Terrence Barr: Competitive landscape in mobile:

This is a blog from the Open Nordic conference in Skien Norway 19-20 june 2008.


Inovator´s dilemma:

• Carrier networks v.s. voip. Is ubiqutious, open standards, no control point, no barriers to entry, cpractically free to use. Even if not perfect it marganiilzes tradition voice model
• Walled gardens vs. open internet: Open technologies and economies of scale outside the wall. Harnessing these revenue opportunities requires adopting the rules outside the wall. Scarcity value begins to evaporate (AOL v.s. internet).

Openness turning the model on its head.

• Openness increases market opportunity, but decrease scarcity value.

The wireless industry at a crossroads:

• Today: predominatly proprietary and closed
• Huge investmens and rapidly commoditizing services
• Massive friction in the ecosystems. Content creators must deal with each island separately making service creation very inefficient.
• Existing revenue models not suited for new services. Monthly subscribtion fee is not granular enough. Customers are wary of random ads but also of data mining.
• Customer satisfaction low and turnover high
• Bottom line: Industry needs new revenue models and needs to renvient itself through innovation and openness.

Comment: Many carriers around the world is using security models to clob developers into submission. Carriers are saying that the developer requires a cut from the usage of every application. This is because there are features on the phones that requires signing of applications.

Open source and open standars: Problems or solution

• Technology diffusion is a fact of capitalist economies.
• Must face this evolution, since it is inevitable. Nust reinvent find new sources of revenue fbefore margins disappear. Must open up and deal with loss of control. Must deal with technology evilution
  
• Open soure and open standards are simply accelerating this rnd
  

What is "open" really about?

• Empowerment
• Choice
• Local decision making
• Control of your destiny
• People no longer accept to be tied into a proprietary model. People are waking up to the fact that tis is not a good ple to be in.

Contrasting approaches:
hierarchical v.s. flatness. Resisting change v.s. dealing with change. Scarcity vs. value. Us and them v.s. we

Do customers really care?

• Governenments (Brazil and EU does).
• Most -people- probably doesn´t care. However, the DRM model example shows that people -do- care in some cases (DRM doesn´give any value to users, users kept circumventing until the industry just gave up). So, consumers -do- care at the end of the day because it gives them choice.

Lead users and open source

• Lead users crave openness. They represent cutting edge of the user base. Notcontetn with stqus quo. Pus the limits and aren ´t afraid to go through some pain. Primary adopters of open soruce and open standars tchnologies.
• lead users create market shifts: If they succeed the word spredáds, the herd of customers following, creating a market shift. If you havent anticipated it you´ll be left behind fast.

The wireless industry is different

• Mobile is the new desktop but. Complex and rapidly evolving technolgy stack. Many players. Security paramount. Enormous scale. Consumer focus (price, functionality) unique deployment model Entrenched distribution and business models. On the desktop everyone have to be a semi expert, but on phones that is just not the case.
  
• Mismatches. Open source properties v.s. wireless requirements and established models.

Inhibitors

• Client-side technology stack. You can´t really build an open blown phone on open source, yet. Bazaar causes fragmentation, at least initially. P nd integration is a headache.
• Innovation and deployment model: Open source works best on continous beta style. Mobile idustry runs on complete functionality, solid testing and long term stability.
• Choice: Can there be too much?
  
• Open access and data connectivity. Requires open and reasonably fast data pipe. Mobile access predominatnly limited, controlled, slow and expensive. Always on cheal fast mobile eonternet still years avways for most.

My own comment: OpenMoko is really, really important for the near term future.

Terrence mentions a rumour: Venture captialists in the bay area says: If your business model requires a business deal requires on a carrier, the VC won´t fund you.


The shift that is occuring:

• Customers are increasingly driving technolgy adoptio: Bacic needs are met. Choice important. Empowered by standards etc.
• Customers vote with their feet.

Positioning for opportunities: Where do you want to be?
You can

• control Not successful in the long run.
• lead You need to be the leader in something.
• follow No value added.

The opportunities:

• Expect ideas from unexpeted places.
• Open yoursel to outside innovation
• Redefine your value-add. "Which business are you -really- in
• Engage your new market research an customer outreach departmet." The community is your best friend. Lead users an untapped source of value
• Monetize different: Commodities are not a bad thing. Many small profits are also very good. Selling intangibles are cool. Build side-channels for monetization .
  
• Money follow trust ;)

Conclusions

• Open soure her to stay Customers won´t have anything else
• Wireless industry being hitt by perferct storm. Commoditzation, infrastructure, shifting expectation.
• etc.