Why the iPhone will never be the biggest money generating platform

The iPhone will not generate significant mobile revenues

Tomi Ahonen has written a very long post about the history of mobile phone development  in Europe and the United States. Tomi is a well known authority in the Mobile space and is the author of the well known Communities dominate brand book.

His post contains a number of provocative and thoughtful observations. The post itself is as long as an e-book, but I urge you to read it all the way. It’s excellent.

In his post Tomi argues that even though the iPhone has brought a revolution in smart phones it will not dominate mobile revenues with its current offering. the bulk of mobile revenues are not in App stores or the real Internet. Apple’s iPhone represents less than 1% of the mobile market, and it’s revenue generation is infinitely small compared to current real mobile Internet revenues. A quote from Tomi’s post:

So we come down to the applications. Tomi, its a smartphone. By definition, a phone that can accept applications? Why aren’t you talking about the Apple iPhone Apps Store. Yeah, sure, its important for us nerds and geeks, the early adopters of new technology, who have been envisioning a pocketable PC that could be perfect for the gadget freak. Yes, the Apps store is wonderful. A billion downloads, yeah. Except that the mass market consumer, your mother, your father, your sister and your brother, are not like you and me at this blog. They will not madly download tons of apps to any smartphone. The theory of “Crossing the Chasm” has been explained by Geoffrey Moore a decade ago and is not disputed. Techie-geeky appeal of ultra high tech does not translate to the mass markets, in fact in most cases what geeks want and mass markets want are diametrically opposed.

No matter what stats you see for Apple iPhone Apps Store success, whatever the stats, the total market share of Apple is 1% of the phone market. It is exactly at the pointed end of that Crossing the Chasm theory that Moore talked about. This is NOT a mass market, and CANNOT BECOME one if the same model is repeated. Understand what I say. Even if you are able to make a success out of your app in the Apps Store today, it CANNOT translate to a mass market success, using that same model. its not my theory, Moore’s theory holds near unanimous agreement by all technology marketing gurus. Do not kid yourself.

The problem with the iPhone is that it has been developed with a pc in mind. It is a pc device that can also call. This is exactly why I wrote a post about a year ago explaining why the iPhone is probably one of the worst mobile phones I have ever used. It comes with downloadable applications that let the user customize his device. But that is exactly why it will not be adopted by the mass market.

Yes there is a big opportunity for apps to be sold to smartphones. Yes, it is a very significant market, when viewed from the angle of the software applications industry. But it will always be – always be – only a niche. Do not allow yourself to be delusional about this. We do not buy – and the mass market will not ever buy – smartphones so that they could install some apps to it. The vast majority of users will be contented with the apps that come pre-loaded, and then they go to web based services to get their additional benefits.

The real value (in terms of revenues) lies in the mobile web. This is not the real web displayed on a high end handheld like the iPhone. Instead it is the ‘walled-garden’ Internet that is build and maintained by the mobile carriers. Sounds totally unbelievable right? The facts and figures however are indisputable. Again, a quote from Tomi:

That is where the big opportunity is. Not apps that we install onto a smartphone, but the services that we deliver via the network. Mobile premium services, what could be called “mobile internet” and by this I mean a superior, better, money-making internet than the old legacy dumb internet we have on the PCs. So I explicitly do not mean “the real internet” onto the phones. That is as dumb as putting a real horse to power your car! We have a BETTER engine in the car. And now, yes, please understand, the “mobile internet” is the far better internet than that horrid old creaky stupid cheap “advertising-led” “get-me-more-eyeballs” internet which we all use today. The internet is for good reason called the 6th mass media channel and obviously mobile is the newer, 7th mass medium.

No, while that will be there, and yes, there will be millions and millions of users on “the real internet” on our smartphones, that is peanuts. PEANUTS. The far bigger opportunity in mobile is in the 7th mass media type of mobile internet, the better, smarter and richer money-making and magical mobile internet. That is where the opportunity is. To see how vibrant and lucrative it can be, one need not look further than this decade and Japan and South Korea, where the mobile internet really thrives already. Application developers have a hard time making money selling 1 dollar apps on the Apple iPhone Apps Store. You have to be very lucky to make the top 100 apps listing to have any chance of recovering your development costs. A very risky development path.

But in Japan, they offer the service on the mobile internet, take a subscription of one dollar per month (100 yen) and pay 10% to the carriers/operators and the service provider gets to keep 90%. Rather than one dollar from one customer once, the customer is charged 12 months, 12 times per year. 12 dollars, and the content owner gets to keep 10 dollars and 80 cents of it. Which is better? A dollar or ten? I rest my case, milad.

Worldwide the mobile data market is a much bigger opportunity than pc based Internet. There are more users, more devices, payment is integrated on every device (no need for credit cards). In another great and long post Tomi estimates these markets:

The total mobile premium content industry is worth 71 billion dollars and the mobile messaging industry adds another 130 billion, giving the total moblie phone based data services industry a size of 200 billion dollars for 2008. Now, consider the internet. Even as we add not only all content revenues, and all advertising revenues on the internet, but also the access revenues for broadband and dial-up narrowband internet access, the overall size of the internet business is about.. 200 billion dollars. In half the time, mobile has grown to same size.

Mobile is the bigger internet. Mobile is the stronger internet. Mobile is the money internet. Mobile is the faster-growing internet.

It sounds counter intuitive to us geeks, but the smart phone market is a niche market. No matter how sexy and cool we think it is. The SMS market alone is bigger than the current pc based Internet content market. Premium mobile data services add extra growth that can’t be matched by the web. On the web we are stuck with inefficient, crappy old-fashioned web 1.0 based business models. In the mobile data market every bit transferred represents real revenue. Twitter could have done it, but they didn’t pursue the biggest revenue generator.

Facebook missed that one too.In 2007 I wrote a post entitled “Mark Zuckerberg, when in doubt, follow the money”. I said then:

But there are 2 aspects to a mobile phone that are of huge importance when thinking about next generation web services:

1. The mobile phone platform has billing capabilities
2. The mobile phone user pays to interact with others

Think of the US on-line advertisement spent 2006 ($16 Bln) as a small hill,

think of the worldwide spent on SMS as the Mount Everest (btoh images taken from Wikipedia). It is estimated that the SMS market alone will be $ 67Bln in 2012 (or 3.7 trillion messages a year!) .That is excluding Mobile Internet services. In Japan alone more than $ 1 Bln revenues are generated from mobile data services. So stop thinking ads and start thinking payed services.

The mobile business model is the most User-Centric I can think of. It provides user value and the user pays directly for that value. There is nothing more powerful than that.

Are you enslaved by your mobile device? Take this test!

We are all becoming slaves of our communication habits. With our mobile devices as the new high priests, we hail the prayer of information and we are bonded by blackberry and iPhone. You do not recognize yourself in this description?

Take this small test to see if you have become a slave to your mobile device:

• Do you never leave home without your mobile device? Get uncomfortable when you do?
• Are you holding your mobile device as soon as you have to wait longer than 30 seconds?
• Do you look at your mobile device, even use it, while someone else is standing next to you and talking with you?
• Do you check e-mail or messages every few minutes, even when there weren’t any the past few minutes?
• Are you using it while you are watching TV, or worse, while talking with your husband/wife/partner/friend?
• Are you using it while sitting on the toilet? Ever dropped it there?
• Do you turn it off, after the plane has taken off? Or even not turn it off at all?
• Do you turn the device back on before you have even left the plane? Or landed?
• Do you use it while talking with customers, business partners, family, friends?
• Does your child have to wait to say something to you until you are done checking your e-mail?
• Is your battery always empty, or are you always complaining about it?
• Is your mobile phone lying next to you when you are in bed?

If you can answer 3 or more of these questions with “yes”  then I suspect you are enslaved by your mobile device. You will probably experience cold turkey shivers when you are separated from your device. You are also alienating yourself from those that stand with you trying to interact.

The problem with these devices is that they suck up all your attention. When you are looking at the screen, it takes away your ability to focus on anything else. Especially while using a touch screen. It is impossible to multitask. It makes you look arrogant and uninterested if you give your mobile device more attention than another human being standing next to you. We are addicted to real-time information. We take our high priest of information with us to dinner, parties, at a bar, work, home, on the street, while we are waiting, and even to our beds when we go to sleep. It is enslaving us each time we receive new information. We become information addicts, and feel we gain status when we handle the information beast in public.

It’s time to face this and start taking control of our lives again. Focus again on those things that really matter. Instead of messaging someone electronically, why not pay genuine attention to the person standing next to you? We might find that all this access to real-time information gives us a false sense of control. It doesn’t really make your life better, it just makes you more distant.

Me? I score 7 out of 12. I think I can still be saved, but it won’t be easy.  I’ve decided I’m going to get rid of my ridiculous behavior. How about you?

How User Interfaces can make or break a new service

Small Update: Just saw that Joshua Porter wrote a nice post in which he states that design (not just UI) is becoming increasingly important. Ties in nicely with this post

One of the most difficult things to get right as a designer is the User Interface of a product or service. Getting the UI right is a key success factor in any development. To me the UI isn’t just the look, feel or the interaction. To me the UI defines the identity of the product or service. It is the only thing a user ever sees (unless he peeks under the hood, but then it’s not your average user anymore, it’s a geek ).  When confronted with a UI I find myself (un-)consciously making all kinds of assumptions about the product, it’s capabilities, it’s difficulty or ease, but most of all it’s identity. The UI defines the product or service so to say. I’ll show you a few examples later on.

There are many factors that make the development of a great UI incredibly difficult. You have to think about the function of the product (what is it for), how it is used, where it is used, physical dimensions, material, color, all possible human senses, the form factor, consistency, complexity, in and outputs. This list goes on and on.

When I was working on my PhD in the field of Industrial Design, I met quite a few designers, both professional and those that were educated to become a designer. It seemed to me that the best UI designers had the ability to consequently apply certain design rules they formulated for themselves before they started a design. These design rules were typically inspired by that long list of requirements I mentioned above. They would spent a lot of time formulating such requirements, because they knew that it would help them design more effectively once these requirements and design rules were formulated.

One of the most difficult aspects of UI design is that the designer needs to play hardball with the other developers once development started. Not only does everyone have his own expert opinion on what a UI should look and feel like. it also turns out that in the process of creation there is less time and less budget available to do things right. As a result, shortcuts are taken and the overall design suffers. This is also the phase where the feature war takes place. I have yet to see a project that implements just the features that were specified initially. More often, developers start freewheeling using their own or alpha user’s feedback and add features to the original design.

Why am I discussing all of this on a weblog about media and technology? Because, in my opinion, a UI can make or break any new product or service. Web 2.0 has brought us the (re-)invention of the Beta release. Every startup that creates a new service starts with a Beta release (sometimes Alpha). This has several advantages of which time to market is most important. Instead of having a development cycle of years, the pressure in the market we now call web 2.0 has reduced that cycle to months, sometimes weeks. It’s more important to be out there, testing the functionality with Beta users, than to spend a lot of time on specification, design and implementation only to find out you are either too late, or you created a great product no one was really waiting for. There is a huge trade off here. Developing with your potential user group shortens the development cycle, but at the cost of stability and usability. But that isn’t the only thing. The Beta period is often also used to test the initial value proposition of the new service. Features are added during the test period and the final release v1 often provides a different service than the Beta release did.

In my opinion the usability and User Interface are often not well thought through. And that is too bad, because it inhibits the user to understand and use the essence of the product or service. This factor can literally break a service from becoming mainstream (along with many other things). UI design is very personal, it’s hard to say in general a design is good or bad.

Let me provide you with a few UI designs I like/dislike. That doesn’t imply that they are good/bad, it’s just my personal opinion. There isn’t any ranking involved, I just selected a few examples, I could have chosen any other really.

The iPhone

An interesting example. The iPhone UI is definitely revolutionary. It is one of the best UI’s I have seen in any handheld computer. The touch screen and the simplicity and consistency of the design are incredible. But to give you an idea how incredibly complex UI design really is, I believe the UI of the iPhone also makes it one of the worst mobile phones I have ever used. Actually, I should have probably said MOBILE device. Steven Hodson asked if I had a kevlar vest when I posted that, and many of the readers disagreed with me. But hte people that disagree are likely looking at it from a handheld device, not from the concept of a mobile phone. The reason for my bold statement is that that very same interface everyone loves doesn’t function well when you are mobile!

Try making a phone call while you are walking around, literally. The touch screen provides no tactile feedback, the buttons displayed are way too small for selecting contacts, letters or numbers, and the amount of actions needed to select a contact and actually make the call are too much. In my opinion,  the design is optimized for an immobile user (meaning standing still). The touch screen forces the user to use his eyes as the main sense. The UI sucks you and your attention into the device, and shuts off a number of other senses. All that is left is a tunnel vision. Try it, you’ll know what I mean. Walk, start trying to type an SMS, listen to your surrounding, try not to hit anything etc. It’s Impossible. A regular phone allows tactile input and feedback. I can type blind on a GSM that has buttons because I can find the buttons without looking. I can walk and still perform basic tasks. in other words, I can use the mobile phone while i’m mobile. That’s impossible on a touch screen. The same thing goes for messaging (SMS).

Twitter

Twitter is one of the communication services I use on a regular basis. While I have tried several Twitter clients, one flashier then the other, I’m still reasonable fond of the Twitter home page. Why? Because it is deprived of too much functionality. The basic features, Tweeting and looking at tweets are presented in a simple and elegant way. The profile images make sure tweets are personalized because I can recognize images faster than names. The content is presented in a tidy way, and maybe most important of all, Twitter enforces the rule of only 140 characters, a brilliant move to keep things simple and concise. I don’t mind at all that I have to hit the refresh button of the browser (unlike with the different twitter clients). I also don’t mind missing tweets pass by as I forget to refresh. Most Twitter clients decrease in usability really fast because they minimize the space they occupy (Twhirl is a great example of this, it looks cool, but it’s UI  isn’t nearly as good as the default Twitter home page). Instead of making the service convenient when using such small client, it actually gets in the way of usability and readability for me.

Not everything is great about Twitter’s home page. I don’t like the method of adding new people to follow. And I don’t like the fact that pressing options or links make me go somewhere else. I’d rather stay where I am and do the thing I wanted to do there. Going somewhere makes me mentally leave the service, and that’s not right.

Minggl

This service has gotten a lot of great press from A-list bloggers. Minggl integrates a number of social networks into your browser. It sounds like real handy, but I am afraid I don’t like the UI very much. There is a lot of cluttering when all my friends are displayed on the sidebar. There are many buttons in the toolbar that are not clear on sight what they do. There is actually only one button that could have made sense (it is the Minggl button) all the way on the left). But instead of turning the toolbar on and of as I expected, it merely sends me to the home page of Minggl, a place where there is nothing to do for me.

To me the Minggl UI in its current form provides no value, making it a service that sounds next-gen, but will probably not attract me enough to try it out. This is a struggle for any social networking service. Most users have more friends than can be displayed in one overview. As a result a compromise is sought to provide the user with a better view of his friends. But it proves to be very difficult to get that right. In most cases the solution would probably be to buy a flat screen of 2×3 meters, but since not every user has one of those, designers tend to scale down, instead of limit.

Wixi

I have written about this service before. I tried it as a Beta user, only to never return to it. The UI was non-appealing to me. Interestingly enough the home page which I revisited just now seemed to indicate they had improved the UI, but when I logged in, nothing much has changed. It isn’t a difficult interface, but for some reason it is non-inviting for me. I find the folder icons floating around a bit loose from the rest. As if they don’t belong to the service. An example of a new service with a UI that for some reason  gave me no reason to actually try it out. That may not be fair, but it is the truth.

Flock

What can I say. Flock is a web browser that has it all. But not for me. I find the UI incomprehensible. I don’t like it that they have chosen different icons for pretty standard functions, the icons aren’t self explanatory to me, but most of all, it is just too much. Be honest, without reading a manual or hoovering with your mouse over any of the icons shown on the left. How many of them can you assign an action to? There are at least 10-15 icons displayed there that I don”t have a clue what they do.

The main screen isn’t much better. I can’t believe how much information is screaming for my attention on this one screen. My brain melts down if I remotely try to grasp what is displayed there. Flock may be a browser that integrates social networks for me, but it suffers not just from a cluttered UI, but from a cluttered concept.

In my personal opinion Flock is a good example where the UI defines the identity of the service (or the other way around). I have great respect for Chris Messina (I believe he is one of the original designers of Flock). But I find that too much functionality in one concept makes the overall service and its usability far too complex, and therefore hard to use for me.

Friendfeed

I’m pretty impressed with the design of Friendfeed. It’s a pretty complex service with an incredible amount of information (if you start subscribing to a lot of users). They try to keep the screen from getting cluttered by using a simple and elegant design. They try to reduce the amount of information (text), it is pretty obvious where the comments and the likes are. The channels are depicted with icons so that you can guess where the info came from. There are tabs at the top that allow you to see other views. I’m not so fond of the extra options a user has when he looks at an entry. He has the option to like, comment, hide , or more. Especially the hide and more links are a bit confusing to use sometimes. Below the more link are a bit technical terms such as “link to this entry” and “reshare”. Not sure what they do, unless you try it out. Friendfeed will have a lot of UI challenges coming to them. The users are already crying out for filtering or ranking algorithms (hey, they are early adopters right). Extra functionality leads to possible UI difficulties. It will be interesting to see how the team can resolve that.

In conclusion

Getting the UI right for a product or service is a nearly impossible task. There are so many factors to take into account. It is often the place where a service suffers most when implemented. At the same time there are examples where the users in general find a UI well implemented. Most likely because the designer (or team) has not thrown their design rules out of the window when the development takes place. I’m not pretending to be an expert on the matter in any way.

But I’m a user. And these UI’s are designed for me, and all other users. That gives me the right to have an opinion on them. And that is what it is, nothing more, nothing less, it’s my opinion. And while I’m probably not easily satisfied, I have the deepest respect for the UI designers in this world. It is one of the toughest jobs there is. And it takes the best of them for a service to have a chance of being successful.

Never, ever, compromise on UI design. You don’t have to get it right from the start, but you have to have a clear vision where it is supposed to be going to. You have to have a set of design principles that you carve in rock and don’t easily step away from. In my opinion the UI is one of the most important fail factors for any new product or service.

I’m interested in hearing your opinion on this. What UI do you find really great or really awful?

Solving the mobile equation (yet again)

The past few days I have watched a lot of people writing about Mobile Internet.  Not surprising as one of the most important mobile conferences is taking place in Barcelona right now and a lot of companies are using that conference to launch their mobile initiatives. I am a bit disappointed to hear what seems to be happening there right now. What strikes me most is that mobile operators simply do not have a clue how to position themselves in the mobile Internet arena. They have taken a great beating from non-mobile companies like Yahoo and Google and still really don’t know what hit them exactly. According to a post in Ars Technica even the top executive Mr Sarin of the largest mobile operator worldwide, Vodafone, doesn’t know what to do.

Mobile carriers need to step up their game and make mobile services easier to use, says Vodafone CEO Arun Sarin, lest they willingly hand over business to media giants like Google. Sarin made the comments when speaking to the press during this week’s Mobile World Congress conference in Barcelona, admitting that his industry has not traditionally done a good job in making new mobile services appealing to users. Not doing anything to fix that, will be the industry’s biggest mistake, he said.

And another quote from that article:

Mobile carriers have the experience and opportunity to keep these customers from slipping away. But in order to do so, they have to offer something up besides a means for other companies to transport data. “Customers want social networking, email, SMS, instant messaging, voice—you name it,” Sarin said. “Communication is our core business. We have to be in all of these spaces.”

Oh boy is he in trouble. Let’s see where he is coming from. Traditionally, Mobile operators have one advantage that other companies don’t have. They offer access to the mobile network. Mobile operators have the monopoly on that. They own the network and monetize users accessing it. There was never a need for the operators to even think about user experience or user services. No need to compete over services, just deliver access and use clever marketing techniques to make your mobile brand more interesting than the other mobile brands. And that is fine in a world where access and the ability to communicate anywhere is the most important user value.

The same thing happened when the Internet grew big in the 90’s. People all went to Internet access providers because they needed access. That was fine for a while, but then other companies realised that once people were on-line there was a much bigger revenue stream available to those that provided the user value in services. There isn’t a single Internet access company that has successfully made the switch from access to user value services.You still get charged for access, but you probably don’t use their e-mail service or spam filters or whatever service any more. E-mail is free and with more storage you can imagine. Other companies filled the gap with anti-virus, spam, and content services. And the Internet access companies are stuck to do what they do best, provide access. They have all tried to create their own content services and failed. They have tried to build advertisement platforms but others moved much faster. It is the penalty for a company that provides nothing more than a pretty expensive plumbing system underlying our on-line experiences.

So Mr Sarin and all other mobile operator executives can try to become user value service providers but they will fail at it. Google, Yahoo, and many other companies have already taken up that part of the revenue stream. They couldn’t be bothered by mobile networks, access technology and the like. They concentrate on what matters in the end. The user experience. Marginalising the role of the Mobile operator to what it does best, providing access.

And then I read this article which talks about a panel discussion between user experience and technology experts during the Mobile World congress. A quote from the article:

The panel, whose title was It’s the User Experience, Stupid agreed that iPhone represents a model for mobile operators to follow, but they reached little agreement on how to follow.

One direction, advocated by Lucia Predolin, international marketing and communications director for Buongirono S.p.A. of Milan, Italy, is to manipulate users by identifying their “need states” — including such compulsions as “killing time,” and “making the most of it” — and fulfilling them subliminally.

Adobe’s Murarka proposed a more technological approach to improving the user experience, satisfying the mobile phone subscriber through better interface design. Sarah Lipman, co-founder and R&D director for Power2B, suggested an almost mystical solution, somehow tapping into users’ “neural networks” to navigate a mobile phone interface “using touch and pre-touch input.”

Never, never trust an International Marketing and Communications director that wants to “manipulate” users. Or someone that wants to “tap into users neural networks”. These people do not have a clue. If this is the innovating power from the mobile industry we will remain in a mobile stone age for a bit longer.

Apple understood that usability, status, and the ability to show of yet another cool device where the first step into improving the mobile experience with their launch of the iPhone. Before the iPhone usability sucks on almost any mobile device. And I’m not the only one that feels that way. It turns out that Apple iPhone users perform 50 times more search requests than other mobile phone users. What is interesting to me, which isn’t mentioned in the source, is whether the searches are performed using the mobile network or a WiFi network. Big difference in my opinion, as the first one costs the uer money, while the second option simply turns the iPhone into a small handheld computer.

In another article it is even suggested that within a few years the number of mobile search requests will overtake fixed Internet searches. Which is true, but sort of obvious. Already here are more mobile devices on the planet than there are fixed Internet computers. If we marginally decrease the complexity to be able to access the web mobile, then people are bound to start using search engines. Good news for Google? They think so.

I do not necessarily agree with that. While more search suggest more advertisement revenues I can’t help but think that we don’t need more search. We need an entire different information access paradigm that is build upon the foundation of a small mobile device. Instead of the current “let’s copy our laptop web experience and cram it on a device with a screen no larger than a few inches and pretty unusable input interfaces”. We definitely need to improve the usability of mobile devices, but before that we need a revolution in mobile UI thinking.

Is Yahoo’s announcement of their new mobile service OneConnect the answer to this? Not sure about that. I saw a demo video of the new service that is to launch in the third quarter of this year and although it combines all kinds of social networks into a single portal, it seems rather complex and technical to me.  Sure, it’s cool they can connect all major social networks and track people on them, but in itself that is a technical solution to a problem I haven’t experienced yet.  What underlying user value has lead to this service other than “lets make sure we can connect to all these cool services so that we can get lots of users and a big market share. Can you imagine trying to set up that service on your mobile phone and actually make it work with a single button press? Now that would be a cool trick. Honestly, I did ask for such a service last year already, I still wonder if Yahoo has been reading up on my blog. They got me one thing I asked for, but forgot the other great ideas I mentioned in that post

Mobile is considered the most important growth market. Forget the Internet, mobile is where the action will be the coming years. Maybe that’s why Microsoft has replaced its entire management team on Mobile. With massive markets waiting to be unlocked in India, China, Africa, there is more money to be made on the mobile web than the fixed web. But if we have to wait for these 10 most important trends from the Mobile World congress I would say dream on. There are lots of little, currently unknown companies out there that understand human behaviour, mobile technology and user needs on the move. These companies will come with services not thought of before. And some of them will become as big as Google and Yahoo now are on the Web.

Freedom to the people

We are nearing the end of 2007 so human nature forces me to look back and forth, thinking about things that happened and things to come. I am by no means a good trend or technology predictor, but here’s my take on it.

Looking back the most talked and blogged about subject is probably Facebook and it’s plans with monetization of their build up social graph. The story remains a top item on TechMeme, and it is a controversy as most either love or hate their Beacon attempt. Now that we are slowly recuperating from the privacy backlash they received, the next thing already being discussed is the possible inflation of visitor numbers or even the stealing of people from other companies. Facebook is now getting payback for the hype that was created around it. This almost seems Dutch behavior. In Holland we tend to talk anyone down sticking his head above the play field. Facebook is in that league now and I predict for 2008 that they will get into more trouble than they are already in right now. Not because they might be doing things wrong, but more likely because they are becoming too popular and the blogging community seems to be smelling blood. And that isn’t good. Fear isn’t what Facebook needs now. It needs leadership and making the right choices together with its users.

Looking forward towards 2008 I feel that the time is there to make some major changes in the current web. We need technological barriers to be taken down by developments such as Android, openSocial, OAuth, and OpenID.  It will take time, but in the end the user wins. I’m not going to worry too much about the technology needed, it always finds a way. More interesting is to think about human nature and the needs that we might need fulfilling in 2008.

More than 2006, when Time Magazine unfortunately called YOU the most important person of the year, I think and hope 2008 will be the year where the user gets his long-wanted freedom back. 2008 will be a year in which  we will see the first brand/portal/network/social graph/device- agnostic  services pop up. What does all of that mean? It means that the portal or network concept we are so used to is slowly replaced by initiatives where the user isn’t locked in, but viewed as a traveler reaching a place where service is required.

If you think about  the user becoming a traveler instead of a profile in a network or social graph then you quickly realise that current service isn’t all that fit to service the traveler. We have walled gardens, locked data, privacy issues, spam, free but ad-based web business models, crappy mobile to Internet solutions, locked mobile phones and networks, a total lack of standards, competition on the network and profile layer instead of on the application service layer, customer “lock-in”, advertisers “lock-in”, iPhone wannahaves, Beacon, DRM, etc. Essentially things that are meant to keep you locked into a specific place, instead of letting you move around wherever you want to go.

But a traveler really doesn’t need all that. What would you take with you when you go on a trip? Basic needs probably include:

A passport that identifies you at all destinations, a traveling bag where you can keep your personal belongings, money, food, drink, a good map for the area you travel to, a language guide, and easy ways for you to: obtain relevant information/keep track of/meet/interact with friends and strangers.

It is a very basic and simple list of needs. Translate these needs onto the (mobile) web and we can easily come up with services that address these needs. Entrepreneurs need to think more in terms of running a gas station on a freeway waiting for a car to arrive and servicing the traveler, instead of becoming an amusement park owner, letting children drive a Donald duck car, but only if you visit Disneyland. This sounds easy enough, but with it comes a radical change in business models. Not based upon page views or clicks, as these are easily inflated, but based upon user value.

As Rolf Skyberg puts it, the network should become the commodity. The question is, who’s going to do the plumbing?

My hopes for now lie with new initiatives like OpenSocial, and Android,  because they do the open “talk”. Let’s see if they can do the “walk” too. Let it be noted that I could care less about the Social Graph, web 3.0, or whatever you want to call it. It is time to free the people, who will take the first step in 2008?

We need a revolution in Mobile UI thinking

A few days ago I was fiddling around with my mobile phone (a Nokia N95) and it occurred to me (yet again) that the current mobile phone user interface just doesn’t work for me. Yes, the screens have become much bigger, it has impressive functionalities, a camera which is almost as good as a regular digital camera, it has HSDPA, WiFi you name it. But it just doesn’t work. The mobile phone interface is a phone interface with some application extra’s. It isn’t really a USER centric interface.

Just take the most basic mobile functionality you can think of (no it is not calling), messaging. I have several (technical) options to send a message to another person. But the phone forces me to resolve the technical details. I have to think about whether I want to send an SMS, e-mail or MMS (yes, I am one of those users that actually use MMS). People will obviously SMS most of the time, but with our physical and Internet world becoming connected in so many ways this will not remain to be the obvious choice. Once I have made a choice I need to wade through several menu’s in order to enter the message content, select the receiver and finally send the message away. It gets worse when I receive messages. Not only do I have several different types of inboxes (SMS, e-mail, MMS), but the notification mechanisms really suck. An SMS or MMS alert draws all my attention away from the thing I was doing. E-mail isn’t noted at all. If you don’t think this is a problem I recommend you try out Twitter and get it to send your tweets to your mobile phone for an hour or so. You see instantly why this messaging mechanisms doesn’t work. It floods my inbox and it distracts me constantly. I have to perform too many actions to read all the messages and then delete them again.

Nokia and other manufacturers are constantly working on their user interface. But they are simply improving on an old concept. Wiht the increased graphics and computing power I hoped they would not improve, but thoroughly redesign the user interface. It isn’t a phone anymore. It is my remote control of life. It needs a user centric interface where not the mobile phone functionality takes the central place in design, but the way I want to use that functionality! I want freedom, instead of being trapped into a user interface that limits my options. But they haven’t. And that is one of the main reasons I think mobile Internet will not break through to the masses yet.

I haven’t mentioned the iPhone up to this point. I don’t own one and only played with it a few times so it wouldn’t be fair to draw conclusions about it based upon a few observations. I can say that based upon first impressions Apple has done a great job in providing us with a totally new UI element when they introduced the touch screen. They have put great effort into usability. But I can’t help but think that even on the iPhone, the UI paradigms haven’t been as disruptive as I would have liked them to be, even if it stimulates mobile internet usage.

Readwrite web reports today that the mobile phone penetration worldwide increases even more than predicted, with currently over 3.3 Bln mobile phone subscriptions. I’m not surprised at that. With more and more strong developing countries now being covered by mobile networks, people in China, India, Africa and South America people fall for the very same being connected trap we all fell for. The mobile phone makes it possible to connect and be connected whenever and where ever we want.

In the article Richard McManus points us to a recent study by Nielsen that reveals that 35% of US teens (8-12 yr) now own a mobile phone and that 5% sometimes uses it for Internet. Richard feels that this is enough evidence to show that the mobile Internet is finally ready to take off.

I’m not so sure about it. The breakthrough of mobile Internet has been predicted many times. But it isn’t there yet. The most important indicator to me that it isn’t there yet is the ever increasing SMS traffic. Why use such an outdated and cumbersome messaging protocol instead of using the possibilities the web has to offer? It isn’t just price, although that is a major barrier to be resolved. I think a lot has to do with usability. Sending an SMS has become easy for people to use (even with the flaws mentioned above). Firing up the Internet anywhere (and I don’t mean just in places near a WiFi point) isn’t simple. And once on-line we are limited within the technical barriers of the mobile phone. Browsing the web doesn’t work on such a small screen.

And instead of thinking about entirely new metaphores for mobile Internet we start moving around this issue and develop solutions that aren’t really solving the problem. One way is to redefine the ENTIRE web (yeah right), by creating special mobile pages. These pages are smaller, need less data transfer and are basically optimised for the mobile phone browser. While this might sound like a good solution it really doesn’t work. First of all, it would take an impossible effort to rebuild the entire web to make it usable for the mobile phone, and secondly, it leaves the user with the task of solving complexity. Do I go to www.flickr.com (which I can remember), or do I need to try m.flickr.com. And how do I upload my picture there?

Another option is to develop a touch screen and really cool zooming and moving around functionality to handle these big pages. Apple did just that with their iPhone. They are providing us with a intuitive solution to handle big amounts of data, but they aren’t fundamentally solving the problem.

In my opinion we need a revolution in mobile phone UI thinking. A revolution that puts the user and his intentions central in user interface development. We need to understand what users do with their mobile phones. We shouldn’t be thinking in terms of releasing technical functionalities with nice graphical interfaces. We need to think in terms of the remote control of life, supporting the user in his interaction needs. If we let go of the current UI and browsing paradigms who knows what becomes possible. Let’s not rebuild the entire web to make it mobile, let’s not even come up with even better alternatives for the iPhone touch screen. Let’s first think about what the user wants to do with his phone, and then come up with an interface and a mobile web concept that supports his actions, regardless of the technology.

I’ll give away one idea for making things better. Why not get rid of the whole inbox-outbox messaging paradigm. It sucks on a mobile phone. Instead convert the entire paradigm into a life stream, similar to the way Twitter and Jaiku work. It fits human behavior much better. We don’t always want to look into or respond to every message we receive. Showing these messages as a constant stream allows me to look at it whenever I want to. It doesn’t call for my attention whenever a message arrives, but I get to decide when I wish to give the message my attention. It allows me to pick up things that are important, and it also provides me easy ways to respond to on ore more people. And it lets me ramble my thoughts to whoever is willing to listen to them. Maybe I’ll ask Chris Messina to create some designs for this particular idea. He does a pretty cool job designing nice interfaces.

We need to let go of current paradigms, and ask ourselves, what is a user going to do with his phone in this social networking age?  It opens a new world of possibilites, a world without mobile web browsing, a world of freedom for the user. So who is going to free me from the limitations of the mobile phone and give me my remote control of life? Or maybe I should start something myself, anyone interested to join?

Who will free the iPhone customer?

What is the deal with Steve Jobs, who is protecting his iPhone from being used the way users really like it, their own way? Apple not only launches it exclusively with certain partners, telling all you morons that don’t happen to have a mobile subscription there to hop over, but it also doesn’t like it when people try to open it up themselves.

Hacks are reported on a daily basis for the iPhone. I wonder how long it will take Apple to understand that these hacks aren’t just a protest against our savior Steve.

The hacks are coming from two emotions: the techies that just love to prove that “it can’t be hacked!” isn’t true, and the  user that disagrees with the “you have no choice” mantra.  If someone tells you that you only have one choice (his), what do you do? Well, I remember getting these sort of speeches at home when I was a child. Didn’t like it then, don’t like them now.

The iPhone may just be the invention of the year. Apple, just may have proved that mobile communications can be redesigned and evolved into a new user experience. But, having said that, they also ignore a basic need of their customers called “freedom”.  Making it an exclusive phone that is only within reach of a few proves to be an excellent short term revenue strategy. It is already the most talked about market entry strategy in the mobile world. But I cannot help but think it is also a very arrogant strategy towards the customer. If we are to make mobile Internet successful, and let the iPhone be one of its drivers, then  Apple better start thinking about opening up their platform.

If not, then Apple will definitely have a great niche on its hands and make a great living on it. But the mass will most likely choose something that works on all carriers and handsets.

And the mobile operators better rethink their strategy as well. As long as they determine who can get on their network and who cannot, they will remain hijacked to the Apple mantra. Forcing them to pay loads of money to Apple for every iPhone they sell.

It is freedom that sells in the end. Freedom will help customers (re-) discover the Internet on their mobile phones. Freedom is the ticket to increase in ARPU, the thing Mobile carriers need so desperately. Google is trying to jump on the bandwagon of freedom with their recent Android announcements. We will have to wait and see if that will be taking of. In the meantime the question remains. Who will free the customer?

Mark Zuckerberg: When in doubt, follow the money

It is the day after the OpenSocial announcements Google has made. I like it already. The scooping part of such events isn’t nearly as interesting as the period afterwards when everyone starts analysing and speculating. It is from these brainwaves that new insights and ideas erupt. It makes you (Re-) discover things on the web. Forget about the scoops, they are just the dying out echos of eager beaver blogging sites bringing the “exclusive breaking news”.

Yesterday I wrote in a first analysis that the user is finally back into the equation. My main point was that now things might be broken open, we shouldn’t forget about the user and his needs. Reading through a lot of the posts today I feel that a lot of articles focus (again) on the wrong side of this equation. For example, TechCrunch suggests Facebook should join the OpenSocial movement because it might just let them become the advertisement network of choice in the social network Walhalla. Robert Scoble wonders whether or not Facebook is scared and advises them to join the party.

If I were Mark Zuckerberg, or any other Social Networking guru I wouldn’t worry a day about OpenSocial. Stop messing about and join the party and break down current walled gardens. It is what users want, and you can’t ignore that. Bad for (advertisement) business? Sorry guys, can we please stop this advertisement business model thinking and come up with something better?

In a previous post I discussed why there is an advertisement trap and possibilities to get out of it. Reading Mathew Ingram not being impressed by Orkut triggered me to think back about some things I wrote earlier. He said:

By contrast, Google doesn’t really have a horse in this particular race — unless you include Orkut, which I don’t — in the same sense that Microsoft didn’t make hardware.

I don’t agree with you Mathew. Orkut might not be the biggest social network in the US, it is very strong in Asia. Asia is the fastest growing mobile market in the world!

Toni Ahonen publishes good examples of successful mobile (Internet) cases on a regular basis, some of them mentioned here. The mobile device will be the most dominant Internet terminal in the world. Already there are more mobile phones than computers available, and the mobile user is definitely finding his way into the Internet. The iPhone has just been called the ‘Invention of the year’ by Time Magazine.

But there are 2 aspects to a mobile phone that are of huge importance when thinking about next generation web services:

1. The mobile phone platform has billing capabilities
2. The mobile phone user pays to interact with others

Think of the US on-line advertisement spent 2006 ($16 Bln) as a small hill,

think of the worldwide spent on SMS as the Mount Everest (btoh images taken from Wikipedia). It is estimated that the SMS market alone will be $ 67Bln in 2012 (or 3.7 trillion messages a year!) .That is excluding Mobile Internet services. In Japan alone more than $ 1 Bln revenues are generated from mobile data services. So stop thinking ads and start thinking payed services.

Let us not forget about China and India where the mobile phone is building a user base very fast. So Google has Orkut, only the biggest social network in Asia and a major traffic driver for them. And, didn’t Google just buy Jaiku, thus adding mobile presence and mobile feeds into the social networking scene? And they are working on the GPhone trying to become a dominant mobile platform as well.

In order to get out of the free (ad-based) web 2.0 thinking that leads to walled gardens and network value instead of user value we need new business models. Business models that create revenues because they are based upon user value. In my opinion there is a whole lot to be learned fro the mobile market. People pay to interact, and they interact like crazy.

All we need now is entrepreneurs and investors that are willing to support developments that connect mobile to Internet and vice versa. Business in which the user doesn’t get it all for free (no such thing as a free lunch). Instead he will be willing to pay for interaction, because that is what brings him the most value. And he will pay more than ANY social networking advertisement model will ever generate in revenues. Google understands that. That is why they are opening up social networks. Unlike Facebook, they don’t need to create advertisement revenues in such small walled gardens. They will make these revenues elsewhere. Their garden is the entire Internet.

So Mark, when in doubt what to do next? My humble advise to you, just follow the money!