Recently in News Category

I usually don't get to write about the events I attend, but with two events in a row (Facebook's F8 and Venture Beat's MobileBeat 2008) and two more to come (TechCrunch's Mobile Web Wars Round Table and TechCrunch's Annual August Capital Meet Up) I need to organize my notes -- and why not do it here on the web.

F8 was a waste of time in general - Mark Zuckerberg's keynote was fine but the next talk that followed him on stage was long and mostly just asking-for-applaud.  it became boring rather quickly, and the different tracks did not offer much.  I switched between sessions in hope of finding useful talks, but at least to me the time could have been better used.  I left early.

MobileBeat was a different story.  There were four panel discussions, and pretty much all of them offered useful information.  The panelists knew what they were talking about.  I for one learned quite a bit.  I'm sure different people left with different takes -- here's mine.  These are not necessarily related - just notes from the event:

• A lot of talk about iPhone.  However, people did mention a few times that internationally the number of iPhones is insignificant compared to other handsets.
• Nokia has a 70% penetration in India.
• The problem with Apple's iTunes App Store is that it's another walled garden.  And the same old pattern is happening there:  A small number of apps show at the top of the list, they get more downloads because they are at the top, and they keep staying at the top.  Vicious circle.  Few apps will find a chance to be "discovered".
• About 6500 apps exist for BlackBerry today.  About 70% of these apps are vertical.
• Unless you have a specific network and customer line up, being vertical makes apps less attractive to the VCs since there's already a small percentage of people who download apps, and for a vertical app this makes the number of downloads (hence growth) even smaller.
• For the same reason VCs prefer to see apps that would work across all platforms, not just iPhone.
• At the same time, a number of companies such as Loopt has found iPhone a good platform for the initial launch - call that your beta.  Do it on iPhone because development is short and download problems are not huge.  Then study the reaction of your users, who are usually the early adopters.  If that works out well, then think about releasing the same app to other platforms such as Windows Mobile or Symbian.
• Despite all the talk about how Apple is eating AT&T's lunch with the app store, AT&T is not much interested in the app revenue.  The revenue from the customer, including the voice, SMS and data plans, dwarfs the app revenue.  So they prefer to focus on the infrastructure and the "network", not the apps.
• VCs are less interested in replicated what's available on PCs on the mobile devices, that's usually done by larger companies anyway and is hard to compete with.  They look more for things that would have not been possible if the devices were not mobile.
• Games are the most popular apps on mobile devices.
• Among interesting topics to mobile VCs are edge issues (such as acceleration), identity management, and discovery of content/apps.
• iFund seemed to be pleased with the investments so far, and they seem to be ready to expand their fund if they see more iPhone opportunity.  Before iFund they have practically never seen a "successful" mobile investment.
• Numbers are amazing (or I should say scary):  In all these years only about 143 mobile M&A transactions have happened in the market, of which less than 20 are more than $200M, and less than 35 are more than $100M.  This means little success in mobile VC investment.
  
• Advertisement is still considered the biggest way to monetize.  However, brands do not prefer deep-inside-the-app advertising, because the user experience does not allow the user to easily "click through" to the target site - user usually does not (or cannot) leave the app.
• Referral fees are also a good business model.  It's possible, for example, to have an app on iPhone that refers the user to a song within iTunes.  If the user buys the song the app gets a cut.
• Also using Virtual Goods as a monetization strategy came up a few times.  Interesting.
• MySpace has about 1.7M users on their mobile web portal.  Facebook seems to be about the same.  These are US numbers.  MySpace also has downloadable apps, but they did not disclose numbers.  I guess if download was in the same ballpark as mobile web users (or more) they would disclose, so it should be considerably less.
• Some interesting numbers in terms of mobile usage in the US:
• Number of subscribers:  232M in '07 ---- 255M in '08
• Those using SMS: 140M in '07 ---- 198M in '08
• Those using MMS: 77M in '07 ---- 123M in '08
• Those with data plans: 74M in '07 ---- 95M in '08
• Of 95M users with data plans ony 40M actually use Internet services, of which 30% are on smartphones.  4% on iPhone (part of the 30% smartphone), but the iPhone users' usage is 5X the average smartphone user.
• The discussion on whether one should write the app for mobile web or as a downloadable app did not coverage to a specific black and white answer.  The consensus was that you should look at your audience.  For example, if it's a business app you would probably want to write an app for BlackBerry.
• AdMob's CEO was emphasizing that advertising on mobile is already happening.  They are serving 3.5 Billion ad impressions (sorry - can't remember if it was "per day" or "per month" - but the number is too huge anyway) internationally.  The CPM is $10-$30 in the US.  A lot lower internationally.
  
• Forget about Java development for handsets in the US.  The download issues are just too much hassle.

I'm sure there's more, but this is most of what I remember from my notes...

The iPhone App Store has arrived.  It requires iTunes 7.7, and the interface, while a lot is left to be desired, is very simple and easy -- a breakthrough in mobile applications industry.  You buy apps just the way you buy songs.  People will get it.  One click, and it's downloaded to your iTunes.  Sync your phone, and you're set to go.

Currently there are 27 pages of applications currently available. A huge number of apps are games - not my forte so I can't really talk about their quality.  Also a lot of books are listed as applications, and a bunch of language tools (translations, phrasebook, etc).  And then there's a host of various types of Applications.  "135 of these apps are free, while the remaining 417 range in price from $0.99 to $69.99, with the vast majority ranging between $0.99 and $9.99."

Read more at TechCrunch's iPhone App Store Has Launched (Updated).

I browsed through the apps and aside from a couple of location-based applications such as Loopt and Whrrl which we already knew about I can't say I saw anything that would really catch my attention - but hey, this is the first day this thing is live.  Think of PCs before word processors.   There will be a storm coming.

Yahoo! has made a game changing move in the search space -- opening its core search technology as APIs to any developer who wants to use it:  "BOSS allows developers to submit queries (and their associated parameters) via an API to retrieve up to 50 web, image, news, or spelling results in XML or JSON format at a time."

The API is free with unlimited access.  Developers will agree to show Yahoo! ads along with the results.  Read the full article at Yahoo Radically Opens Web Search With BOSS.

"At a hardware BOM and manufacturing cost of $173, the new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in the product's functionality and unique usability, due to the addition of 3G communications... The original 8Gbyte iPhone carried a cost of $226 after component price reductions, giving the new product a 23 percent hardware cost reduction due to component price declines."

Read the full article at iSuppli's Preliminary Study.  The image shows the BOM from the iSuppli article. Click on the image for larger version.

The biggest news today is that Nokia is buying the rest of Symbian and releasing it as open source under Symbian Foundation.  Nokia is also planning on a big application ecosystem around symbian focusing on bringing web-based services to the handsets.  So things are getting interesting.  We now have:

• Google/Android/Open Handset Alliance with massive developer support and well, Google's weight behind it, but no handsets yet
• Apple/iPhone with impressive and proven "next generation" user experience, fully connected with 3G and GPS coming, a very fast growing user base but not "open"
• Nokia/Symbian, not as sexy as Android and certainly iPhone but with a huge huge user base, now going the open route
• And LIMO, promising a fully open Linux for mobile platform, but with pretty young anyway you look at it without the carisma of a Steve Jobs that would pull a zero-to-dominate-the-market-in-sixty-seconds.

So the market is interestingly shifting, and obviously regardless of what Android delivers in the end it looks like its existance has caused some really interesting changes in the mobile landscape.  Without Android I don't think Nokia would be doing this.

I'm planning to contemplate some more on how this new picture will change the market...  UPDATE:  Read Om Malik's commentary on the subject.  It's good.

"Early Facebook executive Matt Cohler announced his departure today to join top tier venture fund Benchmark Capital."

TechCrunch has interviewed him and they have talked on a number of topics, from Facebook to Benchmark.

Read the full article at The Matt Cohler Exit Interview.

Biggest news today was the new funding for LinkedIn, well, not the funding itself, but the valuation.  LinkedIn is now officially worth more than $1 Billion - yes, that's with a B.

Also the folks at Reddit released the reddit,com source code as open source.  Aside from some spam control code that they have kept proprietary the rest can be used by anybody to create a post-news-and-let-people-vote service.  Thanks guys!

Ok... The keynote is over. This picture (thanks to Engadget) summarizes the key announcements about iPhone:



The new iPhone - iPhone 3G - will be out on July 11. It has 3G and also GPS (A-GPS), so location based services have a nice platform with location tracking and data connectivity. A lot of enterprise features such as remote wipe, centralized addressbook, etc are built into the device. And the price is $199 for the 8G model - definitely more affordable.

iPhone 3G will be launched in some 70 countries.

Oh, and Apple is replaceing .mac with "me" - with a nice and tight integration of email, calendar, address book, and pictures between iPhone, web browsers, and desktop apps such as Outlook.

So far there has been only one really interesting "news" coming out of Apple WWDC keynote:

"Apple will maintain a persistent IP connection to the phone, where a 3rd party server can ping Apple's notification service to your device. It can push badges, sounds, and custom textual alerts (like how SMSs look)."

This is to avoid running background processes on the device listening for async notifications, which takes away CPU cycles and drains the battery faster.

So Apple is doing a radically different approach: They will maintain a "push" server infrastructure which stays connected to each cell phone. Applications send notification to this server infrastructure which will in turn push it to the device. The connection will stay on, both over wifi and cellular.

A number of blogs are covering the Steve Jobs keynote live. While I'm an avid TechCrunch reader, I have found Engadget's coverage more comprehensive than Michael Arrington's:

Steve Jobs keynote live from WWDC 2008 - Engadget

Also the Engadget page loads faster than TechCrunch's. It looks like the live video feeds are slowing TechCrunch.