EMI keynote at CTIA Orlando

Eric Nicoli (CEO of EMI Group) hinted in his keynote at CTIA that his company had been “experimenting” with DRM-free music and said that their studies showed people would be willing to pay more for it. Last weeks’EMI Group announcement of an iTunes deal will make higher quality, DRM-free, tunes available for $1.29. The new offering doesn’t replace the existing $.99 DRM versions. What’s even more user-friendly is that users who own DRM versions can upgrade their tracks for $.30 each.

Eric Nicoli also made a call for the mobile industry, specifically those in the media and entertainment realm, to take cues from Apple and address issues like value for price, making compelling products and ease of use.

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1// Picturephoning has an interesting write-up on “unauthorized” use of mobile phones by students in classrooms with plenty of YouTube evidence to back it up.

2// At Punchcut we’ve been calling it the new convergence (where convergence is no longer a move to a single, mega-device, but a broad move toward ubiquitous data availability across devices and media), but Mike Mace is calling it the information ecosystem. Whatever you call it, Mike shares an interesting perspective: “The rise of the information ecosystem: How mobile devices, personal computing, media, and the Internet all fit together.

3// Cingular (AT&T) is the second carrier to adopt Qualcomm’s mobile broadcast TV platform MediaFLO.

4// Microsoft announces Windows Mobile 6 at 3GSM.

5// Wired features a quick look at the smartphone lineup that was announced at 3GSM this week.

6// In non-phone device news, a cadre of music execs are busy creating the next gen MP3 player.

7// Finally! Bluetooth headphones worthy of audiophiles.

8// Bank of America Mobile to let users check their accounts, pay bills and transfer funds.

9// Business Week analyzes the timing of a Virgin Mobile USA IPO. It’s an interesting run-down of the US prepaid wireless market with Virgin’s competition from MVNOs Boost, Amp’d and Helio.

10// The “fourth screen”, as the film industry has dubbed it, had an interesting submission from Sundance that debuted at 3GSM. BBC Quote: “Jonathan Dayton and Valerie Faris’s A Slip In Time is one of six shorts made especially for mobiles as part of the Sundance Film Festival Global Short Film Project, and screened at the 3GSM Mobile Phone conference in Barcelona this week.”

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iPods sold at a brisk pace over the 2006 holiday season, which would seem to end the recent iPod sales slump. However, Tomi Ahonen aims to blow away any speculation that the iPod is still holding on to the music player throne. The barrage of evidence from Asian, European and UK studies he presents is pretty compelling. In a nutshell, he says that while iPod sales grew 45% that music phone growth has boomed to 243%, which means that though iPod sales are growing, the iPod market share has been long overtaken by music phones and is shrinking by comparison. (SonyEricsson alone shipped 60 million musicphones compared to Apple’s 46 million iPods).

Now, you’re thinking, “but just because people own a music-capable phone, a so called music phone, do people actually use them for listening/buying music?” Well, Ahonen says yes, and backs it up with some interesting European and Asian studies. The UK study he sites says that 80% of musicphone owners are satisfied or very satisfied with them. Thus Ahonen’s argument goes: the iPod is so totally over.

He’s quick to dismiss the iPod and usher in the music phone era, but I don’t think he’s really discussing the US side of the picture…
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“Cool, no hard hard keys!” versus “Are you kidding? No keyboard?”

First, I’m not deluded enough to think the iPhone is the holy grail of devices. They have a lot in their favor in the US, but they don’t have a smooth ride like they did with the iPod.

If you read the US blogs and tech papers, the iPhone is best thing since the personal modem. Glowing headlines like Apple Waves its Wand at the Phone, where David Pogue equates Apple to a fairy godmother, to “It’s Expected, but it’s Stunning” from the SF Chronicle.

But if you read what the Europeans and Asians are saying, this is cool, but not worth all the hype. Russell Buckley even says it’s just a music phone. Then there’s the LA Times story: “In Japan, Barely a Ripple”, which is saying that all these features (plus mobile payments) have been available in Japan for 2+ years already. (But come on, they haven’t thrown out cumbersome soft keys in exchange for full-face, multi-touch screens, have they?)

So, what is it? Is it just a music phone?
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I’ve tried to separate myself from my Apple fetishism, and slough off Jobs’ reality-distortion effect and really assess this mornings’ announcement from the perspective of it’s impact on mobile user experience. (Certainly, a true UI critique will occur once we can get a device in hand in *sigh* June.

At the end of his keynote this morning, Steve Jobs summed up Apple’s mobile strategy saying, “There’s an old Wayne Gretsky quote I love — ‘I skate to where the puck is going to be, not to where it’s been.’” Which felt apropos given the product they had just announced. But, is the Apple iPhone announcement truly a “revolution of the first order?”

My take is that this is not a revolution for mobile phones. No, it feels more like catching up in a major way in an industry that has been behind far too long. Features like push email are best practices (read: Blackberry), not revolutionary. Integrating mail, voicemail, sms, contacts, voice calls, photos, music and video is also not revolutionary, but Apple is able to realize it where others have not.
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The following was my response since I couldn’t let Jared have all the fun. This question was asked a few days ago on the Adaptive Path blog.

It’s a broad question, but I think it’s really about whether Apple can launch a successful music phone. The iPod is the perfect music player and people are cheering Apple in hopes to get the perfect phone.

The current industry model of carriers and OEMs partnering to create a compelling music phone has had pretty limited success — for example, even though the Motorola ROKR partnered with Cingular to bring Apple’s iTunes and was marketed in unprecedented ways it was what basically a flop by Motorola’s standards because it failed on it’s primary promise to be a music phone. (Engadget reported that 1 in 6 ROKRs got returned). That carrier/OEM dynamic is possibly what’s at stake if Apple succeeds.

Consider this: with ringtone sales on the decline (which is a first in the US), carriers are the ones who stand to lose on the R&D spent developing a music phone offering (since they won’t get paid from data and music sales if everybody’s side-loading their music ala the iPod method). It’s the handset manufacturers (OEMs) that serve the carriers, and these OEMs are the ones who stand to gain from a hot handset that could deliver a compelling music experience.
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