He opened the keynote by giving his own anecdotal research on how people use their phones. In his view, normal people (i.e. not geeks and power users) are using their devices to book real-world services (e.g. restaurant reservations), and to get real-time news. Encouragingly, this now includes finding services in mapping applications. An example of this, not mentioned in the speech, is BookTable, recently added to Ovi Maps.
In this view, the distribution of real world usage breaks down as follows:
- 33% Browsing the web
- 25% Playing games
- 20% E-mail
- 15% Social Networks
- 11% Maps
- 30% Business
- Video playback and games are growing fast
Colao went on to explain the five key areas that Vodafone believes need to be built upon to boost the degree of mobile usage in the general public.
1. Network speeds and quality of service
Colao claimed that 50% of the Vodafone network supports downstream speeds of 14Mbit/s and upstream speeds of 2Mbit/s. However, he did not clarify in which territories these speeds were attainable. However, the need for speed is clear, as bandwidth and latency are the the key factors that are holding back the likes of rich web applications enjoyed on desktops from taking the place of mobile applications. Colao also touched on the points that security and privacy are also key factors of quality of service. This was another unexpanded point, although one may presume this relates to how GSM encryption, and to an extent 3G have been compromised.
2. Devices and operating systems
Colao stated that Vodafone classify devices into four groups: high-end, mid-tier, tablets and "emerging market smarphones". The latter was an undefined term, but we have seen what is likely meant by this in the likes of Nokia's X2-00. When it came to operating systems, the message was much more clear. Colao said in no uncertain terms that Vodafone are platform agnostic, and that they want to see competition in the market and choice for consumers, a point which is returned to below.
3. Content and services
Colao went back to the popularity of data usage types, stating that sending pictures and videos are the most popular. This was followed by personal information management (e.g. contact and calendar sync). When it came to download content, he said that game downloads were the most popular, followed by music, news, and other types of applications.
Vodafone predict that social networking activity will double, and that mobile navigation will increase by 90%. Colao followed up by making a personal prediction that Media (music/video), news (local, sports, and financial) and e-books are even more valuable to the market than they are currently are perceived to be.
When it came to services, Colao commented that a market research survey found that, when asked, the public mostly associated voice calls with the Vodafone brand, even though this is no longer the primary service (by data volume) that they provide. Instead, he regards Vodafone's primary service as entertaining their customers. This is in contradiction to the customers and pundits who would prefer to see a dumb pipe approach to providing mobile internet access.
Besides the consumer sided view, Vodafone are also focused on working with developers. Colao said that Vodafone are ready to provide developers with user data, providing trends and location data. Additionally, Vodafone already supports operator billing, and believe it will become ever more popular. Indeed, this is in tune with how Rovio are partnering with Ovi to provide in-game micro-payments.
4. Customer Affordability
Vodafone are finding that pricing is becoming an even more important feature of smartphones, and indeed users are weighing the price of a smartphone equally against its features. A cynical view on this is that perhaps consumers are coming out of the iPhone driven luxury phase, and of course every penny counts in the current ecconomic climate. This also reflects that services need to carefully consider pricing, providing consumers with both reasonably priced services and devices.
5. Ecosystem profitability
Clearly, Vodafone want to see the mobile market become as profitable as possible, and likewise for developers creating applications that will use the Vodafone network. To that end, Colao advised that network prices will need to be adjusted to reflect usage and network loads. This may mean that, as Vodafone try to meet demand, they may need to raise prices and increase revenue to invest in faster networks, but this was not covered in his speech.
Similarly, as Vodafone moves forward to provide delivery of both applications and multimedia content, they will work to ensure content creators have enough of a margin so as to incentivise production.
Colao said that he hoped to see an end to vertically aligned business models. Instead, he hopes to see a market where operating systems, devices and markets are all interchangable. In his view, this would created a world where customer choice and monetization opportunities are both maximised. Conversely, a closed market would cause low competition, and thus there would be no market forces to keep consumer prices down, which would utlimately inhibit usage.
He also hopes to see an environment where a developer can develop once and publish to many platforms.
It's clear that Vodafone and Nokia have overlapping goals. However, Vodafone's view of a completely agnostic market (where services, devices and OS's are interchangeable) is not quite in tune with Nokia, who are comitted to providing the Ovi service layer only to Nokia phones. However, both Vodafone and Nokia appear to have common goals in encouraging developers to create content.
David Gilson for All About Symbian, 14th September 2010