The compass functionality is still a bit underutilized

The media seems to be a bit obsessed with hardware, iPhone and its “killers” and software (“apps”). This is technology after all. For me, much more interesting phenomenon are applications. I’m not talking about software but more generally what we use the technology for. In “Salmon of Doubt”, Douglas Adams put it well that “[we] are stuck with technology when what we really want is just stuff that works.” I believe that iPhone and what have followed since it are enabling just this. I also believe by just being “stuff that works” was the feature that made iPhone what it is today, while Nokia was fiddling around with technologies.

When I’m talking about mobile phones as Human-World Interface, I’m not really talking about augmented reality. For most part augmented reality is just hype and worst of all, it was just technology. There was some cool factor in being able to see where the London Tube stations were, but all of a sudden it seems like people are far more interested in “monetizing” the technology instead of looking for applications.

Instead, in my view one of the examples of how iPhone gives you an interface to the world around us are the public transportation guides. With access to your location, you can easily check out when the next bus or tram arrive and what bus or tram you actually need to take to get wherever you’re going. I think that the applications for more specialized uses are more interesting, like snipers using iPhone for calculations and doctors using it for stethoscope. For me, Human-World Interface could be summarised as the ultimate universal remote for the world.

I think we’re finally arriving to the vision of a PDA. What the things we used to call PDAs a decade ago were crucially missing were mobile internet and user contexts (fe. location). One important part is also a universal information exchange protocol, and for most part the Web fills that role on modern phones. Right now it would look like instead of general-purpose web, one-application “Apps” are the way to go. I don’t think this is a sustainable way forward, though. It works as long as you only focus on one device (like the iPhone) and you believe in an Apple monopoly, but if/when in the future we have forward-incompatible iPhones and plethora of smartphones running Nokia’s Maemo or Google’s Android, you might be better off falling back to the common Web.

Google’s opinion is that the Web will eventually win, but you have to keep in mind that their whole business depends on that. In the short-term, there’s still loads of money to be made in Apps, but in the long-term investing in the Web will pay off. It is however quite hard to justify investing for the long-term unless you have boatloads of capital, but Google’s planning to be here for that long. There’s no money to be made in infrastructure or technology per se (as RSS and Atom have shown) but once you have an application that depends on them, it all pays out (but you really need an application that has or adds value, not just a fancy feed reader/parser).

One of the still-in-R&D technologies for smartphones is Near Field Communications, which would enable one to (finally?) use one’s smartphone for paying for public transportation or at point of sales. Unfortunately this stuff has been so long in the pipeline that it might really be a technology in search of a problem. It is however a foray into the world where we would use our smartphone to interact with the world.

A similar idea of replacing one’s wallet with one’s mobile phone has been one that Nokia et al. have at various times tried to push, but like NFC, the main problem is that the advantages are not really significant (yet?) and there are serious drawbacks compared to the things you actually have in your wallet. For example, the credit card you have in your wallet is probably almost universally accepted, unlike mobile payment. Overcoming this rather crucial shortcoming is a chicken-egg-problem, however for mobile phone manufacturers. The companies that should develop this stuff are the credit card companies.

The same thing goes for everything else, like using your phone to open your garage door. The two things that need to happen for a universal remote for thw world are open technologies (in this case an API for your garage door), which in turn requires a business case for the companies to open up their interfaces. Only then is the Internet of Things possible. I believe that for Internet of Things to emerge, there’s little point in just identifying everything around us, but also interacting with them. Other than implants, mobile phones seem to be the best thing we have to do that.

Digital Chocolate’s Trip Hawkins has said that the iPhone is the coolest thing in all time and for him, it’s vastly superior to what Kirk had in Star Trek. I’m not as optimistic about iPhone of today, I’m sure there’s going to be much more cooler things in the future. Of the things that we have right now, I have to agree.

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With both the launch of the app-store and the “global” (western) release of an affordable iPhone 3G, it is clear that the rules of the game are changing a little as far as adoptability of software is concerned. While, if you hang around the blogosphere, you’re exposed to a tech-crowd in a tech-world, many of which are anglophiles also, this is no longer so when you’re dealing with a consumer-targetted electronic device, like the iPhone, available in many countries, in all the major stores, and at a fairly appealing price & cool-factor.

No, instead you’ll be dealing with customers from countries like Germany, France, Spain, Italy, etc. many of which prefer to think in their own language. And you’ll be dealing with mainstream users of telephones, who are, let’s face it, often of a younger generation.

So the implication is: how do I, as an app-developer, reach out to both a global, non-english audience? And how do I appeal to the typical demographic (age, income, etc.) that will buy this phone?

The answer seems fairly straightforward: Games !

1. Games have the advantage that they can easily bridge the language-gap, by mostly focussing on visual communication.
2. Games appeal to the younger crowd.
3. And, let’s face it, the iPhone is not (yet) a business-phone, and hence again not aimed at the typical blog-reader & app-user.

Addendum: a possible fourth reason is that I’m personally not so impressed with the iPhone/iTouch keyboard; i.e. I won’t be writing a blogpost on it any time soon. Games are another matter.

So, if you ask me, all you people aiming to create or invest in the next “productivity” app, I would think again and focus on what the lowest common denominator is between your skills and demand.

Inspiration for this quick post: Fred Wilson on the iPhone app-ecosystem.

Vincent

P.S. don’t forget to check out some of the smart comments this post is receiving.

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Judging from Vincent’s latest post (and the comments!) about why he thinks Android will suck, there are many misunderstandings about global smartphone markets. First of all, they are a small subset of all handset market – just about 10%. There are many who are blinded by their US-centric power-user views. The echo chamber of blogs doesn’t help much, especially because most blogs are also U.S.-based. This smartphone market share graph by Volker Weber is one of the best to illustrate that North America is totally different than other markets. The differences do not limit to smartphones, there are huge differences in mobile usage also.

The other thing to note is that the dominating player right now with more than two thirds of the market is Symbian, which is backed by, among others, the number one mobile manufacturer, Nokia. Both have summarily dismissed iPhone and Android as nothing more than niche (“iPhone is nice, but that’s about it”, “Just another Linux phone”?). They are also both usually missing from all reporting concerning Android and iPhone. Not taking them into account is like talking about PC industry and forgetting about Windows and Dell.

It’s always a good reminder that Nokia is also the world’s largest MP3 player and digital camera manufacturer. They also have more than half of the smartphone market. From a U.S. perspective this might not be so visible, because in the U.S. market the best selling smartphones are Blackberry Pearl, Motorola Q and Apple iPhone. If these are your idea of smartphones, do yourself a favour and familiarise yourself with Nokia’s Nseries (for consumers) and Eseries (for enterprise).

In the Open Handset Alliance’s FAQ, the alliance says that the benefits of an open platform for operators and manufacturers are lower costs and flexibility to offer services. For consumers, they promise cheaper prices, but given that most phones are given free by the operator or that it doesn’t actually make any business-sense to do give phones on a discount without a reason, this is probably a joke. Also, do not read too much into the “partnerships” in OHA, as many of those companies are also involved with Symbian and many other mobile initiatives.

The business model of your average mobile carrier is to make money out of you by offering you value-added services. The problem in the marketplace is that most people are just fine with voice and SMS. In the EU, many people feel that mobile data is still too expensive to the extent that the EU will probably mandate some price limits. Seriously, this is an industry that thought WAP and walled gardens were the future. Open competition is an anathema for them.

What the carriers with their monopoly mindset didn’t see coming was that internet is everywhere for far more competitive price and experience than what they can deliver. A surprise hit in Finland is a USB-device with 3G connection with gives you mobile broadband to your laptop with fixed monthly price. Why not just use your mobile’s Bluetooth instead is something a more technically oriented guy would think. But that’s why this guy can’t understand either why Google sees more search activity from an iPhone than from other handsets.

Many ISPs have started to adopt the mobile operators’ tactics now that the basic service is so low-margin. Of course, they can’t go as far as they’d love – you can’t imagine your ISP mandating what kind of computer you can use to connect to the net. In part, this is what the net neutrality discussion is about.

Google reported some time ago, that iPhone is by far the most used mobile user-agent. You can take this as a success story to Apple (and AT&T), but you could also see the sorry state of internet on mobile. A device with a tiny market share dominates internet usage? This is of course good news for iPhone carriers, who would love to have more customers like that. The question is, is the reason that using the web is so easy on an iPhone or because the iPhone owners behave differently? A little bit of both is always the easy way out, but whatever, the bottom line is that it brings more internet traffic revenue to mobile carriers. One point of warning, though, one reason for iPhone’s search dominance to keep in mind is only hinted in the article – the default search engine for many mobiles isn’t Google, but Yahoo! or even an operator’s own.

Then there’s the talk about the open platform of Android. One problem when talking about iPhone SDK and Android is that, right now, neither are “real” in the sense that so far all we have seen is hype. As a Symbian boss said, “We take [Android] seriously but we are the ones with real phones, real phone platforms and a wealth of volume built up over years”. In 2007, 141 different models and 77,3 million Symbian phones were sold. The fight between Android and iPhone SDK is pointless if you don’t include Symbian in it. It is open (to an extent), it’s free, there’s no AppStore (which is good and bad), there’s digital signatures (which is good and bad). And there are almost 9,000 third-party applications.

Want IM and VoIP on your smartphone today? Here’s a Gizmo client for Symbian S60 -platforms by Nokia (See the site for other cool apps if you happen to have a compatible phone). Do not forget the power mobile operators have over their networks, even that app can’t use VoIP on 3G, just on WLAN. Apple and Google are not mobile companies and that’s why they try to change the rules more to the their liking. This is a good thing, but history has proved these efforts have so far been very futile.

This Wired article on Motorola ROKR couple years back is a good reminder of some laws of the mobile market. Of course, the article didn’t age that well (which seems to be quite common at Wired), but the middle part with Nokia’s Vanjoki is worth a second read, especially now that Nokia is busy with Ovi.

PS. I’m a low-profit customer for my mobile operator, I have a simple SonyEricsson K610i with Opera Mini that I use web with like three times a year. I tried to use mobile internet while “outside the grid” (e.g. WLAN or DSL), but because I happened to be outside a major city (and 3G connectivity), the experience sucked a lot. We wanted to see a YouTube movie but were unable to. And this was 2008.

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Many Apple fans are salivating over the rumored launch of Apple’s long-awaited mobile device in Europe. These fans (who put ”fan” in ”fanatic”) are reading the American echo-chamber-blogs and are certain that Apple will not only introduce iPhone in Europe this year, but it will be also revolutionary. As a card-carrying Nokialand citizen who, though, has never owned a Nokia, I disagree.

Telecom operators are far more heterogeneous in Europe and prices vary wildly in each country. Recently EU tried to limit the roaming charges, which is positive development. In USA, Apple went with exclusive deal with an operator so it can control the experience. In Europe, this will be so much difficult. Will Apple discard its main core skill, the user experience, so it can sell its device all around Europe? Or does the user experience mean so much to Apple, that they’re willing to concentrate on just the important markets? I’m betting the latter will happen.

I have to admit that my guess is based on the assumption that Apple launches the phone in Europe on a single carrier. This probably means that iPhone will not be available in all European countries at first. My guess is UK, Germany and France. I’ve very limited knowledge of operators in these markets, but my guess is that there are some big players in all of these fighting over the exclusive deal over iPhone. Other markets will see iPhone later, through subscriptions or after Apple starts to sell iPhone without subscription in whole Europe. But for this to happen, Apple needs to find a way to bring down the price, at around 800-900 euros, it is way too expensive. Compare this to iPods and Macs, which have gained lot of adoption when they entered the price ranges of their competitors.

And then there’s 3G. Telecom operators mis-invested in 3G en masse during the dot-com boom and it’s not widely adopted, but the fact remains that the infrastructure is there and the telecom operators are desperately seeking killer apps for it. Yes, 3G eats your handset battery like nothing else. Yes, the data charges are insanely priced pretty much everywhere. Yes, pretty much everyone has broadband at home these days.

But these are just technicalities. The mobile phone culture is different here and differs widely across countries.

The main reason it won’t matter is… we just don’t care about smart phones. Or what goes as a smart phone on the other side of the pond, as according to some statistics, about a quarter of phones in European hands have the multimedia capabilities. That’s a lot. Go to any European store and try to find a model without camera, music player or internet (3G or EDGE or what they now have). I won’t mention other features like calendars, ring tones, games and such, as they’re are even in the cheapest models already. This is 2007, after all.

The European handset manufacturers made a grave mistake couple of years ago in 2004, when they presumed people were into feature-filled bricks and cheap “clam-shell” phones from Motorola and Samsung came and conquered lot of market ground. After a quick shuffle, both SonyEricsson and Nokia quickly reintroduced cheap models to their offerings. Even Nokia was forced to launch their first clam-shell model. Now, Motorola and Samsung are going for “thin” models and at least SonyEricsson is answering that challenge. Nokia’s answer to these “slim” phones is expected during fall, but the company is know for missing deadlines.

Nokia on the other hand is betting on its N-series line. These are, according to Nokia, what computers have become. Nokia N95 is formidable opponent to iPhone in Europe. On a spec sheet, it has pretty much all the features of the iPhone and is better in some fronts. Naturally, the UI isn’t slick and it doesn’t have the future technology iPhone has.

In Europe the people going for other Apple’s forte, style, might not be throwing their Samsung Ultras, Nokia N-series or SE Walkmans out of the window. They are so much cheaper and get the jobs done and look good. On the other front, technical advances, the likes of N95 is dominating the field with its geek appeal (3G and WLAN, GPS, runs on third-party-welcoming Symbian). And for the enterprise, I don’t see anyone challenging Nokia’s Communicator (and now E-series) foothold. In Finland, the Nokia Communicator (which I think totally sucks not only as a device but as an user experience) is as ubiquitous among business people as iPods are among urban people.

Yes, there will be buzz. Yes, in many ways, it will be a success. But, will iPhone matter in Europe? Probably not. It will have its niche and I hope it challenges other players in the market to improve their user interfaces, but that’s about it.

Better question is, I think, does Apple care? I got the impression that Steve Jobs would of course love to sell as many of these things as possible, but he’s not counting on it to penetrate the market, going so far as using one of the common start-up lies, “we only need 1% of the market”. The device seems to have an audience, but the features might not be so revolutionary to us Europeans that we’d invest in it. It would be a lie to say that Apple is not out to capture the markets it enters, as that’s what corporations do by definition, but it has shown that it can survive as a niche player in computer markets. It’s not Microsoft and it’s not Dell. Using their tactics, Apple probably would have larger market-share, but the costs of doing so might be not worth it (goodwill, community, brand). With iPods, they had tremendous luck (and skill) and could dominate the market without sacrificing their values. I’m afraid many Apple fans believe that with iPhone, Apple has been able to combine the the different market advantages it has in Macs and iPods. This is wishful thinking and I don’t believe that. The fact remains that computers, portable music players and phones are all different markets. Both Nokia and Apple would like us to believe in this trio’s convergence. Their devices, after all, are “what computers have become”.

Kari has always depended on the last year’s models of SonyEricsson. Now he has a SE K610i with Opera Mini installed. Even it will kick iPhone’s ass in Europe.

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