Reading all the 2006 recaps and 2007 predictions (and writing my own) has put me in something of a big-picture frame of mind lately. It’s far easier to focus on the things the mobile industry tosses up each day, like a new device or service, rather than keep the bigger picture in mind. This all sort of started back at the Nokia World event in Amsterdam in October. Sitting around for a couple of days listening to Nokia and many of its partners describe their vision for the future of the industry, followed by a few days of hanging out in the city, got me thinking about some things, or one big thing in particular: innovation.

On the face of it, there’s no shortage of innovation in the mobile industry. That’s one of the reason it’s held my interest for so long — it’s exciting to be surrounded by smart, creative people doing all sorts of cool things. The problem, though, is that too often they’re doing these cool things in spite of the industry, not because of it. Probably the biggest thing I took away from Nokia World was a sense that the company’s realized that mobile can’t be isolated from the internet, and that its biggest challenge will be in melding the two together, and doing so will give it the chance to deliver all sorts of new and innovative devices and services.

For some of the company’s thoughts on this, check out the videos that were part of design chief Alastair Curtis’ closing presentations. They’re certainly just pipe dreams, but reveal some of the boundless imagination this industry’s capable of at the best of times. Of course, despite the optimism watching these videos (and indeed, Curtis’ whole presentation) evoked, I couldn’t help some feelings of cynicism (surprise, surprise) as well. “Oh, pssh, like we’ll ever see that” — that sort of thing. I’ve always felt that having a good bullshit detector is a valuable asset in the mobile industry, but at the same time, my cynicism isn’t purely a facet of my personality. I’ve seen too many good ideas and cool things submarined because they undermine some entrenched, although flawed, business model. Too many good ideas fail because of the obtuseness of some unrelated player in the industry. Too many good people’s projects ruined because of the hoops they’ve had to jump through to bring them to market. Too many companies fail because they couldn’t find a market for their services, not because of poor focus or execution, but because established players simply wouldn’t let them.

There are so many people, so many companies, that are capable of great things with mobile devices, applications and services. It’s too bad that the obstacles they must surmount are so great as well. That’s the biggest problem facing the mobile industry. It’s not technological issues like slow networks or small screens on handsets; it’s the ridiculous obstacles to innovation faced by both tiny developers and behemoths like Nokia. It’s the obstacles that keep great ideas out of the market, that keep small companies from making a big impact.

So consider this a call to arms (albeit one from a pretty small platform). The first step towards eliminating these obstacles is calling them out. What do you see — as a developer, content provider, marketer, vendor, even as a consumer — as the obstacles to innovation in the mobile industry? What’s really holding things back?

Thomas Landspurg has Carnival 58 up at his TomSoft site, so be sure to check it out for week’s best writing about mobile.

You might have noticed that we’ve been having some troubles staying up today. It would appear that this is due to an onslaught of comment spam, causing the site to eat up resources on the shared server we use, which tripped some limits at the hosting provider and led them to choke the site.

The upshot of this is that I’ve had to disable comments and trackbacks for the time being until I can figure out some other solution. So yeah, hooray for spammers.

Update: I think I’ve fixed it, and momentarily outfoxed the spammers. Comment away!

Further Update: Of course, I spoke too soon and have spent most of my day trying to wrest control of the site back from this bunch of jackasses. Yay for spam.

Here’s my penultimate burst of predictions for this year – don’t forget to add yours in a comment or link from your own blog.
 

Prediction 8 – Mobile Payments
 

Carlo has already given his take on mobile payments next year and to a large extent I agree with him that the future probably lies with contactless payments (such as RFID) and not mobile payments per se. Most mobile payments are simply too complicated – far more so than credit cards or cash and thus fail at the operational level.
 

The other major issue that a new mobile payment system has to overcome is the classic chicken and egg syndrome, even though science has now shown that it must have been the egg. In this case, it means that it’s hard to build a user base if you have nowhere that they can use their new toy. And it’s difficult to get a merchant base until you can show you have a user base wanting to spend on that platform.
 

However, there is pain to be solved in this ecosystem – namely the 50% (or so) that operators charge merchants for billing users, normally via PSMS. If credit card companies can charge less than 5% and still remain highly profitable, it’s going to be hard for operators to maintain this stance against the power of market forces and possible regulatory forays by Government and Quango alike.
 

Given this pressure on the ecosystem, there is room for a new player to make great strides, especially if they can leverage an existing user base and if they also focus on maximising usage via P2P payments.
 

For me, this dark horse could be PayPal Mobile, who also have the substantial backing of the giant eBay behind them. They’ve been pretty quiet in the market up until now, but I believe that if anyone can make it happen they can.
 

So my prediction is that PayPal Mobile starts to get some serious traction in 2007, though the true potential won’t start to be realised until 2008 and beyond.
 

Prediction 9 – Location Based Services
 

I still believe!  But it seems like I’m only one of a tiny minority, with many operators and others having written it off as a dead loss.
 

We’re in a Catch-22 here though. Unless operators deploy LBS feeds at an affordable rate, we’ll never find the applications that users love about LBS. In the UK, they even charge in the wrong way, let alone too much, which make promising ideas like MoSoSo (Mobile Social Software) unaffordable to run.
 

This is a shame as there are certainly compelling use cases for LBS – navigation for one, though companies outside the mobile communications value chain have taken this market, which seems a big shame for the industry.
 

The argument against more aggressive deployment is that “we’ve tried that and it didn’t work”. Obviously not very Edison-esque, who reputedly found hundreds of ways not to make a light bulb work, before finding a way that did. I mean, if scientists gave up experimenting after the first few attempts we’d still be living as hunter/gatherers and maybe not even that advanced, as that lifestyle still calls for the invention of certain tools, like spears and pits to trap animals in.
 

My attitude is, so what if people don’t want to use LBS to find their nearest ATM? - though I could have told you if you’d asked. What use cases can we come up with that they will want, coz they are there?
 

This kind of innovation is unlikely to come from operators themselves, as it’s not what they’re good at, so the challenge is how we let loose the entrepreneurs on this and let them have access to location feeds they need to do their experimenting.
 

It would also be a great shame for the industry is the operators lost out by letting another technology determine location feeds.
 

But my overall thoughts for LBS is that outside a few trials, it’s going to be another disappointing and frustrating year. Don’t worry though, it’s time will come.

As Russell promised, here are my predictions for 2007 following my stellar performance last year. You get all ten of mine in one go, though. Be sure to add your own predictions, or link to them elsewhere, in the comments.

1. Lots of mobile TV hype, but little in the way of actual success.

CES saw some high-profile mobile TV from US operators and providers, and the news of launches will continue around the world this year. However, the actual results won’t match the hype, particularly in the US. Long-form content on a set schedule doesn’t match up to the mobile lifestyle. Consumers are already moving away from set TV schedules in their homes, thanks to DVRs, online video and downloading, so why would they accept it on their mobile device? Obviously there are some exceptions to this, such as live sports, but for the most part, it doesn’t seem to fit. Think about casual games: they offer users short, self-contained experiences that fit into brief periods of downtime during the day. Having a few free moments and tuning in halfway through a TV show and watching five minutes of it doesn’t provide the same experience.

2. Widgetization

There have been plenty of widget-style platforms for mobile already, but 2007 will see them take off as web content providers look for ways to offer easy access to their content and services, while users demand it. This, of course, will be followed by the widespread problem of widget incompatibility, since, of course, nothing can be easy in mobile.

3. Mobile data services for automobiles will take off.

For some time, automakers have been toying with building mobile data connections into cars — for instance, I remember seeing a BMW at CeBIT a few years back that could get traffic data and other info. But 2007 will see these services blow up. Already in the US, Ford and Microsoft are working on integrating mobile phones and cars, the Dash mobile-connected GPS announced a deal with Yahoo for local content, and satellite radio companies XM and Sirius are beefing up their data offerings. Adding data into GPS navigation units is a natural progression, and this year will see a lot of mobile data efforts targeted at cars.

4. Mobile social networking doesn’t do much, but the action’s in mobile social media.

Big social-networking sites like Facebook continue to announce mobile features, but most of them seem to be focused on sending as many messages as possible to mobile users, which isn’t all that compelling. That, or they go the MySpace route and go after operator-exclusive deals — is it just me, or are deals that limit who can use your services a little antithetical to building social networks? Anyhow, all these moves by the big companies seem to ignore the fact that mobile phones are intrinsically social-networking tools, and their services should be made to fit mobile, not the other way around. In any case, I’m not convinced that people necessarily want or need access to their MySpace account from their phone; they’re more interested in sharing their experiences, and the media they make from them, particularly to other mobile devices. So watch for media sharing apps and services to thrive this year, while big-name social-networking stutters on mobile.

5. Full-track music downloads over mobile will largely fail, leading operators and content providers to finally realize there are other aspects to mobile music.

It’s not hard to understand why users avoid most mobile music stores: they’re overpriced and unappealing. That doesn’t look like it’s going to change anytime soon, really, but operators will this year begin broadening their music offerings on a larger scale. They’ll embrace podcasts (though they’ll probably find another name for it), streaming audio and other types of music services. Whether they’ll be overpriced and unappealing remains another matter.

6. Mobile search will continue to run in place.

Mobile search, mobile search, mobile search. So many people agree it’s going to be huge, but nobody seems to agree on what it really is. Operators think it’s just a way for users to more easily find content they can buy; search engines tend to focus on pointing you to the nearest pizza parlor; companies like 4INFO focus on delivering snippets of information. I think all the apparent interest in mobile search is little more than a manifestation of the poor usability of so much of the mobile web. People try to find information, services or content they want, but get stymied by one obstacle or another. This turns into a “wouldn’t it be great if… you could just type in what you wanted on your phone, and something would send you there?” thought — but I’m not sure that necessarily would be so great. It’s almost as search becomes an excuse to develop crappy sites and services — after all, why bother making something easy to use if Google mobile will take users exactly to what they need? Search is one way to get people to content, but it’s not always the best way — and I think that’s definitely the case on mobile.

7. More flat-rate data — and hopefully affordable flat-rate data — in Europe.

3’s X-Series will show that affordable, easy-to-understand pricing coupled with attractive services leads to success in mobile data. More and more European operators will begin to realize this in 2007, and abandon their shocking, stupid and incomprehensible data charges.

8. VoWi-Fi’s real impact will be limited to some pricing pressure on certain types of calls.

Sure, there will be more WiFi hotspots built in 2007, and more cities will build out hotzones and muni Wi-Fi deployments. But that’s going to be matched by a realization of the flaws of many of these networks, and further proof that they’re far, far away from being anywhere near capable of replacing cellular networks for voice service. There will certainly be more fixed-mobile convergence launches that make use of Wi-Fi, but standalone VoWi-Fi services will continue to have only niche attraction. The biggest reason for this is they’re, for the most part, price plays that are useful to a relatively small chunk of users (those that make international calls, or travel outside their home country frequently). When the price operators charge for those calls drops (as it will, due mainly to EU roaming-rate intervention, but also because of market pressure), the need for many of these mobile VoIP services will dry up. Those that will be left standing will be the ones for which price is just an additional benefit to the rest of their services, not the central one.

9. There will be plenty of launches of WiMAX networks and others based on non-traditional or new mobile broadband technologies, but their largest impact will be felt by fixed-line broadband providers.

2007 will be a bit early for WiMAX or other new mobile broadband technologies to take a bite out of existing mobile operators. There will be uptake in fixed-line replacement markets, and in existing markets where these wireless networks represent the only available means of broadband, but as far as handset-based services for the mass market, let’s check back in 2008.

10. Mobile payments will struggle in the west, but they’ll be supplanted by other RFID applications in handsets.

There’s little reason for mobile payments to take off in the west, particularly in the US where operators will make somebody — payment processors, banks, merchants, perhaps even consumers — pay for them. Plenty of convenient payment methods exist, primarily credit and debit cards, and replacing them with a contactless payment from a mobile phone offers only marginal benefits. I’ve used one of MasterCard’s PayPass RFID key fobs, and I’m hard pressed to find it any better than swiping my credit card at a POS reader. However, payments aren’t the only contactless transaction application out there. For instance, the Oyster cards in use on public transport in London use RFID, highlighting one area where contactless technology could come into widespread use. These types of applications, not mobile payments, will what makes contactless transactions take off in the west.

We don’t cover many enterprise type applications here, but that’s no reason not to when one comes along that’s neat and produced by some old pals, which you can take as a sort of declaration of interest. Having said that, no matter how well you might know me, I won’t write about your stuff unless I like it, or at least have something to say about it.

Now I’d be the first to admit that enterprise apps can be a little boring. In fact, in some ways, the better they are, the more boring they’re in danger of becoming, because they just…well, they just work and do what they’re meant to, solving some pain and leaving you free to get on with the more enjoyable aspects on running your business. 

TOMMIE is just that kind of thing, so if you run a small or medium sized business, give it a try and you’ll find it removes an awful lot of the boring bits that everyone hates doing. 

At its core is a browser based calendaring system which coordinates everyone’s diaries in a sub-group or company. But because it’s online and browser based, it works across Macs (yes honestly) and PCs and really well on supported mobile phones. And obviously, you don’t need to worry about updates for the software, in the salesforce.com manner.

But once you get under the skin of this, you realise there’s a whole bunch more to it. It organises holidays for staff, for example, ranging from keeping track of holidays taken (a perennial office management issue), allows managers to authorise staff requests and avoiding clashes of critical people going AWOL at the same time.

It keeps time sheets for you, so if you’re that kind of company, ranging from legal, accounting to ad and web agencies, you know exactly who to bill at the end of the month. 

Then it manages expenses, that old bugbear of any road warrior’s life, allowing you to keep track and allocate expenses to specific clients if you run that kind of business.

I could go on, but this is packed with features (including great reporting tools) you’ll find curiously addictive and wonder how you ever managed without them. There’s a free trial and I defy you not to sign up as a paying customer once you’ve tried it, which currently costs less than £40 ($78) per user per year. 

It’s worth it because it simply takes away lots of the bits that no one really enjoys doing, even (or maybe especially) the most dedicated office manager.

A couple of quick ones today, as we continue to look at what’s going to happen this year, in my humble opinion.

Prediction 5 – European Data Tariffs

The Mary Elizabeth Mapes Dodge’s colloquial little fella has taken his finger out of the dyke and flat rate data packages have started to trickle into the marketplace with products like T-Mobile’s Web ‘n Walk and 3’s X-Series.

Stand by for the dam to burst in 2007. Anyone with a contract who wants a flat rate data package by the end on 2007 will get one, though it remains to be seen how PAYG will be affected.

Of course, this is great news in itself. But the fabulous implication will mean that the mobile web’s time has finally come. Walled gardens are largely down now (in Europe certainly), affordable flat rate data is here as well as high speed connectivity. The mobile web is finally open for business and the desk top’s days are numbered.

Prediction 6 – Mobile Marketing

Well, I said that 2006 would see the thaw ending in the winter of mobile marketing and it would start to take off. 2007 sees the Summer arriving big time as bigger brands start to discover the power of the medium.

Why am I so confident? Well, with the mobile web about to explode (see above), brands will suddenly realise that they need a mobile web site, much the same as 1994/5/6 saw a rush to build sites on the first web. So if you work in marketing or for an agency, this should be high up on your agenda before someone else thinks of the idea, or sells one to your client first.

The problem is that “build it and they shall come” isn’t much of a marketing strategy as we all learned back in the day. So once you have a mobile site, you need to promote it.

The fact is that advertising on the mobile web is simply the best way to promote a mobile web site. All you’re asking your customer to do is click on a link. They don’t have to type in a url, or even have the right settings on their phone in the first place. So, no wastage, high efficiency and great ROI.

That’s not the only reason though. As operators are realising that the era of pillaging is coming to an end, at least as far as data tariffs are concerned (plenty of pillaging to still be had in roaming though - for a while), they’re looking for new sources of revenue and naturally enough, will be looking at advertising to help. This will start off with each operator trying to do it on their own. But sooner or later (I’ll give it two to three years), they’ll come to the conclusion that it makes more sense to outsource this to experts and so that brands and agencies can have one buying point, rather than 4 or 5, or however many operators each market has.

Finally, the other inexorable trend in mobile marketing that we’ll start to see this year is ad-funded content. Mobile content is still expensive, which leaves a very big niche to be exploited for companies to sell subsidised content or even free ad-funded content. I’m not just talking the more obvious gaming and ringtones, but applications too. Clever entrepreneurs will start to flock to the sector, now a proven business model exists.

In summary, mobile marketing is hot in 2007 and a great sector to work in. About bloody time, personally speaking, having waited 7 long and frustrating years. But I kept the faith.

Prediction 7 – Mobile Search

Here’s my take on mobile search.

I think that the mobile is currently about discovery, not about search. We want Jerry Yang’s Directory now, not Yahoo! Search that it became. People don’t know what they’re looking for on their mobile in many cases and if you don’t really know what you’re looking for, how can you search for it?

Search is brilliant at finding the needle in the haystack, but not so good if you just know you’re looking for something that you know might just be sharp and shiny.

So, 2007 and mobile search: lots of noise, mucho big announcements, very little actual user use. Its day will come and it’s obviously important that the big boys do their strategic deals in anticipation of that time. But usage won’t be big this year.

Obviously the big story of the day is still the iPhone. In addition to Russell’s thoughts and my own, plenty of folks are weighing in. Interestingly, there seems to be a trend developing — picking out plenty of flaws, but ending with “I still want one.”

• Mike Rowehl: “The mobile gardens have been tending toward unwalling, and unfortunately this sounds a bit like a move in the other direction. I hope I’m wrong. Really hope I’m wrong. Cause I know I’m going to have to get one of these things either way.”
• Kelly Goto: “I feel Apple’s unique and stunning UI along with smart features such as the portrait to landscape switch and the proximity sensor to turn ‘off’ touch screen sensitivity when the device is held close to one’s face will win over the crowd. But with the higher price point ($499 for the 4 GB and $599 for the 8 GB) it’s definitely got to deliver.”
• Tom Hume: “I’m with Ive: it’s “not too shabby” and all that, and my now-Pavlovian responses to any product Apple releases are telling me I want one, but I don’t see this as meaningfully impacting on the mass market (other than giving a slight kicking to other handset vendors). As such it’s more of a decent PDA than a phone, in my book.”
• Raddedas at Techype: “Apple have created a niche product here with amazing appeal - to the niche. At the risk of upsetting the Silicon Valley types racing round on their Segways between hip coffee houses to brainstorm about how this will change everything (using free metropolitan WiFi and their suddenly not-so-cool Palm Treos to take notes), what the iPhone won’t do is change the world.”
• Ewan MacLeod: “All I need to say is look at the N95, the pinnacle of Nokia’s engineering prowess. Stick it next to the iPhone. It just doesn’t compare. Symbian and the N95 just isn’t in the same stratosphere.”
• Matt Croydon: “There are a few things that excite me about the newly announced iPhone (and a few details that I’m unclear on). One thing I’m pretty sure of is that the coming of the iPhone is the tipping point for a new kind of mobile web.”

Well, what is there to say that hasn’t been said already, both by Carlo here and everywhere else on the web?

Great product, great showmanship, can’t wait to try it.

I do have a couple of thoughts though.

On the downside, outside the US, as Tomi points out, the killer app on mobiles is still dear old sms. Despite being dominant, it’s still growing like crazy. So just how easy will the iPhone be to send sms? If it’s not at least as easy to use as the mobile we know today, this is simply not going to get traction in the all important youth market outside America.

Now, you could argue that at those prices that youth groups outside the US are not very high on the priority list. But to conquer any kind of mass market eventually, this constituency will have to be addressed.

Which kind of leads me to another point. I’d be intrigued to know who Apple’s marketing department are targeting with this phone/MP3 player - actually, it’s more of an MP3 player that makes phone calls, I’d suggest. It’s clearly revolutionary in many ways. But outside gadget fanboys, who’s going to want one? Sure, I realise that most of MobHappians will want one, but is that enough? It’s a genuine question and maybe there are enough gadget freaks out there.

Mr Jobs’ “All we need is a 1% share” approach to this is also a little strange - if he’d come up with that kind of remark pitching to VCs or in a grad school business plan, he’d have been thrown out

And there doesn’t seem to be a 3G version, which is strange, given the stress placed on the importance of accessing the web.

My gut feel verdict on the iPhone though, is that it’s be like the Sex Pistols of the music industry. Hugely disruptive, headline stealing and immensely influential, but ultimately, others will come along who’ll take the good bits, dominate the market and make most of the money. I hope it’s not true, as I’d love to see Apple take nice slice of the market on a long term basis. Their design flair alone would make that a fine thing for us all.

Finally, I was intrigued to hear that they’d been planning this for 2 1/2 years, which is precisely when I started suggesting it might make sense. Apart from them buying the iPhone.org url back then(!) my thinking at that time was that convergence would kill the iPod and since Apple makes its profits from the hardware (and no real money from the software -iTunes), they simply had to go into phones or ultimately give up on this golden goose. Seems like they came to the same conclusion at the same time, but I bet it’s taken them a lot longer than they wanted to get this baby to market.

Anyway, a fine job, Apple and put me down for one please.

Well, it’s finally here: Steve Jobs is onstage announcing the iPhone at this moment. Follow the action at Engadget.

I’ll have more thoughts on it later, but my initial reaction: shiny. And that’s about it.

Update: Wow, not sure where to start. First, I don’t think you can think of this as a phone, really (nor does Michael Mace). It’s about the most kickass iPod yet, with some phone functionality added in, along with a web tablet. That’s both an asset, but also a potential hurdle. It’s an asset because it’s freed Apple from the phone-centric thinking that, at time, plagues other handset vendors. But it could be a big hurdle, because it looks like it’s tipped the balance too far away from “phone” and too much to “other stuff” for many people’s liking.

While the touchscreen’s cool and interface novel, I think it’s going to be way too complex for most people’s tastes (granted Jobs did say Apple just wants to take 1% of the handset market). Jobs decried things like the complexity of dialing phone numbers on current handsets — but is having to call up a virtual keypad, or tap your way through a contact app with your finger that significant an improvement?

The internet functionality looks pretty slick, as do the widgets. But my concern in this area is how open the device will be to third-party development. That struck me as odd, since Apple and Jobs usually go to great pains to play up to developers. Pretty much all he said along these lines was that the iPhone runs OSX — what what’s that mean, particularly for external applications? I’m also concerned that the iPhone won’t fit in to the existing ecosystem, and will be essentially closed off to mobile developers.

I’ve got a lot of questions about this device, and the Apple site doesn’t offer much guidance. I’m also very skeptical about the durability of the iPhone — it doesn’t seem like the sort of thing that will take very well to the typical abuse many mobile phones receive on a regular basis, in particular being carried around in pockets (I’ve already got echoes of the first run of iPod Nanos in my mind).

All that aside, the mobile industry’s gotten a tremendous boost today. While most of the iPhone’s features aren’t nearly as revolutionary as Jobs seems to think, the iPhone’s going to get a ridiculous amount of press that will — if nothing else — inform people that all these things are possible on a mobile phone, though they may at first have the impression that they’re possible only on an iPhone. Mobile media has just gotten a huge boost; the mobile internet has just gotten a huge boost.

Of course, alongside that, Apple’s thrown down the gauntlet. As much as the iPod was already the bar for media playback functionality on mobile handsets, those comparisons will now shift to the iPhone: does it play music as well as the iPhone? Videos? Photos? (Of course, on the flip side, the iPhone’s going to get “writing SMS on this is nowhere as easy as my old Nokia”) That’s going to be a challenge for handset vendors, but it’s one that should benefit us users. There’s a big opportunity here for the industry as a whole: Apple’s opened the door, and I’m not convinced it’s going to be iPhones that go flying out, especially at $500 or $600 after subsidy and two-year contract.