Smartphones Take on PCs: Significant Historical Moment

It is a significant first, an iconic moment, a big deal. You will want to remember where you were when you heard that smartphones started to outsell personal computers. According to a report by market research company IDC, consumer electronics makers shipped 100.9 million smartphones worldwide in the last three months of 2010, an 87 percent jump from a year earlier. PC shipments didn’t do as well, edging up just three percent to 92.1 million. The falling prices of smartphones have contributed to this trend. The numbers are skewed by the longer life of a computer compared to a smartphone, which frequently is replaced within two years. For many of us, one doesn’t supplant the need for the other.

Are car companies and content providers allowed to wed? At the Navigation Strategies, USA, conference, it was a striking new world with the automotive industry anxious to engage with application providers. Some of the interesting tweetable snippets from leading automotive and content providers:

• “There is a three year development cycle with automotive. But now you can integrate an app into a vehicle in four weeks.”
• “Maps used to an end onto itself, but now it is a way to organize information.”
• “People will pay for connectivity in the vehicle, but may only be willing to pay during the time when it is needed.”
• “People will pay for traffic, but you need to educate them on what it has done for them. This month you saved x money in gas, this amount of time navigating around traffic.”
• “No one needs a map for their commute. They need their alarm clock to wake them early when their commute route is congested.”
• “Content providers can only avoid the ‘free monster’ with value added services.”
• “Navigation is now about smartphones and how to integrate with the car.”

Augment my reality. I’m not the only one charmed by Wikitude (no, not WikiLeaks) from Austrian-based Mobilizy. I took a walk around a hotel parking lot with Wikitude’s Philipp Breuss-Schneeweis imagining the possibilities of Wikitude Drive, augmented-reality navigation for vehicles or pedestrians. Intended as a heads-up display, it is currently shown as a smartphone mounted on a dashboard that displays the scene ahead of you, exactly as you see it with your eyes. However, the navigation route is drawn on top of the real scene. There is an option, particularly important at night, to switch out of augmented reality to see the route as a street map. Wikitude Drive was the grand prize winner of the 2010 NAVTEQ Global LBS Challenge. World Browser, another product by Wikitude, identifies objects around you. Point your phone and it will (try to) identify your surroundings, such as landmarks, mountains, or buildings.

Location-based social networks. I recently hosted a webinar on location-based social networks (LBSN). It is a hot topic: I had registrants from 42 countries. LBSNs are mobile apps based on developing a social community that broadcasts a user’s location and other content. LBSNs have an element of gaming that fuels and rewards usage, helps people find their friends or make new friends that share the same interest and proximity, and often provide offers and coupons from brands. A hallmark of many of these applications are check-ins, which is a manual or automated process of letting one’s community know one’s location: “I’m at Frankie’s Pizza.” There are too many LBSNs to list, but they include Booyah!, Whrrl, foursquare, Gowalla, SCVNGR. If you are interested, the webinar is available for download.

My webinar guests were Brian Cho of Booyah!, maker of MyTown, and Chad Reed of Pelago, maker of Whrrl. MyTown is an LBSN game that proves the concept with 3.7 million users. Sessions average 55 minutes a day and at its peak had 1.1 million daily sessions. Advertisers drop items into the game that may depend on the player’s location and sometimes a clue cannot be unlocked without a visit to a retail location. MyTown drove more than 800,000 visits to H&M, a clothing retailer.

Wirrl focuses on building affinity societies, and currently has 5,000 special interest societies, such as mountain biking, the Red Bull Society, and Mexican food lovers. Society members make recommendations to other members of their affinity group and a sophisticated algorithm builds up individual preferences. Whrrl’s revenue comes from brands that offer contests and prizes that match society members’ interests and locations. Reed says they use contests, instead of coupons or offers, to allow brands to control costs and add excitement.

Making money. I’m often asked for advice from content providers on making money when consumers are increasingly expecting applications to be free, and some applications, such as navigation or mapping, are getting dangerously close to becoming a utility. One strategy is to add value in a way that is challenging for other companies to cookie cut. An example is Navx, a company based in Paris that provides fuel prices for up to 100,000 gas stations with hourly updates. Consolidating the data isn’t a fully automated process so it is unlikely that companies like Google, or the like, will want to get their hands dirty. Navx also identifies parking spaces, speed traps, and charging stations for electric vehicles.

Probe sharing. Adding live connectivity to enable traffic and other services is critical for personal navigation device (PND) providers that are competing for market with smartphones. The recently announced TomTom GO 2505 is stepping up with improved traffic (updated every two minutes) from probe and traditional sources, as well as local search, fuel prices, and weather. TomTom is anxious to get its users hooked and is providing a 12-month trial subscription out of the box. Part of the traffic data set is provided by its own users, and Tom Murray of TomTom reports that more than 90 percent of its customers opt-in to contribute the data.

The World Mobile Conference is under way. It’s looking like it is all about smartphones and tablets. More later.