Saw your Palm Pre coverage, Ewan –

Remember this?

Mr Operator: Palm Pre – destined for European failure

Heh.

Mr O.

That post he’s highlighted is a column he wrote published back in March 2009 when the Palm Pre noise was beginning to hot up. At that point Mr Operator said the Palm Pre would go nowhere in Europe and set out his reasoning why. You can, of course, read what Mr Operator had to say right here.

Nicely done, Mr Operator.

We never doubted you!

Mr Operator is a very senior mobile industry executive working for an international mobile operator. His identity — like that of the Top Gear Stig — is a closely guarded secret.

Some say he bites the heads off live chickens and never, ever sends text messages. All we know is, … he hates WiMAX with a passion (the Mobile Industry Review shop’s ‘WiMAX My Ass’ T-Shirt is a real favourite of his).

You can review Mr Operator’s back archive of biting insight here.

Meanwhile, over to his latest contribution.

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Interesting read over the last week or so – just as Vodafone 360 goes as sour as an acid-tinged lemon, the mobile data harbingers of doom flock to announcements that Vodafone is to trial network prioritisation for premium customers.

I and many others have been portenting ourselves into holes in the ground for years over the coming mobile data apocalypse…but there’s a big missing piece here. The MNO’s themselves.

Everyone is assuming that they are sitting back, hands held up in horror at the coming avalanche.

The guys that I know in CTO depts aren’t. They have plans. Ideas. Their vendors have products. Their marketing wallahs (the smart ones) have dark files in dusty folders in the bottom of drawers, just waiting to see the light…

…the real story is going to be how, after 5 years of battling each other into the ground over the definition of ‘unlimited‘, we rewind the marketing clock to read: ‘Capped‘.

Capped by volume, speed, location, time or content. All these factors and more have a part to play in using the existing hardware and spectrum as efficiently as possible. They don’t want to offer a crap experience, they don’t want to drop calls and they don’t want to seem stingier than everyone else with the allowance. But they know they have to do something.

This is the 3-wire tightrope that CTO’s, CMO’s and CFO’s must walk over the next 5 years. The corner they painted themselves into was the result of 5 years having spent billions on spectrum they couldn’t sell to users because the handsets and apps were rubbish. Then within 18 months, along came devices, products and content people wanted to use and — stone me — they *did* use it. In spades. Cue hockeystick graphs and long nights at the network planning tools.

But the answer is staring us in the face (well, if you are a Londoner anyway) – it’s called congestion charging.

You want to download a 5MB email on the bus at 8am in the CBD (“Central Business District”)? That’s gonna ‘cost’ you as much as the 500MB iPlayer program you have queued on your laptop late at night back in the ‘burbs.

There’s no way out of this one.

Spectrum is finite, Shannon’s law still holds regardless of what the WiMax people say, and now that the Great Unwashed can get themselves an iPhone, the game’s up. The party’s over early adopters, sorry.

You ain’t the cool kids anymore.

We will soon see devices get smarter – for example, queuing data requests from multiple apps on the device then sending them all in one session instead of bit-by-bit, therefore using the allocated HSPA channel much more efficiently. This will also be much kinder on battery life.

But truly unlimited? Do anything, anywhere, anytime? Not until true 4G is around, networks AND mainstream devices.

Until then, sideloading or more likely — downloading after hours — outside CBD areas will become the most cost-effective way to use your credits up.

Expect to see those with the most advanced billing systems move first – but it’s tricky, as the first mover to the necessary new world of data charging will have to sweeten the pill. Otherwise they risk bleeding customers to the dinosaurs still offering (or trying to offer) ‘unlimited’. Vicious circle, that one. e.g. 3 make me think about what/where/when, the alternative is O2 and their wet-string-bag of a network, Voda somewhere in the middle. Other networks are available, you get the idea.

So long Unlimited, it was nice knowing ya.

See you back in 2015.

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Thank you Mr Operator — I hope we’ll hear from you soon. If you’d like to ask Mr Operator a question, drop me a note and I’ll put it to him.

You can also keep updated with his columns via @MrOperator on Twitter.

I shall be publishing his piece very, very shortly.

If you’re not familiar with Mr Operator, review his back archive here.

Mr Operator is a bit like the Stig. Except that he is not Michael Schumacher. Or one of the Top Gear team. Mr Operator works in an extremely influential position in one of the world’s international operators and, now and again, sends in his commentary from an anonymous address.

I’m looking forward to publishing…

Well he’s back. He was watching the Mobile Developer TV video of Touchnote Mobile that we featured last week. And while he is seriously impressed with the Touchnote concept, he felt he had to put pen to paper. Or fingers to keyboard.

In the video demo we published, Touchnote were showing off their Symbian application. Symbian, of course, isn’t quite the sharpest tool in the box when it comes to beautiful 2009-style user interfaces, particularly when it keeps on demanding to ask you what access point to select and so on. Which really gets on Mr Operator’s nerves….

Over to the man himself:

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I just had to laugh. 3 years on, 3 SODDING YEARS – and Nokia phones still have the bollocks “Do you want to connect / select access point” crap. Talk about making the experience as bad as possible.

Do you see that on an iPhone? no. ’nuff said.

Touchnote – my £0.02: Nice idea. I’ll try it. But…

Why can’t you chose multiple recipients the first time round? Seems crazy to have to do it all again, unless that demo missed something. As she says, [Razia, interviewed in the video] Touchnote is squarely aimed at the party crowd. Therefore send-to-many should be as easy as possible (and will be good for their revenue, though at £1.99/pop it could be a veeeerrrry expensive example of mobile coolness if you were drunk at the time you snapped 19 mates on a partybus….

Why didn’t it auto-fill her email address at the end? I’m assuming the app has a login, which must be able to get that from somewhere. I can’t believe this was the first time sending from that phone.

Was the location mash an option? i.e. “Do you want to share the location of this photo?” – if it’s not there it needs to be for privacy reasons.

I’d say 7/10 overall, but 5/10 for attention to detail. Little things like the above matter way more in mobile than on a PC, but y’all knew that. Quick fixes please, Touchnote team.

Bottom line: it will remain niche – in the way an industry with circa 4 billion users can have niches. Your geek brother-in-law won’t have heard of it, let alone your technophobe mother-in-law, but they will have 100,000 active users in 6 months. That is, until they get pre-installed and integrated into the camera/gallery menu, and carriers/handset vendors get a slice of the revenue. This has to be their long-term plan, in the same fashion that Flickr got into Nokias (Didn’t know you can post automatically to Flickr from your Nokia? No? I’m not surprised).

Maybe Moo will start offering postage. It’s not an 800lb Gorilla in the phone-to-paper-image room, it’s a 1400lb cow.

In a distant, halcyon “Touchnote/Moo Inside” world the wee envelope icon will actually mean a real postal service. Nokia will spend 18 months agonising over changing the menu to have an @ sign to mean email. No, wait – it will mean ‘Tweet this photo’. Ah crap. Nokia will NEVER sort it out, who am I kidding?

Maybe Royal Mail / USPS should buy Touchnote – it wouldn’t surprise me if they are an investor. They have arguably the most to gain here, bringing physical communication gratification back into vogue for the mobile party generation.

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Just wait until Mr Operator’s children/spouse/6ft Norwegian model girlfriend receives a Touchnote… then I think his 7/10 will hit 10/10.

Thank you Mr Operator, it’s good to hear from you and I trust you are well.

Note: Catch up on all of Mr Operator at www.mroperator.com.

Mr Operator finished his column thus:

I’d love to think I’m wrong here, but I can’t escape the nagging feeling that Palm Pre will arrive at the ball 6 months late, to find others with much bigger names in Europe [Nokia - Ed] are already waltzing away with the touch/QWERTY cash.

Sally took umbrage and responded:

Are you kidding? Nokia? Seriously. Have you used an S60 device lately? That OS is so long in the tooth it smells as bad as your many overwraught metaphors and similes. Pre isn’t about the 3MP and flash, dummy … it’s about Synergy, the integrated messaging, and the open architecture of the WebOS

No wonder so many carriers are about to go under, with guys like you at the helms.

Well, Mr Operator wasn’t having any of that.

Here’s his response (also contributed on the bottom of the original post).

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Hi Sally, Yup, I use several S60 devices, all day long.

Q: walk into your local mall and ask 100 people what OS their phone uses. If more than 3 actually know, I’ll buy you lunch. I stand by my point that 90% of the sell is hardware.

S60 as it stands on Nokia is Nokia’s interpretation of how S60 should look. They decide what icons and menus go where. Other vendors have done it differently. Just as Linux/Windows depend on the UI on top, so does S60. S60 is not ‘long in the tooth’ if by that you imply irrelevant/tired. It is very well-established, stable and respected. Do you consider the internal combustion engine ‘long in the tooth’? Compare Honda and Lada. Both engines use exactly the same underlying technology, but deliver a very different driving experience based on the manufacturer’s interpretation. I’m the first to agree with Ewan that S60 by Nokia has dire usability challenges, but as has been repeated time and again, these are only because of the engineering-led UI.

Q: what made the N95 such a success? S60? no. WiFi? no. GPS? no. It was the 5MP/Carl Zeiss camera, plain and simple. Something consumers could understand in 0.5 of a second, with zero help from the salesperson. Apple lost many non-fanboi iPhone customers because of the rubbish camera. Do they care? No. But it doesn’t stop it being true.

If the Pre was 2MP with no flash, it would rule out 50% of sales offhand.

Challenge: Explain Synergy and WebOS in 15 seconds, in language a non-geek could understand. If you can come up with that, and make it sound like a must-have that trumps everything else (particularly the BlackBerry Bold), then you can claim fair rights to use ‘Synergy’ and ‘WebOS’ as a justifiable selling point. Otherwise all you will do is upset/confuse customers, and the sales staff (95% of whom, bless their cotton socks, are not employed for their technical acumen) will not even go down the geek OS pissing-contest path. Anyway, salesperson recommendation ranks among the lowest of influencing factors in phone purchasing, while brand is the strongest.

The iPhone sold completely non-tech people without a word, by being stunningly smooth and inviting further exploration by touching icons that were in your face from power-on. I don’t see the Pre doing quite the same thing, from the reviews to date. Screen too small, menus too deep. If your argument runs to Palm still having 3-6 months to put more icons in the right places, well, so can other vendors.

The Pre isn’t “about the 3MP and flash, dummy” and I never said it was. It’s a *combination* of factors – physical design, touch, QWERTY, camera – that will get customers hooked into further exploration of the device, tariff etc. If you can’t catch them in a 10-second appraisal of the spec sheet next to the shop stand dummy, then you’ll never get them. Camera spec is a hygiene factor these days, along with battery life, keypad ease-of-use for SMS and tariff.

I am impressed with the Pre, make no mistake. I used to write on paper using Palm’s Graffiti as shorthand, I knew it so well. I was Handango’s biggest customer. I really, really like Palm (WM forgiven). But on balance with what is out there and what is coming, I see Europe being a very hard sell for the Pre.

footnote: I do claim some visibility of devices / OS tweaks you’ve probably not seen, under NDA with top handset vendors, so can forgive you for thinking me an old stick-in-the-mud. Unless you have the full picture it’s hard to do a good job of analysis / forecast.

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Don’t cross Mr Operator… unless you think he’s totally wrong?

I’ve given Mr Operator a Twitter account, a domain name and a Disqus account.

Don’t expect to be overflowing with informed Mr Operator opinion every time you turn a corner. He’s a busy chap.

You will, however, see him around the site now and again. I wanted to be clear that if you see the ‘Mr Operator’ user — it’s genuine. I could give Mr Operator the username and password for the Disqus account — however we’re playing it ultra safe. His identity is, as you might imagine, a rather critical secret, given the informed opinion and facts that he often dispenses. There’s an ever-so-slight chance that a over zealous network manager at Vodafone, 3, Verizon, o2, Sprint, China Mobile, T-Mobile or [insert operator network here], might do some lookups and find out the identity.

Therefore Mr Operator sends me his replies by personal email. And I post’em. Likewise with the Twitter account.

If you’d like to follow Mr Operator on Twitter, it’s here: @MROperator.

Check out Mr Operator’s back catalogue here.

If you’re new to the series, you can read his entire back catalogue here. And a quick overview of Mr Operator’s identity? Well, I could tell you, but then I’d have to silence you in some manner. Mr Operator’s identity is a closely guarded secret. That’s because he’s in an influential position at an international mobile operator. And because he tells like he sees it. No sugar coating here. In his last column, he revealed that Google blindsided most of the mobile operators with their Latitude / Google Maps offering. In today’s column, he’s going to tell you why Palm Pre is 6 months too late to the party.

Over to Mr Operator…

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Palmistry is the art of telling a person’s future by reading the lines on their hand. It’s not an exact science – in fact, it’s not really a science at all. Much like forecasting how well a new mobile handset will do, 6 months before public availability.

So many competing forces converge and collude to knock a supposed sure-fire winner off its trajectory to the stars. Coming out so early with very detailed demonstrations of your new device’s capabilities is either a very brave or very stupid move, in this age of quick-fire knock-off OS tweaks. While Apple stole a march with the iPhone, the 2nd (and now 1st) tier vendors have fallen over themselves to get touch devices out there. Yup, the first efforts were pretty dire, but remember in an industry of 12 month development cycles, those dire efforts are last year’s chip paper. The engineers and UI teams have moved on. You just know there’s a lot more where that came from. And where the innovation is in the OS, some changes can be made pretty quickly. No retooling required.

The Pre has (quite rightly) generated a fair old bit of good press for Palm. Like the mad uncle being welcomed home from the wilderness, the mobile industry press outside of the US have embraced Palm once more. No more Windows Mobile, all is forgiven. With some inductively-charged geek fruit and gestures in funny places to liven things up, 3MP + flash, plus some sqeezebox-calendar eye-candy and a removable battery, the Pre is everything to your inner geek the iPhone 3G should have been. But will it be enough?

European consumers just don’t know Palm. Even road warriors only have vague recollections of a monochrome device their IT department gave them to log sales notes on the fly, with a tiny stylus that got lost quicker than you can say Ford Mondeo. So can Palm hope to come to Europe and get a warm welcome? The devil is in the detail.

It will require a substantial MNO investment in marketing, which means exclusivity for at least 3-4 months, possibly more. Palm just won’t get the iPhone’s glorious free coverage in the general press.

At a possible RRP of $250 for a 2-year contract, we can guess that the Pre has a BOM [Bill of Materials] similar to the iPhone. All that goodness doesn’t come cheap – the inductive charging block is essentially a gimmick, as they have included a micro-USB port that is probably able to charge as well. If they plan to sell in China it will have to. If the block also did data transfer with a PC a la iPhone dock, now that would be nice. (Sorry, the geek in me getting carried away). Back to reality.

In the current market it’s all about margin, not ARPU (actually it was ever thus, but try getting away with old reporting tricks these days). The Emperor’s clothes are off, with no-one wanting to subsidise functionality that can’t be monetised well inside the churn timeframe. A device like the Pre is going to be a hard sell to consumers with no cash who still haven’t purchased / will never purchase an iPhone, and to MNO’s with even less cash to splash. O2 have reportedly sold a million iPhones, most locked into contracts with another year to run. Will iPhone owners abandon their ‘preciouses’ to take up with a Pre? Made by who? Not_flippin’_likely.

An LED flash, multiple calendars and inductive charger do not a sex/status symbol make.

To The Kids a Palm is something your dad had ages ago (maybe still does). To mums with prams most of the Palm’s business-oriented integration is pointless. To dads on work accounts it will be a bloody hard squeeze to justify in the current climate. Maybe Palm want to be what the Sidekick was 2 years ago. Times change. US kids got SMS religion. QWERTY email just isn’t the killer it used to be, and with 140 characters still annoyingly popular, don’t expect your ma to be clamouring for a mobile email device any time soon.

But the biggest challenge for Palm is in the form of Nokia. Having the glamourpuss E71 loose out in Barcelona to an upstart knocked up in a shed somewhere [the INQ1] has got to have galvanised them onward and upward. The first disappointing touch devices are, again, 12 months R&D delayed. The N86 is a very promising start. Add touch done well, plus the E71′s keyboard somewhere, and you’d have a million-a-week seller. Even if the Pre is twice the device on paper or in the hand, put it on a shop floor next to a QWERTY/Touch Nokia and weep.

I’d love to think I’m wrong here, but I can’t escape the nagging feeling that Palm Pre will arrive at the ball 6 months late, to find others with much bigger names in Europe are already waltzing away with the touch/QWERTY cash.

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If you’d like Mr Operator to give an opinion on your company, your product offering or comment on news, drop me a note and we’ll see if we can arrange it.

He’s been crazy busy over recent weeks and, indeed months, I’m sorry I haven’t been able to bring you more of his pieces. I know that they are immensely popular — it’s all down to his availability.

If you’d like to catch up on the background to Mr Operator, I suggest reading this introductory piece. You can read all of Mr Operator’s pieces here.

Here’s a quick overview. His identity is a closely held secret. Think of him like Top Gear’s Stig.

He is that man. He’s the guy you pitch at one of the world’s largest international operators. Hardly a week goes by where he doesn’t send me a text privately ridiculing yet another high profile startup that’s just been sent marching, tail between their legs, from his office. He does the best he can to help smooth rough diamonds but, geez, the stories he tells me. He doesn’t ridicule them for spite. It’s frustration. He’s hugely frustrated with the total lack of understanding displayed by most entrepreneurs trying to do business with operators.

Let me try and imitate Jeremy Clarkson.

“Some say he was raised by wolves in the Russian tundra — and might have a mobile base station as a parent. All we know is he’s called Mr Operator…”

Here we go:

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There’s been a lot of Latitude noise in the last few days. The tabloid press has raised the usual spectres – spying partners, snooping bosses – all the while blissfully unaware of the irony. An industry that prides itself on deception, underhand reporting tactics, anonymous tipsters and general peeping into other’s lives to make money shouldn’t protest so loud methinks.

You can see The Sun / Express headline now: “Google Got Me Fired”…”Google Destroyed My Marriage”…”Google Abducted My Child”. The fact that any parties involved had to explicitly opt-in to the upgrade/download, had to sign in, had to turn Latitude on, had to add contacts, had to set their location sharing on – mere technicalities. No-one’s going to let the facts get in the way of a good story.

However it is this reaction and the great unwashed’s assumed agreement that will have MNO’s thinking twice. No-one will want to be the first to launch something that will be dubbed the ‘SpyPhone’. The fact that all MNO’s have – to one degree or another – relationships with Google, that a large majority of their devices support Latitude, and in some cases they actively pushed Google services to customers (T-Mobile) just adds to the apprehension. Some will be feeling a bit blindsided by this – word on the street is that no-one saw this coming so soon. Even product managers who meet up with Google reps on a near-daily basis were in the dark. This is a release worthy of Cupertino.

Regardless, the LoMoSoSo cat/bag ratio is lower than it was a week ago.

Right now it is the geekerati who are playing with Latitude, and mulling over its limitations, possibilities and implications. Much dire talk has been made of the chances of location-based social networks now Google has made its move. Companies are frantically scrabbling to find points of differentiation, to spin themselves as being still relevant in a post-Latitude world. Location Product Managers are being questioned by the C-level, and in turn they are questioning existing providers and those pitching – “What’s your answer to Latitude?” “Why shouldn’t I just wait?” etc. Crunched VC’s with little free cash will be taking the blowtourch to LBS business plans over the next few months. Expect some LoMoSoSo firesales come summertime. As if it wasn’t hard enough already…

Latitude 1.0 has shown what the platform can do. We’ll have to wait for the next evolution to see relevance come into the mix, and it is then that the masses will see the advantages. Others on this site and elsewhere have raised the challenge that mere location is not worthy, but context is. Right now you need to make your own context, and that’s just too hard a sell for anyone outside the circle of S60 / iPhone fanbois. Putting the onus on the user to join the dots won’t work. Like Amazon’s recommendations, Latitude needs to be pushing stuff to you in a manner indistinguishable from magic. ‘Can’t-resist’ offers from retailers you love, proximity notifications from friends you like, much more relevant results from searches. The magic, the added value, plus bringing the privacy controls more to the fore will greatly ease the sell to the masses.

If you are at a loose end, you should be able to broadcast as such to those friends nearby. You don’t need to know Bob is a block away beforehand, and anyway that’s too stalkerish for most, and mapwatching is a timewaster for you. So Bob receives a tap on the shoulder that you are around and up for a drink, knowing he can ignore without you being aware of the rejection if desired. The paradigm is already there in the many requests for SocNet connections we ignore. Indeed, rejection of meeting requests via Outlook with the “Reject and do not respond” has been with us for two decades. It’s become accepted not to friend someone back. No RSVP necessary.

For a family on holiday, Latitude means parents and teens can split up. Mum off to look at shoes, dad off to check out that Vespa dealer, teens off to hang out around that cool fountain where all the locals were spotted last night. Meeting up a few hours later for lunch just became a whole lot easier. Fire up GMaps, click on the rest of the family and choose ‘Get directions’. Dead easy. Of course this relies on roaming data being cheap enough, but we are getting there. Certainly within a year or so with EU regulation looming unless MNO’s pull finger, the idea of your mobile being a useful tool for holiday navigation is quite viable. Imagine disappearing into winding backstreets, following your nose through bazaars, souks, architecture, whatever rings your bell. But knowing that you can easily and quickly find your way back to others in your party.

I envisage a ‘Degrees of Awareness’, where your best friend/sibling/spouse and you both are set to always visible, always proximity-alarmed. You always want to know when they are near. Unless you are doing something deceptive, you’d have no reason not to do this. However your colleagues are a level or two down. You might be interested in knowing if a business contact is stuck in the same snowed-in airport, maybe not.

The apparent suspicion that some claim would be leveled at those appearing offline is a non-issue. Look at how often apps on handsets log out / crash these days. How often do mobiles go out of coverage? The continued realities of mobile life will be the perfect reason, should – however unlikely it may be – someone confront you. Whether you were the victim of an app crash / poor coverage or were deliberately hiding is entirely between you and your mobile.

So unfounded angst / tabloid hypocrisy aside, what does the next year hold?

1) No MNO will actively push Latitude. There’s no service Latitude enables they can monetise anyway. They won’t block upgrades, but they won’t be advertising it either.

2) Google will enhance the IM function, to allow GTalk / Jabber use right from the map display. GTalk will become sexy. Already the status in Latitude pulls from / pushes to GTalk.

3) Added levels of granularity / contact grouping will evolve, with time/day of week settings too. Just as mobiles can block / allow calls from different groups based on time/day/profile, so will Latitude publish / hide / alert you accordingly.

Look for Latitude 2.0 to take off in 1-2 years time, once the general privacy panic has evaporated under the sunny beam of real-world usefulness. Assuming the API’s are exposed, handset vendors will begin to integrate the proximity info into contact lists, and add menu options bringing the privacy options more to the fore. These may tie in with API’s for other LBS apps a la Fire Eagle, but Google have already denied this is on the cards, citing privacy concerns. Maybe some clever-clogs will do some sort of PC or mobile daemon to bring the Latitude functionality into the open. Whether Google can share API’s with handset vendors but not others will be interesting to watch. There will certainly be cachet in being the first to bring deep Latitude integration to a device.

Of great interest will be what the new Yahoo! CEO decides to do with Fire Eagle. It’s been flapping along for a few years now, garnering much kudos within LBS circles for its openness but zero attention from the world in general. There’s not much difference in functionality, apart from the open/shut API thing. Brand Google is a massive leg-up over the myriad of Fire Eagle apps, and if Yahoo! can get over the privacy aspects, so can Google. But if there’s value in remaining closed, they will do so. Google aren’t a charity, and Fire Eagle has yet to show a valid strategy for continuing to suck up resource from Yahoo!. Yahoo! don’t have a Mobile GMaps to nail Fire Eagle onto, and all the Fire Eagle players are so far below the consumer radar they might as well be under water.

Overall Latitude has been a long time coming, and was always going to cause a flap. Two years from now, it will be mature and integrated into modern life. Bring it on.

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Excellent. Thank you very much Mr Operator.

If you’d like to get Mr Operator’s viewpoint on an issue, drop me a note and I’ll suggest it. And if you’d like Mr Operator to give you a perspective on how an international operator would react to doing business with you, let me know. But be warned, we’ve tried this before and, with a few exceptions, the reality is often not publishable.

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Hmmmm…..Credit Crunch…best kept fresh in silver foil…

There are no better opportunities to look for silver linings than when you are in the middle of a huge dark cloud. And financially, things are pretty cloudy right now.

For telcos, and in particular mobile telcos, the next 5 years will see a radical re-arrangement of the deckchairs. Partly this will be driven by the usual challenging of traditional business models, as new leaders get the chance to make a difference. As MNO’s evolve and as new platforms allow ever-more innovative tariffs and service offerings, it’s only natural that the fearless will tinker. We may not see another Web’n'Walk or mobile Skype for a while, but nevertheless things will naturally evolve.

But innovation lead by industry is less than half the story. The real sea-change that’s coming is innovation lead by the masses, delivered not by the MNO’s or OEM’s but by 3rd parties. Until now closed platforms, walled gardens and tariffs of mortgage-payment scale (should you foolishly venture into the wild web from your handset), meant the enablers for people to tinker, experiment and learn were only for the true geeks.

Not anymore. This democratization of mobile will be its saviour in hard times – and the MNO’s that play nicest will benefit the most.

About 3 years ago we saw the first relatively mass-market WiFi handsets released. But it took the iPhone to open the public’s eyes to what WiFi can mean on a mobile – in terms of quality of experience and zero cost. Ditto the usability of GPS on mobiles, where the release of the E71 with its ultra-quick GPS fix times has made a long-present feature into something normal people can see themselves using in the back of a taxi in a strange town. Of course both GPS and WiFi are still a way off from mass-market handsets, but the omens are gathering for both technologies to be in all mobile chipsets by default within 2 years (Bluetooth used to be a luxury. Now you basically cannot buy a mobile chipset without it). Once the functionality is in all the silicon, it’s much easier for the Handset vendor / MNO to decide to pay a little extra to enable it by purchasing the WiFi and GPS antennas at time of manufacture. No wonder TI, Qualcomm et al are so keen on the idea. Nothing adds to add-on sales like not wanting to be the ugly sister at the handset ball. And right now 90% of handsets are ugly sisters, but as more and more begin to have baubles like WiFi, GPS, etc by default, the more obvious those that don’t become.

The tangible customer benefits that GPS (for example) could bring – Search for ‘cheap gas’, get “Save 5 cents per gallon at Texaco only 2 miles down the road” – are what’s been missing until now. Users have had to know the benefits of features to drive them to find and use them – they were not self-evident. Thus only geeks knew about in-store comparison shopping using m-sites such as Pricerunner, Kelkoo etc. But to paraphrase a rather obscure Roger Waters song the last year of iPhone jailbreak, then App Store, Android, Linux, and now the G1 – er – App Store, has ‘wrested the technologist’s sword from the hands of the handset OEMs’ and placed it firmly in the entrepreneurial grasp of the customer’s champion – the independent developer.

To wit: put simple, location-sensitive real-time price comparison in the hands of a housewife out for the morning and watch the dollars roll in (I fully expect that within 2 years this will be a widespread reality). The MNO’s and OEM’s, with all their billions in budgets, couldn’t even start the process, let alone get it right. The intelligence needed to be in the cloud, with several partners involved, and for a device + core network business like ours the cloud is a scary place where ownership and value is hard – if not impossible – to pin down. Fear of giving away the crown jewels meant MNO management preferred to sit on its hands. So nothing happened…..until one day they woke up and found themselves selling open, advanced devices on flat-rate plans. And their customers weren’t talking to them anymore, let alone looking to them for innovation. Cue mad scramble to get back in the value chain, but without having to recreate the walled-gardens of the past. Tricky. Watch this space…

So where’s the tie-in with the current financial gumbo? Like alcohol and tobacco, mobile is one of those things that will go last in the household budget cuts. Given telecommunications accounts for less than 5% of developed-world household spending, it’s a small amount that can generate major savings in the other areas such as fuel and food. As travel cost more, it’s more important to maximize its value. For example, mobile can save you money through services helping you to find better deals or leverage socially serendipitous coincidence (“I saw on mobile FaceBook you’re driving home this weekend? Can I bum a ride?” or “Fancy sharing a cab to the concert?”. You are much more likely to frequently check your friends and update your status on a well-executed mobile platform than on a PC. Mobile use fits in with the day’s downtime. PC activity detracts from other work to hand). The environment is there, the public eye is open to mobile innovation, the data plans are as flat as a wet Sunday in Tulsa and the devices are smarter than the Space Shuttle.

That silver lining is there for the industries’ taking.

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You can read more Mr Operator here. If you’d like to put a question to him, send it over and I’ll try and get it in front of him for next week.

He’s been glued to the Android coverage and isn’t entirely impressed.

Here we go:

- – - – -

Having watched the launch video, first impression (apart from that T-Mobile & Google can’t organise a decent handset release to save themselves):

Poor man’s iPhone.

2nd impression: They have not delivered the second coming of the Jesus phone – although with all the evangelising you’d think they had just solved world hunger.

3rd impression: The apps are just lame. Nothing worth changing MNO for. The slider and look of it does not stand out at all.

4th: Hardware: This isn’t a self-explanatory aspirational device like the iPhone or N95, it could be any QWERTY slider.

No tethering! How dare you use it like you want to.

No MS Exchange support – forget those business users for now.

Push G-mail only. Again, forget business users.

No Stereo Bluetooth <8o=

Gtalk IM presence in the phonebook – nice. Finally something new.

$179 is very subsidised. Hmmmmm……

WTF were the geeks doing up there, talking about modding their phones?

Overall…..a flaming pile of mediocrity. Let’s revisit in a year.

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Oh dear. Oh dear me. It can’t be all bad though?

Here we go:

- – - – -

Ah, the Gphone. Nothing has generated more hype in the mobile press – bar the iPhone. Except that the two, while often being compared in the same sentence, are completely different. One can theoretically be had in any flavour of handset, from any manufacturer, with any feature-set, at any price-point. The other’s an Apple.

Herein lies the strength of Android – Like S30/40 devices, the end-user need have no idea what OS the device is running. Ask any Nokia or Sony Ericsson user what OS their phone has, and 99.999% won’t have a clue. “Er, a blue one?”. Geeks will debate the nuance of S60 vs. Android vs. BREW vs. Apple, and users will continue not to give a stuff. Has the lack of Flash & Java hurt the iPhone? nope. Android promises – surprise – deep integration with Google’s growing suite of apps – search, mail and maps being the big three most people care about. Beyond that it tails off into the niche.

Right now, if your MNO hasn’t got a deal with Google you won’t have Google apps preinstalled on your device. Google have done a sterling job of making m.google.com/maps the most commonly visited place for many mobile switchers, to get what has become de rigueur free mapping functionality. As the new release of GMaps shows, they can bring out ‘free’ services that utterly screw those planning to upsell customers. So long Nokia maps, it’s been frustrating and at ~?50/year vs free, I’ll take free, thanks. Google will do a much better job of getting me from A to B via C, a decent Fairtrade organic coffee house with a 2-for-1 offer on right now, only 2 minutes out of my way. As they have done for search, Google will shortly be a verb for mobile mapping.

The likes of Nuance’s absquatulation. Sure, Nokia could do this for S40, Qualcomm could do it for BREW, the others could do it for whatever they use. But they haven’t, yet. Given Google’s resonance with normobs, the attraction of a phone that makes using Google services easier cannot be understated. Sure, the first release will be comparatively rubbish. Show me an OS or device that wasn’t {looks sideways at Cupertino}. They will get there, trust me. And if the commercials aren’t stupid, the phones will appear at price-points that are a no-brainer. The guys trying to drive uptake of $£?10 web add-ons by mums with prams want simple, friendly, democratic apps on cheap devices. They NEED simple, friendly, democratic. S60 isn’t that. S40 isn’t that, if you want web and email. The iPhone isn’t that at £399 prepay.

Apps are nice, and have proved popular if they are free. But at the price of the iPhone tariffs you have self-selected a population with spare cash. The masses don’t spend £5 a go on stuff you can’t drink, smoke or eat. So the lack at startup of a premium ‘app store’ won’t be an issue.

From a carrier POV, at the right price, with the right commercials, bring it on. There is no loyalty to S40/S60/BREW/whatever. It should be easy to buy. Zero integration needed. If Google are on to it, the handset will come with only one condition – that ad revenue share will come INTO the MNO. The onus will be on Google and the vendors to continually improve the UI, the apps, the experience. MNO’s won’t want to be spending money tweaking beyond cosmetic skins, and shouldn’t have to.

The wait-and-see will last as long as the first week’s sales. A few decent broadsheet reviews and the Gphone will be the Prepay Christmas must-have for those earning the average wage.

- – - – -

Interesting, interesting. Thank you for that Mr Operator. If you’ve got a question about the mobile industry for Mr Operator, whack it to me at ewan@mobileindustryreview.com.
Android will be the kick in the arse for mass-market that the iPhone was to the smartphone crowd.

I was sent the following question from an avid reader who asked to remain anonymous. I knew Mr Operator wasn’t the biggest WiMax fan and I was expecting a 400 word reply from Mr Operator — but was quite staggered when a 2,500 discourse arrived in my inbox, with a follow-up addendum a few days later.

If you’re on the weekly newsletter distribution, you’ll have caught the first five paragraphs exclusively. I know there’s a lot of people who have been waiting for it, so here we go.

Mr Operator on WiMax:

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THE READER QUESTION:

“With Freedom4 covering Manchester with WiMAX and The Cloud spreading most of the City of London in WiFI, the writing is on the wall for mobile carriers. Surely it’s just a question of months and years before most of metropolitan Britain is served by infinitely better WiMAX services? When do you see carriers moving from a inane ‘cell’ infrastructure that simply can’t handle data (“7.2mbit per second from my Vodafone dongle, my arse!”) to a proper, sustainable and expandable offering based on the likes of WiMAX?”

MR OPERATOR WRITES:

When you strip away the polemic, what you have here are two questions:

[is it] just a question of months / years before most of metropolitan Britain is served by WiMAX services?

and

When do you see carriers moving from a ‘cell’ infrastructure to a sustainable and expandable offering based on the likes of WiMAX?

Upon first reading, my head was literally spinning. This had come from a MIR reader. I was – frankly – stunned that someone could string together such a ‘question’ and proffer it with the electronic equivalent of a straight face. Surely this is a wind-up?

But no, dear reader, in the interests of the mobile community, the investment houses and your elected representatives, we must delve into the murky, swirling trough of broken promises, fallen towers and lost dreams that is WiMax. Hold your nose, it’s going to get whiffy…

Firstly, some techno-babble. WiMax is an acronym for Worldwide Interoperability for Microwave Access. It has been around for some time, its first major standards incarnation appearing in 2001, the original idea coming out of a need to move beyond the frankly ridiculous proprietary situation of microwave network point-to-multipoint links that existed previously. No ISP wants to be tied into one vendor for a technology choice – the situation was akin to Vodafone buying a Nokia mobile network, then only being able to sell Nokia handsets to its customers. ISP’s wanted choice, and WiMax promised to deliver interoperability between vendors and therefore choice.

The frequency band this system was to occupy was 10-66GHz – many, many times higher than mobile – the system designed to work with large, fixed external antennas. It was – crucially – meant to be for Line-Of-Sight (LOS) use only. So if you wanted to buy broadband off your WiMax-toting ISP, you needed a man in a van to turn up and bolt what is essentially a satellite dish to your house, pointed at the ISP’s nearest POP (Point Of Presence – think the BT Tower, or your local telephone exchange building covered in dishes). This dish was plugged into a home unit, which you connected your PC to. Using what boffins call Really Big Antennas at the POP end, you could get pretty respectable speeds over these fixed LOS links. Maybe 10MBps or more. Over what people on foot call A Really Long Way – say 5-10 miles even. If you really wound the power up, and used dual REKAD’s (Really Enourmous Kick-Arse Dishes), plus all of your rather expensive 70MHz spectrum block, you might get 70MBps over 70 Miles (This “70/70/70″ figure is oft-quoted, and is fine if your mobile phone has a 2.5m wide dish on the side). This is the sort of thing TV transmission firms and major ISP’s do for breakfast. So far, so 2003. And the Laws Of Physics are still intact.

Then the game changed – literally overnight in the usually geologically-paced world of technical standards. Someone, possibly drunk at the time, strung together the following: “Hey, if we make the frequency a lot lower, and cobble on a whole lot more stuff to try to improve the quality, and drop the range expectation, and the speed, and use smaller bits of spectrum, maybe we would have something that could be used instead of that globally-standardised, 2 billion subscriber-base 700 operator 300 vendor thing called, er, you know – mobile.”

Over at Intel, someone else (possibly at the same long lunch) piped up and said, “Great idea guys, here’s several Billion dollars, hop to it.” And lo, the WiMax hype machine was born. From the primordial ooze of telco sales pits they crawled, sloughing off their fixed-line skins, yellow eyes aglitter with the tinkle of VC cash, government grants, tax breaks, free spectrum and vendor largesse. Fleets of corporate jets were dispatched around the world, to emerging economies desperate to leapfrog the rather difficult and messy process of burying thousands of miles of expensive copper and fibre. Villages were visited, photos posed and backs slapped. Promises of digital salvation and transformed economies were made, and across the globe a million PowerPoints bulleted their soul-destroying way through what turned out to be what the common man calls, ‘A Load Of Bollocks’.

To say that WiMax has over promised and under delivered is to make the understatement of the technical millenia. Many years of wrangling and arguing among the partner companies, technical compromises, lawsuits, IPR spats, walkouts and downright lies has left the WiMax industry’s reputation in tatters. Apart from in the public eye, where punters are keen to believe anything, and where a snappy branding exercise and some well-chosen soundbites along the lines of ‘freedom’, ‘liberation’ etc go a long way in the minds of vote-hungry politicians keen to be seen to be sticking it to the big nasty MNO man.

But there’s a rather pesky technical fly in the WiMax salesman’s snake-oil. It’s called the Shannon Limit, and it has held true for the last sixty years. What Shannon tells us is that for a given radio channel (say, measured in MHz) there is an upper speed limit, beyond which all the bits start crashing into each other, get annoyed and generally do what technicians call Not Working Anymore. Anyone alive over the last twenty years has witnessed an amazing increase in radio data speeds. What was rocket science in 1988 is £10 a month in 2008. 10kbs to 1Mbs inside 10 years – that’s a hundred-fold increase in speed. And there are still more increases to come over the next few years, as ‘Turbo Codes’ bump 3G speeds ever closer to the 4G grail of 100Mbps to your handset. But we have pretty much hit the ropes, in the lab. Shannon’s limit still holds true, even though the data throughput boffins have crept within an electronic gnat’s testicle of it – 0.0045dB to be precise. The upshot of all this geekery is that there is no free lunch in the wireless world, no matter how many Intel invite you to.

And it’s Shannon’s Limit and the e-wizardry used to sneak up on it that we turn to for the technically damning response to the statement above that WiMax is “infinitely better” than mobile. Here’s the rub: they use THE SAME METHODS to deliver at the radio level. The modulation codes used in HSPA are the same as proposed to be used in ‘Mobile’ WiMax. This fact may be why Intel’s head of sales & marketing is now mooting a merger of the WiMax and LTE standards – having fumbled and failed to run away with the ball, they now want to play nicely, but with their IPR in the mix.

Moving on to the myth that WiMax provides better ‘coverage’ than 3G systems. This is like saying that one litre of Dulux’s new, improved WiMatte will ‘cover’ your entire house. Coverage costs. You need the coverage to soak in. You don’t want gaps. Coverage gaps equals unhappy customers perched on window ledges, scaring the neighbour’s cat. There’s a reason why you see mobile sites on every block in major urban areas – because houses are made of bricks and radio waves don’t like going through stuff. Especially at the very high frequencies WiMax uses in the UK – 3.5GHz to be precise, or nearly twice what 3G uses. Intel made a press pack with a cover picture of a pretty girl sitting on the steps of a New York Brownstone house, using what was supposed to be a WiMax-enabled laptop. This was a singular moment of honesty on their part – she needed to be outside, because it wouldn’t have worked inside.

The bugger of radio network planning is that for a given power level and speed, as you increase the frequency the range decreases. This means you need to build more sites to deliver the same quality of coverage. A 3.5GHz system like Freedom4′s requires nearly three times the number of sites that a 2.1GHz (read: HSPA / 3.5G) system does. Does that make economic sense? Their CEO doesn’t think so, hence his quote last October where he stated “We aren’t aiming for consumers…The industry would drive the price down to free.” No, the reality of Freedom4′s ‘coverage’ is that it’s a business-only proposition, and basically unless you live in a business park you’ll be out of luck. Blanket suburban indoor coverage it is not. And their indoor device isn’t even wireless. Hello RJ45 port, it’s been a while.

A big challenge for WiMax is that 90% of network costs are non-air interface related. Planning consent, property acquisition, power, rent, fabrication, support, marketing, backhaul – all these costs are common with mobile. So assuming you got your WiMax and spectrum kit completely free, you still need to fork out billions to get close to cover ‘most of metropolitan Britain’. And at currently allocated frequencies, you’ll be building 3-4 times the number of sites. Good luck with all those tinfoil-hatters then.

Regarding The Cloud and Municipal paid or free WiFi, I can do no better than point you to Google’s search results on the topic. And this steaming great cloud of FAIL is despite WiFi chipsets being in everything but the fridge. Er, OK, you used to be able to buy a WiFi fridge then. Even more reason to accept that even with WiFi devices everywhere, selling WiFi on the streets to the public is and will remain a niche of a niche. The people have spoken. For £10/month they want the data on their terms, in their location, not in some noisy rubbish takeaway joint full of yapping mums and screaming kids.

The design of cellular networks is required for capacity reasons. You can’t just shout from one tall tower in the middle of town, and WiMax has exactly the same ‘inane’ requirements as mobile does to deliver to a similar number of customers. There is nothing in WiMax’s ‘offering’ that says anything different, and anyone suggesting otherwise portrays a singular lack of understanding of WiMax. WiMax has evolved as a standard to explicitly support the cellular network topology as a means of handling data session handoff between, er, cells. This is what the WiMax cousin WiBro in Korea has demonstrated. Pity that after many hundreds of millions spent it’s only got a few hundred subscribers then.

So to revisit the questions:

[is it] just a question of months / years before most of metropolitan Britain is served by WiMAX services?

No – most of metropolitan Britain will never be served by WiMax. Every law of physics and economics tells us that. HSPA+ and then LTE will beat it to the punch, on the back of the massive existing 3G infrastructure investment. Think evolution, not revolution. Replacing a radio card in a 3G base station and tweaking your core network is much cheaper and faster than building the whole thing from scratch – which is what a WiMax operator needs to do.

When do you see carriers moving from a ‘cell’ infrastructure to a sustainable and expandable offering based on the likes of WiMAX?

Never. Because the cell infrastructure is the only sustainable, expandable way to grow delivery of wireless data. And because HSPA+ will appear as a consumer proposition in less than a year with minor hardware upgrades, delivering a realistic 3MBps to the handset/dongle. LTE will appear in another year, delivering an initial 5-fold increase on HSPA+. These improvements are not slideware – they are in pre-production testing at mobile network vendors now. Crucially, the major handset and card/dongle vendors have road mapped the devices that will deliver these speeds. At consumer price points, in the Cath Kidston print of your choice. What you will actually *do* with 15MBps to the phone is anyone’s guess. We know people don’t want to watch TV…

WiMax is 5 years late. Last year 3.5G woke up, got off its arse and slammed the window of opportunity closed tight.

::insert Forrest Gump voice here:: Sorry I had a reality check in the middle of your WiMax party….

Addendum: After writing the above, it struck me that one could take away from the piece the impression, maybe a hint – no, more of an inkling – that Mr Operator is somehow, in a certain light, “Anti-WiMax”. Let me assure you that I am no such thing.

Why, one might as well be anti-blue or cross about the way the tide comes in.

Let’s be crystal clear here: WiMax is a modulation scheme. It’s a way of encoding and decoding bits of information, fit to then fling through the air over some distance. It’s a good scheme. A lot of very talented people have poured a lot of effort into making it work. Into handover algorithms to ‘mobilise’ it. Into nascent QoS profiles so voice takes priority over, say, spam email.

All these things are admirable, necessary and will see WiMax as a perfectly usable technology.

Much like BetaMax was.

(In fact, BetaMax is technically better than VHS. It is still used in broadcast-quality devices – or was until digital came along).

The problem with WiMax, and critically *how it is sold*, is that it is basically no better than what we have now in HSPA, or what is planned for HSPA+ or LTE. It’s akin to your council being sold on the idea that beige concrete is the future, and that we should rip up all the grey stuff and start again (Actually….no, forget I mentioned it).

The reason why it has gained the status it has is purely down to one thing: Marketing. The pervasive force that surrounds us, infuses us, and makes us spend £1 for a bottle of stuff we get for free from the tap.

So when the question is posed, “When will Mobile operators drop 3G for WiMax?” or “When will startups blanket the country in WiMax?”, the lens you need to look through is one of a world where we have already spent many hundreds of Billions establishing wireless networks. That’s you and me, my friends. You have paid for the networks that now serve you. Your £30 a month has allowed mobile operators to re-invest in new sites, technologies, handsets, standards, spectrum licences, to the extent that it is possible to stream live Big Brother to your mobile while on the train at 80MPH. Just as well we have cancer and global warming licked eh? Back to the house….

So, where is the driver for a mobile operator like mine to switch to WiMax? Even if (and this is a huge IF) regulators approved the use of WiMax in 3G spectrum, even IF devices were available, even IF network hardware was there ready to deploy – if all these ducks lined up and quacked a veritable avian symphony – what would we have?

Would you have a faster 3G connection (all things coverage being equal)? No. The laws of physics and every major vendor’s results tell us this. Ericsson pulled out of WiMax a few years back, because they saw the writing on the wall. WiMax was just no better than 3G.

Would you have better mobile handoff, or international roaming? No. WiMax is currently a loooooong way behind the 3G curve on this one.

Would you have better coverage (all things tower/power/spectrum being equal)? No. Again, major vendor tests and the fundamental way electromagnetic waves propagate from A to B via C (the bricks in your house) (brbtell us this.

No, sadly, the WiMax Emperor wears the same clothes he always had.

If WiMax had come along 5 years ago, it would have been a lighthouse for Mobile operators struggling to right the shipwreck of 3G’s launch. But WiMax – and critically its mobile version – just didn’t arrive in time. HSPA and the roadmapped HSPA+ / LTE have stolen the show. Evolution, not revolution. Why tear apart what you have, when you can just bolt on some new cards? Why give customers ‘orphan’ handsets when they can have devices that are backward-compatible with legacy networks?

So when the WiMax salesman comes knocking with visions of cheap glory, you know it’s hollow. There’s no punch, no compelling reason to go his way. And don’t assume that big money is smart money. A few years ago a colleague did the rounds of VC firms, looking for cash to tie together all the disparate European WiFi networks under a common billing/login umbrella. Like what The Cloud has kind of become, except better, because the Cloud STILL does a rubbish job of managing users. Could he get the funds? I recall a figure of around €20 million, tops, to bring a massive boost to established infrastructure. But the response was “not interested”. No-one wanted to back a relatively small investment that would radically enhance the massive value of the sunk capital.

But here’s the killer……..they were more than willing to pony up much more cash to build a NEW WiFi network.

Sometimes, life (and investor logic) really beggars belief.

So where does WiMax fit? Where CAN it do well? The opportunity lies in places where broadband providers (mobile and fixed) are pillaging. Incumbent greed. Buy some spectrum, knock up a few cheap sites, bolt on a dish or two, and stream disgruntled customers some love. But that game lasts only as long as the incumbent decides not to respond. The moment you become annoying, wham! Down comes the incumbent’s price, maybe on a city-by-city basis if the regulator allows it. Bye-Bye WiMax startup.

For nations where 3G mobile broadband with its high QoS and device choice is already commoditised, WiMax has no place to play. Not because it’s inherently inferior, but because it doesn’t have anything to differentiate it except less choice in vendor/device, premature mobility & QoS standards, poorer performance in approved bands and the same cost base for infrastructure.

All it can do is play catch-up. And there’s precious little profit in being last to the party.

Stand by for an inevitable spin cycle from Intel

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Thank you, Mr Operator.

If you’d like to put a question to Mr Operator, simply email it over. We’ll do our best to turn it around quickly.

His piece will go live here later in the day.

If you’ve ever wondered about WiMax and whether it’s any good, you’ll want to look at Mr Operator’s take. I don’t think I’m giving anything away when I say he’s not exactly a big fan — this is, perhaps, predictable — given that WiMax is mentioned (in some circles) as heralding the death of the operator as we know it.

And it doesn’t look that much of a stretch, does it? Not when you can walk the length of the City of London (“the square mile”) connected to The Cloud’s WiFi network?

Prepare for a learned discourse.

Oh and we’ll have a podcast of it up shortly too.

Sign-up to the newsletter here, by the way:

If you’re not getting the newsletter — and you’re signed-up — do talk to Krystal and she’ll sort it.

If you haven’t signed-up already, here’s the form you need:

If you’re not getting the newsletter — and you’re signed-up — do talk to Krystal and she’ll sort it.

Some highlights I plucked from his piece this morning:

• “Over at Intel, someone else (possibly at the same long lunch) piped up and said “Great idea guys, here’s several Billion dollars, hop to it”. And lo, the WiMax hype machine was born.”
• “But there’s a rather pesky technical fly in the WiMax salesman’s snakeoil.”
• “Moving on to the myth that WiMax provides better ‘coverage’ than 3G systems.”
• “And at currently allocated frequencies, you’ll be building 3-4 times the number of sites.”

We’re aiming to publish on Tuesday.

There’s gonna be fireworks.

Question:

What does it take for a smaller handset manufacturer to get ‘into’ the operator stores? Aren’t consumers bored of Nokia or SonyEricsson (like you are Ewan)? Or is it all based on size and rebates and not on market innovation?

A bit of disclosure – I work for UK handset manufacturer Onyx, who launched the Liscio and have other handsets in the pipeline.

I’d be really interested to hear what Mr Operator has to say.

Thanks for taking the time and for being brave there, Mr Reader. I sent this over to Mr Operator who had a bit of time this evening to answer.

Now over to Mr Operator:

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Volume. Volume. Volume.

Background:

An MNO is not a Vertu stockist. They simply cannot afford to have stock sitting round, gathering dust. Every day teams agonise over the mix of devices, OS, colours, etc, fine-tuning their offerings to best meet their target markets.

Behind the scenes there’s a hell of a lot of work to support a new device, even one from a major vendor on a stable, long-standing OS like S40. The logistics of bringing a new handset to market is measured in the millions of dollars/pounds/euros. The marketing collateral, the call centre training, the in-store fitout, the distribution, returns and repair process.

Pushing a machine of this size and complexity in a new direction is not easy.

If you look at a pretty average MNO, say with 5 million customers in a country, they will typically range about 15-20 handsets. Maybe more, maybe less, but the volume tail falls away rapidly beyond the 20 mark. With customers updating handsets every 18-24 months, that means they go through around say 2 million handsets a year. Bring that down across the range and you’re looking at around 100k per model. Of course, the low-to-mid tier S40 devices from Nokia currently have the lion’s share of this, so maybe they are up around the 500k mark, with top-end music & business devices much smaller, say 20-30k each. But you get the idea.

Any way you slice it, you are looking at big numbers. With an average price of say US$150 for a mainstream S40 device, that’s around $15 million up-front hardware cost *minimum* to range an average device. Plus your previously-mentioned internal costs – which have to be factored in for cross-department charging purposes.

So you can see why MNO’s sweat the details on a new handset. Why everything, from the colour and shape of the icons to the tactile feel of the surface to the unboxing process to the boot-up screen must be as good as possible, to convey to the customer a nice experience. You want zero returns. Returns cost big bucks – especially if you can’t pass it back to the vendor.

If you are being asked to take a punt on a new device, a new brand, maybe even a new OS, you have to either have a contract chiseled in stone or the vendor’s children in a vault that it will sell. Otherwise you are asking the MNO marketing department to place their collective necks on the block and hope that the customers like these new, unheard-of devices enough to pay off the axeman.

Sometimes MNO’s do this themselves, for example the Huawei-made Vodafone-branded value range, or Hutchison’s Amoi-built Skypephone. These are long-term plays, where the MNO has complete control over the experience, and the devices are dirt cheap, built for voice’n'text with a comparatively low-spec camera etc. You won’t see these going head-to-head with the N-Series or Walkmans.

And then there’s the customer’s dogged loyalty to an OS, once they get used to the look & feel. Many customers are ‘Nokia people’ or ‘Sony people’. They don’t like change, unless it’s a really compelling sell on price or features. So no, customers aren’t ‘bored’, just they can’t be arsed learning something new.

The answer:

For a small vendor to get into the MNO stores, they need a design, a concept, an implementation that so utterly blows away the top 5, at a price and contract T’s & C’s that it is a no-brainer. I’ve never seen one yet, but would love to. We are talking almost iPhone-style differentiation. A twisting of the cube that redefines what a mobile should be.

The question is, if you came up with such a thing why go through the pain of making it yourself? Why not license it to one of the big 5, kick back and rake in the royalties?

It is literally the case that a vendor sometimes cannot give away devices to MNO’s, if the fit isn’t right. The saved CAC (Customer Acquisition Cost) in not forking out $150 to buy the device may well be wiped out by the amount of customer bad will and brand damage a shoddy device could generate.

This is why, across over 700 GSM MNO’s, with many billions of customers, you see the same handset vendors and the same devices over and over again. I doubt any other consumer device industry is so dominated by such a small number of players. Basic economics tells us if there’s money on the table someone will grab it. In the mobile handset world, Apple recently said “Sod this”, built their own table and have done well in their chosen space. But with a market valuation eclipsing Google and enough spare cash to buy quite a few countries, they can afford to take some hits.

Not so your average MNO or small-scale handset vendor. Hence why the foil to risk inherent in innovating needs to come from within MNO’s, in response to a business plan. Vodafone & Hutchison have probably taken losses to get their bespoke devices to market, but that will be in the plan. But you don’t foil risk with a shiny sales pitch up against the sheer mass of the big 5, the customers brand loyalty and the marketing manager’s desire to keep her bonus & job.

Not that it should be doom & gloom on the micro-vendor front. Far from it. Look at the market for bespoke cars. Or beer. Or watches. There are a significant enough number of people who value something different, something special. Most are happy with a Mondeo, but a small number want a Morgan. Horses for courses. Just don’t expect to see loads of Morgans outside your local Sainsbury’s any time soon.

- – - – -

Thank you Mr Operator!

If you’d like to put a question to Mr Operator, drop it in an email to me, subject ‘Mr Operator’. You can ask anything. Big theme, small curiosity. Has there been a question that’s been burning in the back of your mind? Get it answered.

Mr Operator is going to do his best to answer all questions. It might take a few days or a week or so depending on his work commitments. Try him out?

I’ve agreed that, generally, we won’t be pulling any punches. We’ll be punching away. Or, at least, Mr Operator will be.

I’ve taken off the mask, the 10cm thick iron chains and the straitjacket.

Mr Operator is now waiting for your input. He will answer any question you care to put to him (provided it’s authored by someone with half a brain). I expect that sometimes, he might respond with a single sentence. Other times, you might get an essay.

Let’s take a step back first though. Who is Mr Operator? Here’s the original text I published when we launched the series:

There’s a chap I know. I’ve been calling him The Operator or Mr Operator in the recent SMS Text News Mobile Industry Review podcasts. He’s a little known gem that almost every mobile startup needs to talk with. Or, ideally, hire. Indeed, if you’re not talking to him at the moment, or if you’ve never heard of this service, talk to me and I’ll see if I can introduce you. He consults to a maximum of five mobile startups at any one time. His job? To rip their services to pieces. To rubbish every slide, to bludgeon the startup’s business plan. To slap the VC sitting on the startup board. To bring reality. Yes! His job is to help you craft a winning strategy to pitch a mobile operator.

How do you know he’s any good? Simple. He is that man. He’s the guy you pitch at one of the world’s largest international operators. Hardly a week goes by where he doesn’t send me a text privately ridiculing yet another high profile startup that’s just been sent marching, tail between their legs, from his office. He does the best he can to help smooth rough diamonds but, geez, the stories he tells me. He doesn’t ridicule them for spite. It’s frustration. He’s hugely frustrated with the total lack of understanding displayed by most entrepreneurs trying to do business with operators.

Here’s what I’m looking for: I’m looking for questions. Anything you’d like to know. Send me your questions with the subject Mr Operator and I’ll get him to answer.

You might like to know what revenue splits an operator implements with content providers. How to get on deck. Who runs their deck? How do you sell them an handset? How do you put a service on a handset?

Whatever your question — or set of questions — whack them to me and let’s get moving.

As ever, I’m ewan@mobileindustryreview.com.

That’s until we solicited enquiries for companies to be reviewed.

We got one or two out the door but the vast majority of them, Mr Operator briefly reviewed then wrote back to me saying, ‘Er, if I do a piece on [Company X], it will most likely put the shits up their investors and hamstring them on-going.’

Which isn’t something we’re into, here at Mobile Industry Review.

We’ve got a lot of analysts, investors and venture capitalists reading regularly and, well… if you look at how brutal Mr Operator could be… that might not be good news for a lot of companies.

The idea behind the concept with the series of features was to let people know what sort of things an operator is looking for — so that you avoid making mistake-after-mistake when you’re trying to deal with one.  But then I happened upon the idea of offering companies the ability to pitch Mr Operator and then publish both the pitch and his perspective.

I’m in two minds and I’d appreciate your perspective.  Would you like to read a direct, critical-in-some-places evaluation of mobile companies, from the perspective of Mr Operator?

Or should we do a Q&A style set of features?  You send me your questions for him and I’ll get him to respond?

I’d appreciate your viewpoints — either by mail or here in the comments.

In a recent conversation on SMS Text News regarding the future of the mobile industry – and in particular where applications and clients were headed – the point was put that “The operators have spent so much money that I just can’t see them letting go very much.”

I beg to differ. We are ‘letting go’, in the form of increasingly flat-rate data plans. We see month-on-month growth of data plan sales that eclipses ANYTHING seen previously. Our Mobile Broadband product managers have huge grins, thinking of bonus time. Our network planners sweat buckets and pray to the gods of modulation to deliver them from congestion.

If ‘letting go’ means ‘welcoming thousands of app developers with open arms’ then we must sadly disagree. Many developers see this as something the MNO’s *MUST* do. I posit that we *CAN’T* do it. We simply don’t have the teams in place, or the business model to support said teams. In the age of niche, of the long tail, you cannot dedicate staff to managing a product that only appeals to a small base. You have limited marketing resource. Limited ability to put apps / links on portal / screen. We CANNOT put our brand behind it, and agree to full customer support for it, because the cost of training everyone in the organisation is prohibitive.

So the future as I see it is many niche apps (encompassing clients and web apps) that customers can access via their open, flat-rate device, from ‘stores’ or from ‘Sources’ a la iPhone Installer. There is a widely-held belief that user-installed apps are dead (were they ever ‘alive’ to the masses?), they are too hard for most people to use. This is a viewpoint spawned by the currently appalling experience – to a non-geek – of installing apps on Symbian handsets. Quite rightly MNO’s are loathe to promote something that we know will be a customer-unfriendly experience to install & configure.

But there is light at the end of the application tunnel. The amazing success of FaceBook Apps (indeed, what is FaceBook without apps?) and the ease of adding them, connecting them to other services like Flickr, Dopplr, ShoZu, should give us hope. Hope that customers will discover and ‘install’ applications if they a) see the benefit of doing so and b) are not scared of breaking their device. Mobile phone apps need to be as easy to install as FaceBook apps. Get the OS out of the way and watch the public lap them up. The jailbroken iPhone gave us a taste of this, although by dint of being jailbroken you are immediately looking at someone pretty comfortable messing with the innards of a phone.

The beauty of the iPhone App store model is that you as an O2 iphone user can pay to download an app, and if it goes belly-up you will take umbrage with the Apps store and the developer, not with O2. This is the first time mobile consumers have been exposed en masse to the PC model of application purchase and – critically – support. You don’t call BT when your Skype client goes on the fritz (well, after ascertaining that everything else is working OK). No, you grumble to Skype, maybe reinstall it, maybe visit Skype’s help forums. For the mobile industry this is a paradigm shift.

MNO’s will continue to hunt for key differentiators – apps to pre-install on handsets and fully support. These exclusive deals with major names or really top-notch startups who pass muster will continue to happen. MNO’s will continue to pay product managers and marketing departments to manage and promote the eBays, Skypes, BeBo’s, Monilinks, MusicStations, etc etc. But these deals will be – literally – one in ten thousand.

There will always be users who are way beyond the curve, who can walk into a store and know far more about the devices and apps than the worker bees. These people will always grumble that MNO’s are too restrictive, too slow, too afraid. Some MNO’s are. People are like that, and people run MNO’s. Our customers are like that too. It’ a gradual change happening, kicked off 18 months ago by T-Mobile & 3, kicked in the pants by the iPhone a year ago and no doubt again this Friday. The public are slowly learning what’s possible and what to expect. It’s gathering pace. The enablers are lining up, heads are getting around what is possible, what works, what doesn’t. We are Letting Go, and in doing so everyone will win.

Developers need to evolve along with the MNO’s and customers. Some will be wildly successful, most won’t be. The ones with viral apps, that hook into un-mobilised communities, enabling them to engage in their passions instead of just being another ‘me too’ IM or MoSoSo tool, they will succeed. The Great British Gardening app will rise, I’m sure.

- – - – -

Sometimes you just can’t win.

Spend quite a few Billion to deploy 3G – It’s not fast enough. OK, spend a few hundred million and a few years, deploy 3.5G HSPA, now it’s just fast enough. Until next year, when we (according to the media) demand actual Megabit speeds and sub-20ms latency so we can play games and use VoIP apps to bypass your voice charging mechanism.

Is the customer always right? Does keeping the customer happy make business sense?

Sometimes, no.

The Return On Investment cycle for MNO’s is measured in decades.

Remember the lovely Nokia 7110? The one Keanu Reeves used in the first Matrix movie? How cool was that keypad slide? Well, a mobile site built back when that was hot has only just paid for itself now.

So, you ask your investor for 10Bn over 10 years, buy a licence, build a network, spend a fortune on marketing acquiring customers, wait for EBITDA to become positive (nervous smiles all round chaps) and then actually make some cash/pay some dividends in the last few years, before having to do it all over again, because customers now want the Next Big Thing. In this case, uber-fast low-latency pervasive mobile broadband.

So when an article like this from the FT says that 4G will be available ‘for commercial deployment’ next year, the grain of salt required arrives courtesy of one of these.

A starter on 4G: it doesn’t exist yet.

There is speculation, talk and argument, even some prototype lab stuff going on. But all we really do know is that it will use advanced radio wizardry known as OFDM. We are a few years away from standards-body agreement on exactly what 4G is. Then another year away from hardware MNO’s can test on. And then – most importantly – place a purchase order for. That’s when the rubber hits the MNO road. That’s when line managers in the RF & deployment departments budget time for deployment. Budget for increased backhaul (rather a large issue in itself).

4G has a number of thorny issues to deal with, like IPR. When you buy a 4G network, who do you pay rights to? This is currently as clear as mud, despite recent IPR pool developments. Not for nothing did Qualcomm buy Flarion, the recognised OFDM IPR leader.

Then there’s spectrum slices. Is it 20MHz? 5MHz? 1.25MHz? all of the above? customisable? When your 3G licence runs for another 10 years in clearly-defined 5MHz blocks(in the case of UMTS 3G), you have to work with what you’ve got.

Now about all of this tosh the customer cares not a jot.

What they want is to be sold something fast, that they can use anywhere, while mobile or stationary. HSPA meets this need now, although it does depend on your definition of ‘fast’. Is HSPA ‘fast enough’ for what most people want – web browsing & email/IM? I’d argue yes.

Customers don’t want to have multiple networks if they can avoid them. WiMax will not meet customer expectations of voice for quite some time, if ever, and WiMax MNO’s will still have to pay voice and IP traffic interconnection/termination fees, which will be passed onto customers. And don’t suggest that people will use dedicated VoIP clients to communicate – will you ask your mum to install a VoIP client on her PC so you can save a few quid calling her? Please. (and no, Skype is not the answer. Show me they are profitable. Go on.) So that leaves WiMax as just a mobile broadband play. Is WiMax’s lunch already eaten by the HSPA dongle bully? I’d say yes.
And if it’s ‘commercial’ next year, where are the handsets / dongles? MNO device roadmaps are 12-month affairs, so if things are going to be ‘commercial’ in 2009, we should see LTE/WiMax devices cropping up on them now.

:: cut to handset procurement team meeting ::

“So guys, where are the LTE units we wanted?”

:: crickets chirp ::
:: tumbleweed ::

Of course, none of this will prevent Intel pouring a lot of cash into the idea of WiMax now, and VC’s backing WiMax network startups. When the inevitable happens you can bet that MNO’s will be eyeing the WiMax carcasses eagerly, looking for some cheap infrastructure & licences to integrate into their LTE networks.

So long-term, things are looking good for consumers. Things are getting faster. HSPA+ promises some good speed bumps. Networks will evolve, backhaul will improve. These are inevitable, incremental improvements.

But 100MBps to your handset next year? Don’t wind me up.

- – - – -

You can find out more about Mr Operator here.

Increasingly, it’s not just about the offering, but about the way you sell it, talk about it, and present your company. Utility still comes first… but presentation isn’t far behind, if you’re looking to break out.

Following on from the successful reception of Mr Operator (there’s more coming shortly), SMS Text News will soon launch a series of columns designed to talk with mobile companies of all kinds, to explore how they position themselves in a crowded market, how they engage with customers and influencers, and why (and how) they tell their story.

I’ve engaged Timothy Johnson, a chap I’ve known for a good while, to manage this. Here’s a bit of background on him: Timothy Johnson brings nearly 20 years of corporate communications, public relations and marketing experience, the majority of which has been dedicated to high-tech companies of all types and sizes, both on the agency-side and client-side. Most recently, he drove awareness for Jangl, Inc., a stint in which he helped vault Jangl from a zero-visibility brand to a company with press coverage in USA Today, Reuters, The New York Times, GigaOM, The Washington Post, Mashable, TechCrunch, Cosmopolitan, VentureBeat and with other influencers worldwide. Prior to Jangl, Timothy was a founder at Voce Communications, a top Silicon Valley-based PR consultancy, until 2006.

If you’d like Tim’s perspective on your company and it’s position, mail me and we’ll see what we can do.

The intent behind this series is to give mobile applications developers (and other related service companies) the ability to have their service ‘reviewed’ exactly as a mobile operator would. I don’t like to publish negativity, unless we’re skewering Orange for rubbish mobile data, for example, however this series breaks from that convention. Mr Operator will sometimes be direct and harsh (depending on your perspective). But it’ll be 100% unfiltered, exactly as if you were sat in front of him pitching this morning.

Today, in his first critical review, Mr Operator looks at mobile audiobook service, GoSpoken, a service I reckoned was a brilliant concept (see my post).

- – - – -

GoSpoken is one of those classic services where on the face of it, things look sweet. You have an existing sister media worth billions (print books) and a target device audience of many tens of millions (‘any handset that can play music’).

Where GoSpoken gets hard from an MNO perspective is in the detail. First of all, the discovery is easy – shortcode SMS is understood by most customers. Enter the code, get a link back in an SMS. Click on link.

That’s where the wheels start to fall off the user experience. On an S60 v3 Symbian device, the popups start, every one presenting the customer an opportunity NOT to proceed. Through the purchase and download process the customer is given many choices, most admittedly beyond GoSpoken’s control. Even for a savvy user with a new device it is not a user-friendly experience.

Should you succeed in getting the payment made and the download underway, in good HSPA coverage with an HSPA device (by GoSpoken’s own PR that’s only 4% of the UK base) you are not home free. As the download proceeds, it is highly likely other phone things will be going on. Calls, etc. Every interruption is bad news. The number of people who can multitask on a mobile (assuming the device CAN multitask) can be counted at one MoMo meeting, so as soon as any button is pressed, the d/l is hidden. Depending on the OS, you may or may not get a warning when the d/l fails/succeeds. If it fails – even with 1kb to go out of 16MB – you are probably back to square one, although they do somehow remember you’ve paid. Also, you are at the mercy of the OS as to where the file got stored and whether the music player is smart enough to find it automatically.

So if – despite the mobile industry’s best efforts – you succeed in pressing play on your new Andy McNab ‘tune’, you should be happy. You are now – from a typical MNO perspective – one of only a very lucky few.

MNO hat on. Downloaded audiobooks currently total £7m in the UK, and I imagine the vast majority are via iTunes or other PC-based methods, onto non-mobile devices. GoSpoken are seeking a slice of that pie, and it’s important to realise that that pie is the size it is even with the widespread existence of the friendliest purchase/download/sync/listen package known to man – iTunes+iPod. GoSpoken on mobile is in my opinion an order of magnitude harder than iTunes+iPod, and has the additional customer fear factor of not being backed up (lost device? new number? whither then?). Thus the achievable market is an order of magnitude smaller.

SMS Text News readers, you take the smell test: With a CD audiobook version compatible with *any* stereo or car, and crucially with iTunes+iPod, and only twice the price, what would you prefer to splash out on? Hard media or something intangible that will be hell to shift come free upgrade time?

It is this smell test MNO product managers will apply. Yes, anything that drives data package purchase is good, but if the resultant hassles melt your call centre you will not be popular come review time. Bog standard Google search is doing a nice job of driving data add-ons now, so why would an MNO do a deal to white label audio books from GoSpoken, put them on-portal and back them in above-the-line marketing (thus accepting liability for customer issues) just to shift a few more data packages? Would/could GoSpoken lock the files to the user’s handset or network as a retention play? If they did would you still pay £8? It looks like too much risk for such a small achievable market.

My free advice to GoSpoken? Sell entire books on dirt cheap 64MB miniSD, shipped next day after payment via SMS. That gives the customer a once-only immediately satisfied purchase decision, something tangible that can go in the phone, takes no time to insert/play and can be backed up/listened to on PC. Plus the addressable market of microSD-compatible devices is larger than the HSPA device + coverage + flat-rate plan one.

Supermarket analogy time: yup, GoSpoken does what it says on the tin. Problem is, it’s a niche line, most customers will find the tin’s bloody hard to open (let alone cook) so MNO’s will just stock something else.

Regards
Mr Operator

n.b. Several devices I tried wouldn’t even start the d/l – I got ‘protocol error’ messages. Now this may have something to do with the OMA DRM, maybe not. I understand GoSpoken are working on a non-DRM format, which ties in with the iTunes/Amazon/man&dog realization that DRM is a dead duck that scares off purchasers and makes device upgrades hell for users. If so, great – one hurdle down. . .

- – - – -

Thank you, Mr Operator.

If you’d like to give your product or service the Mr Operator treatment, email me (ewan@smstextnews.com) a brief overview and we’ll line you up.

- – - – -

I make no apology for couching my opening piece in a tone likely to elicit either mirth or derision, depending on your point of view. Call it the result of an upbringing on Ben Elton and Richard Curtis.

Ewan is indeed correct when he paints the picture as one of frustration, not sadism. I take absolutely no pleasure in informing intelligent, diligent people that they have laboured in vain for a year on something that will never, ever see the light of day in its current format. Sometimes the only answer is to rip it all up and start over. Many of these people don’t have valley VC cash behind them – they have left secure jobs, mortgaged houses, sold cars, put small children in care and sent their partners back to work …basically put their medium-term financial solvency on the line for a shot at the mobile big-time.

And so often they are either fundamentally wrong in the MNO part of their plan or they are completely inept at selling themselves.

You don’t get a second shot.

There are many thousands of developers out there with cool ideas, many of which look promising, with good viral uptake among the S60 tweakerati or VoIP devotees. But only a literal handful of people can open the door down the path to mobile nirvana. Knowing who they are, what their business drivers and priorities are is key to getting the second meeting. And the third. There are many, many steps beyond that before you get even close to a customer, and at any stage you could fall. Technical, commercial, legal, regulatory, UI, OEM, OS, the list goes on. The one meeting you managed to get already marks you out as very lucky or well-connected. If you blow it because of poor preparation, an unsound understanding of MNO challenges or some addressable but currently obvious shortfall, then your chances of getting another shot with the same MNO are next to nil. Only the very compelling and unique do so.

My interest in working with Ewan and the SMS Text News team is to try and help promising ideas make it past first base. Obviously the vast majority will still languish in the shareware / Handango void due to the fundamental fact that only a few can succeed pre-installed out of many thousands of candidates.

I’m able to help with the hygiene factors that if not addressed, would see your pitch fail not because the product was poor, but because some other aspect made continuing the relationship too hard and time-consuming for a product manger with a very limited amount of ‘free time’ to do product evaluation.

Ultimately, consultant opinions are like the proverbial – everyone’s got one. Like most things, professional opinion should be taken as part of a balanced diet of market research, second opinion and gut instinct. Plenty of organisations have had Beatles or KFC moments, where they turned down something that went on to become a household name due to prejudice, laziness or arrogance. Sometimes it is their fault, but often – in the mobile industry anyway – it is because of a failing in the approach, not the analysis.

- – - – -

We’ll be starting with some Mr Operator opinions on some mobile companies shortly. I’ve had a lot of suggestions for companies wanting his viewpoint already, so if you’d like your product or service ripped to pieces by our very own Mr Operator, drop me a note.

A mobile operator is a kingmaker, when it comes to mobile startups. If you can pitch your application or service successfully to a mobile operator, very quickly, you could find yourself with hundreds of thousands of customers — if not millions. They’re a lot more accessible nowadays too. Chances are, you can probably get a meeting with an operator to talk about your idea.

That’s where it all screws up for most people, though. Who exactly do you pitch to? CMO or one of the tech guys — or someone else? How do you get an operator’s attention? How should you craft your message to the operator? What kind of revenue share should you look at? When you’ve arrived in the mobile industry with $5m of funding from a top ranked valley VC and a business plan that depends on trying to sign up 3 international mobile networks to reach a 20m paid subscriber target by the end of the year, that’s when the challenges begin. Getting the money and knocking up the funky brand was the easy part.

And although 100,000+ people have downloaded the iPhone SDK, this does not, alas, signify a revolution as yet. The vaaaaast majority of handsets will remain contract, low-spec J2ME-if-you’re-lucky devices that customers will not be able to or cannot be arsed learning how to add apps to. Thus the MNO is still the on-device pre-installed kingmaker. Analogy time: Geeks like to think that as handsets become more open – Linux, Android, the iSDK – there will be a sweeping wave of mobile app democratisation, and soon every mum with a pram will be choosing her own IM client and ringtone editor.

Bollocks.

Look at the most open, customisable mass-market device today – the humble Windows PC. Hundreds of thousands of free apps out there, that will do everything from tell you the time in Peru to track the latest shuttle mission. Yet most PC’s remain bog standard, with users using the pre-installed Microsoft apps because the alternative requires just too much nouse, spare time, risk of the thing going tits-up etc. As a species, most of us like Vanilla. In one kind of cone. With only one price. It’s easy.

So. Pitching mobile operators?

There’s a chap I know. I’ve been calling him The Operator or Mr Operator in the recent SMS Text News podcasts. He’s a little known gem that almost every mobile startup needs to talk with. Or, ideally, hire. Indeed, if you’re not talking to him at the moment, or if you’ve never heard of this service, talk to me and I’ll see if I can introduce you. He consults to a maximum of five mobile startups at any one time. His job? To rip their services to pieces. To rubbish every slide, to bludgeon the startup’s business plan. To slap the VC sitting on the startup board. To bring reality. Yes! His job is to help you craft a winning strategy to pitch a mobile operator.

How do you know he’s any good? Simple. He is that man. He’s the guy you pitch at one of the world’s largest international operators. Hardly a week goes by where he doesn’t send me a text privately ridiculing yet another high profile startup that’s just been sent marching, tail between their legs, from his office. He does the best he can to help smooth rough diamonds but, geez, the stories he tells me. He doesn’t ridicule them for spite. It’s frustration. He’s hugely frustrated with the total lack of understanding displayed by most entrepreneurs trying to do business with operators.

For example, I sent him a text a few weeks ago about a new service I’d come across that I thought his company should take a look at it. “Download it,” I wrote, “Just met the founder and they’re looking for operator contacts?” I sent. Later that evening, he replied: “Installed it, looks nice, drained my N95 battery in 60 minutes. Piece of shit.”

Soooo I won’t be introducing them. This is the biggest frustration I have when I’m sat in the middle between an audience of mobile startups (and established developers) who naturally want to pitch their services to mobile operators. If you can’t deliver a product that meets a few basic criteria, there’s no way you can get in the door.

Just what are mobile operators looking for at the moment and how should you present your services to them?

Well, I have some answers — in the form of a new semi regular series for SMS Text News: Mr Operator.

If you’re a mobile startup and you’re hoping, or your business is relying on getting into an operator, this series is most definitely for you. I’ve sat down and managed to comission Mr Operator (or, Mr Gatekeeper) to write a regular commentary about pitching your business to a mobile operator. In the upcoming weeks, I’m going to ask him to shine his razor sharp wit and experience on a number of mobile startups that I know are hoping to get into operators. (If you’d like your product or service ripped to pieces by a mobile operator (hopefully, prior to doing it for real) and if you’d like to save yourself his £5k/month consultancy fee, drop me a note, otherwise I’ll be picking randomly, soon.)

To begin with, I asked Mr Operator to give us an overview of how the average mobile startup pitch goes with him. Here we go….

- – - – -

So you’ve got a cool app.

It does something Webby, something 2.0-y, but in a new, exciting way that people will love. You have sweated blood over it, sold the dog to pay the Symbian signing fees, and your partner now refers to you as ‘that guy with the bloody phone’.

You have a PowerPoint.

You have agonised over the fonts. Your designer friend knocked you up some business cards with a snazzy windswept and interesting* motif. You have a brand ending in one or two consonants, or possibly a Scandinavian vowel. If you are really lucky the whole name is Scandinavian. It actually means ‘wet shoes’ in Norwegian, but who cares?

Norway is not the prize.

You are Ready. Best suit on, checked the phone 5 times to make sure it’s on vibrate, got 5 copies of the office location printed, plus postcode loaded into GMaps on your new N95 8GB in case the cabbie has never heard of the destination.

You have your app on 3 different handsets, all reflashed to Nokia default, all with spare batteries.

You are going to Meet The Man From The Mobile Network Operator.

The meeting was set up following a 20 second passing blurt at a conference a few months back – you got The Man’s card, and have slept with it under your pillow ever since. You have him on speed-dial, even though you have never spoken since. You have sent increasingly nervous emails suggesting times / places / dimensions where it might be convenient to meet. Finally, there’s a 15 minute slot. You are IN my son. They will love you. Your MoMo mates are so jealous they can’t code straight.

You sign in at reception. He’s still on a call with the states, so you wait.

Read the FT.

And wait. Read Forbes. Check your phone’s on vibrate.

And He’s Here.

Big smile, firm handshake, business cards, etc etc. Up to the 5th floor, meeting room double booked so you camp out in a spare office. He’s only got 10 minutes now because of a call with Australia, so off you go. Out with demo handset one. Straight into it. Wait for S60 to boot up. Smile weakly. Realise battery is flat. Out with demo handset two. It’s a go-er.

Fire up The App.

Of course you’ll get rid of that Symbian pop-up message….and, er, that one too. Of course the UI will look much better when you hire that Flash developer, but, heh, you know start-ups, budgets, etc. Smile weakly again. Slides, did you say? oh, Christ yes, here, hold that, hang on, I’ll just boot up the laptop…………..Windows, eh?….weak smile…. Oh Jesus is that me sorry must have chosen Outdoor instead of Silent sorry….What’s that? Business model? er, well, A round is looking promising.

Oh, long term?

Well, we thought we could get three Euro per month per subscriber….

:: tumbleweed ::

:: crickets chirp ::

:: Fade to grey ::

* with apologies to Billy Connolly

- – - – -

Thank you, Mr Operator.

Standby for more, soon.