I’ve moved to San Francisco, centre of the Mobile World

San Francisco

San Francisco

I’ve moved to the City By The Bay — again. I spent December 07 and January-February 08 in San Francisco with Mobile Industry Review (or SMS Text News as it was known then). I had a fabulous time meeting the great and the good in the mobile and interactive industries. There’s no escaping the fact that Silicon Valley is still the epicentre of digital. In late February, Mark Bole and Jen Grenz of ShoZu invited me along to a TechCrunch event — an awards ceremony if memory serves. Michael Arrington himself got up on stage and with tide of innovation beginning to wrap itself around the mobile market, declared:

Silicon Valley has been the centre of the technology industry for the last 20 years, and now it’s the centre of mobile.

That’s not an exact quote but it was words to that effect. I took exception to this. It was blatantly false. Google’s CEO had, about 6 months previously, stated that they were beginning to focus their efforts on mobile. But the ‘Valley’ — the Bay Area — was far from mobile focused. A lot of the entrepreneurs I was meeting who were professing to work the mobile industry were themselves still sporting bollocks-handsets. Glorified alarm clocks that might, if you were lucky, come with a rubbish, rubbish basic web browser. The trials and tribulations that I described trying to get hold of a mobile handset from AT&T, Sprint, T-Mobile and Verizon were consumed with glee by my European audience at Mobile Industry Review. America as a mobile powerhouse was nothing short of a laughable phrase. Almost as hilarious as the majority of American businessmen walking about with Motorola RAZRs in belt holsters.

RAZRs — and their knock-off copies — are still hugely prevalent, especially across the majority of America. But the iPhone has completely changed market perception. Back when I was last here, the first generation iPhone was the device du jour. Now it’s the 3G iPhone — with another major hardware refresh due in June. T-Mobile’s got it’s Android G1. Verizon’s got it’s Storm and Sprint’s got the new ‘Jesus Phone’, the Palm Pre, on the way (if the Palm team can get it out the door this year, that is).

For a long time Americans have been sat at the back of the classroom wearing the dunce cap and a bemused grin. For a long time, the fact that your mobile handset ‘worked without wires’ was, surprisingly, good enough. What more do you want? When you sit back and consider that this is the nation that put men on the moon, they’ve been rather slow at the uptake of anything other than mobile voice telephony.

Then Jobs released the iPhone. He and his Apple geniuses figured out a way to unleash the latent American talent for delivering inexhaustible and relentless innovation. First, remove the operator from the equation. Deliver unlimited data and reduce ‘voice’ to the proper commodity it should be. Hook the iPhone into iTunes (which already has your credit card details) and, bish-bash-bosh, there’s a marketplace. Develop an application and stick it on iTunes and folk can buy it. Indeed within 30 days of launch, iTunes was a $500m marketplace.

Forget for a moment that the rest of America is still carrying about rubbish, useless voice-only handsets. There’s gold in tham-tharrrr-hills. Everyone company you can think of is, all of a sudden, launching an iPhone application.

Why? Because it’s cool. And because the CEO has one. Or, more likely, the CEO’s daughter has one and reckons her dad and his company is stupid for not ‘having an app’. Out of nowhere, legions of developers are now dedicating themselves to the iPhone platform. Only 17m iPhones have been sold as of last month’s Apple presentation. 17 million. On a bad day, Nokia ships 7m devices each day. To be clear, Nokia’s shipments eclipses the entire iPhone market every 2.5 days.

That should mean something.

But it doesn’t.

This is Silicon Valley. And, like Hollywood, Silicon Valley sets the tone for the rest of the planet when it comes to technology. And technology is now mobile. And mobile is not about telephony, any more. (Thankfully). On the lower layer, it’s about the transmission of data. On the higher layer, it’s about applications and services that fit the requirement of the mobile user.

You know something’s going mainstream when, despite Nokia shipping all those units, you’re sat in a pub in the middle of England somewhere watching the iPhone Applications television advert display between the football match. You know the one I mean — the one showing all the cool things you can do with an array of applications. The one that’s introducing the West to doing more than simply using your handset as a telephone and as an alarm clock. The one that shows there’s more to your mobile life than sending 160 character text messages.

Whatever your view of the iPhone itself, the market is now dancing to Apple’s tune. Blackberry’s App World has launched, Nokia’s Ovi Store is en route.

It’s dancing to the Apple tune because you can make money. There are concerns — the flooding of the App Store, the inevitable price impact, insane decisions from the Apple Store acceptance team — but, developers are making money. More money than has ever, ever, EVER been made in the mobile industry to date. In the middle of a global downturn, developers are making money.

Investors are understandably piling into the marketplace with an array of ‘iFunds’ springing up to help fund application innovation. Yes it’s only the iPhone at the moment, but they’re also looking at Android — with an eye on Ovi and the Pre too. Given suitable imagination and an Elance account, almost anyone can have an iPhone application created starting at a cost of about $500 and, all things being equal, start making money — good, real money — within a few weeks. With only 17m iPhones out there, there’s not much of a Chris Anderson ‘long tail’ at the moment. We’re getting there.

The global American behemoths along with other technology titans are rounding on mobile as the Next Big Thing. Apple, Palm, Google… those are just a few of the names ready and aiming to own mobile. Despite how unpleasant a reality it may be for the die-hard Symbian Helsinki-loving Nokia fans, the centre-of-everything in terms of mobile development is most definitely Silicon Valley.

Which is why I’m here in San Francisco. I’ve got a new project in the works (more details soon) and I’m also delivering some consultancy for two companies in the area.

I haven’t left the hotbed-that-is-London for good. I retain a place there (well, just outside the city actually) and I’ve got a few board meetings I need to attend at the end of the month so I’ll be doing the SFO-JFK hop quite often.

Although Mobile Industry Review is no more (in the context of it going subscription-only last week), I’m still on the hunt for companies and individuals to profile. So if you’d like to go for a drink or a coffee in San Francisco, drop me a note. My UK number still works: +44 7769 658 104 or you can get me on my brand new American number: +1 415 200 9515 or mail me at ewan@mobileindustryreview.com.

Original post by Ewan and software by Elliott Back

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  • http://www.mobileuserexperience.com Marek Pawlowski

    “On a bad day, Nokia ships 7m devices each day. To be clear, Nokia’s shipments eclipses the entire iPhone market every 2.5 days.”

    Hmm…

    7m Nokia handsets per day x 365 days per year = Nokia shipments of 2.555 billion handsets per year?

    You might want to double check your figures!

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  • http://www.mobileindustryreview.com Ewan

    Hey Marek — I'll do that — I'm sure those were the stats I got recently
    from Nokia themselves. Thanks for pointing that out!

    2009/4/6 Disqus <>

  • http://www.mob4hire.com Stephen King

    Hey, Ewan:

    Love your viewpoint on Silicon Valley not being the centre of mobile; but it's interesting that it takes an outside perspective to really appreciate it. I live in Calgary, Canada (YYC); NOT in any sense of the word a hotbed of technology other than petroleum (despite some good stories here and there like iStockPhoto and Stumbleupon). I am CEO of a little mobile company doing good global business: http://www.mob4hire.com (crowd sourced mobile application functional and usability testing).

    I've been doing the SFO/Silicon Valley and YYC journey for most of my 25 year career in the software business; and while it's obviously still a very important spot for technology, the viewpoint that it's the centre of the mobile industry is misguided, hopeful and probably egotistical all at the same time.

    Case in point: The atmosphere and importance of GSMA Barcelona in February far eclipsed what I just experienced at CTIA Las Vegas last week. In Barcelona, the industry was innovative and pushing the envelope with business raging from 9:00 am to 9:00 pm every day. At Las Vegas, the trade show hours were 11:00 am to 5:00 pm, the floors were pretty vacant, and no real announcements to speak of: heck, day 2's big announcements was from Blackberry (notably a Canadian company): they unveiled Blackberry App World; which had previously been announced in Barcelona (in addition to 9 other new app stores).

    To summarize: I had a great time in Vegas vs. I did great business in Barcelona.

    I admire Apple's innovation, as well as the rest of the valley's but unlike the PC and web waves, the mobile industry is everywhere, innovation is everywhere and opportunity is everywhere. Those with that perspective will flourish. Those who relish navel gazing should focus their efforts only in SFO.

    Thanks for readin'!

    Stephen King
    CEO, Mob4Hire.com

  • njar

    Great move.. Despite Sydney being an awesome place. SF is probably my favourite city ever. Catch up Soon!

  • matthaus

    To further your point Ewan I nominate 3rd Street, San Mateo, as the mobile startup capital of the world. Every time I'm there it seems you can walk into any building on the street and you find some mobile startup in it.

    As far as your CTIA-MWC comparison, Stephen, I would agree with your suggestion that MWC was stronger . However, for the mobile consumer market I think both the CTIA and the MWC are increasingly irrelevant, based on feedback we hear from US developers and startups. Simplified, the way they see it, attendance at these events doesn't get them closer to the Apple App Store. Apps and app usage has such a big impact on the US mobile industry in the moment. Take for example the engagement data comScore came out with today. Among others the data suggests that an average iPhone user is more engaged with retail sites than an average internet user (http://venturebeat.com/2009/04/06/behold-market…). That's big news. Is this a sign of mobile commerce taking off ? Will we see more mobile advertising around transactions ?. Being in Europe in the moment I find few commentators get the relevance of news like that, naturally, as questions like these touch few businesses.

    Good move, Ewan. Matthaus from VentureBeat

  • http://www.i2SMS.com Giff Gfroerer, i2SMS

    Ewan,

    In 2007 the US sent, on average, around 3sms per day per subscriber. The US sent 1 trillion messages in 2008, averaging around 10 SMS per subscriber per day. In December we were at 12 SMS per subscriber per day. At the end of the first quarter it was reported the average US subscriber is sending 16 SMS messages per day.

    As Tomi Ahonen has reported, a countries mobile evolution can be directly tied to the number of messages sent per day and the number of texters in a country. Though we are currently between 60 and 65% in SMS penetration depending on the study, the mobile market has arrived in the States.

    iTunes is revolutionizing the way we see the phone. They wiped out their competition in the music field some years ago. Is the same thing about to happen with apps? Their app store has the payment method down pat, which no one else seems able to replicate for success…

    Giff Gfroerer
    i2SMS

  • http://www.i2SMS.com Giff Gfroerer, i2SMS

    Ewan,

    In 2007 the US sent, on average, around 3sms per day per subscriber. The US sent 1 trillion messages in 2008, averaging around 10 SMS per subscriber per day. In December we were at 12 SMS per subscriber per day. At the end of the first quarter it was reported the average US subscriber is sending 16 SMS messages per day.

    As Tomi Ahonen has reported, a countries mobile evolution can be directly tied to the number of messages sent per day and the number of texters in a country. Though we are currently between 60 and 65% in SMS penetration depending on the study, the mobile market has arrived in the States.

    iTunes is revolutionizing the way we see the phone. They wiped out their competition in the music field some years ago. Is the same thing about to happen with apps? Their app store has the payment method down pat, which no one else seems able to replicate for success…

    Giff Gfroerer
    i2SMS

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