I often think of the mobile space as being consumer led, particularly when it comes to media and services. The "next big thing" often seems to crop up out of nowhere, blindsiding the bulk of the mobile industry which often has its blinkered eyes fixed on pushing some new technology rather than listening to consumers and seeing what they are doing.

Mobile TV was one such great white hope, and it hit the market to a collective shrug of the shoulders from consumers, who had all moved on to using on-demand video services and had lost interest in traditional broadcast TV. Sure, it was a spectrally effecient way of distributing video content, but it wasn't the content they wanted when they wanted it, and I've yet to meet the average Joe who gives two hoots about spectral efficiency.

Seems to me like history is repeating itself with mobile payments. "You can replace your credit cards with your mobile!" So what? Where's the real advantage to the consumer in doing that? What consumers are doing in stores, right now, is that 67% of them are using their smartphones for researching products and comparing prices. That's what they want to do. They want to use the capabilities of that device to do something practical and useful for them. Compare that to the 1% using contactless payments.

This time, unlike mobile TV, it's not mutually exclusive. But mobile payments in isolation aren't going to make a compelling proposition. As I said in the press release for the report, "bricks and mortar retailers are not waiting for carriers or OEMs to roll out mobile payments and are leveraging mobile solutions already in the market, such as mobile advertising, couponing, loyalty cards and alternative payments, to drive footfall in stores, and convert that footfall into revenues." So far, it's looking like while the mobile industry beavers about trying to insert itself into the payments value chain through NFC technology, companies profiled in the report like Starbucks that are building the consumer relationships necessary for success. It's the mobile industry that needs to wake up and smell the coffee.

Instagram (owned by Facebook) created its own little PR disaster this week. It added these words to its new terms and conditions:
"You hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the content that you post on or through the service ... a business or other entity may pay us to display your username, likeness, photos, and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you."

The company has now changed this part following a backlash from users, and said in its blog that "it is not our intention to sell your photos". I'm not so sure that their defence of "Legal documents are easy to misinterpret" rings true - the language used initially seemed very clear. This smacks of an attempt to change the terms and conditions which subsequently misfired and Instagram/Facebook had to back down pretty quickly.

Now that the terms and conditions have been changed to something rather more reasonable, it seems this little storm will blow over. However, since the acquisition of Instagram, this type of change to terms and conditions was always on the cards. Based on what has happened previously, a vocal minority of users will disagree and some will end their existing accounts, but so far none of the changes to Facebook’s T&Cs have significantly impacted its growth, and the overall short term impact is likely to be minimal, especially since the company backed down (for now).

However, in the longer term, this does add to the regulatory concerns that many government agencies globally have with Facebook and others (including Google). Will Facebook try and change the terms and conditions again in a year’s time? What about public photos on Instagram or Facebook, which anyone can access? The person uploading the photo has agreed to the terms and conditions, but that doesn’t mean that every person featured in a photograph has – what about their privacy? In the short term, I expect little impact. Whatever impact there is, is likely to be longer term and could be quite significant. Years are more the timescales that regulators work to. Facebook can afford to ignore the moaning bloggers, but can it afford to continue to ignore regulators?

In my recent insight, BBC iPlayer Shows Limited Appetite for Mobile TV, I observed seasonality with mobile usage generally increasing during summer. The BBC has noted that overall usage is increased during sporting events, which tend to occur during the summer months, but the BBC iStats do not discuss whether or not that pattern is true of mobile usage.

I decided to test some alternate hypotheses, using data from the UK’s Met Office (UK’s national weather service). Below is a chart showing the % of BBC iPlayer usage which is mobile against UK average temperatures.

The results correlate very strongly, with an R² value of 0.65. I ran a simple F-test and there is a 0.000001% probability that the correlation is down to chance. A-ha! Believe me, the sun always shines on mobile TV…

Social gaming companies are being acquired right, left and center. RIM has just splashed out on Scoreloop. The top 2 Japanese social networks have been active in getting involved in mobile social gaming. Following the move of its rival DeNA, which spent $403m buying US social mobile publisher ngmoco in October last year, GREE has bought social games platform OpenFeint in a $104m deal.

There’s a lot of activity and a lot of companies playing in this space. Xbox Live is part of WP7, Sony is almost certainly bringing social gaming connectivity to Android with PSN (see my previous blog on the topic), Apple’s Game Center, ngmoco / Plus+, OpenFeint, and one could argue Facebook Connect as well. How many gamer identities do I have to have? The simple fact is that today, each game will only use one platform, but as an end user with multiple games, that means I have to sign up to multiple social gaming platforms. The pertinent question is which ones I sign up to (and actually use) because this will determine the winners and losers.

The advantage ngmoco, OpenFeint, and Facebook Connect (if you count that as social gaming) have is that they cut across gaming platforms and so perhaps have a greater chance of achieving critical mass. That will be a major factor in deciding the winners. With all the other platforms having some sort of built-in audience, the onus is on OpenFeint and Plus+ to woo developers and end users while they have a window of opportunity. Facebook Connect lacks gaming features, Apple’s Game Center is a poor effort, and there is time before Xbox Live/PSN hit mobile in any serious way. However, stumbling now could be game over for these (previously) “indie” platforms.

One message I've consistently been hearing from Nokia over the last two years has been that all of the different Ovi services will somehow combine together to make something wonderful that would "delight users" (their words). Nokia never gave any concrete examples, and I was starting to think that this was simply vaporware - but now that all the services are together and under the same Ovi banner, there is some magic starting to happen. The Nokia Gig Finder application genuinely impressed me at this year's Nokia World. The premise is simple - but then aren't all the best ideas? The Gig Finder app looks at the music you have on your phone, checks your location, and then suggests up-coming gigs for you. You can buy tickets directly, message your friends about it, save the gig on your calendar, get directions to the gig and listen to some more music from the artist to get you in the mood for the gig as well!. Music, Maps, Billing, Messaging, Social Networking and the phone's Calendar all coming together - which sounds like it should be far too complex for the user but in fact the app is remarkably simple and intuitive. All of the technical stuff is hidden and it is the complex integration of services at the back-end and the single sign-in (which has taken Nokia over a year to achieve across its Ovi suite) which makes this sort of stuff possible. An interesting, innovative, compelling, useful app which is greater than the sum of its parts - and with a developer community numbering over 3 million, I'm hoping to see more innovation like this emerging out of the Nokia ecosystem. As Thomas Edison said, "genius is 1% inspiration and 99% perspiration". After the years of talk, they needed something to prove there can be an end product. I'm sure there has been plenty of perspiration behind the scenes at Nokia as they rolled out and integrated these services, at last that 1% inspiration is starting to show. Related reports: Nokia Opens Up To Innovation - David MacQueen

The newly unveiled handheld console, 3DS, has once again demonstrated Nintendo’s innovation in hardware, and it could be showing mobile phone manufacturers the way forwards. Let’s look at Nintendo’s history of innovation in controls:

• The “D-Pad” (first appeared on the NES console, 1983)
• Wireless controllers (NES, 1989)
• Vibration feedback ( N64, 1997)
• Touch control (Nintendo DS, 2002)
• Motion sensor controls (Wii, 2006)

Nintendo did not necessarily invent all of these technologies, but it certainly popularized them, and every single one of these features are now commonplace in both games hardware and mobile phones. Nintendo does not innovate for the sake of innovation – these controls were created with the user experience in mind, and were always released with new titles (“apps” to use the mobile buzzword du jour) which used the feature to add to the experience, such as the Wii controller and the feeling of playing “real” sports. So, what has Nintendo done with its new handheld, the 3DS?

• There’s a 3D screen which does not require glasses
• There are not one but two external cameras. Why? Because with 2 cameras you can shoot 3D video
• There’s automatic data exchange (cloud based computing) and an accelerometer which are new features for Nintendo handhelds but old news for mobile phones, and of course the touch screen of the original Nintendo DS remains

Really it’s the 3D that sets this apart. The 3D screen does not require glasses, although it does require the user to sit at a particular angle to view the 3D effect. On a TV with a roomful of people watching, this is a problem, but for a handheld personal device, this is not an issue. Expect to see this in phones in the next 2-3 years. Shooting 3D video is really something quite remarkable. Due to the size of the device, the cameras are by necessity rather close together, so the 3D effect may not be terribly noticeable. However, the 3DS should retail at sub-$300, and likely will come down to a sub-$200 price point during its lifespan. Price points for current 3D camera setups are not even in the right ballpark for consumer products today, so the 3DS is something of a revolution. Yet again, Nintendo has shown us the way and in the near future we could all be shooting 3D video with our phones. The 3D viewing revolution is coming, and it's being orchestrated by a plumber.

In many ways, convergence between online and mobile is already here. For some types of content, convergence with mobile was something that just happened. Take music; as soon as phones became music players, “convergence” was already in place. Strategy Analytics’ consumer research shows 83% of Western Europeans and Americans have used their phone as a music player, with 37% using the devices as their regular portable music player (although only 6% have actually purchased music on their phone, but that’s a different story… see Can Nokia Challenge Apple's Digital Music Dominance).  For media companies and internet brands, it’s no longer about whether or not they should have a mobile presence, but rather what form that mobile presence takes. An optimized web page? An app in the App Store? A deal with an operator? These are all options, sure, but for me it’s a shame that most of the discussion around convergence is simply about making the same content available on the mobile device. Rather than focus on convergence, which is clearly the direction media markets are heading (if they haven’t already arrived, as in the case of music), I’d like to look instead at what I see as step 2 – divergence. By divergence, what do I mean? I’m talking about the unique factors of mobile; what is it that makes the mobile environment different, and how can that be used to provide a better user experience - and thus, ultimately, greater revenues? Yes, there is a smaller screen size, lower processing power, and of course a mobile experience has to be designed around these limiting factors, but there are also some strongly positive characteristics about mobile usage which can actually be used to improve the experience. One of the first things that people might expect me to talk about here is the idea of targeted advertising. However, I’m not going to go down that route – aside from the fact that you’ve almost certainly heard it all before, targeted advertising is not something that enhances the user experience. It’s simply a tool to attempt to generate slightly higher advertising revenues. I’m not talking about the content either – made for mobile content has rarely been popular, and it seems that what consumers want is traditional content. So what am I talking about? It’s the experience, not the content, which has to be “made for mobile”. An example of a media type where mobile actually adds something new is social networking. The constantly updating nature of social networks along with the “always on, always with you” nature of the mobile phone is a match made in heaven. Strategy Analytics conducted a survey of MySpace users, and found that more users accessed MySpace Mobile daily than the main MySpace.com website. With such high levels of mobile usage, it seems remarkable that the most popular social networks (MySpace and facebook) have yet to monetize this traffic. Usage patterns were quite different – sessions were shorter and tended to be limited to status updates and comments (see Mobile Social Networking - Strategies for Success ). Mobile isn’t exactly converging with online, it’s diverging – mobile will become the main use case for social networks, and the usage will be different from how it has been in the online world. To make the most of this opportunity, social networks need to think about how mobile is different, not just simply try and replicate the desktop experience on mobile. Context is another way in which mobile is very different from online. If I’m accessing a website from my desktop, I am at my desk. If I’m accessing a website from my mobile, I could be anywhere, and the place I am at matters. Taking a simple example, if I’m in town and I’m searching for a movie, I almost certainly want cinema listings close to where I am located. I’m unlikely to want to go to the movie’s own website, or the IMDB page (typically these will be the top 2 search results). Location clearly matters, and this is why both Nokia and Google have been investing so heavily in maps products. Google has a huge head-start online, as not only are Google Maps available through Google's own web properties, they are available on many other websites. This has given Google a 44% share of the local search market (comScore, July 2008). In terms of handsets, Nokia has something of a lead as it pre-installs Ovi Maps on Nokia smartphones. In just 3 years, Nokia went from being non-existent in this market to being the world’s largest manufacturer of GPS devices. The location capabilities of phones add divergence from the fixed, online world – optimizing search results for my location is one way to really enhance the user experience, but it has the potential to add all sorts of richness to other media (see Nokia Strides Forward in Online Location and Navigation and Crowd Sourcing Model to Disrupt Premium Mobile Navigation Market) Take social networking, where as I discussed earlier, mobile is already driving usage. Nokia announced a deal with facebook, and facebook users with Ovi Maps on their device can now post their location. Users can tag photographs uploaded from phones with GPS coordinates. There’s really quite a number of ways in which the mobile experience can actually add something new and I really believe that these early examples are just the tip of the iceberg. Now that people can access the same content online and on mobile (and the iPhone has proven that) we already have convergence. What is going to be exciting to watch, and where we’ll see the really exciting innovation, is actually the divergence of mobile. - David MacQueen, Director, Wireless Media Strategies

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.