These are solid, solid ideas. But they require operators to think of themselves as platforms, making money off access to APIs. And that is just not in their DNA. Rather, in their rush to corner every buck there is to be made in the mobile space, they have tried to integrate vertically – running businesses from cell phone towers to handset applications, doing only a few things well.

They’ve attempted to jump from being a pipe to building applications bypassing the development of platforms in between - for identity, social, location, payments – to build good applications, not one-offs.

Too bad. That’s stunting the development of an entire, first-of-its-kind-in-the-world mobile ecosystem in India.

Even though all of these were available for free download as MP3s, and I knew (most) existed, I never listened to them on my previous phones.

I recall subscribing to a bunch of NYT podcasts on my Nokia. Checking and downloading five MP3s in parallel, creating a desktop folder each week, copying it to my phone memory card and deleting last week’s folder, refreshing and waiting ten+ minutes while the music player scanned the SD card and detected the new episodes (and identified them as songs, not podcasts), and having to painstakingly navigate to where I had left off a podcast if I wanted to resume. It was a pain and I soon gave up.

The iTunes-iPhone integration makes all the difference. iTunes has nailed catalog and content, discovery, subscription and billing. It has nailed auto-download from the Internet. It has nailed silent and automatic sync with iPhone. It has nailed keeping only the most recent n episodes on-device. And iPhone remembers where I left off, per podcast.

And so then here’s what happens: during the day, the iPhone is plugged in to USB, charging. iTunes is downloading the latest episodes of my subscriptions and syncing with iPhone. Once I subscribe I don’t have to do a thing, ever. New episodes are just *there*.

But iPods have been able to do this for about a decade now. And iPhone for nearly four years. No other phone is able to manage music – and playlists and podcasts and videos and photos and contacts and bookmarks and, yes, apps – anywhere as well. You just have to say the others have been lazy.

Or I guess if phone manufacturers still consider themselves to be that – manufacturers of phones – then they’re missing a lot.

This is supposed to *herald* curated computing. Nonsense.

Curated Computing: Fancy cynical analyst term. Here is Forrester Research declaring a new era (‘Post-iPad’, no less).

A consumer can do anything with a Windows PC or Mac… the iPad operates very differently. [It] works more like a jukebox than a desktop — consumers choose (and pay for) applications from a predetermined set list. Each of those applications is, in itself, also curated; the publisher selects content and functionality that’s appropriate to the form factor, just as a museum curator selects artworks from a larger collection…

Rubbish. ‘Curated computing’  has been Apple’s design philosophy for all this decade – that’s only now making its way into industry consciousness.

But it’s a good thing.

If anything, it indicates mobile manufacturers hitting reality. In the short years after the realization that people wanted to ‘do more’ with their phones, manufacturers packed in as many features as they could. A few really took off (cameras, music players, even email), and most others just didn’t (bluetooth, mobile office packages, bar-code readers).

In another way, it’s a sign of the industry beginning to mature. Even as hardware has gotten more capable (faster processors, storage, memory, larger displays, touch-screens) and networks have invested massively to build capacity, there’s a discernible trend to do less better. Manufacturers are (belatedly?) realizing that a mobile device isn’t a smaller personal computer, but something ‘very personal’. And that very personal is very different from personal.

Which is also why everyone in the industry wants ‘vertical integration’ – control over the hardware, operating system, software platform, applications/content, and network. It’s so that having bet on what (limited) tasks a device will perform, a manufacturer has greater control over the quality of what the customer experiences.

Expect, in the next couple of years, for all major smartphone players (in addition to Apple, RIM, Google) to create (curate?)  really great out-of-the-box experiences for the 20% of tasks that matter most – email, web browsing, facebook/twitter updating, maps, and playing music/movies (yes, better than what we’ve seen). Expect  new devices to ship with fewer radios and sensors, and very few basic applications out-of-the-box. All other features and applications will be available via an App Store, to which there will be a prominent link on the home screen.

If this sounds very much like what Apple’s been doing with iPhone all along, of course you’re right. Forrester’s just woken up, declared it a trend and slapped on an alliteration.

Footnote: also, this isn’t as global, industry-churning a movement as Forrester would have you believe: the Japanese, for the most part, like cellphones crammed with bells and whistles (TV, bar-code readers,credit cards, suchlike). And this doesn’t look to be changing anytime soon.

No longer. Not only are more mobile phones being sold now than ever before, there are more types of folks making money off it. For smartphones with an ecosystem such as iPhone, there is

- Apple, the iPhone manufacturer

- AT&T (in the U.S.) that provides cell phone connectivity

- tens of thousands of developers who sell their iPhone applications through the App Store (with Apple getting a cut). And this is not just indie developers. Amazon stands to make a huge bundle through book sales via its Kindle Reader app for iPhone [2]

- businesses that create free iPhone applications but make money off ads within their applications [3]

- record labels that offer their music for sales on the iTunes Music Store

- television networks and Hollywood studios that offer their TV shows and movies (respectively) for sale/rent, also on the iTunes Music Store

Of course, this runaway success has inspired every smartphone label to scramble to bake its own pie. Witness the plethora of application stores (Palm, Nokia, Blackberry, Windows Mobile, Android) [4], and Nokia’s attempts to sell music.

Open or closed?

The more mature a product category gets, the more players there are that stand to make money off it. That’s because the pioneer quickly realizes that for true scale, it must “open up”  the product to entities other than itself. And that’s where it seems we have from history, a clear lesson: IBM opened up the specs of its original PC, and hordes of beige box manufacturers crowded Big Blue out of its own market. Apple itself nearly destroyed all that the Macintosh stood for when it licensed the Mac to other manufacturers.

“Opening up” a successful product and creating an open ecosystem divides the pie into so many slices that the pioneer is left picking up only crumbs. Apple’s iPhone ecosystem has been “opened up” to all those players above through the iPhone OS developer API, the iTunes Music Store and the iPhone App Store, but the ecosystem itself remains tightly closed.

[1] OK, so there were (are) electronic component manufacturers on the source side and advertising agencies on the sell side. But let’s limit ourselves to those that gained directly from the mobile phone. 

[2] Also with iPhone OS 3.0, developers can now charge for features within the application (unlocking extra weapons and purchasing weaponry within games being the most commonly cited examples), so you could have a free basic application with paid features if you like. Before OS 3.0, the best that developers could do was offer separate “free” basic and “paid” full-featured apps.

[3] Take Twitterific, for instance. The free version of the application inserts ads into your tweetstream.

[4] With comical attempts to make them sound different (Palm Software Store, Nokia Ovi Store, Blackberry App World, Windows Mobile Marketplace, Android Market). 

Online pioneers have lapped up the biggest brands and most popular goods: the largest cities, the biggest hotel chains, the most popular travel destinations, the widest marriageable demography, the most desirable gadgets, the most viral videos, the news everybody reads, the the matches everyone watches.

Now comes the hard part. The cities only a few want to travel to [1], the outliers for whom it isn’t easy finding a match [2] , books in regional languages, people with odd skills, niche but tremendously useful gadgets, highly technical videos. There’s a market for all those. In aggregate, they’re as large and lucrative as those that have already been monetized [3].

Then there’s an even larger market – for individual professional services. The mother of all yellow pages, with a location-based and rating-based component. One that connects me to the nearest puncture shop when my car has a flat on a stretch of highway (and takes Rs. 10 for that connection), directs me to the nearest ATM in any city, to the most reliable service center for my phone.

There is no technological barrier to setting up these businesses anymore (you really don’t need broadband for most of this – just plain Internet access, and in some cases, a cellphone). What makes this hard is convincing small businesses/individuals to sign on. Building trust and credibility. Selling to Jet Airways is much easier than to Pravin Puncturewalla on a random national highway. If you’re willing to tackle that, you have a successful business.

Finally, Rajesh has a compelling vision of the “now-new-near” web, which you should read. I think that “niche” is about as much the future as the others. I also think that “now” and “new” are synonymous for the vast majority of cases, so I propose that tomorrow’s web will be the “now-near-niche” web (built around the evolving Internet Operating System)

[1] RedBus.in is doing a spectacular job with that, by my estimates. Driving to work today I spotted a travel service that did a Hyderabad-Kolhapur (!) bus route. And hey presto, Redbus.in has that route listed.

[2] Secondshaadi barely scratches the surface, but hey, it’s a start.

[3] Yes, yes. It’s the same old tired Long Tail phenomenon. Let’s set aside discussions of how cool the phenomenon itself is and why it works, and explore how you can build businesses in India with it.

Or not.

The article’s conclusion is probably right (this is what this post is about; the Kindle could indeed help the U.S. newspaper industry) but its reasoning is entirely incorrect.

Costs (printing, distribution or others) were never the newspaper industry’s biggest problem; it was revenues. Readers have been moving online in droves, resulting in plummeting print sales and print advertising revenues. Also as newspapers have found out, generating revenue from online advertising wasn’t easy. Advertising on the web works fundamentally differently from print. As Nicholas Carr points out:

A print newspaper provides an array of content—local stories, national and international reports, news analyses, editorials and opinion columns, photographs, sports scores, stock tables, TV listings, cartoons, and a variety of classified and display advertising—all bundled together into a single product. People subscribe to the bundle, or buy it at a newsstand, and advertisers pay to catch readers’ eyes as they thumb through the pages. The publisher’s goal is to make the entire package as attractive as possible to a broad set of readers and advertisers. The newspaper as a whole is what matters, and as a product it’s worth more than the sum of its parts.

When a newspaper moves online, the bundle falls apart. Readers don’t flip through a mix of stories, advertisements, and other bits of content. They go directly to a particular story that interests them, often ignoring everything else. In many cases, they bypass the newspaper’s “front page” altogether, using search engines, feed readers, or headline aggregators like Google News, Digg, and Daylife to leap directly to an individual story.

In other words, the true value of the newspaper – the bundle – is lost once online. It becomes a set of standalone articles, each responsible for its own revenue.

Here is where the Kindle can change the game back in favor of print. Since newspapers on the Kindle are subscription-based – just as in print – the bundle can now be restored. Only the medium will have changed, from paper to e-ink. In fact, if Amazon can track the location of a Kindle, it could even display local advertisements, in exactly the same way that local editions of a national newspaper do.

But not so fast. Newspapers (and their partner, Amazon) also need to understand why users moved online in the first place: the convenience of having unlimited news accessible instantly for free. This is what they need to deliver. For the bundle to work, the Kindle must make all its newspapers available for free, instead of charging an arbitrary subscription fee. Revenue from advertisements (on a per-impression basis, since per-click makes no sense in the absence of a web browser) should be split between Amazon (the medium) and the newspapers (the content).

Of course, we still don’t know how many online readers will bite and make the move to the Kindle. But the U.S. newspaper industry sure can’t afford to not try.

But it won’t help.

Microsoft says Windows 7 is netbook-friendly (and it might well be), but that’s irrelevant. The issue is higher margins. If Microsoft prices Windows 7 like Vista, it’s going to raise the total price of netbooks. That is unacceptable. After all, the USP of the netbook is Cheap.

Now, I think the company’s realized the underlying problem: Mobile and Desktop are moving towards each other.

The company is more likely to make higher margins on its Mobile Operating System than on its Desktop Operating System. High-priced smartphones are becoming increasingly popular and also more sophisticated. On the other hand, PCs are getting smaller and lighter – and cheaper.

Most commentators have already identified Mobile and the Cloud as the defining markets for the immediate future and they’re probably right. Microsoft has plays (albeit relatively weak ones) in both these in the form of Windows Mobile and Windows Live.

I think we’re going to see a shift in investment toward these two markets, and away from the PC market. At the minimum, expect a quick rollout of Office Live soon (either free or monetized) and Windows Mobile 6.5.

Except that things have changed somewhat: in 2006, your fellow shutterbugs probably used point-and-shoot digital cameras. Chances are they were using their mobile phones at that last ceremony. Chances are that you were too.

No surprise; consider this. The current installed base of mobile phone cameras is 1.9 billion, up from nearly zero 5 years ago. In contrast, the camera industry only ships 100 million (one-tenth of a billion) devices a year.

Whatever happened to the standalone camera industry? And how long, you might also ask, before they fade into oblivion?

I think the answer to the first, discussed in this post, is that the camera industry stopped innovating.

For years, the Megapixel ruled. Consumers bought a new digital camera based solely on “how many MP it had”, fed by copious advertising  by manufacturers promoting this very lust. So, roughly, 3 Megapixels in 2002 went to 5 in 2004 to 7 in 2006 to 8 now (perhaps even 10) – and stopped.

At some point – perhaps a couple of years ago – folks began to realize that the pictures they were clicking with their existing digital camera were good enough. When they wanted an upgrade and looked around, all they saw were more Megapixels. Clearly, no one was listening to them. Camera manufacturers – Sony, Nikon, Kodak, Olympus and others – probably thought they didn’t have to. Even if existing owners didn’t upgrade, there were so many first-time camera buyers out there. You didn’t have to own a larger slide of the pie if the pie itself was expanding.

This is where the camera manufacturers made their big mistake. At that very time, mobile phone manufacturers were busy embedding tiny 1 and 2 megapixels cameras into their devices. Millions of would-be-first-time-digital-camera buyers bought Rs. 9000 phones and suddenly found themselves with a ready digital camera. The photos were grainy and often out-of-focus, but hey – the camera now fit into their pocket, and was always with them to capture moments with friends, on the bus, in the train, on the street, at home, at outings, gatherings, ceremonies, parties, everywhere. Suddenly, the lure of the Megapixel didn’t hold sway at all. What mattered was that this little camera was always there. It also helped that the same block of plastic was, often, a music player, video player and recorder, radio and, occasionally, Internet browser.

Guts.

By this time, the camera manufacturers had had their first “uh-oh” moment, as sales of phone-enabled cameras shot through the roof. They scrambled back to appeal to their base of existing owners, attempting to sell them on something other than MP. So you began to hear noises about everything ranging from image stabilization to multiple face-recognition.

But the mobile phone industry wasn’t idle either. While the first generation of mobile phone cameras were dreadful, the second wasn’t. Mobile phones that cost around Rs. 15000 to Rs. 20000 – the price range of a good point-and-shoot digital camera – were now sporting 5 megapixel cameras (more than what consumers wanted), advanced lens technology (for instance, the Carl-Zeiss lenses in the top-end Nokia Nseries cameras), great flash (the Xenon flash in the Nokia N82) and customizable settings on par with their standalone counterparts. In other words, phone cameras were as good as standalone digital point-and-shoot cameras. The choice for buyers was now between i.) their existing camera plus a few incremental features, and ii.) their existing camera +  music + web + maps + video + kitchen sink. Making that choice was easy.

The female of the species is deadlier than the male. Unquestionably.

Next – what the camera industry can do to stay relevant in the coming years.

Here’s a list of peeves and loves about each browser.

Opera Mini Good

• Faster page load times
• Snappier controls
• Smoother scrolling
• Slightly better font rendering (all of above relative to S60 Browser)
• Address TLD auto-complete: (type www.opera. and  a drop-down list appears with opera.com, opera.org , opera.net)
• Speed Dial-like shortcuts for bookmarks

Opera Mini Bad

• No support for multiple tabs
• “Small” font too small, “Medium” too big
• Screen does not occupy entire width when phone tilted (in portrait mode). I don’t think the browser is accelerometer-aware
• Not possible to copy URL

S60 Browser Good

• Does not ask for permission to connect; allows selection of default access point. This is because, unlike Opera Mini, which is a Java app, the S60 browser is a native S60 app.
• Page overview – a shrunk view of the current page which you can quickly scroll around on.
• Attractive Back/Forward implementation. Page previews flip forward and back, like moving your mouse across the OS X dock.

S60 Browser Bad

• Supports multiple tabs but cannot open new one!
• No “top”, “bottom”, “pgup”, “pgdn” keypad shortcuts
• Tedious process to copy URL. Bookmark current page, navigate to Edit bookmarks, copy URL, delete bookmark.

What else

Haven’t had a chance to check out Skyfire yet; the founders have decided, in a sadly common blinkered move, to limit launch to the US. A mobile browser from Mozilla’s been “just around the corner” for a while now (and won’t show up on S60 first). Google’s promised a mobile version of Chrome, but my guess is that Android will get it before S60 does. I don’t see mobile Safari on S60 ever. And it hurts to even speak of mobile IE.

Also, a few months ago, Nokia released the E71 smartphone. Sporting a QWERTY keyboard, a thin form factor, and attractive metal casing, the E71 is Nokia’s first serious enterprise phone. Its predecessor, the E61i, was a capable phone hobbled by a miserable plastic body, poor build quality and bad branding (the E61, E61i, E62 [1]). The E71, in contrast, is simply beautiful.

A combination of the application and the phone, then, is supposed to demonstrate that Nokia is now serious about the Enterprise. That it is the first choice when a company’s IT department chooses a smartphone to mobilize its workforce.

Not so fast. Research in Motion’s Blackberry series of phones rule the roost in that space. And it doesn’t look like Nokia’s in a position yet to unseat RIM.

Nokia’s Enterprise Problem

Nokia’s problem are two-fold. One, any enterprise phone has to have a physical QWERTY keyboard, since it’ll mostly be used for email on the go. Nokia only has one device in this form factor. Its history with such phones, as we saw, doesn’t inspire confidence. And it doesn’t have a product roadmap around its QWERTY phones. No organization’s IT department is going to fit its executives with a phone like that. Not when the alternative is Blackberry [2].

Nokia has also never tried to seriously sell to the Enterprise. Sources tell me that in India, the phone is mostly being sold via the retail channel; corporate deals have been non-existent. It doesn’t surprise me. Most of Nokia’s previous Eseries phones had been pretty, Wifi-equipped toys with all sorts of form factors (candybar, clamshell, slider), and tiny 9-button dialpads [3]. Not the sort of product line a sales guy would be proud demonstrating to a firm’s CIO.

Blackberry’s massive brand is also going to be tough to compete with. As things stand today, given a choice, an executive would almost always choose a Blackberry over an E71. Features don’t even matter; just that he/she wants to be seen carrying a Blackberry. RIM has achieved what even Apple hasn’t been able to – ubiquity as well as desirability.

How can Nokia compete in the Enterprise?

1. Concentrate on winning accounts at companies that haven’t set up a mobile device infrastructure for their workforce, instead of converting existing WinMobile/Blackberry accounts. Few IT departments want to support more than one device family. But a surprising number of large firms haven’t gone mobile yet, and there’s where Nokia can leverage one crucial advantage: Price.

2. Reduce price through reduced margins. Nokia commands massive margins on its Eseries phones currently, I’ve learnt. It could win any bidding war by cutting those margins. Blackberry will make it a neck-and-neck affair on features, but Nokia could win on price.

3. Over the next 18 months, build a product portfolio around mobile devices with QWERTY keypads, with a 3-tier low-end, medium and flagship strategy. Nokia’s own Nseries 7x, 8x and 9x models are a good example of this. And retire the 9-button keypad Eseries models [4]. They aren’t going to win Nokia any accounts.

Conclusion

Nokia’s crafted a brilliant entertainment devices strategy around its Nseries branded phones. Not so with its enterprise strategy. While the Eseries brand is strong, Nokia has problems both with its Eseries phones as well as the marketing around them.

Either the company can pull along anaemically, selling “business” phones through its retail channels, or it can take on Blackberry by winning more corporate accounts. That’s going to require changes in its product, pricing and marketing strategy. Tall ask, tall results.

Footnotes:

[1] There were 3 models, nearly indistinguishable externally. The E61 did not sport a camera but had WiFi and 3G. The E62 had neither a camera nor WiFi/3G. The E61i had both. And all 3 were ugly. (back)

[2] Of course there’s Windows Mobile, which runs QWERTY phones by Samsung, Motorola and Palm. Nokia’s E71, in my opinion, trumps Samsung’s Blackjack II and Motorola’s Q9c. Palm practically invented the smartphone market but is now in a dead slump. Then there’s iPhone. Unless it gets a physical keyboard, Apple isn’t winning any deals. Open and shut. I’ve used both the iPod Touch and the Blackberry Curve, and there’s no contest when it comes to doing email. Neither of these are game-changers in the Enterprise smartphone market. (back)

[3] Ironically, with the release of the Blackberry Pearl Flip 8220, RIM has decided to go the other way and test the clamshell market. (back)

[4] There have been repeated calls among the Nokia enthusiast community to bring some Eseries-only features to Nseries devices, notably the ability to display additional information and notifications on the home screen, ability to define “modes” – a collection of active standby shortcuts and themes, the enhanced calendar, a fully functional version of Quickoffice, among others. The E51 and E66 with enhanced cameras (they’re cheap to put into a phone) and standard 3.5mm audio jacks could function admirably as Nseries devices with the above features.

Alternatively (and controversially), it could create another brand for small businesses, (Eseries Lite? Ugh.) that need the business capabilities of Eseries, but for whom the E71 and its ilk are too expensive. (back)