Source: Nokia

I had a chance to join a call with Henry Tirri, SVP of Nokia’s Research Center (NRC) to get an overview of the NRC’s strategy and focus.

Nokia operates 10 research centers worldwide, and Henry oversees them centrally from the center in Palo Alto, California. Previously, the research centers were islands of research being done in Finland. Over the past year, the research centers have been coordinated into an 11 island confederation with its capital in Palo Alto, working together on common themes while reporting eventually back to Helsinki. As I’ve pointed out in previous posts, Nokia has been moving a lot of its multimedia research and development staff to the West Coast this past year, closer to Silicon Valley and Hollywood, where there’s a much larger technology and content talent pool from which to draw upon.

NRCs 1o locations are:

• Palo Alto, CA
• Berkeley, CA
• Cambridge, UK
• Hollywood, CA
• Lausanne, Switzerland
• Helsinki, Finland
• Tampere, Finland
• Beijing, China
• Nairobi, Kenya
• Bangalore, India

The NRC does not represent the whole of R&D at Nokia, and it reports into Mary McDowell who heads up Nokia’s Corporate Development Group that is integrated across many of the firms’ business units.

Source: Nokia

The NRC’s mission statement for 2010 is—

“To explore technology frontiers, to solve scientific challenges today, for Nokia to deliver irresistible personal experiences tomorrow.”

Localized across the separate NRC islands are global research lab capabilities, advanced systems engineering efforts, business development and innovation operations, and strategy and operational excellence teams focused on fueling other strategy and open innovation teams around Nokia, as well as local marketing, financial, and legal support.

The NRC is currently working with 12o colleges and universities across the globe on future research efforts, leveraging them for recruiting, collaborative projects, facility sharing, and as think tanks and experimental labs to define new opportunities that may eventually reach the consumer market. Some of the more notable institutions include UC Berkeley, the University of Cambridge, UCLA, USC, and Tsinghua University. NRC focuses on future developments for all of the major continents around the world, as well as some specific vertical areas such as healthcare, grassroots business, education, navigation (landmark identification) and emergency response (black swan research).

The NRC’s main focus over the next year is on four distinct research areas:

• Rich Content Modeling
• High Performance Mobile Platforms
• New User Interfaces
• Cognitive Radio

Source: Nokia

One concept that Nokia is exploring is “Supersensing” or “Mixed Reality.” The later is a term coined by the research community at large. Mixed reality will offer at some point the capability to dramatically enhance a consumer’s interaction with his or her environment. This may be done through the use of sensors, geographic tagging, as well as community and social network tagging of locations and context-specific data tied to those locations.

This vision would allow a consumer to access a variety of interactive services surrounding them depending upon where they happen to be physically located in time. This could range from basic information services such as news and weather data to more location-specific services— such as having a list of services from a variety of retailer and hospitality establishments at their disposal, without even entering the premises. Today we have much of this information back on our PCs or Macs via an internet connection, or on our mobile device delivered via a web browser or widget. But Nokia’s working on conceptual visualization of all of these services on a mobile device, which is more than just grabbing an individual app off your smartphone to launch a hotel widget and make reservations.

Source: Nokia

Along with mixed reality work, Nokia and NRC has worked through an invitation from the Museum of Modern Art in New York on Morph, a highly personalized device packed with sensors, services, and customizable features. Morph is a product of nanoscience collaboration with the University of Cambridge.  The concept video has received millions of hits on YouTube and can be viewed here…

Nokia’s choice to string its global lab footprint into a collective of 11 separate but collaborating operating units focusing on one mission statement with four strategic goals shows the company’s commitment to developing research-based breakthroughs going forward. The company is also shifting more of its OS development efforts towards Maemo and open sourced platforms for future mobile devices, and also commented that it’s looking at WebOS as well. However, much of the NRC’s focus is on the areas previously discussed is only randomly looking at OS research.

Still, NRC is responsible for up to a third of Nokia’s IPR, specifically that focused on high-end user interface work, imaging and some elements of the company’s Ovi data and OS work as well as traffic research. NRC remains a key research and development advantage, especially with its ties to academia, to understanding the consumer, while developing future interactivity and mixed reality capabilities into multiple mobile environments around the world. While much of the media is focusing on the smartphone OS wars between Apple, Google, and RIM and discounting Microsoft, Palm, and even Nokia long-term, it is clear that Nokia’s approach to the market is very different than the other vendors, which makes its game plan going forward, very unique, and focused long term.

Source: Narragansett Beer

Fremium is becoming an increasingly adopted business model today as it’s becoming popular to give things away for free as a marketing strategy to gain new customers. The strategy of free is not new. Companies have been giving free things away for years from free online newsletters to free samples at grocery stores and to join online shopping clubs. While the term and business model of “Freemium” is being embraced by many marketers, its concept has been around a few years. The word itself is a portmanteau created by combining the two words— ”free” and “premium”.

Freemium has emerged as a viable business model especially among companies that ply their wares and services in a Web 2.0 world. It works by offering basic services for free, which eventually are embraced by customers who find value in them, and then charges those same customers a premium for advanced or special features (or in some cases, the continuation of access to those services). As a business model it was first articulated by venture capitalist Fred Wilson in 2006. Wilson described the Freemium business model as a way to—

“Give your service away for free, possibly ad supported but maybe not, acquire a lot of customers very efficiently through word of mouth, referral networks, organic search marketing, etc., then offer premium priced value added services or an enhanced version of your service to your customer base.”

Jarid Lukin of Alacra, one of Wilson’s portfolio companies coined the actual term.

Today, I hear the term loosely used within VC and entrepreneur circles, as a means to jump-start a business. There seems to be two ways to enable it. First, there is freemium in the original sense, which is to acquire customers via a free offering and then secure them via a premium offer. The second Freemium model is to offer one set of customers a free service while offering another set a premium service.

The latter model is becoming popular among information providers who may be accessing data from a certain provider, then data mine it, add value and analysis on top of it, and offer it back to the original source for free. By doing this for several data providers, they can then combine the mined data sets and sell the combination to customers willing to pay for it, not identifying the individual data set sources (usually part of the original data access contract). Outside of data, physical goods providers are also experimenting with the Freemium model and set aside a certain amount of production to drive buzz and attention, many times around a marketing event leveraging social media in hopes of selling the actual product at some point.

Some examples of Fremium business models—

isayusay is a site where people can communicate in private social circles as well as in public networks. It lets you have private talks while also chatting in the open, in text or on Skype calls. It has a freemium model where communications is free, but access to advanced services like creating e-cards, invites, slide shows, albums, and opinion polls are subscription-based.

FreshBooks focuses on the concept of billing and invoicing for small businesses. It ensures that your data is safe, secure, and accessible to you, and allows a small business to look like a Fortune 500 company, based on the image sent by its invoices, bills, or other accounting communications. Free accounts allow you to invoice up to three clients annually. Higher than that, the premium offerings range anywhere from $19 to $400 a month depending upon invoicing and client volume.

Pawfun.com is a site that allows you to make and share funny ecards of your pets for free, while charging for additional personalized items including ecards, tote bags, t-shirts, note cards and postcards.

Narragansett Beer is a small brewery in the Northeast that is well-known for giving away free beer at many Summer events. This strategy has driven word of mouth advertising among the company’s primary 21 to 45 year-old demographic and has helped it sign up local bars and restaurants to carry its products.

These are some examples of just four companies where the Freemium model is working. Giving things away for free is increasingly becoming a viable business model among Web 2.0 startups but also physical goods brands too. Bigger brands are also studying ways to tailor the model around the launch of new products and services as well, in hopes of creating lower cost social media advertising while gaining new loyal customers in the long run.

Just when you thought it was safe to shop the day after Thanksgiving, known as Black Friday, Adbusters.org is promoting “Buy Nothing Day.” Calling it a 24-hour moratorium on consumer spending on November 27th in the US and November 28th in Europe and elsewhere, they are asking tens of millions of people around the world to bring consumption to a grinding (albeit momentary) halt.  This event, now 20 years old, has been very popular in Europe in years past, and could be more visible in the US this year. The 24-hour moratorium is on shopping, as well as using your lights, TVs, PCs, mobile phones and other nonessential appliances, and while motivating people  to organize demonstrations across the US and the globe.

The underlying message is to think about a more just and sustainable future by going on a personal or family wide consumer fast for the day. Event hijinks include—

• Credit Card Cut-Ups- volunteers stand in shopping malls and offer to put an end to high credit card interest rates
• Whirl-marts- groups of friends silently drive shopping carts around in a long, inexplicable conga lines without  actually buying anything
• Zombie Walks- dress up in your Halloween zombie best and wander around malls mimicking shoppers’ as they look stone faced while scrambling for those last-minute specials.

The point, says AdBusters.org is to illustrate how conspicuous consumer consumption has gotten out of hand. Frankly, I think a lot of consumers have already realized how conspicuous consumption has gotten them into hot water with their credit card bills.

Retailers remain truly uneasy about this holiday season, as we sit in the middle of one of the worst recessions in US history, and they are expected to maintain very light inventory levels. This week I’ve heard some people say they are trying to rename Black Friday to “Green Friday” in hopes of stimulating consumer demand, get people to buy more, so that store receipts will be large, all in hopes of stimulating the economy.  I guess we’ll find out when the reports come out next Monday on how good or bad the weekend went depending on current expectations.

CNNMoney.com though posted a report this past Monday on the “Dirty Secrets of Black Friday “doorbusters” recommending that consumers read the fine print on Black Friday ads. Some retailers have evidently added disclaimers that state that they may have as few as two items per store for some of their biggest advertised specials. That’s a lot of ad space for very little inventory! These practices will clearly not bring positive reinforcement to the brand images of many retailers after the holiday season, especially in the electronics space.

I don’t see “Buy Nothing Day” festivities in my neck of the woods, but I usually avoid the day after Thanksgiving anyways because of the crowds and the stress of dealing with all the traffic. Christmas gifting in our household will be much, much lighter this year, for several personal economic reasons, but that shouldn’t take the magic out of the season for us.

Still, I would enjoy a nearby zombie walk since Halloween is a huge holiday in my book, and this year it seemed to go by just too fast. Some of the scheduled events include—

• Walmart Buy Nothing Day Protest- Oklahoma City, OK
• Mall Site and Best Buy Demonstration- Chico, CA
• Westfield Mall Demonstration- San Francisco, CA
• Bayou City Buy Noting Day Barter Fair- Houston, TX
• “What Would Jesus Buy?” Riverview Theater- Minneapolis, MN
• A Really Really Free Market- Montreal, Quebec, Canada
• Walmart Buy Nothing Picket- Lincoln, NE
• Community Coat Exchange- Salt Lake City, UT
• Radical Cheerleaders Say Stop Shopping!- St. Petersburg, FL

So whether you are fighting the crowds scrambling for those two 47″ LCD TVs advertised for $799 that were shipped to your local big box retailer, doing a Whirl-mart with your college friends, or just staying at home and away from the madness of it all, enjoy the day after Thanksgiving as well as Thursday! I just wish there was a football game on Friday for the ultimate reason to stay home! Oops, I’m not supposed to watch TV! What if I use TiVo and promise to skip the ads?

All is lost!

Well, I was quite surprised that the folks over at TechCrunch today took some interesting data from AdMob and blew it up into something it clearly is not! In the post “Apple and Android Now Make Up 75 Percent of U.S. Smartphone Web Traffic” TechCrunch makes leaves one important word out of the headline— “Ad” and gives the totally wrong assumption that the AdMob data covers all mobile traffic! They go on to say that RIM, Palm, Microsoft and Nokia are all losing lots of share in the US and globally. Comments on the site show that people are taking this data the wrong way based on the headline and the the way the post is written, thinking that the game is over for the other device vendors. Only a few people commenting on the site have realized the error.

So I need to point this out to the folks over at TechCrunch and others:

Share of Mobile Ad Requests/Impressions/Clicks

DOES NOT EQUAL

Share of Mobile Web Traffic

(ad traffic, browser traffic, media consumption over browsers, downloads, etc.)

Share of Mobile Ad Requests/Impressions/Clicks

DOES NOT EQUAL

Share of Mobile Device Shipments/Sales or Installed Base

With over 15 years experience in mobile, media, and market research I don’t have much tolerance for sites that twist data analytics, blow it out of proportion, and create misleading headlines to drive readership. I’m a regular TechCrunch reader, love their posts, and I’m frankly surprised that some editor over there didn’t check this out! Their headline is pretty viral in the blogosphere today. I also have a lot of respect for the folks over at AdMob and their great data. If you read the last page of their report, they clearly state what they track and what their methodology is!

I’ve attached AdMob’s last page below and their full report is in my Box.net box since they publicly posted it.

It’s interesting data as far as the current direction of mobile ad traffic in October. But that is all it is, ad traffic! And it’s backwards looking, which is what analytics is too!

Source: AdMob

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It’s pretty evident that the advertising, public relations, and marketing worlds have been turned on their heads during the current economic crisis. The growth in digital and social media occurring at the same time is changing the way businesses and retailers (both brick and mortar and online) market themselves going forward.

What is clear is that marketing costs are finite and shrinking due to economic conditions. Media budgets are declining while interest in leveraging social media to better target and retain customers is growing. This does not mean that budget spend on paid media— TV and print advertising is shifted percentage wise over to earned media— social media, rather that dollar spend on social is rising, while spend on paid is falling. Companies are taking that reduction in paid spend directly to their bottom lines, as overall marketing and advertising budgets are shrinking.

Today, agencies are in chaos. The are receiving increased pressure from clients to ramp up their social media marketing skills in order to develop tactics to define more finely segmented customers, influence them and drive higher brand loyalty. Marketing and PR, which have operated as separate entities with their own agendas in place, increasingly need to come together collectively to work on optimizing this movement towards developing new skill sets. Today’s marketing campaigns are still heavily focused on driving click through rates and measuring CPMs (cost per mille/thousands) and CPC (cost per click), but are increasingly also looking at CPA (cost per action). Those brands and agencies that tie marketing efforts to the bottom line and are increasingly ramping their earned media efforts will be ahead of others going forward.

To be a leader in this area, agencies and brands need to work together. Identify specific customer segments that match up with the socioeconomic and ethnographic elements of your customers. Determine who the most vocal “personas” are in the social media space in these areas, and find the best ways to reach out to them. We can debate about the short and long tail effect all we want, but targeted marketing using social media tools to reach sub-segments of the customer is a strategy that is growing in importance, at least for now. 

Source: ICD

The concept of a tablet-based device as a control point in the home is quickly becoming a reality. With weekly rumors of Apple’s tablet work hitting the blogs, and discussions among VCs and entrepreneurs as recent as yesterday’s Cyberposium 15 at Harvard Business School where there was a panel discussion on converged devices within the home, the need for a 10″ lean-back device seems to be there. Application focus is on a number of things including enhancing the consumer entertainment experience, providing better family organization apps in key rooms of the house, as well as delivering better search and discovery methods for finding and viewing media in many ways.

Seattle-based Innovative Converged Devices (ICD), previously known as Velocity Mobile, recently announced Vega, the first in a family of converged devices for the home. The company is actively in discussions with IPTV service providers and CE brands in several countries and hopes to white label its products and have them available in by late Spring 2010.

Vega is based is an Android-based platform running on NVIDIA’s low-cost Tegra processor, which sports high-end graphics, HD video playback and encoding (1366×768). It supports WiFi, 3G services, Bluetooth, USB, micro SD, a 1.3 mega-pixel camera with bar code scanning capabilities. ICD has a magnetic docking accessory for charging and wired connectivity. ICD is focusing on 11″ and 15″ class products and is working with the DLNA on a stack to use with the platform, and with Android development in hopes of getting the OS to work with OpenGL. It currently developed off the standard Android SDK, with the difference being the screen real estate (Android today only supports up to 5″ displays).

Vega is positioned as a touch-sensitive, very low power (11.5 hrs. or 4 hrs with video playback), multi-user kitchen-based device that would deliver a variety of applications such as family calendaring and scheduling, video chat, bar code scanning, and digital sticky notes to online TV and video viewing from sites such as Hulu, YouTube, MTV, CBS.com, the BBC, as well as sites running flash-based content.

The business model built around Vega will vary by country and brand. In Europe, IPTV services uptake has been as high as 80% in some countries, and providers are interested in new products to enhance media consumption within the home in hopes of gaining more stickiness to their service bundles. Retailers such as Carphone Warehouse in the UK are also interested. ICD’s currently focused on five countries, working with a partner in each on white label solutions. Some IPTV providers may give the hardware away while others may subsidize the cost and provide an  incremental monthly service charge. Some providers are interested in Vega as a wireless hotspot, and could integrate both WiFi and 3G radios for increased in-home coverage.  The platform will be going through testing and partner product development cycles, with integration into customer launch cycles and marketing plans for next year.

I expect Vega to be one of a number of Android-based offerings within the home over the next few years. Nokia has also been working on their implementation of a consumer internet tablet and has shipped several products, and just recently shifted away from Symbian to Maemo for a richer application experience.

On the application side, integration with a host of service providers is anticipated. With online grocery shopping big in the UK, one grocery chain in particular is interested in Vega and its ability to bar code scan grocery products in the home and upload orders directly into its fulfillment system. In the US, ICD is talking to IPTV and cable providers and CE OEMs and some such as Comcast and Verizon have experimented with home hub-like devices and solutions but have not been successful.

The challenges will be for IPTV, cable, and the retail channel (service provider and big box) to describe the value proposition of connected tablets, while offering them at very attractive price points in an economy where consumer confidence and discretionary spending will remain low for at least 1-2 years.

Image Source: Offerpal Media

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A sea change is clearly occurring, and it started when Apple announced to developers on October 15th that it would allow in-app purchasing of goods and services within free iPhone apps, not just apps that cost money. First, this means that “light” versions of applications will probably soon disappear, replaced by full version apps, that will be “free.” That’s right, free! Expect a lot more free apps in the store! But……they will most likely have a timer on them and when you hit the magical time (say 30 days after download and activation), you will then have the ability to “purchase” future usage from within the application itself. Second, this capability is going to continue to fuel the current insurgence of big brand labeled iPhone and iPod Touch apps.

Today, Apple takes 30% of all revenue if you’re a developer who has developed an iPhone application, gotten it approved by Apple, and have it posted in the iTunes app store. The contract you sign with Apple specifies that Apple takes 30% of “all digital goods sold,” which by the way, includes anything sold within the app itself going forward too!

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Image Source: Apple

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For the full Apple App Store T’s and C’s….see here.

So if you sell your application in the app store for $10, Apple takes $3 of that. And if you turn on in-app purchasing, to maybe offer more features, for say another $5, Apple takes $1.50 of that. If you reversion your app (allow the customer to go to the next version of your app when it comes out) and allow for that “upgrade” from within the app itself, Apple will take 30% of that if you charge for it.

This will increasingly lead to more free apps on the iTunes app store, and soon, most of those apps will have in-app purchasing enabled. It will become increasingly hard for small application developers, who initially  jumped on the iPhone  bandwagon to shift to this model, and make money. It will require apps to be built differently. This ability is playing into the hands of big brands coming out with their own apps in the iTunes app store. If you look at Apple’s app store today, you are starting to see a lot of top consumer brand names appear. That wasn’t so six months after the app store debuted. It was mainly the little guy, the independent app developers! And Apple extolled the virtues of how easy it was to develop and get your app out there at the time. Anyone could do it!

Once the iPhone hit a certain installed base threshold (2 million subscribers) the big brands realized, that if their brand characteristics were similar to Apple’s (premium affinity, high customer loyalty), it would be prudent to build their own iPhone app, and market directly to a captivated, savvy audience, where they may find more stickiness than in traditional advertising. As the iPhone installed base grew even more, all the major brands (not just the premium ones) realized this, and soon we started to see an explosion of applications by major consumer brands and the campaign “there’s an app for that” took on a new meaning in the corner offices of advertising agencies and large consumer brands. There are now over 100,000 iPhone and iPod Touch apps in the app store, and growing.

If you’re a major consumer brand and are building an iPhone application, you need to take advantage of the in-app purchasing capabilities. Your primary in-app purchase offerings could be:

1. Additional access to the app once the “free period” expires, for a fee (what many call “getting more juice”)
2. Access to the next version of the app, for a fee (what I call “getting better juice”)
3. Access to your affinity club offering (think Barnes & Noble) that for a fee, offers your customers additional discounts in your stores or on your web site (what I call the “virtual club”)
4. Access to virtual goods that can then be used towards the purchase of your product at a retailer (brick and mortar or online) that sells your product or service

Big box retailers would be wise to look at all of these possibilities, to effectively target specific mobile customers to either keep them loyal or gain their loyalty. In-app purchasing and push notification to customers who have downloaded the app will become a compelling strategy for marketers to build brand affinity and loyalty going forward. Many agencies (advertising and PR) today are creating “New Media Officers” in order to figure out how to help brands better utilize digital media and social media tools in order to target more relevant consumers and turn them into more loyal ones. And they have to do it by spending less money than the brands would spend on traditional advertising. I know, I’ve been talking to many agencies as these job req’s have popped up (and also since I’m currently “in transition”). Few agencies “get it yet” nor do they understand mobile, mobile advertising, and more importantly, mobile application development and the new creative marketing methods that are emerging.

The big box retailers are beginning to see the potential though. And very soon, we could see virtual goods offered by the likes of Best Buy, Dixons, BJ’s, Walmart and other big box retailers!

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MediaCensus, the data arm of Morning BRIDGE just recently released data on the number of high-definition launches by provider each week, compared over three months. According to its MediaCensus Chart that shows only HD counts (excludes video-on-demand, pay-per-view and broadcast), launches remain strong,

In the current economic environment, everyone is buzzing that newspaper and magazine subscription rates have been getting killed. And it’s the combination of the rise in social media tools (Twitter, YouTube, Facebook, etc.) and digital content consumption sites (Hulu, broadcast network sites, etc.), and the decline in the global economy that’s leading to a significant drop in discretionary income among households, and movemenet away from more traditional media. Many blogs, research firms such as NPD, and service providers are saying that digital media is not seeing a drop off, and in fact subscriptions are either flat or slightly rising. What many, including the press are failing to miss, is that within certain service providers, revenue per household clearly is falling. Hence layoffs at all the major service providers. I’ve heard this first hand from ex-VPs I’ve run into form service providers like Comcast and Verizon. In cable services particularly, there’s been a drop in revenue realized per household, as consumers cutback on packages and tiers. They may be holding onto the HD tier, but they are cutting back on the number of premium channels, sports bundles, etc. that they used to subscribe to, in order to reduce their monthly spend. It may be as small at cutting $8 per month, but across millions of subscribers, it’s hurting provider bottom lines. It’s not uncommon to see households cutting back to basic cable, especially if one or two spouses have been impacted by job loss.

MediaCensus, is the data arm of The Morning BRIDGE’s parent MediaBiz, and for a complete list of HD launches by provider, you can contact them at info@mediabiz.com for more details.

The latest encounter was on November 12th at the Ultra Light Startups Boston meetup. It included a number of 60 second pitches by people bootstrapping their tech startups, as well as a great panel discussion.

Companies pitched included:

• ISayUSay
• Meet the Street
• Model Route
• Freshbooks
• Digitally Speaking
• Greenhornconnect.com
• Easy Data Cloak

I’ll admit I didn’t write down all the pitches given. The panel was moderated by veteran journalist, founding editor-in-chief of Tech-Target, and editor-in-chief and executive editor or Computerworld, Paul Gillin who now runs Paul Gillen Communications.  Panelists included:

• Rick Burnes, Inbound Marketing Manager, HubSpot
• B.L. Ochman, Director, whatsnextonline.com
• Jay Rogers, CEO & Co-Founder Local-Motors
• Mike McDerment, CEO and Co-Founder, FreshBooks

FreshBooks uses SM to track customers and what people are saying about them (typical use of SM today), B.L. Ochman uses it to build communities for clients, HubSpot is using SM to drive webinar attendence and getting up t0 500 registrants all without using email! Local-Motors is using it to drive people to physical events to show off its products.

What clearly emerged from the discussions is that SM has many elements to it. Smart companies are using SM  effectively to:

• drive customers to discover blogs, websites, and ultimately your brand
• give things away while tantilizing people into buying your products or pay-for services
• listen to the customer, supplier, partner and people who won’t buy your product

I’m a beliver that SM is not the answer to everything, but it’s also not a fad like a lot of people claim it to be (usually by those who don’t practice it nor understand it). It’s another form of communications, another way to market and promote, and share information, experiences, and advice. What started as a consumer-centric means of communications has been embraced by forward-looking companies seeking to move beyond a reliance on yesterday’s tools (advertising, email, broadcast and print media), using SM as a compliment to those methods, rather than a  replacement. The people who think that social networking and the use of SM’s a fad, don’t get that. The many companies who have tested the waters by just doing the minimum— creating a Twitter account to watch what people are saying about them, but not contribute, are just being anti-social!