Facebook turns brands into people, too

Mitt Romney was quoted as calling corporations the same as people.  The public largely saw that as an esoteric tax reference.

However, when Facebook transforms brands and corporations into people, well that’s another story.  The new Facebook brand timeline and advertising strategy has created life for brands, and likely even more fortunes for Facebook. 

Your personal timeline will have more sponsored content from the brands that you love and more importantly – “liked”.  Those annoying dental implant ads on the right-hand side of your Facebook page will be replaced with sponsored content stories from different brands. Ads acting like content, brands acting like people, and all in the socially connected universe of Facebook.

The transformation of ads into timeline content is a win-win-win for Facebook.  Firstly, it solves an obvious problem that the right hand side ads on Facebook is a odd mixture of legitimate brands and low-end junk.  The quality of their ad inventory has not been consistent. Secondly, the only real way to monetize their significant mobile audience is through timeline insertion of content (ads).  This has been obvious from the beginning for both Twitter and Facebook.  They have both now started down that path.  To date, Google has been more successful with mobile monetization through their search products.  Facebook will now try to match that with they social news approach.

The Facebook strategy has a good chance of giving Google a run for their money.  Why? What do people do with their mobile devices that brands care about?  They search and they interact with Social Media – mainly Facebook.

Lastly, this strategy focuses Facebook on large brands that support their social mission.

While there is still a place for the smaller “Mom and Pop” establishments in the Facebook Universe, the Facebook Ad engine is clearly aimed at global brands with significant budgets.  Facebook is, without a doubt, aiming for to be the primary digital ad platform of choice for brands in the future.

The Google Vs. Facebook War just got a lot hotter.

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Filed under advertising, android, Content, facebook, Google, mobile, Social Media, social networking, Twitter

Big Game Hunting for Mobile and Social – at the Big Game

The Big Game has become the “Super” event for new mobile and social promotions.

The challenge for advertisers and brands is to create a virtual social environment within the year’s biggest physical social event

The TV ad escalation for the Super bowl grew out of the need to make the Ads their own event.  The higher production value of theses ads is designed to delay that inevitable bathroom break.   The goal of social and mobile media is to make the ad a continuous event during the game.

There are three factors that I believe are important in a social application.

  • Entertainment: Examples are interactive games and passive videos
  • Social Status: Examples are check-ins, followers, and game rank
  • Contextual Information: A key success factor  of Twitter and Facebook.

Get these right and you earn the pay dirt of any social campaign…longevity.

Your app or promotion can be successful with just one of these factors.  If you have two you can be a  wild successes (Zynga). With all three you are Facebook. YouTube or Twitter.

The reason that Superbowl ads are now $7M/minute is that that audience that the broadcast aggregates only lasts 4 hours.  It is a perishable resource that commands a premium price.  What if this audience was addressable with an effective social media channel on a regular basis?  What would that be worth?  For a clue you can read about the IPO of Facebook.

Using these factors as our yardstick lets look at two of the higher profile social game plans and make some pre-game predictions.

Coke is presenting an interactive version of their Polar Bears on a Facebook application.  The bears will react to plays in the game.

Prediction:

While this app will generate a lot of buzz for its “cool” factor, I view this as a very clever branding exercise, rather than a true social campaign.   It will generate a reasonable number of views of the Coke brand and therefore should be very cost effective on an equivalent CPM basis. (As of Friday it had 21K members, but I expect that number to significantly increase on game day)

Will this aggregated application audience have any reason to come back to this app after 10:30 pm on Sunday?

Entertainment Value: High, until novelty wears off

Social Status: None

Contextual Information: Low

I have this Apple app on my iPad.  The enticement is that you get a license plate number to watch for on the Chevy Television ads.  If you see your number you win a Chevy.

Prediction:

This will get some more viewers to watch the Chevy ads closely.  If you are not one of the 20 winners, then what? The rest of the app is populated with Twitter feeds, trivia  and YouTube videos.  Similar to the Coke Facebook application, this application will likely have a half-life that ends at 10:30 pm on Sunday.

Entertainment Value: Low

Social Status:  Zero – unless you win the car!

Contextual Information: Low

My view is that these types of campaigns are still outside the “redzone”.  Once an audience is aggregated, it is a crime not to effectively and continually engage that audience, grow it and profit from it.

The most effective use of social media is still the simplest and cost nothing.  Advertisers put their Superbowl ads on YouTube. That strategy has generated an additional 360M views!

One Last Prediction: Giants 31 Pats 24

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Filed under advertising, android, Apple, Content, iphone, mobile, mobile advertising, Mobile Application Stores, Smartphone, Social Media, social networking

The Razr’s Edge

It is amazing how my two year old HTC Incredible phone managed to die just as the Moto Razr was released.   While there are 100s of reviews of this phone on the web, I have not found any that describes a real life experience, with the ups and downs of getting this new super phone to work for you.  So here it is…

To begin with there are a few things you have to understand about an Android phone.  No two phones are alike.  Phones that come from different manufacturers have their own custom software add-ons and interfaces.

Android phones are like your Thanksgiving dinner table.  You look around and can tell that most of the people are genetically related, but each has their own “special” qualities and quirks.

This is why these phones are popular with the various carriers and manufacturers.  They have, in theory (and I think its just a theory) the ability to differentiate their offerings from one another.  It gives the marketing folks a “raison d’etre”.

Android phones are not the one size fits all that you get from the iPhone.  Android phones are very capable devices. But as they say “With great Power comes great responsibility”  In this case its your responsibility to make the phone do exactly what you want.

With that preamble, you will understand that my moving from an HTC Android to a Motorola Android required a bit of a learning curve.

I lost the HTC Sense UI that I had grown use to and now have some alien  form of Moto Blur (really a bad name for a UI!) and straight Android.  I also went from my “Froyo” version of Android to “Gingerbread”, with the promise of getting upgraded to “Ice cream sandwich” in the new year.  Unlike Apple, many Android devices have been orphaned at lower versions of their operating system.

Now for the actual device.

The Razr Droid is bigger (length and width) than most phones.  At first it feels awkward in your hand but you get used to it after a day or two, so no “big” issue.  The larger size comes with  a great screen.  It is a crazy thin phone and an amazing bit of consumer electronic packaging. There is also no user replaceable battery.  In this regard it is the same as the iPhone

It has a Kevlar backing and I am sure someone will try to shot it and see it its actually bullet proof.  Note to person wanting to try that, It is not bullet proof, trust me! Leave that stuff to the MythBusters show.

You will also realize that this phone is really, really fast.  Dual Core, lots of Ram , yada, yada, yada.

Once you get over how cool looking and fast the phone is, you have four main tasks.

Getting your email and social media accounts hooked up, finding, installing and arranging your applications, loading up you media (songs. videos, pictures, etc) and figuring out how to make the battery life last longer than 6 hours.

I will assume that you know how to do the first two.

To load up you music and other media “stuff”, the Dorid ships with a app called “MotoCast” whicj can sync any files from your home PC or Mac to your phone.  Motocast works as long as your home PC is on and connected to the Internet.  It took a few tries before I got it to work properly.  It’s a personal cloud service.  In the past I used an app called sailing media to do the media syncing via a usb cable.   I was able to sync up my droid with my fav music and videos, although nothing is as simple as syncing an iPad or Iphone on iTunes

I will now focus on what I did to extend battery life.

There are some basic tricks to start with

Wouldn’t it be nice if something in your phone just knew to do all this for you?

Now comes the Motorola magic part……

The Droid Razr comes with an app called smart actions.  This app lets you set up various triggers and then tells the phone what to do.  Some of the triggers are time based such as what to do in the morning, evening and night, some are based on remaining battery level, and some are based on lack of motion of the phone

Here are the battery saving settings that I use from Smart Actions:

Low Battery Saver:

1.            If Battery is less than 20% and the Device is not charging then:

Make Brightness 0%,  Turn Off GPS (just in case its on), disable Background Syncing of Data ,  Turn Off Wifi, Turn Off Bluetooth, Send a Notification to the phone (make it vibrate) to inform me of this condition, and launch the application LTE On/OFF (to remind me to turn off 4G, just in case its on)

Motion Detector:

2.            If no motion is detected for a couple of minutes, and the phone is Not Charging then:

Turn Brightness to 0%, Make display timeout 15 seconds,  turn off Wifi, turn of GPS,  turn off Background Syn

Call Detector:

3.            On Incoming Calls

Make display timeout 15 seconds, make brightness 0%.

Charge me Please

4.            Charging Reminder

If not charging and time is later than 10:00 pm

Then sound a chime to remind me to plug in the phone to charge it

“Hey its dark and warm in here…

5.            Pocket Detector

If your phone is determined to be in your pocket (not sure how this done, ambient light?  Warmth? )

Turn display off.

All these rules are completely variable and configurable by the user.  I arrived at this set for myself after a bit of trial and error.  With the tricks I listed above and creating these automatic actions , I can get about 10 hours of usable time on my phone before a charge.  This is about what I got on my HTC Android.

As a backup I carry a small rechargeable “Energergizer to go”  model xp2000.  This is about 1/3 the size of the phone and carries one complete re-charge.

I would recommend this phone if you want a thin, yet large screen device,  with lots of speed.  If you get it you will have to spend some time tweaking it to get it just the way you like it.

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Filed under android, Apple, Droid, Droid Incredible, Google, HTC, HTC Incredible, iPad, iphone, iTunes, mobile, Motorola, movies, Music, Razr, Smartphone, social networking, Thanksgiving

Social Networking with a Schmear

In the past 10 years I have managed many social media projects – some even before that catch phrase was coined.  While every company seems to want to be on the various social networks, very few seem to grasp how and why

As they say – to cut to the chase:  Social Media is and should be social.  That may seem like an obvious statement but many campaigns seem to miss that point.  Here are some examples of Social Media Myth busting and one surprising example of social media done right.

  • Signing up people to like your product or service by giving them something

I was at the New York Auto show at the Javits Center this past Spring.  One auto company was giving away tee shirts if you “liked” their Facebook page.  They probably gave away 1000 tee shirts and got 1000 likes.  If their apparel budget permitted 1 million tee shirts, they perhaps could get 1 million likes. So what?

By the way, I got a tee shirt for “liking” them. I can’t even tell you what company it was or where I put my treasured prize.

Getting random people, who are fundamentally unconnected, with no interest in each other or even the product to join a social network, just to show you have “numbers” is a waste of time and money – except for the company that makes the tee-shirts, and supplies the models to hand them out. A quick estimate for that campaign would be $10K for a consultant to “produce” the marketing event, another $10K to produce the tee shirts and likely $5K in costs for contractors (models) to hand-out the tee-shirts.  That’s at least $25K spend on getting 1000 “likes”.  It would be better to have a website that says “like me”, and I will send you ten bucks.

How many times do you think any of these people visited the company’s Facebook page?  How many of their friends decided “Gee, I better like that page also?”  How much original user generated content was created because of this campaign?

As we say in NJ….Ugats!

  • Trying to create a great social network around boring content , is … boring,  unless its not.

Let me explain.  If you put up photos and comments about little Jimmy’s second grade music lesson it may be boring to the masses, but for the little Jimmy’s family it’s interesting and fun.  One picture can generate 20 comments in a family circle.   If you take that same picture and put it on a website that sells music lessons, will anyone comment or care?  Will family members share that link on their Facebook walls or Twitter rolls? Interest in content is contextual.  Members of a social network must be self-motivated to spread the word, comment, contribute and create the viral impact of social media.

An interesting example of social networking done correctly is a delicatessen in Newark New Jersey.  Hobby’s deli has been a family run Jewish restaurant since the invention of corned beef.  The real life Hobby’s experience includes fabulous food and even better “schmoozing” between the customers and especially with the two brothers who are the owners.  From the lunch time crowd of lawyers and politicians to the enthusiastic dinner hockey fans on their way to watch a game, Hobby’s provides social subsistence along with the knishes.

To take the Hobby’s experience and bring it to Facebook was not a guaranteed success.  The owners did not pay an “expert” thousands of dollars to help them with the project.   They applied their natural real-life social networking skills and put it on Facebook.  The formula is simple.  They comment on what is going on at the restaurant.  Who is having a birthday? Feeding the Ringling Brothers Elephants, a visit from a pro athlete, little contests between the two brothers, playing the role of a Leprechaun for the holiday celebrating the Patron Saint of Corned Beef – (St Patrick) and the ever-present Devils fans.    Within this content come mentions of the daily special and photos of the food.   While the latter elements are clearly advertising, they come across more in context of the overall Hobby’s narrative.

By taking what is already happening in real life and placing it in social media they have created a tempting morsel for a loyal clientele.  They have less than 1000 likes as of the writing of this blog, but I am sure that is not bothering Hobby’s.  The likes that they do have, really  like Hobby’s.  When their patrons comment, and they do it often, it spreads virally across Facebook.

Which one is a former NJ Devil?

Which one is a former NJ Devil?

To achieve their success they did not stand on the corner of Halsey Street and hand out sandwiches to random people just to get them to like their page.  The Facebook page is becoming a contextual meeting place for their patrons and obviously drives business.  It has the right ingredients: a consumer base that has something in common, content that they find interesting, a natural willingness to generate user comments and a real ROI for the business.  Win-Win-Win

I’m hungry now – time for a trip to Newark.

Link to Video of Chico Resch at Hobby’s (Click Here)

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Filed under advertising, Circus, Content, Corned Beef, facebook, Food, hockey, humor, mobile, mobile commerce, Newark, Rangers, social networking

Google Acquires Patents – and Also Motorola

Google + Moto is the BIG NEWS of the summer.  It was big enough to grab me out of my blog vacation.  While the pundits are filling the airwaves with analysis on this one , I view it perhaps more simply, more straightforward.

The battleground for supremacy in connected devices (mobile smartphones, Tablets, and  set-top boxes) has moved from the R&D labs to the court rooms.  The patent wars between Apple and Google are fierce, with Microsoft bulking up on its own portfolio as part of the consortium that bought the Nortel patents.

Motorola was worth the price Google paid just for their patent portfolio.  In patent wars if you get sued, you better have a patent in your portfolio that can hurt the attacker.  In this way you trade mutual assured destruction with a patent stand-off.

When Google acquired the rights to Motorola’s 25,000+ patents, they bought both defensive capability and offensive firepower.  Apple may go after Android for an Apple patent but what are the changes that Google now has a patent that can hurt Apple?

It is impossible to design and produce a device such as an iPhone, iPad, or Android device that will not infringe on someone’s patent.  Impossible.  What a company must do is acknowledge that they will infringe and hope the other guy also infringes on their patents and us the mutual infringement to to either create a license arrangement or to have both companies do nothing.

Google’s price of $12.5B is about $500,000 per patent, which seems to be a bargain compared to the $4.5B  Apple and Microsoft for 6000 Nortel patents.  Their price was  $750,000 per patent.

Lets assume that the Motorola sale  is approved and Google gets the Motorola patent portfolio.  Google’s next problem is that they have also bought a company that makes handsets.  I say this is a problem because this is a huge company in a market that is different from Google’s core competency.  This is also a company that competes with Google’s other OEM partners for Android Devices.  The conventional wisdom is that these other OEM partners will start to defect, en mass,  to Microsoft.

Yeah right….

What does defect even mean?  Microsoft will pay these companies to produce some Windows phones anyway.

Android is free.  Can Microsoft compete with free?  Google makes its money on Android from their ad business.  Microsoft must make money from their software license for Mobile 7 operating system.  Besides for being years late to the party, Microsoft is structural disadvantaged to compete.  At best they can hope to be a number 3 player.

Google has two choices.

Number 1: They can acquire the patent portfolio and then spin out the Motorola Mobility Business, probably re-cooping half their initial investment.  They could sell Motorola’s handset and tablet businesses, along with licenses to the patents they now own to either HTC or Samsung, their two most important OEM partners.  This would be an amazing move.

Number 2:  Keep the Motorola hardware business and expand Android into the Cable Set-Top Box market.  This is the riskier of the paths as the sheer weight of a big manufacturing company could alter the culture of Google for the worse.  This path would be an attempt to become “Apple”.  While this path seems to be the assumed defacto strategy of Google, I am placing my bets on scenario #1.  This will take a couple of years to play out, so hold onto this link and let’s see if I am right.

An indicator that we are on Scenario 1 will be if Microsoft acquires RIM (Blackberry) or Nokia.  This would be an acknowledgment that the Google OEM manufacturers are not going to defect to Microsoft and that they must own a hardware company to compete.

This has only gotten worse in the last 10 months!

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Filed under Acquisitions, advertising, android, Apple, blackberry, Cable, Droid, Google, HTC, iPad, mobile advertising, Mobile Application Stores, mobile commerce, smart phone, Smartphone

Why I like the iPad 2….confessions of an Android user

My experience with the first generation iPad ended with my returning the loaned device without a purchase While my first experience with the IPad1 left me wanting, I was completely seduced by the iPad 2. With all my positive experiences with my Droid Incredible, I had been holding out for a new Android tablet.   I succumbed to the iPad 2 when I realized that what I wanted  in a tablet could be provided by Apple.

This was my wish list

1.  Business applications and the ability to leave my laptop home for some business  trips

2.  Infotainment, interesting multimedia formats for my news

3.  Entertainment, generally video from my favorite Television and Sports programs

4. Great looking device, want to be one of the “cool kids”

5. New applications coming everyday that matter

6. Decent customer support

I concluded that for this generation of devices, the iPad2 is king.  Here’s why…

To begin with I have a Wifi-only 32Gig model.

For business apps I need email access to multiple accounts, including Exchange. The iPad was easily configured for 4 accounts and I had all my email singing within a minute.

Next, I need to edit Microsoft office docs.  I installed “QuickOffice” and it works great for most light-editing tasks.  I am writing this blog article using the word version of quick office on my iPad. Of course, I also need to print documents. These are several printing apps for the iPad.  I use “PrintCentral” for printing. I just installed the app and it found all the printers in my house. I was able to print from my iPad with less problems than we typically have from a Microsoft machine!

I also require access to the “Dropbox” application. This is a shared, synchronized cloud storage service. I use it to share files among my computers, Droid Smart phone and now iPad, with clients and family.  This app effectively adds 50gig of virtual storage to my IPad.  I have Microsoft office files, music, video and pictures in various Dropbox folders.  Not only is the Dropbox app for iPad great, but Dropbox  and Google Docs seamlessly integrate with QuickOffice.  The permission and privacy features on Dropbox allow me to share access for specific folders with specific people.

A mission critical business app for me is Skype.  While it works great on my Droid phone, having the iPad (really an iPhone App) with video is a good addition.  I wish Skype would upgrade their app to take more advantage of the real-estate available on an iPad screen.

Another business oriented app I tried was “logMein”.  Initially, I  thought this was a new dish at my local Chinese restaurant, but it is program that connects with a Mac or PC and displays the screen of that machine on your iPad.  LogMein (Log-me-in) gives you full control of your remote machine to access files and programs.  I have to admit that while it works, I am not sure how often I will actually use it.

So, for business environment the iPad gets high marks.

Infotainment

Generally this category consists of websites turned into interesting multimedia applications for the iPad.  I have the NY Times, CNN, the Daily, CBS News, Fox News, ABC news, Huffington Post, The Onion, BBC, USA Today and even my old college newspaper, now an IPad app, “The Concordiensis” from Union College. The mix of text, photos, audio and video creates a multimedia publication unlike anything else.

Entertainment

This is the area that I originally had the most concern for the iPad due to the lack of native  (or any) Flash support. The savior for entertainment is the app “iSwifter”.  Using this proxy browser app I am able to watch web video from NBC, Fox and even HBOGo. The video I want to see on the web is completely accessible on my iPad, even Flash video.  Other great entertainment apps include MLB At Bat 11. If you like MLB on an iPhone or Android, you will love it on an IPad.  I just wish you did not have to pay for it separately on each device.

Kudos to the guys at MLB for having the best Sports App…period.

Another cool app is “Tune-In”.  This is a live radio app that gives streaming access to many radio stations within the US and the world.  I recently listened to a Tampa/Carolina NHL hockey game on my IPad.  All of these entertainment apps are in addition to the usual YouTube, iTunes, and video apps that are built into the IPad.

Great looking, cool device.

All I can say here is that like most Apple products, the iPad sets the standard for physical design that all the other tablets will chase. The incorporation of the smart cover is another great feature. Among its other capabilities, the ability of the cover to support iPad at an angle for typing is key.

Applications

This is a major reason for my decision to go with an iPad in lieu of an Android. Unlike the smart phone app market in which there is a rough equivalence between the must have iPhone and apps, Apple seems to have a clear lead in tablet specific apps. Apple also has a huge sales lead in tablets. For these reasons my logic is that an iPad will have a distinct app advantage for the duration of this generation of tablets. (Next year or so)

Customer support

Generally I have been very happy with customer support from Apple. An exception to this was a call I made for an iPad issue. The first I tried to sync my Mac iTunes to my iPad, none of the music or videos would sync.  I called Apple support and the first answer I got was that since all of my music was not bought on iTunes, it would not sync.   What??! Despite the logical problems with that statement, the Apple rep stood firm with his answer.  I then called back and got someone different who directed me to “clear my sync queue” with a program called “iSync”. After I followed her directions, all of my media was able to sync.

Overall, I have been pleased with the new iPad.  As a confirmed Android user for Smart phones, I was hopeful that the Droid tablets would be more competitive with the iPad.  This round goes to Apple.  We will have to wait another year or so to see if Google will catch-up in this segment as they have with smart phones.

As for Blackberry or Windows Tablets?  As we say in New Jersey…

Fuggeddaboudit!

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Filed under android, Apple, blackberry, cloud computing, Content, FLASH, Google, HTC, iPad, iphone, Ipod, microsoft, mobile, Mobile Application Stores, movies, reviews, skype, smart phone, Smartphone, Social Media, Twitter, Verizon, widgets, wifi, Windows, Windows Mobile

Microkia – Birth of a New Species? or Death of Old Ones?

Last Week Nokia announced that they were ditching their Symbian Smartphone OS in favor of Windows Mobile 7.  For those consumers who live, work and play in North America this announcement barely warrants a yawn.  For the rest of the world- the world in which Nokia has been the number one mobile device for what seems like forever – this is big news.

I was an “involved player” in the early formation of Symbian.  At the time a Palm-like device from Psion was dominant in Europe.  The three intelligent organizers (as they were called 14 years ago) came from Palm, Psion and Microsoft.  The conventional wisdom, at the time was to not allow Microsoft to establish a monopolistic stranglehold on mobile platforms, like it did in the PC.

From this strategy grew the Symbian operating system that was used primarily by Nokia and Ericsson. Symbian was based on the Psion OS.  During the BiCE (Before Iphone common era), the coolest smartphones were in Europe and ran Symbian.  Microsoft tried to continually adapt a desktop centric design philosophy to mobile devices.   They had very modest success, far less than their corporate ego would admit, externally or internally.

The good news is that the strategy worked.  Microsoft never established a monopolistic foothold in the mobile space.  The industry exchanged one dominant force for another. Apple and Google have established that position in this next generation.

In the AiCE (After iPhone Common Era) period the world changed.

Nokia’s dominance which was (is) based on great physical phone design, radio interfaces, button placement, and distribution, suddenly seemed less relevant.

The great Symbian operating system was like the  Neanderthals, once Homo-sapiens appeared.

A report released just 4 days ago listed Apple with a 45% share of Smartphones in Europe, followed by 16% for both Android and Blackberry.  Symbian had fallen to around 12%, and is in free fall.  Nokia’s Smartphone share in the largest Smartphone market (North America) is close to nil.  On a worldwide basis, Symbian  has just been eclipsed as the leader by Android with both around 30% share.

Against this backdrop, Steve Elop the CEO of Nokia and most recently a top executive at Microsoft, issued an internal Memo in which he likened the Nokia business to a burning oil platform with multiple fires. Great imagery! (His complete memo to the Nokia troops is at the bottom of this blog)

Meanwhile Microsoft has also been ablaze, except they continue a public stance of  “damn the torpedoes, full speed ahead”.  They seem to have temporarily righted their ship with Windows 7 sales, mainly because businesses refused to buy the disastrous Windows Vista.   They are becoming the Xerox of the new millennium- Lots of great ideas and ground breaking technologies,  with very poor execution.

I have mentioned in previous blog articles that the Windows 7 Mobile, on the surface looks like a viable technology. However, the product is very late to the party, is called “Windows”, and its marketing was linked to Zune (Do you have one?) and Xbox.  Good ideas, poor execution.

Against this backdrop, Steve Elop hooks up with his former Boss, Steve Balmer and the two sinking ships attempt to tie themselves together to stay afloat.  Nokia will have to navigate through the support issues for the millions of Symbian consumers and also there now seemingly aborted relationship with Intel on the Meego Smartphone platform.  Nokia is rationalizing themselves as a hardware platform vendor, not a software producer.  They are making a deal that seemed unthinkable for over a decade.  They have been pushed into a partnership with Microsoft by the success of Apple and Google.

The real winner is Microsoft.  Nokia is betting their Smartphone future with the Windows Platform and hoping that it turns around its plummeting Smartphone share.   Microsoft is risking much less because they have much less to risk in the mobile space.  They have a single digit of market share.  The announced Micorosoft relationship with the largest manufacturer of mobile devices, as they say, “Can’t hurt!”.

The integration and production of  “Microkia” phones will take at least 6 months and  more likely a year.  That’s another year of innovation and product releases from Apple and Google.

The Micorosft /Nokia combination must define a new class of Smartphone, perhaps aimed at developing markets , that is a clear differentiation from the highend iPhone and Droids.   Without a new Smartphone species, Microsoft and Nokia with continue to look like Neanderthals and suffer a similar fate.

——————————

Steven Elop – CEO of Nokia – Memo to his troops

Hello there,

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders, operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally – taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we’ve lost market share, we’ve lost mind share and we’ve lost time.

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

Stephen.

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