Google Selling eBooks: A Bold Step But Not The Last For The Search Giant

[Posted by Sarah Rotman Epps]

I'm a few days late on this one but it's been a busy week!

Google announced Monday that by the end of the year it would allow publishers to sell eBooks directly through Google. Google was already involved in the eBook/eReader market through its patented book digitization efforts and through a partnership with Sony that offers 500,000 public domain books for free in the Sony Reader store.

We expected that Google would move more aggressively into the eReader space, but the move to sell eBooks directly is surprising. Sure, there's Froogle, and Google Checkout, but Google doesn't really sell anything but ads. Even when it could have moved from displaying search results to selling products--like airline tickets--it hasn't, until now.

This move directly threatens Amazon as an eBook seller, but more importantly, it challenges Amazon's whole proprietary approach to the eBook market. Google eBooks will use open standards and can be used on any reader, unlike Amazon's Kindle format. Google will also let publishers set their own pricing, unlike Amazon.

What's next for Google? We wouldn't be surprised to see an Android-operated eReader, one that syncs with Google docs and is optimized for reading business documents in addition to books and news. In addition, specialized eReaders are seen as a potential enabler of paperless hospitals; Google's involvement in digitizing health records could put Google in a central role in the health eReader space.

And of course, if anyone can figure out an ad model for books, it's Google...

Innovation by Orange

[Posted by Thomas Husson]

Many recent innovations in the mobile space are led by new entrants such as Apple or Google. However, let's be fair with telcos. They invest significant amounts of money in R&D and have very creative staff. There has been some skepticism in the industry on selected Orange services such as Pikeo, Djinngo (ex Bubbletop) or Soundtribes where Orange was trying to "reinvent the wheel" without partnering with the right Internet players. However, these services have never been really marketed and does not prevent strategic partnerships to be signed. Orange in particular has many Orange Labs worldwide and is driving innovation.

I saw recently some interesting demos of products and services to be launched by Orange:

• 24/24 Actu is a search engine focused on news and aggregating press articles, TV and radio sources. Available in beta and in French only for now, the service is a mix of Google news and blinkx. More info here
• Remote Media. Simply use your mobile phone as a remote control to connect all you home networks and equipments. You can listen to your music on your connected Hi-Fi, live radio or any other DLNA standard equipment. You can select the pictures or videos you would like to see on your TV from your PC or your external hard drive / media center. To be launched in France in 2010
• Orange TV on iPhone. It is good to see an easy-to-use mobile TV service. Interesting also to see that with Liveradio, operators are using the Apple App Store distribution channel. More info here. Launched on April 7th.
• Orange Application Shop. Orange just launched its own shop last week in France. The aim is not to have the widest catalogue possible but to optimize use for specific devices. The race for the home screen is now launched with other stores even though they are likely to co-exist. Here Orange can offer support from the Orange Partner community. This is early stage though and a new version of the Application Shop will be launched in Q4. To know more about application stores and the difficulty to replicate Apple's success, read Forrester's latest research here.  
• Instant Messenger on your SIM card. A free application directly embedded on your SIM card, working on any device, compatible with MSN / Windows Live. Aimed at targeting youth communities in emerging countries. To be launched in Kenya in May 09 and then in Mauritius and Bostwana in Q3 09
• Secure Health offering for GPs and physicians. A tool to store your patients' details and to exchange with your peers.
• A new conferencing tool offering from Orange Business Services. Virtual meetings, telepresence and "distant face-to-face meetings" make lots of sense in the context of companies reducing travel expenses.

When presenting its 2012 plan, Orange also insisted that it will adjust its organization and processes to make sure 100% of its new offerings are tested in 2 real-life client test centres with a thorough simplicity score methodology. That's a challenge for such a large organization but definitely a step in the right direction.

 

2009 Mobile Trends

[Posted by Thomas Husson]

Since this is my first post here, let me begin with an introduction: I’ve worked at JupiterResearch – now a division of Forrester – for four years in the Paris office - after having spent 6 years in the marketing division of a mobile operator. During that time my research has focused primarily on mobile consumer services: mobile Internet, mobile content, mobile media and marketing, mobile messaging. I joined Forrester via their acquisition of Jupiter in July 08, and I’m excited to join the Forrester Consumer Product and Strategy team.

Since this is prediction time, I'd like to highlight some of the key trends likely to happen in the mobile space in 2009:

1) Tough economic conditions will dominate the European consumer mobile landscape in 2009

- Longer handset renewal cycles. Several handset manufacturers expect a decrease in sales (-5/6% in volume globally according to CEOs of Nokia* and Sony Ericsson). In a recent Forrester consumer survey, 63% of US consumers said they would be less likely to buy a smartphone in today's economy.

- Majority of consumers will focus on voice and SMS. Mobile entertainement (TV, games, music) considered as non-essential will be more difficult to promote by consumer product strategists. Few consumers were anyway ready to pay for those services. This will foster the transition towards ad-funded business models and towards the integration in voice/data packages.

- Minority of consumers will continue to be interested in new mobile services. The net result will be a greater polarization of the market between early adopters / innovators and the mass-market. Mobile services will continue to grow and to generate revenues but may take longer than expected to reach critical mass beyond geeks, business users and the younger generation.

- Starting from a low base, mobile advertising will continue to grow but will not generate significant $. There are several barriers to be removed for mobile advertising to really take off: regular and sticky audience of mobile services, education of advertisers and agencies, independent and certified measurement tools...and lack of budgets. In a recession, ad budgets will be tight and it will be tougher to allocate significant budgets for mobile in the overall media mix.

- Operators will have to reduce costs and could postpone network investments. That happened in the previous crisis (early 2000s) and may delay the launch of LTE and of Fiber (in the fixed space).

2) Regulation issues will be all the more important that new entrants will gain ground. Disruptive forces and innovation will open new opportunites particularly around web/mobile convergence

- the growing importance of regulation for operators is linked to the launch of new technologies and to the arrival of new entrants in the mobile space:

The mobile sector is increasingly dependent on political and regulation issues: pressure from the EU on roaming tariffs, decrease in termination rates, FTTH regulatory environement, pressure on environmental issues, new taxes on smartphones, convergence with media players...

This is not new and was highlighted in 2008 by 3 major facts: Apple's disruptive potential in the smartphone market, Android's launch from the largest online ad player coupled with the FCC auctions. In numerous countries, there are lots of open questions as how to best allocate spectrum and the digital dividend, to grant 3G licenses or to simply provide a legal framework for media companies and telecom players to work together.

- the good news is that innovation will create the building blocks for a mobile 2.0 ecosytem:

Online/web developers are only really starting to be interested in the mobile space and this will change the pace of innovation and the quality of execution.

A flow of innovation is taking place with integration of location into services, with widgets, mash-ups and mobile applications, greater avaibility of full-web browsers, more relevant mobile search, expansion of online social networking into the mobile space, mobile transactions...

Of course, such an innovation will not happen in one year but despite the economic downturn, this revolution will happen. The question is not if but when? And the current answer is probably a bit later than initially hoped or expected by some vendors.

If you want to know more about Forrester predictions, see the "Top European Consumer Mobile Predictions" report from my colleague Pete Nuthall.

For a more detailled and personal take, have a look at my own blog here.

For consumer product strategy professionals, I think it implies the following:

1) look at historical data and facts of the previous recession (2001-2003) but bear in mind, this crisis is likely to be different for the tech industry.

2) listen to your customers TODAY. More than ever, consumer survey will be of great help to better understand consumer behaviour and fine tune product launches. In this regard, worth having a look at Paul Jackson's report: "Consumer Spending in An Economic Recession".

3) work more closely than ever with the financial team when promoting big product strategy decisions. Business plans will be challenged.

* Updated January 25th: Nokia is now forecasting handset sales will fall by 10 per cent in 2009, double what the company was estimating just a month ago