From the gods of personal computing to almost bankruptcy and then being back as the god in Smartphones, Apple has seen the full circle and if the graphic below was to be believed, it is bound for a repeat of its downward spiral.
If you are ruminating disregarding the idea suggested hereby, heres more hard evidence about how vulnerable Apple is on the top:
2.Developers are wholeheartedly embracing the Android platform. This is because the Android platform is rapidly building a global user base that rivals Apple’s in size. Eventually, the Android user base will be a lot bigger than Apple’s. Scale and Threshold is the name of the game which could upset the “Apple”cart!
3. With the Open source, Android has faced problems in maintaining the sanctity of the platform against loosing out on a uniform user experience due to customization by its vendors. That would reduce the Android experience as a whole and is a negative against the Androids. However, Android is preparing to address that issue sooner.
4.It is believed that Apple can maintain its extraordinary profit growth merely by being a “premium” player–selling fewer devices than the Toyota of the smartphone world (Android) but maintaining a superior product and superior margins.
This is wishful thinking.There just aren’t that many premium buyers in the world.And the gap between the latest iPhone and the latest Android phones is closing.
Apple is possibly trying to counter it by tie-ing up now with CDMA operators that would give them access to markets which they had not touched yet. Also Apple follows an aggressive pricing policy.But the game it seems is likely to be in the “open” space more than Apple’s “walled garden”.
More than two large companies this is two different ideologies at war. Android seems to be getting ahead slowly here.
10% increase is Mobile penetration would lead to .6% increase in GDP of the nation: That speaks volumes of Telecom as a economic multiplier. In a nation as large as India, the power of Telecom to connect its 1.2 billion people with Information and utility services is seen as the next Mass movement to drive the a broad based fundamental growth.
The Government of India realizes the potential of Telecom and has been at different levels pushing the levers for stimulating Telecom/Broadband growth. In what is a spin-off of sorts, the Government of India in partnership with NABARD, Department of Telecommunications, Banking/Financial institutions and funded by the USOF (Universal Service Obligation Fund) is launching a spate of micro-programs that will aid Women in Rural areas (Aggregated to Self Help Groups) to become entrepreneurs and gain some socio-economic independence.
The project which is un-named yet, focuses on females, and uses NGOs and Micro-Finance companies to reach out to these Self help Groups (SHGs), helping them with micro-credit and loans to finance their ventures. Furthermore, GoI is also joining hands with market players under the aegis of Corporate Social Responsibility to support the SHGs in their entrepreneurial endeavor. So, the Nokias and Airtels of the world are a part of this whole exercise extending their support, help and expertise to the SHGs. The beauty here is that while this is under the aegis of CSR activity, it has economic and business relevance to these players as well.
The SHGs adorn the role of last mile distribution houses in an otherwise lengthy and economically unviable distribution supply chain. Thus the whole template of a win-win-win for all three parties in the program. The Government benefits from economic-inclusion of the bottom of the pyramid people. The SHGs would benefit from being able to have an earning for themselves at the end of the month. The Companies would benefit from benefits of getting connected to the last mile and the last consumer in the value chain.
That’s called reliving C K Prahlad’s Value at the bottom of the Pyramid.
Net Neutrality is a taken-for-granted thing in the internet that we live in. The concept of free, open and equal internet as it exists today may be under some threat if the advances of giants such as Google and Verizon are to be believed. In some sense, Google is finally beginning to violate its “Do no Evil” corporate policy for commercial and financial purposes.
Essentially Net neutrality refers to the network agnostic behavior towards internet traffic, content, platforms, websites and more. There has been a section of companies that have wanted to differentiate internet services such that some of the free behavior is tweaked in favor of their benefits. For instance, these Telcos/ISPs want the right for companies to pay a premium to have their content delivered faster than rival content, or to establish new layer of faster internet on which to serve paying, premium services. That would leave non-commercial sites on a poorer, slower web where they would find it harder to attract readers – changing the democratic nature of the internet. It would also mean poorer users, or those in the developing world, would find it harder to access the “full” internet experience. That in principal is violtaion of net neutrality.
Companies such as Verizon, AT&T and Comcast have been planning to introduce tiered, prioritized and premium services. This in principal is against the Democratic DNA of the internet and has been thumbed down by several high profile Tech gurus including Tim Berners Lee, the inventor of the Internet.
Berners-Lee has said: “Control of information is hugely powerful. In the US, the threat is that companies can control what I access for commercial reasons. In China, companies could control what users access for political reasons. Freedom of connection with any application to any party is the fundamental social basis of the internet.”
The debate around net Neutrality is not new and has intermittently been popping in and around. In the US, coverage has centered around the Federal Communications Commission which upheld a complaint against ComCast for illegally restricting paying web users from using file-sharing services. In the UK, “traffic shaping” can similarly be seen as a precursor to wider tiers of internet use with ISPs commonly demoting and even blocking P2P traffic, for example. ISPs in the UK have also indicated they are concerned about services that put pressure on their networks like the BBC’s video traffic, which may lead to them charging.
Worldwide mobile device sales to end users totaled 325.6 million units in the second quarter of 2010, a 13.8 percent increase from the same period in 2009, according to Gartner, Inc. Smartphone sales to end users accounted for 19 percent of worldwide mobile device sales, an increase of 50.5 percent from the second quarter of 2009.The double-digit growth this quarter, were offset by lower average selling prices (ASPs). ASPs were lower than expected and margins fell.Intense competition that drove price adjustments and changes to the product mix.Manufacturers such as LG and Samsung pursued market share in a low-margin market but this approach proved risky, as shown by LG’s decline of 27.8 percent in ASP in the second quarter of 2010.
New product introductions from Apple, HTC and Motorola, along with the drop in ASPs, drove strong sales of smartphones, shortages of components, such as active matrix organic LED (AMOLED) displays impaired sales volumes of some of the more popular new smartphones.HTC made its debut in the top 10 worldwide ranking, holding the No. 8 position with 139.1 percent growth year-on-year. This reflects the popularity of its Android portfolio but also a more aggressive branding strategy compared to the same period in 2009.The sudden growth in media tablets, such as the Apple iPad, did not appear to hold back smartphone sales. This lends credibility to the thought that most tablet users still feel the need for a truly pocketable, yet highly capable, device for those situations when it’s inconvenient to carry a device with a larger form factor
A few quick notes on the players in the market:
1. Nokia loss of 2.6 percentage points reiterate the need to do more to attract developers and other ecosystem members by revising its platform strategy and improving its communications
2.Although Samsung’s sales were strong in developing markets, its shift in product mix caused an overall decline in ASP. Its aggressive strategy toward the mass market enabled it to reduce inventory in the second quarter of 2010.Samsung will also be one of the first manufacturers to bring Windows Phone 7 devices to market, in time for the fourth quarter of 2010, showing that this manufacturer continues to keep its platform options open, even as it works on its own bada platform.
3.Blackberry has stood its ground in face of increasing pressure from the Androids. Blackberry released the Torch and Blackberry OS 6.0 to remain competitive. Torch’s form factor will still appeal more to business users than to consumers and will stop many loyal BlackBerry users defecting to other platforms, but it won’t attract many new users to the brand.
4.Apple’s sales would have been higher if it had not had to face tight inventory management in preparation for the arrival of the iPhone 4 at the end of the second quarter of 2010. Apple also suffered from some supply constraint on the new device.
5.In the smartphone operating system (OS) market, Android expanded rapidly in the second quarter of 2010, overtaking Apple’s iPhone OS to become the third-most-popular OS in the world (see Table 2). In the U.S, it also overtook RIM’s OS to become the No. 1 smartphone OS in this region. A non-exclusive strategy that produces products selling across many communication service providers (CSPs), and the backing of so many device manufacturers, which are bringing more attractive devices to market at several different price points, were among the factors that yielded its growth this quarter
6.Telcos will increasingly offer more affordable tiered data plans to users. Tiered data plans will make smartphones more accessible to different market segments and help make smartphones the dominant device category in mature markets. This means that total cost of ownership will be lower, and new users will face less of a barrier to entry
7.Launches of updated operating systems will help maintain strong growth in smartphones in the second half of 2010 and spur innovation. However, market share in the OS space will consolidate around a few key OS providers that have the most support from CSPs and developers, and strong brand awareness with consumers and enterprise customers
Reproducing a report about Mobile Applications and its impact in Emerging Markets (Afro-Asian markets)
Emerging markets will drive the growth of global mobile value-added-service (VAS) revenues from $200bn in 2009 to $340bn in 2014. With China, India, Indonesia, South Africa, Nigeria, Egypt, Turkey, Israel, Saudi Arabia, Brazil, Mexico, Argentina, Russia, Poland and the Ukraine expected to account for 36 per cent of such revenues at the end of the forecast period.These numbers were released by Informa Telecoms & Media, which has been monitoring the high growth potential for VAS in emerging markets as high market saturation limits growth prospects in developed countries.
In fact, operators and service providers in emerging markets have been more innovative and proactive in developing and deploying mobile VAS than their counterparts in the developed world, especially in the areas of mobile payments, P2P funds transfer and agricultural information services. The reason being that these services are having a big impact on the day-to-day lives of the local population and are contributing to the social and economic development of the population in these markets, Informa said, citing services such as M-Pesa from Safaricom in Kenya, the Rural Information Service from China Mobile, the Please Call Me service from MTN in South Africa, and the CellBazaar service from GrameenPhone in Bangladesh.
“Compared to the developed world, there are very different economic, social, demographic and cultural challenges in the emerging markets. In many countries, 3G services are still not available, or are limited to mobile subscribers in larger cities. Therefore operators have to depend on 2G services such as SMS, USSD (Unstructured Supplementary Service Data) and IVR (Interactive Voice Response) systems, to be able to drive mass market adoption of their mobile value-added-services, and to successfully reach subscribers in smaller towns and rural areas,” said Shailendra Pandey, senior analyst at Informa.
Pandey adds that mobile social networking is beginning to see strong growth in emerging markets but most of the services are instant messaging chat applications. One of the most successful service examples is China Mobile’s IM service called Fetion, which has over 100 million registered users. The addressable market for the Fetion service is large as it can work using IVR, GPRS and SMS access modes. Also, mobile app stores have so far not received the same attention from the operators in emerging markets as they have in the US and Western Europe, although some large operators like China Mobile have already launched – or are considering launching – their own app stores. Earlier this year, China Mobile collaborated with Nokia to launch a joint mobile app store MM-Ovi and it has been reported that over four million mobile apps had been downloaded from this app store by March 2010.
Loosing technology leadership and going from No.1 to an also ran within a few years. An interesting account of how Yahoo lost the Internet plot to Google by Paul Graham. Yahoo’s inability to see the major developing trends in terms of building up search based customer targeting finally led it to being a “also ran” from “the biggest thing on internet”.
This is a compelling reading highlighting how successful companies are blind to emerging trends in the face of their big successes.
What happened to Yahoo?
When I went to work for Yahoo after they bought our startup in 1998, it felt like the center of the world. It was supposed to be the next big thing. It was supposed to be what Google turned out to be.
What went wrong? The problems that hosed Yahoo go back a long time, practically to the beginning of the company. They were already very visible when I got there in 1998. Yahoo had two problems Google didn’t: easy money, and ambivalence about being a technology company.
The first time I met Jerry Yang, we thought we were meeting for different reasons. He thought we were meeting so he could check us out in person before buying us. I thought we were meeting so we could show him our new technology, Revenue Loop. It was a way of sorting shopping search results. Merchants bid a percentage of sales for traffic, but the results were sorted not by the bid but by the bid times the average amount a user would buy. It was like the algorithm Google uses now to sort ads, but this was in the spring of 1998, before Google was founded.
Revenue Loop was the optimal sort for shopping search, in the sense that it sorted in order of how much money Yahoo would make from each link. But it wasn’t just optimal in that sense. Ranking search results by user behavior also makes search better. Users train the search: you can start out finding matches based on mere textual similarity, and as users buy more stuff the search results get better and better.
Jerry didn’t seem to care. I was confused. I was showing him technology that extracted the maximum value from search traffic, and he didn’t care? I couldn’t tell whether I was explaining it badly, or he was just very poker faced.
I didn’t realize the answer till later, after I went to work at Yahoo. It was neither of my guesses. The reason Yahoo didn’t care about a technique that extracted the full value of traffic was that advertisers were already overpaying for it. If they merely extracted the actual value, they’d have made less.
Hard as it is to believe now, the big money then was in banner ads. Advertisers were willing to pay ridiculous amounts for banner ads. So Yahoo’s sales force had evolved to exploit this source of revenue. Led by a large and terrifyingly formidable man called Anil Singh, Yahoo’s sales guys would fly out to Procter & Gamble and come back with million dollar orders for banner ad impressions.
The prices seemed cheap compared to print, which was what advertisers, for lack of any other reference, compared them to. But they were expensive compared to what they were worth. So these big, dumb companies were a dangerous source of revenue to depend on. But there was another source even more dangerous: other Internet startups.
By 1998, Yahoo was the beneficiary of a de facto pyramid scheme. Investors were excited about the Internet. One reason they were excited was Yahoo’s revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of “Eureka!” I was shouting “Sell!”
Both the Internet startups and the Procter & Gambles were doing brand advertising. They didn’t care about targeting. They just wanted lots of people to see their ads. So traffic became the thing to get at Yahoo. It didn’t matter what type. 
It wasn’t just Yahoo. All the search engines were doing it. This was why they were trying to get people to start calling them “portals” instead of “search engines.” Despite the actual meaning of the word portal, what they meant by it was a site where users would find what they wanted on the site itself, instead of just passing through on their way to other destinations, as they did at a search engine.
I remember telling David Filo in late 1998 or early 1999 that Yahoo should buy Google, because I and most of the other programmers in the company were using it instead of Yahoo for search. He told me that it wasn’t worth worrying about. Search was only 6% of our traffic, and we were growing at 10% a month. It wasn’t worth doing better.
I didn’t say “But search traffic is worth more than other traffic!” I said “Oh, ok.” Because I didn’t realize either how much search traffic was worth. I’m not sure even Larry and Sergey did then. If they had, Google presumably wouldn’t have expended any effort on enterprise search.
If circumstances had been different, the people running Yahoo might have realized sooner how important search was. But they had the most opaque obstacle in the world between them and the truth: money. As long as customers were writing big checks for banner ads, it was hard to take search seriously. Google didn’t have that to distract them.
But Yahoo also had another problem that made it hard to change directions. They’d been thrown off balance from the start by their ambivalence about being a technology company.
One of the weirdest things about Yahoo when I went to work there was the way they insisted on calling themselves a “media company.” If you walked around their offices, it seemed like a software company. The cubicles were full of programmers writing code, product managers thinking about feature lists and ship dates, support people (yes, there were actually support people) telling users to restart their browsers, and so on, just like a software company. So why did they call themselves a media company?
One reason was the way they made money: by selling ads. In 1995 it was hard to imagine a technology company making money that way. Technology companies made money by selling their software to users. Media companies sold ads. So they must be a media company.
Another big factor was the fear of Microsoft. If anyone at Yahoo considered the idea that they should be a technology company, the next thought would have been that Microsoft would crush them.
It’s hard for anyone much younger than me to understand the fear Microsoft still inspired in 1995. Imagine a company with several times the power Google has now, but way meaner. It was perfectly reasonable to be afraid of them. Yahoo watched them crush the first hot Internet company, Netscape. It was reasonable to worry that if they tried to be the next Netscape, they’d suffer the same fate. How were they to know that Netscape would turn out to be Microsoft’s last victim?
It would have been a clever move to pretend to be a media company to throw Microsoft off their scent. But unfortunately Yahoo actually tried to be one, sort of. Project managers at Yahoo were called “producers,” for example, and the different parts of the company were called “properties.” But what Yahoo really needed to be was a technology company, and by trying to be something else, they ended up being something that was neither here nor there. That’s why Yahoo as a company has never had a sharply defined identity.
The worst consequence of trying to be a media company was that they didn’t take programming seriously enough. Microsoft (back in the day), Google, and Facebook have all had hacker-centric cultures. But Yahoo treated programming as a commodity. At Yahoo, user-facing software was controlled by product managers and designers. The job of programmers was just to take the work of the product managers and designers the final step, by translating it into code.
One obvious result of this practice was that when Yahoo built things, they often weren’t very good. But that wasn’t the worst problem. The worst problem was that they hired bad programmers.
Microsoft (back in the day), Google, and Facebook have all been obsessed with hiring the best programmers. Yahoo wasn’t. They preferred good programmers to bad ones, but they didn’t have the kind of single-minded, almost obnoxiously elitist focus on hiring the smartest people that the big winners have had. And when you consider how much competition there was for programmers when they were hiring, during the Bubble, it’s not surprising that the quality of their programmers was uneven.
In technology, once you have bad programmers, you’re doomed. I can’t think of an instance where a company has sunk into technical mediocrity and recovered. Good programmers want to work with other good programmers. So once the quality of programmers at your company starts to drop, you enter a death spiral from which there is no recovery. 
At Yahoo this death spiral started early. If there was ever a time when Yahoo was a Google-style talent magnet, it was over by the time I got there in 1998.
The company felt prematurely old. Most technology companies eventually get taken over by suits and middle managers. At Yahoo it felt as if they’d deliberately accelerated this process. They didn’t want to be a bunch of hackers. They wanted to be suits. A media company should be run by suits.
The first time I visited Google, they had about 500 people, the same number Yahoo had when I went to work there. But boy did things seem different. It was still very much a hacker-centric culture. I remember talking to some programmers in the cafeteria about the problem of gaming search results (now known as SEO), and they asked “what should we do?” Programmers at Yahoo wouldn’t have asked that. Theirs was not to reason why; theirs was to build what product managers spec’d. I remember coming away from Google thinking “Wow, it’s still a startup.”
There’s not much we can learn from Yahoo’s first fatal flaw. It’s probably too much to hope any company could avoid being damaged by depending on a bogus source of revenue. But startups can learn an important lesson from the second one. In the software business, you can’t afford not to have a hacker-centric culture.
Probably the most impressive commitment I’ve heard to having a hacker-centric culture came from Mark Zuckerberg, when he spoke at Startup School in 2007. He said that in the early days Facebook made a point of hiring programmers even for jobs that would not ordinarily consist of programming, like HR and marketing.
So which companies need to have a hacker-centric culture? Which companies are “in the software business” in this respect? As Yahoo discovered, the area covered by this rule is bigger than most people realize. The answer is: any company that needs to have good software.
Why would great programmers want to work for a company that didn’t have a hacker-centric culture, as long as there were others that did? I can imagine two reasons: if they were paid a huge amount, or if the domain was interesting and none of the companies in it were hacker-centric. Otherwise you can’t attract good programmers to work in a suit-centric culture. And without good programmers you won’t get good software, no matter how many people you put on a task, or how many procedures you establish to ensure “quality.”
Hacker culture often seems kind of irresponsible. That’s why people proposing to destroy it use phrases like “adult supervision.” That was the phrase they used at Yahoo. But there are worse things than seeming irresponsible. Losing, for example.
So what’s driving applications as the future of applications?
Operators need to re-cover costs and investments in 3G through data revenue.App centric business model drives higher profits for Telcos
The cost of advanced wireless networks and 3G infrastructure investments recovery by 3G operators are a negative drag on the balance sheets of customers.Very few companies have recovered their costs and investments in 3G business. More telling is the fact that the profitable operators have a significant play in the application business. The hyper-competition in the voice space isnt helping the cause either. The case study of NTT Docomo which pioneered the apps-centric model by offering iMode service with optional adds ons such as Osaifu-Keitai mobile wallet,i-motion multimedia services, i-area location-information services. Connectivity and high speed data transfers are sold as enablers of various i-Mode packages and not the as the principal offering.
Following the success of the Apple and Android Marketplace, operators are making a bee-line for apps stores. However, a thoughtless approach to Apps Stores can be more harmful than being just the dumb content carrier.
Understanding and meeting the needs of the emerging digital consumer may be the starting point of the journey towards mobile lifestyle enablement.
Users are demanding more and more applications
Consumers are increasingly taking to internet services. An example to this effect is 170 million application downloads in one month (November 2009). The ubiquity of mobile devices has driven adoption of internet based services. Consumer inspired innovation and a falling cost of acquisition of feature and smart-phones are the sub factors powering users adopting and accessing more and more services and applications through their mobile phones.
Mobile ubiquity will compensate for the functional limitations imposed by the small screens of handheld screens.this trend is already visible. Value added services account for almost 30% of telecom revenues in China and Japan and 20% in Europe.
Developer-innovator networks are lending impetus to applications
The robust demand for versatile mobile applications is matched by the push of developer networks that have proven their innovation potential on the internet. Leveraged effectively, these two forces create the suply and demand cycle that work in tandem to put an increasing number of innovative applications into the hands of end users faster than ever before.
All these trends point to a dramatic transformation in the role of the operator and a clear opportunity to lead the way with new applications and services are delivered to subscribers in an Internet-like “have it your way” model.
This post talks about shifting the focus on innovation for apps and services to customer centric models amidst larger value creation templates with more stakeholders. It also shows the roadmap and indicators for value creation.
Connectivity and Mobility have become commonplace and commodities globally. The Voice ARPUs have seen deadweight drops amidst serious hyper competition. In that context data is being referred to as the King as Data ARPUs start taking off in India. The Data surge is powered by increasingly large number of users who are beginning to use their mobile phones as more than just voice and SMS device. They are accessing the internet, applications and more services through their mobiles.
Making the Moolah from Mobile Applications will involve changing the business models, shifting the perspective and defining value in a broader context for the mobile communication provider.
1. From device and network centricity to user centricity
The change driver in this domain is Internet’s personalization level for the user. The Internet led approach puts the user first and then allows the user to choose their own devices and the mode of interaction. Thus the game has shifted from customer empowerment to customer led personalization, whereby users can determine the level and context of their experience.
2. Re-arranging definitions of the marketplace and ecosystem: Innovate in partnership
Earlier the definition of a market used to be the service provider, the operator and the consumer. However, Mobile Apps and Telecom operators now need to create value by expanding the boundaries of their market to a much broader view of application driven commerce, content, delivery for the digital consumer. This may also include taking into account other influencers and stakeholders in the value chain for the consumer. Value thus would be created at all levels: Developer, Consumer segmentation approach, Internet Applications, Mobile Device companies, Operators and the final point of contact where “Consumer Need” is created.
Mobile operators must render their platforms,infrastructure and networks capable of supporting a massive innovation network comprising of thousands of partners in the eco-system.
3. Know Your Customer
The real power vested in the operators is the knowledge of their consumers, their habits, trends etc. It is not the data or voice pipeline to “faceless consumers”. The secret today is to identify consumer niches, derive insights and design/engineer services around these niches which are differentiated in terms of need appeasement.
Application richness and relevance will rely on powerful personalization, based on customers’ past usage,purchase, browsing and mobile habits. Also the discovery, purchase and use of applications will have to be de-cluttered and simplified.
The indicators in the picture above are roadmap constructs for building a future in Mobile Apps.Telcos will need to be mindful of these as tennets/ Strategy pillars for their mobile applications strategy.
4. Power Apps penetration through Internet
Telcos need to learn the art and science of “social merchandising”- Leveraging the power of social networks to act as a marketing “force multiplier”. By dynamically sharing browsing, recommendation and sharing history, social networking can evolve from an internet tool to a force that drives the adoption and use of entire new categories of applications and services.
The capability to build a strong consumer centric strategy powered by Apps is not just a tactical move (much to what is likely to be believed by Telcos). It will involve a fundamental re-think of consumers, services, innovation and value networks and the role that the Telcos can play in value creation.
(Discussion to be Continued)
Founded by Chad Hurley, Steve Chen and Jawed Karim in February 2005,and bought over by Google in November 2006 for $1.65 billion, You Tube has redefined the way people view and share video as a media. Thus You Tube has turned media/video sharing as a very important part of the internet culture over the next few years.
Here’s an interesting graphic re-presentation of You Tube and facts around it.