RIM, Nokia Show inflection Point in Device Market

A decade ago, it would have been hard to imaging Nokia being in the shape it now is, abandoning Symbian and losing market share. Five years ago, it would have been quite difficult to imaging the situation Research in Motion now is in, losing share rapidly. Both developments likely indicate that an inflection point of some sort has been reached in the handset market.

Perhaps one common thread here is that ability to offer a superior web and application experience drives growth. One issue for RIM is that BlackBerry was conceived as an integrated system for handling email communications. But lots of us would say BlackBerry's web browser experience has been poor. When a company optimizes its experience for an important application (secure mobile email) and a particular customer segment (enterprise), and those are key user drivers, a company wins.

But if end user requirements change, the optimization can become a drag. These days, one might argue, it is the web experience, or at least the application experience, which has become key. The change has been coming for a while, but most changes in technology-related businesses tend to take a while to transform a business. RIM's market share issues, along with Nokia's might signal the inflection point at which the new order rapidly becomes established.

If that is the case, then rapid market share declines and expansions always are possible. Nokia's position is different than RIM's, to the extent that Windows Phone 7, matched with Nokia's manufacturing prowess, could change Microsoft's share of the mobile operating system market in dramatic ways many might have thought unlikely.

But it is clear that the Symbian gambit has failed Nokia, and RIM might face a similar fate with its email-optimized platform.

The Business Implications of an "Open" Mobile Ecosystem

One way of illustrating the complexity of the mobile broadband ecosystem is simply to take a look at the ecosystem visually. Econsultancy has a new "infographic" that includes a bewildering array of industry segments and roles. Download the chart here: http://econsultancy.com/us/blog/7649-mobile-stats-and-trends-at-a-glance. iuiui

If you routinely spend a lot of time following developments in the access provider space (telcos, cable), the first thing you will notice is how much of the ecosystem now exists outside the actual ownership of the access providers themselves.

A huge amount of activity now happens in the formerly distinct advertising, applications, content, publishing and commerce realms. Much of the activity occurs in realms allied to the access business, but still separate, such as mobile apps and devices.

Access providers are not just providers of "access to the Internet," of course, and if they have anything to say about the matter, increasingly will find new roles that build on the access role. But it might be striking to see an illustration of the mobile ecosystem where the "access" is such a tiny part of the overall fabric.

But that tells you quite a lot about the new and more open ecosystem that is the future of the access business.

The Mobile Ecosystem: An Overview

Widespread Demand for Online Video, IF Some Conditions are Met

Some 87 percent of U.S. consumers buy multichannel television, but 56 percent of respondents to a recent Harris Poll say they would stop buying multichannel TV and watch on the Internet if certain conditions were met.

Some 44 percent said they would stop buying cable, satellite or telco TV is all of the programs that they wanted to watch were available, for no incremental charge, online. That should come as no surprise.
"Free" is a highly-popular consumer price point.

But "day and date" issues are important as well. Some 25 percent said they would stop buying multichannel TV if they could watch online at the same time the programs were run on a subscription TV service.

Some 16 percent would do so if they could get all the programs they wanted to watch for a small fee online and another 16 percent said they would do so if it was less complicated to set their TV up with Internet.

Looking by age, majorities (59 percent to 62 percent) of multichannel video subscribers between the ages of 18 and 54 said they would be interested in giving up their cable TV if certain conditions were met.

Since it is highly unlikely, perhaps nearly impossible that content owners and distributors are going to go along with the "free or low cost" availability of popular content, video cord cutting on a massive scale seems unlikely. The most likely scenario is a shift to "get Internet access, with some restrictions, if you keep buying what you already do, and possibly pay a bit more."

That's the only scenario that would satisfy content owners and major distributors, no matter what consumers might want.

WOULD STOP PAYING FOR CABLE IF…

"Which of the following, if any, complete this sentence for you? Please select all that apply.

I would stop paying for cable television in favor of watching TV shows on the Internet if…"

Base: All U.S. adults

	Total	Age				Gender
		18-34	35-44	45-54	55+	Male	Female
	%	%	%	%	%	%	%
Have cable TV (NET)	87	85	88	88	89	87	87
Have any interest in giving up cable TV (NET)	56	62	62	59	45	60	52
I could get all the programs I wanted to watch for free online	44	48	47	50	36	47	41
I could get all programs online at the same time that they air on television	25	33	28	25	17	27	23
I could get all the programs I wanted to watch for a small fee online	16	23	20	13	10	20	12
It was less complicated to set up my television with Internet	16	14	19	19	15	17	15
Something else	5	8	5	5	3	6	5
Nothing - I have no interest in giving up my cable TV	30	20	22	27	43	25	34
Not applicable - I already gave up my cable TV in favor of watching TV on the Internet	2	3	4	1	1	2	2
Not applicable - I do not have cable TV	13	15	12	12	11	13	13

Harris Interactive: Harris Polls > The Evolution of Watching Television

TV Viewers are Distracted

U.S. TV viewers increasingly are "distracted" while watching TV, a survey by the Harris Poll indicates. Most Americans also surf the Internet (56 percent) and many do other activities like read a book, magazine or newspaper (44 percent), go on a social networking site (40 percent) or text on their mobile phone (37 percent).

Three in ten say they shop online while watching TV (29 percent). Some seven percent say they have read a book on an eReader device while watching TV while 44 percent they have read a traditional book, magazine or newspaper while watching TV.

Some 56 percent report they have surfed the Internet on a tablet computer while watching TV, 18 percent saying they have done so on their mobile phone.

Some 30 percent of respondents say they do something else while watching TV, while 14 percent say they do not do any other activity while they watch TV.

That does not conclusively suggest that TV has become less compelling, but likely more that other pursuits have become equally compelling. The availability of other convenient devices also suggests there is limited room to create "Internet experiences" on the TV. People already have lots of ways to do that without messing around with their TV screens.

TABLE 1

ACTIVITIES DONE WHILE WATCHING TV

"Which of the following, if any, do you ever do while watching TV? Please select all that apply.

While I watch television I also…"

Base: All U.S. adults

	Total	Age				Gender		Education
		18-34	35-44	45-54	55+	Male	Female	H.S. or less	Some college	College grad +
	%	%	%	%	%	%	%	%	%	%
Surf the Internet using a computer	56	68	59	55	45	53	59	52	57	62
Read a book, magazine or newspaper	44	42	41	44	47	37	51	35	50	51
Go on a social networking site (e.g. Facebook, Twitter)	40	57	47	36	21	34	45	33	44	46
Text on my mobile phone	37	57	46	38	14	35	39	28	41	47
Shop online	29	40	33	27	19	27	31	22	31	39
Surf the Internet using my mobile phone	18	30	23	15	6	20	16	10	19	29
Read a book on an eReader device (e.g. Kindle, Nook)	7	6	8	9	7	6	9	5	10	9
Surf the Internet on a tablet computer (e.g. iPad, Xoom)	7	7	13	4	5	8	6	6	5	11
Something else	30	32	26	28	30	26	33	26	33	32
None	14	8	12	16	20	18	11	19	12	10
Not applicable - I do not watch television	3	5	3	2	2	4	2	3	2	4

Harris Interactive: Harris Polls > Distracted TV Viewers