Just announced right now at their NY offices, Google’s NFC payments system – Google Wallet. Expected to launch in September this year, the service will allow Google Andoird users to pay using their phone at a number of retail stores.
Google have partnered with Citibank, MasterCard, FirstData and Sprint for launch meaning that only Sprint users with a Citbank credit card will be able to use this from the start. This is being billed as an open platform and other payment providers and banks are being encouraged to get involved. Launch retail partners include Subway, Duane Reade, Footlocker and ToysRus starting in New York and moving San Francisco shortly afterwards.
One of the more interesting features is the tie in with Google Offers and rewards which has also just been announced. This allows you to redeem offers at the same time as paying and also collect loyalty rewards electronically rather than carrying a myriad of cards to be stamped manually.
Let’s see if Apple make their announcement at WWDC and whether its an “open” platform
Back in April I correctly predicted that Spotify would soon offer their mobile service to all customers, including free accounts, following their restrictions placed on non paying users; this is a huge step for them in the ongoing battle to get a full cloud service out there. To be clear, this update does not allow non-paying users to stream music that they do not own – only the tracks they have synced from their personal computer to their device. The desktop version of Spotify has been able to sync a users owned music over WiFi to a the mobile device for some time, a smart move on Spotify’s part to save streaming bandwidth costs. This new update now includes iPod syncing, something that has required the owners to always be tied to iTunes. Today’s announcement is really significant in terms of getting users into the Spotify ecosystem and in my opinion really puts Lorentzon & Ek’s company out there as the leaders in the cloud race.
Apple, Amazon and Spotify already account for 90% of worldwide digital music revenues for and I think this move could prove to be a significant shift in Spotify’s publicised revenue problems if they can get customers to move away from Apple. This is all the more likely given their pending US launch and the hype around the lack of launch for the last yeat. Having worked on the original purchasing implementation, which was powered by 7digital, it was actually quite interesting to see how many purchases were made through it when users could still listen for free – it really points to users’ preference to own their music over the “rental” streaming model.
I think the most interesting outcome from all of this will be the
backlash reaction from Apple. In the past, Apple have changed the way that music is stored on iPods during software updates to prevent third-party software from being able to move music onto the device. It wouldn’t take much for Apple to do this and I wouldn’t be surprised if the next software updates will cause problems for the engineers over in Gothenberg & Stockholm.
The other question surrounds the iOS app and whether Apple will allow future updates to it or if they will even just remove it from the app store entirely. At 7digital we’ve struggled to get our iOS app through the submission process; an app that does considerably less to compete with iTunes and the iPod compared to that from Spotify. Unless Spotify has an agreement with Apple – which I find highly unlikely, I wouldn’t be surprised if the app store guidelines change to say if your app name contains the word ‘Spot’ and your logo is green then it can’t exist in the app store.
On top of this there is the well documented case of Apple wanting 30% of any app subscriptions which would effectively ruin Spotify’s model as they will not be able to operate on these terms. I guess the ball is now in Apple’s court.
Seems like today has been a day for inadvertently gathering mobile knowledge, I found out the following:
1) China One Mobile is the world’s largest mobile phone company with over 600 million subscribers as of today. In comparison AT&T in the US has around 95.5 million and the largest UK mobile Telecom Everything Everywhere has only 28 million. In China the second and third largest mobile providers still have around 170 million and 95 million customers each respectively.
2) Apple have sold over 18 million iPhones since Christmas – their largest area of growth was in China at 250% .
3) The Chinese ecosystem for Android apps is massively fragmented. As there are so many devices on the market they don’t all get approved by Google so don’t get to install the Android Marketplace. There are hundreds of sites offering .APK files for manual installation. This must make updating applications a nightmare to manage and would probably lead to many installed apps never getting updated. Has anybody created a centralised system for managing the distribution of applications to multiple app marketplaces yet?
4) Of China Mobile’s 600 million users 476 million used it’s wireless music service over the last quarter which offers downloads from 2 yuan – approx £0.20/$0.30. Meanwhile Apple also took over $1.4 billion through iTunes alone which is neither linked to mobile or China directly, but I find it an astonishing figure that cements the importance of a well executed content strategy on any platform.
5) Much of the growth for China Mobile is into rural areas, they have said they will spend up to 132b yuan (£12b) on their network in rural areas to maintain their lead over China Telecom and China Unicom, it’s closest competitors.
It’s probably a bit late on to be making predictions for the year, but we haven’t really seen any major announcements yet, apart from that small one by Amazon the other week.
So we were all pretty surprised when Amazon announced their Cloud Player/Cloud Drive online locker service, with all the expectation and talk focussed on other services it just crept up out of nowhere and sprung itself on us.
I’m sure they were in talks with the labels and publishers to do this all along but given the to-ing and fro-ing shenanigans of the music industry I guess they thought it was simpler to fire a warning shot to wake them up and get something moving. As has been the case with a number of services in the past it seems easier to offer an apology and seek forgiveness than to seek permission in the first place.
It’s a good service at it encourages users to purchase music in exchange for additional space in the cloud, something which Amazon have available to them in abundance. I see more users being swung to using the Amazon service than having to pay an annual subscription.
Prediction 1: It’s a far from an ideal service as you have to upload your music collection to the cloud to use it and on standard asynchronous broadband connections that would take an age for a decent sized music collection. I think they will introduce some sort of matching service that will just add content to your locker if it identifies it on your local system. I think they need to seek forgiveness from the music industry for launching the cloud locker before doing this or it will surely create havoc.
Prediction 1a: I keep banging on about an Amazon device and I see this as just another sign. Expect it before the year is out.
It’s been much talked about since the purchase of Lala and the rumour mill is always turning about their cloud service. MobileMe is supposed to be the vessel for this service although knowing Steve Jobs it will probably be some new hardware that you push into your inner ear and is controlled by thought alone. This will likely be a US launch initially with a couple of months before worldwide roll out. This is likely to be a subscription service – MobileMe is already a subscription service at $99/£60 per year.
I think the interesting thing here will be about how Apple view this service. If it is just going to be something to encourage the sale of more hardware then it will be quite vanilla, like Ping. If their plan is to encourage the sale of more content, then I would be interested to see if they release apps for other platforms (Android, Blackberry and Windows Phone 7) to allow non iDevice users to get their music, videos and iBooks on the go. It does seem counter-intuitive but I do think that this could encourage sales of other products like Apple TV which is where I see one of their next major pushes – especially as they are never going to win the mobile OS war. It’s also unlikely to happen in the near term as it will harm their app strategy to move themselves on to Android when they are encouraging all to develop for iOS.
The last of the three big hitters, or AGA as they are collectively know at 7digital, have been rumoured to be launching a service for about a year now. They seem like they have been stifled by the music industry, like everyone else. We’ve seen screenshots of a leaked music application showing the ability to sync music content in the cloud although very few other innovative features have been shown.
Prediction 2: There are talks of the launch going ahead very soon without agreement from Warner so it’s likely to be launched at Google I/O in May. Like most Google products this is likely to be a US only service at launch which will probably not launch globally for some time, if at all. I doubt that it will be anything special compared to everything else available. I imagine it will be a big bang launch and get a lot of hype because it’s Google but will quickly fizzle out with more innovative services out there that can offer better curation of content and frequent service updates with newer features.
Spotify have been trying to get into the US for as long as I can remember. They have apparently paid all the necessary advances to the four majors and have got the signatures to do it, but something is holding them back. I think the music industry has probably been trying to tie the launches of Apple, Google, Spotify and Amazon together so that no one gets an advantage as the first mover – which is all moot now that Amazon has broken ranks and made a run for it. I’d expect to see Spotify go state-side in the next couple of months.
Prediction 3: It was interesting to see that Spotify has reduced their service to only allow 10 hours listening per month for Open account subscribers. Aside to it being aimed at getting hooked users to move onto one of their paid subscriptions, this could also be due to a few other things; an agreement with the labels for the US launch, a cost saving exercise for US launch in case of high demand or …. wait for it…. the start of what I think will become another cloud based service. They currently only allow you to stream your own music on mobile devices with premium account but I can see them offering a free service. With the option to play your own music plus 10 hours per month of free streaming as a way to listen to music that you don’t own. I imagine the music industry will like this as it should encourage purchasing where users want to be able to listen to certain tracks unrestricted.
Obviously I can’t say too much about our plans for the coming year. We’ve had our cloud based locker since I joined the company back in 2007 so this years buzz word is all a bit old hat for us, but we’re looking to offer a bigger and better service to rival all of the above.
Earlier this year we announced our partnership with RIM on the Playbook which is another big step forward in our aim of giving 7digital users access to their content whenever they want it and wherever they are. We’re really focusing on being as agnostic as possible and making our service available to as many customers as possible no matter what device, what personal computer OS or what service provider they choose. Coupled with our territorial coverage this gives us some of the widest reach out there and gives consumers the greatest choice.
In order to achieve our goal, we’ve not only been partnering with device manufacturers, we have also been working on our own mobile applications, which are available from the relevant app stores:
- Our Blackberry app has been available for some time now and that has had several refinements to support new Blackberry devices and improve performance as well as a number of great feature additions.
- Our Android app launched late 2010 and allows users to download and listen to their purchases on the go. We have some great additions to this app coming soon, so keep an eye out for those
- We’re still working on getting an iPhone app similar to our Android offering, into the app store. In the meantime, iOS users can always use our mobile optimised web store.
Expect some announcements from us soon….but that’s all I can say right now.
The renewed thought of Amazon creating their own device has made me realise how they are actually one of only a handful of companies currently able to challenge Apple’s dominance in the device arena, specifically around the emerging field of contact-less payments.
The next iPhone purportedly contains NFC technology which would allow the device to act as a contact-less payment method. This is already currently available in some Android devices, but due to the open nature of the platform there’s no single company who is going to actually implement the underlying payment service.
In order to own an iPhone you need to have an iTunes account, whilst it’s not necessary to add a card to the account I would expect all of those users who own an iPhone (or an iPad) will have at least one card registered. Apple can therefore hit the ground running with the iPhone 5 and become one if the biggest payment services in the world overnight.
Google on the other hand have little to challenge with in comparison, they have never really dealt with consumer transactions at scale; Google Checkout has never found much traction against Paypal. Due to the open nature of the Android OS, operators will want to build their own solution to charge purchases to their customer’s phone bills, which will serve to dilute Google’s ability to develop the Checkout platform.
Amazon, however, do have the customers, they also have a payment method for every single one of them. If they were to introduce an Amazon device this year, it would allow them to run head to head with the iPhone in what could potentially be the start of a very disruptive period for the finance industry.
Paypal are in a strong position with their existing user accounts for payments but obviously aren’t into manufacturing devices. They could benefit from either a manufacturer tie in or creating device specific apps that use the NFC chip to charge the user’s Paypal account. Consumer adoption is likely to be limited and the experience would be second rate to one at device level.
Facebook have recently brought on Goldmann Sachs as an investor which could potentially be linked to their strengthening of Facebook credits which, this year, will become mandatory for any purchasing inside Facebook apps. ASOS and now French Connection have built complete eCommerce platforms inside of Facebook and if it’s users are buying credits to use inside these Facebook apps this has the potential to make Facebook one of the biggest banks in the world. If that’s the case then I wouldn’t be surprised if we see them start using NFC technology which coupled with the Facebook Places/Deals platform would make them a strong contender in this race.
NFC based payments itself could pull up lame at the first hurdle as the entire success or failure of all of this rests on adoption of the technology by both the retailers and more importantly the consumers.
So, the rumours are true and Apple will announce the iPad 2 on March 2nd. How can I be sure, there’s an iPad and a big number 2 in the picture – it’s hardly the most cryptic of messages.
Unfortunately this invite wasn’t sent to me and is courtesy of Techcrunch so I won’t be there.
Amazon have announced that they are to offer free unlimited streaming movie and TV show to Prime customers in the US . The are offering about 5000 videos including many of the usual TV series, The Sopranos, The Office, Friends etc. The movies aren’t big new hits but do contain some fairly recent releases. Non of this is new to Amazon though, they have had the Unbox service for some time (now rebranded as Video on Demand) which has the big hits for rental, but this is a great way to introduce some new customers to that service. The device support is great, there are a lot of supported systems most of which are connected TVs or media centres but they also offer the option of Windows Media so you can stream via a Windows PC or an Xbox.
As I mentioned previously, following the complete acquisition of Lovefilm, Amazon looks to be on the start of a major content play which in my opinion signals them taking a serious step into the world of connected devices. The signs are all mounting up for an Amazon device to be released or even set of devices:
- Amazon bought touchscreen technology specialists TouchCo at the start of last year and have previously stated that they weren’t going to integrate these capabilities into the Kindle product line….so where are they planning to use them?
- Lab126 is the arm of Amazon that developed the Kindle and it’s thought that is where the next generation devices are being designed and built. They have been on a hiring frenzy since last year for engineers.
- Amazon’s App store is due to launch soon and the developer portal is now open for content submissions. They are planning to run a similar 70:30 split like Apple for developers wanting to sell their apps. Apps will be sold inside the regular Amazon store.
- The Amazon MP3 store and Kindle bookstore have been around for ages and will be staple additions to any hardware release.
The talk of an Amazon device has gone quiet of late but I wouldn’t be surprised if that rumour mill kicks up again following today’s announcement of an Apple press event on March 2nd – rumoured to be the iPad 2 launch.
So the internet has been awash with condemnation at Apple’s recent decision to impose it’s monopolistic tactics onto content publishers with their announcement to kiabosh any out of app purchasing. And somewhat rightly so; 30% is a lot of margin to be giving away, especially when the margins are so tight anyway that a sale can often result in a loss.
The fanbois may argue that Apple has the right to charge what they want as they have spent money building their platform over the years and I would say that they are right. Apple spent
millions billions in R&D to create the iPhone, iPod, iPad and the iOS and it’s their prerogative to make it work for them financially.
However, that’s certainly not to say that publishers should just stand by and let the “suits” from Infinite Loop have their own way. The music industry learnt this lesson a long time ago, after they let Apple define the rules and set the path for digital music downloads for almost a decade. It finally seems to have started to pick itself up and work its way out of that hole, although I do worry it’s is a bit like an absentminded old man who regularly forgets that the kettle gets hot when its boiled and happily picks it up with both hands whenever it whistles.
Apple won’t drop their prices voluntarily, despite mounting pressure and the more favourable Google rates, because they just don’t have to. Unfortunately it isn’t a fair market so they won’t be forced to change their pricing through natural market forces. My point here is, that if publishers don’t like the 30% surcharge that Apple is about to impose then they should pull their content from the platform. If no one provides their content through iOS devices then those devices become less appealing and as happens in a normal fair market economy Apple will be forced to drop their prices to get the publishers back on board.
Working for an iTunes competitor I am somewhat biased on this, but if the already slightly senile music industry doesn’t want Apple to right the rules for the subscription streaming market in the same way it did with a la carte downloads then they should stand their ground. They should look to pull their content from the iTunes platform or at least stop the impending Apple streaming service from launching. Services like Spotify, MOG, Rdio at al. won’t be able to afford to give £3 per month to Apple whilst giving the lions share to the labels. The aforementioned must also avoid backing down on what they take from music subscriptions just to make this work under the Apple dictatorship or they’ll end up bending over again while the Cupertino giant gets its way.