I don't usually read Joi Ito, but a friend of mine pointed me to
his post on whether or not the Mobile Internet has a future. He notes that:
I don't think there is anything wrong with mobile or with some of the great new mobile applications and devices, but we have to be careful to remember that most mobile networks that actually work are built on infrastructure that is operated by a small number of mobile operators who use a lot of regulated and closed technology.
The reason that we have vibrant startup driven innovation is because the Internet is open by nature. Anyone can participate without asking permission and anyone can compete with anyone else at every layer of the stack. This DNA of open and free competition (except for the occasional semi-monopoly) is what allows startups like Google to come in and displace incumbents. If it weren't for the Internet, I'm positive that the telcos would have determined that it was the most efficient that THEY design and operate the "online directories".
Apart from calling Google a startup (would a new Google be able to start so well now the old one rules the Web?) I think this is a pretty sound analysis, and one we've made before in our Planet Mobile posts (see
here and
here for instance).
Joi's post is interesting in that he is critiquing the Japanese market, which is usually held up as the shining beacon of the Future of Mobile. He notes that:
In 2006 in Japan, mobile advertising was only $330M vs Content (Ringtones, Song-tones, Games) at $2.2B and Commerce at $4.7B. (http://www.johotsusintokei.soumu.go.jp/whitepaper/eng/WP2007/2007-index.html) Although all of us are experimenting with advertising and advertising is increasing on mobile, the overwhelming percentage of money spent on mobile devices goes to paying for and the collection of payments for a small number of not so innovative products from a small number of providers.
So - same old same old as we have in Europe then. As Joi notes, in many ways the mobile Telcos are captive to both regulation and the prices they paid in mobile auctions, which drives their strategy and thus their "DNA".
However, what really caught my eye on this post was this paragraph:
In Japan, services like Mixi have announced that their web usage is decreasing, their mobile usage is increasing and that more of their users are using their services from mobile and than the web. I don't think mobile monetizes as well (for the company) as the web. I think that if we move over to mobile too quickly we're risking moving our game to a platform where the DNA is not what we're used to on the Internet and most importantly, putting money in the pockets of people who do not redistribute it to startups, but instead feed giant vendor ecologies instead.
So - there is apparently a shift to Mobile Internet by some companies, but less surplus goes into their pockets - clearly teh classic new entrant approach, ie enter a market by being prepared to take a lower margin. Joi's solution?
Maybe those smart companies in the mobile space like Vodaphone and Nokia who see the future should create a fund to invest in open innovation on mobile.
Vodafone is experimenting with the BetaVine ecosystem though its still small scale, and hopefully Nokia has had a significant kick up the *rse from the Apple/iPhone business model and will start to truly innovate again.
However, given the DNA in the US/EU industry I'm familiar with, and that the above article implies Japan is not too different big picture, its not clear why they would do this investment unless pushed.
More effective I suspect is to create real competitive alternatives
Update - in a counterpoint, it would seem that Google's Eric Schmidt thinks the Mobile Internet is the new new thing -
for advertising anyway. Well, we hear that annually, who knows, 2009 may actually be the Year of the Mobile Internet!
