The fight for supremacy: Mobile Phone vs PC

A recent comment (thanks Ligia) drawing my attention to Nokia's announced entry in the netbook market brought me back to some previous considerations I had made in my master thesis (more of that in a future post).

As I see it, Nokia's decision to expand in the netbook market is a proof of two things. The first is that the boundaries between the two main product categories (mobile phone and PC) are becoming blurrier by the day. The second is that companies are starting to make their bets on which of the two will end up being the ultra-device.

Let's take a deeper look at this. To help visualize the current market situation, I put together a graph showing the main manufacturers of mobile phones, smartphones, PDAs, netbooks and PCs.


From a categorization point of view, the delimitation between mobile phone, smartphone and PDA (a product that is slowly disappearing) requires breaking these categories down into features and functionalities. The same can be said about the netbook and the PC, or even more, portable computers. The increasing convergence occuring in the mobile industry is providing mobile phones with functionalities bringing it closer and closer to a computer. The mobile industry has been growing substantially, while the PC industry has been flat for some years now.

Perhaps the phone's biggest advantage lies in its constant presence with the user. In today's fast paced environment, ease of reach and quick accessibility can be important factors in deciding which of the two devices is the master. As Anssi Vanjoki, Nokia VP of New Markets puts it: "There is a false thought that the master is the PC and the phone is the slave. The roles are vice versa. The master is the device that is closest to me, and the slave is the one that is used to manage it."

This takes us back to Nokia. They are by far the largest handset manufacturer worldwide. So their bet is obviously on the phone at this point in time. Many people perhaps don't know that Nokia used to produce computers before, but divested the unit in 1991, when they decided to focus entirely on mobile phones.

Looking at the graph I put together, you can see that there are two strategic directions that can be followed. Nokia chose to follow the opposite direction compared to Apple: start from phones and extend into netbooks and ultimately PCs.

Other players that decided to 'put their eggs in several baskets' are Dell and HP. HP followed a similar strategy to that of Apple, by extending from computers to PDAs. However, as previously said, the PDAs have been severely hit by the increasing number of smartphones and HP is currently not reported to launch a smartphone. Not the same can be said about Dell, who has been rumored since the beginning of this year to launch its own smartphone model.

I think these moves show several things: firstly, as already said, these categories are converging at a fast pace, making it easier for companies to extend their core capabilities in new markets. Secondly, PC manufactureres have identified the increasing potential of the mobile phone and the threat it poses to their core market. Thirdly, there is no clear winner in this battle and as a result, the safe bet for the big guys is to invest in both categories.

Ultimately, the question that arises is: which of these two strategies is more inclined to be the successful one? At this point in time, it is perhaps too early to answer it, since there are (still) only few cases of companies entering both categories. What can be said is that Apple has so far done a great job in extending its know-how and capabilities from the PC world into the mobile world and it will be interesting to see if the other way around will generate the same results.

PS. I chose to put Microsoft as a potential entrant in the smartphone market because many expect that its announced Zune HD is the base for a future smartphone. As a second remark, the players portayed in the graph have not been selected based on market share.

Zune HD vs. iPod Touch - episode 1

A funny parody targeting Microsoft's recent efforts to catch up with Apple. These efforts include the launch of Zune HD, Microsoft's newest mp3 player, expected to be launched September 15. Zune HD is Microsoft's answer to the iPod Touch and a possible base for a Microsoft phone. From a technical point of view, it offers extra features compared to the current iPod Touch model, at a lower price. It also allows consumers to access Microsoft's application store, Marketplace, using wireless connectivity. PC World compares the two models head to head. The leaked photos and technical specifications have generated some buzz and it would be right to say that Zune's commercial launch is awaited with some anticipation and excitement.

However, as TechCrunch doesn't miss to point out, Microsoft is once more the second mover. Not only has the iPod Touch been around for a while now, gathering loyal consumers along the way but also, according to numerous sources, a new, improved iPod Touch model is expected to be launched any time now. Specifically, September 8. The changes are expected to be both technical, with added and improved functionalities, but also related to the price levels.

This might as well annihilate Microsoft's efforts, who will see itself once more in the back seat, with Apple leading the way.

App Store's growing pains

Apple's App Store has been facing a lot of bad publicity in the last couple of weeks. The two main reasons have been the increasing (but still remote) number of cases of exploding iPhones, but perhaps more important for the platform, the ban of the new Google Voice application.

While the first issue might scare some consumers away, the cases have been isolated and are 'being looked into'. It is unlikely that iPhone sales will suffer too much from that. What's more worrying is the recent ban of Google Voice app from the App Store. This ban is not only making the FCC representatives raise an eyebrow, it makes App Store developers rebel.

Apple's loyal community of developers has helped it make App Store the phenomenal success that it has become in the year since its launch. Without wishing to go too deep into App Store figures, I will just quickly go through some of the numbers of this (still) unprecedented success in the mobile industry. App Store reached 1 billion downloads in only 9 months since launch; currently, with just over a year passed, more than 1.5 billion applications have been downloaded by users on a handset base covering only four models (iPod Touch, iPhone 2.5 GSM, iPhone 3G and the new iPhone 3GS) and around 50 million (my own very rough estimations, will get back with more official numbers) handsets worldwide. In the eve of the billionth download, Moconews used the online counter to come up with some basic, but impressive calculations: about 100 apps were being downloaded each second, translating into 6,000 per minute, 360,000 per hour and no less than 8.6 million per day.

This impressive growth rate is fueled by a constant upload of new applications, provided by App Store's developer base. 148apps.com estimated in an older statistics that around 1,000 games and 4,000 non games apps are being submitted each month. Currently, there are more than 65,000 applications available for users to download.

I think that such numbers, while impressive, show that the App Store is growing too fast for Apple to handle. Apple has kept a firm grip on the catalog from the beginning, but the app review and acceptance process has never quite been clear. There have been several cases of apps rejected from the App Store for quite bizarre reasons.

The recent ban of Google Voice seems to be the last straw in Apple's relationship with its developers. There are several reasons for their discontent. Firstly, building an app is not cheap at all. If developers cannot know the criteria that are being used in the acceptance process, they run the risk of developing an app that ends up being rejected and never makes it in the App Store. Secondly, the app discovery process is becoming increasingly tiresome. Except for the lucky few that get to see their app featured in an iPhone commercial, there is little a developer can do to make his app stand out in the App Store.

There is no doubt that developers are key to the App Store and Apple knows this. The fact that Phil Schiller himself (Apple Senior VP and the man that ran the latest WWDC in the absence of Steve Jobs) started sending emails out to angry developers shows just that. It is interesting to see whether Apple will be slightly more transparent about the acceptance process.

Personally, I do not think App Store will end up being suffocated by its own growth. There is however evidence that this outstanding success has taken even Apple by surprise and as such, they can be caught off guard at times. But I also think that the recent events show that Apple and App Store are not invincible and that they need to watch out when dealing with their two driving forces: the customers and the developers.

Food for thought...

Is Big Brother watching you or are you watching Big Brother?

A funny parody about Google's increasing invasion in our privacy got me thinking long enough to get me to write this post.



I guess it's no longer a mistery to anyone that we are living in times in which our privacy is being invaded from all fronts. Long live the social networks, the search engines, the personal videos, the tagged photos from some party where we overdid it with the booze. We are all 'up, close and personal', exposed more than ever before to our friends, but also to strangers.

It would probably be even scarier to see how all the data we are more or less willingly posting online are being used by marketers. We are surely turning into a pile of data, accumulated in time and that is being used in our disadvantage to make our every commercial behavior a certainty for the world's marketeers.

In the Orwellian tone of this blog, it would be worth mentioning Google Latitude or Loopt, the so called geo-social networks that allow users to track their friends at all times. Such services are particularly relevant for the mobile phones and it's no wonder that they are among the most popular social network applications on the App Store. Being betrayed by your own phone's GPS and being exposed 24/7 to your friends might not always be a blessing.

Our personal life is not the only one being exposed. Reuters recommends LinkedIn and Twitter for finding a job in these though times. Our professional life is now also out in the open, and let's face it, aren't we proud to share our achievements with everybody?

There is a point to this post and I am getting there. I have to be honest about one thing. The purpose of this blog is to get me out there, to get me noticed in this cluttered blogosphere. There's no doubt about this. And I am taking my chances, because I know this is just one more step to exposing myself to the world. And I chose to take it. Which gets me to the question: how much of this lost privacy is given up willingly? Is it not us who keep blogs, who upload party photos and update our statuses?

This is not to suddenly take the blame away from the big online players juggling with our personal life. What I am trying to say is that we are partially responsable too. In most cases, we are given the possibility to filter down and limit other people's access to our personal life. But when we start opening it up willingly, let's think twice before starting to show fingers at others.

The Search War or Should we 'google' or 'bing' it?

Google announced yesterday on one of its blogs that it has been working for some months now on an improved version of its search engine, under the code name Caffeine. Since the changes are done under the existing Google search engine, the improvements will likely be noticed only by developers, and less by consumers. However, preliminary comments claim that the version is significantly faster, and includes a larger number of result pages.

According to industry experts, the changes are mainly addressing the search rankings, particularly relevant for all the SEO dependent companies. The improvements are therefore mainly targeting the wide network of advertisers using Google's keyword advertising, the company's largest revenue generator.

Google's announcement comes at a time when the search industry is heating up. It started some months ago with Wolfram Alpha, a search engine based on a more sophisticated knowledge-based computing. However, the event that triggered a new wave of excitement in the search world was Microsoft's launch of its new search engine, Bing. It has managed to create quite a buzz and recent market data show that Bing is slowly, but quickly accumulating market share.

The next big move was Yahoo's announcement that it would drop it own search engine, which has faltered behind Google for several years now, and will use Bing instead. "Take that, Google!" was probably the thought of both Microsoft and Yahoo's CEO, two companies who have seen their businesses lose momentum and let's face it, lots of dollars, in front of their mutual enemy.

Last but not least, real time search among statuses and timely data is starting to prove a challenging alternative to the traditional search engines. Many industry experts claim that Twitter's real attractivity lies in its advanced real time search option, and not later than yesterday Facebook announced the acquisition of FriendFeed, a smaller competitor of Twitter.

Google has recently intensified its efforts in other markets as well; its Android platform is gaining adherents in the mobile industry. The company has also made public its efforts to develop an operating system under the Chrome umbrella. This move has finally put the cards on the table; it was perhaps anticipated by many ever since it became clear that Google is going for Microsoft's neck. So far, it has done it in a less obvious way, but this latest move shows that Google is willing to fight Microsoft on all fields.

From a strategic point of view, these latest moves pretty much resemble a chess match, with each player going for the opponent's queen. While far from being a chess expert, it is easy to see that Microsoft went straight for Google's core business, its search engine. Search related advertising is by far Google's biggest cash cow, with approx. 97% of revenues generated from keyword advertising. Google fought back and announced its plans to launch its own operating system, which, surprise, surprise, happens to be Microsoft's core business and money making machine.

This is one chess match everybody will keep a close eye on. Time will tell if bing will be the latest verb added to the English dictionary. For what it's worth, I used Google as the search engine for this post.

and now, it’s goodies time, with two cool links that can help you decide which search engine is the best for you (in case you had troubles making up your mind): http://www.search3.com/, http://blindsearch.fejus.com/

As a final remark, this chess match is going to get a lot more interesting. There is one particular player that must always be kept in mind. You guessed it… Apple. Eric Schmidt’s recent departure from Apple’s board shows that a new war is in the making.

Traditionally, Apple has always been considered as the ultimate Microsoft rival. And it has played its part remarkably, if you’d ask me. On the other hand, Google and Apple always played the friendship game and somehow nobody really perceived them as rivals, since there were not many things they had in common. However, things are changing. Apple and Google are now fighting it off on several fields: in the mobile industry, Google’s Android platform and its Android Market are clear competitors of the iPhone and its OS, and of the App Store. In the internet browser field, Chrome and Safari are trying to catch up with big guys Internet Explorer and Mozilla. And now Google is launching its own operating system too…

Exciting chess matches are lying ahead and I for one am one happy spectator.

Game on!