1. iOS.  This would have been best for both Nokia and Apple, but Apple would never have gone for it.  Nokia obviously would have benefited from getting access the most user-friendly mobile OS.  But, Apple would have had a legitimate path for avoiding the same second-fiddle role that plagued them in the computer industry in the 1990′s.  When I talk with Apple people, I am struck by the unwillingness to to learn from these painful lessons of history.  From 1988 to 2000 Apple was being kept on life-support at Microsoft’s pleasure, just so that Microsoft to keep the regulators at bay.  OK, that’s a bit of an over-statement, but not wildly so.  The point is that there is a natural monopoly here, and Apple is pursuing again pursuing a strategy that cannot make them a market share leader, opening the door for Android to run the table.  So, while an Apple-Nokia partnership would have been ideal for both companies, that wasn’t going to be entertained by Apple, so that wasn’t a legitimate option for Nokia.
2. Android.  The obvious choice.  Last quarter, Android represented 53% of US SmartPhone shipments vs 19% for Apple iOS, and 6% for Windows Mobile + Windows Phone (according to NPD), so Android clearly has something that the market likes.  Nokia wouldn’t have been able to take full advantage of their Navteq asset, but that’s a sunk cost.  Nokia certainly feared the prospect of competing head-to-head with the likes of HTC (usually stated as “avoiding commoditization”), but Nokia has this with Windows Phone too.  After all, HTC has been working with Microsoft OS’s for over a decade now.
3. Windows Phone.  The dark horse.  I don’t know what sort of concessions Nokia got out of Microsoft as they played Google and Microsoft off against each other, but this seems like an incredibly short-sighted decision.  Who knows, maybe they can pull it off, but the odds seem very long.  Microsoft has been struggling in the mobile industry for a long time.  What Nokia brings to Microsoft does not seem to address the root cause of Microsoft’s struggles (see post from Feb of last year: Microsoft Doubling Down on Failing Mobile Strategy?).  Nokia’s tremendous handset prowess has fallen dramatically in the last couple of years due to the change in the basis of competition caused by iPhone and Android (see, for example, Apps are for Creating iPhone Evangelists).  The early results from the market voting with their wallets is that Windows Phone 7 doesn’t address this changed basis of competition.  Certainly, Nokia should be able to bring some distribution volume to Windows Phone, but that first phone is many quarters down the road, and by then, Android would seem to be unassailable.

Stephen Elop claims that Nokia and Microsoft creates a viable 3rd horse in the SmartPhone race.   Maybe, but why take such a huge gamble, when Android is already the leading horse, and one could argue that Nokia’s ability to make money per handset is at least as good with Android?  It seems that Nokia is now on an almost-impossible-to-win path.

There have been a number of other NFC announcements, and lots of conjecture on the potential uptake of these services.  When it comes to assessing the key components of potential widespread adoption, I stand by the analysis in the above post.

Why?  The most important observation is that the basis of competition in the handset industry has changed.  Don’t be like the old General fighting the last war.  This war is about the Apps and Services that people can use on their phones.  The customers don’t give a hoot about making phone calls.  Lord knows the popularity of the iPhone in places like San Francisco and Manhattan (where the mean time to losing a call/connection has to be less than a couple of minutes) demonstrates that the customers don’t care about many of the things that we in the telecom world think the customers should care about.

The easiest path would be to just copy the Samsung approach — they knew they were coming late to the Android market, so they invested very heavily in the engineering, distribution (eg, pricing to the carriers), and promotion of their flagship Galaxy S.  It may well work for Samsung, but even if you committed to the Android path on your first day Stephen, it will still be 2012 before the first Nokia Android phones could ship, so you’ll be coming from much further behind than Samsung.  That might auger for doing a bit more than this straight up the middle approach — but, this straight up the middle approach is not a bad place to start.

You could try something like the Motorola approach of “adding value” to the Android UI with Motoblur.  I personally find it difficult to see much value add here, but maybe there is a segment of the market that really likes this sort of stuff.  If they are seeing commercial success, the next question is how is this a sustainable source of competitive advantage?  OK, my biases are showing through — I wouldn’t recommend the “copy Moto” strategy for Nokia.

What I do think would be a potentially fruitful approach for Nokia in their take on the Android strategy is to focus on the Browser.  For all the things that Google has done well in their Android implementation, you’d think that the Browser would really kick butt.  But it doesn’t.  Google still doesn’t seem to understand the fundamentally different sort of Browsing one does when mobile than when sitting in front of a PC that has a reliable high-speed Internet connection.  There are times when I still want Opera Mini-like functionality.  HTML 5 is a great step in the right direction, but if Nokia took a more pragmatic approach to the mobile Browser, it could be awesome.

Other relevant posts on this Meme, Stephen:

Mobile Browsers vs Mobile Apps, Fragmentation

Apps as Basis of Competition in Mobile

Proposed iPhone 5 Design.

That is just plain funny.

Seriously, Apple could use a bit of media training in how to handle a crisis.  The sequence of responses from Apple around their defective antenna design are less than ideal:

First, Steve Jobs sends one of his famous terse email saying “don’t hold it like that”.  You do have to give kudos to a CEO who chooses to respond to any customer emails, but that isn’t the best way to address a verified problem.

Then, Apple says the “formula we use to calculate how many bars of signal strength to display is totally wrong“, not that there is any actual signal attenuation.  Apple gets points for apparent candor in their willingness to ‘fess up.  But, their assertion that it is just an issue with how many bars are shown is inconsistent with the published reports showing that the bandwidth delivered to the phone is affected dramatically by how is it held (see Speed Test image below).

Now, even the staid Consumer Reports is slamming the iPhone 4 over the antenna attenuation issues.  And Apple’s response is to start deleting threads on their tech-support forums referencing the Consumer Reports’ negative review.

Perhaps, this is a time for Apple to recognize their changed role in the world.  As the most valuable tech company in the world, they are held to a higher standard than others.  That may not be fair, but it is reality.

Declining connection bandwidth for iPhone 4 depending on how it is held. Left to right: not being held; held in leather case; held bare-handed.

With Capital Efficiency, Entrepreneurs can focus on building what customers want, rather than what VCs want to fund.

In addition to Democratizing the Startup Process, Capital Efficiency drives another important improvement in the startup model: Entrepreneurs are largely freed from the tyranny of building what the VCs want to fund.

In the traditional startup model, step one is for the entrepreneur to raise venture money.  Pragmatic Entrepreneurs want to know what the VCs want to fund, because it is much easier to sell a VC on an idea/category/business model that they have already decided they like.   This is a significant contributing causal factor for all the reporting and cocktail party chatter around what VCs are interested in/funding now.  This echo chamber effect causes some big problems, systemically reducing the chances of startup success through two mechanisms:

(1)  The world ends up with multiple copycat companies pursuing essentially the same business idea.  These companies engage in infant fratricide, wasting money, time, and market opportunity, in the process.

(2)  In an effort to “anoint a winner”, some VC funds will put much more money into the number two or three player in a space on the hopes that they can leapfrog into the number one spot.  Most of this “extra” money is spent inefficiently at best; poured down the drain at worst.

But, Capital Efficiency changes this.  Since Entrepreneurs don’t need to seek VC money as step one in the process (step one is put product into the market, since it’s so cheap to do), they don’t need to try to read the VC groupthink tea leaves regarding what is hot today.  Instead, they can follow their own market knowledge/intuition to build something the world really wants.  I humbly submit that we’ll all be much better off with this approach.

It makes sense for the next new iPhone to support NFC mobile payments.

I know we haven’t even held the fourth generation iPhone in our hot little hands yet, but I was thinking about what Apple should put in the next new iPhone, and it seemed obvious that adding NFC to enable mobile payments for real world purchases made perfect sense.  Then, when I saw today’s announcement regarding the acquisition of Innovision by Broadcom, that solidified my belief that this must be coming down the pike.

Mobile payments are a wonderful idea — pay for modestly priced items in the real world by just putting your phone up to a reader.  It’s gotten some traction in Japan, but it’s failed to see widespread adoption, because it is so darn hard to get the multiple players in disparate ecosystems to act in concert.  You need:

(1) The handset vendors to put the NFC chips, and supporting software, into a critical mass of phones.

(2) The mobile operators, who generally subsidize the phones, to enable the payment mechanism (or, in an unsubsidized ecosystem, you need a banking partner to enable the payment mechanism).

(3) A critical mass of merchants to install point of sale systems to use the same NFC system as the phones have.

(4) A critical mass of users to actually use the system to pay for things.  Making the use of mobile payments be “easier than cash” is a necessary, but not sufficient condition.

Getting all four of those to move in concert has proven to be an insurmountable barrier to date.  BUT, Apple is in the perfect position to pull it off!  Let’s take the each of the items above in turn.  Apple doesn’t have to convince anyone other than themselves that they should put the NFC chips, and supporting software, into the phones.  Apple already has iTunes as a payment mechanism for the majority of iPhone users.  If anyone can leverage their brand to convince merchants to do something, it has to be Apple.  And, with the rabid Apple enthusiast fan base, they will get a lot of early adopter end users to give the system a try.

Apple is likely the only company on the planet (outside of Japan) that has the ability to pull this off.

I can only think of one reason why Apple might choose NOT to do it.  The only way that Apple can recruit a critical mass of merchants to install the NFC point of sale systems is to go (quasi) public with the effort long before the launch, and Apple hates to go public with anything before a launch.  Of course, given the impressive pre-order rate for the fourth generation iPhone — despite the phone getting leaked a couple of months ago — maybe they should rethink that stance (heck, maybe they should be cutting some affiliate marketing checks to Gizmodo for creating so much demand).

Denying Fragmentation is an issue for Android isn't going to help address that real and growing issue.

Dan Morrill, Open Source & Compatibility Program Manager at Google posted a couple of days ago On Android Compatibility saying, essentially that Fragmentation is a non-issue on Android, and it has been trumped up into being an issue by bloggers/pundits looking to drive traffic.

While I am a big fan of Android, I have to respectfully disagree with Dan.  ”Fragmentation” is a real issue if (1) it takes noticeably more development resources to support the multiple instantiations, and/or (2) end-users have to become hardware platform aware in knowing whether or not a particular piece of software will work on their device.

Re (1).  I don’t know which developers Dan is talking with, but the small (less than 10 developers) companies I talk with complain vociferously about the extra resources it takes to develop, test, and debug for the various Android handsets out there.  Often, it is a problem of simply getting access to the handsets before they go into the market.  Of course, one has to expect some overhead associated with supporting multiple devices, but the current level is legitimately concerning to developers–especially as they look at all the new Android devices coming to market in the foreseeable future.

Re (2).  If you want to know whether or not Fragmentation is an issue from the end-users perspective, just spend some time reading the user reviews of anything other than the top apps.  It has become fairly common practice for end users to list what handset they are using the app on, because it is widely recognized as being a key determinant as to whether or not a particular app will work.   (Dan uses the example of an app using the camera not working on a device without a camera, which is sort of a customer-intelligence-insulting example.)

I’m not saying that the Android team isn’t going to heroic lengths to attempt to avoid Fragmentation, but Denial is generally not a good approach to dealing with a real problem.  Let’s not have a repeat of the Java fragmentation tagline: “Run Once, Debug Everywhere.”

In April, Android represented 37% of AdMob ad requests from Android and iPhone.

Interestingly, Symbian has seen some noticeable increase in ad requests over the last couple of months.  If anyone has some insight into that, please do let me know (or post a comment here).

Verizon Picks "Interesting" 3G Definition.

If you look at the definitions for the construction of the maps, Verizon has defined “3G” for AT&T Mobility as HSPA only, despite the fact that the International Telecommunications Union includes EDGE in their definition of “3G”.  The ITU is part of the United Nations, for goodness sake — if they don’t transcend petty capitalist squabbling, I don’t know who does.  And, look at who Verizon takes their definition of 3G from: the vendor who sold them the protocol, Qualcomm, which sounds like the fox guarding the chicken coop to most consumers.

Instead, AT&T attacks Verizon because the map seems to imply AT&T doesn’t have voice coverage in all those white areas on the map?  Why not attack them from a position of strength (“here’s what our 3G map looks like using industry standard definitions”), instead of a position of lameness (“we think consumers are too stupid to know the difference between voice and data”)?

Look at Apple’s $230B market cap compared with those of the companies around it. IBM (Apple’s Goliath in the 80′s): $170B; Microsoft (Apple’s Goliath in the 90′s and 00′s): $270B; Google: $170B; Nokia: $44B; HTC: $10B. Apple’s a big boy now, and they need to be careful about public perception. A couple of recent happenings could turn against them.

At Apple’s request, there is a police investigation that leads them to breaking down the door of the home of the Gizmodo editor who got the fourth generation iPhone prototype, to take his server, computer, and hard drives (SJ Biz Journal article). Wow. That’s some serious Gestapo-like stuff! That can look cool/gutsy when you’re the Underdog, but as the Goliath, it could really turn into an ugly PR nightmare.

Apple sued HTC (23X smaller market cap) over some UI items earlier this year.  Recall that HTC has had forward facing cameras in many of their phones for a long time, and they’ve got new IP from MSFT, so there may be some potential for IP infringement by Apple, or one of their suppliers, with the upcoming forward facing camera iPhone capabilities. HTC could suck a lot of oxygen out of the room at the fourth generation iPhone announcement in June with a well executed PR/Legal strategy painting HTC as the scrappy innovative underdog and Apple as the abusive IP stealing Goliath. If (to be clear, I’ve got no knowledge as to whether this is possible) the HTC CEO is able to say “We think competition is healthy, but competitors should create their own original technology, not steal ours,” (word for word from Apple Sues HTC press release) Apple might be surprised at how many reporters are ready to take up that cause.

It seems like Apple should proceed with care.  If the Bully label is affixed, it will be very difficult to shake off, and very bad for their brand.