As a proud and delighted owner of a 2G iPhone, I was sitting on the fence last month when Steve Jobs presented the new 3G version at the WWDC in San Francisco. Getting an unlocked version in the UK (I would not go for an O2 subscription obviously ;)...) had a cost, and seeing my investment become obsolete so quickly was quite frustrating. On the other hand, the iPhone is by far THE best gadget I ever had, so anything even better would be too attractive to resist.
So the 3G iPhone was announced and now launched. In terms of hardware, it is more an evolution than a revolution vs the previous version, with HSDPA and A-GPS as the main upgrades. HSDPA will be nice and should offer a browsing experience closer to WiFi. A-GPS is interesting, but still waiting for the apps to make it worthwile on a mobile. However, these two improvements do not hide the fact that the iPhone is now playing catch up with the specs sheet of the flagship devices of players such as Nokia or Samsung:
- 2 MP camera ? Please... The benchmark now is 5 MP with flash and at least digital zoom
- No video support ? Are we in 2008 or 2002 ?
- No MMS ? OK email is great, but some people still like to send pics (or videos by the way...) via MMS for the immediacy and all. Why not giving users the choice ?
- Haptics and some tactile feedback (quite standard now on Motorola, LG and Samsung) would have been nice to improve the user experience of the virtual keyboard
- Memory: why cap it to 16 GB ? The only reason I see is not to cannibalise too much the iPod sales, but still, 32 GB would have been nice....
Even with these shortcomings, the iPhone launch in 21 markets worlwide was a huge success with people lining up for hours from Auckland to New York via Tokyo and London and the demand proving to be too strong for the iTunes activation systems.
There is one basic reason behind it: price and affordability. When Apple launched the first iPhone, they were too greedy and tried to kill too many birds with one stone, so convinced were they of the iPhone uniqueness:
- They did not want to cannibalise iPod sales and therefore forced the mobile operators to sell them unsubsidized
- They required a revenue share from the operators to maximise the value per device
Don't get me wrong, and let me repeat it, it is true that the iPhone is THE best gadget ever. However, when as a customer, you are used to get a new phone for free every 12-18 months, you are not that ready to spend $400/£270/€400 for an iPhone, especially if you can get a top-of-the-range Nokia, Samsung or Sony Ericsson for free. For Apple to have "sold" 6m 2G iPhone under this model is quite impressive and clearly demonstrates how good the device is.
To become mainstream and mass market, Apple had to review its model, hence the success of the 3G iPhone launch:
- Accept the subsidised model, sell to the operators for a guaranteed revenue, get lower margins per device, but achieve major gains in volumes
- Take some lessons from Andy Grove and proactively cannibalise iPod sales
I also think two new developments will support the sales numbers:
- Exchange support opening the gates to the enterprise segment
- 3rd party apps support expanding the range of user experience on the device
As my personal contribution, I took a pic of the line in front of the O2 shop in my neighborhood in London. This is no flagship store, and the line was solid all day long on Friday. As a comparison, there was no line at all when the 2G version got released. On Sunday, it was far quieter, as the store had sold out as almost any other 3G iPhone outlet....
So I am ready to bet the 3G iPhone will become the 2008 bestselling smartphone, far ahead of Nokia, RIM and Windows Mobile. The key question is whether I will upgrade my 2G version or not...
Quick Response (QR) codes are as common as pachinko machines in Japan. Basically, they are a type of small bar code that captures a web address. With a mobile phone, you just take a picture of the code and then your mobile browser is directly re-routed to this website. It is extremely convenient as it eases data input on a small mobile keyboard - especially for sometimes quite complex URLs - and offers some kind of immediacy.
QR codes are now on everything in Japan, from business cards (rather than the company website address) to catalogues. Advertising and e-commerce are part of the applications supported but the main point really is to simplify the mobile internet experience.
QR codes have now appeared in Europe and the US, mainly pushed by advertisers, e.g. Umbro pictured below, with companies such as Boots or HSBC also adding QR codes to their products or print materials in the UK.
The issue with QR codes at this stage is that not that many phones have a reader pre-installed. The swiss army knife that is the N95 obviously has one, but it is well hidden in a sub-sub-sub menu. To favour uptake, clients can be downloaded for the main OSes - Symbian, Windows Mobile,... It will however take time to create critical mass in the installed base, but I hope this is something mobile operators (not advertisers) will further push. It is indeed a great enabler to increase mobile internet traffic, just look at Japan!
GigaOM has an interesting post with a list of mobile VoIP applications, the underlining message being that VoIP is now ready to change the mobile industry and push prices down in the same way as it did in the fixed world, with the wider availability of smartphones, WiFi and 3G mobile broadband serving as a basis to help the market develop to 250m users by 2012.
In a previous post, I already gave my views on VoIP: this is a technology, not a service. I already mentioned that mobile VoIP services such as Skype or Truphone are interesting only for some niche segments doing a lot of long distances or international calls, and it is interesting to see how Om and his team fit well this customer profile:
- They are advanced geeks not afraid to install apps on their phones and change settings. Believe me, this is not mainstream ! They are also happy to accept technical issues and lack of stability of some of these solutions
- They have smartphones that are WiFi enabled and use it for VoIP calls, hence limiting the mobility side of things. And using 3G mobile internet is not free...
- They are a SME with employees/bloggers spread out across the US so they need to do a lot of long distance calls without the luxury of large bundles
I am not against VoIP. As a technology, it will be key in the development of mobile next generation services. As a service though, I am still struggling to see how it can become mass market when you can get unlimited bundles in the US for $80-100 (or family plans with unlimited on-net calls for far less) and very large bundles (we are getting 5 hours and unlimited internet for £30 ($60) now...) in most European countries.
The only trade-off is for long distance/international calls, so seems GigaOM's team fits well the interested niche segment. Who gets cannibalized there, mobile operators or providers of LD/international calling cards? LD cards already almost disappeared in Europe as broadband providers (Carphone, Free,...) use the VoIP technology to offer unlimited national and international calls on their network...
Social networking and sites such as myspace, facebook and webjam revolutionised our interactions with the web over the last five years and it is now likely that this is moving to the mobile area.
It should not come as a surprise for anyone following market dynamics and consumer behavior in Japan and Korea (and China....). After all Mobage-town is Japan's 2nd largest website (per page views) while being mobile only, and a large chunk of CyWorld subscribers in Korea pay an additional fee to access it from their mobile.
A recent study by Nielsen shows that this is now developing in the US and Europe with 1.6-1.7% of mobile users in the US and the UK accessing social networking sites from their mobile, while numbers are lower for Continental Europe (0.5%). If you think this is negligible, think again. If you apply this penetration to the installed 3G base and to users subscribing to a data plan, you end up with quite a sizable penetration! Even more interesting, if you look at the numbers starting from people using social networks, it appears that a quarter were also accessing their profile/sites from their mobiles in the UK.
Using social networks can be as addictive as a Blackberry so it should not be too surprising. As MySpace and Facebook also lead the pack in terms of mobile usage, the key question becomes whether there is some room for some mobile driven social networks or if the "incumbents" will simply also succeed on the mobile.
One key output though is that mobile access will become more and more important. So Webjam, when do we get one ? ;)
After months of speculation about a G-Phone, Google came out last week - full event script here - with its mobile plans in the form of Android, a mobile Linux OS. It did not go alone though, as the big guys of Deutsche Telekom, HTC, China Mobile, Qualcomm and Motorola joined in for the press conference. They are all part of a new 34 strong industry group called the Open Handset Alliance, also including companies like Telefonica, NTT DoCoMO, Sprint, Samsung or LG.
To sum up, Android is a "software stack" consisting of an OS and middleware - developed by Google - on which customised UIs and applications - developed by Google (Maps...) or others - can be added. It will be made available under an open-source license (i.e. free?) giving handset manufacturers and MNOs the freedom to customise the user experience for their users. In a perfect world it should still enable Motorola to differentiate from say Samsung on the phone UI and Telefonica to customise the user experience and key services offered differently than say T-Mobile. Quite the opposite from the one-size-fits-all approach Microsoft has with Windows Mobile - though it is changing a bit, just look at the customised UI available on Windows-powered phones offered by Vodafone and the Palm 500 in particular...;). In terms of business model, money won't be made on the OS, so Google expects to create value in two ways, directly via some revenue sharing deals and indirectly via increased mobile advertising revenue. Indeed the mobile internet experience is expected to become far better, so more traffic will lead to more clicks on Google ads. Earlier this week, Google also released the SDK with a full YouTube profile and walkthrough.
I have to admit I still sit on the fence on that - sharing the views of most in the sector - for three main reasons:
1. The OHA might not be such a show of industry support as one might think. It is actually fairly easy to join and remain in the loop though not dedicating resources, especially actors such as Motorola (already involved with Windows Mobile, Symbian and its own Linux OS) which are clearly not fully committed. Were it not led by Google, I would already have discarded the whole initiative.
2. First walkthroughs were quite underwhelming, nothing here revolutionary compared to your average Phone OS, definitely not the WOW factor the iPhone delivered when introduced. OK this is still just an SDK, so there is room for progress
3. First handsets are only expected - from HTC - by Q3 2008, almost one year down the road. By that time, tough to say how Android will fare versus latest releases from Nokia S60, Sony Ericsson UIQ or a potential second version of the iPhone...
On paper, Android is definitely on the right track and its willingness to offer a great experience to all users while still enabling differentiation is great. I can only root for any initiative looking to further develop the mobile internet, so I will look with great interest on how the platform develops over the coming months.
I was recently in Japan where I could have some fun with their range of handsets. I was in particular interested to see their broadcast mobile TV models, since they are not available in Europe - they use a different broadcast technology called OneSeg.
It was pretty fun to play with Aquos and Bravia branded phones. The OneSeg broadcast quality on the Bravia phone was also very high and you could totally imagine watching TV on it for a fair amount of time.
Q2 2007 data for handset shipments are now available. Overall, more than 250m devices were sold during the quarter, so that the billion mark should easily be reached for the whole year. This slow but steady growth is ensured by a strong replacement market in mature countries and the boom of emerging markets such as India or China.
Nokia is the clear winner with 39% market share. The tough years where the Finnish OEM lost its design flair and went down to a 30% market share are now over. Amazingly, margins remain best-in-class even though Nokia pushed sales in emerging markets.
Building on the attractive design of its Ultra collection, Samsung grabbed the second spot with 15% share. Motorola went down to third place with 14% share, still not able to recover from the RAZR hangover. Fair to say though that it might just be the trough, as the new portfolio announced a couple of months ago - RIZR, Q9, RAZR 2 - have still not launched in all markets.
Sony Ericsson is the second clear winner with the fastest growth - +50% y-o-y - and 10% market share. The Swedish-Japanese JV is still building on its Walkman and Cybershot branded devices. A new trend last quarter was the availability under these brands of more affordable, "low-end" handsets. Rumour has it that Bravia - for Mobile TV - and Playstation - for gaming - branded devices are on the roadmap.
Closing the Top 5, LG kept on strengthening its position with 7% market share, with the Shine and Prada handsets following the success of the Chocolate. This highlights how the OEM market is becoming more and more concentrated with 5 players having 85% of the total market.
OK, so a bit more than five months after its announcement, the iPhone has become widely available across the US, in what has become the most overhyped consumer electronics launch of all times. You had it all, camping, long queues, famous people, and this sense of victory when finally getting it. It did beat hands down game consoles and Windows 95, and is something unheard of for a mobile phone. Engadget has a great recap hour per hour coast to coast of the launch day. Apparently, the buzz of the raving reviews was real and the momentum is still going, as the iPhone is already out of stock in several locations.
The key question is obviously whether Apple will be able to deliver on expectations and revolutionize the mobile industry with the iPhone in the same way as it did change the music industry forever with the iPod. Based on its joint interview with the new at&t CEO, Steve Jobs is quite bullish. At the same time, several established players on the mobile value chain are already admitting - directly or not - that they will be impacted by the iPhone, be they smartphone specialists, handset manufacturers or mobile operators. The Financial Times had this week an in-depth assessment of the potential impact. Key questions include:
- Will the iPhone deliver the simple user experience that is promised to really make phones fund and easy to use ?
- Will OS X, Safari browser and widescreen finally support the development of the mobile internet ? As it also favours large data bundles, who will benefit from this potential growth ?
- As the iPhone created precedence in terms of how much the handset manufacturer controls the activation process, will it change comparative positioning between the different players on the value chain ?
- Will the bet pay off for at&t and will it attract churners from other networks, Verizon in particular ?
The launch of the iPhone is just the beggining of the story... The next six months and the European landing will be even more interesting
Last week on May 15th, Motorola CEO's Ed Zander went on stage to show that his company was still able to deliver attractive handsets to the mobile market and maintain its competitive positioning. The recent period has indeed not been dear to Motorola that is still recovering from the RAZR hangover and its over-reliance on this model. As a result, market share fell sharply - while Samsung, SonyEricsson and LG became the new darlings to challenge Nokia - last quarter's operations resulted in a loss close to $200m and the overall disarray was significant enough to attract the shareholder activist Carl Icahn and start a proxy war...
Motorola's answer is quite underwhelming...and I am putting a positive spin on it. They came on stage highlighting only 4 handsets, only one being "new". They dared resurrect an old Asian stylus-activated smartphone to say that they were ahead of the iPhone in terms of innovation. They went on to present the RIZR Z8 and Q9 as new products, even though they were introduced 3 months ago at 3GSM and are already starting to show their age versus current products on the market, even though they are still to be launched ! Even though the Z8 is a powerful phone, it lost the powerhouse race to the Nokia N95. Similarly, there are already on the market far more well-rounded smartphones than the Q9 - Samsung BlackJack anyone?
The best was the RAZR 2. First I am surprised that Motorola is considering it the 2nd iteration of the RAZR, as several models and updates occured since the first RAZR was launched 2.5 years ago: V3, V3i, V3 EVDO, V3x, V3 MAXX, V3xx.... THis is not even the first 3.5G RAZR! Is it just because the antenna is flattened at the bottom of the chassis? Sure the phone has pretty good functionalities - HSPDA, full browser, external 2in screen,... - but nothing revolutionary compared to what is already available.
I might be wrong but given the kinds of benchmarks that some 3G handsets - SonyEricsson w880i, Samsung U700 and LG Shine - have set, it will still be tough for Motorola over the next 6 months...What they really need is to throw away the RAZR blueprint and start anew with no legacy. It might result in something that could be as attractive as the iPhone. After all, Motorola has a track record in launching successful handsets such as the StarTac and V50...
Over the Easter break, I went back to New York for my annual pilgrimage... This time, I really noticed empirically that the US mobile market had come of age. When I lived in New York and got my first mobile subscription in 2002, penetration was below 50%, you had 6 major operators using 4 different technologies, usage of data services was non existent, and you had to go to dodgy "hole in a wall" kind of shops to get your plan...
By now, penetration is above 80%, there are 4 major operators left, and data services such as V-Cast from Verizon Wireless are in par with what you can get in Europe - especially since they launched their boadcast mobile TV with Qualcomm. From a consumer perspective, the most striking is how distribution has improved. Similarly to what took place in Europe earlier, branded shops (own shops or franchises) are now dominating distribution - with more than 50% of total sales. As growth also slowed with maturity, a lot of small dealers also had to leave the market (not enough commissions anymore). Moreover, specialised distributors have also appeared.
Visiting a BestBuy in New York, I was amazed to see how their mobile - sorry cellphone - shop in shop was similar to a Carphone Warehouse, up to the format and font of the catalogue ! Not that surprising with hindsight as Carphone just announced that, following a successful trial in NYC, they will roll out 200 stores over the next in a JV with BestBuy.
Two major announcements this week of telecom executives stepping down.
Ed Whitacre announced he would step down as the at&t Chairman and CEO next June. Whitacre built a $250bn telecom behemoth through several high profile acquisitions, starting from the initial SBC Baby Bell and building in acquiring other Baby Bells, building Cingular, acquiring AT&T Wireless, AT&T and finally merging with BellSouth, re-consolidating the US telecom sector.
The same week, Orange CEO Sanjiv Ahuja announced he was leaving to pursue new ventures. Ahuja was instrumental in turning Orange around over the last three years and fixing all the excesses from the bubble period. Also he was key in the integration of their new fixed mobile approach and development of a leading quadruple play.
In my previous post, I highlighted the potential of mobile RSS readers. There is of course a clear threat for mobile operators, as this is another tool that could transform us into a simple pipe, i.e. we only provide the connectivity/data transport while others make money from value added services. Though being a pipe is not all bad - you make reasonable money out of a steady stream of cash flows - it won't help you improve your valuation and offer strong growth perspectives. Just compare the market cap and valuation multiples of Google, Yahoo!, AT&T and Verizon in the US and you will understand what I mean...This is a major concern and Orange CEO's Sanjiv Ahuja recently raised the alarm at CTIA Wireless in Florida.
We should not discount this threat. However it is also an opportunity. First because mobile data usage has not yet delivered and any opportunity to do so is welcome. Moreover, the internet and content consumption on a mobile remains different and mobile operators are the best positioned to offer unique functionalities that enhance the user experience, leveraging on our platforms and end-to-end control. This is why at Vodafone we signed all these partnership agreements with the internet players - Yahoo!, Ebay, MSN, YouTube, MySpace and Google announced at 3GSM - because an integrated mobile experience will be better than a plain vanilla one, for us, the internet/content players and the end users...
Of course, depending where you are positioned on the mobile content value chain, you might think differently, so share your views.
One of the most exciting features of my new mobile is its RSS reader. I previously already had phones with an RSS reader but it was not really user friendly, as you had to dig into several sub-menus and update one feed at a time. What is great on the w880i client is that it can be easily accessible through the shortcut menu and can update the feeds automatically based on settings you can define, i.e. from once a day to every hour. It has become a key component of my daily life as I can easily get a download of the key news headlines that matter to me in my morning and evening commuting.
I won't expand here on how RSS and XML have revolutionised the way content is published on the web (if you need an RSS 101, check here). You get the information you want from the sources you trust - old media or 2.0 - and you can aggregate it the way you want on My Yahoo!, Google desktop or...webjam. The new trend - as currently being developed by Wikio - is to aggregate by topic rather than source. It might be far more powerful assuming you can avoid all the crap from untrusted sources.
On the mobile phone, it could actually be the perfect format to get the news you want. As content can be pushed to the mobile (OTA for the experts), it solves the issue of having to go through several clicks on the wap portal. Other advantage is that you can be extremely selective and niche in the kind of content you want to be informed about, the kind of reach and richness a wap portal - be it on-deck such as Vodafone Live! or off-deck such as Yahoo! Go could never offer. An RSS reader will only download headlines and the beginning of the article, which on a mobile is quite cost effective and versatile. If you want to know more, just click on the link and you get access through your wap portal. As mobile data pricing is evolving and becoming more affordable, this could really take off as the key mobile internet tool, especially in terms of RSS feeds discovery and bookmarking.
I was recently on holiday in Egypt. It was amazing to see so many mobile users - teenagers and young adults - using their phones not only to make calls but also to take pictures or to listen to radio and music. FYI, mobile penetration in Egypt is around 20%.
Egypt is one of these emerging markets developed enough to ensure a growing middle class can afford some extras. The mobile phone is becoming the de facto key device. You need it to communicate so it is first on your list. The income level is however not high enough to ensure ownership of several gadgets, so the mobile is also the camera, the radio player and the mp3 player.
While handset manufacturers are pushing convergence in developed markets with devices such as the Sony Ericsson W880i or the Nokia N95, it might actually become a mainstream trend thanks to emerging markets. Mobile operators can also benefit, mainly because of the low PC and internet penetrations, so that the mobile is the only gateway to the world...
Innovation is a key component of the telecom business. As prices come down for voice communications and data traffic, the rollout of new products and services is key to generate new revenue. In the fixed business, recent home runs have been broadband, IPTV and VOD (look at Free in France or Fastweb in Italy). In the mobile industry, fair to say that the expected killer applications still have to make a major impact on the bottom line.
I think Orange has an interesting approach to discovering and internalising innovation. Its Orange Partner Camp program is a kind of mini CES or 3GSM giving developers and start-ups the opportunity to show their skills. The format, which includes 1-2-1 and speed dating sessions appears to ensure meetings take place with the right people on each side.
The Game Developer Conference (GDC) went on this week, a good opportunity to build on my previous post on mobile gaming. In particular, game guru Trip Hawkins - EA founder and Digital Chocolate CEO - had some valuable comments in his keynote (thanks joystiq for the coverage), where he admitted that games on mobile phones still offered a below par and undifferentiated experience: "I am sick and tired of mobile gaming being a wasteland of second-hand properties, high royalty fees, and retro titles ... games that are downloaded by a tiny portion of cell phone users (5%), and even then only to 'waste time'... What we need to do, is find out how to make mobile a first-rate platform ... something people want to pick up to play. If we do, there are potential billions out there for mobile sales." Hawkins compares the future shift to the success of the Nintendo DS: "If Nintendo handled the DS like most developers handle mobile games, we'd have ended up with watered-down ports of Mario games. Instead, DS gameplay have been created with the system's features in mind, and that makes it good."
Also, Nielsen released some stats on console gaming penetration in the US (thanks again joystiq) that shows that 40% of the US households and 50% of the population have access to console gaming. But the top 20% gamers accounts for more than 75% of gaming time... As console gaming is a 'razor & blade' business (you lose money on each console sold but you recoup through the games), it means even a higher share of the profits is concentrated in this top 20%. Money is in the core gamers, not the casual ones - unless Nintendo proves me wrong over the long term with its Wii - and the same applies on mobile phones.
I just got my new mobile, the Sony Ericsson w880i. This is certainly one of the most amazing phones that have been recently released. It stands out as a fashion phone that offers a large set of great functionalities.
Starting with the design, it is amazing how small and thin it is. To give an idea, it is smaller and thinner than the Moto SLVR, the super thin candy bar of 2006. The design is also extremely attractive and futuristic in a neo industrial way. Surprisingly, it does not negatively impact the ease of use, the pad is actually pretty comfortable. At 70g, you won't notice it in your pocket
Hard to believe then that it packs 3G, a front camera for video calling and a 2MP camera at the back, plus a slot for an M2 memory card - 1 GB in the box ! On the software side, Sony Ericsson's UI remains one of the best. Nice features include a solid browser in supporting/adapting real internet pages (and landscape mode), and a great RSS reader that can be updated automatically. The push email option is nice but I fear very few email servers will support it. Last but not least, the music player offers a nice navigation and Sony's walkman branding guarantees a sound quality far above the kind of awful noise you usually get with phone MP3 players.
Of course not everything is perfect. The battery will last you only 2 days, you can't put that many songs on 1 GB of memory and loading music on the phone is still a bit cumbersome (especially if you are used to iTunes), but you can certainly cope with that given the design and features you get in exchange.
Using this phone made me realise how mature the 3G market now is, as small sexy phones can now pack the technology - my first 3G phone was the brick like Nokia 6680... With the 3G/HSDPA Samsung and Motorola phones arriving later this year, this will become a given and might accelerate 3G penetration (installed base at least...).
Do I still want the iPhone ? You bet I do ! But the w880i will easily keep me happy until Christmas...
At 3GSM, I attended a panel about mobile gaming (more out of personal interest I have to admit...). Panelists included execs from Real Networks, Gameloft, EA Mobile, Telefonica and Orange. It was an example of the kind of discussion where people are willing to maintain the hype about a topic and refuse to admit that, unless something radical is done, penetration of the given service/application will remain low...I feel rather free to express my views about mobile gaming and its relative failure (even with all the buzz around) because I am (was) a pretty involved gamer and experienced the rise of this form of entertainment from niche teen geekitude to mass market with a size larger than the movie box office ($30bn and rising)....
Some statistics to start with. 40% of mobile users use the games they have on their phone. But only 5% will purchase games, and out of this 5%, only half will do more than one purchase. What is clear here is that even though a lot of people (40% in markets in Western Europe where penetration is close to 100%) play snake or solitaire (pre-installed) on their mobile while on the tube or waiting for a friend, only a negligible fraction (2.5%) is generating value out of mobile gaming ! How do you build a healthy ecosystem out of that where all participants can have a profitable business ? Hiding behind aggressive forecasts sizing the market at $10-15bn 5 years from now won't solve some very basic issues that block the widespread adoption of gaming, i.e.:
- User experience on a mobile phone is pretty bad. If you are used to a console or even a PSP or DS Lite, a numeric keypad won't do it (even the N-Gage was not good enough). Therefore heavy gamers will rather avoid convergence and have a dedicated device for gaming in addition to their mobile
- The bulk of the market is therefore formed of casual gamers that play on a very low frequency to "kill time" and fill boring moments. Snake will do for them and, though they might get a new game once in a while, you can't build a valuable ARPU business out of them
- Mobile games are just (very bad) ports of traditional games (like a 1995 version of Doom) and don't leverage of the mobile specificities (communities, LBS...). Hence for a mobile operator the only revenue out of mobile gaming would come from the sale of the game (e.g. mobile retailer) and none from the usage
As long as we (as the mobile and gaming industries together) don't find a way to fix these problems, i.e. improve user experience to attract high ARPU gamers, increase game portfolio and buiild on the mobile specificities, mobile gaming will remain a vertical with a negligible contribution to mobile content and overall mobile revenues. Easy to criticise, but I don't have the answer either...but at least let's try to be more realistic
Not everything is lost though. I am looking forward for the new reincarnation of the N-Gage platform on Nokia multimedia phones. Also Nvidia showcased at 3GSM their mobile graphics card enabling pretty impressive 3D graphics (a rarity on mobile games so far). In addition to more advanced positioning and presence solutions, could it support the real take off of mobile gaming ?