Industry Players
The mobile industry itself affects what is possible and practical in the mobile channel, as capabilities and standards are heavily influenced by the business relationships between carriers and device manufacturers, who effectively control the channel.
This information will change over time, and may have changed even by the time this book is published, so the author suggests it covers "some of the history of decisions made by various players." It is likely the nature of the decisions and the identity of the players will be different in future, but it serves as a general indication of the kind of thing you can expect to deal with.
CARRIERS (OPERATORS)
The "carrier" is the company that sells service to the consumer. Primarily, they manage an access network using their own "towers" or leasing network capacity from other firms, decide what communication protocols can be used on their network, and determine what devices are permitted to connect to their network.
Traditionally, the carriers have occupied a seat of power in the channel - mobile users are "their" customers - and while they recognize that additional capabilities make the mobile channel more engaging (increasing the value of the medium appeals to more prospects and is more likely to retain customers), they have been heavy-handed arbiters of what their users may have. Their primary concern has been quality if service: any device or service that jeopardizes the network (security, bandwidth, etc.) is unacceptable.
In some instances, service operators must also depend on the carrier for assistance to distribute their application to the user base, as well as to handle billing (in which purchase are "charged" to the user's cell phone bill rather than a separate credit card). From the carrier's perspective, this poses some risk - whether they must pay if the customer defaults, or if customers see these "added charges" as part of the cost of the device, which is detrimental to retention.
The notion of churn is mentioned separately: while users are often locked into term contracts, the rate at which customers leave remains at about 1.5% per month, which they would like to reduce. To do so, they face a careful balance of providing users with the capabilities they desire, a quality of service they will accept, and a price they can afford - all relative to what their own competitors are offering.
Carriers and Devices
Most carriers subsidize the cost of equipment. (EN: This is a bit generous - the customer gets a cheap phone, but pays for it over the course of a one-year or two-year service contract, so it's more akin to financing the device rather than subsidizing it) As such, the acquisition cost of a customer is high, as the carrier must pay for the device up-front and recoup their cost over time. There is some risk, though this is generally mitigated by cancellation penalties charged to customers
As such, carriers have significant power in the device purchase (in effect, the customer buys the device from the carrier, not the manufacturer) and power to negotiate with manufacturers about price and features of the devices they will accept. As such, satisfying the demands of the carrier, rather than the desires of the user, is critical (though ideally, one derives from the other).
It's noted that this varies by markets. In Japan, the user may only use devices issued by their carrier. The user cannot choose their own device, and the carrier is deeply involved with the device manufacturers to ensure they provide devices that provide a quality user experience. In Europe, regulations prohibit this restriction and the user can choose their own device. Hence, the user is free to choose and the carrier generally does not concern itself with the device manufacturers' efforts to deliver a device that satisfies user needs.
In the US, it is mixed. (EN: The author skirts this, but it seems to me to be in a state of transition from the Japanese to the European model. Especially with the advent of the smart-phone, users are raising more objections to having the two decision married - a good example being that iPhone was only available from AT&T for years, to which there was much consumer objection - and even in the present day, as Verizon is beginning to offer iPhone, customers are still displeased at having only two options. So the European model seems to be preferred, but progress is very slow.)
Decks and Walled Gardens
The "deck" is common content served to the user - the screens that the user sees before navigating to any other content. This typically includes a home page with links to information about the account (check bill, see current balance, etc.) or other services the carrier wants to sell (an advert of additional services). Some carriers also provide convenient links to users - such as checking the local weather, linking to a search engine, etc.
It's commented that "less experienced users" seldom discover other content or applications outside of that which the service provider puts on the deck for them. (EN: This is not unique to the medium. For example, most users know how to create "bookmarks" for Web sites, but many begin with the "favorites" list or use the in-browser search capability, and even fewer will change their default settings or install plug-ins. I would also take exception to "less experienced," as there are individuals who have years of experience but seldom go exploring outside their immediate needs to discover other content/applications. It's a common complaint among software developers that people would really value their widget if only they knew it existed, when the truth is that people simply don't value the capabilities of their application - rather than admit that their application is not something that most people need.)
A separate notion is the "walled garden," which is content that is provided to support a mobile device. The chief difference in these concepts is that a "deck" is a starting point from which a user may depart, whereas a "walled garden" is a restricted area that the user may not leave. Naturally, there are gray spaces in-between (if the user can leave the deck by clicking a link, but cannot manually type in an URL to roam where they please).
Naturally, competition for space on the deck is fierce, and business goals drive the decisions. The carriers will generally not give third parties precedence over their own content, and beyond that, it can often become a choice between something that derives immediate revenue (paid advertising) and something else that derives less revenue, or none at all, but would make customers more likely to value the device (and remain loyal to the carrier over the long run).
As an estimate, it's know that the user generally won't tolerate more than three clicks to get to their destination, and a mobile screen can handle at most about 15 links or icons, which provides space for around 3,000 items. (EN: This assumes that the device manufacturer will seek to provide maximum links rather than convenient one-click access to certain features - more likely the number is significantly smaller. On the other side, it also doesn't consider that a screen can be scrolled, which increases the number. So any estimate is going to be a bit arbitrary.)
Mobile Virtual Network Operators
The author refers to the Mobile Virtual Network Operator (MVNO), an unusual but not entirely unheard of operation that provides a content service for mobile users. Examples given include a company that segments a given demographic group (teens and young adults, an ethnic community, the gay community, etc.).
She asserts that there are "hundreds" of such networks in existence. However, these services "fail almost as often as they are launched." (EN: This, also, is not unique to the medium - the mania of "portals" on the Internet promised to create specialized sites that would serve as a launch pad for specific users. Most failed horribly, though a few survived as social community sites rather than real "portals." And generic social networking applications have largely made them moot - people don't change their home page, but they may subscribe to a community site or, better still, join a "group" on Yahoo or Facebook.)
It's also suggested that some MVNOs have specified their own handsets - which are tailored to the needs of the content network. In addition to being able to customize the software load of the handset, the device itself becomes a "status symbol" that indicate a visible membership in a club.
(EN: I'm getting the sudden sense that this is kid-stuff: having a device that identifies you as part of a "fan club" for a popular soft drink or a band may have some appeal with a certain demographic. Not to say it's all kid-stuff - I expect certain nonprofits and activity groups might do the same. I'm doubtful this would be a person's primary mobile device, or that it would be regarded as a general-purpose device at all, but a "special" device for a specific purpose: my "hiking club" device that gives me access to information about the hobby and club events that is updated wirelessly - possibly valuable for a purpose, but not going to be my primary mobile phone.)
Network Types
The author mentions that mobile devices generally support a number of different network options. In the US market, carriers provide support for voice and data traffic via the cellular network and devices can also connect to wireless hotspots, generally at a faster speed and lower cost, but security becomes questionable. Presently, the user chooses the network they would prefer, but detection and switching are becoming automated.
From a design perspective, you may need to consider which connections will be used most commonly, and decide how to handle switching. A media-rich application designed to be used by a broadband wireless connection may need to automatically shift to a more lightweight version to suit cellular signals. An application that depends of a secure connection might adjust or even block service from wi-fi hotspots.
DEVICE MANUFACTURERS
At the time the book was written, the leading device manufacturers were Nokia, Samsung, Motorola, LG, and Sony. Each uses different strategies:
Nokia seeks to have "design leadership," by controlling its user interface with an eye toward standardization across all applications on the device; LG seeks to establish relationships with carriers rather than with consumers; Motorola seeks to provide superior hardware in terms of being technically better or more appealing to the user; etc.
If your aim is to sell a new technology that would require a change to the device, it is often a better approach (and even necessary) to begin by working with carriers who will approve the device for use on their network before the manufacturer will be inclined to mass-produce it,
It's also noted that manufacturers are pressured to keep the device cost cheap. Carriers seek to compete on price, and reduce their risk when they subsidize hardware costs for their customers, and so pressure manufacturers to keep per-unit cost low, either directly (by insisting on it) or indirectly (by refusing to buy/support).
(EN: I wonder if the iPhone and Droid have changed this model, where consumers are demanding a specific device and specific capabilities, and are even willing to pay a premium price to have a specific phone, it would seem to give the manufacturer more leverage.)
TECHNOLOGY AND PLATFORM PROVIDERS
The next group of companies in the mobile space includes companies that provide hardware components that are built into devices and software components that are preloaded. While this was originally handled in-house as part of device manufacturing, or as a vendor-customer relationship. Increasingly, the identity of these companies is becoming evident to users, and the operations are taking on the characteristics of a partnership.
The author mentions hardware providers in this sense, though they are still largely relegated to the vendor/supplier mode rather than taking on partnership characteristics and are generally driven by client demand: a device manufacturer provides specifications for a keyboard that a specialized firm manufactures for them. (EN: My sense is that too much has been made of this. This far, only Intel has gained much power or recognition as a component provider in computer hardware. While I agree there's potential for customers to care about what brand of lens is used in the device camera, it's just not materializing.)
In terms of operating systems, most device manufactures develop their own systems, but it's fairly common for them to license their OS for use on third-party devices, though the market leaders (RIM's blackberry OS and Applie's iPhone OS) tend to be exclusive. It's noted that most companies have experienced difficulty in managing vendor relations, and have been drawn into conflicts (and suffered PR damage) when their OS didn't work quite right on another device. A few other providers (Microsoft and Android) have attempted to create an independent OS for mobile devices, but have enjoyed little success. It's likely this will remain in flux.
Developers of application environments create a platform that will be layered onto the operating system to extend its functionality or support a given development technology. This is of great interest to developers who wish to have a common platform on multiple devices for efficiency of developing applications, but of little interest to most device manufacturers, except inasmuch as customers ultimately desire application functionality depending on the application environment and the operating system cannot be conveniently evolved to provide the same capabilities.
Web browsers are discussed separate from other applications in that they are a far more common application (virtually universal with any device that has Internet access) and it is common for manufacturers to use a third-party browser than to develop a proprietary browser. The author suggests that creating of a better browser does not mean instant adoption, as the ability to easily install a browser, common on the desktop, is largely absent from mobile devices, and there is little demand among users for additional functionality.
There are a number of companies that provide additional software for mobile devices, generally to extend the capabilities of the device. For example, "predictive text" (in which all applications attempt to "guess" the word the user means to type based on the first few characters) has not been widely supported, or supported with much competency, by operating systems - so it is left to third-party developers to work it out. It is imagined that should this meet with success, the technology will be widely licensed or bought out by an OS manufacturer.
APPLICATION AND CONTENT DEVELOPERS
The author lumps together the two categories of firm, those that provide applications for mobile and those that develop content for consumption by other applications. These developers tend to be relatively small, and have very little influence on carriers or other manufacturers - as it is expected they will seek to develop applications that run on a device, or content that will be displayed by a device, accepting the capabilities as given.
The notion of open content si mentioned: information that is provided in a format (such as XML) that can be consumed by different applications and combined with other information.
Currently, both application developers and content providers have a challenge in getting cash flow. There is much competition and many essentially free alternatives for users, and the venues through which they can offer their product to the customer (applications "stores") generally require them to pay an additional cut (or increase their price to consumers).
CONTENT DISTRIBUTORS
Content distributors are differentiated from content developers in that they do not engage in the production of the content itself, but merely provide a means by which the user may access it. In effect, these are "store fronts" where applications and content are purchased, and they exercise power similar to a retail store in determining which merchandise to stock and how to price it to consumers.
There's a quick reference to "mobile search" as an emerging space, which means to provide an independent means of obtaining content (there is no direct relationship between the search utility and the content provider). There are "dozens" of start-ups, and the potential for Internet search giants (Google) to shift into this space.
INDUSTRY ASSOCIATIONS
Industry associations attempt to define standards that can be used by multiple firms, the goal of which is to provide interoperability among the products of various manufacturers.
The author names CTIA (Cellular Telephone Industry Association) and the GSM association as two leading associations that are accessible only to large companies - corporate dues are in the tens of thousands and much travel is required of key personnel, so they are not accessible to smaller shops. Other organizations include the Online Mobile Alliance. Mobile Marketing Association (specific to marketing practices), Mobile Data Association (specific to data formats).
The author remarks that "politics abound in these associations, having sometimes absurd effects on the standards."
(EN: This is not uncommon. The creation of an association to define standards is, itself, a power play. Where corporations form an association, it's a struggle between them with the bigger dogs winning power. Where it is created independently, it's a struggle between people, often to gain professional prestige or personal power. In the Internet channel, it was not uncommon for associations to be formed among academics or unemployed "professionals" with a bit too much spare time - and leveraged the task of defining standards as a method to forward a personal agenda, or to gain power and esteem. The danger these associations pose to an industry should not be underestimated.)
GOVERNMENT
Various governing bodies seek to regulate the wireless industry. In the United States, the Federal Communications Commission (FCC) is the key regulatory agency over mobile communications
(EN: This is an extension of their dominion over land-line telephone communications, which is important to remember as some of their activities may seem a bit odd if viewed outside that context. Also recall that the FCC is beholden to Congress, and as such is heavily influenced by the parties who hold the strings of specific politicians as well as to the whims and panic attacks of the general public.)
The author bullets some of the recent issues in which government has sought to intervene:
- Wireless Number Portability. For a time, changing providers meant changing one's telephone number, making it difficult to switch, and the cell phone number was an indication of a person's geographic location, a privacy issue for some.
- Emergency Location Services. One problem with portable phones is that there was no way for an emergency service (911) to know the location of a caller. US carriers are now required to add location services for this purpose.
- Liberal Patent Awards. The US Patent Office has been very liberal in giving patents to companies, even for "reasonably obvious extensions to existing technology," effectively giving specific companies the ability to patent something as frivolous as "wireless e-mail" and prevent others from offering similar services.
- Child Protection. Regulators regard the mobile channel as being more hazardous to children than normal phones or Internet service and have been (overly) aggressive in passing legislation to restrict content and access, intended to address offensive content, but which is also restrictive of benign content.
The author also indicates there are a flock of "other" regulations that exist, but have not been actively supported and, as such, have not had an impact but are a bit foreboding./ For example, Section 508 of the Telecommunications Act of 1996 requires any software product to be accessible to the disabled, but has not been widely applied, and the author asserts that the mobile industry has "ignored" this regulation or made various excuses for continued failure to comply.)
(EN: Section 508 is applicable only to agencies of the federal government, and requires them to ensure that the special needs of disabled government employees are accommodated. The author is not alone in either misunderstanding or completely ignoring the scope of the legislation, and it may eventually occur that this law is more broadly applied. From the text of the discussion, the author appears to be a proponent of the notion that every employer should be subject, and the requirements should further be extended to consumer products.)