Cloud Business Model

8/14/2019 Cloud Business Model

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2008 Fjord. All rights reserved.

09 mobile trendsCompiled by Christian Lindholm & team


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2008 Fjord. All rights reserved.Edition 1 Christian Lindholm

2009 Topics of Importance


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2009 Trend Candidates


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2009 Key Fjord Trends


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App Stores are digital

Innovation BazaarsNowhere in the industry can the future ofmobility be seen as clearly as in ApplesApp Store.

2009 will be a year of wonderful digitalbazaars full of innovative apps andservices from developers around theworld. Homebrew computing will be

reborn.


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Apples App Store has changed everything.The predictable process of getting into thestore, the application search and discoveryexperience for customers, and the collectionof revenue has become easy. Homebrewcomputing will be reborn and thrive.

Pangea, the creators of the Bugdom andNanosaur games, has made $5M on iPhoneappsmore than from 21 previous years of software sales.

Pricing below 2 seems to unlock volumesthrough impulse buying. Trial apps withlimited feature sets, free apps with ad-basedbusiness models and rental charging will alsosucceed..

App Stores are digitalInnovation BazaarsFor many years, mobile apps have been lost in the dark alleys of operator portalswith poor selection, poor discoverability, and bad revenue splits.

Marketers have innovated new app conceptslike iPint and iZippo that make advertising asocially sharable act.

The long tail of the App Store will allow the

iPhone to attract great content and emerge asa true mobile gaming platform that putspressure on the Nintendo DS and Sony PSP.

These real revenue and brand exposureopportunities will start a tornado of innovation,investment, and competition that will delightusers and finally unlock the potential of

smartphones as open platforms.Operators, Nokia and even the major Internetportals such as Amazon, eBay, Google, MSN,and Yahoo will fight for control of these newmarketplaces.


7/352008 Fjord. All rights reserved.Edition 1 Christian Lindholm

App Stores are digitalInnovation Bazaars


8/352008 Fjord. All rights reserved.Edition 1 Christian Lindholm

The Cloud puts digital life

at your fingertipsMobile phones become true life recorders asMoores Law drives processing power andmemory density up and costs down. Everything

you record is sent to the Cloud.These Cloud-based services safely store andeffortlessly share your life. The PC is displacedas the hub and takes its place as a powerful but

non-mobile client.


9/352008 Fjord. All rights reserved.

Edition 1 Christian Lindholm

The Cloud puts digital lifeat your fingertipsIncreases in processing, memory and software capability turn phones into true liferecorders. Cloud-based services safely store and effortlessly share your life. ThePC continues its evolution from hub to client.

Continuing and dramatic reduction in the costof memory, increase in mobile processingpower and advances in operating systemsenable phones to become truly powerful liferecording computers.

Everything from location, photos, video,speech, audio and nearby friends becomesindexed and sent to the Cloud.

The Cloud " as embodied by Facebook,Google, Apples Mobile Me, MSN, Yahoo,MySpace and others is where the mostrelevant information about your friends lives.Its also the place where you publish your lifestory, hear from far-away friends and makenew ones.

In the developed world, Outlook is no longerthe sole repository of all personal information.The PC continues its displacement from beingthe primary digital hub into a powerful clientthat is best used sitting down at home or

work.In the emerging economies and for mobile-centric teens there are even fewer reasons tocentre your digital life around a PC as Cloud-based services are cheaper and moreaccessible, interconnected and reliable.

Googles profitable web business model andunparalleled distributed computing networkgives them a massive head start. Facebook isgrowing at a massive rate. AOL, Microsoft andYahoo are chasing. Nokia is struggling to getin the game.




The Cloud puts digital life atyour fingertips




Netbooks for connected kids

Connected Netbooks quickly penetratethe connected youth market byoffering better internet experiencesand ergonomics than a smartphone,creating new revenue opportunities formobile operators




Netbooks will be favoured by teenagerswanting to hangout in Facebook andMySpace, chat over IM, video call overSkype, and watch videos at YouTube. This isthe personal communication andentertainment centre; however their argument

for getting one will be homework. It will beused continuously at school, on the bus, andin the bedroom.

The screen of 9 to 10 seems suitable for browsing and typical non-work related tasksand is at the same time highly portable.

The incumbents will dismiss it as a toy, fallinginto an innovators dilemma trap.The opportunistic Taiwanese will find newbusiness from the growth-hungry and cash-strong mobile operators.

Netbooks for connected kidsThe Netbook is less than 1kg and an A4 or smaller sized machine powerfulenough for all the normal consumer computing tasks. It will be sold by mobileoperators using 24 month subscriptions costing 30 a month.

Netbooks will be free in exchange for a 30a month, 18-24 month subscription which willbe appealing to cash-constrained consumers.As with the iPhone, Netbooks offer a businessmodel that unlocks mobile data revenues.

We expect several new consumer-friendlyLinux based experiences to emerge during2009 funded by operators. Gaining anexperience control point which can act as abase for future service revenues is tooattractive to pass up for the operators.Windows XP will also do well in the developedmarkets.

Key players to watch in 2009 are Acer, Asusand HP who have some of the mostinnovative devices in space. Watch CarphoneWarehouse to see how the business model isshaped. We predict that Apple will also enterthe space, but not until 2010.




Netbooks forconnected kids




TV finally goes mobileTimeshifting, placeshifting andepisodification of visually rich audio/visualcontent is creating a TV revolution in whichcontent is decoupled from the constraints of

the broadcast model and mobile-enabled inboth the time and place. Transmediacontent is now available on multiple devicesand consumed when needed.

This transformation will be lead by the BBC,Apple and YouTube.


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Even better video playback from new mobilechips in 2009 and less inexpensive memorycards will make it easy to stream, sync, anddownload video content.

The BBCs iPlayer is spearheading the newTV which provides for time-shifting andplace- shifting. Apples focus on video in theiPhone and iPod as well as the iTunes Storeis a great side loading experience.

Going from a controller-based linearbroadcasting model to an on-demand social

consumer-pulled model is a revolution that willefficiently cater to the social trend of boredom.2009 will be the year the mobile couch potatois born. We will see consumers staring at theirmobiles with headphones on as they tune into mobile TV and tune out of reality.

TV finally goes mobile2.4 QVGA screens are becoming standard. Memory cost is rapidly falling. New

phones play high-quality video and offer fast downloads and streaming. This is anattractive platform for the content industry and a boredom killer for commuters.

We expect the most progressive broadcasters willstart to create new forms of content which iscentred around content brands, but where thecontent is available in smaller time chunks. Sport,

news and weather will be among the first toevolve.Handset vendors and operators will want topromote these services. New business modelswill be created. iTunes is an early success withboth renting and purchasing options. The mobile+ fixed line operators offering TV over broadbandwill invest in mobile and strike broader contentlicensing deals to drive revenue and todifferentiate from smaller competitors.As with YouTube before it, in 2009 we will see TVbecoming more community driven and usershelping to surface great content by promoting anddriving traffic to it.


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TV finally goes mobile


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Companions at the mobile feastMore users will carry companion products in2009.For years Blackberry users have carried asmaller phone for voice. Early adopters carry theiPod in addition to a mobile as their optimisedmusic device. In 2009 we will see more iPhonesand iPod touches in users second pocket as anentertainment computer. The losing battle with

battery life, the need to disconnect from work,high cross-operator tariffs, and the advantages ofa dedicated device are the main drivers.


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Heavy Blackberry e-mail users have for yearscarried a second phone for voice. Manyconsumers prefer to combine a mobile phonefor calls and an iPod for music.

The leading practical reasons include limited

battery life constraining usage, a need tocontrol the ever-presence of work, and highcosts to communicate with friends on differentoperators.

However, in addition increasingly thecapabilities of a specialist device outweigh theinconvenience of carrying two devices. Theirsuperior interaction, functionality and displaymeans that the mobile phone is good enoughfor voice, text and camera, but does notcompete in the delivery of media content.

Companions at the mobile feastConsumer research would typically confirm that users want fewer devices ratherthan more. Behaviour is increasingly indicating the opposite.

We do think that consumers have no problemmanaging two mobile devices. Theyincreasingly realise that two companions arebetter than one at the mobile feast.

We would expect during 2009 to start to see

additional successful fusions of music + voicebeyond the iPhone where users select acasual computer as their second device. Thiscombination allows for good ergonomics andgood service evolution.

We also expect to see rich camera + voice +GPS combinations where the high-end mobileagain grows in thickness to cater for powerfuloptics and great battery life for voice, mappingand life recording.


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Companions at themobile feast


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Facebook status updating is addictive and thevolume of updates and comments is growingexplosively. Twitter has become a conversationand is moving into the mainstream.

Microblogging will evolve from a naval-gazing toyto the Swiss army knife of social media. Itssimplicity and openness make it very flexible and

adaptable to user needs. It has the potential tocombine messaging, sharing, news reading andsearch. The status field is the new search box.

Microblogging becomes

Micromedia


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The constantly accelerating pace of modernlife means less time for long form content.Microblogging will deliver customised streamsof bite-size information from across the webthat fits the new pace of life.

We dont have time for IM, news reading, andsocial networks, but they are all enjoyable andimportant. We need to do more with less.Bloggers will find that microblogging satisfiesthe majority of their need to speak out.

Microblogging is often as short as 140characters. It is simple and flexible, allowingdevelopers to extend it and users to consumewhat they need. Its brevity is suited to mobile.Twitter started the microbloggingphenomenon by asking: What are youdoing? That question has intrigued millionsof users and now Twitter invites new users toJoin the conversation.

Microblogging becomes MicromediaThe simple one-to-many sharing of life moments with friends and the world atlarge, allows people to feel connected and part of a community.

Twitters openness and flexibility has turnedinto a social network, IM service, news reader,social search and sharing service.All of this still limited to 140 characters.

The US election raised Twitters profile withthe candidates setting up accounts.Celebrities from Britney Spears to StephenFry as well as brands such as Comcast andDell followed, all of whom are sharing newsand engaging in conversations.

13 million Facebook users update their statuswith simple text notes at least once everysingle dayand over 1M mobile replies wereleft on the site within the first 24 hours of thelaunch of commenting support for mobilephone users.

In 2009, microblogging wont be aboutblogging, it will be about the web.


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Microblogging becomesMicromedia


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The Android invasionThere are an increasing number of Androidprojects under way in R&D labs around theglobe. The open source genie is finally out of thebottle in the mobile industry and will be

impossible to put back in.In-house operating systems will have a hardertime staying alive as margin pressure increases.Operating system competitors will feel the

squeeze and Asian manufacturers will take fulladvantage of free access to great software.


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The Android platform is gaining momentum.There are a growing number of projects rushingto build phones on top of the platform. It is thechoice of small players like HTC shaping more oftheir destiny, Chinese manufacturers competingon a more level playing field with Nokia andmobile operators wanting an environment theycan customise at will.

It is expected that both Samsung and LG wouldfollow their past strategy of endorsing alloperating systems. Their processes are wellsuited to many independent and parallel projectsand they will make beautiful and exciting Android

hardware.Android is one of Motorolas last lifeboats, butlong term it becomes increasingly harder to seewhat makes Motorola unique in the market.

The Android invasionAs R&D budgets are tightened, managers look to fast solutions. This could helpAndroid mature faster, when managers worry about surviving next year, ratherthan worry about being strong in five years.

Operators will certainly endorse Android as theysee it as an open platform which they cancustomise. However, as the iPhone has proven,a mobile platform really shines when developersinnovate on top of it. The challenge withcustomisation is that it can be easy to breakdevelopers existing applications. Operators andmanufacturers will have to walk a fine linebetween differentiation and developer disruption.

The developers, development tools, linkage toGoogle cloud services, indexing of generateddata and continuous improvements to theplatform remain crucial control points for Google.

Android is still a primitive, unpolished userexperience and lacks meaningful differentiation.Search as a user experience paradigm has notbeen leveraged. The current platform lacks allsex appeal. Aggressive innovation is needed.


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The Android invasion


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War for the worldNokia has dominated the low-end, high-volumeend of the mobile market for years, constantlybeing challenged by numerous small playersdriving down cost.

In 2009 this battle to connect the worldspopulation will heat up and the dynamics willchange as both Samsung and LG will bring outan arsenal of low-end devices and operators willcontinue to steer volume to non-branded ODMsand aggressive Chinese OEMs like ZTE andHuawei.


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We think both Samsung and LG need to stepup in their marketing efforts as these marketsare not controlled by operators.

Nokia is pushing ahead with much moreadvanced marketing that engages people and

their communities. Mobility is widely perceivedas a universal good and currently Nokia isseen in many markets as the brandedmessenger spreading the word.

The Chinese play by their own rules in IPRand elsewhere making it harder for LG andSamsung who have to make a choice whose

game to play. Nokia has been able to live adouble life due to their powerful IPR portfolio.

We think there is a massive opportunity forinnovation in the low end and selling cheapvoice alone is not a sustainable strategy.

War for the worldAs the mobile industry brings voice and SMS to the entire human population, thebattle for control heats up and the dynamics change.

Making cheap and cheerful mobiles has littleto do with making high-end feature monsters.We believe that the current economic climatewill accelerate this polarisation.

A major opportunity will emerge by combining

focused internet experiences with low-endterminals. For example, Opera enjoysconsiderable success in the emergingmarkets and we expect Facebook and otherapplications and service providers to follow.

By building great mobile applications onecould radically change the perception of the

internet.Also, more powerful and much cheaper chipstied with the emergence of viable open sourcesoftware platforms such as Android will allowcutting edge software innovation from the USand Europe to help accelerate the Chineseand other Asian manufacturers.


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War for the world


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QWERTY goes consumerTweens are messaging natives andsocial network addicts. They willlook for more efficiency from their

mobile and will start selectingQWERTY keyboard devices inincreasing numbers during 2009.


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The small QWERTY mono-block device isbecoming a dominant design and moving intothe mainstream.

Nokia has finally built a small QWERTYkeyboard worthy of challenging the Blackberrywith the E71. Nokia will become a majorchallenger with the low cost E63 and Nokias

strategic focus on enabling e-mail for the 80%of the world that does not have an account. Weexpect RIM to aggressively push into lowerprice points, improve their consumer offeringand grow their market share in 2009.

The lower price points and improved softwarehave already made devices like these the

favourite among the American Facebookgeneration who spend so much timecommunicating using social networks, SMS andimages.

QWERTY goes consumerThe Blackberrys relentless focus on a small QWERTY keyboard and e -mail hastransformed the industry.

Entering text on a small QWERTY device ison average about twice as fast on a 12-keyphone with T9 predictive text input.

We will see many more QWERTY devicesemerge during 2009 with many types ofoperating systems.

We expect lots of innovation in cleverprediction, error correction, combined withclever mechanics for greatly improvedergonomics.

We think these devices will become especiallyaddictive when bundled with apps fromFacebook, MySpace and Skype.

In 2009 HTC, Nokia, Samsung and LG willchase RIM into the consumer market.Microsofts acquisition of Danger in early2008, may also result in a more multimedia-centric QWERTY product.


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QWERTY goes consumer


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Location becomes the new

service bedrockNokia is aggressively investing in location andtheir strategy of coordinating peoples lives usingmaps is compelling. Google is the main

challenger with ubiquity on the web and workinghard in mobile. Location awareness in massmarket phones will lay the foundation.

The massive scale of investment is creating

insurmountable entry barriers for smaller players.Maps are the service Trojan Horses for bothGoogle and Nokia.


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Location and the services built on top of mapswill become one of the hottest topics in 2009.Nokia and Google will charge forward,Microsoft and Yahoo! will chase them andothers will react. Start-ups will continue toproliferate and be acquired.

The opportunity to innovate on top of locationis enormous in many areas ranging fromsocial networking, to enhancedcommunication, to rich advertising services.Tremendous new value will be created.

All of this is fueled by GPS enabled devices atsignificantly lower cost as well as newgenerations of hardware and software makingpositioning faster, less power hungry, andmore accurate including the ability to havecontinuous positioning even when indoors.

Traditional publishers will start to feel thepressure.

Location becomes the newservice bedrockLocation will be the bedrock of compelling consumer mobile services withenormous monetisation potential.

The current methods of overlaying informationon maps do not scale and will run intoproblems. There is a need for innovation inhow to contextually search for and find things.

One challenge for the mobile industry is tocrack the concept that will bring localbusinesses and consumers together in acommon experience where businesses canprosper and consumers get rapid access toinformation.

Mapping data requires similar investment toan operating system and needs to extractlocal knowledge from people to enrich theexperience. Only locals know where the bestcoffee is served.

TomTom and their core asset Tele Atlas is anexpensive but likely acquisition target.


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Location becomes thenew service bedrock


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