This is Part 2 of our look at ICT developments in 2009 and beyond. The discussion is structured by the typical marketing lifecycle implemented by ICT vendors.
Part 1 discussed the use of hype and spin in ICT marketing. The terms were applied to the increasing importance of cloud computing in 2009 and beyond.
In this part our focus is on smartphones.
As IP and IT lawyers we'll be monitoring in 2009 the business and software ecosystems around smartphones. This is because we serve the legal needs of those porting their products and service on smartphones, eg software application developers, website ventures, and publishers and other offline and online content owners.Turning back to cloud computing a clarification is appropriate before discussing smartphones and our next term involved in ICT marketing.
Buzz is our next term. In contrast to hype and spin, buzz is a positive word. It contrasts against the unreality at the core of hype and spin. Cash registers ring on buzz. Which brings us to smartphones and their increasing importance in 2009.
Ahead are more smartphones with better functionality for voice recognition, GPS, and docking into other devices. Moreover, ahead are smartphones with better software.
At least at the level of buzz, the business strategy wars are revolving around - Apple's 3G iPhone and its applications versus Google's Android (looking for smartphone hardware adopters) versus Research in Motion's improved Blackberry offerings - and all versus the rest.
Among the rest is the Sony Ericsson joint venture. In 2007 it sold 101.3 million units (Source: Wikipedia). It is experiencing a lack of buzz due to not having ready and available high end smartphones. It experienced falling prices and margins in 2008 (Source: BusinessWeek.com, 18 Oct 2008).
Against everyone Finland's Nokia remains way ahead in its global mobile phone market share. It aims to stay there focusing on improved features and value for money. With more buzz around the iPhone and Blackberry it is facing more competition. Recently it reported a 5% decline in revenues and 30% fall in net earnings (Source: BusinessWeek.com, 16 Oct 2008). Nonetheless, Nokia dominates with its mobile phone global market share of about 38% in Q3 of 2008, down from 39% in Q3 2007 and 40% in 2006 (Source: Wikipedia).
In contrast to years ago, the buzz about mobile phones is over their software, rather than their form factor, touchy feely elements, or skin appearance. The Apple's iPhone is the epicentre of the buzz. It's made rapid fire progress as indicated by this iPhone timeline. Helping is the fact that Apple is an overall systems company (eg software + hardware + iTunes + Apple shops).
A comparison between the iPhone and Google's Android is available here at Popular Mechanics. Google's strength is in its clenched fist around search advertising and the relationship between online information publishers and users. Google is an intermediary, the classic middleman. It shapes the marketplace and then "sells" one to the other.
The strength of Research in Motion's Blackberry is that it remains its market share among people in business. For a good review and video of the Blackberry storm go here. In the second half of calendar 2008 reviewers of Blackberry devices compared it to the iPhone. Devices from Sony Ericsson, Nokia, Samsung and others seemed to be rarely in the picture.
Buzz helps those it favours to be the model selected in the parade.
Apparently buzz is critical in online marketing, not just ICT marketing. In a video interview for McKinsey Quarterly in September 2008, Dr Eric Schmidt (CE0, Google) observed: "You can have a long tail strategy, but you better also have a head, 'cause that's where all the revenue is."
Apple's done some sharp legal deals fueled by iPhone buzz. In late 2008 one of those deals proved very costly for Optus. Following its July 2008 iPhone launch it suffered a A$44 million "incremental impact" to its EBITDA as a result, even though there was "robust demand" for the phone. A statement released by the company noted that "higher subsidy costs are associated with iPhone 3G".
In 2009 as smartphones continue their move past hype, spin and buzz they will go deeper into the next stage. This is the stage at which an ICT offering becomes a habit. The habit stage in ICT marketing will be discussed in Part 3 of this series.