Why platforms like iPhone and Twitter are becoming control freaks

This post first appeared in VentureBeat.

Small app developer shops have had a great couple of years. Facebook, Apple, Twitter, and a host of other platforms opened up and let these third-party developers build games and other apps to entertain their users, and in the process allowed developers to build multiple monetization channels as well.

It was a great move for the platforms — all those cool apps brought in more users and kept those users coming back. And it was great for the developers who would otherwise have found it hard to drum up an audience for their apps. But it looks like that trend is probably in danger.

In recent weeks we’ve seen both Twitter and Apple clamp down on developers, adding new restrictions to their developer agreements. It looks like the platforms are eager to take over what appear to be lucrative business opportunities those developers helped to build. Now the question on everyone’s mind is, exactly how much control are the platforms going to be exerting here? It may be that wresting back control from the stakeholders is imperative if a platform is to grow, but if so, how do the stakeholders that helped popularize a platform benefit?

Whether we’re talking about Twitter launching an ad network that could challenge other Twitter-based ad players, or Apple’s recent decision to ban Flash-to-iPhone conversion tools, or the fact that Apple’s new iPad device lacks external ports, it’s clear there’s a trend towards control here. Apple has never been considered an open system, but the actions of the past week indicate that it’s going even further down the road to a closed ecosystem. And then there’s Google’s Android platform. Android’s raison d’être was to enable openness and allow the partners in its ecosystem to decide how closed they want to go. Yet, Google, as the curator of the platform, decided to introduce a new distribution channel and differentiate between phones based on its own criteria. Meanwhile, social networking giant Facebook has been busy, too. The social network has long said that its users should be in charge of their own privacy settings. But a few months ago, it changed tack and took on the role itself.

Why is this happening? Well, there are many reasons, but they tend to fall into three broad categories:

Erect Entry Barriers: Facebook, Google, and Twitter have all grown and scaled on the back of the open web (where access to services has been unfettered by any gatekeeper and consumers were free to switch services with minimal switching costs). They have been able to attract users rapidly because the web has been an open playground, with users gravitating to services that best served their needs. This is very unlike the physical world, where competition is highly uneven in different geographies and location inherently serves as an entry barrier. Increasingly, these companies are recognizing that while the open nature of the web has been a great contributor to their growth, they need to erect entry barriers one way or the other to limit competition if they want to sustain growth at the same rate. By taking steps to control access, features, development tools, or buying out competition, successful companies are looking to raise their control over the markets that they operate in. Apple’s lack of USB ports (primarily aimed at discouraging sideloading) and Google’s “Superphone” requirements for its distribution channel are both indicators of such entry barriers. These barriers will usually not be obvious to the end-user, but they certainly limit the ability of third-party players to operate and interact at will.

Build Platforms that Can Scale: As companies grow larger and more successful, a key decision they face is how much to invest in new products versus how much to continue investing in their existing assets. While there are pros and cons to both approaches, when companies decide to continue investing in existing assets by, for example, building new products/services on top of existing ones, they’re more inclined to protect that investment by exerting more control over their base products. Apple’s approach with its various product lines clearly exemplifies this approach. Starting off with the iPod ecosystem, Apple built the iPhone. On top of the iPhone OS, it has now built the iPad. Note that the iTunes way to interface with the product remains a constant, while the underlying core remains the same for apps (iPod Touch, iPhone and iPad). Having built a platform that Apple has now scaled to multiple products, the company has to ensure that it retains significant control. And that explains its latest move to keep companies such as Adobe at bay — companies that have a professed multi-platform multi-screen strategy that obviously gets in the path of Apple’s single-platform, multi-screen strategy. Similarly, consider Google’s new online-only distribution channel for Nexus One. A movement towards distribution is a first for Google, since the company had thus far allowed device vendors to forge their own distribution tie-ups. While these are still early days to gauge the success or failure of this channel, the intent is pretty clear. As Google continues seeing increased uptake of Android, it wants to involve itself not just in enhancing Android features and providing web services on Android phones but in expanding this presence to newer areas.

Grab the Early and Late Majority Crowd: A key feature of most web and PC-based services remains that most users tend not to tinker around with default settings. The implicit understanding is that if they are comfortable installing/using a service, then they are fine with the settings suggested by the provider. And this user behavior is exploited by service providers to further their goals. For instance, Facebook’s recent privacy settings changes are aimed at making as much profile info public for as many users as is possible. In a similar vein, Twitter’s move to acquire Tweetie or that of releasing a semi-official Blackberry app can be seen as an attempt by Twitter not only to control its platform but also to encourage users to access it through their own application. The underlying assumption here is that, while the innovators and early adopters ( read up here on the theory around diffusion of innovation) might care too hoots about using an “official app”, it is the next wave of people that are the low-hanging fruit. And to this large mainstream crowd, Twitter does not really want to project the impression that the service is significantly separate from the platform. While there are no obvious advantages to using one app over the other currently, that will likely change, as future versions of “official apps” are likely to be more tightly integrated with Twitter’s monetization model and will potentially offer more incentives for users to stick to them.

Given these advantages, it’s clear why platforms would feel the pull to take more control over their offerings. But does enhanced control really deliver in the long run? An answer to that question might come from a different set of players, the mobile operators.

Having started off with highly controlled and closed ecosystems, mobile operators have flourished offering their services in a lock-down fashion. However, of late, they have begun to realize that while closed systems are great for milking consumers, they are not sustainable in the long-run, since the more closed a system gets, the easier it becomes for a disruptive entrant to create havoc. You only need to take a look at the rapid collapse of operator walled gardens (where users were not allowed to browse any mobile site beyond the operator portal and a few select partner sites) and spread of flat-rate mobile data plans (that enable unfettered access to the mobile web) to gauge the pace of this change. Consequently, they are now attempting a painful transition to open ecosystems.

It is ironic that a key reason these mobile operators are beginning to change their business models is because they’re trying to emulate the very same Internet players who are now closing up their offerings. And as the two worlds — mobile telecom and the Internet — converge, expect players from both categories to switch business and operational models more often.

In the meantime, what does this mean for stakeholders in the Internet platform ecosystems — the app developers? Are they going to be left high and dry? I would reckon not. Going by past evidence, closed ecosystems, while being tremendously helpful to the platform owners, still allow for opportunities to be made at the edge of the ecosystem in areas the platform owner deems too small to bother with. The difference in this situation is that there are now a lot of edges — wide edges — where innovative developers can create products that can stand on their own whilst leveraging the larger platform. At the same time, services that offer limited value-addition will fall by the way as the platform owners decided to expand.

So it is really up to stakeholders to decide if they want to be offering me-too services or building out truly innovative offerings. But keep in mind that while platforms are going to continue to exert control over their ecosystems going forward, that strategy will only last until the next disruptive company springs.

YouTube’s live sports broadcast deal is watershed moment for online video

This post first appeared in VentureBeat

YouTube is taking a major step today with its first live sports broadcast deal. It will be streaming live the Indian Premier League Championships. Such live broadcast deals have hitherto been the bastion of traditional pay TV operators. The Google-owned site signed an agreement with the organizers back in January and retains rights for two seasons.

The IPL is a tournament of a short-form of cricket that has become extremely popular in the last couple of years. The tournament spans 60 matches over the next 45 days. The IPL is currently in its third season, and has already seen runaway success in attracting eyeballs. By acquiring global rights (other than the US market, where Willow TV has the rights) for online streaming, YouTube is testing out a whole new business territory.

The IPL constitutes what are called Twenty20 cricket matches between eight teams made up of players from multiple cricket-playing nations. Revenues from advertising and sponsorship will be shared between Google and IPL, with YouTube offering the content free to consumers. The tournament itself is big money. TV broadcasting rights for 10 years were reportedly purchased by India’s Sony Television Network and Singapore’s World Sports Group for over $ 1 billion. In previous years, while online streaming was available on the official website of the tournament, however, it was geo-blocked in nations where the IPL had TV broadcast deals. That is changing this year. YouTube’s deal with IPL requires them to delay the stream by 5 minutes in countries where they have simultaneous TV broadcasting. Moreover, the online streams promise significant interactivity and customization. Viewers will be able to select their camera choice and freeze and fast-forward footage.

YouTube is reportedly going to stream the match at four quality levels. Google is also bringing its social network Orkut into play here through IPL-branded communities while engaging in both print and outdoor advertising promoting the event.

The timing also appears to be right. Comscore reports that by end of January 2010, over 10 million Indians had visited a sports site in the month, an increase of over 97% year-on-year. Viewer engagement also recorded strong figures, with both total minutes spent and total visits recording growth in excess of 100%. Google is expecting over 10 million unique visitors, and over 40 million cumulative viewers through the duration of the IPL. To put this in context, India had over 8 million broadband subscribers [PDF] (defined as speeds >256 Kbps) at the end of January 2010. Sponsors too are looking to cash in on the latent demand. One of the sponsors on YouTube, telecom operator Airtel is upgrading the access speeds of all its fixed broadband subscribers who wish to watch the matches to 2 Mbps, although fair usage/tiered limits still apply.

What does this deal mean for YouTube? Google is stepping on the pedal when it comes to generating revenue streams on YouTube. This tournament, when viewed in the context of YouTube’s tryst with legal content is interesting. YouTube has, to date, been primarily a forum for user-generated content, but it’s been trying for a while to increase the proportion of content that it can sell advertising on. User-generated content is great for pulling in the numbers, but it is deals such as this that will likely help YouTube make money. Already, large name-brand advertisers including Coca Cola, Samsung, HSBC, and HP are said to have signed up for advertising in India, with each of them said to be purchasing between 5-10 million ad impressions. YouTube will also be producing over 20 clips per match, which will be up for sponsorship, and it is likely to deploy several ad formats including homepage ads, pre-roll and mid-roll ads, and banner ads next to the video player. Advertisers get an opportunity to target a global audience. In the UK, which has a sizable cricket audience as well, local advertisers are being brought aboard.

YouTube is no stranger to live/high-traffic events. Its live streaming of U2’s concert last year attracted over 10 million viewers. The site had also hosted highlights of the Beijing 2008 Olympics, but only in geographies where digital rights could not be negotiated. Experience from such major events could ideally help YouTube refine its pitch for streaming other sporting events. While the current agreement offers content free, YouTube could indeed explore paid subscriptions of such events at a future date. Again, all of this depends on how successful the company is at hosting the event without technical hiccups.

For pay TV operators, who traditionally have paid significant broadcasting license fees to gain exclusive access to sporting events, YouTube’s entry is sure to shake up the scene. There are not many ways in which broadcast TV can compete with the interactivity offered by online viewing. In markets such as India, where cable and satellite subscription is still growing and broadband penetration is very low, migration of ad dollars might be limited. However, in a market such as the UK, YouTube will likely eat into the potential ad revenues that ITV4 (incidentally, a free-to-air channel) looks to generate. And if you take into account that set top boxes that allow YouTube content to be streamed to large-screen TVs are also making their presence felt, pay TV operators, such as Sky, that have traditionally relied on exclusive sports content definitely have reason to be concerned.

For Google, the imperative of making YouTube profitable is becoming more pressing with every passing day. By gaining rights for online streaming of major sporting events, YouTube gets a solid chance of trying to position itself as a comprehensive online video destination. One comprised of user-generated content, video rentals, on-demand premium clips, and live events. Viewed in that context, YouTube’s current deal with the IPL indeed appears a step in the right direction. If YouTube succeeds in creating a compelling usage experience for the viewer, one that betters broadcast TV, then rest assured, Google is going to be a regular fixture at event rights auctions around the world.

For those of you based in the US that want to watch the IPL matches, YouTube has clarified that you’ll be able to view them 15 minutes after they have ended.

Google to offer stripped-down Nexus One phone in India?

This post first appeared in VentureBeat

Google may be preparing to launch a stripped-down, low-cost version of its Nexus One smartphone in India, and possibly other developing markets, according to speculation on multiple Indian technology sites. The rumors appear to have originated in a tweet from a TV show producer. But irrespective of how it got started, it sure highlights the importance that Google is placing on the developing markets.

Apple has historically focused on building high-margin products and slapping the legendary Apple Tax on them, but this strategy hasn’t found many takers in markets such as India. Indeed, many would say Apple has priced itself out of the market. In India, the iPhone 3G 8GB model is priced at about $680, while the 16GB variant is priced at about $790 (the 3GS has not yet been released, possibly due to the limited uptake that the 3G version has met). However, Google’s entry into the mobile handset space has to do with more than just device margins. The company is trying to increase the avenues by which consumers can interact with its services. Be it in the mobile space through Android or through its attempts at experimental fiber networks. And it is in this context that emerging markets such as India represent a large market that Google can ill-afford to ignore.

India is adding close to 18 million mobile subscribers every month, and the Indian telecom regulator TRAI estimates [PDF] there were around 127 million wireless subscribers accessing data services (essentially GPRS/EDGE based mobile data services) at the end of September 2009. That is a sizeable number, and one that continues to grow. Mobile advertising, too, is beginning to make its presence felt. Admob metrics [PDF] from January 2010 show India accounting for over 5% of all ad requests, behind only the US and ahead of many other developed mobile markets including Japan and the UK.

Moreover, Google already has some strong traction in the market. A Comscore September 2009 reportestimates that Internet users in India spent up to a third of their online time on Google sites, a figure that is over three times the global average. Given such strong usage indicators of its services, Google will want to build on its brand strength, while simultaneously tapping into the fast growing mobile space. Google is already experimenting with multiple mobile products for its Indian audience, including Google Phone Search (search using voice calls to a toll-free number, with results being sent as a text message), Google SMS Search (search using text) and Google SMS Channels (SMS-based mobile communities). Putting a feature-rich, yet low-cost phone into the hands of its users appears the right next step.

It is in this context that a stripped-down version makes sense from Google’s perspective. Google has previously signaled that it considers India an unfriendly marketplace for smartphones. One can only speculate on what components might be tossed, but there are a few low-hanging fruit. India does not yet have 3G networks, given that the required spectrum has not been auctioned yet (although that will likely change soon, hopefully). Similarly, GPS and WLAN chipsets could be on the block, if Google is looking at cutting down on the radios. The display, too, could be swapped out for a less expensive and smaller LCD screen as opposed to the OLED display that the Nexus One currently boasts.

The resulting device would definitely not be what Google calls a “Superphone“, and therefore would not qualify for its online webstore. However, that might do a world of good to Google if it were indeed to launch such a phone in India where online commerce is still finding its feet. Apple found out the hard way that in a large country such as India, having a presence at the neighborhood handset retailer store is critical to driving uptake (Apple’s iPhone is primarily available only at select carrier-owned distribution stores, which are very limited). While Google might not have the experience of dealing with large third-party distributors, it has shown that it does not shy away from such challenges. Indeed, the very fact that it chose to launch its own distribution channel for the Nexus One in the US is testimony to that.

India would likely not be the only target country for such a stripped-down version. Brazil comes readily to mind as another good candidate. For Google to translate its successes on the desktop to the mobile web, a strong presence across devices will be inevitable, be it through carrier partnerships or through Android-based phones, or better-still, a Nexus-One style device where Google exerts significant control. And emerging markets such as India with its large mobile base are probably the right entry point.

Google Buzz’s privacy breach is sign of things to come

This post first appeared in VentureBeat

Google's Buzz is facing some pretty strong headwinds. After being hit by significant backlash over the cursory way it treated privacy settings for the new service, the company has tweaked the settings yet again. Per google's product manager Todd Jackson,

"Starting this week, instead of an auto-follow model in which Buzz automatically sets you up to follow the people you email and chat with most, we're moving to an auto-suggest model. You won't be set up to follow anyone until you have reviewed the suggestions and clicked "Follow selected people and start using Buzz."

The question on everybody's mind right now is, "How did Google botch it up so badly?" I'm inclined to believe that a lot of this backlash is probably what Google expected. Given the strong feedback Facebook got from its user community on Facebook Beacon, and more recently, when Facebook reset its privacy settings, Google should definitely have known what kind of collateral damage such a product can do to user privacy. Google's blatant disregard of privacy issues probably echoes what Mark Zuckerberg had to say a few weeks ago -- Privacy is dead.

Increasingly web players are going to test the limits of privacy, and how they can put more and more of our digital lives out for everyone to see. If the web is indeed making a transition to a social web, then Internet companies are going to spare no effort to ensure their strategies for monetizing the web are carried forward to the social web. And what better way to do that than to win yourself access to the fattest possible data pipe. Google can't build a social network of 400 million people to compete with Facebook today, but it can start creating one with what it already has. Build a social layer, thrust it on the inboxes of millions of people, push the limits, and then take baby steps backward.

Such scenarios are likely to recur increasingly as social networks, email providers, handset vendors, and mobile carriers vie for a piece of the pie in the next phase of the evolution of the web. Each of these categories of players has access to a certain amount of personal data, and they will increasingly look to build what they will want us to believe are, 'social' networks. With mobile-based check-ins expected to be a commodity soon, the intersection of location with behavioral data from social media offers significant potential for the next generation of online/mobile ads. Metrics from current social media are extremely encouraging to say the least. Comscore, in a recent report, says that time spent on Facebook at end of Dec 2009 increased almost 200% year-on-year. And this is on top of a 100% growth in unique users.

To Google's credit, it has been prompt in reacting to feedback. But the very fact that it has attempted to marry personal services such as email with public networks shows the large leap that it has taken with user data. The tweaks that it is currently doing now are pretty minor -- just the bells and whistles of how the service is defined. It's that large leap that's going to encourage other players in this space to keep experimenting around the borders of traditional privacy norms. These norms are going to be tested so many times, that they might indeed be reset at some point soon.

Google’s fiber network is attempt to force telcos to change

A version of this post appeared first in VentureBeat

Google's come up with yet another ambitious plan- that of deploying fiber-to-the-home as a trial in select communities across the US. The company claims it will will adopt an open access approach making its network open to other service providers as well. What’s most interesting about this announcement isn’t the possibilities of high-speed, instead, it’s the thought of how this test rollout could effect the telco industry.

Google has slowly been crossing paths with the telcos, a fact that’s been more than obvious from its series of forays over the course of recent years. However, while telcos have always looked at Google with a sense of alarm, this latest announcement is likely to set the cat among the pigeons. Telcos have traditionally considered selling voice minutes and, of late, data bundles, their raison d’être. While so-called “over-the-top” services from Internet players such as Google have threatened telco revenues from additional services, their core networks were never under threat. At worst, most telcos believed they might be relegated to the role of a dumb-pipe. That is now set to change.

Google’s apparent entry into the fiber-to-the-home (FTTH) space comes as a rude awakening for US telcos. Consider for instance, Google’s proposition that it will allow third-party service providers to use the network. While that might sound great in isolation, Google appears to be making a clear move aimed to force the FCC to allow last-mile fiber unbundling. “Unbundling” would allows service providers to use the existing last-mile network of an incumbent operator. The FCC currently exempts incumbent telco operators from having to lease their lines to other providers. But the FCC continues to get requests from providers to fully enforce unbundling with regards to fiber rollouts, as it does for fixed lines.

Similarly, consider Google’s emphasis on communities. In its announcement today, it reached out to local community managers interested in bringing the test network to their neighborhoods through its public Request for Information. A key factor that determines speed of FTTH rollouts, and implicitly cost, is getting the necessary regulatory permissions and the right to use existing infrastructure. By encouraging local residents/community managers to reach out to Google with a list of what their community can offer, Google is striking at one of the biggest challenges telcos routinely face across the world in terms of fiber rollouts: that of encouraging higher uptake in areas where they’ve already rolled out services. Experience from smaller European fiber operators such as Lyse clearly demonstrates that higher user involvement in the overall fiber rollout process helps drive down churn (churn refers to the number of subscribers that move away from a service — a key metric for any telecom service provider). Lyse rolls out the fiber network right up to the edge of a subscriber’s home and then encourages the subscriber to dig and lay out the fiber themselves through their gardens and into their homes. This has helped it create create an emotional attachment to the service, which has a clear impact on churn.

I’m not saying Google is already looking to build services aimed at rapid uptake with minimal churn. But these are two sure indicators that Google is now ready and willing to shake up the teleco ecosystem by striking at the heart of what they do and how they do it. They are pointers that Google clearly understands some of the biggest telco challenges and is ready to come up with innovative ways to address them should it decide to go all-out as a fiber service provider.

Globally, telcos have always tried to make the case that fiber rollouts are highly capital intensive — even more so when they are FTTH as opposed to Fiber-to-the-Node/Cerb. They’ve used this point to make their case against last-mile unbundling or, in some instances, as a case against net neutrality. High investments have acted as a natural entry barrier, and with low competition, pricing of the access services has remained high. Moreover, lower competition has meant there’s less incentive for telcos to rapidly rollout networks. Google’s entry (or the threat of it) could change that.

It is quite possible that Google will back down from its stated “experiment” after the initial rollout. But it’s more likely that Google will continue with a phased rollout program until it can generate enough panic amongst the telcos to create what it set out to create. But until then, the noise around Google’s FTTH plans are only going get more shrill and gain more momentum across the developer and user communities.

Google does not necessarily have to go ahead with a highly capital-intensive network rollout and subsequent maintenance, a completely alien line of business compared to its core search advertising business. All it needs to do to is ensure that the right environment is created to force change upon existing telcos. For proof of the same, think back in time to the whole debate around open mobile ecosystems and Google’s ‘bids‘ for wireless spectrum. I believe today’s announcement was a first — albeit giant — step in that direction.

Nokia's Key to Long-Term Relevance : Emerging Markets

A version of this post appeared first in VentureBeat


Cellphone maker Nokia may not get as much love (or press) in the US as Apple does, but internationally, it's putting on quite a show. The company has 39% of the global smartphone market, according to a new report from market researcher Strategy Analytics.But put the smartphone market to the side for a moment, and take a look at some other markets Nokia's currently building out -- markets most other device makers have largely ignored. The company has been rolling specialized services out to emerging markets in Brazil, China, India, and parts of Africa where there's a high demand for affordable, practical mobile services.

Yesterday, the company announced its latest progress on this front. It has already offered English-language services on Nokia phones and via mobile portals in China since 2007 (a service called MobileEdu), but now it's partnered with international education firm Pearson to bring other types of educational content to phones in China in a joint venture called Beijing MobileEdu Technologies.

The MobileEdu service to date has over 20 million subscribers in China, according to Nokia, with over 1.5 million active users every month. The site offers downloadable courseware that appears to be typically priced at 2 Yuan (~$0.3). The new venture will obviously seek to expand that market.

Services such as these, coupled with a strong presence in low-cost handsets, have resulted in Nokia gaining a significant leg-up on competition in emerging markets across the world, including two of the biggest -- China and India. Be it in terms of coming up with highly cost-competitive, yet utilitarian, phones (think of the 1100 series), or in terms of carefully building up a brand that endears itself to the bottom of the pyramid, Nokia has demonstrated that its understanding of emerging markets is next to none. While other vendors such as LG/Samsung/Motorola have traditionally focussed on LC (Low-Cost) and ULC (Ultra Low-Cost) handsets to drive sales, Nokia is probably the only handset vendor taking an active interest in services that it can bundle along with its low-cost phones.

One of these services, similar in intent to the MobilEdu initiative, Nokia Life Tools (currently available in India and Indonesia), is offered through partnerships with content providers such as Reuters and forms a key part of this services thrust. The SMS-based service offers agriculture, education, and entertainment services through an on-demand or a subscription model. The service has been available in India at prices of Rs.30 - Rs.60 ($0.65 - $1.3) since mid last-year. It is targeted at rural consumers, for whom the mobile phone is the primary means of connectivity to the external world. The agriculture services enable farmers to get market rates directly on their mobile, without having to travel to distant towns. That means they can accurately identify the right price and right market for their produce. And it means those farmers no longer have to go through a middleman to conclude a sale. Nokia promotes this service with its strong existing distribution channels and with its innovative "Nokia Vans" with which it reaches into the hinterland. The service is currently available in over 10 languages. And with India's adult literacy rate of ~66%, the company indeed has a sizeable target market for the service. While Nokia hasn't disclosed any uptake numbers in India thus far, I assume they're good, since the company extended the service to Indonesia and has announced plans to introduce it in Africa too.

Life Tools is only one example of Nokia's push into emerging markets through unique phone/service bundles. Others services include money-transfer solutions such as Nokia Money, a basic service that provides banking services to the unbanked, and Nokia Tej, a mobile order and supply chain management solution.

A focus on these markets is also likely to help the company over the long-term. These are markets where subscribers wouldn't be able to afford $30+ monthly data plans and where literacy levels aren't high enough to justify deployment of complicated mobile applications. And that's precisely why Nokia is going behind these subscribers with a two-pronged strategy of low-cost phones + highly relevant services. While the margins may be slim on the actual phones, the volumes are significant. And so is the opportunity. For instance, India just added over 19 million mobile subscribers in December 2009, and this is a country in which Nokia holds a 50% market share.

It also greatly helps that the company has built a solid brand that is valued high for reliability. The company was voted the most trusted brand for the second year running in the annual brand survey conducted by India's Economic Times business newspaper.

Nokia certainly has to figure out how to deal with North American carriers and sort out how to create phones that appeal to a North American audience. However, in the meantime, it's putting up a strong show in the global smartphone market. And whether its hold on that market is sustainable or not, one thing that it can safely lay claim to is an understanding of consumer behavior and needs in emerging markets. And these markets are the reason Nokia is not going to vanish anytime soon.

Is Apple falling behind itself in the innovation game?

A  version of this post, including early reactions from Asia, appeared first in VentureBeat

I agree, having a title like that on a day Steve Jobs introduced what is arguably “Apple’s greatest” device is debatable. But nevertheless, today’s unveiling of the iPad begs that question. While the iPad undoubtedly has top-of-the-line hardware, and a ready content/application ecosystem to feed on, however, does that mean Apple has genuinely innovated in creating a device category that can potentially rescue the legions of traditional media players? Or does it mean that Apple has created a device that can move an entire content stream from other devices/screens on to the iPad? I don’t believe so.

Innovation begins where conventional thinking ends. With the iphone, Apple had done just that. They questioned the fundamental thinking of handset vendors on why keypads should be there, on why compelling third-party applications can’t be built easily, and many more. However, with the iPad, Apple appears to have fallen for the trap of sticking to conventions and building products that do more of the same. True, the iPad indeed boasts a variety of features, targeted at e-book readers, regular content-viewing consumers, and ‘business’ consumers (although I am highly skeptical if we are going to see too many people suited up and using iWork on the iPad).  Apple has also thrown in a 3G radio and sewn-up a flat-rate data plan with its long-time partner, AT&T. But somewhere, all of these bells and whistles fall short.

Apple's iPad adopts a position that is confusing, both to the industry observer and the consumer. While the Kindle and the iPod tried to push consumers to adopt different screens/devices for different needs, the iPad, by attempting to do bits of everything, runs the risk of falling into a no-man's land! For instance, consider its suggested role as a netbook replacement. You cannot run regular Mac OS X apps! And lack of multitasking means users cannot perform basic netbook-style activities such as having a twitter client open whilst streaming music from an online radio. The lack of a camera is also likely to flummox consumers who would expect a $600+ mobile browsing device to allow video-conferencing. And finally, despite the high-end 1 GHz processor that the iPad boasts of, Flash is still off-limits for iPad users, stunting the overall browsing experience. Similarly, take its comparison to a portable high-res media player. The device lacks widescreen display, and you can't connect it to your large-screen TV. 

For more, consider its role as an evolved music player. You're stuck with the amount of memory you opt for, no expandable memory slots for you. Its positioning as a gaming device is probably the only thing that makes sense. Social gaming apps are likely to get a shot in the arm with this category. However, serious gaming remains a big if. Such hazy positioning makes for a potent combo when one takes the pricing of the device into consideration. Although it might start at $499, once you add 3G capability, a 3G data plan (the $15 plan for 250MB from AT&T is a joke for this kind of a device) and the keyboard, and suddenly even the entry-level iPad looks much pricier. Beyond the consumer, Apple also runs the risk of cannibalizing sales of its profitable Mac lines. 

Apple has historically shown that it has been ahead of the innovation curve, atleast in the decade gone by. Starting with the iPod, the iPhone, and the Macs, and the ever-neglected Apple TV, Apple products have always been known for going the extra mile in building innovative solutions for consumer challenges and in the process, profitable business lines for themselves. However, with the iPad, all I see is a product that does a little of many things, a product that tries to build on past glory (not necessarily a bad thing) and most importantly, a product that is representative of other technology companies and not Apple.

Make no mistake, the iPad will likely sell in strong numbers. It might strike it rich in some of the Western Europe markets as well, but as for as I am concerned, this is a step back for the innovative company that I have admired for long.