Industry Has A Microsofty For Windows Mobile OS

There were a lot of posts this past week about the world's un-sexiest mobile OS...Windows Mobile. This is a product that gets absolutely no love despite being pretty solid from a technical and UI/UX perspective. Some of this can be attributed to the favorite sport of the tech press, Microsoft-bashing. Some of it is simply the curse of being an OS that's been around the block a few times (its roots are PocketPC 2000)...so for many it's associated with non-phone PDAs like the HP iPAQ (about as cool as grandma's socks). Some of it has to do with unfortunate partnership decisions MS made with handset manufacturers...most notably by taking their first big jump into the smartphone fray with the super-suckilicious Motorola Q. Company president Robbie Bach basically fessed up to this, according to a story in The Business Insider, at an analyst day event in Seattle earlier this week. And then of course there is the new mobile OS hotness, Android which is hooking up with all the sexy handsets (and some Moto devices as well). Om Malik, who has never been a fan of Windows Mobile fan, reported on GigaOM that Google's Android OS is beginning to pose a real threat to Microsoft despite having a fraction of its install-base (11% in US). My feeling is that Windows Mobile still has a lot of potential game, but the key to getting consumers and the industry re-interested will have a lot to do with how they execute on a number of key events in the next couple of months. First they need to get the delayed Windows Mobile OS 6.5 (which MobileGamesBlog is reporting may be re-branded Windows Phone) launched in early Q4 and complement it with the simultaneous launch of a well stocked (they plan 600), well designed Windows Mobile Marketplace app store (think Xbox Live Arcade). Next they need to hit their April 2010 launch target for Windows Mobile 7 (by which time they should have thousands of apps in their store) and announce a bunch of key handset relationships. Then they need to buy RIM.

Report: At AT&T Motricity is Jen & Amdocs is Angelina

Mobile Entertainment is reporting that AT&T Mobility is replacing its deck platform management system from partner Motricity with that from software & services giant Amdocs (the company that bought Qpass back in 2006). If true, this will be a huge blow to Bellvue, WA based Motricity, which also recently lost their Bell Mobility account. That said, there won't be many publisher tears shed for the Frankenstein-esque implementation of Motricity's mCore platform at AT&T... which can trace roots back to a product Moviso LLC (oh, the memories) implemented at Cingular in the beginning of the decade. Apparently the change is happening as part of the phase out of MEdia Mall and its replacement with AppCenter as AT&T's storefront for all mobile content. According to the article, publishers will be transitioned to Amdocs next month and AT&T claims, on its website, that AppCenter is launching this summer (better hurry).

Unsure Whether iPhone Helped AT&T in Q2 2009?

Top 5 Tones on Web-To-Mobile Biggies

Here's a list of the Top 5 ringtone titles on the Big 3 web-to-mobile portals. Universal Music Group artists performed the best in this sample overall, except on industry leader Thumbplay where the customer base seems to be a bit more partial to Country artists. Overall traffic to these sites continues to deteriorate overall, with Thumbplay holding up the best with ~15k daily uniques (according to Google Trends).

Is KongZhong Spicy or Dicey?

I'm keeping a close eye on major Chinese mobile content service provider (SP) KongZhong (KONG) in anticipation of their Q2 2009 earnings conference call scheduled for Aug 10th. The company is ostensibly on fire, having experienced 5 consecutive quarters of solid revenue growth, with plenty of cash in the bank and a stock up 136% in the quarter (including a 52week high in the last week). Investors clearly believe that KongZhong is one of the best positioned companies to take advantage of the amazing growth potential of the Chinese mobile content market as its carriers roll out 3G. However, the ability to realize that potential has everything to do with staying in the good graces of notoriously skittish operators and regulatory authorities...as UK personalization outfit MonsterMob (now part of Zed) learned the hard way back in 2007. For that reason I was very interested to read a rumor posted on the website of Chinese telco consulting firm Marbridge (attributed to internet portal Netease) on July 17th claiming that KongZhong has been aggressively buying stored value from TD-SCDMA (Chinese 3G standard) test accounts in the interest of "self hitting"... which is, basically, buying their own products with those subsidized operator credits from China Mobile, to either arbitrage the spread with their generous 85% revenue share, or in the interest of manipulating the ranking of their content on the carrier deck. That speculation, coupled with the company's sudden announcement last week that President, CTO & Co-founder Nick Yang had resigned and Morningstar's abrupt announcement yesterday that it was going to drop coverage of KongZhong have got me super-extra-vigilant.

Pre-mature Price Drop Causes A Tempest In A Teapot

It turns out that the $99 Palm Pre pricing at Best Buy, that was getting buzzed about all weekend, was the result of an error in a print advertisement according the VentureBeat and WSJ's Digits Blog. Perhaps the most notable thing about this mishap (the price was supposed to be $199) is that it didn't create a run on stores for the device. Sales nationwide over the weekend were pretty decent...but no one was reporting lines around the block. It'll be interesting to see how Palm, Best Buy & Sprint approach pricing on the device going forward (my guess, $99 is the price in no time). Two things are clear, the Pre has a lukewarm hype-profile more like BlackBerry than iPhone, and more importantly, Best Buy's response to this incident demonstrates that their ads regularly feature major pricing f-ups...so I'm keeping my eyes peeled for a sweet $399 Samsung 55" LED.

Let's Do The Time Warp Again: Top 10 Games At The Big 3 US Carriers

I was beginning to feel that the mobile industry's (as well as my own) obsession with the iPhone was getting positively unhealthy...so I decided to take a look at what was going with mobile games in the US carrier "app stores." Wow, so much has changed in the last year...not! The following list is based upon the Most Popular or Top Selling titles on the respective carrier websites. Unfortunately T-Mo USA requires a log-in to see this data...so they won't be included for the moment (a little help please). While putting this together I must admit that I had a bit of a chuckle, at Verizon Wireless's expense, when I noticed they still attribute all their EA Mobile titles to Jamdat....which EA bought way back in late 2005 (and which ceased to exist as a brand shortly thereafter). But as you can see, this anachronism almost seems appropriate...

New iTunes Paid App Top 100 Quick Stats

Average Price Top 100 App = $3.16 +7.85% from my Jun 17 survey

Average Days in Store Top 100 App = 99

note: if you remove the outlier $69.99 MobileNavigator App, Avg Price = $2.48 (-15.36% from my Jun 17 survey)

Average Price Top 50 App = $1.95 (-25.86% from my Jun 17 survey)

Average Days in Store Top 50 App = 91

Average Price Top 25 App = $1.47 (not covered in my Jun 17 survey)

Average Days in Store Top 25 App = 76

Average Price Top 10 App = $1.09 (-57.39% from my Jun 17 survey)

Average Days in Store Top 10 App = 47

Clearly price erosion is alive and well on the platform...and it's becoming more acute amongst top performing Apps. As I was running through the numbers I was struck by the fact that there currently isn't one established mobile games publisher with a title in the Top 10! Of this group PopCap has the highest ranked title with "Bejeweled 2" at #14. This motivated me to create a new spreadsheet highlighting how these guys are stacking up in the Top 100 today...

EA Mobile is clearly the most on top of its game (punny) right now vis-a-vis the major publishers on the App Store...with Gameloft & D'Choc in hot pursuit. Glu Mobile = MIA.

SpinVox Hot Spinning

Super-hyped and hyper-funded UK voice-to-text firm Spinvox has taken a lot of fire in the last couple of weeks. First, mocoNews reported last Monday that the company was trying to pay employees in stock as a cost savings measure....which can't be a good sign (even in this dire economy) for a company that's received ~$200mil from Goldman Sachs and others...half in the last 18 months. Then mocoNews/Paid Content ran an extensive 2-part interview with CEO Christina Domecq which raised allegations of company excesses, non-payment of salaries/expenses & slow-boating vendor payments... which Domecq dismissively attributed to the economy & disgruntled ex (or soon to be ex) employees. Then today, a BBC investigation revealed (and this was touched upon in the Moco interview) that many of the messages the company claimed to be automatically processing through their hot-shot "D2" algorithm were actually being listened to and manually transcribed by call center staff in South Africa & the Philippines (low-tech). After the release of the BBC story SpinVox got its spin on and retorted with a post on the company's blog addressing (re-addressing in some cases) issues raised by the Beeb & Moco. Their publicity department must be asleep at the wheel, because absolutely nothing good can come from the company entering into a war of posts with the media (in which the company portrays itself as a victim). This is only going to subject SpinVox to further scrutiny of its technology & financial condition. I've gotta say, it feels to me like another shoe is about to drop on the SpinVox story...if it does, hopefully it doesn't completely crush a firm that ostensibly offers a cool/useful product with lots of potential to scale.

The US Is Getting Smartphonier, But Which OS Is The Smartphoniest?

FierceDeveloper ran a piece yesterday profiling the various mobile operating systems, including subscribers, recent growth rates, launch dates, supporting handset manufacturers, etc. Most of the information came from recent comScore survey data that revealed 30mil Americans have smartphones while 204mil still have dumbphones (and the rest have Fisher-Price phones). Here's the numbers by OS & growth rates from Feb to May 2009...

1. BlackBerry = 12,202,058 +26.2%
2. Windows Mobile = 7,040,584 +3.4%
3. iPhone = 5,744,018 +9.2%
4. Palm = 2,406,244 +0.3%
5. Symbian = 889,232 +0.1%
6. Android = 797,633 +86%

The growth information is obviously distorted somewhat by product release cycles...so, as you can imagine, iPhone will show crazy growth in the next cycle from 3Gs as will Palm from the Pre/WebOS. In the following cycle I'd expect to see Android growth spike again if the HTC Magic/myTouch performs to its potential. Frankly, I was pretty impressed by just how dominant BlackBerry is in the US and with how big Windows Mobile still is...like, I don't know anyone with a Windows Mobile device (except my mother-in-law...seriously).

Mickey Flashing Japanese DVD Buyers

Engadget is reporting this morning that The Walt Disney Company (DIS) is embarking on a pilot project in Japan to bundle microSD cards containing full length features, with the DVDs of the same film, in order to give consumers a portable digital copy option. The packages, featuring Panasonic cards, will be available starting in November with films such as Pirates of the Caribbean & National Treasure and will set Japanese consumers back about $51 (ouch) ...which is $11 more than than a typical DVD (I assume/hope they mean Blu-ray). Disney envisions that the cards will primarily be used in mobile phones, portable media players and GPS devices (sounds dangerous). It will be very interesting to see what how much uptake Disney gets on this product and whether it sustains past the early adopter stage. Generally I like this idea, but always thought it would work better as a piracy mitigation strategy in markets like China (where pirated product owns the market).

Of course, this isn't the first time that full-length films have been put on flash memory cards. Most initiatives have surrounded handset promotions...like Motorola bundling Univeral's Bourne trilogy on a 1gb microSD with its Z10 handset to eventize its European launch. But codec companies, like Actimagine, ROK Entertainment & Mo-DV, as well as flash memory providers like Sandisk and Samsung, have been trying to convince the studios for years to compress movies on to cards as part of a bigger retail play. The most ambitious commercial initiative happened back in September 2005 when Sony Pictures Digital partnered with Carphone Warehouse to sell titles like Spiderman, Ghostbusters & Hitch through the handset retailer's British & French outlets on 256mb cards using Actimagine's codec. The quality of this product was very impressive (especially compared to other mobile playback options of the time). However the project ultimately failed because sales people in the hardware focused retailer didn't understand how to sell this entertainment product to the consumer, matching handsets to the right cards makes the shopping process a little klugy, the product didn't work with a lot of handsets, and...oh yeah, the cards were kinda expensive (like $50). Anyway, bundling is a great way to overcome these issues, if they can be sure that the cards will work with a very broad range of devices in the market. When we get to the point that every device with a microSD slot can play a movie file in one standard format, I think there's an opportunity for a scalable standalone business...particularly as the price of flash memory continues to plummet.

BlackBerry 9550 Storm 2 with SurePress Coming This Fall?...Where's The WiFi?

More Mobile Mezze Please

• Firemint takes top 2 games titles & I-Play is top publisher in PocketGamer.biz's iPhone Quality Index for Q2 2009.
• Apple posts boffo earnings fueled by the iPhone...which sold 5.2mil units in the quarter. Apple mentions on their earnings call that they are having trouble keeping up with demand for the iPhone 3Gs. In typical style their guidance for the back half of the year was tepid.
• Mobile Streams PLC 1H Revs fall 23% on the same day that Finance Director James Colquhoun announces resignation
• WGWorld.com announces (and I have confirmed) that quality So. Korean mobile game developer/publisher GAMEVIL is going public on the KOSDAQ at the end of July

Is Japan The Mobile Handset Galápagos?

A great story in the Sunday New York Times discusses the inability of Japanese handset manufacturers to parlay their ostensibly ultra-cool & uber-advanced domestic devices into worldwide consumer phenomena. Despite having developed capabilities like email in 1999, cameras in 2000, 3G in 2001, full-track downloads in 2002, mCommerce in 2004, broadcast TV in 2005, as well as super useful shit like universal barcode readers & video conferencing, companies like NEC, Panasonic, Fujitsu & Sharp get absolutely no love outside the land of the rising sun. The article attributes the problem, primarily, to inelegant, proprietary & "clunky" software...which makes developing apps for the devices cumbersome for publishers...and a Japanese proclivity for oversized clamshell style devices. While I think the software & style points are valid, I think the bigger issue is the difference in the evolution of how Japanese & most non-Japanese consumers perceive/use their mobile devices.

In Japan the mobile device, for most consumers, was the first & primary access point to the internet (and email) and NTT DoCoMo's iMode was the equivalent of AOL, Mosaic & Outlook...which was accessed from an NEC handset over the carrier's network, rather than from a Dell Inspiron 7000 with a 28.8 modem. Therefore Japanese handsets were basically 12-key netbooks from their inception. The capabilities that were mission critical for those devices - email, browsing, chatting & commerce - weren't important in (for example) the US, because early adopter types and soccer moms already had laptops to handle those functions. For Americans, until very recently, their mobile was for calls, texts (never big in Japan) and narcissistically repping badass-ness with a kickin' polyphonic tone. A device that could manage those tasks with the added benefit of looking slick in your hand, on your ear on next to your cutlery at Houstons (e.g RAZR) was an American rockstar. But now that the iPhone has enlightened the average Western consumer to the virtues of the mobile internet and the utility of downloadable apps, perhaps the ways in which we use and perceive our mobile phones are homogenizing with those of the Japanese...and, perhaps, their technologically sophisticated handset industry is going to surprise us with some uniquely evolved superstars in the smartphone game.

MOBshop Speculation Is Red Hot

Not since the frenzy over Cold Fusion, or perhaps, the pre-reveal hype surrounding the invention that came to be known as the Segway, has there been excitement in the tech community to match that around Cyriac Roeding's stealth venture MOBshop (f/k/a Cross Platform Corp). OK, perhaps I exaggerate a bit, however, the former CBS Mobile Head and recent Kleiner Perkins Caulfield & Byers Entrepreneur in Residence must have had a major epiphany during his well documented post-CBS worldwide walkabout...because money ($2.5mil so far) & talented people (including his CBS successor Jeff Sellinger) are aggressively chasing this new venture. Kleiner Perkins is taking a particularly keen interest as lead investor and by taking 2 board seats. Former LinkedIn CEO Reid Hoffman, who's also investing and allegedly not prone to hyperbole, told TechCrunch's Michael Arrington yesterday that the venture was "extraordinarily interesting" (Segway...right?). Based on the name, speculation is that it's a mobile shopping play and not just for mobile goods (no one is going to get excited about another app store or Jamster). My guess is that it's an on device application that uses mobile payment tools like Boku (which I reported on last month) & context (location, time, etc.) specific information to facilitate transactions...but who knows, maybe it's a personal hovercraft that runs on water.

US Success Wiki For Nokia

Inspired by the excellent piece in Wired on Monday entitled 7 Reasons Nokia Phones Get No Love in U.S. I've decided to start a US Success Wiki for the Finnish handset maker. I invite you all to add to it via comments to this post or by sending me a private email. I'll repost with modifications & additions based on your contributions. Here are my initial thoughts:

• Make Nokia an aspirational brand by exclusively marketing & selling premium, cutting edge handsets, like N-Series & E-Series devices & specialty phones like the 5800 XpressMusic. Nokia needs to create the perception that it's the BMW or Mercedes of mobile phones. That low-end crap on T-Mo is doing nothing to help the company's reputation.
• Nokia needs to get over its long-standing pissing match with the US carriers & do deals with all of them in the interest of getting devices subsidized down to prices people can afford & sold in places where people actually buy handsets.
• All Nokia devices need to be available on CDMA carriers.
• The super-convoluted & non-intuitive UI (that only an engineer could love...& US consumers hate) on Nokia phones needs to be overhauled. Just because a device can do ten thousand things doesn't mean it has look like it (think...not Microsoft).
• Make sure Ovi is technologically brilliant (no one is saying that right now), provides users with a compelling shopping experience & is chock full of cool, reasonably priced, apps...and then promote the crap out of it (using some of that money the company is currently wasting on stadium naming rights & motocross sponsorships).

Breaking Stories: Picsel & Mandalay

The Register is reporting that Scottish mobile file-rendering innovator Picsel Technologies may be kaput. If it's true, sad to see them go...good guys with good technology. Unfortunately, this is another mobile company that had a hard time figuring out who their customer was...carriers, handset manufacturers, IP owners? btw...that all said, gotta have a chuckle at the URL on The Register link, check it out.

Hot on the heals of my post yesterday about Mandalay Media's earnings, Mobile Entertainment revealed today that the company (through a subsidiary of its Twistbox brand) is an intensifying legal dispute with long-suffering former porn-powerhouse Penthouse over the payment of a minimum guarantee & product promotion. I would call this worrisome in light of Mandalay's reliance on premium adult content and their cash situation.

Nokia Revenue & Net Last 8 Qtrs

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Earnings: Mandalay Media May Need More Cash For Tr... er, Quality Adult Content

LA-based mobile adult content and games holding company Mandalay Media (MNDL) announced fiscal Q4 (ended 31 Mar 2009) and 2009 fiscal year end earnings in a release today. The company, which is better known by its operating brands Twistbox & AMV, is spinning the release to emphasize that FY Q4 was its first with a positive adjusted EBITDA. Frankly, I'm not sure whether that's going to be the main takeaway. I was pretty distracted by their massive GAAP net losses (see below) stemming from a Q4 goodwill write off of $34.8mil, and after digging into their 10-K, concerns about their cash situation ($5.9mil at the end of March).

• 2009 Revs = $31.3mil ^878% from 2008 (partial operating year)
• 2009 Net Loss = $41.6mil compared to a $2.2mil loss in 2008
• Q4 2009 Revs = $9.9mil
• Q4 2009 Net Loss =$32.7mil
• Estimated 2010 Revs =~$40mil

Perusal of Mandalay's 10-K also revealed that their business is clearly dominated by adult content, which accounted for 82% ( $25.52mil) of their revenues versus 18% ($5.74mil) for games. I think mobile adult content has the potential to be a pretty good business WW for the top players in the space and in a previous post I suggested that these guys were pretty well positioned in the sector. However, in their report they admit that the competitive landscape in the adult content business is pretty intense and that some of their competitors are better funded. The company spent a pretty substantial $7.4mil on content licenses in 2009 (for adult content & games) and management cited the ability to continue to have access to that content (pay for it) as a key success factor going forward. Since the company isn't yet generating enough cash from operations for it's needs they'll have to find a solution in the financial markets to quickly bolster their cash situation, before this becomes a serious point of concern for them.

Appsolute Mess?

On the heals of Apple's 1yr iTunes App Store anniversary, where it announced that they've now had 1.5bil downloads & that there are 65k Apps on the platform, every digital blog & some more established financial journals have run stories highlighting concerns about clutter on the platform and various strategies employed by publishers to break through it. Clearly awareness of the is problem is intensifying and all I can say is...uh, duh! I've been on about this since the beginning of the year, back when there were only a few thousand Apps in the store.

The most popular of the aforementioned clutter mitigation stategies are price and the deployment of free teaser versions of Apps designed to drive awareness/consumption. Some have been a little sneakier, putting their games (for instance) in the less crowded categories, or by doing what the Wall Street Journal alleged Digital Chocolate did (and since undid), adding a bunch of "ea"s to its game descriptions (apparently trying to hijack consumers looking for EA Mobile games?).

If you remember, way back in January Apple VP Greg Joswiak proclaimed that the company wasn't going to editorialize the store, but rather allow free market forces to let the "cream rise to the top." Well clearly that philosophy has continued and what we've learned from its application is that cream costs 99cents and tastes are free. What remains to be seen is whether bigger publishers (with over 50 people on payroll) can actually make money on the platform under this paradigm and whether price differentiation based on quality will evolve as a viable strategy for applications on iTunes. If not, I believe the App Store experience will begin to deteriorate and its laudable (perhaps amazing) early success will become the object of nostalgia in the light of a longterm opportunity squandered.

Mobile Content Mezze Platter

There's a bunch of stuff going on...but no over-riding theme that's struck my fancy yet this week. So, in the meantime here's a list of stories from around the mobile content blogosphere for y'all to snack on...

• Verizon Wireless jumps on the smartphone app store bandwagon (GigaOM)
• Apple now claims 1.5bil App downloads...and implies it's unbeatable (Mobile Entertainment)
• EA creates 99cent iPhone game studio called 8lb Gorilla...which will further hasten price erosion on Apple & every other mobile platform (touchArcade)
• Could Nokia's weakness in the US mean that it may become the GM of handset manufacturers? (Wired)
• GAMEVIL's Baseball Superstars mobile game franchise surpasses 10mil downloads! (Wireless Gaming World)
• With King.com launching on iPhone, does that mean that skill-based game wagering is coming to that platform? (IGN.com)
• It can't be a good sign when heavily-funded UK voice-to-text company SpinVox is trying save costs by paying employees with stock (mocoNews.net)

Fishlabs Skewers Greystripe At BBQ Smackdown

I love a little drama (and frankly there ain't enough of it in this space)...so I must say I really enjoyed coverage this morning from PocketGamer & GoMo News of Fishlabs CEO Michael Schade's "Network" moment on the subject of how mobile in-game ad network Greystripe has been performing for them (at a BBQ put on by competitor Smaato...btw). Apparently he's "very frustrated" (and doesn't care if everyone knows it) that Greystripe is not selling all the available inventory in the German developer's games. It looks like a rift has developed between the companies over how important targeted ads are within games...with Schade clearly being of the opinion that targeting matters very little and that the focus needs to be 100% ad fill. To me it seems like striking a balance between relevance & placement to maximize revenue yield from CPM or CPC should be the priority...but what do I know? Clearly Schade is moving on...to his BBQ buddies Smaato.

Anyhoo...the whole kerfuffle got me wondering how much money really gets generated from an ad-supported mobile game. I've always heard from publishers that the revenue was pretty pathetic and that ad-supported was only appropriate for games at the end of their pay per download or subscription fee life cycle. I mean even if a game is downloaded by a million people, played 20times, has a $15 CPM with 70% fill rate it would generate about $200k...and that would probably be the Tetris of ad-supported games. Most publishers could beat this result with a lackluster 100k paid downloads across carriers WW. Ad fill, relevance, does it really matter very much...are ad-supported games worth all this acrimony? Probably not...what I'm guessing is that those Smaato guys just rock better brats and beers than the Greystripe crew. Oh snap!

Nokia Dis-N-Gage-ing Vancouver Games Studio

Develop is reporting that Nokia is eliminating 100 jobs and shuttering the Canadian game development facility that was once the center of the Finnish handset manufacturer's gaming ambitions...going back to N-Gage 1.0 (the "taco") era. While it's no secret that Nokia is in the process of major headcount reduction WW, and it is widely rumored to be abandoning N-Gage 2.0 (the platform & game download service) in favor of making Ovi the destination for all its App/content initiatives, it's unclear whether this move signals that they are getting out of game development altogether. My guess is that they are...and that they will leave it up to 3rd party developer/publishers to fill Ovi's shelves with quality games. What Nokia needs to focus on in the short-term is clarifying to those publishers what platforms they are supporting (is N-Gage still viable?) and convincing them that Ovi is going to be a consumer destination that they should care about.

Broadcast Mobile TV Is A Financial Disaster

This according to a quote in a rambling Reuters article yesterday about how video Apps and mobile VOD services for premium and user generated content are killing linear mobile TV broadcast initiatives like DVB-H and FLO TV. The situation is so dire that Strategy Analytics has lowered their 2010 WW Mobile TV market size estimate from $5.4bil 3yrs ago to $280mil today (yikes!). Let's face it, other than during the rare sports or news event, how many consumers want to pay to have their grandparents' linear TV on their phone? To make matters worse, apparently even the early broadcast & satellite initiatives in markets like Japan & So. Korea that ignited the irrational exuberance for mobile broadcast TV in the West, haven't proved to be very lucrative.

I think this article makes a bit too much on the App component of this crisis. Consumers are totally agnostic about how they get mobile video content (App, WAP, widget, whatever)... all they care about is having a huge selection of content and the ability to timeshift it, share it and interact with it. For product developers to be successful they will need to focus on creating very simple ways for consumers to get & play with the content they love. One developing initiative that I'm particularly bullish on for mobile is US cable companies' plans to offer their consumers cloud DVRs as part of their TV Anywhere strategies...this means that Comcast customers could catch up on their saved shows, from any of their subscribed channels, from any computer, connected TV or mobile device whenever & wherever they want (Sling without the box). I'd pay for that. What I'm not bullish on...and there was a whole section on this in the Reuters article...is made for mobile content. I've been there and done that and there is no model I could ever find to make this financially viable in the longterm and, most importantly, the vast majority of this content is crap that no one wants to watch on any screen.

Mobile Streams Stock Up 195% In Month To 52wk High

Un-Glu'd: CEO Greg Ballard Stepping Down At Glu Mobile

In a company press release, that hit the wire immediately after the close of US markets today, it was announced that Glu Mobile (GLUU) President & CEO Greg Ballard was stepping down after 6 years with the company. Glu, which was founded in 2001 as Sorrent and went public in March 2007, has struggled to become profitable and, in what many analysts perceived as as major misstep, was a latecomer publishing games to the ultra-hot iPhone platform. That said, Glu is a highly regarded publisher and by virtue of being the biggest public US-based pure-play mobile games company they've become somewhat of an industry bellwether. Moreover, in his role as a well-liked and articulate CEO, Ballard had taken up the mantle from former industry luminaries like Mitch Lasky (Jamdat) and David Gosen (I-Play), as the voice of mobile gaming...so it should be no surprise that his sudden departure is sending shock waves through an industry that is perennially on tenterhooks.

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Turning Japanese...Adult Content Chokes The Pipe

A double entendre peppered article from Bloomberg this morning highlights network capacity issues that Japanese mobile operators are facing with "unlimited" data plans, on their notoriously virile 3G networks, due to downloads of adult video content. NTT DoCoMo and KDDI have already imposed limits on some of their heaviest users and Softbank is now considering a similar move. One of the biggest issues is that adult content usage is really spikey...with capacity being taxed most greatly in the wee hours of the night (so many troubling images). The article claims that Japanese adult sites are seeing about 1,000 new subscribers a day, paying as much as $100 each to sign up. It's not entirely surprising that this situation is developing first in Japan, where they've had good data-ready 3G networks since 2001, where they have great handsets and where most people use their mobile phones (as a opposed to computers) as their primary access to the internet. So...it's not that the Japanese are any randier than the rest of us, they're simply early adopters (thought leaders, if you will) of a category of mobile content that Juniper estimates is currently worth $2.5bil WW and that will double in value to 5bil by 2013.

The most troubling aspect of this story (and there a few) is that it demonstrates the weaknesses of so-called advanced mobile networks WW. Frankly, it's become glaringly obvious that 3G networks are not yet ready for primetime (or latenight) when it comes to streaming video. The proliferation of data caps, lack of support for video calling and examples like the iPhone's delayed support of tethering, slow-boating of video-streaming Apps and resistance to Flash speak volumes about the continued frailty of these networks. As consumers rapidly get more comfortable with web-browsing on their phones (like in Japan) and come to expect that they're favorite video sites from the fixed-line internet (e.g. YouTube, Hulu, etc.) will work, this issue will become a bigger customer service concern for the carriers...and a more painful lost revenue opportunity for site owners, publishers & content owners. Let's hope that while the mobile operators trumpet the virtues of & spend billions on their WiMax and LTE 4G networks that they don't totally neglect the capacity issues of their 3G networks and sour a generation on the potential of mobile video. Oh yeah, and note to the more prudish mobile networks and hardware manufacturers out there...the history of other media (i.e. cable, VHS, internet, etc.) suggests that you should get comfortable with adult video content leading adoption of video services on 3G, 4G or whateverG...to the extent that's what you want.

Velti's Prelim 1H 2009...Still Hard To Read The Health Of Mobile Marketing

London-based mobile marketing platform provider Velti (VEL), which recently bought Ad Infuse, estimates that it's Jan - June revenue has grown 50% to about $30mil on "strong demand" for it's technology, according to Reuters. The company, founded in 2000, has contracts with big mobile operators like Vodafone, Orange France & Telefonica Mexico and a bunch of blue-chip brands like Microsoft, Mastercard, Nestle, Disney, Colgate-Palmolive and Bacardi. Velti claims its platform can currently reach up to 2bil people in 35 countries (hmm...but how many people have actually ever seen a Velti message?). While ostensibly encouraging, what's totally unclear from this statement is whether there's any organic growth going on here, or whether gains are solely attributable to the Ad Infuse acquisition. I guess we will see when the real numbers are released in the next few weeks.

btw -- there's been a lot of speculation about how much Velti paid for San Francisco-based Ad Infuse...but the fact that the company is now disclosing that it's borrowed $14mil from investors to fund the purchase (and other activities) should help give us a clue...again, all should be revealed with official 1st half results.

Keeping An Eye On The Run-up In Mobile Streams Plc Stock Price

It's All Good?...Buongiorno CEO Says Economy Not Hurting Business

According to a detail-light Reuters interview this morning with Buongiorno (BNG) CEO Andrea Casalini, the Italian mobile giant had a "very good" 1st half 2009 and claims that the economy hasn't hurt business. Without providing any numbers, Casalini indicated that Buongiorno was performing in line with its plan and while it has the resources to make acquisitions it was going to focus in organic growth. I'm very interested to see the actual Q2 numbers. As I reported in early May their Q1 figures were down 15% from a year earlier...and I have to believe that their personalization heavy product line is becoming less and less relevant in a smartphone world. Moreover, I still can't find any indication that their big mobile social networking initiative Peoplesound is getting any meaningful popular traction (see graph below). But, we shall see...these guys are still a mobile entertainment powerhouse, with ~$450mil in 2008 revs (#4 on my revised Mobile Entertainment Top 20) and they do have significant mobile marketing and telco aggregation components to their business to offset potential content woes.

Updated Cabana Mobile Entertainment Top 20 by Revenue

Oh No He Didn't! ...Pachter Calls Mobile Games A Fad

Joystiq ran a piece last night covering the July Industry Update from Wedbush Morgan rockstar interactive entertainment analyst Michael Pachter in which he has a section entitled "Mobile Phone Games Are A Fad." His point is that the market for mobile games will grow over the next few years, but will eventually decline as better portable gaming devices enter the market. Here are some other interesting tidbits from the report:

• The mobile games business WW is currently around $2bil (sounds right to me, I've always thought those $5mil folks were smoking crack)...and will max out at between $4bil & $6bil in the next few years
• iTunes App Store has generated ~$400mil in revenue from mobile games in its 1st year of operation (this is based on 20% of downloads being games...which I think is an underestimate)
• Pachter thinks EA's mobile initiatives are "misplaced" & he goes on to discuss how the top mobile games producers are "barely profitable" (I think he's being generous here)

Without having read the full report (which I probably can't afford), I must say I disagree. I think mobile games will continue to be a substantial part of the mobile content mix and will attain more popular acceptance (substantially beyond today's 5% of addressable users) as devices and platforms evolve. As usual teens & tweens will drive the trend. Already we're seeing smarter mobile devices (iPhones, BlackBerrys, G1s, etc.) get into the hands of that demo..and I'm certain, as the capabilities & user experiences of those products continue to improve and their game offerings get better and cheaper, that kids will leave their DSis and PSPs in a dusty corner of the bedroom floor more and more frequently. This non-rockstar analyst predicts sustained growth.