Mobile Fix: Should GAFA really be a Gang of Five?
Simon Andrews, founder of the full service mobile agency addictive!, reveals some interesting insights from the Open Mobile conference…
Last week Eric Schmidt endorsed our GAFA grouping as the Gang of Four. This week Stephen Elop of Nokia rolled into town arguing that it’s really a Gang of Five.
His pitch at the Open Mobile conference in London was that mobile had moved from a battle of devices to a war of ecosystems. He argued that Apple had effectively created Android. By building a closed ecosystem they left a vacuum for an open one, which was promptly filled by Android. His charts neatly showed Apple as a closed box and Android as an open one – albeit with flaps that Google could choose to close whenever they wanted.
He is focused on the opportunity for Microsoft and Nokia to build a third ecosystem – one that is truly open. And within the numerous assets of Nokia and Microsoft he sees operator relationships as a key advantage. As he rightly points out Apple has a certain love hate relationship with operators while Google is feared.
Nokia enjoys pretty good operator relationships – in just about every market in he world – and they are looking for ways of using their technology to help operators.
It was a compelling argument and we remain positive about the prospects for this partnership – but the clock is ticking.
At the same conference an analyst from Nomura gave a fascinating look at the economics of mobile, from which we took 3 key points;
- They believe Apple need to launch a mid range phone to maintain growth as the market for expensive smartphones is now saturated. If they don’t, the mid range players from Asia – Samsung, LG and emerging Chinese players like Hawei and ZTE will do very well. If Apple do use the Nano strategy ‘then all bets are off’. But given there are no strong rumours, it’s probably not going to happen this year. Either way the Nomura view is that brands like Motorola and Sony Erickson will suffer as the market gets more competitive.
- They think the honeymoon for tablets is over – the market is going to commoditise very fast as new entrants drive lower prices. Their view is that the sweet spot that will make the market really take off is around $300. Given screen costs are going to start falling this is probably going to happen – but Apple may be able to reduce their prices too. We heard a great Steve Jobs quote: “Everyone said iPads were expensive – until they tried to make one”.
- Third, the Nomura view on Nokia is not that positive; they see space for three players in smartphones – Apple, Android and probably Microsoft. But no-one had bought a Windows phone yet and it’s only when Nokia produce a mid priced device – probably in 12 months – that we will know if it is going to work.
Elop was asked if Nokia was for sale and he categorically said no. But Nomura think that if the share prices drops significantly they could be bought – and the only likely buyer is Microsoft.
Apple
The other big news this week was at the Apple developer conference, where we saw the launch of the Apple cloud, with some very interesting services. And the new OS was announced too – to good response, especially from those who have played around with it.
The live blog of the Steve Jobs presentation is worth flicking through to get an idea of the range of stuff launched – and to see some of the figures quoted – like the fact they have now sold 25 million iPads.
Quite a few people noticed that one thing that wasn’t mentioned was iAds. After all the hype last year there was no mention here. Is that significant? A very smart friend of ours has a bet that Apple will be out of advertising within 2 years… we’ll see.
Amazon
Amazon announced that seven authors have now sold over one million copies on the Kindle. And the range of games on the Kindle has been expanded with a new spelling game.
We heard at Open Mobile that 10% of all YouTube views are now on mobile. There is a good presentation from a Google exec on how they are rewarding good ads on YouTube is well worth watching.
With a model that means advertisers pay less when people enjoy their ads, this is something to watch very carefully.
Facebook have grabbed headlines this week as people got upset over face recognition being rolled out, to speed up tagging of pictures on the platform. Whilst we think many FB users will welcome this new service, the privacy lobby is getting more vocal. Of course the fact that in London every number plate is read and logged by computers and that facial recognition is used on CCTV gets less coverage.
Finally
We’re doing a quick gig at next weeks IAB Mobile Engage where we try and convince a Dragons Den style panel that QR codes really are worth taking seriously. If you’re there come and say hello.
And we’re still looking for great design talent – especially with UX skills. We’d appreciate all help so if you know anyone point them in our direction.
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