UPDATE 10/11/07 – The NY Times has covered aspects of the Walled Garden for mobile services. An interesting recent article with a range of comments can be found at: NY Times Article
As markets and applications for wireless devices evolve, continuing improvements in the user interface and input/output capabilities of handsets will be required. Many of the evolving applications such as navigation, video, email, internet browsing and others, call out for larger, higher resolution displays. As always, improvements will be sought to solve the user input and human interface problems with very compact handheld devices. To date, thumb typing numeric and QWERTY keypads have been the primary user input device. Touch screens, gestural input (e.g. multitouch), and new keyboard layouts will be offered in new devices and the consumer will evaluate these new approaches.
Finally, there are several over arching trends in the market for wireless handsets. The first is convergence of functions. As advancing technology enables them, consumers want to carry fewer devices, perhaps just one. The second over arching trend is wireless connectivity: connectivity via the cellular network at the wide area network (WAN) level; Wi-Fi wireless network connectivity at the local area network (LAN) level; and Bluetooth connectivity at the personal area network (PAN) level. Connectivity is expected any time, any where, person-to-person, person-to-machine, person-to-content, machine-to-machine, and machine-to-peripheral.
Another trend is the recognition that there is value in good product design. Consumers expect more product for less money, but will pay more for good design and fashion appeal. Additionally, ease of use and product appeal trump proliferating features particularly when combined with strong product design, a solid business infrastructure and good access to content.
Listening to music, though largely popular, has not been viewed by industry as a killer application. However, the Apple iPod is an interesting business case that illustrates how an appealing device, with ease of use, good software and a tightly aligned business for distributing content can enable a company to establish and maintain a large and very profitable market position. This is in contrast to the approach taken by many suppliers of portable media players (PMPs) who have treated the market as a commodity style opportunity. That is, they make and sell small electronic devices and let users apply them however they are able. Rather, the iPod formula combines an appealing device, ease of use, a successful means to distribute content, with effective marketing that makes the device attractive while at the same time telling the user how to use the device to further the company’s objectives. Apple marketing drives the customer to recurring purchases of both hardware and content. The iPhone appears to be conceived in a similar manner building on the iPod success. The iPod competes with devices made by many manufacturers but the iPod presently defines the PMP market. In part, Apple is using the iPod success as a base to attack an even larger market (mobile phones) but one that involves selling not only to the end user, but comprises a much different operating environment for the hardware manufacturer, the service provider.
Looking ahead at the market for handheld wireless devices, it’s difficult to forecast how the several walled gardens tended by the platform developers and service providers will grow. Service providers such as AT&T and Verizon, as well as platform developers including Apple, LG, Nokia, Microsoft, and others, will continue to till, sow, tend and harvest their collective gardens. Consumers will go to the market and look over the gardeners’ products and make their selections. At the end of the day, the choices of consumers will determine the market players’ successes. Happy Harvesting.
