July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

I always get asked, “What was the big theme at MWC this year?”

It’s a hard question to answer, since there is so much going on. But there is one way to gauge it, by looking at who is exhibiting, how big the space is that they rented, and where the are booths in relation to each other.

This is not a perfect analysis, because some companies choose not to attend (Apple being the prime example). But there is a message even in absence. Two years ago, Nokia decided not to have a booth, but Samsung took its spot and then a year later overtook its market share.

At this point, you probably know more about the specific news coming out of Barcelona than I do. From the ground, there’s no way to keep track of all the press releases and keynotes. Every once and while someone mentions some tidbit. And I start every meeting by asking each company what they are announcing at the show. But that’s just a small sliver of the data flow.

Its hard to keep up because this show is crowded. Its a giant space, but at times the walkways are complete gridlock. First conclusion: This is a healthy industry.

The big handset vendor booths are crowded. Samsung’s sprawling expense feels like a high end department store, there’s so much on offer. Huawei, LG, Sony and ZTE all have some nice phones on display, and their smaller ‘booths’ are buzzing. The HTC booth features gymnasts, and what is often mentioned as the best phone introduced at the show. The Nokia booth features a massive conga line every hour. They have some phones too. The only exception to the merriment is the Motorola booth. For some reason they decided to decorate their showspace with high walls and climbing vines, so it’s hard not to think of Ancient Roman ruins. They have two models on display, the Droid RAZR HD and RAZRi, both of which are at six months old at least. And neither was running the latest version of Android, even though Motorola is now part of Google’s corporate family. The assumption is that Motorola is saving its best for Google I/O in May, which is odd because carriers buy phones in bulk at MWC, not at I/O.

Different halls focus on different types of companies. This year Hall 3 seems to have the largest booths. Qualcomm, Intel, Samsung, Nokia, and Alcatel all seem to have a half acre apiece there. The smaller networking and backhaul equipment vendors congregate in Hall 7. Hall 8 is where you find the app and monetization companies. This is not a perfect system, but it helps to keep track of what’s what.

It is hard to do a precise analysis because this venue is bigger than that of past shows, but you could probably learn something meaningful by comparing the amount of floor space reserved for each kind of company.

For instance, “App Planet” used to be lots of small stands from dozens of app and game vendors. Now it is home to large exhibitions from ad networks, analytics companies, and gaming studios like Gree.

Big telco vendors like Alcatel, Ericsson, Huawei, and Nokia Siemens all have huge spaces, but the antenna, base station component, power system and cabling companies now consume far less square footage than in the past.

One thing that has not changed is that the biggest exhibitors, notably Ericsson, still maintain gigantic facilities set apart from the main building. These companies sell to carriers and need a lot of space to host big operator entourages, display big pieces of hardware, and sign big deals. I heard one guesstimate that Ericsson spent $15 million on the exhibition this year, but signed $5 billion in contracts at the show. Seems like a good investment. In fact, Ericsson’s ‘booth’ really seems to be a village, or a show in its own right, complete with its own entertainment, restaurant-scale catering, and numerous sub-sections.

Looked at in this light, one of the more notable themes this year is the growing importance of the enterprise in mobile. Typically MWC does not attract a lot of non-carrier corporate buyers.

But that does not seem to have stopped Airwatch. This provider of Mobile Device Management (MDM) and enterprise mobility software had a space in Hall 3 that appears to be larger than even that of its neighbors, Qualcomm and Intel.

Set aside the fact that Airwatch could probably hold all of its employees in a quarter of that space, its presence is a pretty clear sign that software is now a major force at MWC.

Photo credit: VentureBeat/Jonathan Goldberg

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

[This is the latest installment of Jonathan Goldberg's MWC 2013 travelogue. We're hoping he won't be too exhausted to file another news-filled post tomorrow. --Ed.]

Tonight is the Night of Parties. Twitter, Nokia, Ericsson, Andreessen Horowitz, and a few others hosted after-hours events today. Last year, Google won the best event title by general acclaim. This year they did another great event, but word on the street is that Air Watch had the real blow-out. The array of choices is overwhelming.

All this makes for some late nights.

The show officially closes at 7 p.m. But many companies host cocktails starting at 5 or 6. Getting out of the Fira conference center can take an hour.

Then, people in Barcelona eat dinner late. Exceptions are made for all these strange foreigners, but most of the year if you go into a restaurant at 8 p.m. you’ll qualify for the Early Bird discount — and that’s if the restaurant is even open yet.

See where this is going?

8 p.m. is too early for dinner. So a lot of times people hold a business meeting over drinks. Then a business dinner at 10. Swing by the “Bubble over Barcelona” party after that. The first live music act at the Google party goes on at 10:30. And the club is open until 2:30.

At this point, you have to be careful. If you still have any charge left in your phone, you may get a text from a friend. And if they’re Nokia employees they probably have a table at a nice lounge with a cold bottle of vodka and good champagne.

By this point transit is hard to come by.

And it is probably around this time you remind yourself that next year you really, really should not schedule any 8 a.m. breakfast meetings.

Buenas Noches, Barcelona.

Sent from my Verizon Wireless BlackBerry

Photo credit: VentureBeat/Jonathan Goldberg

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Last week we suggested a few things to keep an eye out for at Mobile World Congress, and last night we had our first sighting.

Mozilla announced a greatly expanded line-up for its Firefox OS. Firefox OS, or FOS, is interesting because it is entirely ‘web-based,’ meaning the average HTML-literate web developer can write an app for the system. Many developers (and carriers) see this as somewhat of a holy grail, the ultimate end game of all the mobile operating system platform wars.

Creating great mobile experiences in a world of OS fragmentation is one of the major themes of VentureBeat’s invitation-only Mobile Summit, which is only six weeks away (April 1-2 in Sausalito, Calif.). Read more about the Mobile Summit themes.

Firefox will not bring an end to the platform wars, but it is a step in that direction. In our post last week, we told you to keep an eye out for new hardware partners and new carriers. And at its press event yesterday, Mozilla delivered both. They now have three hardware partners including TCL (aka Alcatel), LG Electronics, and ZTE. That’s a good start, with devices shipping ‘this summer.’

Mozilla also announced 17 carrier partners, and this is probably far more important. Telefonica was already on board, having been the first to announce Firefox OS support last year. Added to this were America Movil, Deutsche Telekom, Etisalat, Hutchison, KDDI, KT, MegaFon, Smart, SIngTel, Sprint, Vimplecom, and a few more.

You may not recognize some of the names on this list, and that’s because Firefox OS is targeting carriers in emerging markets. But Mozilla ha now lined up something like 17 of the top 30 carriers globally. This is a pretty serious list.

So far so good. There is still a lot we don’t know about Firefox OS, and it is still largely untested in the marketplace. But last night annoucement shows the company has made considerable progress.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

It’s been a long day of traveling, but a sunny day in Barcelona can lift a lot of spirits.

I’m heading to Mobile World Congress. This is one of my favorite weeks of the year. MWC is still an important conference (I’m thinking of you CES), and Barcelona is a great city.

I’ll be posting on industry events during the coming week, but I also hope to capture a little bit of the experience beyond the press releases, demos and meetings. Think of this as a guide for planning your trip next year.

The first thing to know about MWC is that the show is big. Something like 70,000 people attended last year, and it creates a sense that foreigners are overrunning the city. That started at the airport when I was departing the U.S. When they called boarding for “Executive Platinum” cardholders, 100 people rushed the podium. The hard-core road warriors were migrating.

This year MWC is at a new venue. Barcelona has great mass transit. But on Sunday the metro was empty except for the line heading out to the Fira, the conference venue. That platform was crowded with people who exuded “telecom.” And I saw two friends in line.

Moving the show to the new venue has caused all kinds of consternation among long-time attedess. Everyone remembers last year’s transit strike, and the Fira Europa is in a remote location. The old venue was in the middle of town, and very compact. No meeting was more than a 5 minute walk from the next meeting. The new site is much bigger, which is why they moved it. Still, any gathering of attendees (for instance in the waiting lounge of the airport for a five-hour delayed flight) will eventually have someone fretting about the new locale. A good cure for this is to say, “I remember when the show was in Cannes 10 years ago. They never had enough hotel rooms, and we had to rent a car and drive an hour each way.”

Personally, I think all this anxiety about the new venue stems from something deeper. Five years ago, this was a telecom conference. The big exhibitors made switches, antennas, signalling sytems, testing boxes, subscriber databases, and microwave radios.

Today, half the show is apps, mobile software, and tools for making apps and mobile software. This conference literally used to be filled with men with grey beards. The grey beards are now in a shrinking minority, and no one is quite sure what that means. It’s a new industry.

Regardless, registration is now much easier. Its a sunny day in Barcelona. And now it’s time for sangria and paella.

Sent from my Verizon Wireless BlackBerry

Photo credit: VentureBeat/Jonathan Goldberg

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

1) The Mobile Experience

In this theme, we’re looking at the intersection of design and technology. Smartphone hardware is starting to all look alike. So increasingly the only way to stand out is through building a better user experience. The platform wars are now a race to find new ways to people to interact with their devices. Look for advances in voice control, gesture recognition, contextual awareness and smart design.

Look for news from some of the smaller players. In particular, we are watching to see if Firefox Mobile gets traction at other carriers and handset makers. Same goes for Microsoft. Bonus points if you can spot any Apple employees walking the show floor.

This is not a big show for ad network news, but we will be looking for movement from the carriers. Who is partnering with whom? And which carriers are going to try and go it alone?

We anticipate a lot of new mobile payment schemes. Some more workable than others. We would also watch for new ways to use NFC chips in phones. Many think that we need to have these in devices for mobile payments to take off, but we will probably see NFC chips used for things other than payments first.

Expect all the big equipment vendors to showcase their small cell solutions. Alcatel, Cisco, Ericsson, Huawei, and ZTE will probably all have something to say. But also keep an eye out for smaller companies like Accedian and Spider Cloud who are driving much of the innovation in the space.

We expect all the chip companies will announce something about LTE product launches (some have already done so). But watch the details. When will these chips actually ship as opposed to ‘sample’?

MWC tends to be a carrier-heavy show, and we expect to see digital living rooms built around carrier plans. More interesting may be other sensor networks and “M2M” (machine to machine) systems.

With software companies taking a growing share of the show’s square footage, you should look to startups like Apperian, AirWatch, and Enterproid as well as stalwarts like Good Technology and Mobile Iron for interesting news here.

Photo via Christine und Hagen Graf/Flickr

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

As the mobile industry gears up for one of the year’s biggest trade shows, the Mobile World Congress in Barcelona, we are also getting ready for an event of our own: the VentureBeat Mobile Summit. We are lining up an array of top-notch speakers to address the highest priority topics in the industry today — and today, we’re proud to announce the first set of speakers.

The invite-only Summit will be held April 1 and 2 at the gorgeous Cavallo Point Resort in Sausalito, Calif., just across the Golden Gate Bridge from San Francisco. The Summit website outlines the topics which we think are top of mind, and an early partial list of participants. While the Summit is limited to just 180 invited attendees, you can request an invitation to the Summit here.

Our goal for the Summit is to offer insight from established companies to early stage start-ups tied together by their efforts to reshape how we interact with mobile devices and data.

Keep an eye on the Summit website as we announce additions to the line-up.

Alex Linde serves as vice president of mobile and digital apps at The Weather Company (TWC), a company that has made some pioneering moves in mobile, with 100 million downloads of its mobile apps. Joining TWC in June 2012, Alex is responsible for developing, managing and executing all aspects of TWC’s mobile strategy, which includes a product line that features one of the most popular applications for the iPhone, iPad and Android platforms.

With a strong background in mobile technologies and next-generation product development, Alex comes from Yahoo!, where he served most recently as director of mobile and tablet advertising, and previously as director of mobile platforms. Prior to Yahoo!, he created the first standard-compliant mobile widget engine, served as vice president of applications for mobile messaging specialist Colibria, and founded a mobile marketing startup bridging TV and multimedia messaging. Originally trained as an engineer, Alex was an early contributor to the very first mobile browsers.

Alex is a member of the Interactive Advertising Bureau, where is currently serves as co-chair of the IAB Mobile Committee.

Charles Huang is the CEO of Green Throttle Games, Inc., a Trinity Ventures- and DCM-funded startup based in Santa Clara, Calif. that’s focused on creating video games on TV in the new era of video games. Previously, Charles was co-founder of RedOctane and the co-creator of the Guitar Hero video game franchise. In 2005, the company published Guitar Hero, which went on to become the fastest video game to reach $1B in sales and a franchise that has exceeded $5B of total revenue to date. Guitar Hero was the best-selling video game in the world in 2007 and 2008.

Fabrizio Capobianco is the CEO of TOK.tv, the company which lets you talk to your friends while you watch TV. He also serves as President and Chairman of Funambol, which he founded in 2003 and which grew to be the leading mobile open-source company in the world. Fabrizio likes pretty much every sport and spends a great deal of his life watching it on TV. He is a successful entrepreneur, having founded several Italian high tech companies, and has extensive expertise in the mobile industry, with work experience that includes Reuters and Tibco.

Michael Bayle is Senior Vice President and General Manager of ESPN Mobile. A former Yahoo! and Microsoft executive, Bayle develops and manages all aspects of ESPN’s mobile strategy and execution, including content production, programming and publishing on every ESPN Mobile platform. He reports to John Kosner, Senior Vice President and General Manager of ESPN Digital and Print Media.

Most recently, Bayle was Vice President of Monetization and Marketing at Amobee, a leading mobile marketing developer, where he led global ad operations, North American business and market development and strategic partnerships. Prior to Amobee, Bayle was Senior Director of Global Mobile Monetization at Yahoo!, where he launched Yahoo’s mobile advertising business, while building a global team that created mobile campaigns for Fortune 500 partners in 29 markets. Bayle also held business development positions at Yahoo!, Microsoft and International Data Group (IDG).

[image credit: www.cavallopoint.com]

The news of the day in the tech world was once again focused on Apple. Venturebeat has coverage of the new iMacs, Mac minis and MacBooks. However, the main event was the iPad mini.

If you are reading this, then by now you are familiar with the features of the new tablet: its Lightning port, its ultra-thin design, and Jony Ive’s diamond-studded chamfers. However, I think there are some important industry implications for this device and the way it was priced. Last month, I pointed out how difficult the hardware market has become, and the mini looks set to drive that process along.

After years of talking down 7-inch tablets, Apple changed course. What does the company hope to gain? I think the answer is market segmentation. This is one of those “MBA 101″ topics: Divide the market into multiple pieces and sell products in each. Apple risks seeing some people who would have bought a larger device opting for the less expensive mini now, but it must believe that it will sell an even larger total number of devices.

I see two pieces to this strategy: one internal to Apple, the second as a major weight on the industry.

Draw out a number line from $0 to $800, with tick marks every $50, then write down the Apple product at each marker. The new mini fits into several gaps. The base 16 GB mini sits well below the now-discontinued iPad 2, and in between the iPod Touch 32 GB and 64 GB. Put simply, Apple had room for more products here. It risks losing some low-end iPad units and probably some high-end iPod Touch sales, but it has created a whole new category for its offerings.

Apple deserves credit for its originality: After all, it basically invented the smartphone market (yes, Windows Mobile, I remember you). But this does not mean it does not learn from its competitors. It has become clear over the past nine months that there is consumer demand for 5- and 7-inch devices. Samsung, for example, seems to be doing very good business with its seemingly mammoth 5-inch Galaxy Note, a phone that edges into tablet territory. Like many, I was skeptical at first about this product, but it turns out Samsung was onto something. The Note is too big for most people’s pockets, but Samsung has done its homework. It has successfully marketed these devices to women who carry the Note in their purse. I had this point driven home to me last month, when I saw the entire crew from Asiana Airlines Flight 213 in a hotel lobby. All 25 of the flight attendants were carrying 5-inch or larger devices. Amazon and Google have also done well with the Kindle Fire HD and Nexus 7, respectively — although they are ‘doing well’ by a different set of metrics than the iPad.

So Apple saw an opportunity and made its play. It is too early to tell how many minis it will sell, but I think Apple should have a very good Christmas this year.

The same is not true for other hardware makers. For years now, Apple has been effectively capping the prices its competitors can charge. So far, no tablet priced even close to the iPad has done well. The best-selling non-Apple tablets today are all priced at or below $200. Apple products command a premium, that has been true for phones, for tablets, and for laptops for many years. The iPad mini, priced at $329, pushes the prices even further down for everyone else.

When Google launched the Nexus 7, Android management bragged about how little money they were making on the device. That could not have been good news for Google’s hardware partners. Android’s goal is to spread its OS and the Google API as widely as possible. Its hardware partners’ profits seem to be a much lower priority. Amazon, for its part, has charged rock-bottom prices for its tablets, but that is part of its strategy of profiting from selling content, not the hardware itself.

I made some comparisons about the profitability of the various tablets out there. I used iSuppli’s teardowns for estimates of the cost of the iPhone, iPad, Kindle Fire HD and Nexus 7. This is just iSuppli’s estimate, and not everyone agrees, but I think they have a pretty good track record, and are at least close enough. I also made a guess as to the iPad mini’s costs.

By this analysis, it is pretty clear that only Apple is profiting from tablet hardware sales. Amazon may even be losing money.

One interesting fact that comes out of this data is how much we are all paying for memory. This is the one favor Apple has done the industry. Apple charges $100 for each bump in memory. A 16GB iPad Mini is $329, a 32 GB version is $429. The other vendors have mostly followed this pattern. My estimate is that 16 GB of NAND Flash costs about $10, and iSuppli quotes a similar amount. Apple buys so much, it may actually pay even less. That’s a 90 percent gross margin for Apple, comparable to the kinds of margins you ordinarily see for software, i.e. products which have no cost of goods sold. By comparison, most hardware businesses are happy to capture 30 percent gross margins. Apple’s corporate average gross margin is in the 40s.

By my admittedly rough math, almost all the profit Amazon sees on the Kindle or Google/Asus see on the Nexus 7 comes from their mark-up on memory. It will be interesting to see if Apple someday changes its pricing model to make even that slice difficult for its competitors.

Yet even with those healthy memory margins, the other tablet makers do not make much money.

I think this will get even worse. You can now buy a $45 Android tablet in China and an $80 version in the US. This means that even those $200 levels we see today will fade soon. By contrast, Apple has kept prices for its high-end iPads constant.

All of this matters a lot. Apple and Samsung are the only smartphone makers generating a profit today. Market share and revenue look nice in PowerPoint and press releases, but profits are what sustain investment in the future.  And there are far fewer of these to go around.

Jay Goldberg is a financial analyst with an investment bank. He has been working with tech companies for ten years. Prior to that he lived and worked in China for almost 10 years. His previous post for VentureBeat was about how hardware is dead.

Top photo: VentureBeat