We’ve done a fairly thorough job of chronicling the “rise” and demise of Gizmondo. The fun really started when Russell unearthed the company’s, uh, interesting executive renumeration scheme, and continued with the news that some of the execs had served jail time for organized crime and fraud. Unsurprisingly, the company has gone under — but the fun doesn’t stop there.
Early Tuesday morning In the posh Los Angeles suburb of Malibu, a million-dollar Ferrari Enzo was completely destroyed after crashing during a street race with a Mercedes SLR. The Ferrari, estimated to be traveling at over 100 miles per hour, “careened up an embankment, probably became airborne and then slammed into a pole, slicing the vehicle in half, police said.” A man, who escaped the crash with only a cut lip, said he was a passenger in the car, which was driven by “a German man called Dietrich who had fled the scene”. Turns out the passenger — who had a blood-alcohol level of 0.09, above the legal limit — is the owner of the car, and police are skeptical of this claim that somebody else was driving, since only the driver’s side airbag deployed.
The car owner’s name? Stefan Eriksson, the one-time head of Gizmondo Europe, who resigned after his criminal past came to light. Incidentally, Eriksson also used to race cars professionally.
In the meantime, the collapse of the European company continues, with some strange goings-on afoot. Guy Kewney says he’s heard reports that Tiger Telematics, the US company behind the Gizmondo, wants to buy the assets of the European company, but it’s unclear what’s going on with the US company — particularly as its Web site has gone offline. Probably the most salient point in all of this is that, as Guy points out, the company spent £140 million to make £1.4 million in revenue — meaning every customer they got (assuming the estimate that they sold 10,000 Gizmondos is accurate, though it seems optimistic) cost them about £14,000. Now that’s the kind of acumen they don’t teach you in business school…
I didn’t see this story get a lot of play, whether it was simply because I’d already left for Barcelona, or because it got lost by everybody else in the 3GSM shuffle, but it’s worth noting that Hutchison Whampoa postponed the IPO of 3 Italia. This is the second time it’s been postponed, this one because investors saw the value of the company between €6 billion and €7.5 billion, significantly less than what Hutchison thinks it’s worth. At the same time as the IPO was postponed, Goldman Sachs bought 10 percent of 3 Italia for €420 million , which would give it a valuation of about €9 billion (less €4.8 billion in debt). That’s still a whole lot less than the €12 billion to €15 billion value Hutchison was throwing around for the IPO.
Hutchison’s been trying to portray 3 Italia as a media company (just check the new tagline on its logo for more proof), rather than a telecom operator, since they typically enjoy better valuations and trading multiples, but investors aren’t buying it. Hutchison and its execs have talked a lot of game about 3, but it certainly appears investors are less than convinced.
As I’ve already written, 3GSM is huge and even spending all 4 days there would probably mean missing out on lots it has to offer. It would also leave you a foot-sore wreck, badly in need of a detox and a break from mobile stuff.
It’s very well organised as an event, but I do have a piece of constructive criticism that would make things an awful lot easier for people attending.
Couldn’t the exhibitors be categorised and located in appropriate zones? This would make trying to find things so much easier, rather than the needle-in-the-haystack approach we’re currently forced into.
This does happen to an extent. There was an “adult” zone for example and one for “content” too. But there were plenty of content players who chose higher profile pitches in one of the other halls.
3GSM covers a lot of areas, much of which is of little interest to me and I’m sure other delegates have similar specialisms. I’m not very interested in mapping software or wifi broadcast hardware, for instance. But you’re forced to look at all these stands while trying to find stuff that is relevant.
Of course, it’s impossible to categorise everything, but anything would be better than the apparent hotchpotch currently on offer.
And once the zoning had been accomplished, an independent series of judges could award one or two companies in each area a “must see” badge, so that delegates know that if they visit no other stand in that zone, it has to be that one.
Just a thought.
The star of the 3GSM show for me was a young, US-based start-up called SNAPin, which has developed a brilliant, bit of software that solves so much operator and user pain, it takes a little thought to get your mind around the implications.
SNAPin isn’t a sexy, in-your-face application, but works almost unobtrusively in the background on your handset. It’ll be put on your phone by your operator and it’ll simply help you get the most out of your handset.
As an example, you take a picture with your phone for the first time. As it is the first time, a little bubble (or whatever style the operator chooses - it’s very customizable) pops up saying something like “Would you like to know how to send this picture to someone?”. If you say that you would, it talks you through the process and helps you do it.
No more product manuals, in other words.
Yes, but what about all those phones that are sold with the wrong settings? You’ll still need to refer to the manual and anyway, this is what people find hard to work out.
But, no problem. If SNAPin detects the wrong settings, it’ll just fix them with an Over The Air (OTA) update. You can even then go and mess them up again and it’ll just quietly correct them.
The operator even has the choice of deciding to fix stuff in the background or opting to tell you what a nice company they are as they’ve solved the problem for you.
Now all the operators have to do is price MMS more realistically and they will have a service that’s severely in danger of being used. Except they need to make a lot more templates available to make it really usable, but that’s another story.
SNAPin would be pretty cool if that’s all it did. However, it also empowers users to do a lot of the stuff they’ve had to rely on customer service teams to do in the past, along with the “Press 1 to listen to crap music for 10 minutes”.
If you dial the operator’s customer service number, your phone prompts you with a pop up menu to help yourself. It offers you choices of top issues like billing enquiries or upgrade options. Then it gives you the information on the phone screen.
For example, if you choose Billing, it’ll give you a mini-statement. It can even point out that your existing package is not the best value and offer to change it.
SNAPin works on a licence per handset model, paid by the operator. While they were reluctant to say how much this was (fair enough), being able to pre-empt just one customer service call a year, would more then cover the cost of that subscriber’s licence. This doesn’t take into account the revenue increases that might open up as people start to use the many services a mobile phone can offer that they don’t know about and/or know how to use.
SNAPin just announced at 3GSM a big trial with UK operator, Orange. But if you work for an operator, you need to call them now - otherwise you’ll get stuck in a very long deployment queue as everyone realises that this is a must-have product.
Thanks to Simon Jones of OnPr who made me go and see his client by practically frog-marching me through the exhibition. A fine example of great PR, as I’m sure I’d never have found them on my own.
Reading this glowing review, I feel I ought to just add that this isn’t one of those “sponsored posts” that some bloggers have started to do. There’s no commercial arrangements in place between us - it’s just a very well thought through solution to obvious market pain. I wish I’d thought of it.
About 55,000 people attend 3GSM and the exhibition is spread across 8 (that I discovered) massive exhibition halls. It’s HUGE.
But the overwhelming impression is of men in dark suits going about their business. If I had to guess, 95% or so seemed to be men.
The lack of women is actually emphasised by the use of female eye candy by many of the exhibitors. I’m not going to be drawn into whether using these girls is politically correct these days, but it did heighten the impression that this was a bloke’s event.
I’m with management guru,Tom Peter’s view that women generally make better execs than men (huge generalisation that it is) and given the choice, I’ll often employ women in preference to men. But even if this is gender bias, they have to be at least as good as men, so mobile is missing out, big time, in my view.
As importantly, 50% of the user market are female and having so few within the industry is surely going to lead to missed opportunities and hold back potential growth.
In 2006, I had assumed that the women’s movement had won their battle, made their point and times had moved on. Looking around 3GSM showed that there’s a long, long way to go before any kind of equality is achieved.
Out of interest, does anyone know who the most senior women in mobile are? Do any of the large operators or handset players have any women board members, for instance? The only senior woman I can think of is Nokia’s Lee Epting (pictured).
Anyone have any theories about why there’s so few women? Is it actually their choice to avoid tech industries?
Leave a comment and have your say.
I’m just back from 3GSM after a hectic round of meetings, networking, exhibition hall trudging and a soupcon of partying. For those of you who didn’t make it, here’s a quick snapshots and for those of you that did - why didn’t you come and say hello?
Carlo’s been doing a great job of keeping us all up to date with all the significant news from the event, along with some fine analysis, so I won’t repeat that. But as a general impression, the event was characterised for me by a real lack of big announcements. This was typified by Motorola’s “Did you know we have a groovy phone called the RAZR?” that Carlo wrote about. Motorola also seemed to have bought out every advertising poster site in Barcelona and flown in CEO, Ed Zander, so perhaps they wanted to announce something, but weren’t quite ready.
I think the lack of big news though, is perhaps symptomatic of today’s business style. In former times, companies held back their important news for these huge industry gatherings. Now they just announce stuff when they’re ready to go to market, with the focus of these events changing much more to networking.
It’s also true that if you do have an announcement, you’re more likely to get coverage in the week after an event like 3GSM, when everyone else has shot their bolts. Ironic, really.
In my earlier post, I pointed out how smartphones are moving to the mass market. This has significant ramifications for the whole industry, not the least of which mobile application sales.
The application download and sales environment is something of a holdover from the days of the PDA: people, typically professional or prosumer users or early adopters, find a relatively task-specific application, buy it, and install it on their device. It’s little wonder that the download market is dominated by work-oriented and productivity apps, while the only significant consumer downloads (outside content like ringtones and wallpapers) have been games. The mass market’s not shown an overwhelming interest in downloading applications, and it’s not likely that their views will change all that significantly just because they get smartphones. But — and this is a big but — they love services. Whether it’s SMS sports scores, checking public transport schedules or my old standby, looking up movie showtimes, people like services. The application is almost irrelevant, except as a means to an end, whether it’s a Web browser, messaging client or something more specific. It’s the same type of thing on the wired Net: standalone application use pales in comparison to that of services.
This fits how people use mobile devices, if you think about it. Even on their most basic level, mobile phones are valuable not as an application, but because they provide access to services like voice calls and messaging. Strip that service out, and the application is worthless. You can even easily find examples in the enterprise or professional market — the value of Blackberry and other push e-mail systems is in the service, not in the application.
The upshot of this is that the application development and download market is in for some big changes — but they’re definitely positive. Standalone application development will find success, but it will be in niche markets. Those that find mass-market success will be those that provide an interface to a service (look at stuff that I’ve written about before like ShoZu most recently as an example). Another way to look at this is that the mobile phone does provide a computing platform on which standalone apps can be run, but at their heart, mobile devices are communications devices, and the connectivity they have should be used to its full potential. Again, think of a simple voice call: what good is a basic phone when it can’t access the network and, in turn, voice services?
So, while the standalone application market will find some success, the service market will be huge. So think in terms of services — what’s the service users are being provided, and then what’s the application needed to deliver it. This calls for plenty of support that existing applications providers can adapt to provide: distribution, and especially billing. There need to be frameworks in which to distribute the applications that provide access to services, systems for content delivery and billing mechanisms. And all of these need to be designed and delivered with the same attention to the user experience as the services themselves, integrating into existing patterns of use and payment mechanisms.
The switch to thinking in terms of services rather than applications might be daunting for some developers and content providers, but there is a payoff: recurring subscriptions. Provide someone an application, and they’ll pay you once. Provide someone a service, and they’ll keep on paying. This isn’t a license to rip off users, like some ringtone and wallpaper providers have chosen to do by duping people into shady subscription plans, but it calls for some new thinking. A good example would be the Sudoku application that the Future Platforms crew made for Puzzler Media. The application is free, but users are charged 25p every time they ask for a new puzzle. On the one hand, this lets people who download the app, then don’t like it or don’t use it not feel ripped off. On the other, it generates a recurring revenue stream from repeat users. Another possible benefit is that platforms exist that developers can use to access services that don’t require as much time to energy to develop as standalone applications.
We’re on the precipice of a big paradigm shift that calls for a pretty radical rethink. Insert your own dramatic ending here, but times, they are a-changing.
ShoZu is a pretty fine photo-sharing application, and an even more exciting service. It’s a consumer application that’s risen from the operator-licensed Cognima Snap (see our previous posts on it for background), and has been received very enthusiastically — so much so that Cognima has stopped licensing Snap and only servicing existing deployments in order to devote the bulk of its resources to ShoZu.
What makes ShoZu so great is its user experience. It does as advertised — it puts your cameraphone photos onto various photo hosting or blogging sites — but it does it simply and easily, and has some other nice features like contacts backup and downloading. The smartphone versions are pretty fantastic, and the Java version works well too. Of course, it doesn’t hurt that it’s free, either.
In choosing to focus on ShoZu, Cognima has made some big changes to its business model. It’s no longer licensing Snap to carriers on a white-label basis, but one of its revenue streams is to do carrier deals for co-branded versions of ShoZu, and it’s also working on deals with handset manufacturers to embed ShoZu in their handsets (an additional revenue stream is affiliate deals with the Web partners to which users can upload their content).
It’s also got media deals going, including a recent one with Warner Music. The first thing it’s doing with them is to provide a video blog for the band The Veronicas, where they’re vlogging concerts and events around the launch of their album. We’ve posted before about similar moblogs moblogUK has done with popular beat combo Maximo Park, as well as more recently with Goldfrapp, so the musician moblog looks like a growing trend. It makes sense as it offers artists an easy and immediate way to communicate with their fans as well as build a community around them. ShoZu also got Howard Stern and his crew to document his switch from terrestrial radio to satellite in the US, which was quite a coup.
With its carrier and handset deals, ShoZu will add premium services that will presumably be paid either by users or by its partners. The company’s committed to its free services remaining free, with the exception of the contacts actions, for which it may charge later. But that doesn’t mean the features will stop coming: the company is now on a 6-week development cycle and has plenty of things in the works, including the delivery of media like podcasts, videocasts and RSS to users’ handsets, as well as the ability to send different media to multiple or separate sites (ie multiple accounts or, say, Flickr for photos and YouTube for videos). The versions that will be embedded in handsets, though, will be native applications — they won’t just be a rebadged Java version — that will more closely approach the functionality of the smartphone versions.
As I said earlier, the company is squarely focused on the user experience. They’ve put in some really thoughtful features, for instance the ability to email photos from the service rather than from the device. If you want to email a photo that you’ve already uploaded to your host, you simply go into the ShoZu app and put in the email addresses, and the service then sends out the full version of the photo. It costs just pennies, even for multiple recipients, because the only thing that goes over the cellular network are the addresses. The actual photo itself goes from the service.
An extension of its user focus is the company’s reliance on user feedback, with many of its ideas for new features coming from user suggestions. Cognima’s CEO says they all religiously follow what people are saying about ShoZu by using things like Technorati to track blogs. You’d expect little else from a company whose main purpose is to make a great user experience of something at which operators and handset manufacturers haven’t been quite so successful, but it’s still refreshing to hear that they’re listening.
Smartphone OS developers have for some time been looking to move their products deeply into the mass market, aiming to take smartphones down from the high end and solidly into the midrange of the market. It’s a strategy that looks like it’s quite near to bearing fruit, with a number of developments this week highlighting the shift that is on.
Things are going well in this regard for Symbian: more than a million phones that have its software are sold every week, and it’s growth is continuing. It’s got significant volume now, and is getting more aggressive — as evidenced by the licensing fee changes it announced before the show. It’s also working with Freescale and Nokia to develop a single-chip reference platform that can be easily licensed by manufacturers, that can cut their bill of materials by up to 50 percent as well as increase their time to market.
Access/PalmSource’s new Linux platform is also built with the mass market in mind. Forget the business feel of the old Palm OS, ALP is completely different. It’s a much-needed update to the aging Palm platform that showed its age alongside other mobile OS competitors. ALP could be what finally brings mobile Linux close to fulfilling the hype that’s built up around it over the last few years. The company’s being very smart about how they’re implementing it: the OS and UI easily adapt to different form factors and screen sizes and devices, while the UI is being designed with customization as a means to real differentiation in mind. The Linux APIs ALP will expose will give manufacturers and carriers a significant opportunity to make their devices fit all sorts of uses and niches, further driving the volume Access will want to quickly attain.
So what’s driving all of this? Operators. A Vodafone executive spoke quite a bit at an S60 event yesterday about the company’s handset strategy, but their thinking is pretty representative of most other operators. Vodafone spends between 6 billion and 7 billion euros a year on handsets, and really doesn’t make any money from them. It wants to settle on two or three smartphone platforms that will allow it not only to cut costs, but reduce fragmentation so it can more easily get content and applications — at premium prices, of course — to its subscribers. It’s interested in platforms that will allow it to customize the user experience as well, so it can differentiate itself from its rivals. Clearly it’s settled on S60 as one of its platforms, so look for Vodafone (which was something of a European pioneer in white-label handsets) to get Asian OEMs to license its special custom version of S60 along with the Freescale single-chip platform to start churning out lower-spec devices. Within two years, most of Vodafone’s handset portfolio will be models based on its selected platforms.
The smartphone platforms will allow for rich functionality, hopefully with fewer compatibility (and support) issues than today’s fragmented landscape of closed, proprietary OS and differing Java implementations. So what does this all mean, beyond the fact that millions more users will be able to run native smartphone applications and access richer content and services? It goes much deeper than you might think — so stay tuned for the second part of this where I’ll explain the significant changes ahead for the world of mobile data and content.
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