[I'm reposting this "classic" post to fix a large number of broken links. My apologies if you receive an extra copy in your feed.]
Two weeks ago, I asked why mobile application sales are dropping. A great discussion followed, with many different perspectives (if you haven't read the comments, I encourage you to check them out).
To me, one of the most striking comments was the one no one made – nobody came back and said, "you're wrong, sales are actually going well." I think we have a consensus that there's something wrong with sales of sophisticated mobile data apps – native apps that are more than just games or ringtones.
There are two schools of thought on why app sales are down. One perspective is that the market was a mirage in the first place – most people don't care that much about mobile apps, and to the extent that they do, mobile browsing is a good substitute. I think this perspective is growing quickly among industry insiders, and even someone from Microsoft largely seconded it.
Another interesting example of this view is the weblog i-Mode Business Strategy, which tracks adoption of i-Mode data services. It's carrying a lot of quotes from operators and others saying that a mobile device should be focused on a single purpose, and the whole idea of deploying a lot of different apps or functions is low-value.
"All i-mode applications are in fact secondary, the primary being the voice. The secondary applications typically struggle through out their life cycles for the lack of focus and synergy."
The other perspective is that a diverse market for mobile data exists, but we just haven't tackled it correctly yet. For example, Bob Russell at Mobile Read wrote a very kind commentary on my post, but also strongly encouraged people not to panic and give up on the future of mobile data. Several of the other replies to my post echoed that theme.
I'm somewhere in the middle. As I've written before, I believe that a mobile device has to solve a compelling problem before people will buy it. Solving fifteen problems is too hard to market, so there needs to be one flagship function or usage that gets a device sold in the first place. In this respect, I think the "mobile device = appliance" folks are right.
But once the user gets a mobile device, I think many customers will allow it to blossom into more usages – if that blossoming process is handled properly. That's where I think the mobile data world fails today, and that's what I think we need to fix.
The role of mobile data
When I started work at Palm in 1999, I was already using a handheld to track my calendar and contacts, but not much else. I was lucky enough to get a cubicle in the middle of the developer relations team, who taught me all about the third party apps that were just then starting to take off for the platform.
The variety was so huge that I'd spend hours browsing around on PalmGear, picking out new things to download. Many of the applications turned out to be things I tried once and never touched again, but a few filled meaningful roles in my life and I came to depend on them.
There was my buddy Convert-It, which converts between English and Metric measurements (a must for any competitive analyst based in the US).
Tide Tool tells me when it's a good time to go tide pooling at the beach.
Mars Clock lets me track the time of day on Mars for the Mars Rovers. (Why does that one matter? Because if you're browsing the Mars Rover pictures that NASA posts on the Web every day, Mars Clock lets you convert between the Mars days that NASA lists and actual Earth days – so you can figure out when a picture was taken.)
This is a treasure chest
To me, the Palm Launcher became a treasure chest of useful little software gems, things that enhanced my life and made me happy. But I discovered that my gem collection was different from everyone else's. Tide Tool didn't matter to most people, and Mars Clock was interesting only to the fanatics who followed the photo stream from the Mars Rovers. Other people had their own favorite apps that I didn't care about.
Even among the Palm enthusiasts, there was never a single "killer" application everybody used. Instead, everyone had a different set of personal killer applications that met their own individual needs. Each person was a vertical market of one, the exact opposite of a mass market.
I discovered that when I was talking with potential customers or the press, I could hook almost anyone on Palm if I had fifteen minutes to show them the range of software available. But you can't spend a quarter hour per customer on a product that sells for only a couple of hundred dollars – that's a great way to go broke slowly. So we started to look for mass market ways to have that conversation.
At one point Palm planned an extensive TV advertising campaign for the range of applications, called "The Perfect Day." The first commercial was already finished when the tech bubble burst and Palm's stock value collapsed. The company decided to cut expenses, and the commercials were the first thing to go. The video was shown at a few trade shows, and that was all. (I tried to find a copy of the commercial online, but couldn't. If you know where to see it, please post a link.)
Later, when I was at PalmSource, we didn't have nearly enough money to do TV ads, so we tried to use the Web to spread the story. The result was something called the Expert Guides, a set of about 50 volunteer-written guides to applications for Palm OS. I'm more satisfied by these guides than I am by just about anything else I was involved in at Palm.
If you want to understand the power of mobile data software, and what it can mean to a person's life, browse some of the Guides. The ones on personal health, aviation, and professional medicine are especially impressive, but you can also find quirky things like cigar and liquor software, scuba diving software, and software for various religions.
In addition to creating the Guides, we ran a couple of contests soliciting first person usage stories from users. They were big successes, generating several thousand stories. They ranged from comical to heart-wrenching – people using handhelds to overcome disabilities or start new careers. Almost every story featured different apps. One story I remember in particular was reprinted in the Aviation expert guide:
"I'm a Mission Pilot with the Civil Air Patrol, the auxiliary of the U.S. Air Force. Installed on my Palm Powered device (a Tungsten T now, but over the past six years I've owned an i705, Palm Vx, Palm IIIx and Pilot Professional) are several aviation application including the Airplane Owners and Pilots Association (AOPA) airport directory. It contains virtually all information about thousands of airports across the US. On a January 11 night flight over northeastern Oklahoma, we heard a pilot call over the radio that he was having difficulty finding his destination airport in the darkness. He was alone and his charts were inadequate, out of date or missing. While my crewmember dug through his flight bag of charts, maps, directories and other guides, I pulled my Palm i705 out of my flight suit, turned on its internal light, opened the AOPA eDirectory and found information on the airport that this pilot was flying to. Within 60 seconds, my radio call advised the lost pilot of the airport's location, frequencies, hours of operation and instructions for turning on runway lights and rotating beacon from his aircraft. And my hands never left the flight controls. Is the Palm a great device? You bet. Is there a wide variety of software for use on it? An unbelievable amount. Is it convenient to use, even while flying an airplane? Absolutely. A lifesaver? The other pilot would certainly say so. And it's never farther away than the front pocket of my flight suit."
We had a database with several thousand of those stories. We never figured out what to do with them, other than list a few of the best ones in the Guides.
Based on all this interaction with customers, I an utterly convinced that mobile data, and all the myriad applications associated with it, will eventually be a very common, well-loved part of the lives of huge numbers of people around the world. This stuff is just too useful once you really dig into it.
I'm also convinced that conventional marketing won't make mobile data happen, because the compelling thing about mobile data isn't the total number of applications – it's the individual discovery of an application that does something critical just for you. We have to find a way to explain mobile data differently to every individual person.
After you think about it for a while, the right place – maybe the only place – to explain this is on the device itself. I think the right way to do it would be something like this:
When the user first gets started, the device asks the user a few questions about their work and interests. Based on the user's responses, the device suggests the installation of appropriate software. So, for example, if the user is a doctor and a boy scout troop leader, the device suggests a selection of medical software, and a boy scout troop management program (yes, there's an Expert Guide on that, listing about 70 relevant applications, including knot-tying instructional software -- something critical for a Scout). If the user agrees, these are downloaded to the device, and the user's wireless account is automatically charged for them. If the user doesn't agree, the device makes it easy to come back and buy the software later.
By customizing and automating the whole application shopping process, we make it easy for people to discover what they can do and get used to the idea of using their device for more than one purpose.
I think this integrated discovery and install process is the key to making mobile data take off.
Why hasn't it happened already?
If the right thing to do is so obvious, why hasn't some mobile OS company done it already? I spent the last seven years wondering about that question, and never got a satisfactory answer.
But I get it now.
Making real, personalized mobile data succeed isn't in the critical interest of any of the powers in the mobile design chain.
Hardware vendors focus on the lead solution that's built into their device, because that's what drives the hardware sale. So, for example, Palm has a strong incentive to spend all its time making e-mail on the Treo work great.
The OS vendors focus on the needs of the people who control their sales. That means supporting the feature requirements of the mobile operators, because they're the ones who decide if devices with a particular OS will be offered to users.
To an OS company, the operators are a feature requirements black hole, an "endless aching need" in the words of Bette Midler and Amanda McBroom. There's always one more feature they want implemented, or one more deal you can close if you just respond to a request. These opportunities expand to consume all available engineering resources, no matter how many engineers your company has.
I finally understood this a couple of months ago when I was talking with a former Palm employee who had moved on to one of the biggest mobile-related companies – a firm so huge that you'd assume they have enough engineers to do anything. We were talking about flaws in the user interface of a new product the company had released.
"Hey," I said to my friend, "You're on the inside now. Why don't you just call the product manager and explain to him what's wrong?"
"I did," my friend replied. "But the product manager said all the engineers are busy answering operator requests, and there's no one left to work on user features."
"There's no one left to work on user features." If mobile data fails, you can carve that on the tombstone.
We need a new platform – sort of
If we can't count on the OS companies to make mobile data work, then the obvious answer is to get away from the OS companies. Separate applications discovery, purchase, and compatibility from the underlying OS. Let the OS company serve the needs of the hardware companies and operators, while this new software layer serves developers and users.
What we need isn't a new OS, we need a new software layer on top of the OS.
I think that software layer should include:
--The APIs needed to run the applications, consistent across all devices so developers can write once and run anywhere (think of this as Java done right). That creates the largest possible market, encouraging the creation of the focused vertical applications that drive mobile data adoption.
--The software discovery and sales experience. The whole chain from learning to purchase to billing to installation should be built in, to make it effortlessly easy for people to try and install new mobile apps.
--The billing system needs to be managed carefully. The right thing is take a sustainable, restrained cut of developers' revenue and grow along with them. Many online mobile software stores take an enormous cut of the developer's revenue. That doesn't cultivate a developer community, it's more like running a McCormick harvester across it – you bring in an impressive harvest for a little while, but in your wake you leave an empty field of stubble.
--An open garden. Any developer should be free to add an application to the store. Real mobile data is so diverse that no entity on this earth is capable of determining in advance what people will want. Rather than trying to pick winners, the platform vendor should take a uniform cut from everyone and let Charles Darwin choose the winners. Better yet, put in a user rating system to help the best apps rise to the top.
--Sandboxing. Because anyone can publish an app, the software layer should be thoroughly sandboxed so that a rogue app can't mess with the phone network. This is much easier to do when the layer is built on top of the OS rather than within it.
--The layer should include enough of the user interface so that developers don't have to rewrite their apps for every different device.
Which companies could make it happen?
No one's putting together the whole offering yet, but there are some promising possibilities...
Adobe Apollo. Adobe says it's creating a software layer that will run on top of both PCs and mobile devices. Adobe has enough financial resources to make the necessary investments, and operators are anxious enough to get Flash content that they might agree to bundle Adobe's software.
But to succeed, Adobe would need to give away Apollo. Today the company is charging for Flash in the mobile world, which will limit its deployment and prevent the creation of a standard. Also, Adobe hasn't shown any signs of including application discovery or purchase in Apollo.
Microsoft WPF. Microsoft is working on a software layer that's conceptually similar to Apollo, called Windows Presentation Foundation. Like Apollo, it's not clear if WPF will include the software discovery and purchase experience. Also, Microsoft is holding some features out of the cross-platform version of WPF in order to prevent it from cannibalizing native Windows sales. That's a very difficult line to walk.
Nokia S60. Nokia's S60 software is closely tied to Symbian, but the company could theoretically separate it and offer it as a layer. I have no idea if that has been considered, or how hard it would be to implement. Nokia has been making some efforts at improving the app discovery experience, including the recent announcement of the "Nokia Content Discoverer," one of the most awkwardly-named software products I've heard of in the last five years. I like the idea, though – it's supposed to help people find content and apps. I haven't been able to find any pictures or video of the product in action. If you're aware of any, please post a link in the comments below.
Nokia's other handicap is that it's very closely tied to the operators. It would have to hive off resources to support the apps platform separately from operator influence.
StyleTap. This small Canadian company has created a Palm OS emulator and is selling it for use on Windows Mobile devices. So you can run most Palm OS apps on Windows Mobile. There's no software discovery element, but it is a nice software layer, and could be evolved into a layer for all mobile devices. Unfortunately, StyleTap is charging $30 a pop for the emulator. If they wanted to become the mobile software layer of the future, they'd need to give it away and make money through app sales. I doubt a company of their size can afford to do that.
Brew. Qualcomm's Brew has one of the nicest software downloading and billing infrastructures I've seen, and includes a set of APIs. So it's a full software layer. Its two problems are first that it's made by Qualcomm, a company that already holds – and charges for – many fundamental mobile patents. The last thing mobile companies want to do is give Qualcomm more control over their lives. The second problem is that Brew is set up as a series of closed gardens. The operators choose which apps to offer, and there's no discovery experience that I'm aware of. So I'd classify Brew as great technology hamstrung by a completely wrongheaded business model.
Savaje. This company has gone through a full cycle of being unknown, hyped into extreme prominence, and then dropped back into obscurity. What they're trying to do is fix Java, by making it consistent across devices, efficient, and wrapping a better business and technical infrastructure around it. The question about Savaje has always been whether or not they can deliver. I'm not close enough to them to judge that, but if they get their act together they could be a promising option.
I know I've skipped a lot of other candidates, but hopefully you get the idea (if I missed your favorite, feel free to post a comment about them). There are a lot of companies trying to make various sorts of software layers, but most of them are focusing on the APIs and technologies, the traditional control point in the PC world. That's nice, but what's really needed is a new business layer and infrastructure, not just another set of APIs. I think the first company that realizes this will be the one that drives the blossoming of mobile data.
I hope it'll happen soon.
I want to tell you a little story about a mobile data application. From one perspective you might think it's trivial, but to me it speaks volumes about how the mobile data market works and what suppliers need to do to make it successful. I have to give you some background in order to explain the story; please stick with me and you'll see where I'm going.
I'd been hoping to post a big commentary on the future of mobile platforms this week, but I couldn't get it done. My schedule slipped because I was heavily involved in a neighborhood protest against a nearby housing development. A developer was looking to build houses that are about twice the size of anything else in the neighborhood, on much smaller lots. We thought it was a clear violation of the city's planning rules, and we were worried about what the close-packed houses would do to the neighborhood.
For months our protest had been working its way through the byzantine planning system in San Jose – several rounds of formal protest documents, meetings with city officials and the developer, flyers to the neighborhood, signs, a hearing before the Planning Commission, and finally a presentation Tuesday night before the City Council. We prepared a very extensive PowerPoint deck documenting the reasons for our protest, which is what used up my blog-writing time last week.
My neighbors asked me to be the lead speaker, meaning I'd have five minutes to summarize our case – and not a second more. San Jose City Council meetings start at seven pm and often run until one am or later, so the mayor enforces rigid limits on speaker time. It was critical that I make all our points, without skipping anything but also without rushing too much.
I scripted my talk and practiced it several times. Unfortunately, I couldn't get it consistently to come in at five minutes. If I accidentally added even one sentence, it caused the whole thing to go off course, and I'd run out of time before I hit the conclusion.
I was deeply worried. But then I remembered a survey we did a couple of years ago regarding applications usage on Palm devices. One of the most popular applications was something called Big Clock.
When I saw that at the time, I thought, "so what, a clock." But now I had an urgent need for something that would help me stay on track with the speech. So I searched for Big Clock online, and sure enough I found the website.
My Hero
If you haven't tried Big Clock, it is a combination clock, timer, and alarm system. And as the name implies, the numbers are extremely big. The timer function turned out to be exactly what I needed – I set it to five minutes, and it counted down the seconds in big numbers that I could read at a glance. As you can see, the interface is ugly but very functional, with large buttons that you can tap with a finger (something you need when you're on a podium).
Tuesday night at 11 pm, Big Clock and I made the presentation together. I was very grateful I had help, because sure enough my speech started to run long. When I noticed, I was able to talk faster and jump to the conclusion. I finished literally as the mayor started to tell me to shut up.
We won the case. I don't claim Big Clock did it all, but it sure helped.
Lessons about mobile data applications
There has to be a real need. I didn't care about Big Clock until I needed a timer, and then I needed it desperately. But if I did more public speaking, I probably would have sought it out a long time ago. Often mobile applications do things that are "useful" or "cool." Forget about it. If you aren't solving a burning need, the user won't go for it. (By the way, burning needs can include boredom – this is why mobile games sell well.)
It has to be easy to install. Palm OS isn't great at this, but fortunately Big Clock comes as a single file, so once I unzipped it on my PC I could just double-click on the icon and sync it to my device. It would have been even better if I could have installed it wirelessly.
It should be easy to learn. No, strike that – it needs to work with no learning at all. Big Clock shines here. The tabs are self-explanatory, and there are some delightful touches in the interface. For example, you can reset the numbers just by tapping on them – tap in the top of a number and it goes up one, tap on the bottom and it goes down one. I found this just by tapping on things – something the Palm user interface encourages (because you can rarely damage data or cause problems by tapping, you feel safe exploring).
The user must be aware of the application. I was lucky that I'd done that survey on application usage. Otherwise I probably would have never heard of the product, and you wouldn't be reading this today. I don't know how the average user is supposed to know what applications are out there.
Most mobile data platforms today fail one or more of these tests. Sometimes the application does something that looks cool but doesn't solve a real problem (I see this very often with applications developed by mobile operators). Or the applications are hidden, or they are hard to install, or the user doesn't even know they exist.
Failure on any one of these imperatives causes the whole mobile data ecosystem to fall apart. That's why most mobile data solutions fail today, and that's what I want to talk about fixing in my next post.
Next week, I promise.
Wow. Motorola, NEC, DoCoMo, Panasonic, Samsung, and Vodafone announced that they're banding together to create a unified Linux-based operating system for mobile devices. The group says it will create a unified set of APIs, but said nothing about user interface, so presumably they hope to differentiate from one-another at that level. The UI is pretty closely tied to the APIs, so I'm not sure how they will pull that off.
Anyway, this is potentially a major challenge to the Windows Mobile and Symbian worlds, as this new Linux would presumably be free of charge. I think it's also ominous for PalmSource/Access and TrollTech. It'll be much harder for any of the mobile OS companies to charge for their software if there's a practical free alternative. (Speculation: If Motorola had succeeded in buying PalmSource, would they be donating some or all of Palm OS for Linux to the new consortium? We'll never know.)
I think it's increasingly clear that OS plumbing is going to be a commodity in the mobile space; if you want to make money, you need to focus on the upper layers of the software.
On the other hand, the devil's in the details. As Symbian discovered, it is incredibly difficult to serve several different masters. DoCoMo can keep the Japanese vendors in line, but Motorola and Samsung are mortal enemies and I am very surprised to see them in the same camp. Maybe their mutual fear of Nokia and Microsoft trumped their dislike of one-another, but we'll see how long that lasts. Will the Linux partners band together to pull down the proprietary OS's, or will they use the knives on each other? Either way, the next couple of years should be a very entertaining.
The e-mail was from the CEO of a prominent mobile app developer, a company you've heard of if you're familiar with the mobile space. He makes software for a broad range of mobile devices – Palm OS, Windows Mobile, Symbian, etc. He told me that his overall application sales are disturbing:
"Companies like us (I've checked with a few others) have seen our market flatten or worse in 2005, especially in the 2nd half. While a simple example might be that this is due to new devices being late to the market...I keep wondering whether this might not be some deeper-rooted trend. I'd be delighted to hear about your view of our market (niche?) and its current dynamics."
Since then I've talked with a number of mobile developers, and heard eerily similar stories. Sales are stagnant to down, and the problem's not just focused on one OS. At one point I talked with the folks who run the Palm Entrepreneurs Forum to see if they'd be willing to let me survey their members, to confirm the problem. (PEF is an online forum for developers of software for all mobile devices, not just Palm OS. Their mailing list is highly recommended if you're running a small mobile software company. A lot of smart people hang out there, so I thought they'd be a good starting point.)
But the PEF folks told me, "Don't bother doing a survey. Everyone knows it's true." And sure enough, if you poke around on the web, you can find a lot of commentary raising questions about the viability of the mobile data market.
The situation was a big surprise to me. I knew from my time at PalmSource that many Palm OS developers weren't happy with their sales. No shock there. Palm OS hardware sales have been consolidating for a couple of years – Sony withdrew from the market, Handspring and Palm merged, Samsung hasn't done a new Palm OS phone in a long time, and several other Palm OS hardware vendors quietly withdrew from the market.
But I had thought it was just a Palm OS problem. Not so, the developers told me. They said application sales on Windows Mobile and Symbian are also stagnant, and although some developers report an increase in sales of RIM applications, the increase is on a very low base, and is not enough to offset the declines elsewhere.
It seems bizarre that this would be happening. The consensus among the industry analysts is that smartphone sales are rising sharply. Since the definition of a smartphone is that it can accept third-party applications, sales of those applications ought to be going up as well.
In some cases they may be doing so – the developers I talk to are not Java houses making simple add-ons like games and ringtones. There are anecdotal reports that sales of those are going pretty well. What I'm talking about is sales of more substantial applications, generally written to run native on the device's operating system. If the phone is becoming a multimedia computer, as some vendors claim, sales of these more sophisticated applications ought to be booming.
So why aren't they?
Before we can tackle that question, we need more data on device sales. Unfortunately, that's in very short supply. Three companies (Canalys, Gartner, and IDC) publish quarterly reports on shipments of handhelds and smartphones. Unfortunately, most of the information they collect is sent only to their paying customers, other than a teaser press release with a few statistics in it. Those press releases are not even issued every quarter, so there are gaps in the coverage. And the numbers themselves are not high-quality because they're just self-reported shipments into the channel. Vendors could lie, and even if they tell the truth all you know is what they shipped, not what the stores actually sold.
Nevertheless, these are the best numbers we have. By combining the Gartner, IDC, and Canalys numbers, and doing estimates to fill in a couple of gaps, I built the chart below. It shows estimated worldwide unit shipments of handhelds and smartphones, by quarter, for the last two years.
Quarterly worldwide unit shipments , in thousands.
This is one of those "stand back and squint" charts. Don't sweat the details of why a category went up five percent in one particular quarter – chances are that's a statistical anomaly. Look at the broad trends over the last two years.
A couple of notes on drawbacks of the chart:
--It's not possible to get an accurate estimate of quarterly Windows Mobile shipments, because the press releases don't report shipments by OS every quarter. They report by hardware vendor, and only the top five vendors are shown. The rest are lumped into "other." Most of Microsoft's licensees are smaller hardware companies that don't show up in the top five (even HP hasn't consistently been a top five vendor).
--I had to make some educated guesses about shipments of Symbian devices in Japan, because they sometimes make the top five and sometimes don't.
Despite these problems, it's possible to form some conclusions from the data:
--Total shipments of handhelds (Palm OS and Windows Mobile) are dropping steadily. Big duh, we all knew this.
--Total shipments of Palm Treo devices are growing, but not enough to offset the decline in handhelds.
--Total Palm OS + Windows Mobile + Other shipments have been declining on a year-over-year basis since Q2 of 2005.
--All of the year-over-year unit growth is in RIM and Symbian.
So it's not really accurate to say that the smartphone market is growing. The Symbian market is growing, the RIM market is growing, and everything else is flat to down.
What it means to third party application sales
I think there are three problems.
The first is that the two platforms that had been driving the most app sales, Palm OS and Windows Mobile, are not growing in total. The sales mix is shifting between them, but when you add everything up their overall sales are not increasing. That means we're selling more replacement units to the installed base rather than units to new users. Existing customers already have apps, so application sales drop.
The second problem is that as the mix of devices shifts from handhelds to smartphones, I think application downloads become less attractive. If you had a handheld, it was pretty clear that you could add more software to it, and since you synced it with a PC all the time it was fairly easy to get and install new applications. But a smartphone feels more complete – it has a lot more software bundled on it (in some cases more than you can use). Microsoft has also shifted much of its sales mix (we don't know how much) to devices that don't have touchscreens. On these devices it's harder to use some classes of mobile applications, and some Pocket PC apps simply won't run on smaller, non-touchscreen devices. Also, smartphone users are much less likely to sync to a PC than their handheld counterparts, and without regular syncing it's a lot more difficult to find and install apps.
The third problem is that application sales haven't tracked the growth of some of the smartphone platforms (in particular Nokia S60, which is producing most of the reported growth in smartphones). The CEO who wrote to me compared his sales of S60 apps to UIQ applications (UIQ is the user interface used on the SonyEricsson p900 series of smartphones):
"We have Symbian Series 60 and UIQ versions since 2004. Even though S60 outsells UIQ at least 10:1, our UIQ version out-sold S60 10:1 – 5:1, and that's pretty constant across the industry. Most S60 phones have not been marketed to end-users as smart-phones and therefore their clientele is not smartphone clientele."
When I was at PalmSource, we surveyed users of Nokia S60 devices, and most were unaware that there was even an OS in their phone, let alone that they could add applications to it. They just thought it was a multimedia phone. I know Nokia's trying to change that, and they've made some progress, but given what the starting point was I'm not too surprised when developers say they haven't seen heavy sales of native S60 apps.
(Note that I'm not trying to beat up on S60 in particular here; the developers I talk with are disappointed by every platform.)
If you add up everything that's happening, it's a lot easier to understand why many mobile app companies are depressed:
--Palm OS and Windows Mobile, taken as a whole, are not growing. That probably accounts for the decline in app sales on those platforms.
--Smartphones in general are less likely than handhelds to drive app sales. The more handhelds are cannibalized by smartphones, the tougher the application sales process becomes. This would worsen the effect of the flattening demand for Palm OS and Windows Mobile.
--The platform that is producing lots of smartphone growth isn't currently a big driver of sales of sophisticated apps.
What do we do about it?
The CEO who wrote to me put the question very well:
"Is the market shrinking? Is it saturated? If so – why? Are these devices really irrelevant to the "rest of the world"? Are they not as useful as we all thought they were 5 years ago? Or is it something else altogether? Strategically, I have to wonder whether this is a hiccup in the market, or is this what we're going to see moving forward."
I wish I could say it's just a hiccup, but the evidence points more toward a change in market structure plus saturation of the core market that had been buying Palm OS and Windows Mobile devices.
That doesn't mean we should all give up, but I think there will need to be some changes in the market before mobile app sales will really take off again. As a couple of mobile developers told me recently, "we need a new platform." I'll write about what I think that means, and the prospects for it, next week.
____________________
Many thanks to the folks at All About Symbian for including my post on Sprint's 3G smartphone in the latest Carnival of the Mobilists.
Several months ago Sprint contacted me with an offer to become a "Sprint Ambassador." They said they had noticed my blog, and wanted to send me a free 3G phone, with service, for six months. No obligations, no requirements, and no restrictions on what I can write about it. If I choose to, I can send them feedback on the phone via a web form. At the end of the six months the service will be terminated (unless I want to pay for it).
Being the basically greedy tech geek that I am, I took them up on the offer. Within a couple of weeks I got a shiny new Samsung A920 mobile phone, and a free-ride, all-expenses paid account on Sprint's EVDO high-speed network. That includes free downloads of any content, games, or other services I want. Sweet!
I'm not sure what Sprint was hoping to get from me -- nice word of mouth or user feedback. But for sure I've been a disappointment to them, as I haven't posted any feedback to their website, and I haven't written anything about the phone on my blog.
Until now.
I have so many things I want to say about the phone that it's hard to know where to start. I guess I should do a summary. Here goes:
The best thing about the phone: It's a great data pipe. I can cable it to my laptop and use it as a high-speed data link. It works quite well, and has coverage in every urban area I've been in. I never thought I'd say this, but I like it better than WiFi.
The worst thing about the phone: Everything else. And I mean everything. The interface is borderline unusable, many of the services are a joke, and I'd be demanding a refund if I had paid for it.
My advice to Sprint: Embrace your destiny as a big data pipe. You do that superbly, and I think people would pay you for it. Meanwhile, you should stop over-complicating your phones with data services that you're clearly not competent to create.
Here are the details:
The good stuff
I was at a dinner with Barak Berkowitz of SixApart a couple of weeks ago, and I talked about the prospects for WiFi networks spreading in urban areas. Barak challenged me on it. "EVDO rocks!" he said. Who needs WiFi?
I think he has a point, with a couple of caveats. Here in Silicon Valley, WiFi is both enticing and frustrating. I have yet to find anywhere in the entire urban area where there's not a WiFi hot spot. I go to my son's little league baseball game, out at the edge of the suburbs, and I can see eight different hotspots in the neighboring houses. But usually all of them are locked -- I can find the connections, but I can't get in. At this year's CTIA conference in Las Vegas, there was a very extensive WiFi network, but it was saturated or I wasn't accessing it correctly or something. I couldn't get in.
In both of these situations, I just popped out my EVDO phone, cabled it to the USB port of my computer, and I was on the Internet. I look like a geek, but I'm used to that, and the great feeling I get from having access anywhere is enough to compensate for any loss of social status.
I haven't done any formal benchmarks, but data transfer speeds seem about the same as my WiFi network at home. I have had occasional Outlook mail sync problems in which the program reported that it couldn't establish a secure connection, but other than that the connection has been very reliable.
There is no EVDO network outside the cities, of course. But there's rarely a WiFi connection there either.
Does EVDO kill WiFi? I'm not sure. The cool thing about the municipal WiFi networks is that many of them will apparently be free, supported by advertising. At worse, they'll probably be fairly low-cost flat rate. EVDO is more expensive, but it's easier to access once you pay the fee.
I don't know if I personally need connectivity around town badly enough that I'd pay for the service with my own money, but I'd definitely try to talk an employer into paying for it. They'd get enough added productivity from me that it would be worth the investment for them.
I'm going to miss EVDO when Sprint turns off the phone. If they fix the bugs in Outlook sync, I think they have a potential winner on their hands.
The bad stuff
I'm sorry to say that if it weren't for the EVDO-to-PC connection, I would be almost completely negative on my Sprint 3G experience. I've been struggling to decide what frustrates me more about the phone, the user interface or the services bundled on it. I've decided that it's the user interface, because some of the services are okay, whereas almost every aspect of the interface has problems.
Rather than trying to explain everything that's wrong, I'm just going to give you some representative examples:
Services
Web access that isn't. The phone has twelve icons in its first-level launcher. One is labeled "Web." It has a little picture of a globe and an @, just to make sure you get the point. I know from doing market research on mobile users that when you say "Web" they expect to get a full-function web browser. That isn't what Sprint gives me. There's no way for me to input a web address; all I have is a list of categories: Downloads, News, Weather, Sports, Entertainment, Money, etc. There's also a search function, but it searches only within Sprint's walled garden.
Within each category there are several choices that Sprint has pre-selected for me – in news there's CNN, USA Today, Reuters, etc. I can also get the NY Times, but that's $2.99 a month. I bought the Times (hey, Sprint's paying), and the phone downloaded a Java app that runs a special NY Times player. After all this hassle and $3 a month, the content looks almost identical to what I can get for free on CNN et al. I'm disappointed.
Just below the icon for Web is an icon called On Demand. I select it, and it gives me a series of options almost identical to what I had in Web – there's news, sports, weather, money, movies, maps, etc.
After a web search (on my computer, not the phone), I discover that On Demand is a Java-based content service provided by the nice people at Handmark. I should have realized this, because the app flashes the Handmark logo at me whenever it's downloading something.
Why does Sprint bundle a Handmark service that offers pretty much the same stuff as it bundles in Web? I have no earthly idea, but the clear implication is that Sprint threw things into this phone without any coordinated thinking about how it all fit together.
Slow, inaccurate, difficult to use mapping. Location-based services are hot, so I tried out the Maps function within On Demand. At its launch screen, I can either select the current location (via a check box) or enter an address. First I check the current location box. Sometimes the service fails to work at all, but on the most recent try (at a little league game) it cooked up a location that was about a mile northwest of where I actually was. I presume that's the nearest cell tower, but the app never warned me about this inaccuracy.
I tried to scroll the map over to my actual location, but every time I scrolled the map, the app had to call out to a server to retrieve the data. This took from five to 20 seconds per click, and reminded me of what it was like to browse the web on a 28.8 modem. This is one reason why I am not a fan of thin client apps on 3G networks.
I decided I would try inputting an address instead, so I scrolled down to the address entry section of the main screen and tried to type. But the phone beeped at me and would not accept any input. It didn't explain what was wrong either; it looked like the app was frozen. After fumbling around for a while, I realized that I need to manually uncheck the Current Location check box before I can input an address. Hey, Handmark, why not uncheck the box automatically when I start to input an address?
The service seems to work okay at issuing driving directions, but because the phone can't tell where it really is, I have to input both the current address and destination, which is very tedious using a keypad. I could get a lot faster results just using a printed map.
Video: Paying for commercials. This is a multimedia phone (I know because it says "MULTIMEDIA" right on the bezel), so I had to try the video services. The first challenge is to find them. I try Web, which has an Entertainment choice within it. Sure enough, about five TV shows are listed. I pay $2.99 a month to get into Lost, assuming I'll get episode videos. But instead I get content like character summaries and 50-word episode recaps. What a colossal rip-off. I could get this stuff, in a lot more detail, for free on the Web; why am I paying for it here?
So Web clearly isn't the place to get video. There's an icon labeled Media Player, and an option within it says Channel Listing. I select that, and we're in business. A sub-menu lists Sprint TV Live, Sprint TV Ultimate, Music & Radio, Sports, Cartoons, News, and so on.
Sprint TV Live appears to be streaming of some basic cable channels, such as Fox News and Weather Channel. When I try it at the Little League game, the frame rate is noticeably low – maybe ten a second. And sometimes the audio gets choppy or pauses. I think what must be happening is that I'm at the edge of the EVDO network, so I'm not getting full throughput even though the phone reports four bars. (Keep in mind, though, that I'm at a junior high school within the city limits of the tenth largest city in the US, so I'd kind of expect good coverage.)
I tried the same streaming when I was downtown. There the sound was solid, and the frame rate was much better. So it's a network coverage problem.
Fox News and the Weather Channel get old after a while, so let's try a different option: Cartoons. Several channels are listed, including Cartoon Network Adult Swim. That's a late night cable channel that features obscure Japanese anime mixed with very strange original cartoons. Just the thing to amuse me when the little league game gets slow.
I pay my monthly fee for Adult Swim, and the program dumps me back into the top-level listing of channels. I expected it to launch Adult Swim, but instead I have to scroll back down to Cartoons, open that, and then launch Adult Swim. Bad interface design.
First nasty surprise: Not all the shows in Adult Swim are listed. There are only seven shows, and some of my favorites are missing. But okay, here's "Samurai Champloo," which is a very quirky and stylish Japanese samurai / hip-hop thing. So I select that one.
Second nasty surprise: After I select Samurai Champloo, I get a list of only two items – and they aren't episodes. They are just two-minute clips from episodes, each ending with a graphic telling me to watch Cartoon Network. That's right, I am paying these bastards $3.95 a month to watch commercials.
There's another channel dedicated just to anime. It costs $5 a month, and lists only five shows. Each has a single episode posted, cut into several five minute segments. At least I'm getting full episodes, but this is far from a generous selection when I'm paying $60 a year just for this channel!
I didn't try all the other channels, but it looks like you have to pay separately for most of them other than Sprint TV, and this video clip behavior seems to be the norm. Either I get little excerpts from episodes, or a couple of episodes are posted in full, but cut up into a series of clips.
Previously, I thought watching video on a notebook computer via WiFi and DSL was unpleasant – you had to wait a long time for downloads, and the pictures were small and grainy. But that seems like flying on the Concorde in comparison to the Sprint experience.
Disappearing music. I had my daughter try out the phone, and she naturally downloaded some songs. That was dodgy at my house (which, like the ball field, is on the edge of network coverage). She ended up standing in the living room, holding the phone up next to a window to make the download happen (coverage is better at the front of the house). Eventually we got several songs onto the system. The difficult trick was finding the songs again once we had downloaded them. I looked in the My Content icon, where downloaded games and ringtones were saved. But no songs. I tried Media Player, which has a function called "My Play List." The songs ought to be there, right? Nope, the play list is empty.
No, my songs aren't in the Play List. Maybe if I tell it to copy from the Media Listing (whatever that is)...
Dang, the songs aren't in here either.
So I went back to the Music icon, which holds the music store (powered by Groove Mobile). It has a tab labeled Player. When I open that, I finally find the songs. What's more, I discover that I can sort them into playlists. That looks good. I create a new playlist and save it, then exit the music store.
Then I go back to the Media Player icon, and look for the new playlist. Nope, still nothing there.
I decide to try something else. One nice thing about this phone is that when you close the flip cover, there's a small display and music controls on the outside so you can use the phone like an iPod. I try them. But it turns out they don't connect to the music store either. I can't see my playlist, and I can't play any of the songs I paid for
So I have to go back into the music store. While there I notice two other challenges:
--The music store disables the phone. You can't dial out while it's running, and all of your incoming calls are routed direct to voice mail.
--The music store and its cache of songs are all one thin client app. So if you don't have coverage you can't get to your music. That means no listening to your tunes while you're in an airplane.
So here's how it apparently nets out, folks: If you rip or steal MP3s and download them from your computer to the phone, they end up in the phone's built-in media player. You can receive calls while listening to these songs (the phone pauses them automatically), and you can turn off the radio and still use the phone as a music player. But if you buy the songs legitimately from Sprint's online store, the media player can't see them, you can't play them when the radio's off, and you can't receive calls when you're listening to music.
Having worked in the mobile industry, I know how this sort of thing happens – Samsung designed the phone separately from Sprint's service, and there wasn't enough time or money to integrate the phone and service properly. But what a nasty thing to do to the user.
Sirius: Streaming music (with limitations). The Media Player also gives me access to Sirius radio, which I thought was fairly interesting. The client is built into the phone, and costs $6.95 a month. Unlike the video downloads, I got full channels. Good. I'm not sure how pleased a Sirius fan would be, though – there are only 20 channels, all of them music (no sports, no comedy, no Martha Stewart, no Howard Stern). So for a little over half the price of a full Sirius subscription, you get 1/8 the channels. Not a superb value.
Still, I found a channel I liked and the sound quality was okay and I was feeling fairly good about things. I decided to leave the music on in the background while I tried other features.
Oops.
I have to exit the Media Player to do anything else. The music stops. Same thing if I want to dial the phone – I have to explicitly quit the Media Player first. In fact, if I try to dial a number while Sirius is playing, the phone thinks I'm trying to pick a different radio channel.
As was the case for downloaded music, it appears that you can't receive calls when you're running the Sirius client. The main reason for owning a mobile phone is to make and receive calls; this app is equivalent to a car whose radio doesn't work unless you park.
I'm not sure how often most people would want to use this service.
(After some searching online, I think I've found out why incoming calls are blocked. Apparently the phone is set up to block incoming calls anytime there is an EVDO data session. This is supposedly a compatibility feature because Sprint's older, slower 1XRTT data network can't interrupt a data session. So the built-in media player can play MP3s and still accept calls because it doesn't talk to the network, but Sirius and the music store can't accept calls because they initiate an EVDO session. There are online reports that you can use a secret code to enable incoming calls on the phone during an EVDO session. Sprint doesn't encourage this and says it may disable some future services, such as push e-mail.)
Games do work. To be fair, I should mention that games seemed to work properly on this phone. I lent it to my 11-year-old son, and he downloaded games at a furious pace. Filled up about half of the memory card. Regular old telephony seems to work fine as well.
The interface
Inconsistent navigation. When a phone has a lot of functions embedded behind icons, it's important the user easily undo commands and get back to where they were in the interface. This encourages the user to explore and try new functions. If it's easy to get lost in the interface, the user will become very reluctant to try things – which translates to less usage of those lucrative data functions that the operators want to sell.
This phone has three different ways to go back – there's a Back button, an End button, and sometimes one of the soft buttons is designated as an undo button. It's never clear which one will work in a particular situation, and sometimes I had to use them in different combinations. In some sub-menus within functions, there was no way back at all – my only option was to use End to go all the way back to the start of the interface.
For example, when I tried the New York Times player, I was not impressed with the newspaper content. So I hit the Back button. Only that didn't do anything. So I tried the soft button labeled Quit, but all that did was take me back to the splash screen for the NYTimes app. This is confusing, since I thought that splash screen was part of the NY Times app. If I were a normal user I would be totally lost at this point, but eventually I realized that Quit exited the Java runtime and dumped me back on the splash screen from which Java had been launched.
This must have made sense to someone at Sprint, but it won't to most users.
Anyway, from that point the back button works. I try to back out all the way to the main menu, but the program dumps me into a Downloads screen and refuses to go back any further. I have no idea why I'm in Downloads, but I press End to get away from that before I accidentally buy something.
I think this sort of screwiness happens in part because the phone has applications produced by various third parties, each of which does its navigation differently. But that's no excuse – Sprint should provide interface guidelines, and enforce them on its developers. By failing to do that, Sprint is neglecting its job as the integrator of the device.
Graphical toejam. Each of the twelve icons in the main services menu animates when it's selected (this is called a "focus effect"). I can customize the animation – in one effect, the icon grows larger and changes shape. In another, it's backed by flames. In another it's superimposed over a blob of purple Jell-O. In another it's backed by rippling water effects. All of this is cute, but it's mostly a sign that the people working on the phone had no idea how to allocate their time. They made visual fluff while major parts of the phone didn't actually work.
The synesthesia user interface. Sometimes the people designing a multimedia device feel the need to add a lot of sounds and graphics to it just to prove that it has multimedia capabilities. This is the technology equivalent of a 15-year-old girl who wears halter tops, lowrider jeans and heavy makeup just to prove she's developing curves – and it's about as attractive.
(In other words, a 15-year-old would think it's hot, but I think it's alarming.)
In this phone, the teenage tart routine shows up in the dialer. Instead of making the standard tone noises when you press a key on the keypad, this phone generates offbeat plink and bing sounds, and every number you dial shows up on screen in a different color. It reminds me of the articles I've read about synesthesia, a sensory condition which causes some people to mix their senses – they can hear colors or see sounds. One of the phenomena they sometimes report is that letters and numbers each have their own distinct colors.
Sprint's phone helpfully lets you experience this condition for yourself:
Lookie! It doesn't know enough to insert a line break after the hyphen, but it assigns a cool color to every number.
I count myself lucky that the phone can't generate smells, or the caller ID might work by odor.
"Woah, dude, did you step in something??"
"Nah, my boss just left me a voicemail."
(By the way, it turns out there's an obscure menu command that turns off the rainbow numbers. But I had to study the user manual to find it. How many users are going to do that?)
What it all means
I have very fond memories of Sprint. They were one of the first operators to support Palm OS, and I had a great working relationship with several of the people there. I wish them well. But I think they're on the wrong path with mobile data.
Sprint's going to get a distorted view of public demand for data services. Because the games are relatively easy to find and use, they're going to get more usage. Many other data services won't be used because they're hard to find, hard to figure out, and often deeply disappointing.
If a handheld vendor produced a product this broken the company would go bankrupt. But of course that's not going to happen to Sprint because the mobile data thing is a sideline to its successful voice business. All that will happen to Sprint is that it will waste gobs of R&D money and frustrate its customers.
I think it's arrogant for a mobile phone company to try to make decisions for its customers on what they should or should not do with data. The voice equivalent would be if they tried to regulate what subjects could be discussed on a voice call. Who would tolerate that?
I strongly encourage the folks at Sprint to ask themselves if they're truly competent to create wireless data services. The strong evidence is that they're not. I think they would have a much better chance of making money if they opened up the data network to all third party developers and let customers choose which services will win. Maybe Sprint could make money by taking a cut of the billings, just as DoCoMo does with iMode. Or maybe it could just focus on being a carrier for other peoples' data, which is what it does with voice. Either choice would be better than creating more media hairballs like this phone.
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PS: Is the Sprint Ambassador program a good idea?
I'm a big fan of "influencer marketing," the process of working with early adopter customers who advise others on whether or not to buy a product. It's a very affordable way for companies to work with vertical markets without making a huge investment in each, and it allows even small companies to have a big marketing impact if they make a great product. It's also an outstanding way to get feedback from your most enthusiastic customers.
The Internet made influencer marketing possible for most firms. Because it's a new field, the ground rules for it are still being worked out. My colleague Nilofer Merchant recently wrote about an influencer marketing program that Lego runs, and Microsoft has been running a program called MVP for years.
Most influencer marketing programs focus on building two-way relationships with a relatively small number of users. The Sprint program is different in that it appears to be recruiting a relatively large number of people, and the approach is not very personal – they just send you an e-mail (and one that isn't signed by any identifiable person). There's a whole sub-thread of discussion in the blogging community on whether the Ambassadors program is a good thing. Sprint has made almost no effort to engage in a dialog with me, other than an occasional automatic-looking e-mail asking me to send in feedback. They basically just threw a free phone at me.
One school of marketing thought says that any form of publicity is a good thing (although some former Firestone Tire executives might beg to differ). A Google search for the term "Sprint ambassador" yields about 23,000 hits, so the program is generating some buzz. But a random walk through the comments shows more discussion about the program than actual discussion of the phone and service. Some of the comments complained about the impersonality of Sprint's approach, and there were a number of complaints from Ambassadors who wanted to transfer their current phone numbers to the Ambassador phone (something Sprint says it can't do for billing reasons). This hamstrings the program for many people because it means they can't make the Ambassador phone their main phone. It's more like something to play with on the side, which is the way I use it.
There's also an amusing post from a blogger in Copenhagen, who was invited to join the program even though the nearest EVDO cell tower is about 4,000 miles to the west.
So is the Sprint Ambassador program good marketing or bad marketing? Hard to say because I don't know what Sprint's goal was. It's not a home run, that's for sure, because so much of the online discussion is about the program itself rather than the phones.
On the other hand, maybe Sprint should be grateful for that since the phone and services have so many problems.
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What do you think? Am I being unfair to Sprint? Do you have this phone and like it? You're welcome to post your thoughts.
Several days ago a financial analyst in Canada floated the idea that Apple and RIM might collaborate to create the merger of an iPod and a Blackberry. Most of the online skepticism about this idea has focused on the incompatibility between the RIM and Apple cultures, particularly their large-ego CEOs, but there's a much more serious reason why it's a dumb idea:
iPods are beloved by young people and creative types who want entertainment on the go. Blackberries are beloved by fast-moving corporate managers who want to squeeze a little more productivity out of their busy day.
Young and mature. Carefree and career-driven. Slacker and buttoned-down. What's the intersection between those two groups?
Right: Virtually nonexistent.
So, how many people would buy the Frankenpodberry?
Every 20-something surfer-dude IT manager on the continent. Plus some technophiles. But not a mass market.
Convergence works only when you combine two features that are both desired by the same demographic group. Making a mobile device ain't like making a Reese's Peanut Butter Cup, folks.
Does this mean Apple and RIM would never partner? Not at all, lots of companies do dumb things. But I think the product wouldn't sell.
Over at the business book I'm writing, Stop Flying Blind, I've finished with competitive analysis and am starting to discuss how to understand and use market research. If you're interested in the topic, you're welcome to stop by.
