlashCast is slated to launch before the end of the year. Although FlashCast leverages the FlashLite engine, the types of services have been limited to essentially data casting services based on restricted RSS feeds and applications that are around. The significant benefit of Flash Lite is that existing Flash developers can utilize familiar tools.

Microsoft Silverlight with WPF

Silverlight is Microsoft’s answer to Flash. Microsoft’s Silverlight and WPF will likely have the best combination of both developer tools and design tools, they have had some trouble attracting the design community that Adobe has been able to garner to date. Also, it seems clear that Microsoft is still set on enforcing and defending its dominance as an operating system which is still lagging in mobile. A key question is whether Microsoft will actively support a Silverlight client for Java CLDC or BREW-based devices. And, if they do, will it be able to run on non-smartphone, feature-based phones that have limited memory. Microsoft has outperformed Symbian and Palm in the U.S. but may remain somewhat marginalized due to the success of the iPhone and Blackberry in the U.S.

I put together a diagram (based on data from mMetrics) that shows the percentage of data-capable handsets that support Java, BREW, Flash, Microsoft, RIM, Palm and Symbian.

Mobile AJAX

In and of itself, Mobile AJAX is not an RIA platform. It appears that Mobile AJAX companies are essentially becoming in-browser variants of on-device portals (ODPs). Mobile AJAX, when deployed via a Mobile Internet Browser, is missing a number of key features that are necessary for a true mobile RIA platform:

• > Limited integration with the phone’s core features such as call handling, messaging, PIM, etc.
• > Rich media support (e.g., audio / video integration) is non-existment
• >The level of interactivity is quite minimal when compared to that of Flash or Silverlight
• > Some of these limitations can be minimized when using a stand-alone AJAX-based application that can run independently of a browser.

The role of the browser

WAP

In the late 1990s, WAP was championed as the key enabler for accessing the Web from any device. It became the de facto standard for building page-based, websites on mobile devices. Due to the limited bandwidth, high latency and primarily text-based experiences, the phrase “WAP is crap” came to summarize the overall industry attitude towards WAP as a vehicle for delivering mobile applications and content. Although WAP is actually a collection of protocols, the term is often used to connote HTML-like sites on mobile devices. In fact, most WAP 2.0 mobile browsers support a version of HTML called xHTML. Over the past year or two, “WAP is back” has become the mantra. During the time that WAP was effectively de-emphasized, the mobile industry focused on “static” content such as downloadable binaries (e.g., games) and personalization content, i.e., ringtones and wallpaper. In addition to the improvement of enabling infrastructure (e.g., improved WAP browsers, better devices, better data networks), the re-emergence of WAP and the Mobile Internet has been driven primarily by (i) the availability of Mobile Internet browsers and high-end Smartphones with 3G data connectivity, and (ii) opportunity to create new data revenue streams from mobile advertising. The early impression-based ad networks and ad delivery methods that were proven and are currently thriving on the Internet are being replicated on mobile devices.

ODPs

The emergence of on-device portals (ODPs) developed for mobile phones is akin to the development of RIAs on the PC. ODPs are mobile applications optimized for accessing and interacting with content and information. They were initially conceived to address the poor user experience provided by resident mobile OS-based applications and/or WAP-based mobile sites and applications. ODPs specifically tackled problems that arose in WAP-based services such as compounded network latency issues, poor user experience & limited user interface, and most importantly, the high number of clicks required to access relevant data on a mobile device. ODPs typically deploy strategies related to caching and pushing data that creates a more responsive and immediate experience when compared to WAP-based alternatives. While ODPs provide a better user experience and have been shown to make finding, trying and buying content faster and easier, they must often be downloaded over-the-air (OTA) to the phone and almost always require complex, proprietary tools. This reliance on proprietary toolsets has increased the complexity for developers when creating and deploying new mobile services. Desktop or browser A number of ODP providers have focused on providing homescreen replacements. It is too early to determine whether these vehicles will drive data usage and drive premium content sales. Or, they may turn out to simply add yet another mediation point, and hence latency or delay, between the end-user and their desired destination. An interesting indicator to the future role of the desktop versus the browser is to watch when and how applications and services move from the browser to the desktop on the PC. I content that a majority of media access and network usage comes from applications and not necessarily the browser in-and-of itself. The PC-based RIA platforms are rapidly moving beyond the browser to the desktop. Examples of early initiatives in moving from the browser back to the desktop:

• > Adobe’s Integrate Runtime (AIR) extends their Web development to the desktop
• > Microsoft’s Silverlight is taking the .NET Framework and WPF both cross-platform and cross-browser

Mobile 2.0 will drive innovation

Irregardless of how Mobile 2.0 is defined and how the key enabling tools and platforms evolve, it will:

• > Encourage innovation
• > Lead to a creation and deployment model in which mobile services are rapidly brought to market
• > Enable a new market for existing web developers by letting them use standard, common web tools
• > Solidify multi-platform, multi-modal content and services.

At a minimum, it seems clear that the concept of ‘mobility’ is evolving to become associated with a state (e.g., a lifestyle) rather than a device. We will be able to momentarily attach our personalized access, content and services arbitrarily to any device, network and format.

I expect that Mobile 2.0 will come to represent a wide range of personalized mobile experiences resulting from open access and distribution networks coupled with frictionless, multi-platform content creation and connectivity. One thing is for certain, current telephony platforms (think IMS) are not in a position to enable and deliver these types of services consumers have come to expect.

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Before getting into any great detail, I’d like to briefly state the main points I will aspire to address in this two part post.

Mobile 2.0 is here today and can already be observed in the market.

There are three key drivers that will catalyze Mobile 2.0 in particular and innovation in general:

• > Open, frictionless distribution
• > Ubiquitous mobile broadband access
• > Rich, Interactive Application Platforms

The verdict is still out on the browser. Mobile 2.0 will be much more than the Internet viewed through the lens of a 2 inch browser (i.e., taking the Internet to go).

Mobile 2.0 Redux

There has been an active dialog surround Mobile 2.0 going back to 2005. The most detailed analysis and discussion has stemmed from Open Gardens and Mobile Web 2.0 by Ajit Jaokar and Tony Fish. Ajit and Tony have developed a detailed and nuanced discussion surrounding the impact of mobility as it relates to Oreily’s principles for Web 2.0. At this point in time Web 2.0 definitions can essentially be distilled down to the utilization of the web as a platform. Marc Andreessen recently provided a great overview of Internet platforms I will review current mobile platforms according to Marc’s taxonomy in a future post. In contrast, Mobile 2.0 definitions still widely vary although generally focus on the user experience and the corresponding ability for individuals and communities to create, personalize, interact and mobilize rich content and services. A sampling of definitions for Mobile 2.0 include:

• > The convergence of mobile devices and services - Cashmore
• > Next generation of data services to mobile connected devices – Applequist
• > Open standards, open platforms, open source and centered on content and messaging – Capobianco
• > The entirety of the device and its myriad and highly differentiated possibilities for interaction with the end user – Starr

Mobile 1.0 content and services can be characterized as repurposed broadcast assets such as personalization content (ringtones, wallpaper), games and rich media (video, music). Depending on your outlook, Mobile 2.0 can either be thought of as taking current Web 2.0 services to go, or as representing a radical departure in which a whole new set of services are created by putting mobility at the center of a whole range of personalized, interconnected multi-platform content and services.

Catalysts for Mobile 2.0

Drivers that will catalyze the uptake Mobile 2.0 services include:

• > Open, frictionless distribution
• > Ubiquitous mobile broadband access
• > Rich, Interactive Application Platforms

Ubiquitous mobile broadband access is foreseeable in the imminent future. Nationwide data networks are pervasive. Now, all handsets ship with data access capabilities. And, multimedia capabilities have moved well beyond smart phones into standard feature phones. The question is how soon will we achieve open, frictionless distribution and, how long will it take for mobile RIA platforms to get widespread adoption. And, will the existing RIA platforms be sufficient for the needs of Mobile 2.0?

Open, frictionless development and distribution

For Mobile 1.0 content and services, we are getting quite close to having frictionless content distribution in the N. America and Europe. Off-deck services are thriving and pSMS billing, from a consumer perspective, is easier than any of the micro-payment systems that exist on the Internet.

The areas that are still impeding the frictionless development and distribution relate to the following types of impediments:

• > Fragmentation & Lack of Standards
• > Control & Regulation
• > Complexity and User Experience
• > Cost Structure

Fragmentation and Lack of Standards

There are thousands of phones, hundreds of network configurations and dozens of content formats. This fragmentation of the delivery of content and services is compounded by the relative lack of standards relating to software and service delivery. A majority of phones utilize proprietary operating systems. This has led to a thriving middleware ecosystem that does not exist on the PC (due to the dominance of Windows) as well as the prevalence of standardized Internet browsers. Middleware, runtime environments are required on mobile phones so that third-party developers can create applications for the phones. The dominant environments are currently Sun’s Java (J2ME) and Qualcomm’s BREW for feature phones and Symbian, Windows, RIM and Palm for Smartphones. A majority of the complexity associated with distribution (i.e., devices, networks, formats) can be handled by mobile content delivery platforms. In terms of service creation, the current environments for creating and developing mobile applications and services are proprietary and difficult to use - a key impediment for innovation.

Control and Regulation:

It is well known that mobile operators have invested heavily in their networks, services and subscribers. Burdened with this significant cost of ownership and operation has led them to move cautiously in creating and / or adopting new services and methods of distribution. Furthermore, given the investment they’ve made in acquiring subscribers and maintaining a level or service quality, they have become rightfully protective of their overall network and billing relationship with the consumer. This leads to a number of actions to control and regulate service offerings.

Two examples of the types of control they wield over content and services, namely (i) the use of decks as a primary means of marketing services and, (ii) restrictive usage of their network for any bandwidth intensive content and services.

Mobile operators have relied upon decks (i.e. “portals”) as their primary vehicle for marketing and distributing premium mobile content. In a sense, these portals function like big box retailers (i.e., Walmart, Best Buy, Target) in which shelf-space is limited and in high demand. Third-party content providers whose brands and services are able to leverage a strong position in the deck combined with a strong consumer proposition (i.e., price, brand strength, content / service uniqueness) yield high volume of subscribers viewing their service offerings and with resulting strong click-through and conversion rates. Sales of premium content sold from their decks have started to flatten and is causing them to focus on many aspects of the deck including, but not limited to, the amount of content on the deck, the user experience and number of clicks required to access the content, how best to personalize the end-users view of the content offerings, the role of search, and the role of bundling and theming of content and services.

Second, given that their data networks are considered a scarce, limited and costly resource, they are quite protective when enabling off-deck rich media content such as full video streaming and downloads. They have the ability to entirely shut down any unauthorized off-deck services. These actions do not apply to all off-deck content. Mobile operators are quite supportive of off-deck content and are even looking to third-party direct marketing companies (e.g., Thumbplay, Buongiorno, Acotel, Jamba) to drive premium content sales. It is often confused that off-deck means bypassing the mobile operators. Mobile operators receive revenue splits from a majority of all off-deck premium content and services.

Complexity & user experience:

There are a number of examples of poor user experience and complex processes for discovering content and services. First, it is still quite difficult to find, try, buy, share and enjoy mobile content and services. Second, the quality of the experience and overall cost of delivery is impeded by the plethora of phones, networks and formats. Finally, the delivery of content and services via SMS and over-the-air (OTA) downloads can been unreliable. On a whole, a number of these limitations and complexities have been or are being addressed by both the carriers as well as third parties that provide end-to-end solutions.

Flat rate pricing will be a key driver that will accelerate user adoption. We saw the impact on the Internet of moving from a per minute dial-up plans to flat rate pricing. Moving from complicated data platforms (e.g., per Kbyte, constrained flat rate plans, roaming data charges, etc), will have a similar impact on mobile data adoption and the corresponding impact on ARPU. Odlyzko makes a strong argument that flat rates were a key role in the rise of the Internet in the U.S. than in other countries.

Rich Interactive / Internet Application Platforms

On the Internet, the success of Java and Flash drove a new model for creating and deploying applications that go beyond the traditional “thin client” applications that were delivered and rendered for the end-user via browsers. Applications written in Flash are an example of what Macromedia coined Rich Internet Applications (RIAs).

RIAs can be thought of as extending the traditional website model (i.e., in which a browser accesses pages on a server) by adding an additional client-side functionality to handle the user interface thus making the user experience richer and more responsive. It is worth noting that most RIAs are written using some combination of a standard declarative markup language (e.g., XML) and a standard procedural language (e.g., Javascript) for the user interface and application logic, respectively.

Six frameworks for creating and deploying RIAs are widely discussed: Adobe’s Flash / Flex, Microsoft’s Silverlight, Mozilla’s XUL, Sun’s Java FX, AJAX, Laszlo’s OpenLaszlo.
These platforms will be reviewed more detail in Part 2 as they relate to mobile.

Whether we use colloquial terms like cell phone, handy, mobile or more general concepts – a personal communication device, a mobile remote control, a connected mobile media player, a secure identity manager – naming conventions are on the verge of a crisis in the emerging mobile data ecosystem. To state the obvious, these descriptive, albeit narrowly conceived names evade our ability to capture the true potential and evolution of networked mobile media. Certainly, a cell phone is and will be all of these and more.

Not only are the names for the device itself in flux (e.g., Motorola’s convention of calling it the device formerly known as a phone OR Nokia calling their phones portable computers), the traditional names for the types of media and programming are proving to be increasingly less relevant. The cell phone is not a mobile television. The cell phone is not a mobile radio. The cell phone is not a gaming console. The cell phone is not a portable computer. With respect to its capabilities, it is all of these and more. But, from the consumers perspective, these terms and concepts that been co-opted from traditional media – mobile television, mobile radio and mobile magazines – constrain consumer expectations and associations, e.g., exemplified by characterizations such as “like TV but smaller, poorer quality” or “like the Internet but static and slower”.

Such consumer dissatisfaction, partially driven by the use of older media categories and their connotations within a new medium, has triggered a self-fulfilling and constraining feedback process in which service providers attempt to make the mobile version of each respective traditional media closely match their non-mobile counterpart. We have also seen this with the fleeting attempts for mobile service providers to replicate the whole iTunes experience. To be sure, the idea of mobile television or a mobile iPod has captured the media’s imagination and attention over the past year, which has rapidly increased the overall consumer awareness of the idea that you can use your phone for more than voice. But, unfortunately the wholesale adoption of such analogies and mindsets may end up slowing and inhibiting the adoption of emerging mobile media content and services. The good news is that the structural underpinnings are in place for a major disruption to occur: a majority of phones are data-enabled (i.e., akin to personal computers shipping with modems), flat-rate pricing is in place for connectivity – a key driver for the initial Internet expansion in the U.S., and digital licensing models have been catalyzed by the success of the iPod in particular and on-demand capabilities in general. New rich media services will be rapidly emerging and we should take care to consider how they are packaged, presented and marketed to the consumer.

A case in point relates to the use of the term “IPTV” in the context of mobile and when does it make sense to use terminology from Internet services and apply them to mobile. The label “mobile television” does not come close to capturing such richness. For example, watch one of the mobile operators linear broadcast TV lineups and then take a look at one of the online broadband Internet television such as Heavy.com or Maniatv.com or MTV’s Overdrive). While the term “IPTV” is associated with a much richer experience than “mobile television”, it fails to capture the consumer’s imagination due to limited exposure and adoption of such service offerings.

Before we simply move from adopting media-centric terminology (mobile television, mobile radio) to Internet-centric hybrid terminology (Mobile Web 2.0, mVoIP, wIPTV), we should quickly take a look at the reality of today’s consumer and their digital universe:

The mobile ecosystem – devices, networks, consumers – is going through a disruptive change akin to what happened in the larger digital ecosystem when the personal computer became connected (and subsequently untethered) and transformed from being a novelty item (word processing, spreadsheets) to an indispensable, connected media and communication portal. As has been stated many times, the cell phone is no longer a voice-centric utility; it is rapidly migrating to an always-on, connected mobile personal media & communication device.

This rapidly evolving mobile ecosystem – connected multipurpose mobile devices and broadband data networks – is on a crash course with the raft of Web 2.0 services (communities, user created / categorized / controlled / influenced content, blogs and Wikis). Both traditional media and even the relatively recent Internet services – VoIP, Internet Radio and IPTV – were for the most part developed prior to the onslaught of Web 2.0.

So, before new terminology becomes adopted and reified, we need to stop and take pause. As with any emerging media, the naming conventions for content, applications and programming are out of date even before they are introduced. Merely applying old media terms and corresponding associations are causing the content and service offerings to congeal and become fixed – thereby decreasing the room for the type of personal, connected, on-demand experiences consumers have become to expect. We must reduce mental friction and drag introduced into the system by unimaginative terms and service offerings that ultimately do a disservice to the both the consumer and the potential richness promised by truly personal mobile networked media and services.

The idea of simply taking an existing media practices (i.e., existing content, programming and descriptions) and “dropping it” into a new medium (e.g., early television often involved simply broadcasting a visual feed from the radio production studio), hearkens back to when my father asked me why composers don’t just write more music like Beethoven. Being an amateur composer and new music enthusiast, it was clear to me that after being exposed to Schoenberg, Weber and Berg, you can not write music like or listen to Beethoven and Brahms in the same way … similarly, listening to The Who in the same way after listening to Deerhoof. Along the same vein, as is often observed, you cannot watch broadcast television after owning a TiVO / DVR … be restricted to email after becoming an instant messenger … listen to terrestrial radio after digital satellite … cannot simply download music ala carte after having access to an “all you can eat” music subscription service … browse the Internet on a Blackberry after you’ve experienced browsing on the iPhone, etc. After experiencing such a wide range of new services (IPTV, VOD, Satellite Radio) and new devices (PSP, TiVO, iPOD), how can we be expected to willingly participate in a “sit back” experience such as linear broadcast mobile television.

Consumers are looking for better ways to discover, enjoy and share mobile media on their mobile phones. There is a demand for new, fast, intuitive and easy-to-use methods for creating, publishing, discovering and sharing media via mobile.

So, what do you call these personal, connected, rich interactive services containing both professionally developed and delivered (i.e., structured) media coupled with user created / influenced / controlled (unstructured) mobile media experiences that consumers will increasingly come to expect?