s.mueller

The concept of free in the mobile phone market

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© Sergey Eshmetov - Fotolia.com

© Sergey Eshmetov - Fotolia.com


Nokia’s announcement to give away its navigation software and maps for free came as a total surprise to all of us. Just two years ago, Nokia had paid the enormous sum of € 5.7 bn for Navteq and now it’s free? Why would Nokia do that? Pure desperation?

Indeed, many experts see this as the last big move of mobile phone giant Nokia to catch up with its competitors. Rivals such as master of innovation Apple, aggressive telecommunications giant Samsung or Research in Motion whose Blackberries have become the synonyms of business phones have been gaining market share in the last years.

But what is truly remarkable about Nokia is its talent for comebacks. Several times the giant has been labeled “out of the game”. First, when Nokia totally underestimated the strong trend towards flip-phones (all for the benefit of Samsung) and just recently the high acceptance and then consumer desire for touch screen phones such as Apple’s iPhone. Many also argue that Nokia’s OS Symbian cannot keep up with the rest. Every time industry experts pointed to missed chances of the immobile giant, Nokia found a way back to gain market share and increase sales. And every time, Nokia somehow managed to come back. One of their strengths is pure size. Nokia is the world’s largest manufacturer of cell phones. No other company has such a huge variety of phones on sale. What they lacked in innovative technology and design, they always compensated with size.

But what made Nokia so huge is not only quantity. From early on Nokia has been focusing on usability and intuitive usage when they designed their phones. I remember my first 5110 and later the more business-style 6210. Other than the Sagem, Motorola or Siemens, you at once understood how they work. And they were simply solid. Nokia’s OS Symbian even profited from the weaknesses of Windows Mobile. It has always been faster and more stable. Yet what the custom Windows OS could not offer, users found in specials hacks, updates, etc. What started small became an argument to buy such a phone: you could easily mod it!
While Windows tried to fight this, and Nokia was busy improving its Symbian, Apple understood what this trend meant for the business and turned the “issue” into a business model and presented an innovative phone which could be customized with numerous apps. As all the others, Nokia followed. But has been trailing far behind. But this time, Nokia turned the game upside down and instead of responding to industry actions, it made facts.

The tactical move of giving away navigation for free shook the world of the Garmins and Navigons and certinaly iPhone mother company Apple. While the entire industry was still running on Google Maps and expensive navigation software solutions, Nokia has been creating exceptional expertise in the field of navigation. Of the approximate 163 mio gps-equipped smart phones 51% are Nokia. Ovi maps are available for more than 180 countries, auto and pedestrian navigation are offered in 74 countries and in 46 languages. There is 6000 3D building views for more than 200 cities.
As convincing as this offers is to consumers, it is also a disaster for competitors. Within a day Nokia managed to depreciate entire business models. Still trailing with their own app store Ovi, giving away a valuable service such as navigation and the necessary maps for free is quite an argument for consumers. Nokia maps rock: And it opens Nokia the doors to what may become the most valuable information in the mobile phone business: the current whereabouts of each user. And thus the ability to offer products, services and much more always exactly in perfect match to the current location. The nearest pizza restaurant, car rental station, CVS, Radio BestBuy,..

Maybe in the future the concept of free will permeate the mobile phone market. You give away the phones for free knowing that people make heavy use of the applications offered and thus in the end earning more than with the sale of the phone itself. Telephone calls not included yet. The future will be data not minutes. And in order to make the most profit you have to be the one who can provide the most adequate information at the right time. This is what Nokia aims to achieve. And it values this new market at such a high price that it is willing to give away its navigation software plus the excellent map material which in 2008 has been worth more than €5billion. This reminded me of Chris Anderson’s “Free – the future of a radical price.” In his best-selling book, he named numerous companies who chose this dramatic turn and became highly successful. Let’s see if in a 2015 edition, Nokia will serve as a another perfect example of how successful the concept of “free” can be.

Sources:
http://www.heise.de/newsticker/meldung/Nokia-bietet-kostenloses-Kartenmaterial-und-Navi-Dienste-fuers-Handy-909803.html
Handelsblatt
Wirtschaftswoche

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Update on the current market situation, powered by Gartner Research:

Gartner 2010

Gartner 2010

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wyl

Do you still believe in anonymous surfing?

the transparent user

the transparent user

Using a 10 years old security gap you can be identified by any webmaster. Don’t believe it?
If you are a member of Xing, facebook, StudiVZ or of any other social networking plattform, just go and give it a try: http://128.111.48.22/experiment/nwcheck.php

In their 15 page paper the four students Thorsten Holz, Gilbert Wondracek, Engin Kirda und Christopher Kruegel describe how every social network user can be identified by his unique digital fingerprint. What makes every user uniquwe is the consistency of group membership and usage in his or her favourite network – be it Xing, facebook or any other. This allows to clearly identify every single user, given he is a member in one of the social communities and given that he makes use of groups. The security hole lies in browser history which is being archived and fairly easy to access.

If you are interested in the complete details of how it works and what you can do to reduce the risk, simply download their paper: http://www.iseclab.org/papers/sonda-TR.pdf (803 kb).

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s.mueller

The New Democracy of Social Media

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Just the other day I read a statement by David Hughes, director of e-commerce at Marks & Spencer: „..the customer trusts the reviews more than the brand.“ Wow what a statement if you think about it. But what does that mean for brands? Are they becoming less important?

Brands usually serve as lighthouses. In the jungle of oversupply, businesses have to invest greatly into marketing and branding in order to make their products stand out from the rest. Usually it was like this: if your brand was not strong enough your quality was sometimes of no importance to the affluent consumer. The price tag provided the orientation. High price equals high quality. Low price must be low quality. Although strong trade brands by Aldi, WalMart, etc proved the opposite this was still a truism for many consumers.

Social media now further changes the game. A cheap DVD player may get better and more user reviews than the expensive alternative. Thus there seem to be new opportunities for economic brands: if their quality is convincing, their product features meet the consumer’s expectation and the consumer really has the impression to have made a good deal you are all set to be successful. This list sound familiar? Indeed: these are the ingredients for strong word-of-mouth. Why talk about a 200 dollar dvd player that is none the better than any other model? But if there is one model out there that offers the same features and decent quality for 100 dollars – that is something your friends might be interested in.

In the overall look, this is one manifestation of the new democracy provided by social media. You brands out there better prepare! You can no longer hide behind your brand image! Bad quality will be unveiled faster than you think with more reach than you might expect.

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s.mueller

Tilt-shift time-lapse addiction…

I must admit: I just love this kind of videos.
Except for Deutsche Telekom, I barely know of commercials that make use of this technique, maybe also because it is hard to fit it all into 30 seconds. But the resulting videos are just amazing.

Here is another one titled „24 hours, Pavey Ark“ by Michael Moloney Studio which I saw in the Schweinshaxe Blog and wanted to share here, too:

24 hours, Pavey Ark from Michael Moloney Studio on Vimeo.

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s.mueller

Altimeter on understanding customers' social behavior

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Understand Your Customers' Social Behaviors

View more presentations from Charlene Li.

Another very good presentation by the guys from Altimeter, found on the page of we are social
Again everyone, thanks for sharing your insights!

We will comment on it as soon as we find the time to do so!

So far, enjoy!

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s.mueller

Smart Design Contest

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Smart Design Contest

Smart Design Contest

Show your skills!

Smart gives you the chance to design your dream of a Smart and share it with thousands of other users.
Who could more democratically decide whether what you designed is good or sucks than the crowd. So start your Photoshop and get creative!

Here is the link: http://www.smart-design-contest.com/

Have fun!

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wyl

Have you completed every project yet?

Perhaps you did not know  of „The Cult of Done Manifesto“? 
Neither did we, but we found it, liked it and thus shared it with you.
Here it is:

„Dear Members of the Cult of Done,

I present to you a manifesto of done. This was written in collaboration with Kio Stark in 20 minutes because we only had 20 minutes to get it done.“

Visit: DONE MANIFEST for more information

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s.mueller

Why Social Media Is Not For Everyone

Our comment on the recent article published on mashable.com

You cannot repeat it often enough!

Social Media does have great poential, no doubt.
It enables companies to reduce the ever growing distance between them and their consumers, between producer and buyer, takes them closer to their target groups and provides answers to the increasing desire for personalized products, or to sum it up: unpredictable consumer behavior.

But blindly investing into this miraculous segment may also cause harm. Not only in terms of an investment.
Social media is, as the name implies a social sometimes even personal phenomenon. No impressions are stronger than personal ones. But if whatever you do or say is not credible, the strength of the personal, social contact turns into the opposite of what had been desired: ignorance, distrust,  and negative word of mouth. It is like selling insurance contracts to family members in order to fulfill goals set by an insurance company you work for.  This will ruin social relationships forever. The same goes for companies who half-heartedly use Web 2.0 to boost profits .
Not every company fits into this personal sphere. And not everybody wants to be addressed this way. You cannot push a brand into the personal sphere of a consumer. Especially not if a company or brand does not possess the required desirability.
Consumers may be „victims“ or information overload, unlimited product varieties, etc but they still have control over their private sphere. This has to be respected at all time. They decide what brands they „pull“ into this sphere.
Usually it is brands they trust, have known for quite a time, that accompanied them during their life, brands they long have been admiring, or they use to transform features of the brand onto themselves.

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s.mueller

The Human Brain – A Supercomputer

The following graphic is based on data collected by the University of California, San Diego, in which they analyzed the timespan from 1980 through 2008 for the total number of bytes bitten processed by Americans. According to the study, the amount of date has increased by 6% per year and now amounts to an the huge number of 3.6 zettabytes. That is one billion trillion bytes and more than we can imagine. It includes all kind of information or data, no matter from what source.
In terms of the internet, this clearly mirrors the fact that websites contain more and more megabytes of content which if not accessed via DSL can take very long to load. As the speed of our internet connection and the number of ways to access the web (WiFi alarm clock, domestic laptop to check the news at breakfast, mobile device on the subway, desktop pc at work, mobile device during lunch break, laptop back home,..) increases, our brain has more and more data to process. Or maybe not. If you are smart, you filter information for what is really relevant at the moment. But still, this is more than information overloa, rather information collapse. And it raises the question how even with smart filtering, we are able to deal with these billion trillion bytes EVERY DAY!

SOURCE:
http://www.fastcompany.com/blog/maccabee-montandon/upswing/america-hungry-need-data

Posted using ShareThis

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s.mueller

Social Media in Europe and Germany

We have already shared this lovely presentation on our youtube channel last week (SOMMarketing) and here it is now on your website.

This video/presentation nicely sums up all the facts currently circulating about Social Media and the impact it has on how companies will do business in the near future. Social Media may not be the right tool for every company. But for those it does make sense, this presentation provides excellent arguments to convince marketing execs to go social. However, efficiency, costs and a stringent Social Media strategy which is carefully embedded into the company’s overall marketing strategy still are major „ToDos“ that need to be defined before investing into the colorful world of Web 2.0.

Enjoy!
And to the authors: Thank you for creating and sharing it!

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