Role of iPhone in 7th Mass Media? The booster!

Oh, and following on yesterday's blog about Mobile as 7th Mass Media (being as superior to the internet, as TV is to radio), we will see a watershed moment on the awareness of this issue, June of 2007, when the iPhone launches.

Yes, the iPhone will shake the handset makers and like I've said before, it won't take massive market share, but it may well reach its 10 million unit sales target in the first full year of sales. And its influence will be greater on how much all handset makers have to improve their game to try to match Apple's better user experience. That is not the big influence of the iPhone to the converging industries (Y of Convergence)

But now, think of the six "legacy" media - print, recordings, cinema, radio, TV and internet. Up to now, if they think of mobile as the newest (ie 7th) mass media, and whether it is a viable "relevant" sibling in the mass media options, most executives in legacy media probably thought of the phone in their pockets. Likely a year old phone. Much of the media giants are based in America - meaning laggard phones and carriers. So they would not very easily warm up to mass market adoption of new media content on these puny little inconvenient "toys".

But that mindset will be shattered when the media blitz of Apple's future starts in June. Apple will certainly feature the music ability of the iPhone - due to the installed base of iPod users. It will certainly play to Macintosh users, so part of the blitz will cover the "computer-like" abilities of the iPhone ie as a kind of "super-PDA" (as it is the obvious grandson of the Apple Newton). But the part that will most shake legacy media executives - especially in America - will be how powerfully Apple will convince its iPhone will handle video files (ie TV and cinema) and internet browsing.

Suddenly the wall is shattered. Up to now, its easy to dismiss cellphones as not viable media platforms (even though they already are, as we can plainly see in Japan, South Korea etc). But the iPhone will alter the perception. With its large screen, and its intuitive user interface (no clumsy tiny keypad) - regardless of whether the iPhone ends up being any better at media consumption than its contemporary smartphones or not - the media blitz that Apple will mount for the iPhone - in America - this June, will forever extinguish the image that phones are not capable media platforms.

Now - where is the insight to readers of the Communities Dominate Blogsite? Ha-ha, well, you can see the future, clearly, that this will be happening in June (or if Apple delays iPhone, then at the later date when the iPhone is launched). You have now 3 months to get YOUR act in order, to steal a head-start in this race. The whole Hollywood and Madison Avenue media machine will "discover" mobile (cellphones) this June. If you can prepare for it, now is the time to capitalize on this upcoming major upheaval. Now is the time to capture the best talent (before the recruitment frenzy starts) or land the major clients or develop the apps or run the projects etc. Ha-ha, and do your training.

Perhaps its time to go back and read the Mobile as 7th Mass Media blog entry one more time, to really grasp the meaning. This story will start to roll now, like a snow ball. It will grow, echo, and be an avalanche later this year. The more you (and your team) have had time to adjust your mindset to understanding this, the better off you are when the big storm hits.

Its just part of the service we do with Alan here at the Communities Dominate blogsite for you   :-)

Comments

[David Cushman]

Seen this Tomi?:
http://www.youtube.com/watch?v=1xXNoB3t8vM

[Tomi T Ahonen]

Hi David

No I hadn't seen it but had heard of it. Thanks, very funny.. I've always preferred Conan over Jay Leno, but here in Hong Kong unfortunately CNBC Asia will only show Leno, not O'Brian... At least I have my Letterman and the Daily Show with Jon Stewart.

Tomi :-)

[Mark Logan]

Nice post, Tomi. I agree completely. To me, the iPhone will be the first device that helps people understand the paradigm shift from mobile phones to ubiquitous computing. It's such an easy step for consumers to go from the iPod to the iPhone that it's going to earn instant mass appeal. And when consumers are carrying around highly useful, well-designed, always-connected personal computers in their pockets, well we have the dawn of yet another new era. Should be a blast.

[Nic Brisbourne]

Tomi - great blog and great couple of posts on mobile as the 7th media. I am more of a one internet man, but you have got me thinking! I'd love to read your two pager.

best,
Nic

[Mike]

I agree - the iphone will change peoples perceptions of over the air downloading and I hope other manufactuers will take note.

I am still not convinced though.Research by the Continental Research Group (2006), Q Research Group (2007) ad Entertainment Media Research (Edgecliffe-Johnson, 2006) (all in the United Kingdom) found the majority of mobile phone owners are not yet using their phones as a replacement for a standalone MP3 player.

Why - restrictions, restrictions. As iTunes marketing director Peter Lowe put it, consumers ‘want to have the flexibility to do what they want with it. They don’t want to rent music’.

A major online store called ‘MusicStation’ created by the firm Omnifone will open its virtual doors in a few months, and has partnered with all major music publishers and twenty-three mobile operators in 40 countries. They will be offering unlimited track downloads at a fixed weekly fee, including data traffic charges but the consumer only has access to their tunes as long as they continue to pay their weekly fee. Once you dont pay, you lose it all.

Other dissuading factors is lack of storage on phones, often limited to a hundred or so songs, which doesn’t allow users to bring their whole library with them and the enormous difficulty in uploading music to phones.

Many music phones have external storage using microSD cards, but to export music from let’s say from a computer, the consumer has to have a card reader for their computer, or a proprietary data cable that works for their particular phone model or Bluetooth. It is also difficult to get the music off the phone if the consumer decides to upgrade their phone or move to another network operator who may use a different proprietary system.

Finally, I wonder can you turn on music capble phones during flights, or use them in cars while driving - or do they face the same restrictions as ordianry phones? Lastly, the current carriers do not have the accessory base of iPods meanings I cant just dcock my music phone with my home entertainment system when I get home..meaning I cant play new OTA songs with to my kids or whatever..unless they have bluetooth capable phones :)

I hope the iPhone solves these problems and I think they will. Lets hope the other manufactuers take note.

[Tomi T Ahonen]

Hi Mark, Nic, Mike

Thanks for stopping by and posting comments.

Mark - I think I agree with you (ha-ha). But let me be clear, I don't see the iPhone, radical as it may be, as becoming a mass-market phone. So the utility of its exciting innovations, as "Apple branded" will be limited to a couple of percent of all mobile phone users in the world.

But exactly like the Macintosh spawned Microsoft's Windows, and today everybody benefits from the Apple innovations introduced in the Mac O/S, and computers of the 1990s with Windows are immeasurably more user-friendly than those introduced by Non-Apple makers in the 1980s. A before and after kind of look at computing. But inspite of every generation of Macs being inherently better for the user than its "IBM-compatible/Windows-compatible" rivals, the Mac never had more than a single-digit market share.

This I am afraid will be the fate for the iPhone as well.

BUT the relevant point for us in the mobile telecoms industry, every mobile phone from this summer will be compared to the "standard" of quality, the iPhone, for its user interface. Is it nearly as good as Apple's or far from the level it should be. All of the Nokias, Motorolas, Samsungs, SonyEricssons, LGs, etc will have to greatly improve their game. And that is good for the end-user everywhere.

It is also particularly important in the mobile phone's utility changing from being only a communication device to becoming a consumption device, creation device, commerce device etc. That is why for the concept of Mobile as 7th Mass Media, the iPhone's introducion will be the biggest booster.

Nic - the two-page Thought Piece on the Mobile as 7th Mass Media is coming to you in your email inbox

Mike - good posting, and it makes sense considering it from a UK-centric or say a USA-centric view. However, these problems you mention have all been solved already in the mobile world. The world's most leading mobile music country is South Korea. There the concept was invented (two years after the iPod). The social networking site of Cyworld (think MySpace + YouTube + Flicrk + Habbo Hotel + Amazon + iTunes) has already become the world's second largest digital music retailer, behind iTunes. Yet South Korean population is one sixth that of the USA - and while Cyworld's music is sold only in South Korea, iTunes is in dozens of countries.

And another comparison, in 2005 in America where iTunes launched first, less than 10% of all music sold was sold in digital formats. In South Korea, across all the music services, already 45% of all music sold was digital - and sold directly to mobile phones. For example the local South Korean pop artists (who are major Asian exports, regularly on Japanese charts etc, a bit like Britain is to European music charts) - have their music sold for about 50 cents US per track to mobile phones. But for Western artists and their royalty deals, the prices are higher, but still less than for example the 99 cent songs on iTunes.

Its not just South Korea. The world's second most advanced digital music market is Japan, and the IFPI reports that about half of all music sold to mobiles, is sold in Japan (Japan is about three times as big as South Korea, which is second biggest)

Of the Europeans, Sweden is the most advanced mobile music market. The smallest of the mobile operators, Three, outsells iTunes Sweden already. And full-track MP3 files can be is sold for as little as 8 cents (US) per song (for older songs, obviously, not current artists and their hits).

We have the concepts and technologies, and consumers will literally flock to them. But for example in Britain, its been slow going with the operators and the major music labels, circling each other, trying to figure out how to proceed.

And finally, yes I think the iPhone will also help improve the music consumption on mobile networks, but honestly, I think Apple will attempt to help sustain the business of the iPod/iTunes concept. So I'd expect the real innovations to come from say SonyEricsson with its Walkman branded phones, who are among the biggest threatened concepts by the iPhone. Expect SonyEricsson to be hard at work to invent the right responses to the iPhone, partly in the device, partly in its user interface, partly in its (Sony branded) accessories etc, and partly in the eco-system for music.

And also LG and Samsung can learn from their home market, and innovate. And Nokia is no IBM (as a rival to the Mac) or Creative Labs (as a rival to the iPod) when it comes to smartphones. Expect N-Series phones to be perhaps the biggest market share battle for the iPhone. And here Nokia's volume-production machine, its mobile operator/carrier contacts and distribution will give it a formidable lead (to begin with, we'll see how it pans out over time)

Thanks for writing.

Tomi Ahonen :-)

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