Recent Blog Posts

The Interaction Design Association is putting on their first conference next February, and it looks to have a great program. It’s not a mobile conference, but Morten Hjerde (of Sender11 blog on mobile interaction design fame) will be speaking (and not about the iPhone).

Interaction 08

There's been a lot of talk about MVNO failures, especially in the US, and how perhaps how the model isn't valid. When we noted that so many of the spectacular US MVNO failures have been for Los Angeles based companies (look out, Helio!!), I decided to investigate a little further.

First, keep in mind that brands such as TracFone (over 8m users) and Virgin Mobile (US) are MVNOs. They are using a very different business model: low cost pre-paid services, with phones specific to their network. Virgin Mobile, for example, works extensively with device manufacturers to create customized handsets.

There are some very low-investment MVNOs which appear to be doing fine. Working Assets, for example, has provided liberal-agenda retailing of telecommunications services for well over 10 years. They've added wireless services from Sprint: no special phones, no special services, just a branded retailer for Sprint. And the ability to go carbon-neutral.

I think that Boost Mobile (a Sprint subsidiary) and Jitterbug Mobile are still too new to declare success or failure just yet. I have hope for Jitterbug, as they are targeting a growing market segment.

So the folks who are failing are mostly going after the same type of market: youth or topic-obsessed (e.g., ESPN) who will pay extra money for cool services. Because of the strong branding implications, cost of customer acquisition is higher.

An excellent resource to understand the MVNO market in general, and the European MVNO market in particular, is found at market research company FirstPartner (find European MVNO 3.0 and select Download). It's a big diagram, and it will take a while to really understand it. We've extracted a small amount of the data here for further exploration.

The pie chart shows the segments of the European MVNO market as identified by FirstPartner. Paraphrasing a bit, they are:

1. cost-driven, voice + text only
2. physical retailers extending their store brand into mobile, usually voice + text only, such as Walmart and Tesco
3. niche affinity brands, such as Gaymobile
4. content-focused brands (this is the first category where non-messaging data become important)
5. convergence plays, such as triple-plays

If we assume that the European market will have a similar structure to a mature American market, then we can slot companies into each category and see how they are competing.

1. TracFone, Virgin Mobile USA, Boost's prepaid offering, STI Mobile. High volume players with excellent distribution models. TracFone is doing great; Virgin Mobile is in trouble, paying more than $100 to acquire subscribers and losing 4.8% of its users per month, and only making $21.48 per user per month.
2. 7-11 Wireless and a host of tiny brands such as The University of Kansas.
3. Movida, Voce, KDDI, Working Assets. A crowded marketplace for what is in Europe only 8% of the market. As a result, success will happen by keeping costs down or being able to charge a premium; others will have trouble succeeding.
4. ESPN, Helio, Disney, Amp'd, Boost (premium). Here's where we are seeing the bulk of the failures in the US.
5. Embarq, Pivot. Competition includes Verizon (Fios, Wireless, and so forth). Cable and wireless executives are enthusiastic about the "triple-play" and even "quadruple-play", but I'm still waiting on a good reason to limit my wireless choices to what cable operator I have. I expect the bulk of these folks to be either business focused with data, or consumer focused with voice + text only.

Obviously the US market won't end up being exactly as the European market; we also can not expect one analyst's document to model the industry precisely.

Of particular interest in understanding failures is cost of acquiring a subscriber. The FirstPartner document (in addition to the column on the left discussing business models) lists average cost to acquire customers at 30-200 euros for content MVNOs, as compared with 25-30 euros for cost-driven MVNOs. TracFone, the largest MVNO in the US, is still subsidizing handsets; in 2004 their acquisition cost was $70, or over double the European costs. Virgin was $121 last year. Helio, Amp'd, ESPN, and Disney are/were paying much much more.

As a user experience blog, I'll point out that all of this has a profound effect on what companies are willing to invest in user experience. Eliminating device subsidies would significantly reduce acquisition costs, but then we'd have to rely on device manufacturers to get user experience right. So far, that's Apple. Nokia and SonyEricsson are pretty good, but certainly not great.

I just received an email flier promoting a Mobile Local Search conference. I briefly considered the idea of attending or speaking, but decided not to. Interestingly, this came the same day as a recorded interview with VC Chip Austin of mobile-focused i-Hatch Ventures by mocoNews, which covers a bit about the local search space.

I see mobile local search as an enabling technology, like voice over IP (or IP itself). Or even Google. Take a search of online assets – business listings, tourist listings, movies, classified ad listings, and service points like ATMs – and filter or sort them by location. It’s that simple.

It’s that simple, and that powerful. But any company with a strong location database is in pretty good shape, as are the search providers. There are opportunities for some wild-eyed startups in the space, but perhaps not for the core offering. Go2 has been in this space for ages; Infospace officially was but never seemed to get past business and person listings. It was never as compelling as Go2’s offerings (which are only getting better as location becomes available).

I’m more interested in leveraging local search for other services. Do you have a special interest in antique stores? A recurring search of your location can let the phone alert you when a store is nearby; this will feel like push messaging. On a road trip near lunchtime? Get a summary of all food options available to you without having to backtrack. On that same roadtrip and about to pass the last opportunity for gas/lodging/food for a long time? Get an alert.

Yes, mobile local search can be monetized directly. In fact, considering that 411 costs over $1 per call, there is a fascinating niche available for pay-per-use if the operators can avoid requiring data plans to use it and the service can be accessed directly from the device menu rather than through a browser (I think I just described a widget). Another method of monetization is the ever popular dreaded advertising. While advertising is more difficult for the small mobile screen, it is feasible. Our mobile UI pattern library contains some UI solutions for advertising. Solutions exist for display of advertising without being intrusive.

Over at UX Matters there’s an interesting post, Where Are You Now? Design for the Location Revolution. A lot of the article is a good summary (“immediacy, spontaneity, and specificity” I particularly like) but the one thing that really got me thinking was the distinction between relative and absolute locations.

I won’t reiterate, so go read his whole post if they don’t make inherent sense to you.

I think it didn’t actually go far enough, and in that might have discovered why we feel that mapping is not the app-of-the-future. Who really cares where you are — in absolute, coordinate terms — on the surface of the planet? I’ll bet more or less no one. I am a huge nerd and I only refer to my MGRS coordinates a couple times a month.

For the most part, its all relative.

• What will the weather be like in this area this afternoon?


• What italian food is available within 10 minutes of here?


• How do I get from where I am now to the convention center?


• Are any of my friends in the airport yet?


• Does anyone within driving distance have a Toshiba CRT TV?


• Does anyone nearby know about laser smoke detectors?


• Do any of the motels at this upcoming exit actually have vacancies?

Like everything. Not just your mobile life, but your real live life. Mobiles should work the way users think, and not the way the technology works. Practically everything should be relative, contextual and personal.

The MS Live Labs/U-Washington Photosynth demos have fostered some talk here in the office about how such technology can eventually apply to mobiles (actually, Seadragon rather more so). But this morning Barbara realized that a great opportunity is being missed so far. At the moment that you take a photo with your cameraphone, it should be possible to get feedback as to where you are.

One of the biggest concerns I have with technologies like Nokia Point & Find that I mentioned before is that the searchbase will be tiny for a long time. If someone can build a system that uses a vast library of existing photos, the product could be really useful almost immediately.

And the relationship is quite synergistic; the more photos that are taken, the better the service gets. GPS-enabled phones might well want to use it to pinpoint the location, but the general location (via GPS, cell, sector or even user questioning) as well as the raster data, can feed even more information info the system for later correlation and retrieval.

We don't have a server farm and a suitably-large stack of developers, so Yahoo! (Flickr), Microsoft (see above, plus Streetside, Virtual Earth, etc.) or Google (earth, satmaps, street view), get on this please.

Fellow mobilist Morten Hjerde has a very nice functionality and usability review of Nokia's Podcasting application; it's a good thoughtful read. It looks like Nokia committed all of Apple's podcasting errors and added a large set of their own. Oh, and it's an application for listening to podcasts, not actually podcasting.

A podcast listener is a tough application to design correctly. Consider some of its needs:

• integrate with the browser on the device, so appropriate links open up in the podcast app.
• handle information feeds of arbitrary formatting, with user-understood displays.
• integrate with voice call functionality, with appropriate pausing.
• monitor battery use, alerting the user a bit earlier than usual that the battery is running low and they may want to consider stopping the application so they can make voice calls.
• intelligent download/update management, respecting connection speeds & availability, storage available on the device, frequency with which a feed is updated and listened to, and so forth
• facilitate sharing with other listeners
• facilitate saving to some more permanent storage location
• intelligent use of meta-data

After all of the above, the application also needs to be great at actually listening to podcasts! Where did the user last leave off? When resuming after a minute or more, "rewind" the podcast by 10 seconds or so. Should a long delay rewind more? Should fast-forwarding jump a fixed number of seconds forward, or a percentage?

Interestingly, none of our clients or prospects appear to be thinking towards a podcast application on a phone. Perhaps the folks thinking in this direction have not yet invested in user experience, designing more for what the developers want rather than what users need.