I have not blogged in awhile because I just have not had time. We had a great week in Barcelona last week, announcing some important relationships as we continue to expand our footprint in mobile social networking. We will announce more on our international expansion this week.
But for now, I want to share how I am seeing mobile social networking become a “replacement” technology on many levels and how that is incrementally changing the mobile space.
It is a strange time in communication history right now. In the telecom sector alone, we have observed decades of expansion and growth that is now reaching saturation. Many countries are approaching 100% penetration in wireless. At the same time, the dizzying pace of technology is creating overlapping curves of technology that are sometimes complementary and sometimes not, but my key observation is that all the trends I see are toward “replacement” of the consumer communication experience.
I see three dimensions:
1. Micro level: consumer communication behavior is changing. When I look at the world and think about our business, I try to add a social anthropology filter. Like, WHY do we communicate the way we do?
One of my favorite historical examples of a communication trend is the fax machine – something that nobody needed before they had it, which everybody needed for awhile, and which is now rapidly becoming something that nobody needs. Did technology create the behavior? Or was there an unmet need to transfer documents immediately and so the technology rose to the occasion? It seems that the latter makes the most sense, but if the fax machine had never been invented, would the world have screeched to a halt? No. But here is the big question: What asshole decided it had to be on hard-to-use curly thermal paper and why do consumers put up with it? (I know there are a lot of plain paper faxes now, but still.) Raise your hand if you have ever received a thermal paper fax and subsequently photocopied it onto regular paper. Yes you have.
It is interesting to me how consumers will put up with a tool that is substandard for their purpose for so long. That there is a nearly universal threshold of sufficiency for all consumers about the same product fascinates me. I generally expect that 0% of my landline calls will be dropped, but I fully expect 10% of my wireless calls will be dropped. I put up with it for the same reason I sometimes use a butter knife in lieu of a screwdriver: It is good enough for my purpose.
This relates to social networking, which is a technology that was introduced (the same way the fax machine was) to facilitate communication. The same general questions apply: Why do we embrace the notion of “social” communication so strongly? Did we all universally desire to be connected to our friends and strangers but just lacked a tool before MySpace? And regarding the threshold of sufficiency, why are so many legitimate business contacts “friending” me on Facebook, a tool created by kids for kids, complete with a “poke” function that I find radically out of context for all of the people who find me on Facebook? That these colleagues will torture Facebook into a communication tool in a professional context means that there is clearly a desire, if not a need to communicate “socially” that transcends a particular demographic.
That is a vastly important point. The very notion of communication is evolving to include a social aspect. Hundreds of millions of consumers cannot be wrong. “Social communication” is replacing other forms of communication along the entire spectrum from a one-to-one experience to mass media. I only have so much time in a day, and I am spending it more on MySpace and less on talking on the phone and watching TV. That is a big deal.
Which brings me to the second dimension.
2) Intermediate Level: Devices and other tools are evolving to embrace social communication. The number and variety of handsets and other devices will continue to grow as OEMs attempt to identify every minute consumer desire and create a feature for it. As true as that might be, it is also true that there are key functions that every device must have. A camera is a good example of something that nobody thought needed to be on a mobile device until someone realized that the cellular telecommunications industry is not in the business of facilitating voice communication, rather it is in the business of facilitating all forms of communication, including pictures and video. Location awareness is another example. Along the same lines, in a few years, every mobile device will include a social communication toolset.
It makes perfect sense. The device manufacturers are the intermediaries that create the tools that consumers use to communicate, and an audience of hundreds of millions of consumers is something to pander to. What makes a consumer pick a certain handset off the shelf instead of the hundreds of others is that thing that enables them to communicate in the way they want to communicate. So if social communication is a replacement for one-to-one communication, then device manufacturers must embrace this evolution lest they create a market opportunity for some other company to fill the need.
And they are embracing the evolution in a big way. Every major OEM that we work with is integrating social communication tools into their devices, and you will start to see these devices roll out this year. Your address book will ingest your friends on MySpace or Bebo. Your camera will automatically background send to your Photobucket or Flickr account. The social communication experience is going to be brought closer to the surface for mobile consumers, and it is going to have ramifications because this is communication replacement technology: The things you use your mobile phone for today are not going to go away, but the percentage of your experience using traditional features versus these social tools will decline. Take the camera as an example. Just two years ago, nearly 100% of pictures sent from a mobile phone were sent via MMS to another mobile subscriber. Now, as much as 20% of pictures sent are going to a non-human recipient like Flickr or Piczo, and they are generally bypassing the MMSC and being sent via IP or email. This has a ripple effect for a long chain downstream, but the most important is the carriers themselves.
Which brings me to the third dimension I am observing as social communication replaces today’s communication standards.
3) Macro Level: The underlying enabling technology of mobile communication is changing, which is focusing efforts on superserving the existing mobile consumer base. I was in Barcelona last week, and it was amazing how many carriers I talked to that have abdicated their positions already and are totally happy with the notion of being “dumb pipes.” Also amazing was the much larger number of carrier representatives that had the exact opposite “over my dead body” attitude about it.
Of the former category, the general message was that competing air interfaces will force their hand anyway, so better to get ahead of the curve. Fair enough. Of the latter category, the spirit of competitiveness is very strong, and rightly so – I wouldn’t throw my hands up if I had 50 million paying subs. But I can say as a vendor serving almost every carrier in North America that there is an active drive toward consolidation of services and vendors. For so many years, carriers have been expanding the offerings on their decks (which has generally been good) that now there is literally too much on the deck to be useful for consumers. While I still think ultimate choice is the best policy and so do most carriers we work with, we are seeing a focus on core value drivers, and those are the services being meaningfully integrated into the native mobile experience. This makes perfect sense to me.
EVERY carrier is upgrading their camera and photo sharing experience.
EVERY carrier is upgrading their address book experience.
EVERY carrier is upgrading their data messaging experience.
And, (speaking from a position of certain insight) EVERY carrier is actively working to integrate social communication into their native communication experience. There is demonstrated high value in enabling consumers to communicate with their social networks seamlessly and frictionlessly. Some of the solutions are pretty amazing. We are fortunate to be involved directly in the plans of carriers and OEMs to see how this area is evolving.
The replacement strategy at this level is interesting because the carriers and OEMs are not looking at social networking as “an application that goes on the deck.” Rather, they view it as an obvious replacement for their core communication bread and butter (voice, SMS, email, IM, etc.) and are keen to integrate it meaningfully to capitalize on the massive opportunity it represents. While WAP is an important part of any service provider’s mobile strategy, any company focusing only on WAP will find the high ground is already occupied by the integrated few chosen to drive the greatest amount of value.
In summary, consumers’ changing personal communication habits are intersecting an industry that is very motivated to evolve to meet their changing desires and the result, while perhaps incremental compared to some of the advances we have seen in the mobile space in the past five years, is still a major shift in how we communicate. What is truly amazing is the number of moving parts required to be part of the same machine, and the fact that it is actually happening is great to see. I am very excited about 2008 and the changes that it will bring in this space.