This has not been a good week for Motorola – having lost $3.6 billion dollars – this blog is not about Motorola per se – but rather about wider industry trends I have been blogging about some time now – and Moto is symptomatic of ignoring those megatrends
Amongst the woes of Motorola, was a curious headline which caught my attention. Apart from the much publicized efforts around Android, Motorola is ALSO working on a Windows Mobile 7 version.
Don’t get me wrong .. I think Windows Mobile 7 will be an interesting development especially considering Microsoft’s newer Skybox/Cloud strategy to unify the Web, Mobile and the PC – (which is textbook Mobile Web 2.0).
Ignoring technical merits and other factors, what is perplexing is: Why pursue BOTH Android and Microsoft especially when it is necessary to focus and differentiate in the market. This reminded me of a comment from Dean Bubley – If it were ever possible to port Fortran on Mobile devices, Motorola would do so!
The point is: Technically it all looks great and is a challenge .. But the market for devices has changed dramatically.
The cell phone market has gone from being a device to a Platform.
Where Motorola Blew It says ..
The evolution of the cell phone from 1.0 to 2.0 is all about the change from device to platform. While Apple’s (AAPL) iPhone is certainly the best example of this transition, many of the other players in the market have been focused on this for a long time. What are the characteristics of a platform as compared with a device?
Motorola’s track record in these areas is spotty at best–virtually nonexistent. Who’s defining this new approach? For the most part, the key players are companies with little or no experience in cell phones. Instead, they come from the computer industry. Leading the way are Apple and Google (GOOG), which has championed the Android operating system for which anyone can develop applications. BlackBerry maker Research In Motion (RIMM) is rapidly trying to evolve in this direction, and Nokia has made significant, albeit largely unrewarded, efforts in the past few years. Microsoft (MSFT) and Palm (PALM) are also still relevant in this discussion.
This is absolutely spot on!
More than a year and a half ago – I blogged that Nokia understood this vision best .. and saw it coming when I mentioned in a blog called the four holy cows of the Mobile Data Industry (Apr 2007) – that Nokia(rightly) sees itself as an Internet company and before that the vision of Mobile Ajax and Mobile RIA in early 2006 which talked of the same trends as the Web and the Mobile worlds start to converge
The execution of that strategy over the last year and a half has not been easy due to various factors – and only now are we seeing the full impact of Ovi and Nokia 5800 Xpress phones acquisition of Navteq etc
And even a visionary player like Nokia is being given a run for it’s money by Apple, RIM and now Palm and Microsoft.
So, the market is being split into emerging markets(which Nokia still largely dominates) and the Smartphone market(which is now being dominated by the platform players)
In that context – a focus on technology alone is not enough ..
And this is just the beginning .. We are seeing a great deal of complexity emerge
Last year, at the Mobile Monday Amsterdam, I blogged about the idea of Long Tail devices .. The ASUS effect : Mobile innovation triggered by open source, long tail devices and a shift in the device value chain – the idea being that the changes in the device stack will mean that many new players will enter the marketplace who are not in this space already.
The core competency of Supply chain efficiency – which Nokia and the big 5 manufacturers (Nokia, Samsung, LG, Motorola and Sony Ercisson) still largely dominate – will be complemented by other skills(which we call Platform skills) especially in the mature markets. It also means many new innovations will be deployed(because we don’t need to produce phones in greater volumes and new players – especially PC players – will try and distinguish themselves)
That too seems to be in full force with the entry of DELL with Android and Huawei with Android . All these players will try and distinguish themselves somehow. Not all will succeed – but many will try and that will make the device market more like a PC market with a large ‘other’/ white label component (40% white label )
And the world gets more complex ..
O2 alone has 6/8 Android phones planned this year, Google continues to gain a share of the Location pie through Latitude which follows on the heels of cell-id databases which means Location information continues to be abstracted up the stack(and towards the service layer) and away from the network. Rather than seeking perfection, RIM comes out to say that the “new reality” of making complex cellphones will be a nightmare”. Bebo – like many social networks who have not made much money on the Web, wants to go ‘mobile’ and we see the first signs of malware on the Android platform
All the above mirrors the PC / Web way of working on to Mobile devices.
Nor is the platform model the only way to go ..
One of the biggest opportunities will be from the network itself especially network enabled devices which are not phones. This will be enhanced by LTE and the best example of this strategy today is from Amazon Kindle The search for the IMS/NGN application: A multimedia version of Kindle (Amazon book reader)
Even voice will be impacted. Previously we had Fring and Truphone on mobile devices but that launch of Jajah on iPod touch is very interesting because it could be a service (and hence useful for more people as opposed to a geeky tool). Details are not clear but I think for ex – we need a good UI, WiFi connectivity etc to enable more people to use VOIP.
To conclude ..
What does this mean for tech? Hardware certainly isn’t dead, but our relationship with it may be changing.
For consumers, it could mean a rapid shift toward cheaper gadgets. In the past, the masses continually needed expensive new computers for word processing, web surfing, photo editing, etc., and bought more powerful PCs. Maybe now folks mostly want devices that let them connect to Internet-based services, send a few Tweets, or upload a quick video – tasks that don’t require the most powerful gear.
We are talking about services led differentiation – either web services, converged services or network enabled services ..
What is sure is devices and the technology will be a commodity ..
In this world we are seeing interesting strategies from the PC/Web players(Microsoft, Dell), Device manufacturers(Nokia, LG), Google, SIM/NFC, RIM and even the resurgent Palm which people gave up for dead
Which is why I find Motorola perplexing ..
As usual happy to get any insights ..