Ease of use
Microsoft, the world’s most powerful software company launched NetMeeting, one of the world’s first VoIP software packages. The problem with the software was a terrible interface and connecting to other users was not very easy.
Skype came on the scene some years later with an easy to use interface and a feeling of “fun” and they subsequently took over the market. Microsoft ironically had a solution based on H.323 which is open and Skype chose to be proprietary. Still, Skype became the success NetMeeting should have been.
Many people in the technology space left Apple for dead and the company amazed us all when they launched the iPod phenomenon. They changed the way the world consumed digital music by making them actually start to pay for it and moreover, having an iPod became a status symbol. A fashion accessory if you will.
Having tried to acquire an iPhone for over a week I can tell you firsthand that Apple is doing something we have never seen in the communications market before. In addition, in my experience, people who were anti-Apple are now buying these devices or at least trying to.
Apple has done many of the things we have talked about in the world of IMS
including allowing disparate developers to come up with applications and in exchange for customer access; they pay Apple a fee per sale.
As Apple grows its iPhone business I feel the company is poised to change the face of telecom. RIM could be immune for a while because the company’s devices have keyboards and Apple’s don’t at the moment but other device manufacturers are likely in big trouble. Nokia is in an interesting situation because the company has done a better job of innovating in the device space than Apple but the market – especially in the US seems to be apathetic. Apple can do no wrong and they have produced a single device which is becoming the envy of the world while Nokia has laundry lists of devices which consumers aren’t passionate about.
If you think I may be heading in the wrong direction with this analysis, consider Sony Ericsson just posted a 97% drop in Q2 profits and 2,000 job cuts.
Even Apple is not immune to competitive threats however. One of the hottest downloads for the new iPhone is Pandora, the streaming radio station which allows users to design their own radio station. Pandora has the potential to reduce iTune sales. And media seems to be where much of the money is in this business.
But even these opportunities have financial challenges as devices gain WiFi access.
Then there is the challenge of TiVo – the company allowing recording of television and the ability to view it on mobile devices. How does a service provider add value to this relationship?
For service providers, the landmines are everywhere but there are also tremendous opportunities. After all, one million people signed two-year contracts for iPhones in a few days. Because of devices like the iPhone, consumers have realized they can indeed surf on the go. An entire class of touch-screen devices has been invented to capitalize on the change in consumer habits and of course in response to the iPhone.
So the good news mobile data consumption will continue to grow at rapid rates. However, if service providers want to make money in this new environment, they need to focus on entertainment among other things.
They also need to start getting good at something they haven’t excelled at in the past… The user interface. Service providers have often told me they don’t just want to be dumb pipe providers but while they say this, they are simultaneously shipping products on their mobile networks which stink.
The fact that Apple could enter the mobile phone market – while being 20 years behind and do so well shows you we need to rethink everything. The world is changing rapidly – social networks, web 2.0, mashups, obsessive compulsive media consumption and many other trends are changing how we use broadband connections – both wired and wireless.
The opportunity for service providers is to find ways to help customers get the most out of their disparate connections -DVR, music services, p2p networks, social networks, IM, SMS, email, web surfing, etc. The level of complexity inherent in integrating all of these technologies is bewildering but in the end, customers want things that work and are easy… This is the lesson Skype and Apple have taught us.
So as you come up with new business plans, keep in mind simplicity and ease of use are key and while you are at it – you need the cool factor to appeal to consumers. Walled gardens are great if they are easy to use and have the sex appeal needed to capture the attention of the audience. The telecom world has changed and if you haven’t paid attention these past few years and months, you better start soon.