iPhone, Android Developers Race to Bring Highly Anticipated Technology to Masses.
While we here at mobilestance prefer to poke fun at market predictions rather than make them, we’ve decided to go out on a limb and draw a big ol’ line in the sand: 2008 will be the year that QR codes become viable in the US, thanks largely to the efforts of Apple and Google.
While recent efforts by Scanbuy, Discovery Communications and Citysearch have been impressive in terms of ambition and overall scale, they were nevertheless hamstrung by two significant flaws: (1) they’ve relied on a non-standard, proprietary code format, and (2) nearly all participants were required to download a java app via SMS prior to engagement - a tall order if you’re activating an OOH general market ad campaign. That said, in either an odd coincidence or boldfaced market collusion (kidding), both Google (directly) or Apple (indirectly) have taken the necessary steps to breakdown both of these barriers… the results of which will begin to take affect in and around the third quarter of this year.
To date Apple’s efforts have been uncharacteristically hands off, although this could quickly change in the next iPhone firmware release. Specifically, Apple has created a near perfect platform for a QR reader: a high-quality handset inclusive of a (good enough) two megapixel camera, a publicly available SDK, a bullet-proof distribution model in the iTunes App store (expected this June), and most importantly, a highly-attractive, early-adopting, data-hungry user base.
All of which makes for extremely fertile ground for the (third party) development of an iPhone QR reader, and develop they have. Even without a user-friendly distribution model in place, developers have been busy porting their existing QR readers for use on the iPhone. iMatrix has already developed an iPhone version of it’s dual use (proprietary shotcode + EZcode / standard QR / Datamatrix) reader, and no doubt many more will follow. The iMatrix reader utilizes the iPhone SDK’s relatively robust API set to not only launch web URLs and initiate messaging and voice call events, but can also “add contacts to your Address Book, add events to Calendar [and] add new notes to Notes.” Until the iTunes App store is online the only way to install the reader is a via a fairly manual process (and only on unlocked handsets), but it won’t be long before the average user can easily download and install the reader via what is sure to be a dummy-proof, Apple-branded experience.
Compared to Apple’s laissez faire attitude towards QR, Google has been far more proactive. In addition to make sure that every Android phone will include a non-proprietary reader preloaded as part of the standard application set, Google is also championing an open-source J2ME reader project dubbed “ZXing” (which supposedly stands for “Zebra Crossing”). Not only is Google helping the app’s development in terms of hosting / distribution, it has also been actively recruiting developers to help with the project (I witnessed this first hand at the Nokia Barcamp in New York last November, when Google’s Sean Owen led a packed house through a four-minute ZXing presentation that abruptly ended with a pitch to java developers to aid in its development).
So which will have greater impact on the market? Well, while Google’s approach has the advantage of having the reader app reloaded onto the handset, Apple has the (short term) advantage of actually having handsets on the market! Also, (as stated earlier) Apple could always add a reader app to the next firmware release and instantly increase the size of the US QR-reader install base by a factor of twenty or so. This scenario is not (purely) speculation, as Apple has been known to “pull a Microsoft” and co-opt a particularly useful software app or two… all in the name of “user experience.” Watson, anyone?
More to the point, the reason all of this is so interesting is because of the perfect intersection between technology and lifestyle. Start with the iPhone user base (mobile-dataphilic, upscale, big spending, early-adopting, Gladwell-style alpha-influencers), then add what we can assume to be first Android buyers (ubergeeks, tinkerers, mavericks and malcontents - i.e. current Linux users) and you’ve got the perfect launching pad for a QR movement - and not just any old QR movement, but one of the advertiser-friendly / “interesting to Sandhill road” variety.
Proof of concept video, iPhone QR reader, below:
Achung! Clip is punctuated with annoying whistling, nauseating camera movement and a few failed demos to boot!
On March 6th Apple gave the world its first peek at the widely-anticipated iPhone SDK (Software Development Kit), which developers will use to create native iPhone applications. In typical Apple fashion, the event was hosted by Apple CEO Steve Jobs, and was held at the company’s Cupertino, CA headquarters. In a somewhat rare move, His Steveness delegated most of the announcements to Apple Execs Phil Schiller and Scott Forstall, choosing instead to serve merely as more or less the event’s MC - opening the proceedings with some iPhone growth stats, and closing the affair with a brief Q&A punctuated with his usual displays of hype and candor.
The Background: Without the iPhone SDK the only choice for developers wishing to create iPhone applications is to create a “web app,” which are vastly inferior to native apps in most respects: Web applications are inherently slower, less secure and powerful than native apps, and require a data connection to operate.
Apple is targeting a June, 2007 release date for the iPhone SDK. Key details are as follows:
Distribution. Simply put, the only way to distribute an iPhone or iPod Touch application is to go through Apple- via the (yet to be released) “App store” or on iTunes. This will likely require the application to be “certified” by Apple, considerably prolonging the development and testing process (this versus a 100% open system, otherwise known as the internet). Ultimately this means that while brands need to give developers more time to have their applications certified by Apple, distribution and discovery of iPhone applications will nevertheless be a relatively painless process for consumers. What’s more, if developers are allowed to “deep link” to specific pages on the App store, promotion of specific Apps should be extremely straightforward to marketers. (SMS “WAP-push”, email, web banners and paid search should all prove efficient promotional means).
Free or Pay to Play? For premium apps Apple has announced that they will be retaining 30% of net revenues for distribution and payment services, but the big news (for marketers) is that Apple doesn’t seem to be getting in the way of free (read: marketer-friendly) applications - whether sponsored, co-branded and/or ad-supported. Not only will they not get in the way, but Apple has gone on record as saying “Apple gets nothing” if the app is free. This is tremendously important for both brands and agencies wishing to enter the free-to-the-consumer iPhone application space.
Functionality. The real promise of the iPhone SDK is that, according to Scott Forstall (Apple VP of iPhone Software), Apple is “opening the same native APIs and tools to build our iPhone apps…[so that] 3rd party developers can build native iPhone apps using the same SDK that WE do.” It is with these set of APIs that 3rd party developers (read: anyone from agencies and brands to the kid down the street) can build native applications that integrate the iPhone’s address book, calendar, media player, 3D / OpenGL graphics layer, 3-axis accelerometer, camera, internet connection, databases and more. This is big folks…
Restrictions. So far Apple has stated that that the only applications that won’t be allowed will be those classified as “porn, malicious, illegal, infringing on privacy or bandwidth hogs.” Those last two are a bit nebulous and will need to be further clarified by Apple in the coming days (isn’t YouTube - a service already featured as a prominent iPhone web app - the world’s #1 bandwidth hog?). Also, applications will not be allowed to unlock the SIM - which should come as no surprise given Apple’s newfound wireless subscription revenue stream (subscription revenue shares only come from their partner carriers - hence the SIM lock). Finally, VoIP apps will be restricted to running over the iPhone’s Wi-Fi connection only; VoIP apps running over cellular networks will not be allowed.
Security. Much of the Apple announcement was dedicated to new enterprise-friendly enhancements, such as Apple’s licensing of Microsoft’s ActiveSyc (for integration with Exchange) and other iPhone software updates guaranteed to keep RIM awake at night. Nevertheless, while these enterprise-grade moves haven’t been positioned as related to the SDK, iPhone’s new enterprise-level security features, such as “Cisco IPsec VPN, authentication and certification, enterprise class WiFi (WPA2 / 802.1x), security policies, configuration tools, and remote wipe” are, coincidentally, many of the same security features that will also satisfy the needs of marketers looking to protect personally identifiable, commerce, and other sensitive areas of consumer data.
Analysis: Overall, marketers should be quite encouraged by what we have seen so far in the Apple SDK. No doubt the weeks and months following the release of the iPhone SDK will be peppered with numerous announcements of native iPhone applications of varying degrees of functionality and import.
That said, much of the discussion following the SDK announcement had been focused on Apple’s decision to restrict distribution of iPhone apps to their “App Store” - in that this decision constitutes a new “walled garden” similar to those erected by the Carriers (and AOL before them). What remains to be seen if Apple’s distribution barrier was created in the name of quality and security (as it claims), or solely for the purposes of greed. If the former, Mobilestance finds no fault with Apple’s decision to act as gatekeeper, plain clothes cop, judge, jury and executioner in the policing of the ecosystem it has created. If, on the other hand, shameless self-interest purveys Apple’s distribution policy (laborious approval policies, the hamstringing of applications deemed competitive to Apple’s other business units), we can only hope that either developer backlash or third party system hacks will force Apple’s hand towards a more democratized distribution model.
Last week was punctuated by a steady stream of mobile marketing-related announcements, studies, partnerships and launches - some interesting, some not so much… and none of which truly worthy of a dedicated post.
Nevertheless, taken in aggregate these moves represent an ever-advancing industry, charging forward on the backs of the innovators, the followers, and the “never say hype” over-enthusiastic forecasters.
We give you then, the first of mobilestance.com’s “This Week in Mobile Marketing”
TWIMM: We read the domestic Mobile Marketing trades, studies, announcements and insane market forecasts… so you don’t have to!
Mobile Search. Nielsen Mobile (formerly Telephia) announced that “46 Million [US] Mobile Data Users Used Mobile Search Functions in Q3 2007.” But before you get all excited, keep in mind that “The most popular form of mobile search among data users in Q3 2007 was 411 (18.1 million users), followed closely by SMS (text-message) -based searching, which was used by 14.1 million data users during the same period.” Yep… the “big news” is that folks are mostly using mobile search to look up local phone numbers - not exactly a headline generating statistic. Still, “while local listings were the leading search objective in terms of users, (27.1 million data users searched for local listings in Q3 2007), 14.8 million said they searched for information such as sports scores, news or weather, while nearly a quarter (11.3 million) said they searched for mobile content.” Good news for SMS Ad Networks such as 4INFO . Notably absent from the announcement was any mention of WAP-based search offerings such as those by Google, Yahoo, Jumptap and the like - other than a brief mention that “61% of 411 search users are female, while 60% of WAP (or mobile web) search users are male.”
Meanwhile in related news, Nokia’s head of search Jussi Pekka Partanen simultaneously hyped local search while taking shots at Google, as reported moconews.net. At the the Visiongain mobile search conference in London last week the handset giant contended that mobile search will be more context-focused than the existing page rank-driven engines currently dominating the desktop search market. Nokia’s current “Nokia Search” product seems more evolutionary than revolutionary, combining web search with local (meaning: on the device) content search.
The Mobile Web. 40% of web publishers have launched mobile sites, with another 25% planing to do so in the next year, this according to Jupiter Research in a report entitled “Mobile web sites: Designing for mobility.” The number is somewhat misleading, insomuch as “this number… likely reflects mobile versions that consist of frames and offer a kludgy user interface,” or so says Mediapost. The report states that only 3% of the above mobile sites are “mobile advertising enabled” - in that they have the ability to optimize ad delivery based on whether the user is viewing the page via a mobile device (versus a PC). Mediapost also notes that up to 1/3 of these pages enable mobile commerce of some sort, such as “instant transactions and the ability to drive shoppers into nearby stores” - a fairly vague definition of mobile commerce to be sure.
Notable Mobile Website launches included a dedicated mobile version of FIM’s Photobucket (m.photobucket.com), Discovery Mobile’s new mobile portal (discoverymobile.com, which houses the all of Discovery Communications’ mobile sites, such as Discovery Channel Mobile, Animal Planet Mobile, and TLC Mobile), and USA.gov Mobile (http://mobile.usa.gov - which seems to be a fairly straightforward RSS fed Gov’t info formatted for mobile).
Mobile Content. The NBA announced that they are partnering with Turner to handle all of its mobile-related content offerings, this according to Fierce Mobile Content. Fierce reported that “the cable network will assume operational control of the league’s digital efforts, including its mobile and broadband businesses. The partnership, effective for the 2008-09 NBA season and continuing through the 2015-16 campaign, also calls for TBS to take over programming, marketing and technical operations of NBA TV, the league’s 24-hour digital television network, and host and operate the NBA.com Network, which includes the NBA.com, WNBA.com and NBADLeague.com websites. In addition, TBS will operate NBA League Pass, the league’s out-of-market game package. TBS, Inc. and the NBA will jointly sell advertising for all of the league’s digital assets.”
QR Codes. In a rare break from our “US Bias,” mobilestance.com continues to cover The Sun’s “Babe-Infused” QR Code efforts (UK). This week the Sun announced the results of its experiment with the promising mobile marketing technology. According to the Sun, the “new mobile content service has achieved early success with around 11,000 users registered so far.” Buoyed by these numbers, the tabloid plans on publishing “another pull-out (supplement in The Sun) to further inform people on how to use QR codes.”
Research-Driven Market Hype. The results of two “hypefull” Mobile Marketing studies were announced last week. The first was on Monday from ABI Research, who announced that “mobile marketing is expected to grow to over $24 billion worldwide in 2013, jumping from just $1.8 billion in 2007,” this according to the research firm’s study/product entitled “Mobile Marketing and Advertising” (retail price: $4500). The second came from Advertiser Perceptions, who reported on Wednesday that “26% [of advertisers] said they were currently using mobile, 20% said they planned to use it in the next six months, and 54% said they are not currently using mobile,” as reported by Ad Age. These numbers were based on surveys of “2,000 brand marketers and agencies” as part of their “Wave Eight” study that seems to cover both “hot” hand held media channels, such mobile video and search -as well as “not so hot” channels such as podcasting.
Miscellaneous News. The FCC launched a probe to “determine whether mobile phone text messages and short codes are covered by non-discrimination provisions of the telecom act,” this according to RCR Wireless News. The FCC move comes in wake of Verizon’s recent high-profile decision to block text messages from NARAL Pro-Choice America - a decision it quickly reversed under pressure from from a successful grass-roots campaign the organization launched against the carrier. Finally, Steve Jobs announced an underwhelming firmware update to the iPhone at last week’s Macworld 2008. Among the updates included features that now allowing users to send group SMS messages (something I can do on my two year old RAZR) and the non-GPS-based “Blue Location BEacon” feature in Google Maps (something I’ve been able to do on my Blackberry since Google launched the service late last year). Baby steps, to be sure. Forget a 3G version… I’m still waiting for such standard “features” as Cut and Paste!
The slow news week after Christmas is notorious for the oft-derided “year in X” reports, but rather than take time exploring the value of such “Remembrance(s) of Things (less than a year) Past,” mobilestance.com would like to take the time to indulge in our own year end recap of the most notable US Mobile Marketing developments in 2007 (and yes, the illustration on the left depicts “Old Man 2007″ knowingly handing an iPhone to “Baby New Year 2008″).
And what a year 2007 has been. Between the flurry of VC and M&A activity, the reality of a declining global ringtone market and the re-orgs that followed, the explosion of ad supported business models, growth in consumer use of key mobile data services, notable marketplace exits, divestitures and bankruptcies, new entrants in the wireless space (yes, I’m talking about Apple here), and the aggressive moves on the part of the internet portals (most notably Google, but also Yahoo and even AOL and IAC), 2007 may yet be remembered as the year mobile finally “happened” -much to the delight of the Business 2.0 crowd.
After reviewing the list please take a second and weigh in on what you feel was the most important Mobile Marketing event of ’07 by participating in the poll at the end of the piece. Also, since 2007 was such a busy year no doubt there’s plenty more that could be added to this list… that said feel free to leave a comment if you’d like to add some additional insight or if you feel something crucial has been overlooked.
Thanks much… and now without further delay, mobilestance.com proudly presents “The 2007 US Mobile Marketing Game Changers.”
Google Steps it up.Not content to merely sit on the sidelines and play by the rules set forth by the US carriers, the search giant spent much of 2007 re-writing the rules of the US wireless industry.With their conspicuous “open access” lobbying effort, leadership in the Open Handset Alliance, the launch of their open Android platform, and their plans to enter the upcoming 700 MHz US wireless spectrum auction has a legitimate player, Google has stirred the 2007 US wireless pot like no other single corporate entity. While it remains to be seen as what will ultimately come of its aggressive moves in the space (although it seems Google has single-handily forced the biggest hole to date in Verizon’s vaunted walled garden) , it is clear that Google is determined to usher in a far more flexible (read: marketer-friendly) US wireless marketplace… a market that will likely be a boon to innovative third party mobile application developers, hybridized business models, and - most importantly - accelerate consumer adoption of “beyond voice” mobile services.
The Rise of MMS. 2007 was the year that US consumers finally got behind MMS in large numbers, exiting news for marketers not satisfied with the simple Joys of Text. In November of 2007 the MMA reported 33% of all US mobile phone users reporting monthly use of “Picture and/or Video Messaging” - that’s up dramatically from a paltry 16% in 2006. In the younger demographic segments the numbers are even more attractive, with monthly usage peaking in the 18-24 year old group at an astounding 55%. So what does this mean? Bottom line, now that MMS has reached critical mass in the US marketers are free to (finally) capitalize on the expanded interactive and multimedia prowess of the enhanced messaging channel. The possibilities are endless… everything from moblogging, MMS-based couponing, photo contests, video alerts, pattern recognition, html email-type CRM communications and so much more. Sure, there’s nothing actually new with all of these tactics… but now we’re talking about the difference between MMS-based marketing campaigns with real ROI back to the brands, versus the eternally frustrating”test campaigns” of earlier years.
Enter the iPhone. So much has has already been written on the sleek Apple device that it’s become extremely difficult to assess its actual impact. Never mind the recent eye-popping stats released on the iPhone’s disproportionate share of the overall browsing universe, or recent efforts (while fascinating and seemingly quite worthwhile) by marketers to leverage the device to deliver hypertargeted messaging to the forward-leaning, early-adopting, free-with-the-dollars demographic. No, the real impact of the device lies in it serving as a “showroom model” for the full potential of the mobile marketing channel. An independently sold (from the carriers, mind you) Wi-Fi/GSM hybrid with a beautiful touch screen, snappy web browser (snail-like AT&T EDGE network speeds notwithstanding), usable video, music and photo management options… and coming in February, a public SDK for the development of third party applications and a (rumored) flash plug-in for the device’s browser - a first for the “mobile” web (and hey just because it’s the holidays let’s not get into a debate on what is or is not actually the “mobile” web - for now let’s just go with it). It’s amazing how quickly the standard for what is “possible” in mobile has been raised since the release of the iPhone less than six months ago - and how what once passed for cutting edge has so rapidly become not simply dated, but altogether irrelevant. More than any other event in the mobile marketing industry’s short history, the entrance of the iPhone has fueled a frenzy of interest in the space - both from brands and agencies alike. The motivational equivalent of the ‘69 moon landing… with all the junior rocket scientists that followed.
Mobile Advertising Comes of Age. After a few years of luring in the shadows of the mobile marketing industry, the mobile advertising market became incredibly hot in 2007, punctuated by major acquisitions by leading interactive and mobile firms, as well as a dizzying array of venture-fueled deals in the space. The two leaders in the nascent mobile advertising industry, Third Screen Media and Enpocket were promptly acquired by AOL and Nokia, respectively - while Microsoft, once again outmaneuvered in the interactive ad firm acquisitions game, was forced to settle on European Mobile Ad Firm Screen Tonic. The remaining independent mobile ad firms were also firing on all cylinders, with Amobee, Millennial Media, AdMob, Greystripe, and Quattro Wireless all expanding on the heels of fresh investment capital raised in ‘07. Newspaper giant Gannett made a major investment in SMS-based ad firm 4INFO, while Google and Yahoo played a bit of small ball (we can gut Google a little slack here… they’ve been busy rewriting the rulebook for much of the rest of the mobile industry after all). The former taking the much anticipated step of expanding AdSense into the “mobile web,” while Yahoo! announced mobile publisher services and plans to integrate mobile inventory into their Panama ad platform. As for the internet display advertising giants, DoubleClick (soon to be Google) launched their publisher platform, while aQuantitative’s Accipiter Unit (now owned by Microsoft) tied up with NYC-based MoPhap to bring mobile capabilities to their publisher-side interactive ad serving platform. Add daily press releases by major web publishers bringing mobile inventory online, and I think you get this picture: 2007 was the year that nearly everybody in the space simply had to have a mobile adverting play. Sure, there was a bit of herd mentality going on, and no doubt we’re in for… shall we say, a bit of a “correction” in the coming years (this kind of activity surely cannot be sustained indefinitely) - but regardless, the business and technological systems are now in place for brands to reach out and communicate directly with consumers via the mobile handset. Keep in mind this is very different than previous (primarily SMS-based) mobile marketing activity that simply leveraged mobile as a direct response channel activating other forms of media such as television, print and radio (as so eloquently described by Jeff Minsky of OMD in a then accurate but increasingly outdated assessment of the channel - sorry Jeff, but I couldn’t take that one lying down!). Using mobile as a broadcast-type media may be a bit controversial to some, but as long as there remains checks and balances with regard to consumer privacy (yes, the carriers seem to be pulling their weight here, although some needed to be prodded a bit on the subject) an effective system of reaching consumers via their mobile devices should flourish in the months, years and decades to come.
According to Moconews.net, Nokia and Universal Music are adding their names to the long list of firms looking to unseat (or even gain market share on) the Juggernaut that is the Apple iPod / iTunes. The two are “teaming together to offer free 12-month access to music from Universal’s artists to buyer’s of Nokia’s musicphones… people will be able to keep the songs once the free-offer period expires. Nokia wants to get other labels to sign up to the ‘Comes With Music’ product, which it hopes to launch early next year.”
While offering free music isn’t (remotely) a new tactic in the digital music market space, what makes the move somewhat notable is the combination of the world’s largest handset manufacturer with one of the largest music labels. Likely this initiative is in reaction to the iPhone’s European launch, as Nokia tries to defend its turf from an invading, buzzworthy handset. Nokia has reason to be alarmed, as their musicphones have not sold particularly well (even in Europe, a market otherwise dominated by Nokia).
Should the iPhone successfully convert current iPod owners to the new device, suddenly Nokia has a lot bigger problem than an underperforming musicphone unit: Apple will have secured foothold in their core handset market - right in Nokia’s backyard. I would not be suprised to see more, even more aggressive announcements like this moving forward should the Apple iPhone gain traction overseas.
So much has been written in the last week or so following the announcement by Verizon Wireless that they would be opening up their network to handsets sold by third parties, and that they would be streamlining the (currently) painstaking process of third party application development.
Most have focused on the reactionary nature of Verizon’s move, that it was simply a defensive move to counter the coming Android threat, AT&T’s iPhone, as well as to satisfy the new FCC rules governing the upcoming Spectrum Auction… rules also pushed through in large part to Google’s marginally-successful Congressional lobbying efforts. In general, the bulk of the coverage from the mainstream media and major industry blogs have largely written off Verizon’s move as a token gesture that will have little impact on the market for at least the next several years. In many ways these publications are correct, yet clearly they have missed the larger picture.
But to the mobile marketing community, as well as the marketing community at large, the shift represents the beginnings of a long-awaited shift towards a working Mobile Marketing system. I say “working” because the current environment of carrier-specific technology standards and business practices makes for an overly-fragmented, cumbersome system that seems counter its own ends. Divergent carrier technologies notwithstanding, the idea that third-party developers can now publish applications on the Verizon network without having to be “approved” by the carrier is a watershed moment in US mobile marketing, opening up roughly 25% of the marketplace that was, until now, more or less unreachable to the “free to the end user,” advertising-supported model.
For US consumers, innovative and (just as important) inexpensive (handset and/or ad-supported) mobile applications will become far more commonplace, as handset manufacturers will now have the freedom of preloading applications that consumers (rather than the carriers) are interested in using. While these handsets will inherently carry a higher MSRP due to the lack of carrier subsidy, it is my prediction that pricing for “non-carrier subsidized” / D2C handsets will ultimately not become a barrier to purchase, as consumers will value the benefit of getting the handset they (actually) want, rather than being forced into the handset the carrier wants them to have.
iPhone, Android Developers Race to Bring Highly Anticipated Technology to Masses.
Last week was punctuated by a steady stream of mobile marketing-related announcements, studies, partnerships and launches - some interesting, some not so much… and none of which truly worthy of a dedicated post.
The slow news week after Christmas is notorious for the oft-derided “year in X” reports, but rather than take time exploring the value of such “Remembrance(s) of Things (less than a year) Past,” mobilestance.com would like to take the time to indulge in our own year end recap of the most notable US Mobile Marketing developments in 2007 (and yes, the illustration on the left depicts “Old Man 2007″ knowingly handing an iPhone to “Baby New Year 2008″).
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