AT&T denies change while sticking it to loyal iPhone users: Should you switch to Verizon or Sprint?

AT&T Customer Service Memo - Figure 1.

AT&T Customer Service Memo -Figure 1.
(Click through for a great spoof from the old Unix days.)

$250 is AT&T’s new penalty to loyal customers for upgrading with each new release of the iPhone. AT&T’s change in policy to extract this extra fee seems especially unreasonable while they still do less well than their competitors with more dropped calls, slow downloads and spotty coverage in any part of San Francisco with lots of geeks, hipsters or hills.
So if you have an iPhone 4s, what should you do? (Here’s the best explanation I can find for eligibility to upgrade.)
Since the first iPhone upgrade, every year when Apple releases a new phone, AT&T has given it’s best upgrade pricing to those who bought the latest model when it was released.  I know, because I’ve bought that phone for that price every year (except the year Apple had systems problems and had to make an exception and give me one free in order to sell it to me at all). One year they threatened to charge more (for 3GS owners upgrading to the 4), but folks raised so much stink that they went back to the old policy.
Perhaps because it is an election year, AT&T really sounds like a politician here. It simply denies inconvenient truths, and sticks to its guns even in the face of facts.

4 reasons I'm excited about the SF AppShow

I’m extra excited about our next SF AppShow this Tuesday May 25. In addition to looking forward to seeing you all and taking the stage again, here are the top four things I’m excited about:

  1. Our amazing guest host is my friend Gina Smith. Before I’d met her in person, I used to watch her on Good Morning America and World News Tonight. She was ABC News first Tech Correspondent, and covered the web 1.0 boom for them. She’s also the author (with Steve Wozniak) of NYT bestseller iWOZ: From Geek to Cult Icon: How I Invented the Personal Computer, Co-founded Apple and Had Fun Along the Way.
  2. Another friend is presenting: Mike Smithwick. He started writing Distant Suns for the Amiga in 1985, and I first met him during my days as an Amiga engineer. More than 25 years later and Distant Suns is still going strong, and he has new announcements to make Tuesday night. It was a great coincidence that he applied to the show without even realizing I was involved.
  3. The wraps are finally coming off the secret new project from best-selling author Neal Stephenson (Snow Crash, Quicksilver, Cryptonomicon, Anathem) and my friend Jeremy Bornstein at Subutai Corporation.
  4. It’s cool that we have custom iPad bags from Rickshaw Bag Works, and that we have Intel as a sponsor, as well as SugarSync and Appency PR, and a lineup of other great media, presenters and guests.

Please grab a ticket and join us for cocktails and appetizers starting at 5:30pm!

Best iPhone Twitter app comes down to Tweetie vs. Twittelator Pro

Tweetie screenshot main page

Tweetie screenshot main page

Gizmodo’s new comprehensive review of iPhone apps evaluated many more than I did (“ten zillion”), but matches my own experience. We both narrow it down to Tweetie vs. Twittelator Pro.

I’ve been switching back and forth between the two for the last month or two. Either is a great app with the edge for smoothness going to Tweetie (which also seems to display more tweets on the page). The edge for pure power goes to Twittelator Pro.

Twittelator Pro screenshot main page

Twittelator has a great feature I wish was included in other iPhone apps:  a button to scroll down a whole page at a time. This is especially useful in catching up with a long list of tweets. This is the only app I’ve seen with this functionality, so it’s a nice innovation.

The other power feature I make use of in Twittelator is the ability to define my own saved searches.

I can’t think of anything in Tweetie that Twittelator doesn’t do (well, there are fart noises and the flashlight if you enable the Popularity Enhancer).

Despite all that, my current swing is in favor of Tweetie, though I still switch it up. Which do you prefer?

Blackberry Storm vs. iPhone: Similar Experience or Disaster?

The reviews bear out what I said in May: Overall user experience, not touchscreen or features make the iPhone a winner vs. Blackberry Storm.

Any suggestion that adding a touchscreen would make Blackberry competitive with iPhone was always silly. Blackberry already creates a great experience for some users. To work equally well for another group of users, RIM needs to do more than add features or change input device. Continue reading

10 million iPhones, 200 million AppStore downloads

Today Apple announced both that they’ve sold more than 10 million iPhones and that the AppStore is exceeding 200 million downloads — an average of 20 downloads per phone so far.

I love it when I get a prediction right… well, part of it anyway. I thought it was ridiculously conservative that iPhone users would download only two apps each on average (one paid, one free). We’ll have to wait to see whether actual 2009 AppStore revenues exceed $1 billion as the iPhone continues selling and more apps worth paying for are lauched, but it was already up to $1 million a day in August.

They Murdered the Experience: iPhone purchase and activation

One of the first things that gave me joy about iPhone 1.0 was the purchase, activation and setup experience.

If you’ve ever bought a cell phone, you’ve probably experienced pain going through all the many confusing options (in store or over the phone) for plans, dealing with upselling for warranties and accessories, answering all the questions and waiting for computer problems, credit checks, etc. Then onto quirks activating and setting up. Nothing about the process seems considerate of the customer, their time and frustration. Before iPhone 1.0, this was true across all the carriers and handsets out there.

iPhone 1.0 and AT&T changed all that, simplifying plans and choices, allowing you to purchase a phone with a credit card in seconds (like buying groceries), and providing for activation at your home computer with just a few simple questions.

I’d often evangelized this part of the experience as setting iPhone apart, as a brilliant move by Apple, and as something that would hopefully have an impact on the industry as a whole.

Unfortunately, it seems that in solving a business problem, AT&T and Apple have dropped that focus on the customer and their experience and taken us back to the days before iPhone 1.0. I can only hope that they will consider this a mistake, learn from it, and find a way to put the experience first again while addressing the business problems. They still have it in them to change the industry.

I’d love to hear from Apple or AT&T how they went about deciding this way to do things, retreating so far from the brave stand they took with 1.0.

Experience: the essential competitive advantage

I camped on the street last night in front of 1 Stockton, the San Francisco Apple Store.  I’ll be here until 8am tomorrow.

Reporters ask “why?”
It’s a great question.  And it occurs to me that every business should be answering this question, too.
What would make anyone want to camp in line for a new product release?
What would make someone do that in my industry or for one of my products?
What do people in line say?
What do those who pass by say?
How do they feel after the line is done and they’re buying and using the product and service?
(I’ve had some great conversations with the homeless about what a one-man tent costs, or where they sleep and how they live.  What’s it like to talk to people you don’t think of as part of your market, or you wouldn’t normally have a conversation with?)
Of course, the answers must extend beyond marketing, to every aspect of the product, how it is sold, delivered and serviced.
I may be preaching to the choir, but only dinosaurs will keep competing primarily on price, features, or ad dollars. Others have gone on at length about some of the reasons (Seth Godin, for example).
Watching an Apple Store for 24 hours, and talking to people about it is a great example of how all the little details are accounted for, from the security guard who says goodnight to the friendly staff who all greet you with a smile, to the window cleaner who spends 90 minutes here each morning at 6am and the free internet I’m using to type this on a store computer while charging my old iPhone.
I’m not a fan of Apple in particular.  I’m a fan of anyone who understands the power of good design (understood in the broad sense) and delivers a fantastic end-to-end experience.
If you aren’t asking these questions for your business, it’s just a matter of time until someone comes along and eats your lunch by delivering a dramatically improved experience. And they’ll do it without using any special magic, just by paying attention and asking different questions.
If your organization operates in silos with no way to account for the experience a user has throughout the process, expect the same.  Saying “we’re customer focused” doesn’t make it so.  What do your customers say?
The answers you come up with today may be less important than continuing to ask the questions, to be curious, and to be out there talking to people and watching them.
So come join me in line, start asking the questions, looking, and listening, and lets talk about some of the answers.
(I’ve written several posts about the iPhone and User Experience that you might find interesting, perha

Apps are the new Singles: Betting on AppStore Revenue

Steve Jobs still hasn’t announced the App Store for Mac.

Referring to the iPhone App Store, analyst Gene Munster at Piper Jaffray estimates that Apple’s App Store could emerge as $1.2B business by 2009. Is that too low? Focusing on revenue per user, his most aggressive estimate looks conservative to me.

Look out, because the App is the new Single.

The apps that have already been shown (and those yet to be developed) are cool. People will want to try many of them before settling on the ones they continue to use. Good thing it will be easy to discover, purchase and install them. $15 in average app revenue per phone seems paltry, even if 70% of iPhone apps are free.

I think analysts missed it with their first estimates for iTunes revenues, too. They had to keeping upping them for years.

It wasn’t obvious from what was happening at the time in the digital music marketplace how ready the public was to buy from a store (and for a device) that got all the pieces right. You needed to talk to consumers in depth to look past business as usual and understand their unmet needs.

iTunes and iPod are literally the text book example of how user experience as strategy changed an industry in ways the number crunching business analysts couldn’t predict.

In the same way, there are thousands of fantastic uses for mobile technology which no one has been able to discover, develop and sell because the platform for it hasn’t been there. From the developer side, there are too many crippling limitations to development and barriers to sales. For consumers, the devices aren’t easy to use to start with, but finding, paying for and installing is a nightmare on more levels than Dante could describe.

iPhone and its AppStore are game changing because they directly address the total user experience for new mobile applications. This is a bigger change for mobile applications than iTunes was for music.

I remember the days when you bought (or copied) stacks of applications for your computer. There are many reasons we don’t still do that. So we don’t think of wanting to buy lots of small applications. Just as we didn’t used to think of buying lots of music as single songs. App Store might make you think differently. You’ll buy lots of these new singles.

I’m be willing to bet on a significantly higher figure for App Store per user average revenue in 2009. Any takers?

San Jose Mercury News ran a great article by John Bourdreau today about the iPhone economy as Application developers swarm to iPhone with many good quotes and stats.

In response to Forbes IPhone Apps Appeal, which raises many issues about usability, security and quality:

Not every release has to be a hit. User ratings and reviews like in iTunes will make it easier to discover the best apps that enhance the iPhone experience, and avoid those that need improvement. The ease with which they can be found, purchased and installed will make it painless to try several and discard any that you don’t automatically hum along with.

The best will become hits, driven by ratings, blog posts, status messages and more — no payola required (though it still has a leveraging effect to make hits even bigger).

This is a dramatic change. For the first time mobile has a viable ecosystem for new applications.

I predict that more revolution will come to the mobile industry (and to how mobile technology impacts people’s lives) through the App Store than came from the introduction of the iPhone itself.

In response to Apps First to Market will win?:
I think apps will work more like music singles. First to market in a given genre will not be an overwhelming advantage. In fact, releases will be inspired by each other and build on each other. There will be no stigma to having a new favorite next week. Ratings from other listeners, as well as what your friends are listening to, reviewers are writing about, etc., will help you decide what to tune in to.

iPhone Apps Store Growing Twice as Fast as iTunes Music

Location-Based Services Coming Soon (says a long-time naysayer)

For years, I’ve heard that location-based services are just around the corner. “Later this year.”

For years, I’ve told clients, “Not for years.”

Especially when they want to do marketing by taking advantage of LBS.

Emphasis needs to be on “services” first, providing something the user wants. That has to be in place before there is an opportunity to market through LBS, and even then, privacy and other considerations will dictate the the marketing message delivers real value. The best marketing isn’t a message you want consumers to hear, it’s value you provide in some service, entertainment or education that they want.

Even if it becomes technically possible, I’m never going to want a coupon for a latte to pop up as an ad on my mobile just because I’ve walked by a Starbucks. That’s the kind of thinking that drove carriers to charge per-lookup fees for location, hoping to get revenue streams from both the end-user and from brands.

I might be interested in location giving additional contextual relevance to my search results. There are lots of really cool things I might do with location that no one has thought of yet.

Anyway, Mashable is right to suggest that iPhone 3g is game-changing in LBS.

The new pricing model for the iPhone 3g with GPS along with the forthcoming App Store make for a perfect storm coming. Developers have a great platform and now are freed from old constraints to think first and foremost of what services users will want.

No longer will they be constrained by rather than thinking of how be ad-supported (or how to cut deals with handset manufacturers or carriers).

For the first time in the history of mobile, a significant base of users will have everything needed and developers can take advantage of this to offer new applications and to incorporate location seamlessly. This will open many new possibilities, not all of which we can predict now.

Most of these, we won’t think of as location apps. They’ll just be apps that also take advantage of location.

In the same way, I hope we’ll see innovative LBS marketing that consumers won’t think of as marketing or advertising. Those will be the stand out successes.

Google CEO on mobile search (Why it's different and what to do about it.)

This morning Reuters ran an interview with Google CEO Eric Schmidt reinforcing some of what I know about mobile search and making “do no evil” more concrete.

First, the quote on mobile search and advertising, then some additional info and conclusions on working with mobile search.

Speaking of the emerging market for Web-based advertising on mobile phones, Schmidt said the vast majority of Google searches on mobile phones were done on Apple Inc’s year-old iPhones, which prominently feature a Web browser.

“Mobile looks like it will ultimately be the highest of ad rates,” because ads can be targeted by user location, he said.

Since the iPhone has a small fraction of the market, this tells us that few searches are being done on most other phones. Today, buying Google mobile search ads amounts to targeting iPhone users.

As well, it reminds us that mobile searches are different from web searches in another way — they tend to be more locally focused (and that enhanced targeting can be worth paying extra for).

I recently spoke with a potential client who, even with a small test budget, had trouble finding enough mobile AdWords inventory to buy. It wasn’t the first time I’d heard this complaint, so thanks Eric, for reassuring us about why.

Earlier this week Mobile Marketer ran a good piece on why Search doesn’t play a large role in mobile – yet: Crisp CEO that also reflects his comments:

A surprising finding in the first quarter index is that only 7.51 percent of traffic to the publisher sites in Crisp’s network is driven by search engines.

“Search does not play a large role in mobile yet, and it is not increasing much at all.”

Google accounts for 6.4 percent of the total traffic to the Crisp publisher sites, or an 85.2 percent share of the search engine traffic.

Traffic referred by search trends higher within local properties such as local newspapers and local television.

…local newspapers garnered a 27.36 percent… Local news TV was next, accounting for an 11.75 percent share of traffic from search… Categories such as men/sports, autos, online services, business, national news, magazines, TV and entertainment, women’ lifestyle and youth, in that order, accounted for the rest of the traffic from searches.

Note that what we’re really saying here, is that even on the iPhone (accounting for most current search traffic), people use search differently on mobile than on their computer. This is with the most usable device for the mobile web, the game-changing enabler in that space.

Therefore, it is the mobile context, not the device or dataplans, that accounts for these differences seen in use of the mobile web.

You can expect mobile search to grow as more folks get iPhones (or equivalent), but you can’t expect the mobile context and behaviors to change. Plan for these categories to continue driving most mobile searches, with inventory to match.

This is part of learning to Think Mobile. Users will always treat mobile differently from past media, including the desktop web, no matter how advanced the devices get.

Bonus Quote: On Evil and Changing The World
I’ve always loved the idea of Don’t Be Evil (and the Ten things Google has found to be true). Great to hear how it works in practice.

Even better to hear from one of the world’s most successful companies that making money is a side effect of wanting to change the world, not the other way around.

From the same Reuters article:

When he first joined Google as CEO seven years ago, Schmidt acknowledged thinking the “Don’t be evil” phrase was a “joke” being played on him by founders Larry Page and Sergey Brin.

Schmidt recalled sitting in Google’s offices later in 2001 when an engineer interrupted a strategy discussion over a planned advertising product by saying, “That is evil.”

“It is like a bomb goes off in the room. Everything stopped. Everyone had a moral and ethical conversation, which by the way, stopped the product,” Schmidt said.

“So it is a cultural rule, a way of forcing a conversation, especially in areas which are ambiguous,” he said of how the mission statement works in practice at Google.

Schmidt reaffirmed that the company’s primary goal is not to make money selling ads, whether it is banner ads or ads on Web searches, online video, TV and mobile phones.

“The goal of the company is not to monetize everything, the goal is to change the world … We don’t start from monetization. We start from the perspective of what problems do we have,” he said, referring to big, world-class problems.