Today, Nokia announced the inclusion of free turn by turn navigation on ten phone models – further enhancing Ovi’s value proposition. The service, which is almost certainly to be seen as a fast follower to Google’s similar launch in late 2009 should in fact be viewed as pushing an industry on the precipice over the edge. But the question is – does turn by turn even matter? From purely a platform perspective – yes, for now. For others such as Apple to follow suit they will need map data, turn by turn licensing agreements, an acquisition perhaps, or take a hit on margins. While Apple may find a way to bring turn by turn to the iPhone in short order, Nokia and Google have laid down the gauntlet by using maps as a competitive differentiator, a difference the companies must hammer home while the advantage is theirs. The proprietary ownership of mapping data is a huge advantage for Nokia (Navteq) and Google. There is a famous saying, wherever you go – there you are. But such antiquated logic demands an update and today we would be trite not to say, wherever you are - there your phone is. If you are not yet prepared to accept this reality you should peruse Yelp, foursquare, Loopt, Aka-Aki, Gree or Gowalla and you will clearly see that the future of mobile is not only about where you are but where you are going. By enabling turn by turn navigation on its devices both Google and Nokia have assured developers that location based services will be available to those seeking to include them in applications while making location based advertising easier. Nokia has two advantages over Google. Firstly its scale - S60 devices are ahead of Android devices, for now at least. Secondly, its navigation solution resides primarily on the device, not on the network. For users who travel internationally and don’t want to pay roaming charges, those with spotty coverage, or those who don’t want a data plan this is a huge advantage. For carriers hoping to offload some network congestion this approach is a relief. Of course, it's threat to carriers hoping to bundle TBT for an additional cost. For consumers (primarily those that do not own stock in a GPS manufacturer) this is a big win. For Nokia, "free" is a significant improvement on its current proposition but the company will have to do more in the long term to be seen as an innovator and not a fast follower. Despite the momentum building towards turn by turn navigation the features are simply a means towards a longer term end. Knowing where people are, where they are going, and how they are getting there is incredibly valuable information and could lead to a plethora of new advertising opportunities in addition to new applications. Related research: Nokia strides forward in online location and navigation Location based services, opportunities within an emerging battleground -Josh M

Today, Nokia announced the inclusion of free turn by turn navigation on ten phone models – further enhancing Ovi’s value proposition. The service, which is almost certainly to be seen as a fast follower to Google’s similar launch in late 2009 should in fact be viewed as pushing an industry on the precipice over the edge. But the question is – does turn by turn even matter? From purely a platform perspective – yes, for now. For others such as Apple to follow suit they will need map data, turn by turn licensing agreements, an acquisition perhaps, or take a hit on margins. While Apple may find a way to bring turn by turn to the iPhone in short order, Nokia and Google have laid down the gauntlet by using maps as a competitive differentiator, a difference the companies must hammer home while the advantage is theirs. The proprietary ownership of mapping data is a huge advantage for Nokia (Navteq) and Google. There is a famous saying, wherever you go – there you are. But such antiquated logic demands an update and today we would be trite not to say, wherever you are - there your phone is. If you are not yet prepared to accept this reality you should peruse Yelp, foursquare, Loopt, Aka-Aki, Gree or Gowalla and you will clearly see that the future of mobile is not only about where you are but where you are going. By enabling turn by turn navigation on its devices both Google and Nokia have assured developers that location based services will be available to those seeking to include them in applications while making location based advertising easier. Nokia has two advantages over Google. Firstly its scale - S60 devices are ahead of Android devices, for now at least. Secondly, its navigation solution resides primarily on the device, not on the network. For users who travel internationally and don’t want to pay roaming charges, those with spotty coverage, or those who don’t want a data plan this is a huge advantage. For carriers hoping to offload some network congestion this approach is a relief. Of course, it's threat to carriers hoping to bundle TBT for an additional cost. For consumers (primarily those that do not own stock in a GPS manufacturer) this is a big win. For Nokia, "free" is a significant improvement on its current proposition but the company will have to do more in the long term to be seen as an innovator and not a fast follower. Despite the momentum building towards turn by turn navigation the features are simply a means towards a longer term end. Knowing where people are, where they are going, and how they are getting there is incredibly valuable information and could lead to a plethora of new advertising opportunities in addition to new applications. Related research: Nokia strides forward in online location and navigation Location based services, opportunities within an emerging battleground -Josh M

Handset vendor Apple entered the mobile advertising arena by acquiring mobile advertising network Quattro in January 2010 for a reported $275 million. The move follows Google's $750 million acquisition of rival advertising network Admob in November 2009. 

In theory Apple now also has a distinct advantage over other rival advertising networks that serve adverts onto Apple's devices.

Through the iTunes and app store Apple has access to information about the type of applications purchased by their customers, how much they spend on applications, how frequently they download, and because the registration process for Apple devices requires the submission of profile data, some demographic data. Furthermore, Apple can innovate and be creative in the types of advertising units it makes available. 

• Consequently, unlike other advertising networks, including Admob, Apple is potentially in a better position to provide superior ad targeting and attract a greater share of mobile advertising dollars directed to Apple's own devices.
• Apple's focused strategy will continue to reap benefits, as its mobile device installed base continues to expand.

However, Google will be better positioned to capitalize on the $23 billion mobile advertising market with its broader approach to cover all handset types.

With Google and Apple making acquisitions to enter the mobile advertising market, should competing handset vendors jump on the bandwagon? I believe they would be unwise to do so.

• A successful mobile advertising network requires scale across a portfolio of handsets and media. Or, in the case of Apple, exploiting the data they have about their customers (who advertisers perceive as an attractive bunch) along with the end-to-end control they have over the device and service delivery.

At this stage most handset vendors have very little information about their device owners to provide useful targeting, and consequently little value-add to advertisers compared to other ad networks that offer greater scale.

Conflict of interests with operator channel partners is another reason for vendors to hang back. Operators have their own ambitions to use customer data in order to provide mobile ad targeting and device vendors will encroach on this territory.

It's worth noting that scale does not guarantee success either. Nokia's experience in mobile advertising provides a cautionary tale.

Nitesh Patel

Spiderman (née Peter Parker) and Harry Obsorne. Julius Caesar and Marcus Brutus. Apple and Google. Each of these great friendships inevitably turned into a rivalry. The battle for the consumer’s mobile soul became more complicated on January 20th as rumors abounded that further acrimony between Apple and Google, the former bunkmates, has led Apple to consider Microsoft’s Bing as the iPhone’s default search engine. Take a moment to let that sink in. Apple partnering with its rival Microsoft – certainly with noses tightly clenched - to challenge the enemy du jour, Google. The mobile market certainly makes for strange bedfellows. Beyond just posturing, the possibility of Bing coming to the iPhone shows Apple is serious about its divorce from Google but it could just be an interim step for greater Apple control of its platforms. 1. Google Services. A number of iPhone users – unwilling to pay the annual fee for MobileMe use Google services, particularly Google Sync to keep e-mail, contacts, and calendars always up to date from iPhone to cloud to computer. If Apple is serious about limiting Google’s footprint they should make MobileMe free and hasten the conversion of Google users to MobileMe users. Failure to do so, combined with the possibility of greater disconnection from Google services could convince some Google users to adopt Android. But a free MobileMe not only prevents this, it gets users further invested in the Apple ecosystem. 2. Apple Control. Maps. Search. The processor. Streaming music. Apple still partners with a number of companies for its device and service, but it has also been on an acquisition binge. Could this be the beginning of greater control for Apple to ensure a wholly differentiated experience? Acquisitions of PA Semi, Lala, PlaceBase, and Quattro certainly indicate it more Apple control could be the future. Could an Apple search engine even be on the horizon? 3. The Tablet and other platforms. All service/OS providers want greater control over the user experience. Google is releasing an entire OS, Chrome, to extend its control to more platforms. Apple will not want to cede valuable property on iPhone, iPod Touch, or the iPad/iTablet/iSlate/iTenInchOLEDTouchscreenMacBookTouchPro. Looking at the broader picture – offering improved embedded services such as Maps while also allowing users to download other best of breed applications will ensure an improved, but differentiated experience. It seems therefore that partnering with Bing could be an interim step, another defensive move to relinquish any lingering grip Google has on the ‘out of the box’ Apple platform and eventually lead to a more wholly Apple experience and an improvement to the Apple ecosystem. But if Apple doubles down with its own services it must remember an important lesson Spiderman was once taught before he could defeat Harry Osborne’s Green Goblin – with great power comes great responsibility. -Josh Martin

The Apple app store has surpassed 3 billions downloads, nearly a download for every other man woman and child on the planet. And yet the race to billions more continues unabated – even McDonalds had the dignity to stop counting eventually. However, the massive download figures and the eye popping number of available applications bring one important fact into evidence; digital content providers need a lesson in old fashioned inventory management. Imagine if you will, walking into a Best Buy and being confronted with nothing but stacks of boxes higher than your head and filling every available inch of floor space. Such a situation would not only make purchase impossible it would make discovering new content almost impossible. This phenomenon was coined “The Paradox of Choice” by Barry Schwartz, author of a book of the same name. Consumers are simply confronted with too many options making top ten lists not only the most important aspect of discovery but they become a self referential list perpetuating themselves over and over and over. New applications such as Chorus, Appsaurus, and other application finding applications are emerging to fill the void. However they do not address the underlying fundamental issue that App stores must put better policies in place to avoid users having to wade through fifty pages of flatulence applications (that is not an over exaggeration). This is truly an instance of the long tail run amok. In an upcoming piece of research expected to be published in February, Strategy Analytics will tackle this problem by identifying the necessary steps that App store owners must follow to prevent consumer fatigue, drive incremental sales, and provide a superior customer experience. Until then, check the top ten lists. -Josh Martin

Afte the inevitable wave of irrational exuberance has come the equally inevitable correction and flow of negative comments regarding Google Nexus One.

• We are now seeing a huge rebound of criticisms about customer service, implementation and execution, moaning and complaining for existing t-mobile customers who have to pay more than a new customer to get a cool device and strong complaints from developers about availability of SDK and support.
•  Naturally, the questions about Google's ability to execute on direct sales are being raised but these shall pass very quickly in our view.

Within our wireless team we had divergent opinions from network centric, application focussed and device driven analysts but ultimatlely we arrived at the following key perspectives:

• Consensus is that Nexus will be successful by high end tier Smartphone levels (single digit volumes in 2010 but upside potential when it rolls out beyond TMO in US and to more open markets in Europe). Nexus is likely to sell more through operator channels than direct overall. Handset volume though is not the metric by which Google will measure Nexus success nor should operators as Nexus sales are a means to an end.  If Google is successful and Nexus ends up driving usage and value for operators, they will support it with subsidies.  Otherwise, operators can passively watch Google evolve its own-branded offering with little to lose. Tier One handset vendors (SAM, LG) may have the most to lose as Google’s marketing muscle and brand coupled with compelling devices and experiences will be a strong competitor for Operator slots, subsidy dollars.

• Handset revenues and profits are a nice to have for Google. Key to their success and long term ambition is too boost the mobile browsing ecosystem. More open devices capable of browsing/search/maps from Google or others is positive for Google.  Google needed to update and get close to parity in terms of an engaging, fun, easy browsing UI with competitive links to key apps like maps, media etc and this device achieves that goal. Google is great at creating a buzz and the media is ready to talk about something other than Apple.

• Google Nexus and indeed the whole Android approach is not about controlling/owning the user (contrast this with Apple). Google’s key metric is advertising revenue. Google's vision is well publicized: the browser is how they will deliver services, even on mobile, and apps are a stop-gap measure as far as Google's strategic vision is concerned. Google is banking on HTML 5 as their solution to fragmentation but we believe they are drinking too much of their own coolaid here and underestimating the importance of apps. Google’s key goal is to increase eyeballs and advertising.

• Some key elements that have not been addressed which we believe are key in Google’s future evolution and will be key to watch relate to Voice and what Google does its Gizmo5 acquisition to push Google Voice into a full VoIP proposition. This is where Telcos should be most worried and where we have yet to see all the pieces positioned on the battlefiled.