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iPhone 3.0 Software

June 5, 2009 at 7:51 pm · Filed under TigerSpike Innovation Lab, Work Related Stuff and tagged: 3GS, audit bureau of circulations, iphone 3.0, iPhone 3GS

I decided to write this document because I did some reading and watched the iPhone 3.0 video (which you can too here, but who has time to sit through over an hour of video these days, so below are the highlights and some analysis of what this means to you, with some time segments of the video referenced so you can go straight there without having to see the whole thing. Summary is here [01:22:10].

There are some also insights into iPhone too and why you should care about it more than you think you should.

The short answer is that the new improvements in 3.0 make an already great product even better. There really is no excuse for brands not to have a presence in the app store.

Key Statistics

30 million iPhones and iPod touches and growing
In 80 countries. They excluded China, our man on the ground there tells me there are so many (All cracked of course)
45,000 apps and over 1 Billion downloads from the app store so far
iPhone 3.0 SDK was released for the developers on St Patricks day 2009, and will be pushed out to everyone’s phones this summer
iPhone apps are now being approved within 2 weeks
I could go on, but the short answer is that the iPhone really needs to be the centrepiece of your digital strategy. It is the quickest way to start doing something that works

For me this graph is the most important

The blue bars are how many handsets are out there, and the red is how much traffic they generate as a % of all traffic. See if you can guess which one the iPhone is! What this means is that despite having a small number of total devices, iPhones do the most searching of the mobile web. Almost HALF of all traffic is generated by 8% of devices.

This is because:

Design of the iPhone is way nicer than all others at the moment, so you want to interact with it
The usability of the iPhone is way better than all other phones. They just spent more time getting it right

I know people who switched from a high end Nokia perfectly capable of web browsing, but only started when they got their iPhone. This may not be the case for ever, but it is the case now.

Apps are a similar story. The Blackberry app store is a very poor cousin to the iPhone store. No comparison really, and Nokia Ovi will take a while to gain traction, although both have potential.

Summary of 3.0 new features

This section will loosely follow the video, and if you want to see more you can go straight to the time listed.

In app purchase [00:11:00]

This means you can buy extra stuff without leaving the app. You set the price, get 70% of it back and Apple pay you monthly . Apart from extra game levels, the big winners here are magazines, and in particular magazine groups.

For two reasons:

You only create one app, and then sell each edition of the magazine. You can get revenue straight away and so don’t need to rely on mobile advertising, which won’t bear fruit until 2010/2011 in my opinion. If you want that route, go for Sponsorship for 6 to 12 months with one of your best advertisers
This spring, The Audit Bureau of Circulations (in the USA) has recently allowed non replica versions of magazines to count towards paid digital circulation. This means your iPhone magazines can boost your circulation numbers (and therefore your ad rates).

For city guides, or groups with many titles, check out [00:12:00]. Having one main app means revenue potential is way higher than for individual apps per issue. AND you get to cross promote.

Any magazine or magazine group that isn’t taking advantage of the 30m people and the easy payment mechanism that this new channel gives needs their head examining.

Push notification [00:22:00]

This is one of the best features of the 3.0 software. It allows the application to send you an alert which you can then click on to go into the application (either on a pop up screen, or in the SMS inbox). If you push look at usage patterns of applications, people stop using them fairly quickly. These reminders are good ways to reduce this.

Check out how ESPN are sending over 50m push notifications a month for sports [00:39:15]. Very cool. If you do alerts, have a look at how ESPN are doing it and copy them!

Another cool thing is that you get to assign your own sound to the push notification.

Accessories [00:18:00]

This lets developers design for accessories. This new API lets you control the accessory from the iPhone. For example a graphic equaliser to control a spreaker that you plug your iPhone into it.

The main winners here are the medical devices companies. There is a good example of what Johnson and Johnson are doing at [00:43:30]

But so what you can do the same for other devices? The thing is that iPhone is way easier to use, and looks good. For older people this is what they need. Until the iPhone, high end devices perplexed the older generation (and when I say older generation, I of course mean anyone over 30!

Maps [00:19:05]

maps WE can now use Google maps within iPhone applications, including location based information (with GPS, Wifi and cell tower triangulation for non 3G devices). The maps are free: You don’t need to buy or license your own maps, you use Google’s. Which are the standard these days.

Knowing where you are opens up one of THE key values of mobile, so the Big winners here are any applicaitons that direct you somewhere. Restaurants, Hotels, Shops, events, parties etc… Finding out wher eyou are now, and whee you need to get to is way easier now.

Palm Pre has full turn by turn directions with their GPS, which 3.0 does allow IF you bring yourown maps. Great news for people like Tom Tom and NavMan as they have 30m potential new customers. And in app purchasing means that they can make their money on the additional maps needed.

Peer to Peer [00:14:50]

This is great for games where you want to play against other gamers near you. But it is also great for business.

The great thing here is that it connects over bluetooth with automatic discovery and no pairing. So it is easy. I don’t care what anyone says, Bluetooth up until now has just not worked. We have been working with it for 6 years.

So the big winner here in my opinion is brand sponsored games or business applications where the main areas of business are in big cities like London, or New York (or anywhere where there will be more than one iPhone out there). I ride the subway from Brooklyn to Manhatten every morning, and see at least 3 other iPhones, but you do need this.

Other cool customer features [01:03:00]

In app email – will mean that viral spreading of apps or content from apps becomes way easier
Streaming audio and video – iPhones now become radios. All radio stations must build fron ends
iPod access – so you can access the songs from within your app. Great for personalised applications [00:34:00]. In SIMS3, you can buy a stereo in game and play your own songs through it!
Landscape keyboard – a big criticism of the iPhone compared to Blackberry was the keyboard. JD power recently rated the iPhone number one in customer satisfaction among business users so don’t be surprised to see Blackberry overtaken soon for this demographic [01:11:50]
MMS – this is now supported allowing sending of video and multiple images. Great for news for companies who want to do UGC campaigns [01:12:20]
Universal search –lets you type in a search word, find it within emails, notes, songs, apps… everything [01:17:32]. Probably a reaction to Palm Pre’s similar functiaonloity but pretty good nontheless.
Copy and Paste – you can now do this from anywhere to anywhere [01:09:22]

What not to do

Don’t go cheap. To quote my Singaporean camera sales guy “you want cheap?, is no good… you want good? Is no cheap”. We have seen a few times where clients have gone for the cheap option. One had to completely rebuild their app, and the other is still waiting forit to deliver 3 months later. Don’t pinch pennies on this, you wouldn’t with your corporate website, and you shouldn’t with your iPhone app.

Use professionals. If you can find an independent iPhone developer who is good and professional, then great. If he or she is a good designer even better. But from our experience the best iPhone freelance guys are working for themselves, becoming rich enough by building their own games, and if they mess it up, you are left with no redress.

Put together a Financial model for when the project will break even. If you use US$50k+ as a ballpark for a reasonably good app, and you sell it at $1.99, you know that you need to sell 34,000 apps to break even. Throw in sponsorship, and you can be making a profit before you even start the build. This is absolutely possible, we have seen it work a number of times.

Consider other applications. If you are building an iPhone, keep the wireframes, walkthorughs, designs etc.. for Android / Blackberry / J2ME apps. Don’t pay for separate builds where you don’t have to. Technically since iPhone is written in C and the rest based on Java you will need separate builds, but many elements will be the same.

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Integrated consolidated groups are not the way forward

March 10, 2009 at 2:34 pm · Filed under Observations and Ramblings, Work Related Stuff

I knew when these groups were being put together that they weren’t necessarily a good idea. We talked to a number of them in Australia and overseas initially, and recently (with the exception of Photon) have seen all of them struggling with falling share prices, layoffs and a lack of clear direction. Here are the reasons why I think they are not the way forward:

Most mergers / acquisitions don’t deliver

I learnt this long before TigerSpike when I worked on them at KPMG. Any management degree will also tell you that mergers and acquisitions are more about egos than exploiting synergies and driving value (which should be the only reason for them).

If you look at many of the consolidated groups, they are a combination of many companies. So how can this work? When one is hard enough, how can you get value from many?

Motive is wrong

If ego or only money is the motive for these groups then that is not right. If you are not sure if it is, I’ll give you a clue – it is if it is being driven by VCs and bankers then it probably is. The Finance guys of course need to be involved, but not the ones driving it. Blue Freeway was a good example of a company that was being run to look sweet to VCs and investors without thinking about adding value to clients. They have since changed their model, but still seem to be suffering.

Some examples of reasons for mergers or acquisitions are a good idea are:

A company with many publishing clients buying a company with a cool piece of technology and selling that through their client network
Two companies with complimentary geographic footprints merging to become global and sell to clients who need a truly global footprint
An old media company buying a new media company to infuse the new technology, innovation and thinking into their company
A traditional advertising agency with many clients asking for digital services buying a company who provides these services to expand their offering to these clients
Two similar companies merging and saving costs by centralising support functions (if they can harmonise their processes so that the central admin guys are not just working twice as hard on each individual company’s processes)
There are more, but you get the idea

The motive for these things need to be that the combined group can add value to their cleints, while either cutting costs or increasing revenues, or both. Put simply, 2 + 2 has to equal more than 4.

Technology is underestimated

Originally BlueFreeway was going to combine the platforms of all the member companies into one “Blue platform”. This sounds good (to the VCs as it builds their IP), but in practice it is never going to happen. If the tech guys in each company are anything like our tech guys, they all have their theories on the direction of tech and they are all right about those (NB: we actually are right!).

Now imaging putting them all together and trying to form a consensus on:

which technology direction to take (people like Joost got it wrong initially, and paid for that)
which base technology to use – I know that half the Blue Freeway companies used .Net, and the others Java, and others
how much time each tech team has to spend on the central project (our tech are fully utilised for 6 months on our own client projects. If we were part of a group, spending time on a big central project would mean that revenues would fall)

I.e its NEVER going to happen. Going back to my days overseeing technical integrations at KPMG, the banks had a really hard time integrating two of their own internal systems, and they had ten times the budget and resources that these groups do.

Building from scratch is more viable, but that takes a long time. We are on version 3 of our Phoenix platform which has been continually updated over the last 5 years. We have guys assigned to it full time. Building a new one that meets the needs of all the group companies is very very hard, and each new company purchased becomes a new complex integration project.

People forget technology. Especially the money men or the wide boy entrepreneurs. Technology buried Boo.com. If you get it wrong you are fucked no matter how good your marketing / PR spin is.

Heart is ripped out

Most of the companies that are bought by these groups are medium sized start-ups. They are being run on the passion of the founders and every ones hearts are in it. It is “us against the world!”. When the founder cashes out, or takes orders from someone with a different direction in mind, then things change.

When the motivation leaves these companies performance falls. Also with a larger group behind them, the long suffering underpaid staff who were doing it for the love now start to ask for more money. This is inevitable: if you are not motivated by other things, then money becomes more important, and that increases the biggest cost that these companies have. Again, performance suffers.

Advertising is changing

But there are many groups out there. Photon is doing well, or look at WPP or any of the other big advertising groups. Why are they working?

I think that the reason is that they give the individual companies autonomy and feed them work through the other companies in the group. But to be honest, we work with many of these groups and they often don’t like each other, and often pitch against each other and try to nick work from each other’s clients. We are often engaged to help with mobile work despite the existence of a mobile company within the group.

The theory is that big global brands can go to one advertising network like WPP and get everything they need. Problem is that is not the case. The one relationship to rule them all’ doesn’t happen because the companies are not that close, and specialisms like mobile and social media are just not good enough within the agencies. We have seen many larger advertising agencies put their hand up for mobile work that they just can’t deliver, and they end up doing something stupid like QR codes when only 5% of handsets have the reader installed (creating an extra unnecessary step for consumers).

Brands are starting to go outside these big groups for 2 main reasons:

the skills they need are not within the group. No matter what the bigger guys say, the smaller agile independent digital companies will always outshine the big agencies for innovative and cool work. Which is what the brands want
the big brands can exert power over the smaller companies. For example Brand X will get more personal attention from a medium sized agency for whom they are one of their largest clients, rather than from someone like Publicis for whom they are one of their smaller clients. This trend is also being seen in tech companies, where big dollars are flowing away from guys like IBM and towards medium sized technology outfits for this reason.

The risk in smaller companies

Ok, so before I get too down on them, bigger companies and groups do have some advantages over smaller companies. Smaller companies if they are good, are likely to grow. Smaller companies who grow fast may well be very profitable, but they will go bust if they are not careful. You don’t want them to go bust in the middle of your project.

They may seem cool, and exciting, but many smaller companies lack the controls and processes that larger companies have (that said, I am constantly surprised how many many larger companies are weak in this area). If you are their biggest client running their biggest project, then this is uncharted territory for them.

In summary

Only merge or acquire if 2+2 really does equal more than 4. Do it for the right reasons
If you are a brand, shop around for cool services that you want. These may well be within a group, but don’t assume that just because one group company is cool and easy to work with and do good work that the others will too
Make sure if you go for someone smaller that they can deliver what you need. What you don’t want to do is work with a small company who goes bust or gets so busy they can’t deliver for you
Go to a cool independent medium sized company like us (Oh jesus christ!.. don’t tell me that whole email was one big sales pitch for TigerSpike… haha…)

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Nokia vs Apple

February 18, 2009 at 10:46 pm · Filed under Observations and Ramblings, The Future, TigerSpike Innovation Lab, Work Related Stuff and tagged: apple, appstore, nokia, ovi

This blog entry is mainly about Nokia’s Ovi store. Loosely this is an App store like Apple’s, but it promises to be availble to 300m devices by 2012.

This is big. I am a big fan of apple, but iPhone sales are dwarfed by sales of Nokias. In my opinion Apple is still way ahead in terms of the phone design and useability, but Nokia (and everyone else with varying degrees of success) are all trying to copy; and as Motorola found out, you can’t just make one awesome phone (the V3) and then sit back and bask.

What does Ovi have?

A general app store that gives developers 70% of sales revenue (like Apple) accross 15 set price points, and charges though the carriers (after the carriers take their share (which is SHIT – carriers take 40% to 50% – there won’t be anything left!), or through credit card. Apple is way ahead in this respect, and Nokia will have to come up with some more solutions – things like Paypal will help, but one thing Nokia hasn’t got that Apple has is the billing relationship. And that matters. Alot.
Nokia music store does pretty much the same thing as iTunes, and also streams from your PC. It also has a recommendation engine which is good, but it isn’t as cool as Apple’s iTunes Genius (neither of which are as good as last.fm)
Nokia Friend view, which actually pits Nokia against Google (their new Lattitude service). I think that Google has a better chance, as their solution goes accross all platforms wheras Nokia’s is only availlable on S60 handsets at the moment. They both look cool though – check out the videos here.
MOSH which is Nokia’s UGC thing which I won’t go into here.
A games capability which Nokia will be ahead of Apple for; due to their experience with the N Gage. That said, Apple is more Wii (because of the accelarometer) and NGage is more Playstation, and I prefer Wii over Playstation. Steve Jobs doesn’t really like gaming either, so he may be missing a trick here. Games outsold DVDs this year.

Distribution

iTunes has between 100m and 250m users depending on who you ask, iPhone has tens of millions
Nokia say that Ovi will be on 300m devices by 2012. This is bullish, but Nokia do have 40% of the global market, and there are more than 4bn connections out there (or thereabouts), and 40% of that is 1.6Bn!
Something else to remember is that iPhone users use their devices way more than Nokia users do – even the new Nokia devices… we will wait and see what Nokia produces to answer the iPhone. I haven’t seen anything close yet (from anyone – confirmed by our guys Nic and Simon who are at 3GSM in Barcalona at the moment)

Can Nokia get it on the handsets?

All the new ones yes – the first one is the N97 in May, but they say that they will be able to get it on the Series 40 and 60. Through an ‘on handset’ application. Getting people to download that is by no means easy.

Also remember that Nokia will start to piss the carriers off as they will theorise that they will lose revenue (the credit card part). Who knows they may gain more (i.e. their share of the carrier charged downloads), but they will fight over it – which should be fun to watch! The carriers need to invest in this stuff too otherwise they will become dumb pipes, which they need to either accept, or do something about. And it has to be something more impressive than Nokia and Apple, and Google can do. And that is a very tall order…

So will Nokia win?

Even considering that Nokia has just laid off a load of their R&D guys due to the recession (Not a good time to need to innovate and develop cool stuff) in summary: If Nokia can connect effectively with their handsets: i.e. all the lower end handsets download the application OR all new Nokias pre load Ovi AND they sort their billing out, AND the carriers don’t kill them, THEN they will have the biggest network in the world. Even if they do this – Apple will still be there, they won’t go away because they are too cool and they do things right and their design is beautiful.

But while Apple is “cooler” than Nokia. it isn’t by that much…. Finnish people never hurt anyone, so Maito on calista, Sokeri on Halpa to you!

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Death to patents!

November 25, 2008 at 9:11 pm · Filed under Observations and Ramblings, The Future, Work Related Stuff and tagged: patents

Apple is being sued for patent infringement over the way its iPhone surfs the internet by EMG Technology, who alledged that the company infringes on a patent it holds for navigating the internet on mobile devices. The patent was issued little more than a month ago, but relies on 76 claims that were originally filed in 1999. The patent covers how online content is displayed on mobile devices after being reformatted from HTML to XML.

Wake up call to all the old way of doing things: Gen Y don’t give a shit about copyright, and China doesn’t give a shit about Patents (ergo: they will be worthless within 50 years, and a good thing too!).

In my opinon if someone comes up with an innovative new product, they should get off their ass and commercialise it and make money from it, then by the time everyone has copied them and they therefore make less (which is good for the consumer) they should be continually innovating to commercialise their next product.

People like the Tetra pak moguls don’t deserve their millions. I can’t see any arguement that can be used to say that they do. Sure, make a few million, but end it there; let patents last a maximum of 3 years. These guys are essentially sitting on their arses making money without hard work or continual innovation. And that is wrong.

To all the Pharmaceutical companies who whine about “the cost of R&D needs to be protected” get over yourselves you make way too much money and you know it.

With regard to the Apple case, it seems like EMG renewed a bunch of patents with the specific purpose of suing. Why don’t they stop being babies and make money from it themselves, not wait for Apple to and then try to bring Apple down for succeeding where they failed!. By the way I am not an Apple-phile; they took us to court in Sydney when we trademarked “mPod”, (which we did before the iPod came out, but they took all “pods” to court) to be honest it was just their Lawyers using up their retainers and justifying their own existence and producing nothing.

ok so I am sounding a little socialist (my grandad was in the Communist party when he was at Oxford!). And I am not saying lets redistribute the wealth, becoming rich is fine if you do it by working hard or innovating, or both. Not inventing one thing once, and then build a giant lazy-boy (reclining comfy chair) out of Patent protection lawyers.

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