Raj Singh’s Mobile Life

Are Plugins (and Flash) Going Away?

Given my previous 2.5+ years working in the browser space with Skyfire, a lot of folks ask me two questions:

1. Is Flash going away (on its own or because of HTML5)?
2. Do web plugins go away with HTML5?

I wanted to quickly answer both of these. First, Flash is definitely not going away in the near-term. Although some (maybe all) casual web gaming can be developed in HTML5 and web video can be built with HTML5, Flash still has an ecosystem of DRM (digital rights management) tools, required by major web video publishers and supporting reporting and advertising frameworks. With the top premium video publishers, given the importance of DRM, if Flash went away, it wouldn’t be replaced by HTML5 but rather some new plugin that enables DRM. HTML5 is inherently open and thus would not work for high-end premium content.

As to the question of whether plugins go away. In an ideal world, you’d want everything to be standardized and based on W3C specifications; the obvious advantage is that your webpage could then run on any W3C compliant browser. Unfortunately, I don’t see this happening. Plugins have existed because they are the innovation delta between what developers want to do and what HTML spec enables you to do. As an example, Adobe is now talking about the use of Flash to develop 3D applications, it is unlikely that this will become part of HTML spec anytime in the next 5 years. As long as their continued innovation in the front-end, plugins will continue to exist.

Lessons Learned in Monetization

Earlier this week, at the excellent MobileBeat conference, I moderated the “Lessons Learned in Monetization” panel – thank you Matthaus.

Before jumping into the summary, quick plug, I did a guest post last week for Venturebeat on “How Can Phone Makers Differnetiate in Mobile 2.0 World” – let me know your feedback.

Ok, onto the panel, we had a fantastic group, Steven Goh from Mig33, Lee Linden from Tapjoy, Juggs Ravalia from SPB Software, Sam Altman from Loopt and Chris Phenner from Thumbplay.

Covered a bunch of topics, here is my brief summary in order:

Sam mentioned that Loopt early-on (and maybe even now?) is selling data bundles with prepaid operators (eg Boost Mobile). Interesting concept, in that prepaid operators need to incentive data packs whereas post-paid operators want you to take the unlimited data pack and then of course not use it!

• General consensus amongst the group was that prepaid content or virtual goods cards sold in retail was not worth the investment. Note Zynga recently announced virtual goods cards in 7-11 stores for Farmville.
• Lee (and the larger group) felt that the future would be some combination of free or premium apps with in-app purchases (eg virtual goods) as opposed to a subscription model which has been mostly unavailable and maybe even traditional advertising since the dollars are so small although the rumblings are that iAd is incredibly profitable, if you can get it.
• Not surprisingly, general consensus amongst the panelists and the audience was that regardless of the app, you need to test multiple price-points for any in-app purchases or virtual goods and offer items at all price-points to catpure each kinds of user.
• Steve made an interesting comment about the general commoditzation of operators in emerging markets do to dual-SIM phones. I hadn’t thought of this previously but it makes absolute sense and validates the forthcoming switch in business model that I detailed in Item #11 in my previous VB article. FYI, if you are not familiar with dual-SIM phones, there is an explanation here.
• At this stage, the audience started (and quickly ended) a debate about open versus closed gardens. As I saw at the Uplinq conference a few weeks ago, there are some developers that prefer the closed garden model as opposed to the democratized app store. Of course, most of these developers were inside the garden previously and had that key carrier relationship.
• Sam made an interesting analogy; CPC (cost per click) is for the web but CPC on mobile is CPV (cost per visit) given the location capability of the device. This isn’t the first time I’ve heard of this concept and I know some of the check-in and AR (augmented reality) companies like Layar have been exploring new ad units and click-thru concepts.
• Juggs mentioned that SPB has looked at ad-supported models and other mobile 2.0 type billing methods but still believe and has data to show that it’s existing premium application and B2B business to OEMs and operators are a much more sigifnicant revenue line. Juggs also mentioned that he doesn’t believe his audience would react favorably to mobile advertising and that he has no plans to try mobile advertising (as a publisher).
• I asked Chris with Thumbplay questions about the crazy PSMS return rates. If you are not aware, as mentioned in this post, ATT was seeing upwards of a 25% return rate on PSMS campaigns – insane! Chris called the activities “criminal” and blamed much of the problems to affilites who game; this doesn’t surprise me considering the amount of PPC (pay-per-click) arbitrage that exists.
• Not clear from my notes but I asked Steve about the roll of psychology in gifting. Mig33 allows for gifting within the social network; Steve validated that gifting has been exploding on his service. As an FYI, CyWorld based in Korea, has seen half the country buy a virtual goods gift.
• Lee talked about incentivized downloads, also known as PPD (pay-per-download). PPD is absolutely continuing to grow and IMO, as shared with many others, PPD is what made in-app advertising more lucrative since ads could finally be measuered (eg direct response), since they led to a digital ecommerce transaction.
• Speaking to Chris on the buy-side of advertising, Chris mentioned that they perform 10s of advertising tests within 48 hours as part of their on-going optimizations of keywords, ad units, metrics and so forth. Chris mentioned he’s heard of some advertisers doing upwards of 1000s of tests in short sprints – talk about multi-variate testing!
• On the topic of PSMS versus credit cards, I believe it was an audience member who said in trying both, that he never received a single sale via credit card due to the huge drop off at the credit card entry page. Andy from Billing Revolution quickly responded with some incredible stats demonstrating the success of credit card entry when the workflow is streamlined.
• Sam, not surprisingly, talked about the use of location to create location history to then draw behaviorial data to offer more targeted advertising. Loopt refers to this as the LifeGraph.
• On the topic of offers, an audience participant from OfferMobi mentioned they have tested some mobile offers and that there has been some success but there is still not enough data on OfferPal or TrialPay type offers to draw any conclusions.

Those were my brief notes; to all the panel participants, if I’m missing or misstating any data, feel free to comment below.

Understanding the Emerging Market

I recently gave a talk on some emerging market trends and themes and I figured it’d be good to share them here. With all the focus on 3G data caps and smartphone penetration, we still forget that regions like Brazil (beyond emerging market) still only have 4% data penetration and some parts of Africa (eg Nigeria) have near-4G networks but much of the rural population is still lacking a phone.

The Microprenuer

Many of you have probably heard this story but the government in Uganda wanted to enable two things: 1. Provide mobile phones and thus voice and data access to rural villagers and 2. Create more female entrepreneurs since culturally females were home wives and not enabled to work. To do this, the government in conjunction with Grameen Phone and MTN did something very clever, they recruited females from various rural villages and gave them a mobile phone, known as the VillagePhone. The females instantly became the sole owner of a mobile phone (Village Phone Operators) meaning others at the village would pay her some small fee to use her mobile phone. In one move, villagers were able to call friends and family (or the doctor!) and get limited information in real-time (imagine what it would be like without internet access) and additionally, females were now a working class, a microprenuer. The story of the phone tethered to a single pole in the middle of the village with a line to use it is not a joke – it is real!

USSD (binary SMS) and Voice Services

A search box on your home screen seems like a no-brainer and it’s definitely one of those features you don’t realize how much you appreciate until it is on your home screen. I rely on this search box all day to get information on various things whether it be local services, events and so forth. Anyways, in rural markets, unfortunately data access is often not available and thus you have to rely on alternate forms of transport. Voice is often thought of as a 1:1 communication service but can also be used as a way to broadcast information. Companies like Lexy allow content producers to broadcast channels over voice in the US and projects like the Spoken Web Project take the same concept but apply it to basic information for the third world. For example, I would call a phone number and hear an automated operator tell me the major news around me, the sports scores, the weather and so forth.

Alternatively, how do you offer a information access through an application without being able to send data. It sounds like a trick question but the answer is to use SMS for transport. USSD is effectively a fancy term for binary SMS. When you press #MIN on your mobile phone in the US, you are sending a binary SMS message from your phone to the network; the network then responds with an SMS message that appears as a popup dialog on your phone with the number of minutes available for your plan. Well imagine if you could create a simple J2ME application with a rich UI that uses SMS for transport – great idea and this is what a number of startups are doing for various emerging market operators. See solutions like Shorthand Mobile, MobileXL, Spectrum Mobile and Eyeline.mobi. The UIs feel like portals with access to various text based content. Until data access become available, this is a great interim approach and a great way for these companies to establish their brands with these users.

Mobile Payment

Not sure about you, but I completely rely on plastic (credit/debit cards) and often carry little or no cash. I only take cash out of the ATMs (cash machines) for basically the few times when I can’t pay by card in my average day usually when I know I’m going to San Francisco (and need to pay for parking :). Paying by card generally makes sense since I get an automatic log of the transaction from which I can categorize, archive and reference as a receipt. In any case, the one assumption here is I do have a bank account and I do trust my bank. Well, what do you do when you don’t have access to a local bank or a bank that you can trust.

This problem is encountered by millions of folks in rural populations everyday – welcome M-Pesa that has initially been deployed in Kenya in partnership with Safaricom and Vodafone. Effectively, a rural villager can use their mobile phone account (SIM) as a way to pay other villagers by sending money from one mobile phone account to another. This has been incredibly successful because in many cases the villager trusts their mobile phone operator more than the national banking institutions and are willing to deposit real money into their mobile account via the mobile network operator agents (of which their are an abundance of in rural regions).

In some ways, this makes absolute sense and in advanced markets such as Japan, we are beginning to see banking institutions partner with network operators to allow subscribers to make non-digital purchases via their mobile phone. That being said, even in advanced markets, we still don’t have elegant P2P (person-to-person) payment solutions although many startups are attacking this problem (eg Paypal being the incumbent). I guess once your mobile phone becomes the plastic, do the operators eventually move down-stream and become the banks? Scary thought…

Family Browsing

Having worked on browsers for the past 2.5 years, I’m always amazed at how much browsing usage comes from emerging markets. South Africa is often a top 10 browsing country in terms of usage as reported by Admob which is insane considering their population. Anyways, given the cost of data in some rural villages, it’s too expensive for every family member to have internet access and/or maybe the family has to share one phone so how do you browse the internet as if you had a PC and a larger screen. Well, duh, you get the mobile phone with a built-in projector! Samsung Galaxy Beam is one example but there are several other lower cost devices entering the market. Imagine taking it a step further and connecting your projector-enabled mobile phone to a Bluetooth keyboard or maybe a Bluetooth Zeemote. Now, you effectively have a home PC but using your mobile phone, not a netbook but a mobilebook – very cool!

Above are some example of some of the amazing innovation that is happening in the emerging markets – looking forward to seeing what is developed next!

OEMs, Please Choose

I recently did a mobile trends presentation and this is one of the graphics I had created

OEMs, please choose? Which side do you play on?

Understanding PDE (Positional Determining Entity)

In the past 2 years, the industry has finally moved beyond LBS as a category to LBS as a feature. As stated previously, “What app wouldn’t be more useful with location?”! What’s misunderstood in all of this is how location is retrieved by the app and what this means.

E911 (government mandated subscriber location lookup) in the early days was the initial motivation for opeartors to introduce network-based location lookup. This location is acquired through a combination of network triangulation technologies and is delivered to the requested entity (eg person or app) via a positioning server. This approach is often referred to PDE or carrier-based location lookup.

The challenge with PDE has been in business models; operators have been charging for PDE location queries and a variety of middle-men and/or aggregators have been trying to sell this access (eg Wavemarket, Autodesk’s former mobility group, Alcatel Lucent and others). Most developers obviously can’t afford to pay 5-10 cents per location lookup and have thus resorted to the many free alterantive ways to get location such as determining location by the cell tower or getting location through WiFi or most obvious, getting location from GPS (readily available through APIs in smartphones today.

You may ask, why PDE if you can get location in other means? The challenge with the alternative solutions, is that the app can only get location for you (and you only). This is great for use cases like Google Maps but what if you wanted to get the location of your buddy or what if you wanted to send an SMS when one of your friends walked by your house – yes, that would be kind of creepy but advertisers love this scenario (proximity marketing). Unfortunately, the only way besides doing a FourSquare check-in to get the location of one of your buddies or a passerby is using carrier-based location lookup.

To entice more developers, many of the carrier location aggregators have been trying to offset the 5-10 cents per query pricing via alternative business models. For example, a developer can receive subsidized queries in exchange for sharing advertising revenue from their app. Unfortunately as much as mobile advertising is growing, it still cannot offset even a 5 cent query. The better question to ask is why is there a charge at all – if PDE was free, there would be a whole new set of apps that could be enabled built leveraging real-time location. For example, without needing an app running in the background, I could track the entire life-path of a user – an advertiser’s goldmine in terms or profiling! Well, as with most things, the reasons things are the way they are is often not the most logical:

1. Without naming operators, some can’t scale PDE. I’m pretty sure they want to open it up, assuming the right privacy features were in place but the query volume would kill the network infrastructure. Let’s see what happens as initiatives like GSMA’s OneAPI continues to push forward – this is a solvable problem.

2. Some operators are restricted by their licensors. For example, CDMA operators use Qualcomm’s QPoint to power the PDE and likely have licensing fees based on volume that inhibit their capability to open it up.

3. And of course the biggest problem is that there are a handful of developers (eg Family Locators) who are actually paying 5-10 cents per query. Unfortunately, when somebody is willing to pay, then let them pay even if it inhibits innovation. I guess we’ll have to wait for Google to make it free (somehow)!

In any case, let’s see how this evolves. Carrier-based location lookup can open-up a whole slew of new applications that cannot be achieved effectively today. It moves the problem from getting location to the larger problem of privacy which many others are trying to tackle.

Has the Power Shifted Back to Operators?

Over the past few years, we’ve seen the OEMs (including platforms) take a more and more facing role to end-users. The OEM controls the App Store; the OEM has the direct consumer app billing relationship; the OEM is launching new services that often are in direct conflict with existing services that operators have managed for years; the OEM is dealing with customer service directly (ie call ATT regarding the iPhone and you are directed to Apple customer support) – the list goes on. Ask any developer today where do they go to build and distribute their apps – they go to the OEM for development support, for distribution and most importantly, for their checks!

With that being said, ATT’s and now O2′s recent announcements of moving to metered data plans has created a potential shift-back in control to the operator. In Google’s perfect world (although not admittedly), operators are dumb pipes, building infrastructure to enable voice and data services. Operators focus on their networks, leverage their phone retail distribution channel and deal with billing and customer service as it relates to voice and data. For services, the OEM takes charge – part of a broader concept that in the new world order, OEMs will pay operators a percentage of their services revenue and not vice-versa (a la Blackberry receiving a percentage of operator’s data revenue).

In any case, with operators imposing data tariffs (expected for quite some time), app developers may now need to rely on the operator more than ever. If I have a data hungry app (eg Qik), I want to sell that app with unlimited data. To include features that tell my users to curtail their usage because of data caps is a non-starter. Does this mean smartphone apps could be sold with data packages (eg when you buy Hulu later this summer on your iPhone for $10/month, it includes unlimited data?) – that’s a deal that can only be done with the operator putting them front-and-center again.

This is not a first, premium feature phone apps on operator catalogs have often been zero-rated (made data-charge free) but most feature-phone apps never consumed that much data to begin with. If the next generation services are expected to be data-heavy, it’ll be interesting to see how OEMs and operators deal with special data privileges for certain apps (ie are we returning to the walled garden?)

Is the Killer App the App Store?

In 2000, I was (for fun) building WAP pages for simple casual games. By design, casual games tended to be 3 minute games since the thought was that the mobile device was an on-the-go experience and thus users would play games while standing in line or waiting at the dentist’s office whereas today the majority of mobile phone use is actually at the home.

Anyways, later that year, when I was working at Cellmania on operator WAP stores, we had aggregated 15K WAP applications, half of which were probably casual games and the other half were a mix of simple apps. As expected, a majority of the games and apps were long-tail developers and few stood out of the pack but all of which were still downloaded and helped fufill the minutes of micro-bordeom each day.

Fast forward to today, and things haven’t changed much. Yes, instead of WAP applications, we have native applications and instead of 15K apps, we have 200K apps. Games are still being designed for a 3-5 minute experience and the long-tail of apps still tend to be independents with few standing apart in the store but all of which are getting downloads and some use.

One big difference though has been on the metrics of success. Whereas in 2000, WAP applications and later J2ME games could either be premium or free, today we have premium , ad-supported and free with ad-supported probably making up the majority of the app market. Obviously with ad monetization, impressions become the key statistic for revenue and thus the new Daily Active User (DAU) stat has become quite important which leads me to my question, what is the killer app or what is the app that will drive a high DAU?

Some obvious apps include maps, browser, address book and so forth. At first, I didn’t think voice was a killer app but now I can’t live without voice input on my phone, I use it for local search all the time. As I start thinking about what apps that I have I downloaded that I would consider killer apps, I’m often stuck – it’s not that I haven’t downloaded 100s, if not 1000s of apps, it’s just that I can’t think of any apps that I use everyday beyond some of the most obvious (eg Facebook, Yelp, Twitter, Pandora etc). Some less obvious exceptions for me are note-taking, voice recording, misc utilities such as a file manager and a slew of games but as are most people with games, I am very fickle (and thus why the mobile gaming folks see 70%+ return rates on Android’s one-click return button :)

In trying to answer this question, I thought of a different approach – what are consumers asking for. When I was at Kodak Mobile, I spent significant time in mobile phone shops watching what people would ask for when they came into the store to buy a phone. Interestingly, at the time, they would often ask, how many megapixels was the cameraphone and if it supported Bluetooth. Ironically, some of these folks had never owned a digital camera before and didn’t even know what Bluetooth was but they knew they had have it.

Today, when you walk into the phone store, it’s quite a different set of questions. Gone are the megapixel wars and Bluetooth has become pervasive – now, they ask if the phone can do Facebook or if it has games or if it connects to their favorite website – they are asking if the phone has apps. My Dad the other day asked for a very specific app. He wanted a calculator on his phone, something that seems quite “boring” but given that he’s a math professor (and not a techie!), it’d prove quiet useful for his occupation. For him, that’s his DAU app and for others it’s a different app.

Whether it be to fufill micro-bordeom with casual games or finding apps that connect to your favorite services, the killer app is not the app itself, the killer app is the app store (and I’m sure all the OEMs and operators realize this). Let’s just hope we don’t kill outselves with fragmentation.

Navigating the Mobile Content Landscape

The mobile content space has changed a lot over the past 5 years – I have given up in trying to keep up! In any case, I’m doing a talk on marketing mobile music for NARIP and they asked me to provide a cheat sheet for their audience. Below is part of what I quickly prepared for navigating on-deck content – I’m sure I’m missing some companies and there may even be some inaccuracies below but I figured this was a good starting point for anyone seeking to do mobile content bizdev with the operators:

Let me know what I’m missing.

Wholesale Application Community

As many of you know, the App Store landscape is becoming quite fragmented. There are scenarios where a device may have an OEM App Store, Platform App Store, Operator App Store and maybe even a 3rd Party App Store – as a developer, this is a challenge and you really have to think about where to spend your time to prioritize your energy. It’s not uncommon that the vast number of downloads come from one particular App Store or maybe even your own website. Gone are the days that being listed on an operator deck meant a gold rush unless of course you are still very feature phone focused.

In any case, as much as I’ve wished for reduced fragmentation, I haven’t seen it yet in 11 years in the mobile industry (and philosophically, it can be argued both ways as to whether fragmentation drives or stymies innovation). That being said, Apple’s success with the iPhone in some ways demonstrates what happens when you have 40M phones that can all run a single version of an app (ie no porting required). Nokia’s plans (at least what I heard) to focus on fewer devices that are cross-compatible going forward is consistent with this view (ie do you rememer J2ME’s original goal of write-once, run anywhere!?)

Anyways, my long-time friends at WIP have led a charge to ask operators and the WAC (Wholesale Application Community) to be cognizant of developers needs in an open letter to the ecosystem. Caroline Lewko is seeking additional comments/endorsements and had asked me to make this post, please check out the letter and provide your feedback – the goal here is to solve the App Store fragmentation problem – thanks in advance.

Sharing Overload?

I probably am not the case study for over-sharing data but there is no denying that there is a broader trend of sharing personal data. This is how I use the following services:

I use Facebook for photos, personal thoughts, birthdays and friends/fam events. I don’t tend to post too many photos myself and I’ve been kind of light on posting personal thoughts, mostly because I haven’t spent the time to organize my social circles (eg family, friends, acquaintances).

I use Picassa for more professional photo albums, often captured with a digital camera as opposed to my phone. I still use Flickr a bit as well and those photos are always public and tend to be more real-time.

I use Twitter for random and professional thoughts, often with a mobile bias since most of my followers are mobile geek-heads.

I haven’t really used FourSquare yet, mostly because I’m scared I’ll be addicted to mayorship but obviously, it’d be used to publish my location to friends; I did try Google Latitude for a short bit but it being mapped to my Gmail contacts was overload!

I have registered for Blippy but I haven’t yet given them my Amazon and Bank Account etc details; I’m holding out to make sure it’s secure but there is no doubt that the data they are collecting is absolutely interesting. I have found myself scanning some friends who use the service and being fascinated by their purchases.

I have used a mix of services to share what I’m listening to, including Playlist.com and others. I’m definitely more top 100 and so I’m probably not an exciting musical person to follow.

I’ve started using a mix of services to blog what I’m eating, fascinating data from many angles including tracking my lifestyle and showing the world how much I eat-out (meaning unhealthy)!

I guess I should also include LinkedIn, although I don’t update it as frequently, I’ve thought about using it to start sharing what I’m reading, in terms of books etc and my favorite blogs which I’m often pinged about.

I suppose, I should also include my own blog where I share other misc thoughts that can’t be characterized in 140 character snippets.

All of this represents my identity and if aggregated, probably an advertisers gold-mine – I’m sure they can extrapolate an incredible behavioral profile, some pieces like what I buy and where I eat being a lot more monetizable than others.

My question is how does this evolve? Do I end up sharing more and eventually use services like Zeo to share when I sleep? Who becomes the ultimate aggregator of all of this data and how is all this data shared? There is an argument for being open with the data but in some way the data is also your IP? And how many of these services will require user-initiated publishing/sharing as opposed to implicit sharing (eg location constantly being broadcasted). All of this in someways contributes to an ADDish lifestyle because of the constant pinging with different social graphs.

Thoughts? I guess the counter argument is that I live in the Bay Area :)