2012 Mobile Trends And What They Mean For Product Strategists

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Thomas Husson

When revisiting our 2011 mobile trends, Julie Ask and I concluded that many, if not all, of them were still evolving and relevant. We have placed the main new trends for 2012 into four categories: business, ecosystem, consumer expectations, and technology.

Mobile Is A Key Business Strategy Enabler

Product strategists must work with other roles in the organization to:

  • Develop a scalable approach to delivering mobile services. Organizations will need a strategic approach to building and spreading institutional knowledge as well as governance for the development of mobile services.
  • Craft a mobile strategy that extends beyond phones. The emergence of tablets in particular will require a different approach than smartphones.
  • Differentiate on the delivery rather than the content of mobile services. In 2012, “how” mobile services are delivered will differentiate them — not what they offer.
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Book Business Outlook For 2012: Hard Work Ahead

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James McQuivey

This week hundreds of us in and around the book industry will converge on Digital Book World 2012 (#DBW12). It's a conference that has risen in significance because this industry has rapidly come to understand that it is uniquely susceptible to digitization -- and poised to benefit from it -- in a way that other media are not.

This awareness has translated into relative optimism among publishers. As I'll share with the DBW12 audience on Tuesday morning, we recently conducted a survey with Digital Book World of publishing executives whose companies together earn 74% of all US trade publishing revenues. As we closed out 2011, 82% of publishing executives we surveyed were optimistic about the digital transition. That's a large number, even if it's smaller than the 89% it was a year ago. But when we take into account all the measures of optimism we threw at them -- about the industry in general, about the fortunes of readers, and the importance of their own roles -- most of them decreased somewhat and some decreased significantly. 

Most tellingly, only 28% of these executives thought their own company would be stronger in the future because of digital compared to 51% who agreed with this sentiment the prior year. This suggests that publishers have started to do the hard work of making the digital transition and they're finding that it is, indeed, hard work. It's worth putting ourselves in the shoes of these publishing industry product strategists for a moment to consider just why they aren't positive that their companies are going to come out better off. I see three reasons:

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Apple Schools Textbook Publishers In Education Innovation

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Sarah Rotman Epps

 At Apple’s event today in New York, Apple unveiled iBooks2, a new version of its iBooks software that is tailored to interactive textbooks, and iBooks Author, an app that makes it free and simple to create interactive textbooks for the iPad.

There are already thousands of digital textbooks available on the iPad, as well as on other devices like PCs and Barnes & Noble’s Nook Tablet. But as my colleague Annie Corbett and I have written, e-textbooks are a transitional product, accounting for only 2.8% of the $8 billion US higher education textbook market in 2010, according to the National Association of College Stores. The vast majority of digital textbooks are not very innovative; they’re essentially print replicas with digital extensions like highlighting, search, and annotation. The iPad — which now outsells Macs in schools, according to Apple — is capable of much more than what has previously been produced, and Apple hasn’t been satisfied with the status quo. Today, Apple demonstrated iBooks2, a new textbook experience for the iPad; these new textbooks can be created using iBooks Author. iBooks2 will solve two product strategy problems for publishers:

  • Production cost. Companies like Inkling are doing quite well helping publishers take their education apps to the next level. The problem is that publishers’ content creation and production processes are still optimized for print, not digital, so working with Inkling is expensive (in terms of publishers’ labor, not necessarily Inkling’s fees). So most publishers opt to create a small number of new apps and settle for digital replicas or “enhanced eBooks” of everything else.
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CES 2012 Preview: Tablets, Ultrabooks, And Wearables

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Sarah Rotman Epps

It's that time of year again! Next week I'm headed to Las Vegas for CES 2012, along with 140,000 other people (bring your hand sanitizer!). Here's what I'll be looking for among the masses of gadgets:

  • Tablets: Ice Cream Sandwich, Windows 8, and all the rest. Last year, there were more than 80 tablets that debuted at CES. This year, I expect the field to be whittled down some, but there will be plenty of CE manufacturers strutting their stuff. Look for new Android 4.0 tablets from Motorola, Toshiba, Acer, and others. Will they sell better than last year? I don't expect to see any barn-burners, but there's reason to be optimistic: The percentage of US tablet shoppers who say they prefer Android as the operating system on that tablet doubled from 9% to 18% between January and September 2011. Meanwhile, the percentage of tablet shoppers who say they prefer Windows decreased from 46% to 25% — still more than those who prefer Android. We'll be looking for the dazzling Windows 8 demos at the Microsoft booth and elsewhere. In addition, we'll be looking at how smaller companies are using Android as an enabling platform but building their own curated experience on top. For example, I'm meeting with Jean-Yves Hepp to check out the Qooq, an Android-based tablet optimized for cooking and kitchen use that's selling well in France.
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Potential Nook Spinoff: Unlocking Value But At What Cost?

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Sarah Rotman Epps

In a press release today, Barnes & Noble announced its intention to explore a potential separation of its successful Nook business in order to "unlock that value" and build upon its rapid growth (the Nook business will have an estimated $1.5 billion in revenue this year, according to the company). As PaidContent.org notes, international expansion could be a key motivation for the move.

I have been impressed with how Barnes & Noble has managed its Nook business thus far and I imagine that they have good reasons for exploring this separation. Nook has grown rapidly, but continued growth and international expansion will take sustained investment that B&N shareholders may not have the patience for. However, the Nook business has benefitted from synergy with Barnes & Noble in two key areas: 1) Barnes & Noble's channel (retail stores) and 2) Barnes & Noble's publisher relationships. It's not clear how a separate Nook business would function without the benefit of Barnes & Noble's retail stores and publisher relationships.

Nook has fueled Barnes & Noble's growth: What will be the value of Barnes & Noble without the Nook business? Where will the growth come from?

A key model for Barnes & Noble to consider is that of News Corp. and The Daily. News Corp. owns The Daily but it's managed independently, with its own P&L. The best scenario for B&N may be to pursue a similar structure, giving Nook the independence to grow and attract new investment but maintaining the synergy between Nook and B&N's retail stores.

Co-Creating Value At Disney World

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Doug Williams

Happy 2012 to everyone!

I wanted to share a blog by an acquaintance of mine, David Deal, VP of Marketing at iCrossing. A few days ago, he posted about a new co-creative experience in Epcot at Disney World, wherein you the guest develop a virtual thrill ride, then board a contraption that simulates that ride. It's similar to the old Body Wars and Star Tours rides at Epcot and Hollywood Studios, respectively, but this time YOU create the ride, and YOU experience the creation -- including twists, dives and loops. Yeah, that's right: loops.

The thing is, you have to follow the principles of engineering in order for your virtual ride to work. Remember, this is Epcot, not Universal, so there's an educational component here. The introduction to the experience educates the guest about the physics involved with engineering a ride like this. While creating your ride, the program prompts you to make corrections where necessary to allow your car to finish all those twists and loops you've created. Raytheon sponsors the experience, presumably to show kids how awesome and fun science and mathematics are.

Pretty cool, right? I remember taking the Star Tours ride a loooooong time ago, and hearing about how the engineers had to be very very careful to align the motions of the pod with the visuals on the screen to (a) make it look real; and (b) keep people from getting (too) sick. Technology has accelerated to the point where hundreds of these experiences are now created each day (no word on how common motion-sickness accidents are).

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Product Strategists Should See NFC As Much More Than Contactless Payments

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Thomas Husson

A year ago, Forrester stated that 2011 would — finally — be the year that Near Field Communications (NFC) began to matter. We predicted that dozens of millions of NFC devices would ship and that the market would start moving away from being niche, although it would still be years away from becoming mainstream. Now that 2011 is coming to an end and it is once again the time for predictions, let’s look back at NFC’s year before we publish our report on mobile trends in 2012 at the start of next year.

I recently got confirmation from trusted sources that 35 million to 40 million would be a good estimate for worldwide NFC mobile phone shipments. 2011 was a game-changing year in that handset makers eventually started to embed the technology in their product portfolio.

Despite the hype about Google Wallet, the reality is that few consumers can use it. It will take a few more years before we reach a critical mass of not just NFC device owners but also users of services enabled by NFC technology. Why? Few services are available now; the out-of-the-box experience is still poor; consumer education is missing; and there’s only limited availability of NFC readers in the retail environment.

Product strategists should stop focusing on NFC as just a contactless payment technology but should instead anticipate new uses for the technology that enable consumers to interact with the environment around them.

Most consumers using an NFC device in 2012 will more likely use it for device-pairing or data-sharing purposes than for payments. Why? Because it can work in a closed loop without the need for NFC infrastructure. Device manufacturers will offer NFC-based multimedia content sharing services, such as the recent Blackberry Tag.

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Forrester's CPS Practice Welcomes Our Newest Analyst - Denée Carrington!

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Carlton Doty

Over the summer, I asked you all whether we are finally headed toward a cashless society. Since then the battle for the digital wallet has certainly heated up. Well today, I am thrilled to announce the newest addition to Forrester's Consumer Product Strategy practice. Her name is Denée Carrington, and she will be joining us as a Senior Analyst, covering consumer payments, starting January 3, 2012. 

To provide more specifics, here's a sneak peek at some of the coverage areas where Denée will be able to help Forrester clients with consumer payment strategy in the new year:

  • Defining the future of consumer payments
  • Managing a portfolio of payment products (e.g. credit, debit, prepaid, contactless, mobile, person-to-person (P2P), etc.)
  • The business models and profitability of these payment systems
  • Understanding the dynamics of customer (consumer and merchant) payment behavior
  • Understanding the payments needs of different markets
  • Sizing the different payments market opportunities
  • Driving customer (consumer and merchant) adoption of payments systems
  • Building and developing new payment systems
  • Optimizing existing payment products to improve security and increase convenience
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Beyond Tablets: The Next Five Computing Form Factors

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Sarah Rotman Epps

With CES 2012 a month away, it’s a good time to look ahead at what’s next for consumer technology product strategy. All eyes have been on tablets: Apple sold 40 million iPads in just 18 months, with 11 million sold in this past quarter alone. With the Kindle Fire and Barnes & Noble Nook Tablet finding their own successful markets, it’s easy to see why tablets attract so much attention and excitement. But computing evolution doesn’t end here—tablets, while still growing rapidly, are not the final form factor. We’ve identified these five form factors as the best candidates for what comes next, which we describe in more detail in a new report for clients:

  • Wearables. Wearable devices are devices worn on or near the body that sense and relay information. The Lark sleep tracker and BodyMedia wristband both sync with iOS devices and target health and fitness scenarios. WIMM Labs' wristwatch runs on Android software, and targets multiple scenarios including news, social networking, health, and personal finance.
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Introducing Engaged TV: Xbox 360 Leads The Way To A New Video Product Experience

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James McQuivey

What to do when a failed product concept still lingers, haunting every attempt at injecting it with new life? That's the problem with interactive TV, a term that grates like the name of an old girlfriend, conjuring up hopes long since unfulfilled yet still surprisingly fresh. Gratefully, it’s time to put old product notions of interactive TV behind us because this week Microsoft will release a user experience update to the Xbox 360 that will do for the TV what decades of promises and industry joint ventures have never managed to pull off.

Meet engaged TV. From now on, I will no longer need to plead with the audiences I address, the clients I meet, or my friends who still listen to me to imagine the future of TV. Because Microsoft has just built and delivered it: A single box that ties together all the content you want, made easily accessible through a universal, natural, voice-directed search. This is now the benchmark against which all other living-room initiatives should be compared, from cable or satellite set top boxes to Apple’s widely rumored TV to the 3.0 version of Google TV that Google will have to start programming as soon as they see this. With more than 57 million people worldwide already sitting on a box that’s about to be upgraded for free – and with what I estimate to be 15 million Kinect cameras in some of those homes – Microsoft has not only built the right experience, it has ensured that it will spread quickly and with devastating effect.

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