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Why Google Needs Brillo, Their OS for the IoT

/ Mark Brill / Leave a comment

With Google’s I/O announcement of Brillo, things are hotting up for operating systems to run the Internet of Things (IoT). We are witnessing a considerable growth of connected objects – from watches to cars to homes. Some of these are from established manufacturers but low-cost, rapid development means that there are an increasing number of startups delivering new devices. With such a broad range of smart objects the real challenge of the IoT is how to make them a fragmented landscape work together.

Google believes that Brillo is the answer (the irony of the similarity to my name is not lost on me). They announced an operating system that is largely Android based with an additional communications layer called Weave. The over arching premise is a consistent experience. Senior VP, Sundar Pichai said in his announcement that with “any Android device [connected to] a device based on Brillo or Weave, a user will see the same thing no matter what.”

The company is already busy in the connected world – they own Android, which powers a majority of the world’s smartphones and has built Android Gear for wearable devices. Google purchased Nest, the connected home system, last year and for the future, their driverless car development will naturally connect to the IoT. The development of complete operating system makes sense for Google.

However, what underpins most of their strategy is their search engine, and with it, paid advertising. Android, for example, puts their search at the heart of mobile. Although smartphones will be the core device for the IoT, the proliferation of connected objects means Google need to ensure their search giant status is future proof.

The success is not guaranteed for Google. Look at the challenges they’ve had in other developments such as social media to see that the power of Google does not always result in uptake. And there are many challengers in connecting the IoT. Major players including Samsung, Microsoft, Cisco and mobile chip manufacturer, ARM have all made moves in this area. There are also a growing number of start-ups and open source projects such as Contiki, Riot and Onion.io. Perhaps most interesting project is IFTTT (‘if this then that’). Many people will know it as a tool for cross posting on social media, but IFTTT offers much more than that. It uses ‘recipes’ to create a codeless method of connecting across channels and devices such as Nest, Phillips Hue or Fitbit. With millions of recipes already running on their apps, the company has a head start on Google supported by a $35m VC funding round in 2014.

Brillo was just one of a number of interesting announcements at Google I/O, there is no question that the operating system has added to the increased interest (and possibly hype) around our rapidly developing world of connected objects.

The Challenge for The Fashion Brand, Apple

/ Mark Brill / Leave a comment

Updated, March 2015

Whilst some are calling the Apple Watch a game changer, many tech observers have missed the point. The Apple Watch is a fashion accessory and it makes Apple a fashion brand. Whilst previous products from the iPod onwards have had a lifestyle element to their branding, the watch puts Apple firmly into the fashion accessory market. The industry bible, Women’s Wear Daily pointed out that Apple’s real competition is not from other tech providers such as Samsung, but the from the mid-range watch manufacturers such as Swatch and Guess. Both of these companies are developing their own products due out within the next 12 months.

Apple understand the importance of being a fashion brand. They have made significant hires from Burberry and Gap, not to mention the addition of leading designer Marc Newson. A number of fashion and watch journalists were invited to the launch event, which further demonstrates the importance of the sector to Apple.

What was the fashion industry’s reaction to the Apple Watch? Generally favourable, but not totally blown away. It’s probably best summed up by Alex Blanter from A.T. Kearney, who specialises in fashion insight:

“Everybody is still trying to figure out how to make a smartwatch a truly must-have device, rather than an interesting and curious novelty,”

An interesting take on the Apple Watch came from HSBC Research who looked at the market for the product in China. They pointed out that luxury watches are bought not to tell the time, but as a status symbol. Is the Apple Watch a sufficient status symbol for that market? They pointed out that the most significant market in this area were as gifts. On that basis, Louis Vuitton or high end sporting goods are competitors as much as watch brands. Perhaps that is Apple’s biggest challenge. Whilst smartphones are (arguably) an essential item, the Apple Watch is not. As an accessory, watches are replaced much less frequently than smartphones. Whilst there is clearly a market amongst the early adopters, does it have what it takes to compete in the higher end accessories market? Understanding the retail challenge, Apple announced that the Watch would be available in selected retailers such as Galeries Lafayette in Paris, and Selfridges luxury hall in London.

One thing that is in Apple’s favour is that they’ve created a product that has watchmaker’s credentials. The Hodinkee watch blog declared the Apple Watch to be a bona fide time-piece, from the overall design, through to the straps, the astronomy face and the rotating crown. The review makes a convincing case for the Apple Watch as a genuine watch. Following the official launch in March 2015, commentators generally agreed that the Watch meets the stylish credentials that consumers are looking for. However, the watchmakers blog pointed out after the launch, Apple will not be in the high end $17,000 Edition, but rather, from shifting a large amount of $500 mid-range watches.

It’s not just the existing watch makers – brands from Motorola to Huwei have also launched equally attractive smart pieces. This is not the first time that Apple has entered an existing market saturated with products. Aside from the brief partnership with Motorola, Apple had never launched a phone before the iPhone.  However, when it comes to smartwatches, in spite of some predictions, as the tech analyst Benedict Evans points out, no one really knows the answer. The ultimate questions is whether Apple brand is sufficient to drive the large scale adoption that the company is hoping for.

Bluetooth – The Revenge

/ Mark Brill / 4 Comments

Remember Bluetooth marketing? Well it’s back, kind of, in the form of Beacons and Bluetooth Low Energy (BLE).  It’s a proximity device that connects to smartphones via BLE and can send information and take payments seamlessly. There was much talk in marketing circles about the potential of Apple’s iBeacon, but what are the possibilities for marketers? And is it a realistic proposition?

At 2013’s launch of the iPhone 5S/C one feature slipped by barely noticed – iBeacons. The system makes use of a function called Bluetooth Low Energy. It has been available in high end smartphones for a few years, and unlike its earlier predecessor, it uses tiny amounts of power to connect to nearby devices. Beacons are small units (2-3cm long) that can be powered off a lithium watch battery for a couple of years. These can then be situated around a store and send data to and from smartphones via an app.

Imagine I go in to a department store, and I have their app on my smartphone. As I enter it, a Beacon picks up my presence and alert pops up on my mobile to tell me of an offer in a particular department. As I reach the relevant department, the app tells me where the product is. If I decide to purchase, then I can simply confirm that through the app. At the till, a photo pops up to confirm my identity and I leave the store. For many brands, that kind of scenario seems to offer a great solution to problems such as ‘showrooming’. It allows them to have a consumer conversation precisely at the point of purchase.

The system has already been tested by Shopkick in Macy’s  and will shortly be rolled out to over 100 Amerian Eagle Stores. . There are also companies such as Estimote who are supplying beacons that can be cheaply purchased. Some commentators have suggested that they will become an important, distruptive technology this year

Of course, Beacons are not without their problems, many of them are similar to the old-style Bluetooth. For starters, the handset needs to have the right features available; BLE and location services turned on, and a relevant app installed (according to TNS, around 35% of people in the UK use the Bluetooth feature on their handset). But as with other marketing technologies, there are also issues of user permissions and expectations. Whilst Beacons can be used to precisely monitor and guide customers through a store, the question is whether they will find this acceptable. For example, will consumers allow their photo to pop-up on the store till in order to allow them to make an automated payment on their smartphone? Given recent privacy issues from the NSA to the WiFi tracking in London, it is unlikely that consumers will trust brands enough to allow it (there will be the inevitable cry of ‘Minority Report’).

In many ways, Beacons are a slightly more targeted version of Bluetooth marketing. Some people think it could change the world,  but history suggests that the take up by consumers will be pretty small.

 

 

Brands, Mobile and The Future

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Predicting the future is never easy, but I gave it a go at a TEDxUCL talk in the spring …

The future is …

By 2045 we will have reached the point of singularity when the devices that are now smartphones will become the size of a grain of sand and 1 billion times more powerful. At that point the computers become sentient and run the world in a Matrix style.

So what happens between now and then? Read the synopsis below, or you can simply watch the video!

Well the first problem is that largely speaking, consumers just don’t care about brands that much. Pointless apps, or social media campaigns fail to ‘engage’ the audiences. The solution is around service. Brands should do what they do, and use channels such as mobile to simply do it better. Some brands understand this. Look at someone like Gatwick Airport who use Twitter as a service channel. They encourage their visitors to Tweet any problems and a small team sets about putting it right. Similarly car companies such as Mercedes are using QR codes in a useful way, by embedding them in cars to help emergency services know how to get access quickly in case of an accident. Or an augmented reality app that shows you how to change car parts.

When it comes to the future of smartphones themselves then we’ve pretty much reached the conclusion. They’ll become faster, brighter etc, but the functions that we have will remain large the same. People were surprised when Apple launched the 5S and 5C that there was nothing radically different. But that’s not the point. The radical change was the introduction of the device itself. From then on, changes are simply incremental. So the next generation are the ‘connecteds and wearables’. Google Glass is seen as a major innovation. It probably won’t be the device that everyone adopts, but it is a good indication of where things are going. However, there are many issues particularly around privacy. Where is the place for brand engagement.

A good brand example of a connected device is the Nike Fuel wristband. Although millions of $s were spent on its development, innovation is not about money, or spending, it’s about ideas. There are many good examples, such as Red Tomato Pizza’s fridge magnet. Simply press the button and it connects to your phone and orders your favourite pizza. A simple idea, well executed. Even more interesting are developments in the world of health. In Kenya they have been using it to track the spread of malaria, for example. Or in Switzerland they have hooked sensors up to the brains of sheep. When a wolf is in the area, it can sense their distress and send a text to the farmer. A simple, effective use of mobile.

iPhone 5: What’s the Impact on Mobile Marketing

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Not the iPhone 5 (obviously), it’s the iPhone 7 of course.

The best round-up of the new iPhone 5 (6th generation) comes from The Next Web. From a mobile marketing standpoint, do the changes have any real impact?

Given that the original iPhone (and app store) changed the face of mobile marketing, any update from Apple may have a significant impact. Although the updates to the iPhone were essentially incremental, there will be some changes for marketers:

Larger Screen – the impact is not significant, delivering a slightly better user experience, however by introducing a new size, this may well impact on app builds and particularly legacy apps. Will brands be up to spending more money on development? Could this drive more businesses to choosing web and responsive design over apps?

4G Support – brands need to provide a rich content engagement. Access to the rapid growth of 4G networks will open up a whole new world of brand content and is probably the most significant update from a marketing perspective.

No NFC – this is also significant for marketing … a significant disappointment. It was unlikely that Apple would have shoved an NFC chip in their handset – they like to do things their own way and define the market. However, we know that iPhone users tend to drive demand and activity – web browsing, app downloads and mobile social media , have all been boosted by Apple’s smartphone users. If we want to see NFC driving forwards then seeing it in an iPhone is the best way to do it.

Siri – this has yet be used as a marketing channel, so the updates have little impact (especially if you are outside the US)

Finally (though not on the subject of mobile marketing) the end of Ping was announced. Apple have never been a social network business, and the launch of their music recommendation system was never likely to succeed (I was bemused by it when they Ping it two years ago). The company’s real foray into social media came last year with the deep integration of Twitter in to iOS.

Global Mobile Smartphone Sales: Samsung Lead the Stats

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The latest data on smartphone sales, reported by Tomi Ahonen, shows that Samsung sold nearly twice the number of phones as Apple, in Q2 2012. In part, this is due to the fact that Samsung have a range of handsets across almost all budgets, whereas Apple is only in the high-end smartphone market (at that point, the S3 was not yet launched). Whilst  Samsung have taken sales from the likes of Nokia and RIM in the past (and that trend continues), it seems that the lion’s share in the first part of 2012 came from Apple. Their share dropped from 24% to 17%, whereas Samsung increased from just over 30% to nearly 40%. Apple’s drop is not through lack of sales, but rather, from the increase in the global smartphone market. However, the impending iPhone 5 may also have caused some Apple users to wait and see what they company would do.

The most interesting aspect of all this is that Samsung is also involved in making TVs, tablets and PCs (and for that matter washing machines). The company is working on the integration across all devices and by next year they expect to be responsible for 3 billion screens in the world.

With 6 billion phones globally, it is equivalent to 86% of the population owning one (of course some people have two or more phones, so it’s not that big). 30% of those phones are now in China and India, and smartphones are by far the biggest selling category (we now have 1 billion globally).

Data Source: Tomi Ahonen, http://communities-dominate.blogs.com/

In terms of operating systems, Android was nearly 67% of the smartphone sales in Q2 2012, and taking into account the installed user base, that it is currently 41% of all smartphones. As someone pointed out, Android phones are selling faster then babies are born.  iOS at 17% of sales and 19% of the installed base. Samsung’s share of OS was: Android  91%, Bada 8% and Windows Phone 1%.

Who owns the mCommerce platform, operators or handset makers? Let the battle commence.

/ Mark Brill / 1 Comment

With all the talk of mCommerce and contactless (NFC in particular), a war between the operators and handset manufacturers was always on the cards. It looks like it’s beginning to kick off. The Wall Street Journal reported on Friday that RIM (BlackBerry) was ‘locking horns’ with operators over who controlled the NFC customer data. The issue is about where ‘credentials’ (the encrypted personal payment information) will be stored. Will it be on the SIM card (operator) or the phone memory (handset manufacturer). This is much more than a row over a technical function, as the customer will be tied either to their network or handset depending on how this data is stored. Whilst RIM talked about their close relationship with operators at the Mobile World Congress, one senior figure at Bell Canada recently stated “we expect some closed operating-system vendors will probably try to build into the handset. RIM and Apple fall into that category”.

The problem from an operator perspective is that whilst revenues are being squeezed, customers are demanding much more for their money, in particular they want more data. How do the operators make more money in already saturated markets? The answer is through providing mCommerce. In order to do that they will need to invest in expensive security infrastructures, making it even more critical to keep their customers with SIM-based credentials. On the other hand, we have increasingly seen handset manufacturers and handset operating systems define the mobile market and mobile content. The two that have done most to drivfe this change are Apple’s iPhone (and appstore) and Google’s Android.

My money is on the handset/operating systems winning out. Apart from their obvious success in defining the mobile content channel, they seem to have the revenue model right. Operators tend to charge consumers or merchants/content producers high transaction charges – look at app stores before Apple (£1000 + to get your game listed) and the low payouts on premium SMS. On the other hand, Apple and Google are past masters at the freemium model – get something for free and pay if you like it. And there’s no question about which model consumers prefer.

 

Dean Bubley’s blog gives more insight into the NFC revenue model

Three reasons why Apple won’t release an iPhone Nano

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A number of stories appeared this week suggesting that Apple will be releasing a small ‘nano’ version of the iPhone. It’s not the first time these rumours have been around, but the story this week was started by a report by Bloomberg. They indicated that Apple are looking at a cheaper, smaller phone to beat off competition from Android. The report was based on an anonymous source (Apple rumours are always anonymous), who had seen the smaller, nano-style phone which apparently had no ‘home’ button (very unApple).

In some ways it seems logical that Apple will release a Nano iPhone. They have a 5% share of the global mobile phone market, so there is plenty of room for improvement. There is increasing competition from manufacturers such as Samsung and HTC who are matching Apple for quality, but fulfilling the lower-end smartphone handset market. The iPhone 4 is a premium product, and the price means that there are many people who can’t afford it. Whilst Apple has success in certain markets such as the US and Western Europe, they face stiff competition in regions such as Asia. Even in Japan, where Apple had 75% of the smartphone market, Samsung made some significant gains at the end of 2010.

The problem with this report it is still essentially rumour. Rumours that have been kicking around since the release of the first iPhone. To make an Apple rumour more believable there needs to be something to make the report credible. Last year the lost iPhone 4 handset was taken apart and it was clearly Apple. There is nothing to back this particular rumour. Here are three reasons why Apple is unlikely to release a Nano Phone:

1. Apple don’t need a lower end iPhone. Given that Apple are making more profit than all the other handset manufacturers put together, dominating the market by volume isn’t really that important. True, Steve Jobs once said that one day all phones would be iPhones, but I think we can put that down to bravado. It is not consistant with Apple’s market strategy to date.

2. A smaller iPhone isn’t cheaper to build. Building a smaller iPhone is technically problematic, and wouldn’t be any cheaper. Reducing some features such as such as a camera or memory may help keep costs down, but not significantly so.

3. A different size screen would create compatibility and usability issues. Apps would have to be redesigned (there’s 250,000 of them in the app store) and the virtual keyboard would be much harder to use.

It is unlikely therefore that Apple will produce a smaller model of iPhone. If Apple are to go the route of an cheaper model of iPhone then the solution may lie in a stripped-down version of the existing phone. Keeping the screen size the same will remove two of the three issues outlined above. They could reduce some of the functions such as the memory, cameras (no forward facing cameras) and a lower resolution screen. Apple will still need to take care to ensure that they don’t take out the ‘iPhone-ness’ of a cheaper device. In the end, the decision will come down to how much of a threat (or perceived threat) there is to their profitability with their existing mobile offering.