Microsoft Capture Nokia On Transfer Deadline Day

Yesterday was the day of the big spenders. Gareth Bale became the world’s most expensive footballer and joined Real Madrid for £85 million,  Vodaphone announced the selling off of its huge stake in Verizon for a mere £84bn and Microsoft has agreed a deal to buy Nokia's mobile-phone business for 5.4bn euro ($7.2bn; £4.6bn).

Tottenham have already spent the cash and replaced Bale with half a team of international talent. Vodaphone are planning on giving their shareholders a huge dividend of some £54bn to sweeten the windfall and true to their nature will avoid paying any tax on the deal. But what of Microsoft and is the deal going to reverse their fortunes under its new leadership?

Only some ten years ago Nokia ruled the mobile world and was the device of choice for the majority. However, Nokia made some fatal errors of judgement around its operating system and also failed miserably to compete with its new competitors from the Far East and Apple. Today it finds itself with saes falling at the rate of 24% in the last year. Microsoft, like a giant tanker spent 10 years trying to change course in changing seas and took too long in doing so.

So will a marriage of two of yesterday’s men make any difference to their fortune moving forward?

Microsoft will now license Nokia’s patents and mapping services and take on some 32,000 Nokia employees but will it win the consumers over? Microsoft will also licence the Nokia brand for the next ten years which may sound a good move but may also not appeal to the consumer.

Mobile is the area of tremendous potential but it has been one of weakness for Microsoft. There attempts to fix their OS offer have had the hype but delivered little. Microsoft’s Surface tablet should have been a winner but turned out a loser and its weakness was down once again to the OS and its offer.

Nokia greatest weakness has been their inability to adapt and sort out its OS. So will Windows OS mobile be the new must have or will it merely burn a deeper hole in Microsoft’s purse?

The new Lumia phones, which run a Microsoft operating system, may offer a small rest bite and the potential for greater integration, but will the marriage also drive other mobile manufacturers away from Windows offers and yet closer to Android?

Real Madrid have already covered their expenditure with the sales of Kaka and Ozil and in shirt sales. Vodaphone believe they can survive as a smaller global player and have a wedge of cash to soften the move and we now have three clear mobile offers; Apple, Android and Windows/Lumia/Nokia/whatever brand they finally choose? 

Spotify For Trade eBooks?

Many talk about creating a ‘Spotify for eBooks’, but all too often they fail to grasp the differences between the media, marketplace and cultures and once again see all as the same. There is no reason to doubt that a subscription service will work for some book sectors, but there is plenty to question whether it could prevail across all sectors.

Academic, professional and educational sectors have a captive audience and market and often also have ‘must have’ content. This makes subscription services potentially viable in these sectors. There are questions about who can aggregate the offer and whether the subscriber is the user or a secondary intermediary service, but the content is often mandatory either way. The challenge is establishing that one stop shop and recognising that multiple ‘must have’ offers don’t always work in the eyes of the buyer.

Music, newsprint, magazines, film, TV along with services such as broadband and mobile service provision are ideal for subscription. The nature of these services also can lead to collaborative offers which can exploit additional memberships and add additional value. Importantly with regards to the content it is less about individual files and more about access to databases and collections.

Trade ebooks however have several challenges. The market and consumer reading is still very mixed between ebooks and pbooks, The readers are likely to only read a mere handful of books a year and often in an inconsistent and unpredictable time manner. Heavy readers tend to be eclectic in their habit and therefore do not want to be restricted to one genre and whereas ‘Twigging’ works best in a ‘must have’ market it is often far less important in a trade market where depth and range can be easily provided and search and discovery become more important.

The emergence of MOOCs such as edX and Coursera have started to radically change the content and business model in academic and education sectors. Jimmy Wales, founder of Wikipedia reflects on his own experience, ‘I was taking an advanced calculus class and my instructor was reputed to be a fabulous researcher, but he barely spoke English. He was a very boring and bad teacher and I was absolutely lost and in despair.’

‘So I went to the campus tutoring centre and they had Betamax tapes of a professor who had won teaching awards. Basically I sat with those tapes and took classes there. But I still had to go to the other one and sat there and wanted to kill myself.’

We now have TED Ed, MOOCs, Khan etc all built around offering the best teachers, content to all irrespective of location. The emergence of the virtual and universal course is forcing institutions to rethink their models and here access to quality can be best achieved by a subscription model.

Even the software industry is ditching its perpetual licence model and starting to move to a subscription based one. This drive is being led by the likes of Microsoft with their Office 365 which is now offering subscribers full office mobile on the smartphone.

Streaming services and faster mobile bandwidth are changing media markets such as music, film, TV sports. We are now seeing a clear shift from download and buy, to own to subscribe to access on demand as much as you want. Large subscription based services such as Sky, Vodaphone, EE, BT are all now also having to offer complimentary and added value services to maintain their member bases and avoid churn. Vodaphone are offering new 4G contracts with either Sky mobile sports or Spotify bundled in the UK. In other words you can now subscribe to one umbrella service and get the others at discount or even free. It’s about community and lock-in based on a single subscription.  

So what about books?

Today we have a number of attempted subscription based services; Nuvem de Livros in Brazil and Argentina, 24Symbols in Spain, Oyster in US. We have the potential return of the subscribing library and offers such as Amazon’s lending library. However these have to compete with a market which is still in a heavy discount war and undergoing fundamental relationship and value chain changes. The subscription offers that have emerged are not doing anything new and it could be argued are appealing to students and so tapping into the ‘must have’ segment not the trade.

We also have the potential of our Read Petite venture and subscription model and we would argue that this is different content to trade ebooks and a different new marketplace.

Subscription models are appropriate where there is a high reliance on the access and ’must have’ content, the captive audience and the alignment with mobile and online streamed services. We would suggest trade ebooks are not there today and are unlikely to make that transition anytime soon. 

Vodaphone Joins the Tax Avoidance Rouges Gallery

‘Our employees pay tax so why should we pay corporation tax?’ was one argument raised by one global giant when accused of tax avoidance. Now we have another from Vodaphone who have paid NO UK corporation tax for second year running, despite earning £5 billion in UK sales.

The new argument is that they have made enough contribution via other investments in UK infrastructure. Over a decade ago it paid £6 billion to the Treasury for the 3G spectrum and has recently paid over £800 million for new UK 4G spectrum. Ironically they were able to slash their corporation tax liability to zero by claiming allowances for investment in infrastructure, such as it made in the mobile spectrum and in interest payments. They claim they paid £300m of interest during the year on loans to fund its £6bn purchase of 3G spectrum in 2000, which they offset against last year's profits. We may be naïve, but to the simple person that would suggest that the interest payments against the investment were then effectively funded by the taxpayer. If correct that is somewhat like Amazon being paid more in grants than it pays in tax.

Vodaphone still made £294 million operating profit.

Then we have the usual Luxembourg company, Vodafone Procurement Co Sarl, which reported profits of 215 million euros and according to accounts paid no income tax, for the period. The company which lends money to other group units, reported profits of $2.43 billion for the year to March 2012 and reported a tax bill of less than 1%.

Vodaphone are not new to tax controversy and are reported to have stuck a significant ‘deal’ with HM Revenue and Customs in the past. It is somewhat ironic again that Dave Hartnett, the tax officer who struck the deal has now joined Deloitte, who advise Vodaphone on such issues. The names ‘gamekeeper’ and ‘poacher’ spring to mind.

Vodaphone has published a defence of its tax activities and insists it is committed to "integrity in all tax matters" and although it paid no corporation tax in the UK it did pay over £2.5 billion in similar taxes in other countries and claims it paid £882m in other UK taxes and contributions during the year.

We should erect a rogues gallery of corporations who avoid their taxes on such a grand scale. Every month a new ‘rouge’ is unveiled, every month the size of the kitty not being collected and being effectively avoided, grows. Everyone points the finger at each other and appears to cry, ‘not me guv!’ The reality is that when we all have to tighten our belts and we have welfare cuts and caps, it may be legal, but it is becoming increasingly immoral for these corporations not to pay their fair share and that applies to all taxes and not those they select to offset others. It is also immoral for a government and its agents not to act as diligently as it does to others to close down what is fast becoming a moral scandal. 

Apple Open Up UK iPhone Market

Following the news that UK network operator Orange was to sell both the iPhone 3G and iPhone 3GS and effectively end the exclusive UK arrangement between O2 and Apple, which has been in place since 2007, Vodafone have now announced that users can register an interest online, with the handsets becoming available to customers from early 2010.

So the exclusive madness looks to be ending and leaves only the likes of 3Mobile outside the party. However, we believe that could soon also follow suite and some customers have already been offered deals.

More Mobile Releases

The mobile world is buzzing with new sets and launches:

The Pulse Android ‘pay as you go’ handset by Huawei will hit the market in October and have a 3.5in touch-screen, a 3.2-megapixel camera, GPS and comes pre-installed with Google applications like Google Maps and Gmail. Users will also be able to download applications from the Android Marketplace. The price is £179.99 and for an extra £5 per month, or a £1 a day, you can have unlimited internet access with T-Mobile. The device will also be available to contract customers.

Interestingly, Nicola Shenton, T-Mobile's head of handset marketing states, “With Android, we don't need the iPhone.” A somewhat brave statement but in today’s iPhone exclusive world he has little choice.

LG BL40, or new LG Chocolate, will be available on Orange and the Carphone Warehouse from this month. The original Chocolate sold more than 21 million units worldwide.



The new Chocolate features; a 4-inch, 21:9, 345 x 800 WVGA capacitive touchscreen capable of displaying 16 million colours and even has a split screen dual functionality, which means you can have two applications running literally side by side. There is a 5-megapixel camera with LED flash and Scheider-Kruznach glassware and a micro USB port plus a 3.5mm jack.

Then we have the latest revision of Microsoft's mobile operating system,Windows Mobile 6.5. which boasts a new user interface, the revamped OS, the Windows Marketplace for Mobile app store and offers users a hosted backup service called My Phone. The LG GM570, will go on sale on 6 October, the official release date for Windows Mobile 6.5. In the UK and will be exclusive to Vodafone.
LG have claimed its intention to launch 13 new Windows Mobile handsets worldwide by the end of 2010, which in any world is aggressive.

So in one month we must choose our new handset, or wait. This may mean changing carrier and may even mean giving up cherished features like free skype. We are undecided but eagerly waiting to be tempted.Which would you choose?

No More A Roaming We Will Go?

Vodafone has become the first mobile phone operator to abolish roaming charges, meaning its customers will pay the same price abroad as they do at home. From June 1, Vodafone’s 18 million UK passport customers will be able to call and text phones in Britain from 35 European countries for the same price that they would be charged in Britain. This is initially on offer until the end of August. It is this move could be followed by other mobile operators as caps on roaming fees are due to come into force on July 1.

Viviane Reding, the EU Telecoms Commissioner has targeted the charges a “roaming rip-off”, with a two-year plan to cut charges by an average of 60%.The price of a roaming for a British customer in Europe could be cut from an average 25p to a maximum of 10p and the cost of downloading a megabyte of information will cost no more than 92p if consumers pay standard rates. The current cap of 41p per minute for a call made to Britain from another EU country will drop to 31p by July 2011.

Vodafone has also announced plans to launch a mobile application store for their 290 million worldwide customers, following similar announcements from others such as RIM, Nokia, and Microsoft. Software developers will be able to use to store as a single point of access to Vodafone’s global customer base. Developers will be able to use Vodafone’s billing system to charge for apps with a share of their profit going directly to Vodafone.

Android Moves

The G1 was the first Google Android phone to launch in the UK through T-Mobile and sales are reported to have exceeded their expectations with 100,000 UK sales in the first 6 months and in the US the G1 device has sold 1 million units. Android was designed by Google and a host of partners to make it easier to surf the web and carry out complex computing tasks on mobile devices.



During May, T-Mobile users will be able to update their G1 handsets with the latest Android 1.5 ‘Cupcake’ update. The ‘Cupcake’ software update offers G1 owners enables users to use the 3.2magapixel camera to film videos and upload them straight to YouTube. Photos can similarly be uploaded straight to a user's personal Picasa web album. There are new widgets for the calendar and the music player, new zoom functions on the G1’s camera, a speedier acquisition of GPS location and improvements to the email client and web browser. The update to the G1's Android platform includes an on-screen touch keyboard, giving users a choice of input methods.


Now Vodaphone have launch the new HTC Magic Adroid phone in the UK with no keyboard just a touchscreen. It comes with Gmail and Google Search support and a range of other bundled applications, widgets and access to the Android Market for further applications.




T-Mobile has also announced it will launch another Android phone later this year and Samsung has unveiled its first Android phone, the I7500, which is due to launch in June. So unlike Apple, Google have clearly spread their reach to use multiple manufacturers and carrier networks, whilst retaining the operating system and application marketplace.

At the end of the day its going to be down to the fickle consumer to choose or the killer application to seduce.

More Mobile News

G2 - Sorry 'Magic'

Vodafone have announced the second smartphone based on the Google Android platform, manufactured by HTC, the company behind the G1. Instead of the obvious G2 name they have chosen to call it Magic. Magic will be available from Spring in France, Germany, Spain and the UK and will be exclusive to Vodaphone.
The Magic has a 3.2-inch touchscreen, 3.2MP camera, GPS and a trackball for navigation; feature all the usual Google family applications; YouTube, Google Maps and Google Talk; and come in black or white.

So when did your kids get hooked on mobiles?

The Daily Telegrapgh reports today on a report of a survey of 546 children by the UK charity Personal Finance Education Group (pfeg). In the report they claim that over 35% of 8 Year olds own a mobile and 75% of 7 to 15 year olds owned "at least" one mobile. Alarmingly the report also claims that by the age of 10, children were shopping online using their parents' debit or credit cards.
A third of children (32 per cent) have used the internet to buy computer games.

At last, no more forgetting to pack the mobile charger

The mobile operator’s organisation, GSM Association (GSMA) have announced a new power charging standard for mobile phones which, with the exception of the Apple iPhone, enable all new mobiles to be charged from the same universal charger from January 2012. The chargers will be up to three times more energy efficient, require 50% less standby power and be based on the micro USB connection.

Laptops For Free With Wi Fi Broadband

Ok you want to be always online. You may buy into a mobile contract for a new 3G Smartphone, or subscribe a Wi-Fi broadband dongle for you laptop, or why not subscribe to a service that throws in a new laptop / notebook!

Today you can go into your local Mobile shop and walk out with brand new notebook, WiFi broadband connection. Orange, 3 Mobile and Vodaphone are all offering packages that could significantly change our habits and usage. Why buy a ebook reader when you could have a notebook and connection? Why buy an expensive laptop if you comes with your deal? There will be issues and it will not appeal to all but at around £30 a month (the same as or even less that many electronic and entertainment subscriptions it offers a lot.

Think about the student who struggles to buy the laptop or the school pupil whose parents have today to buy one, or the pensioners, low paid worker etc. who can’t afford the initial outlay but could afford the subscription. What would it mean to a small company?

Think about what it means to have any of the deals below plus Wi-Fi broadband from www.three.co.uk or more still at www.orange.co.uk

HP 550 Notebook
• 15.4" WXGA display
• Intel® Celeron® M Processor
• 1GB RAM
• 120GB hard drive
• WiFi
• Windows Vista® Home Basic
• Weight – 2.7kg
• Send 150 texts a month direct from laptop
• Worth £329 inc VAT*
• * HP suggested retail price as of 30th June 2008. Actual price may vary.

HP Mini Note PC 2133
• 8.9" WXGA display
• Via C7® -M ULV Processor
• 1GB RAM
• 120GB hard drive
• WiFi
• Windows Vista® Home Basic
• Starting weight of 1.27kg
• Send 200 texts a month direct from laptop
• Worth £399 inc VAT*
• * HP suggested retail price as of 30th June 2008. Actual price may vary.

HP 6910 Pavillion
• 15.4" WXGA display with NVIDA®
• Ge-Force™ Graphics card
• Intel® Core™ 2 Duo Processor
• 3GB RAM
• 250GB hard drive
• Super Multi DVD Reader/Writer (DVD+RW)
• WiFi
• Integrated webcam
• HP QuickPlay - launch films and music at the touch of a button
• Windows Vista® Home Premium
• Weight – 3.1kg
• Send 250 texts a month direct from laptop
• Worth £599 inc VAT*
• * HP suggested retail price as of 30th June 2008. Actual price may vary.

Or go to www.PCWorld.co.uk www.carphonewarehouse.co.uk to see the wide range of deal available from these retailers.

The business model is changing and although some aspects still fall short the concept is in play and presents an interesting proposition to consumers and also to content providers who now start to see a switched on consumer who doesn’t need to download stuff to access it.

We know where you all are!

Imagine a birds eye view of traffic across the Uk and not only can you see the congestion areas but you know the speed of all the vehicles. Now add information about the programmed journeys and directional flow of traffic and you can send everyone down the same rat runs and on. Its quite frightening and makes one wonder about privacy and the big brother world we are now entering!

Seriously, being able to see the flow and speed of traffic and plans of drivers is powerful information. TomTom has announced it is to work with Vodafone UK on developing such a new traffic information system. It will collect information from Vodafone on the location of mobile phones to provide real-time information on the speed and direction of cars travelling on all major roads across the UK.

The service is expected to launch in the first half of 2008, when further details will be made available. The system will also be available for road authorities and businesses, who may use it for dynamic traffic control management and improved fleet management.