Juha Christensen's Mobile Experiences

Battle of the Mobile Platforms Revisited

Apple have demonstrated, through iPhone and iPad, that consumers want large displays and are willing to pay for mobile applications. They have also shown that the value chain is ready for new business models that break with the previous approach, where the device maker sells to the mobile operator, who owns the customer relationship.

We're about a year from the smartphone demand curve crossing over the feature phone demand curve. I see this from the vantage point of being on the board of both Teleca and VirtualLogix. Single-chip, single-core Android phones will within 6-8 months cost approx. $60 to manufacture, which means mobile operators will give them for free with a one year €15/$20 per month calling plan.

My firm belief is that 0.6 billion smartphones will be sold in 2012. The big question is, however, which operating systems will dominate. There are several drivers that will determine who the winners are:

• Great hardware: Cool devices still rule. A lackluster device running a great OS won't sell. A great device with a lesser OS can do well. Just think of BlackBerry.
• A low-friction app buying experience: The combination of iPhone and iTunes means that consumers can easily and simply buy an app. The operators as well as Amazon and PayPal have something going for them here. They all know how to bill people.
• Ease of developing apps: The app model on iPhone and Android has revolutionized and democratized the concept of being an app developer. The barriers are coming down to a level where it's possible for a much broader set of developers to write cool apps.
• Powerful distribution: Getting the OS out on a wide range of devices and letting Darwin's Law loose will help drive reach, as well as take care of ensuring that the devices on a given OS get better and better.
• Developer Monetization: It's clear that long-tail developers can't make the economics work by monetizing their apps though a $0.99 per app charge. They need to have access to multiple monetization avenues, such as Location Based Ads.

We're seeing the battle lines being drawn up now. The other device manufacturers have clearly seen how Apple has gobbled up an order of magnitude more value-per-consumer, and more important, profits-per-consumer, than the classic device players in the market.

It's clear that the analysis in the boardrooms across the industry have led everyone to conclude that the control point is ownership of an operating system.

Conversely, the mobile operating system field is getting more crowded than ever with players like Symbian, WebOS, LiMo, Azingo, Windows Phone, BlackBerry, Android, iPhone, MeeGo, Bada and Openmoko.

iPhone and Android has the all important momentum. I am, however, becoming increasingly impressed by MeeGo. I confess to be biased since key components come from Trolltech, where I served as a board member until Nokia bought the company. I do believe there is something to be said for the combining Nokia's market share, distribution clout and software skills with Intel's ability to lead the market with rapidly evolving reference designs. Intel has hundreds of OEMs who trust them, which could mean that if Intel plays their cards right, they get to own and define both the software and semiconductor stack with MeeGo and Atom. This is, of course, contingent on Atom increasingly becoming a viable alternative to the ARM juggernaut in terms of cost, performance and power consumption. So consider Intel a very strong contender in the mobile platform space. With the added clout from Ken Klein's team at WindRiver, which Intel bought for approx. $800 million, they have a very clean shot at being a contender.

I am impressed with the new Symbian 4 stuff, but with Nokia as a departing anchor tenant, and only DoCoMo left, the Symbian Foundation guys will have to find a new hardware manufacturer to build their future on, or realize the game is lost. It's sad, and it was certainly not the intention when we founded the company, but the harsh reality is: Symbian gave up owning the UI layer in 2000, and that was the beginning of the end.

Windows Phone is showing some great promise after some years of lackluster performance. I like the innovative user experience, and have been super thrilled to see that the team has realized (or re-realized) that people aren't EITHER consumers or enterprise users. They are both. It's clear that Dell is a good anchor tenant, but it will take more to win.

RIM has built a strong franchise with BlackBerry, but you have to wonder how long they can keep the patient alive. Their OS appears to me to be on it's last leg. RIM needs to secure their OS future soon, or get orchestrated by another OS vendor. Very soon, email will be a hygiene factor rather than a unique feature. Everyone will have good Exchange and email sync.

HP has a chance of being an alternative to Apple. This statement might shock some, since HP to many is a boring, colorless brand. However, look at the assets they have quietly been building up over the past years. There could be a great consumer/enterprise mobility story in the making. On a side note, I think Todd Bradley from HP and Steve Kessel from Amazon should hook up and find a way to solve each other's problems. Together, they could be present a formidable alternative in terms of both devices, consumer reach, enterprise integration and business model.

LiMo in my mind still dark horses. Depending on how well the relationship between Google and the Android OEMs and operators goes, some might be motivated to move over to LiMo. However, it's hard to be hardware independent, open and agnostic without creating a binary compatibility problem. Developers will want to write once and run anywhere, rather than have to build multiple versions of their apps.

Again, the all important momentum is with iPhone and Android. In order to beat Apple and Google, it's important to think of them as the incumbents, and to realize that Nokia, HP and others are the new entrants who have to disrupt the Android and iPhone business models. You can't out-Google Google and out-Apple Apple...

CloudMade - Putting the Developer in Charge

Earlier on this year a smart VC, who multiple times has competed successfully against Google, told me that Google is generally willing to act as an “irrational economic player”.  It’s willing to destroy value just so others can’t get at it, even if it means destroying value for itself.

Google just announced that it will offer navigation. Navigation has so far captured 70%+ of the $2 billion mapping market. The bad news for established navigation players like Tele Atlas and Navteq is that this will erode the value of navigation, just like the value of maps have been eroded. The good news for those players is that Google has now tipped its hand and shown that it’s willing to compete against the very ecosystem that it has been nurturing over the past couple of years.

Google’s strategy is to leverage maps, including navigation, to extend its current search franchise into local search. We’ve believed from day one of CloudMade that contextual search, using location data and some knowledge about the user (for example which app he/she is using) creates much more valuable CPM/CPC/CPAs. If you’re an advertiser or a merchant, you will pay more per impression if you know someone is a mountain biker and is near the bicycle mega store you own.

Google betting on one-size-fits all model
Google is betting on building a horizontal, local search franchise. I know that sounds like an oxymoron, but please read on, it gets clearer. Google is building a one-size-fits-all set of services around mapping, and will serve the masses with those. Think about Google Maps, Latitude or Earth. They are horizontal one-size-fits-all web apps with little or no segmentation.  Everyone uses the same app. 

Meanwhile, in the process of building out end-user applications rather than sticking to being a platform player, Google is causing considerable collateral damage. Its move into the territory normally occupied by mobile operators, OEMs and small, medium and large developers is turning the marketplace against itself. The honeymoon is over and the do-no-evil days have ended. Google has declared any monetizable pocket in tech a target, including the key franchises of Apple, Microsoft, the mobile operators and now also mobile application developers. The problem with Google’s approach is, the value is not in horizontal services, but in leveraging the democratizing effect of the app stores to use the 100,000+ vertical apps as a way to divide the market into tiny segments and let them flourish and gain traction.

CloudMade believes vertical apps will inherently nano-segment the market
Most of the impressions that will hit consumers, and most searches that are contextually and location oriented, will occur through vertical apps. Take the mountain biker example. Where will I be more likely to respond if I want to a) navigate my mountain bike though a new trail and b) click on that ad from the bicycle mega store? A horizontal Google app, or a well crafted, vertical app written by a focused developer who understands my special interests? We believe the latter. We believe the mountain biking savvy, app developing expert who knows the hidden trails in his/her community will be better at providing relevance to local mountain bikers.  

As I speak to mobile operators and handset manufacturers about the CloudMade business, it’s clear that most of the players understand the value of their immense reach, and want to pick long-term partners with whom they can build a franchise in local search, local advertising and local geo services.

It’s clear that Google’s latest move has served as a lighting rod for clarity in the value chain. Over the past days I have spoken to people throughout the ecosystem. So far, the uncertainty about what Google was doing has actually caused a lot of mobile operators, handset manufacturers and app developers to take a wait-and-see attitude. Now, with Google showing their hand, and making it clear that it’s willing to compete directly with substantial parts of the eco system to get at the local search market, we’re seeing that the wait-and-see is over. With Google choosing to go it alone rather than cooperate with the ecosystem, the ground rules have been laid down, and the competitive landscape is clear. 

So what are we doing at CloudMade?  
We’re building out our traction in the vertical mobile application area, signing developers within key categories that we believe will drive massive volume. This is a real micro-segmented approach, aimed at driving traffic to thousands of narrow verticals. We’re already seeing this scale.

Local, relevant ads: We’re jumping the learning curve on Location Based Advertising and Sponsored POIs. We’ll shortly be offering developers, mobile operators and handset manufacturers a revenue share on Sponsored POIs and ads that they include in their apps. This is big news to developers, who so far have had to depend on the modest revenues from selling apps at $0.99, $1.99 etc.

Data Marketplace: We’re building a massive marketplace for geo data. In fact, in a few weeks we have our “opening day” at the CloudMade Data Marketplace, the Turkish Bazar from which developers can choose a variety of content that they can mash into their maps. This will result in more app diversity, deeper functionality and even completely new types of vertical apps.

Offering for operators and handset manufacturers: CloudMade has created a super interesting set of propositions for mobile operators and handset manufacturers. We’re doing rev share deals with them where we work side-by-side to build franchises in the local geo spatial arena. We offer them onboard maps (built into their devices) and offboard maps (loaded from our servers), we offer them navigation jointly with our navigation partners and we offer up relationships with our many vertical app developers. For Tier 1, 2 and 3 operators and handset manufacturers this is turning out to be very compelling. The big differentiator is that the operators get to decide what the services look like, they get to brand them and they get to make money from them. That is as opposed to the alternative, which is to take someone else’s services, accept that they are all branded by someone else, who also pockets the ad revenues from them.  

We’re focusing on making maps look the way the merchants and developers want them to look. Through CloudMade’s Style Editor (http://bit.ly/3nkMn2) anyone, even non-technical people, can produce advanced, custom maps that reflect the brand and identity of their company or their customers company. We’ve found that many, especially those with no yellow in their corporate identity, prefer this to a one-size-fits-all yellow map.

Navigation: We’re continuing to ramp up our work with key players in the turn-by-turn navigation field to increase the scope for navigation solutions. We are building assets to help drive the verticalization of the field, so we see custom navigation for different verticals. Again, CloudMade doesn’t believe in one-size-fits-all. We think different types of navigation will require different types of apps. For example, if I’m hiking in the mountains I don’t care about roads. I want to navigate hiking trails, be directed to places where I can fill my water bottle, and I want to know where the vista points are.

Last, but not least, the most important component of CloudMade’ approach.

Tools, tools, tools: CloudMade is focusing a lot of effort on the tools side. We believe that the best way we can serve the community of mappers and developers is to put all the control in their hands. We’ve demonstrated this through our efforts already, for example with our iPhone libraries (http://bit.ly/2IRZA3). We’re similarly putting the control of Location Based Ads and Sponsored POIs into the hands of developers. Put yourself in the shoes of the vertical app developer. You know better than anyone else how your constituents want to be advertised to, what ads they want (and don’t want) to see and how to place those apps in your app. 

Similarly, we’re readying a suite of tools that makes mapping easier, faster and more powerful. CloudMade’s web based Mapzen tool ( http://bit.ly/1MRz8U), and Mapzen POI Collector for iPhone (http://bit.ly/2HsiAR) will be available shortly. This suite of tools enables us to further serve the 180,000 person large OpenStreetMap community that is building the most detailed, finely textured and accurate map of the world. The community was founded by the founders of CloudMade, and most members of the CloudMade team are active members of the OpenStreetMap community. The map we’re building in the community is stunning in it’s detail. It’s essentially the Wikipedia of maps. After all, who knows better how to map a community than people who live in the community. Just look at this Stanford example: http://bit.ly/3HJiRh vs. http://bit.ly/1i2N8m.

The Mapzen suite enables us to bridge the needs of app developers, who serve as a proxy for consumers in a given vertical segment, and the mappers, who are members of local communities or specialists in a certain type of mapping (e.g. mountain biking trails). Bridging the consumers needs for maps and the mappers’ desire to create maps that truly reflect their local community will result in mobile and web applications that both feature better maps and be more attractive to users.

So what’s the bottom line?

Over the next twelve months, we will see hundreds of thousands of vertical apps use maps and location services to better serve consumers with data about where they are, where they are going, how they get there and what is surrounding them at their location. We will see mappers collect map data that is highly relevant to local, narrow communities. We will see owners of diverse datasets make their data available though the Data Marketplace. In turn, we will see app developers jump on the opportunity and leverage the map data and Data Marketplace datasets into highly targeted, compelling and enchanting apps. Many will choose to monetize the apps through a combination of app store revenues as well as carefully selected Location Based Advertising and Sponsored POIs.

If you are a developer that has yet to use our platform, get started here: http://bit.ly/Vjdcp (or if you’re an iPhone developer, go here: http://bit.ly/2IRZA3).”  If you are with a larger company with a need for a mapping provider that does not compete with you email me at juha@cloudmade.com.

Adding a custom CloudMade map to your blog

Today I added a CloudMade map to my blog. Now, admittedly it's been a while since I last did any coding or scripting, so it took me a bit to get everything worked out, including a brief Skype IM exchange with Jim Brown, our CTO in CloudMade.

Here are the steps that will help you get a map on your blog:

1. Get an API key from CloudMade here. Simply enter your URL (in my case www.juhachristensen.com) and click the button that reads "Register". You will see the API Key listed as a very long number. In the script below replace the text that reads API KEY with that long number.

2. Decide on a name for your project. I named mine juhablog as you can see below. Replace juhablog with your project name below. Note that there are two places where you need to make that change.

3. Decide on what size map you need. I went for 160 pixels wide by 350 pixels long because that size seems to work well with TypePad, which I use. Alter the pixel sizes in the script below, if necessary.

4. Find the latitude and longitude of where you want your map centered. I simply did this: I went to maps.cloudmade.com and navigated my way to a close up of where I want the map centered. Once you've done that, click the button named "Share" and copy the two numbers for lat (latitude) and lng (longitude). Paste them in to replace the numbers in the script below.

5. Decide on the zoom level. I went for zoom level 8 (the number right after lat and lng in the script below). I experimented a bit with it to show the right zoom level.

6. Decide on which custom map style you want to us. I went to maps.cloudmade.com/editor and found a color on the color slider that I liked. Once you've found a style you like, click "Fullscreen" then click "Share." In the first line you will see the words "styleId=". Copy the number right after that into the script below right after the part where it reads "styleID:". In other words, you will replace the number 8 that I put in there. Style 8 was the style I found fit the style on my blog.

You're now done customizing the script. Next comes the steps you need to put this into your blog. Each blogging tool has a different approach. In TypePad you create a new TypeList, select "Notes" and paste the script into the notes area. You then include the TypeList on your blog wherever you want to place it. Now, again, each blogging tools vendor does this differently, so refer to the help section for advice on placing scripts into your blog.

Here's the script:

<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> <html xmlns="http://www.w3.org/1999/xhtml" xml:lang="en"> <head> <title>CloudMade JavaScript API example</title> </head> <body> <div id="juhablog" style="width: 160px; height: 350px"></div> <script type="text/javascript" src="http://tile.cloudmade.com/wml/latest/web-maps-lite.js"></script> <script type="text/javascript"> var cloudmade = new CM.Tiles.CloudMade.Web({key: 'API KEY', styleId: 8 }); var map = new CM.Map('juhablog', cloudmade); map.setCenter(new CM.LatLng(37.467137, -122.252034), 8); map.addControl(new CM.SmallMapControl()) </script> </body> </html>

Business of Luxury Part 15: Multi-Brand Groups Take Opportunity to Emerge from Crisis with Intact Capacity

While the luxury industry has not been as hard hit as most enterprises, the crisis has had it's impact. Some luxury goods manufactures have spotted the opportunity to slug it out by not reducing their skilled labor force but freezing hiring in most other areas.

Luxury buyers in Russia and Eastern Europe have been the hardest to drive to the stores, yet declines in most segments have only been in the order of 10-15% in the region. According to CPP Management Consultants, the period February-May showed the decreases in key areas being as low as 5%. Asia has held steady. In fact, analysts believe most of the growth ahead will come from the BRIC countries (Brazil, Russia, India and China). According to Bain and Co. Brazil and China will be the two fastest growing markets through 2010. 

So as the luxury market treads water, manufacturers face a dilemma. Their most precious resources are designers and craftsmen, on whom they depend to design and craft their high margin, Made-in-France and Made-in-Italy products. As the CEO of a luxury goods manufacturer, do you decided to cut expenditure like most companies do during crisis times and risk depleting the very resource you have spent years building up? Designers with the right touch, taste and target-market-empathy are hard to find, and the artisans crafting the goods often take years to learn the trade.

It is doubtful that Brazil and China will provide enough growth to offset the declines in Eastern Europe and Russia during the next 24 months, so luxury companies face pressure from shareholders who are increasingly allergic to companies that do not take decisive measures to cut cost during crisis times. 

I believe the hardest hit will be the mid-sized, public luxury goods companies, who don't have the resources, geographic coverage or multi-brand focus to sustain themselves though the crisis. Larger, multi-brand groups like Richemont, Hermes, LVMH and PPR can seek cover through managing dozens of brands each and though already being well established throughout the BRIC countries. 

The multi-brand groups seem to be adopting a strategy of holding onto their designers and artisans, betting on retaining capacity for when the crisis is over. "We currently have a hiring freeze, except for craftsmen and new store employees," Hermes Chief Executive Patrick Thomas told the Reuters Global Luxury Summit in Paris in May. Hermes Group grew 1H/09 revenues to €875 million up from €813 million during the same period in 2008, mainly caused by growth in leathergoods offsetting declines in most other categories. In fact, this year alone Hermes will start training 50-100 new craftsmen to gear up ahead of the competition for when the crisis starts blowing over.

Some smaller manufacturers are seeing the opportunity. Swiss watchmaker Parmigiani Fleurier, who makes watches averaging $45,000, emphasizes the difficulty in recruiting new staff to join their 600-strong Swiss-based craftsmen team. To Reuters, Chief Executive Jean-Marc Jacot said: "The young generation are not keen to work with their hands. They prefer to work with the laptop!"

Starbucks Store Experiment Holds Key to Higher Per-Store Profitability through Nanosegmenting Customer Base

OK, those of you who drink coffee with me know that while I'm not a great Starbucks fan, I sometimes find it the most viable alternative in a neighborhood I don't know. While many local neighborhood coffee places have more atmosphere and a more edgy vibe than Starbucks, too often it's hit or miss with the quality of the coffee. They simply don't have the buying power, discipline and economies of scale.

At a recent Starbucks visit with some friends, I speculated that Starbucks is turning into a bland McDonalds of coffee. While at Microsoft I interviewed the person who then owned management of the Starbucks brand for a job in my division. He characterized the Starbucks experience as "self indulgence" and told me that is what had driven the average customer to visit Starbucks 3.7 times per month spending an average of approx. $23 per month. 

Providing a self-indulgent experience on a long term basis becomes hard. Anything we do a lot, and that everyone else does (like going to Starbucks) somehow feels less self-indulgent. This is where my visit to Starbuck with some friends turned into a discussion around the viability of creating a chain (coffee or food) where every single store is different, yet all the stores benefit from the economies of scale of a large company like Starbucks.

Much to my surprise, and delight I must say, Starbucks just announced a store experiment in Seattle. The store will open as 15th Avenue Coffee and Tea, complete with new interiors and no reference to Starbucks.

Starbucks uses the rather clinically sounding term "community personality" to describe what they want the store, and potential follow-on stores, to have.

So how do you create a store that really becomes a local neighborhood fixture, as opposed to a "stealth Starbucks" where you know after a couple of visits that "this feels corporate?" Well, think LEGO meets Zazzle. You hire people from the community as opposed to drive-in professionals on a Starbucks career path that sends them around neighborhoods they don't care about. You give the store managers wide authority to shape the store based on the local "hood" as opposed to a corporate style guide or manual. You let the store manager choose from a wide array of customizable SKUs, so each coffee bag, mug etc. has the logo of the local store. In fact, there has to be so many SKUs that no two stores look alike. The last thing you want is for the mugs in all stores to be the same mug, just with another logo. 

What's really interesting about this experiment from a business point of view is that it can, if managed well, accelerate Starbucks profits in multiple dimensions. First, you'd probably be able to get more frequency out of the visitors, say get them to come 4.7 times per month instead of 3.7 times. You could probably also charge a bit more for this "nanosegmented experience" since it's more "you" than a generic Starbucks. Let's say Starbucks monetize the stores with $7.00 per visit per customer rather than the current $6.20. With those changes, you've already increased your monetization per customer by 43% per month. 

This experiment will indeed be interesting to follow. In particular, I am curious to follow how Starbucks implements and manages "community personality" and keeps it fresh.

Blog is Back

It's been a while since I last blogged. So what has happened in the meantime? 

Well, a lot. After we went public with Trolltech we sold the company to Nokia for $153 million. We scaled Unwire into the market share leader in Scandinavia and sold a majority stake to LD Equity for an undisclosed sum. We decided the CPGA (cost per gross add) was too high for Sonopia, sold the US subscriber base and put the concept into hibernation. We took Teleca private, after years as a public company, and continue to scale and build it from it's base of 2,000 employees with the competent help of Dr. Romesh Wadhwani's team at Symphony Technology Group.

I also joined the board of another Index company, VirtualLogix, the leaders in mobile virtualization.

A small team of us successfully spun Sunstone Capital out of Danish Government owned Vaekstfonden two years ago, and raised a new fund from which we're investing from now. In total Sunstone has about €450 million under management. I am a Venture Partner in the fund.

During the same period, Christian, Scott, Stine, Tim and I started Progression Partners, and started looking for disruptive category killers within Consumer Internet, Mobile and Enterprise. The first company to come out of Progression was Cogniance, which already, only one year in, has scaled to 75 highly competent designers, engineers, testers and NOC staff in Menlo Park, California and Kyiv, Ukraine. Over the last year we've spent most of our time on scaling CloudMade, founded by OpenStreetMap founder Steve Coast and OpenStreetMap board member Nick Black. Stine has focused a lot of her time building up SVP (Silicon Valley Pad). Progression is also incubating multiple other companies, more about them in a later blog.

In the meantime I also found some time to go to Financial Times's Business of Luxury conferences in Venice and Tokyo. I missed out on the latest conference in Monte Carlo, but expect to go again next year. I am still hoping to find or build a venture that elegantly mixes technology with luxury.

Business of Luxury Part 14: Multibrand Management Insights from Gucci CEO Robert Polet

Robert Polet, Gucci's CEO spoke at the FT Business of Luxury Summit, a speech that lacked the passion and drama of the Gucci of yesterday, but was in tune with today's stronger focus on the business side. 

Gucci has, since Maurizio Gucci persuaded Investcorp to take over the 50% of the shares he didn't own in 1988, slowly but steadily become a fine tuned fashion machine. Maurizio hired Dawn Mello in 1989, and Mello hired Tom Ford. After some initial disappointment, the ship started to turn, though Maurizio didn't scale with the company. His brash management style and his inability to systematize the business, as well as think in terms of effective supply chain management, affected product quality and brand, so Investcorp engineered a takeover of Maurizio's shares in 1993. Shortly thereafter Mello left the company.

With Maurizio gone, Domenico de Sole, a former lawyer for Maurizio, took the helm at Gucci, and took a bet on a bold direction suggested by the then unproven designer Tom Ford. The rest is history. Gucci took over Sergio Rossi, Yves Saint Laurent and YSL Beaute in 1999, Boucheron and Bedat & Co in 2000, Bottega Veneta, Balenciaga as well as the Stella McCartney and Alexander McQueen brands in 2001. Gucci had in the meantime become a publicly traded company.

Today Gucci is a EURO 1.8B company with 5,600 employees. Robert Polet, who came to Gucci in 2004, formerly managed Unilever's Frozen Food and Ice Cream Division. In his speech at the Business of Luxury Summit he shared his take on the fundamental thinking that drives Gucci's business. He explained that increasingly, consumers are driven by:

- Desire & Emotion
- Consumer Segmentation
- Consumers Trading Up & Down
- Consumers performing Mix & Match
- Ultra Exclusivity

Polet explained that Gucci and its brands need to posess the "I Need It Factor" and that Gucci internally manages this is through:

- Managing brands tightly
- Leading and coaching people
- Providing an environment for creativity to flourish

Gucci's brands must, according to Polet, be perceived by consumers to be their friend. They must be inspirational and help keep the consumers' dreams alive. They way Gucci achieves this is a narrow focus on a virtuous circle that starts with Consumer Insight, feeding Creativity, in term connecting with the firm's Operational Capabilities, in turn again enabling Consumer Insight.

Gucci finished 2005 with EURO 485 million in operating income, so something tells me the model is working.

Trolltech IPO - Up 10% During First Day of Trading

Trolltech ended it's first day of trading up 10% during a day where the overall stock market lost ground. Reuters wrote about it here.

Trolltech IPO - First Day of Trading

Trolltech starts trading today at a stock price of NOK 16 on Oslo Stock Exchange (where Opera is also traded). The stock will trade under the symbol TROLL.

It's been an exciting journey, from the early planning through the beauty parade with the Investment Bankers up until the finale deliberations on pricing a couple of days ago.  I have been thoroughly impressed by the Management Team during this process. They have grown with the task, been diligent at every step and really shown that they are of world class caliber. Few people can keep running the business and driving for results while at the same time taking the company public.

Trolltech will issue 7.5 million new shares and this raise approx. NOK 120 million. More coverage here. If you want to follow the development in the stock click here.

Business of Luxury Part 13: Brand Extension Boundaries

Sony just announced a series of PlayStation branded luxury goods. The collection includes items like a watch, a leather wallet, wine glasses, a corkscrew and a picture frame. The watch, for example, retails for about $650. Not exactly high end pricing, but certainly micro segmented enough to give customers a feeling of buying something rare, unique and personal (to their tastes).

Many would argue that there is little correlation between gamers and people who enjoy wine, but in fact a fairly high proportion of gamers are middle class adult males who fall into the same demographic as higher middle range wine buyers.

Canon CoolVue 2020 with Google SmartLook

A friend sent me this hirarious picture, depicting a contact lens with built-in WiFi, Location Sensor, 16 Megapixel Camera and of course featuring a toolbar from Google with Google SmartLook. Google would of course, even in the year 2020, have to pay for reach as they did in the agreement with Adobe last week. Yes, reach deals and the race for good old fashioned eyeballs is back 1999 style. I suppose the picture below indicates that the likes of MSN, Yahoo and Google will still pay for eyeballs in 2020.

Web 2.0 - It's 1999 all over again

I participated in the first Web 2.0 conference as a speaker, and went again for the second time this past autumn. It's hard to believe that Web 2.0 only really got wind in it's sails 2 1/2 years ago, but if anyone has any doubt that the hype has reached hysteric proportions Baris at ComVentures has published a list of Web 2.0 companies here.

Hype or no hype, the Web 2.0 Conference has  become the place to discuss the next evolution of the web and, more importantly, the business model, usability and technical architecture ramifications of the changing landscape.

Business of Luxury Part 12: Licensing Your Luxury Brand

While the luxury brands micro segment their customer bases and become more relevant, meanwhile extending the experience to an immersive retail experience augmented by online media, they are increasingly looking to licensing that brand to companies with narrow domain expertise in a certain product segment. The best case in the industry today is the almost total domination by two firms within eyewear: Luxottica and Safilo. Similar examples exist within fragrances. Dior sunglasses, for example, will be manufactured by Luxottica and sold through a number of Luxottica controlled outlets and distribution channels, as well as though Dior's own stores.

The reason fashion brands don’t manufacture or simply outsource certain product categories is that that playing in the market either is associated with high technical barriers to entry, has distribution channels that are somewhat locked up or has economies of scale around manufacturing or raw materials or access to craftsmen.

Pambianconews of Italy is probably the best source for tracking the luxury licensing world. The company is the leading strategy consultancy in the space. Carlo Pambianco was at the FT Business of Luxury Summit and liberally shared his experiences within the licensing space.

Carlo Pambianco seems to believe in brand extension, and expressed the view that the luxury players are far from maximizing the opportunities their brand reach affords them. Most could safely extend their brand into products that are consistent with their audience’ needs and desires, but chose to play it extremely safe after the Pierre Cardin disaster, where a brand was essentially ruined though poor licensing control and declining quality.

One brand that has mastered broad brand extension is Ferrari.

The perceived value of their cars, and the myth around them, only seems to have been strengthened by the broad availability of branded goods. I just passed though Munich airport and within 2 minutes walk saw both Ferrari branded trainers and a Ferrari branded fragrance. Last week in Las Vegas I saw Ferrari Branded pens, key chains, a laptop computer and even children's go-carts.

I do believe even super exclusive brands like Bottega Veneta could safely, though cautiosly, extend into a number of adjacent products and successful merchandize them in their stores, extending the monetization of the brand.

I think we will increasingly see what people today would deem as unexpected product categories, even services, under the brand umbrellas. Why not a Giucci branded travel alarm clock, a Ducati branded motorcycle vacation, or an Armani branded high-end cruise? If Rosie O’Donnell can do it so can Giorgio.

Microsoft and Teleca Sign Multi Million Dollar Deal to Blend Obigo Suite and Windows Mobile

Teleca and Microsoft Corp. has agreed to expand its three-year relationship with the company by commissioning Teleca to integrate most of the components of its Obigo mobile phone software with Windows Mobile to meet the requirements from a top mobile operator. The order value is in the multi-million dollar range.
 
Teleca will be selling products (Obigo) and services in parallel with Microsoft to the mobile phone manufacturers developing and selling Windows Mobile 5.0-based phones.

Business of Luxury Part 11: The Power of Retail

I have always been fascinated by retail and its ability to make or break a product. I had the fortune of spending a fair deal of time planning and executing retail concepts at both Psion and while running the Windows Mobile activities, and witnessed some good successes, namely around Psion Series 3 and Series 5 and with Pocket PC and Smartphone. I also learned that the old saying that “retail is detail” holds true. All parameters have to work out, the Four P’s have to be pumping in unison and the supply chain has to be smooth, both the downstream and reverse supply chain. When backed up by strong demand generation, retail can work wonders for a brand, as we saw with Pocket PC, where we went above 50% global market share within four years, starting from a market position where our biggest competitor had 89% market share.

A large portion of the luxury industry is in the middle of a major shift from being a distribution business. Traditionally most goods were mainly being sold through distributors or to retailers. Now the shift is towards a model where the brand owners also own, or tightly franchise, their own monobrand stores. The brands can, through owning the total retail concept, control the experience tightly. The retail store is the most immersive branding opportunity for the brand owner. Only here can they own both context and content, and immerse the consumer in the brand. Furthermore, shopping is increasingly becoming Experience Space filler. Consequently, full end-to-end ownership of retail is crucial.

In some cases, luxury goods manufacturers chose to own their own retail concept to bring a number of brands through them. In the licensing space the best example is probably Italian eyewear manufacturer Luxottica, who under license manufacture eyewear under brands like Bulgari, Chanel, D&G, DKNY, Miu Miu, Moschino, Prada and Versace. Luxottica owns Lenscrafters, Sunglass Hut and a number of other retail outlets. Though that they control choice, selection, margin and end-to-end experience for eyewear customers. In addition, Luxottica is good at working with the brand owners’ old retail operations. Lately, Luxottica has sought to capitalize on the growing luxury market by creating a high-end spin-off called Lenscrafters Optique, high-end merchandized stores with more exclusive SKUs, more personal service and in more premium locations than Lenscrafters can normally be found.

So retail is strong, but where is online going? Well, judging on the current roadmap for the fashion companies I spoke to at the FT Business of Luxury Summit, most of them are simply putting their products up on the web, without the same care for merchandizing and experience management as that applied to retail. Maybe it is the case of “one thing at a time” meaning "they will get to it" or maybe we will see the emergence of micro segmented fashion brands coming up from below exploiting the Internet to compete effectively against the high cost incumbent luxury players.