Written by Ariel Seidman on March 10th, 2010
All three major players — Apple, Google (Android) , Microsoft –have launched or announced their mobile OS the question the question we are asking is who will dominate the mobile OS ecosystem? The premise of the question is flawed. There will be no globally dominant mobile OS the way Windows dominates the PC. Just a few of many reasons:
- Price: Price-insensitive markets (e.g. most of North America and Europe) view their phones as jewelry. At $99 (iPhone 3G) it is not a very expensive piece of jewelry. Highly price sensitive markets (Southeast Asia and South America) will see Android coupled with copycat devices.
- Carrier Distribution: Carriers remain a vital distributor in most markets. They have financial (generously provided by OEM and web companies) and strategic (keep Google honest) incentives to distribute multiple platforms.
- Open Platforms Win: An overstated arguement. The 20% of apps that matter will get ported to all platforms with over 10% share and the 3-4 incremental days that it takes to get an App into the iPhone App Store is annoying but mostly inconsequential. As the mobile browsers continue to expose more device APIs the Android is open argument wears thin. OK, so you say well I want to go really deep into the mobile OS and create my own layer above the OS. There are very few companies who have the resources and skill-sets to do this. OEM’s like Motorola are trying but don’t have the right skill-set. The companies who have the resources and skill-set to this are the exact same companies who have launched their own mobile OS.
- Data Lock-In: Data you create on your device will not stay on your device the same way that data you generated on your PC 20 years ago remained there. As the world moves to the cloud in 2010 these client level data lock-in advantages are muted. More important are the cloud based data lock-in (e.g. Y!Mail, Gmail, etc.). The device is just access point.
- Application Lock-In The argument goes something like. Users spend lots of money on Apps and music and given these investments will be locked into the platform where they made these investments. To build significant application lock-in users will need to be spending far more then $50 a year on Apps [source]. Recall, to create strong switching costs 10 years ago users spent hundreds of dollars on Microsoft Office, Adobe Creative Suites. Could it really be anything less?
[For good history and insight into mobile fragmentation see Richard Wong's TechCrunch post and presentation]
Posted in Mobile, Strategy | No Responses »
Written by Ariel Seidman on March 7th, 2010
A few weeks ago I got my hands on a Google Nexus for a few weeks and used it as my primary phone. I have no intentions of doing a Nexus product review as lots people have done that by now. I can critique a few user experience issues but overall it is a good device, and for anybody upgrading from a Motorola Razr device it is an awesome device.
But for me, the iPhone has become like those pair of jeans that grow so comfortable you just don’t want to give them up. Given the hundreds if not thousands of weekly interactions one has with their iPhone it becomes part of your muscle memory and switching to a new mobile platform (i.e. new experience) becomes a significant investment in time and energy. This is experience lock-in. This lock-in is likely stronger then PC experience lock-in because your mobile phone is an extension of your body in a way that a PC is not.
I know people who can barely use a PC to send email but would never give up their Blackberry or iPhone. Apple has a significant experience lock-in. Can it capitalize on this quickly enough in some of its key markets (North America, Western Europe, and Australia). The $99 iPhone is a good start.
Posted in Product, Strategy | No Responses »
Written by Ariel Seidman on March 7th, 2010
Groupon.com is a clever way to create demand for local businesses, and with their success plenty of me-too Groupons are sprouting up. This raises the obvious question that got asked on Quora.com the other day: Is Groupon a sustainable or defensible business? Here’s my take:
To create higher levels of defensibility they need more deals per city. With only a deal a day per city (~50 or so cities) the activation energy a competitor needs to catch up is fairly small (sales force and some search marketing spend). If they had more liquidity on the supply side (thousands of deals per day) it would be very hard to create this kind of supply with a sales force.
PS: I highly recommend Quora.com. If your following the right topics and people the conversations are thoughtful. Ping me if you want an invite.
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Written by Ariel Seidman on January 6th, 2010
I own and use multiple Panic products (Code and Transmit). Panic sent out an email that is instructive if you are looking for effective customer communication techniques.
- Clear why I am getting this email: ”You signed up for our list via Coda”
- Empathy: ”we’ll write at most a few times a year, and only for big news. No minor updates. We know your Inbox is crowded.”
- Call to Action: The button entitled “Unsubscribe from eList” is embedded prominently in the email. I don’t feel like they are trying to sneak anything by me.
- Short and Sweet: See for yourself.
- Formatted for PC & Mobile: Most of my email consumption is happening on my iPhone and they nailed it.
- Simple graphics: No big and splashy images, just some elegant graphical accents.
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Written by Ariel Seidman on December 3rd, 2009
Today at Yahoo! I had the pleasure of hearing Marty Cagan talk about building awesome products and a good question came up. What companies do a good job at scrapping (aka retiring) features? Building features is relatively cheap and easy. Scrapping them after afterwards is very hard. Netflix attempted to retire their Profiles features (allowing users to create profiles and set controls around on how many movies and the types of movies each profile can rent). This did not go over well with their community. Two weeks later they came back and decided to keep it. Now the feature is buried deep into the Account Settings page. This is the right way to do it if you absolutely cannot retire the feature. Here is how the sequence of events played out on the Netflix blog and site:
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Written by Ariel Seidman on December 3rd, 2009
Lots of new mobile data coming out over the past few days. Since we are operating in an emerging category one has to make certain assumptions about how the mobile market will unfold. Each new data point can validate or debunk ones assumptions.
Mobile Advertising
- Mobile coupon redemption will hit $6B by 2014 according to Juniper Research [source]. Unless there is a new compelling scenario (e.g. eBay scenario helped create PayPal) this will be a very slow road.
- Mobile will grab 11.7% of all digital ad spend by 2014 [source]. Mobile ad monetization is actually an area where lots of product innovation needs to happen.
Carriers and Connections
- Mobile carrier wireless data revenues grew 27% y/y in Q3 2009 hitting $11.3B. While AT&T (with exclusive iPhone) is growing their data revenues fastest 6% q/q, but Verizon and Sprint are not far behind 5% q/q.[source]
- T-Mobile (33M customers) even with some nice G1 Android phones lost 77,000 customers for the first time in history [source].
- WiFi Hotspots hit 1.2B connections growing 47% in 2009 [source]. This is obviously good but big opportunity to provide centralized authentication and billing. Its crazy that you need to create an account and enter credit card for each WiFi Hotspot provider.
Mobile Devices
- In 2010 over 1B mobile devices will connect to the Internet vs. 1.3B PCs that are connected to the Internet. Mobile devices growing 2.5x faster then PCs so it won’t be long before more mobile devices are connected to the Internet then PCs. Happening incredibly fast. [source]
- 200M “Smartphones” (iPhone, Android, etc.) will ship in 2010 [source]. One smartphone generates as much data usage as thirty feature phones so this is analogous to shipping 600M feature phones [source] In my opinion this divergence will increase dramatically as the content (apps and web services) improve over the coming years.
Posted in Mobile | No Responses »
