I recently returned from BlackBerry World where Research in Motion laid out its plans for the future of the BlackBerry and Playbook platforms. The packed event saw a number of important announcements but also indicated four key trends which RIM watchers and users should be aware of.

Recognition of deficiencies and willingness to address them

The Playbook has a lot going for it. It is fast. It has full Flash support. It comes with the ability to view/edit Office documents. But the launch of the Playbook was at times undermined by a few missing elements such as native e-mail, BlackBerry Messenger and key apps such as Facebook and Twitter.  Instead of shying away from criticism RIM has now addressed these challenges. Native e-mail is coming. Facebook has arrived. And with so many developers now sporting Playbooks (RIM gave one to each conference attendee) it is certain that an ever growing number of apps will arrive including the seemingly ubiquitous avian adventure, Angry Birds.

Continued differentiation

BlackBerry is different. Users buy more expensive apps than on other platforms, they desire social networking offerings as much as gaming, and they demand productivity (and ever more – entertainment). Hence the reason adding a native Facebook app was an important first step to making the Playbook more appealing. In addition, recognizing an area it could better serve this unique user base, RIM partnered with Microsoft to offer unified on-device, on-line, and location based search. This feature will help to further differentiate the BlackBerry experience and further embed the concept of super apps as tightly integrated offerings. Finally, the concept of dual identity to make separating a device between work and personal is a uniquely BlackBerry offering that should appeal to users who take their device to work or use their work device at home.

Super Apps will be more Super

RIM already has a number of highly regarded apps and a slew of Super Apps. But the specifications of the new Bold (and the Playbook) will ensure that super apps become super charged. And the demos at BlackBerry World indicate that an ever improving slate of apps is coming soon and will continue hence.

Android Apps

I admit to being a skeptic about Android apps on BlackBerry for a number of reasons. However, the demos at BlackBerry World showed that in certain instances porting Android apps could provide a good experience for Playbook users. However, I would suggest that instead of positioning Android porting as simply a “take an Android app and sell it on BlackBerry” it should be positioned as “Here is a solution that gets your app 90% Playbook ready.” This ensures motivated developers can leverage limited resources but also promises Playbook users that they will get an app that will take full advantage of all the APIs and hardware the Playbook has to offer.

With dedicated developers, unique offerings such as BlackBerry Messenger, and strong ties to the enterprise RIM can surely overcome the short term challenges it faces as it transitions to a more consumer oriented brand that continues to thrive in the enterprise.

Thanks to RIM I have had the opportunity to test a Playbook (and it’s pre-release software) for the last several days which has afforded me enough experience to come to some early conclusions.

 

In short, the Playbook feels like a thoughtfully created device and there is a lot to like.

1. Innovative user interface. Gone are front facing buttons replaced instead with swiping on the bezel to bring up different menus, screens, etc. It truly feels like an innovation in a space that after just one year already feels a bit stale.

2. True multi-tasking. This has been often touted by RIM and it really is a game changer. And while I may not need to have a video running in the background while playing a game the fact that I can have multiple tasks running at once makes me feel like the Playbook is more of a productivity tool than competitor’s devices.

3. Speedy. The Playbook is fast, responsive and handles web browsing with aplomb. It also plays spectacular 1080p video.

But there are also a few areas for improvement.

1. Lack of apps. RIM should have focused on having 10 to 20 key apps available at launch that are amongst the most popular; Facebook, Twitter, Skype, OpenTable, Yelp, Angry Birds, Kindle (Kobo does come pre-loaded but it’s not nearly as popular), Ebay and a handful of others – including e-mail (see point 2). And let’s not forget BlackBerry Messenger – RIM’s own offering which seems to be missing. It’s not necessarily about how many apps you have but the quality and utility of those apps.

2. No e-mail client. I understand the logic behind RIM’s decision to only allow e-mail via tethering from a BlackBerry - if the Playbook was exclusively an enterprise play. But it’s not. This decision inherently limits the market to BlackBerry users who keep their handset with them at all times. RIM has said they will release an e-mail client within 60 days but if I did not have a BlackBerry I would probably hold off on purchase until it is released.

3. It’s small. Maybe too small. Even using all of the 10” of the iPad screen makes creating content difficult – albeit possible. But the seven inch screen – while great for thumb typing - simply isn’t big enough to write a report. It’s great for e-mail and messaging though and I think I would bring it with me more places than my iPad 2 because it’s small. So there is a give and take. However, RIM should consider various sizes. The use-case for tablets isn’t quite “set”, but if they become primarily home devices, larger screens may be more desirable.

After reading the early reviews of the Playbook I tempered my expectations so it was nice to be positively surprised by the device upon using it. And the issues it faces today are ones that RIM is already addressing. E-mail is coming. More apps are coming. Blackberry Messenger must be arriving soon.

If QNX is in fact the future of BlackBerry it portends very good things for the platform. The Playbook is nice to use, fast, responsive, and the multi-tasking makes me long for the feature when using my iPad.

Overall, the Playbook has a lot of potential and will answer a vexing market question – does the 7” form factor offer enough differentiation from a smartphone while enough differentiation from a larger tablet to have a role in the market. Or does it just become the smartphone for people with oversized pockets?

Location based services are all the rage. Just this morning Shopkick announced another partnership – this time with Crate and Barrel. Foursquare recently exceeded 5M users. Gowalla launched its newest update providing an overhauled user experience. Articles on the topic have appeared everywhere, including Fierce Wireless (Warning shameless self promotion at the last link). But despite the hype location based applications are still just at the larval stage.

Today, stalwarts remain the key players. Recently, we revamped our Apps Database – which used to contain the top ten apps for iPhone and Blackberry in the US. Our new iPhone database contains a more global view - capturing the top 100 (free, paid and grossing) apps - in 62 countries. The data shows that Facebook remains the dominant player – regardless of region. Out of 124 free apps lists (2 weeks of 62 countries) Facebook and Skype appeared on 98% of the lists. Windows Messenger appeared on 75% of the lists.

Interest in social networking is not restricted to mature markets either. In fact, the Middle East and Africa are most likely to download social networking services - with nearly 11% of all free iPhone downloads coming in that category – almost 2x that of Western Europe.

Clearly there is intense interest in social networking even if there is not yet sustained interest in location based social networks. Foursquare and Gowalla combined for 12 total appearances (11 for foursquare and 1 for Gowalla) managing to garner placement on less than 10% of all free apps lists. However, many of the companies, such as McDonalds, that were bold enough to partner with these up and coming companies have found great success as these services continue to slowly grow, expand, and increase their influence.

In fact, these services will be so important in 2011 that we dedicated an entire prediction about them in our recent report 11 for '11: Predictions on the Future of Mobile Media (although to know what we predicted you’ll need to read the report). Additionally, we will be hosting a webinar on Thursday December 17, 2010 at 10:00 EST to discuss the future of social networking and how location will come to play an increasingly important role in 2011 and beyond.

Please find more information and register at the link below.

Mobile Social Networking: A Platform For Success?

Amazon has announced that over the past 12 months purchases made from mobile devices generated US$1 billion in sales, representing almost 3.5% of its total net sales during that period. $1 billion is clearly a large amount of money and 3.5% not an insignificant share. Furthermore, Jeff Bezos indicated that smartphones have had a strong role in driving mobile commerce to date, which is not surprising given the larger screen size and better resolution provides an improved product browsing experience over standard phones:- "The leading mobile commerce device today is the smartphone, but we're excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business." Unfortunately, there was little further information relating to the type of products being purchased via mobile, e.g. whether or not it includes the sale of ebooks, or the % mix between digital content (e.g. MP3) versus physical goods? However, this announcement, combined with the increasing volume of web traffic generated by mobile phones, and the fact that that the global smartphone installed base is set to expand from 458 million in 2010 to 1.1 billion by 2015, has a clear implication for web retailers that are seeing increasing mobile traffic to their sites: Integrate mobile to your digital sales process, because a growing share of consumers are using their phones to buy stuff! Perhaps not surprisingly, Amazon has been ahead of the curve with respect to mobile commerce for sometime. It currently offers dedicated smartphone applications for the major smartphone platforms (Android, Blackberry, iPhone, and iPod Touch) in the US. The absence of support for Symbian is clearly a consequence of Symbian’s low penetration in the US. Amazon has also designed mobile optimised sites for smartphones and in June 2009 Amazon’s subsidiary A9.com acquired Snaptell, a company focused on image recognition and visual search technology which allows users to take photos of products and find pricing information, rather like Google’s Goggles (still Beta) and ScanBuy. Linking the image capture capability on camera phones with off-board product recognition, price comparisons and product reviews can help to convert the handset into a powerful commerce device in my opinion. Perhaps most importantly though, Amazon allows users to register their payment details to their account and to make purchases using a single click, through its 1-Click ordering system, which eliminates the inconvenience of manually entering payment details. For many web retailers adapting for mobile is not likely to be a priority yet – few will have forgotten the dotcom bubble bursting. However, I believe this announcement by Amazon provides an indication of the potential size of the missed opportunity if they do fail to address evolving consumer behaviour. Nitesh Patel

The iPhone launched in mid 2007. Apps launched in mid 2008. Hulu is still not on the iPhone – or any other mobile platform for that matter. While some content owners have finally dipped their toes into the proverbial mobile waters - as ABC has done with the iPad - mainstream content owners continue to ponder their next move. Sports however continue to dominate.

I initially analyzed the success of sports in the report, March Gladness. Since publication, the Baseball season has started, Hockey and Basketball have completed playoff runs, the World Cup launched into full swing, and Golf’s Masters and US Open have all made their way to the mobile device.

And sports continue to dominate:

• As of April, ESPN’s Scorecenter application has been downloaded more than 5 million times
• More than 1.2 million people downloaded NBC’s Olympic application in the US
• The FIFA World Cup App game ($2.99) was the #2 app on June 16
• ESPN’s 2010 FIFA World Cup game was the #3 and #10 on June 16 and 9 respectively
• The US Open’s mobile site recorded 1.7M visits during the championship, an increase of 518%
• Allot Communications announced that its data showed a 26% increase in mobile broadband usage during the first 10 days of the World Cup

So, how can other content owners get off the mobile sidelines? By learning the following lessons:

1. Timely content is important. Whether it be a TV show that aired the previous night that a fan wants to catch-up on during a commute or a live press conference content needs to be available when a user wants it,
2. Provide an additive experience to TV. One could argue that video would drive interest in mobile sports but other information such as in depth stats, tracking information, and scores are integral to the experience as well and often times drive snacking behavior. In fact, focusing offering context beyond video will lead to a compelling second screen experience for fans while watching TV.
3. Release in various forms. Apps are a component of the go to market strategy but not the entirety. The mobile web is integral. Supporting all platforms (iOS, Android, BlackBerry, Windows, and Palm) is also imperative. Leveraging excitement into other apps such as games can turn into additional revenue.

Overall, it is imperative that content owners begin to do more than just experiment with distributing content on the mobile device. Sports have trail blazed a path of success that other content owners can follow. But they have to step up to the plate or risk users finding their content from alternative channels.

-Josh Martin

Mobile social networks: Loyalty, Publishing, and Revenue: Oh My! You may think that because we have ushered in the digital age there will be fundamental shifts in human behavior. You’d be wrong. Services such as Gowalla, Foursquare, Loopt, and even Yelp are finally at the tipping point of success because they tap into latent human desire. And then make acting on those desires simple. Much like the loyalty programs that offered a tenth sandwich after getting nine purchases punched on a card new social networks are offering benefits for loyalty firmly merging the physical and digital world. The aforementioned services are mobile social networks – allowing users to check-in to locations, earn badges for visiting pre-determined locales, and net loyalty rewards (such as free drinks) for particular achievements. The availability of smartphones and the opening up of mapping API’s will help these solutions succeed where other have failed. For greater insight see David MacQueen’s Insight Nokia Strides Forward in Online Location and Navigation. The most amazing part of these networks is the willingness of brick and mortar companies to participate. Becoming a Mayor (by visiting a place the most) on Foursquare and earning a free burger can only be achieved if the establishment opts in. And they are opting in. But free fare is just the beginning. In the last few weeks Foursquare has partnered with the American television network Bravo – allowing Blackberry users to earn special Bravo badges when they visit pre-determined locations, which one can assume will complement Bravo’s programming. Another Foursquare partnership with Canada’s Metro newspaper will provide location aware content from the newspaper’s nightlife section and eventually other sections as well. Finally, Foursquare most recently partnered with Zagat, allowing users to earn special Foodie badges at Zagat rated restaurants as well as offering restaurant tips. So, what does this all mean? Is it just a passing fad? In short, no. It seems like this is the new era in customer loyalty. While the social networking aspect of it remains new the ultimate goal is to drive user behavior. And open user’s wallets. While the players may change the fundamental merging of the physical and digital world is happening. Just this week OpenTable announced it had seated more than 2 million restaurateurs through its mobile applications. GyPSii is also building location based applications that offer location specific advertising such as coupons. While publishing companies will tout solutions such as the iPad as saving their businesses the truth is, services like location aware social networks could be the true path to salvation by driving consumer to spend identifiable real world dollars on real world goods.

 

As we rapidly close the cover on one of the toughest years the telecommunications, content and internet industries have ever seen, SA takes a look ahead beyond the recession to detail the key megatrends for the mobile industry in 2010.

We see a tough but positive mobile ecosystem outlook with devices recovering stronger than services. More consolidation is likely among network operators, while profits for device vendors will continue to flow away from handset only vendors in favor of device/services integration specialists. Emerging markets will continue to dominate volume with strong 3G rollout competition expected. The global market for services, applications, devices and infrastructure will post modest growth of approximately 3% in 2010.

The total mobile industry revenue including services, infrastructure and devices was flat in 2009. We expect a modest growth of 2.8% in 2010 to $1140B.

· In 2009, only strong growth in data spends by users ensured that total industry revenues did not decline. Data revenues grew 9.5% in 2009 and are expected to grow at a 13% rate in 2010 reaching over $200B.

· Handset market sell through revenue will rebound well in 2010, posting growth of 4% while the infrastructure market will continue to struggle and will decline slightly.

Key issues shaping the 2010 landscape include:

• Operators needing to balance the the strong rise in Capex requirements driven by the data traffic explosion against slow revenue growth. The likely outcome being significant M&A, network sharing and even applications development.
• Handset OEMs will be forced will put the early stake in the ground for new device categories. Traditional OEMS will continue to struggle to match the Apple & Google vertical integration strategy which has proven so successful.
• As the big five vendors focus on smart phones and content/services in the open markets, a race develops to get services/apps onto feature phone products or other operator customized devices
• On-portal traffic continues to grow but is outpaced by off portal session growth. Contextualization and personalization of the user experience will determine winners and losers.
• The rapid diffusion of Flash and HTML 5 on handsets could negate much of the need for mediacos to use open platforms/app stores in mature markets.
• In the business sector we see SMEs and Manage Mobility as key battlegrounds. We see growth in hosted services for SMEs (e.g. Unified Communications infrastructure-one phone mobile and fixed, one voicemail etc.  Personal v corporate liable devices (iPhone v BlackBerry) becomes a major issue.
• In the Emerging Markets area we see consolidation & 3G expansion in urban areas as key battlegrounds. With improved financing prospects, there will be significant consolidation among regional operators and rationalization of holdings.

Devices Perspective

As expected, the back half of the year is already full with Android announcements. When Android was first announced in late 2007, there was some skepticism in the industry that operators might find it tough to partner with Google and many of them would go for the “wait and watch” approach. It is fair to say that Google has dealt with the issue diligently by scoring wins with three of the top four major US carriers.  

As of today, the Android scorecard for major US operators is as follows:

T-Mobile USA : Three Android devices, the HTC MyTouch, Motorola Cliq and Samsung Behold 2. TMO US has been a slower mover in the converged device space. No doubt that the carrier is positioning Android as a preferred platform in the converged space.

Sprint: Two devices, the Samsung Moment and HTC Hero. The new devices will complement Palm devices in the smartphone segment. However, we believe the Palm Pre and Pixie are likely to remain the focus of the carrier during the holiday season.

Verizon: Two devices; although the device partners are not announced at this point. RIM has been a key vendor partner for VZW, especially in the converged device segment. Blackberry devices have benefitted from heavy promotions, such as the BOGO offer for most of the year (Buy One, Get One free). With the addition of Android in the Verizon portfolio, it will be interesting to see whether it will have any impact on subsidies/promotions offered on RIM devices during the seasonally strong fourth quarter.

AT&T: AT&T is under no pressure to include Android to its portfolio in the near term. The Apple iPhone is doing a superb job in attracting new subscribers and upgrades. However, the carrier has hinted on several occasions that they are open to multiple platforms. The AT&T portfolio already supports Windows Mobile and Symbian in addition to RIM and iPhone. In our view, it is only a matter of time that additional platforms, such as WebOS and Android, will be joining the ranks of AT&T.

Android’s penetration of major carriers' portfolios will fuel interest among the developer community to build compelling applications. The US is the world's most important handset market and Android has gotten off to a good start. Although the expansion of Android to major US carriers' portfolios is good news for Google, it is too early to say whether the devices announced so far have sufficient traits to differentiate sustainably from one another.  It remains to be seen how effectively OEMs utilize Android in differentiating from the sea of Android devices expected to join carrier ranks in the next 6 to 9 months.

News in a nutshell:

- Co-developed Android devices which will include Google apps, and will also be open to 3rd party apps

- Devices will include Android Marketplace (App store), Google Maps, YouTube, and Google Voice (VoIP)

- 2 devices initially to be launch in next few weeks

- Did not mention who is actually making the hardware, except to say that it's not Google

- Does not necessarily impact strategy with other devices/OS, Verizon Wireless (VZW) will still have plenty of other devices/OS in portfolio

You could feel the love on the conference call between VZW and Google. I bet Microsoft is not feeling the love, however; they paid VZW $550m in guarantees to be Verizon's search partner.

With this deal, VZW has opened the door for device/OS vendors to put their own content and services on the handset, a significant shift in strategy from its previous "walled garden", VCast-only services environment for feature phones. Although VWZ has to date exerted less control over smartphones in its portfolio, e.g. its customers can buy Blackberry smartphones or a number of Windows Mobile powered devices with no restrictions to getting third-party applications and content onto those devices, it has been able to tolerate this while those devices have accounted for a relatively small volume of sales. However, with the smartphone installed base forecast set to reach 170 million in North America (47% cellular user penetration) by 2013, VZW has clearly felt the need to exert some degree of control, rather than allow vendors to run the show entirely.

It's not as simple as open versus closed, but rather that there are degrees of openness, and through this agreement Verizon has definitely opened the door further. It's like opening Pandora's box, though, and there's no shutting it again.