Archive for November, 2009

The Fight

Wednesday, November 25th, 2009

It all started at the beginning of October, when Verizon launched the “There’s a Map for that” ad. Not long after, AT&T responded with a(n unsuccessful) lawsuit, and ads of their own. And, as if AT&T alone wasn’t enough of a sparring partner, later in October Verizon introduced it’s Android plans with an ad directly aimed at Apple’s iPhone. Of course, Apple has engaged in the fight.

So, what should we at Sprint think of this? On one hand, it’s great to have two Big Bell Dogmatists slugging it out, spending all their energy dragging each other down in the public arena. It makes both of them look ugly.

But, on the other hand, is it good for us to just sit on the sidelines? Sure, we enjoy the same benefits over AT&T and the iPhone that Verizon is making a big stink about, but how many people know that? Our 3G map is much bigger than AT&T’s (looks a lot like Verizon’s), we’re regularly recognized for having the most reliable and fastest 3G network, and of course, we’re the first with 4G. And like Verizon, we have two great Android devices, the HTC Hero and the Samsung Moment.

So what do you think? Is Sprint best served by sitting on the sidelines as Verizon dukes it out with AT&T and Apple, or would we do better by jumping in the ring ourselves?

Observations: Uses – November 24, 2009

Tuesday, November 24th, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly

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be disappointed when they don’t play out.)

Does 99 cents work for location-based apps?

Monday, November 23rd, 2009

Last week I was a judge in the Location category at Under the Radar. I was really impressed with the event as a whole, the quality of participating companies, and specifically all four of the companies in the Location category. I was most encouraged by a company called SimpleGeo. They’ve developed a cloud-based service providing location infrastructure for mobile apps. What I like about this is that it accelerates innovation, which accelerates the mobility revolution, which is great for all of us in the mobile ecosystem (except maybe those that have fixed assets at the heart of their economic engine, or those lacking a clear path to support the kinds of bandwidth the mobility revolution will drive…).

But, as much as I liked the company and the service, their pricing model really raised some issues for me. They have three tiers of service. They have a free service, a $399/month service, and a $2,499/month service. The breakpoints are driven by the volume of queries, and Matt explained that the free service could support an application with up to 5,000 or maybe even 10,000 users. I asked if that pricing would support someone with a 99 cent app, and Matt explained that the pricing was based on a tremendous cost savings compared to a company operating their own location infrastructure rather than using SimpleGeo’s cloud-based services.

So, let’s do some math. Taking the middle of the range number, let’s say that when we get to having 7500 users, we’ll need to step up to the $399/month SimpleGeo service. That works out to $4,788 per year in SimpleGeo services. If I charged 99 cents for the app (and I got to keep 70% of that price), then my total revenue from app sales is $5,197.50, leaving $409.50 to cover all of my other costs (assuming that my users stick with the app for no longer than a year).

Bottom line, I’m not sure that sophisticated location-based apps work at 99 cents, and I don’t think the problem is SimpleGeo’s pricing model – the alternatives are likely more expensive.

What do you think?

Observations: Devices – November 22, 2009

Sunday, November 22nd, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)

Observations: Uncategorized – November 21, 2009

Saturday, November 21st, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)

Observations: Openness – November 18, 2009

Wednesday, November 18th, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)

Observations: Carriers – November 17, 2009

Tuesday, November 17th, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)

Observations: Applications – November 15, 2009

Sunday, November 15th, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)

Carrier Speed vs. Valley Speed

Friday, November 13th, 2009

Last week, I participated in the Open Mobile Summit in San Francisco. It was a very impressive event. My favorite session was probably the keynote panel on day 2 with Walt Mossberg (The Wall Street Journal) moderating (sort of), John Donovan (AT&T), Kevin Lynch (Adobe), Michael Abbott (Palm), and Vint Cerf (Google). It was a great demonstration of “Big Bell Dogma” vs. Internet innovation.

My panel was the “Fireside chat: Future of the carrier deck.” Again, I think the contrasts in perspective and approach were pretty apparent.

For my intro, I explained that I think there are three fundamental truths that shape how we’re thinking about the deck and app stores:

  1. Customers just want to do what they want to do, when they want and where they want. We need to let that happen.
  2. App developers just want to get their great ideas to market as fast as
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  3. However, mobile operators still hold a unique place in the ecosystem. We can take steps that create value for customers and developers.

With those truths in mind, we’re focused on what one of my teammates (Brian Huey) phrased as “Do you want innovation to happen at carrier speed or valley speed?” We want it to happen at valley speed, which means that the carriers need to stop being a chokepoint and instead focus on how to add value without slowing down the process of bringing innovation to market. We don’t add value by trying to determine which apps are worthy of appearing in our “stores.” We do add some value by allowing customers to choose to pay for apps and content through their wireless bill. We do add some value by helping with marketing so that customers don’t have to wade through an endless supply of similar apps. We really add value when we open up our assets (network, location, etc.) so that developers can expand their creative limits.

Carriers are great at operating network assets, and we manage an existing relationship with the end customer. We aren’t great at writing consumer software or developing consumer-facing interfaces. In those areas, we need to get out of the way and let the highly capable players (startups and established players) who specialize in those areas to do what they’re great at. (Needless to say, not all carriers share this perspective.)

In the spirit of getting out of the way, the week before OMS, at our developers conference Sprint announced three pretty significant changes in how we view the carrier deck and app stores:

  1. We don’t believe that carriers are the best at operating app stores. Since Palm’s App Catalog and the Android Market are both well designed app stores, we’ve never included our carrier deck on the Palm Pre (and soon Pixi) nor on any of the Android devices we’ve launched – and we never will. However, as Microsoft’s Windows Marketplace and RIM’s Blackberry App World are establishing similar credibility, we will be removing our deck from Windows Mobile and Blackberry devices. There’s no need to confuse customers with multiple ways to get apps and there’s no need to force developers to submit to multiple stores.
  2. Similarly, feature phone users (those that don’t have a smartphone like Android, Palm, or Blackberry) still need an easy way to find, buy, and download apps and content. This is where the carrier deck still makes sense. But we don’t believe that the carrier is the best to run this app store, nor
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    to figure out where it can go in the future. So, we are issuing an RFP to outsource the operation of our deck to someone who specializes in app stores, can do it faster and better for developers and customers, and can take it all to the next level.

  3. We also know that there are already lots of applications out there that haven’t bothered fighting through the gauntlet of carrier approvals. Instead, they’re distributing their apps through independent mobile app stores. Probably the best of these (at least the most successful) is GetJar. At our developer conference we also announced that we’re opening up our deck so that when our customers search in our deck, they’ll also be able to find and download everything that’s in GetJar.

I’d love to hear what you think? Is Sprint heading in the right direction, or should carriers continue to insert themselves more in the process? Please leave your comments below.

Observations: Devices – November 11, 2009

Wednesday, November 11th, 2009

Standard disclaimer: don’t take from my selections, ordering, headlines, etc. any indications of the interests or plans of my employer (if you do, you’ll undoubtedly be disappointed when they don’t play out.)