Mediaholic

Back in January of 2007 when it was known that the iPhone is coming, many (including myself, see The iPhone Effect) were trying to anticipate the effect it would have on the market. An article in the New York Times titled "BlackBerry’s Quest: Fend Off the iPhone" got me thinking about this issue again and made me re-evaluate my original analysis.

Here are some interesting facts and observations:

• The smartphone market (in units sold) was just 7.5% (125 million) of the overall mobile phone market (2 billion) in 2007, but is expected by analysts to rapidly grow.
• Worldwide, smartphone shipments jumped 60 percent in the last three months of 2007 over the same period the previous year, according to IDC, the tracking firm.
• In that same year the lion share in the smartphone market shifted from enterprises to consumers, suggesting that consumers want smarter phones and are making the shift to these phones while enterprises already have them. I think it is safe to assume that the growth of the smartphone market will come mainly from consumers.
  
• Consumers demand for smartphone increased the importance of features like multimedia, 3D graphics and a desktop like web browser.
• Blackberry US smartphone market share declined from 45% in 2006 to 40% in the 2007, this is despite the fact that their user base doubled in that year.
• The iPhone US market share in the first six months of its launch was 17.4%.
• Nokia is so far a very small player in the smartphone market in the US but had a 52% share of the worldwide market in 2007 (down from 56% in 2006 and expected to slip further).
  
• Google Android is for now a lab experiment, nothing more.
  
• Windows Mobile market share seems to be declining and no one considers Palm anymore as a serious player in that market. This leaves RIM and Apple as the current rivals to watch in the US with Nokia joining them when considering the worldwide market.
  
• Danger, the maker of the sidekick, was acquired in 2007 by Microsoft, suggesting that Microsoft is aware of the trouble lying ahead and is making desperate moves, that will probably have no impact on the outcome of the smartphone battle.

So what does it all mean? Well... here are my thoughts:

• The battle of the smarphone market is probably the most important battle the tech industry has ever seen. This is because phones are more popular than computers by an order of magnitude and with time it seems like the lion share of the mobile phone market will be held by smartphones.
• Apple is positioned to win this battle in the US and maybe even worldwide and the only one that can prevent that is Apple, meaning unless they make tons of mistakes or some force majeure intervenes (say Steve Jobs cancer makes a comeback) there is no company that stands a chance to beat them.
• RIM will most likely get acquired by Microsoft (once Microsoft is done with Yahoo! that is). However if Apple does make enough mistakes (or you know what happens) RIM will most likely be the winner and in that scenario they might just end up buying Microsoft and not the other way around... :) Now that is a thought worth savoring.
• Worldwide, Nokia and specifically Symbian, will most likely drop to less than 50% share in 2008 and may lose the leadership position within a few years to Apple.
  

One more thing, Google Android is fundamentally different from the others since it emphasizes consumers freedom to use mobile devices like they use computers, over everything else. As such it is my favorite underdog, I dare say that in an ideal world it, or something like it, will win, but as we all know we do not live in such a world.

In case you wonder what is Blackberry stand regarding consumers freedom, the following quote from the New York Times article will make it clear that, just like Apple, they are the bad guys:

R.I.M. makes its alliances clear. “We are sort of polite and amiable and we gently interrelate with the carriers and try to find compatibility,” Mr. Balsillie said. “It may be a better strategy to fight the carrier. We may be wrong. The carrier may get disintermediated, in which case we fade with them.”

UPDATED on April 28th with more accurate Nokia market share figures thanks to a user comment, suggesting that their US market figures are very different from the rest of the world.

By: Alon Cohen & Ronen Mizrahi

Linked-In is one of the earliest business social networks and as such inspired great hopes of simple access to people for the purpose of doing business. The hopes were for direct or friend-assisted access to individuals you want to do business with, which may be in your network up to a certain degree of separation.

Many of those who actually tried using the network as business tool report a complete failure.

Seamus McCauley states in post at Virtual Economics: “Here’s the problem with LinkedIn - it doesn’t do anything. You sign up, you find some colleagues, you link to them and then…nothing.”

So have others, including Jeff Pulver, who completely gave up on Linked-In and moved to Facebook.

Our experience is that even using the paid version of linked-in for direct access does not help a bit. The only people you really gained access to, were the people you already knew beforehand, and all the rest of the millions on the network remained inaccessible.

One can only assume that Linked-in invested vast amounts of development time into the referral mechanisms just to discover that it doesn’t work in the real world. The network’s main value is apparently manifested as a repository of resumes and as an active update mechanism that generates notifications as friends find to new jobs.

The problem, as we identified it, was not the concept of the friendly referrals but rather the lack of incentive for people to propagate introduction requests, specifically in fear that they may not be up to par, and the lack of a method to evaluate the request and determine whether passing it on will undermine their reputation in the eyes of the receiving party or reinforce it. In other words am I doing the receiver a favor or am I wasting their time with junk. Plus what’s in it for me?

The idea is to create a clear incentive path and a tracking mechanism for deals that materialized due to referral actions taken by individuals, with the intention to make business introductions facilitated by a social network significantly more efficient when compared to pre-existing methods.

This is similar to the efficiencies social networks added to other forms of communications between friends such as selective sharing of news, photos and other personal data.

Business referrals among friends has been taking place in the world long before the Internet came along, yet it has not been made more efficient or monetized by social networks yet, like other social activities have.

The Internet and specifically social networks provide the underlying infrastructure to do just that with the potential to track the referral and its path in the network and to keep all parties updated with respect to the referral progress.

As an example if I knew that by referring a start-up to an NBC executive I will receive 1% of a multimillion dollar in case the deal is closed, I will probably do my best to forward the referral request, and even make an effort to find the correct next link to ensure higher success probability of the referral.

Think about helping an entrepreneur get to a VC for a few millions dollars deal, or any other deal that is not so hard to quantify. I am sure you can think of some as you read those lines.
Obviously the network will monetize its database by taking its own 1% commission from those “few” multimillion dollars deals.

The provisional patent described here was filed and it is depicting a method and mechanics associated with incentivizing and monetizing the referral system in business social networks such as Facebook, MySpace, Linked In, Xing, Plaxo or Pulse and can fit other social networks used for Dating and Matching, as such it is not limited to the business domain.
Third-parties currently working on social network projects and APIs (Google, Open Social and so on) may also implement it across several social networks such that the referral path may span and can be tracked across seemingly unconnected networks.

The inventors are happy to negotiate licensing terms with interesting parties that want to own the patent and its priority date.

In a year (April 7th 2009), this patent will officially lose its priority date and will be available, royalty free, to all social networks. Take that as our own contribution to the social networking world, and yes, we need this to work. We are already in discussions with few parties, so if you are the CEO of a social network straggling to differentiate and compete, or a Biz-Dev guy for that matter, with those companies, don’t let this slip between your fingers, be among the first to contact us.

For more information please contact Alon alonc@netvision.net.il or Ronen ronenmiz@gmail.com.