ImaginativePRO Blog

NOW ANYONE CAN CREATE THEIR OWN APPLE IPHONE APP

These startups are enabling the low-cost creation of iPhone apps. No programming experience necessary.

Apple's App Store surpassed the 100,000 iPhone and iPod touch application milestone in late 2009. Branded applications are one of many catalysts behind the virtual storefront's growth, as more and more companies turn to the mobile channel as a digital marketing tool. But for businesses with neither the software engineering expertise to design their own applications nor the financial flexibility to outsource projects to professional developers (who typically charge between $2,000 and $20,000 per app build), the App Store has effectively remained closed for business.

No longer--an influx of startups is enabling clients to create their own iPhone apps on the cheap, with no programming skills necessary. Here are three clever, cost-effective approaches to getting your business on smartphones.

AppBreeder

AppBreeder, an online DIY app creation platform,  offers users App-Kits--i.e., flexible collections of settings, behaviors and gadgets customized across different verticals, including AppBiz, AppRealty, AppRestaurant and AppLegal. All application elements can be managed and personalized via AppBreeder's virtual AppBuilder tool set, and all software components can integrate with iPhone capabilities, including GPS, accelerometer and multimedia. AppBreeder pricing fluctuates according to whether the app is ad-supported (free), whether it's web-based ($9.95 to $14.95 per month), or whether it's native ($29.95 to $49.95 per month). Apps also can extend to Android and BlackBerry smartphones.

SwebApps  Designed expressly for small businesses, Sweb Apps enables customers to build and manage iPhone applications in six easy steps. Prefab templates lay the groundwork, but users can personalize each app with customized buttons and background images as well as tools including App Tracker (to evaluate the application's daily use) and Client Sign Up (to capture customer contact information). All apps are installed on the iPhone operating system and run natively. Pricing ranges from $200 to $400, depending on the number of bells and whistles, with a one-time setup fee of $50 per button. Sweb Apps also applies a $25 monthly hosting fee to each application. MyAppBuilder  Targeting small publishers, record labels and other creative media firms as well as bloggers and Twitter subscribers, MyAppBuilder promises to translate virtually any content into an iPhone-optimized application. Users submit their “App Blueprint” (text, image files and the like) to the MyAppBuilder.com Control Panel. After the company's publishing platform works its magic, the completed app is sent back to the client for review, and assuming it's accepted, MyAppBuilder uploads the software to the App Store for Apple's approval. In addition to a $29 monthly subscription price, MyAppBuilder charges a $20 processing fee to whip your content into App Store-ready shape.

COMMENTARY:  The entire world creating their own apps.  What a chaotic situation that would be.  It certainly appears that we are headed down that path. 

By the way, you can add AppMakr by PointAbout to the list of DIY Apple iPhone app building software.

Courtesy of an article appearing in the February 2010 issue of Entrepreneur Magazine 

FACEBOOK AWARDED U.S. PATENT FOR THE CONCEPT OF A SOCIAL NETWORK 'NEWS FEED'

On Tuesday, Facebook was awarded a major patent for “Dynamically providing a news feed about a user of a social network”. This is a huge deal for a number of reasons, most significantly that it grants Facebook the opportunity to pursue other social networks which are infringing on their patent. Included in the patent are additional claims including feed filters, feed advertising, searching the feed, and more. (update We’ve been told that this is about the implicit feed stories. Will update when we have more info.)

Earlier this morning we reported on another patent which actually has not yet been approved but was simply published. This patent is confirmed published. The application was submitted back in 2006, before many other social networks integrated the feed as a major component. Twitter, for example, didn’t even launch prior to Facebook submitting this patent which could theoretically hold significant implications.

The inventors named on the patent are some of the company’s top executives, including the founder, Mark Zuckerberg, Ruchi Sanghvi, Andrew Bosworth, Chris Cox, Aaron Sittig, Chris Hughes, Katie Geminder, and Dan Corson. What this patent means for the future of the social networking space is unknown, however this patent could be considered as significant as the original six degrees patent.

In contrast to the patent that we wrote about this morning, the news feed patent is much more general, which means it could be interpreted a lot of ways. For example, below is the news feed generation process as described by the patent:

Essentially it includes the generation of feed stories followed by the limiting of viewers of those stories. As many avid followers of the social networking space know, the feed (also called the “stream”) has become one of the central components of online social activity. The entire Twitter product, for example, is a feed.

Whether or not Twitter should be concerned about this new patent award is unknown, however this could be considered one of the most significant social web patent since Jan. 16, 2001, the day the six degrees patent was first published.

Update

It appears that this patent surrounds implicit actions. This means status updates, which is what Twitter is based on, are not part of this patent. Instead, this is about stories about the actions of a user’s friends. While still significant, the implications for competing social networks may be less substantial.

COMMENTARY:  What gets me about the news feed patent awarded to Facebook is that we are now a connected world.   Everybody is using news feeds.   The definition of a social network are becoming more blurred.   This patent maybe much ado about nothing.   Personally, there are too many damn news feeds. 

How exactly are damages going to be measured?  How much is a news feed worth?  If Facebook will actually enforce its news feed patent remains to be seen.   Who couldn've forseen back in 2006, when the patent was filed, that news feeds would be so commonplace. 

I subscribe to at least a dozen news feeds, and I don't have time to read them all.  

Courtesy of an article dated February 25, 2010 appearing in All Facebook blog 

AMYRIS RUMORS OF AN IPO CONTINUE

IPO fever is gripping greentech, and rumors are circulating that Amryis, the company that made synthetic biology a household word, could be one of the next to file.

The company, which was spun out of research conducted at UC Berkeley, could file the necessary documents for an IPO in the second quarter, according to sources. So far, Amyris has raised around $165 million. Codexis, which makes enzymes for fuel production, filed its S-1, the form that is the official prelude to an IPO, in December, and Mascoma, which wants to make cellulosic ethanol, has been trying to raise a few hundred million from the private equity markets to pay for a plant.

Amyris specializes in concocting microbes that feed on sugars and secrete made-to-order hydrocarbon molecules that can be converted into jet fuel, industrial chemicals or biodiesel. In nature, yeast ordinarily eat sugar and produce alcohol. (In fact, fine wine is what happens when microbes go to the bathroom, but don't expect a sommelier to tell you that.) Developing a genome so that yeast secrete hydrocarbons instead of beer or wine is Amyris' secret sauce.

Amyris, potentially, will be able to produce biodiesel that it can sell for $2 a gallon at wholesale, CEO John Melo told us in late 2008.

The first product out of the company was an artificial version of artemisinin, an antimalaria drug that drew millions in support from the Bill and Melinda Gates Foundation. The metabolic pathway for developing fuel is different, but similar to the one used for making artemisinin.

"Some people refer to it (synthetic biology) as metabolic engineering on steroids," Jack Newman, one of Amyris' founders, told us in a previous discussion. "There are a few things we have adopted from plants. Plants are great for making hydrocarbons."

Although we spoke to Melo and Newman earlier, we didn't talk to either of them for this story.

If anything, the company has been notably active lately. In December, it paid $82 million to Brazil's São Martinho Group for a 40-percent stake in an ethanol mill project that the parties hope will be operational by 2011 or 2012. The Brazilian company already controls three ethanol plants that make about 600 million liters (158 million gallons) of ethanol per year.

Five days later, it entered into letter-of-intent agreements with three other Brazilian companies -- Acucar Guarani, Bunge Limited and Cosan -- to produce ethanol and high-value chemicals. Later that same month, it hired a chief commercial officer (Peter Boynton) and a COO (Mario Portela).

The company is also working with the state of Alabama to build sugarcane plantations and yeast-powered fuel refineries in that state. Amyris does not want to license its technology. Instead, it wants to produce fuel itself in tandem with industrial partners and sell it, initially to large fleet buyers.

If Amyris does file for an IPO, and Codexis follows through a public offering, it will mark a watershed moment in the biofuels industry. Investors have plunked hundreds of millions into cellulosic ethanol and biodiesel companies in the last five years. So far, though, only a few of the companies that have been the beneficiaries of those investments have produced much fuel, and to date, no one  is really producing large, commercial volumes. Successful IPOs could jump-start the market by giving these two companies the needed capital to build factories. The U.S. is also woefully behind in meetings its own biofuel mandates, so expect some support and encouragement from the government, as well.

Amyris has said that the company could produce as much as 600 to 800 gallons of fuel per acre. That's far better than corn ethanol and somewhat on par with sugarcane ethanol. However, it is lower than what cellulosic ethanol and algae growers say they will get. Some algae companies claim they will get 5,000 gallons per acre per year.

The road to fuel nirvana has long been paved with delays. Back in 2008, Melo said he hoped the company would be able to produce 200 million gallons or so out of its first Brazilian plant. Hey, wait a minute. 2010 is now.

COMMENTARY:  In January I was introduced to Amyris by a VC firm that was involved in funding Bloom Energy and Fisker Automotive, which I profiled on my blog.  The VC hinted that Amyris might file an IPO, and that I should advise some of my clients to make an investment.  I hate rumors and dismissed this as more hype than reality, given the sad stage of the IPO market.  This feeling still has not changed and I have said so on several occasions on my PBT Consulting blog.  

Amyris' synthetic biology technology which produces biofuels with 80% lower carbon emissions than regular fossil fuels is very compelling, but the biofuel yields per acre are very low compared to corn and algae biofuel production.  Furthermore, most of the attention and investments are focused on celluosic ethanol, a higher yielding and more advanced method for extracting biofuels.  Amyris truly has some catching up to do, and its investment in Sao Martinho Group, the Brazilian ethanol producer, and letters-of-intent with three other companies is an obvious move to quickly commercialize its biofuel production technology.

Whether Amyris will actually file for an IPO remains to be seen.  It seems that far too many greentech companies filing for IPO's have either no revenues or have incurred huge losses.  I view some of these IPO's with some suspicion.  A great exit for the angels and VC's that invested in those startups, but risky for the individual investor.       

Courtesy of an article dated February 5, 2010 appearing in GreenTechMedia  

THE PHENOMENOM OF FOURSQUARE, THE GEOGRAPHIC TRACKING SOCIAL NETWORKING SITE

I hate the word "buzz," especially when it's being stoked by a calculated PR push, so I'm going to start using a new word, "puzz" (publicity + buzz) to describe that phenomenon.

The last couple weeks have seen a lot of puzz about Foursquare, a very interesting, cutting-edge social media application that combines digital, mobile distribution of data with the real-world physical locations of its users. Basically, it's a social network site that tells your friends where you are. This is a very cool idea, bringing online social media -- previously restricted to the infinite, abstract Internet -- into the limited, concrete geography of the real world. The latest Foursquare puzz has it partnering with IGN Entertainment's AskMen.com site, for a deal that will distribute content about local travel and entertainment from the AskMen A. List newsletter to Foursquare users, complementing the highly targeted local social focus of the latter.

Foursquare is certainly puzz-worthy, but for me a large part of its interest springs from curiosity about its strategy going forward: will Foursquare be able to avoid the kind of privacy-related screw-ups that have plagued Facebook and Google? The Foursquare management team must be especially vigilant, because privacy screw-ups in the abstract, infinite Internet are one thing - but screw-ups with real world ramifications are potentially far more serious.

(This question assumes that Foursquare is going to introduce new functions over time, like other social media sites -- but I could be wrong. Do any readers have ideas for interesting new Foursquare applications or features? I'd be interested to hear them).

Even before the issue of new features, I have a couple questions about the existing Foursquare system. As always, one of my main concerns is how to avoid people you don't like with a minimum of awkwardness. This is easy enough when the entire scope of interaction is limited to the virtual space of the Internet. But when a social network informs other users of your real world location, it gets much more complicated.

For example, say someone you don't like asks to be included among your Foursquare followers. Of course you have the option of just rejecting them outright, with all the attendant awkwardness. But supposing you cave in and accept their request, you must now engage in a subtle dance of disinformation and exclusion. The most obvious step, of course, would be excluding them from your active alert list, so they don't get location updates.

But it's not quite that simple: what if they are also following one of your friends, who tracks you down via Foursquare and happens to post your shared location? Then the non-friend shows up, putting you and your friend in an awkward position: either your slight to the non-friend will be revealed, since you were using Foursquare but excluding that individual, or your friend will be forced to lie - saying he or she didn't find out about your location via Foursquare (provided this wasn't already disclosed on the site, e.g. "going to meet Jim at the Cupcake Cupola").

The more friends who come to meet you (who are followed in common by the non-friend) the harder it becomes to lie: if the non-friend arrives to find nine people gathered in a spot, all of whom he is "following" on Foursquare, and there's just one who didn't alert him to his/her location, the non-friend is bound to suspect a dis.

In the old days, you could ignore someone's call and say you didn't hear your phone ring, or didn't have cell service where you were, or claim you haven't checked your email for the last couple hours, etc. But the transparency and simultaneity of social network technology makes it much, much harder to come up with these kinds of excuses - if your other friends know where you are, the non-friend will know he or she has been deliberately excluded.

While it's incredibly petty (I'm just going to issue this as a blanket disclaimer when writing about social media) these kinds of things matter to people, and have a potentially decisive impact on the quality of their user experience with social networks. As sites like Foursquare move to integrate virtual social media and real world locations and events, is there any way to avoid this kind of awkward disjuncture and collision? Or is this simply an essential, unavoidable aspect of real life, which can't be engineered away?

COMMENTARY:  The popularity of the Internet and advances in mobile devices has spawned every conceivable kind of social network sites imaginable.  So now we have Foursquare, a site that has apparently found its niche:  the voyeristic, self-grandizing, attention-grabbing crowd.   For the life of me, why in hell would anyone want others to know where they are in the real world?  Apparently, Foursquare is filling a real market need, if you can believe that.

The popularity of Foursquare got me to thinking, so I looked into the demographics of its users and here's what I found from QuantCast, the people who track online traffic for sites.  The data are all estimates, mind you, but here's a cross-section of Foursquare's demographics:

• Female - 63% of users are Female.  Females are definitely more voyeuristic than their male counterparts, so this makes sense. 
• Middle-Aged - 36% of users are 39-49 years of age.  I have no idea what this tells me, but seems to fit the mobile crowd who can afford to own an iPhone, iPod, and soon to be the iPad.
• Asians - Asian users make up a higher coefficient of visitors on Foursquare than your typical site.  I usually find Asians to be smarter, yet somewhat reserved and private individuals, but under that facad are latent voyeuristic and attention-grabbing tendencies that I didn't know existed.  It could also be that Asians are more into letting others where they are, either for bravado, upstaging others or security reasons.  Example:  An asian parent wanting to know where those asian kids of theirs are. 
• Less Affluent - Foursquare users tend to be lower on the economic scale with 23% making less than $30K, and 28% making between $30K-$60K.  This one is a surprise to me because college educated individuals tend to have higher incomes.  I am wrong again.  I have to hit myself on the side of my head out of frustration.  
• College Educated - 43% of Foursquare users are college educated. 17% have graduate degrees. I equate college educated with having some smarts and common sense, but, alas, I am wrong again.  Today's college crowd are really into the mobility thing and are serious social networkers, they were responsible for the success of Facebook, so letting their friends and social sphere where they are in the real world, is a natural evolution, I guess.      

I want everyone to know that I am just having some cynical fun here.  No harm intended.  That's just me. I welcome your comments regarding Foursquare. Please let me know what the magical allure over Foursquare is all about.  I am dying to know. 

Courtesy of an article dated February 25, 2010 appearing in MediaPost Publications The Social Graf

 

SEPHORA EXEC DISCUSSES MEASURING THE ROI OF SOCIAL MEDIA

Within retail headquarters around the country – and even here at NRF - there have been countless discussions about cultivating communities through social networks. Conversations that start with “How do we do it?” and “Who owns it?” are often followed by the inevitable, “But what’s the point?” Certainly there’s no use in leveraging resources for social media if there isn’t some kind of pay off. And if it isn’t increased sales, well, it had better be something.

One company making serious headway in the social media landscape is Sephora. With over 437,000 fans on Facebook (up 5,000 from the last time I checked) and 53,000 Twitter followers, in addition to a robust mobile site filled with ratings and reviews, Sephora is a company that seems to be doing all the right things and – more importantly – knows why they’re doing it. In advance of her session at next week’s Retail Innovation & Marketing Conference in San Francisco, Sephora Direct SVP Julie Bornstein discusses how the mobile revolution will impact catalogs, what other retailers give her social media inspiration, and how the company strives to take care of its “fans”.

You’ve been significantly involved with web and catalog merchandising and marketing throughout your career. As retailers move toward mobile, how do you think mobile will impact print catalogs?

Julie Bornstein

Print Catalogs are more important to some businesses than others. For certain categories (ie: furniture), they are a pretty critical part of the shopping cycle. Even for apparel, the ability to market an image on a big glossy page is hard to replace on the web or phone – at least for generations who didn’t grow up with technology. While mobile gives businesses yet another way to reach their customers – when it comes to marketing an image and getting your catalog in front of your best customers, it’s hard to give up. Reductions in frequency and page count will continue. Will they ever go away? I doubt it.

At the Retail Innovation & Marketing Conference, you’ll be speaking about “Driving ROI through Social Selling.” I know many retailers find it challenging to measure the ROI on social media. Can it be done, and how?

First of all, one of the great things about social media is that it doesn’t cost a lot to play. Getting the internal resources focused on it is one of the major costs. Clever ways to build your base can save a lot of money. Testing offers and measuring redemption helps provide a base. Start small. Test some things and measure sales from these channels—but know that the part you measure is only a piece of the value. There is also great value in the customer feedback you receive daily from your customers. That alone is worth something. And use this audience as a focus group to help drive business decisions. We’ll talk a lot more about this subject on Wednesday.

Sephora recently launched a mobile application that allows customers to view product reviews on their mobile device. How did you make the decision to move forward with this?

Have you ever tried to decide which moisturizer to use while standing in front of a wall of options? Our category is so well suited to ratings and reviews. When we first launched ratings and reviews two years ago, we set a new record for speed of amassing hundreds of thousands of reviews within weeks of launching. Our customers love to talk about beauty and they love to hear what others have to say. It’s the “beauty” of the category. So this was a natural. In addition, we had a great partner (Bazaarvoice) to launch this with us and make the implementation very easy.

When it comes to social media, what other businesses are you watching and learning from?

I’d say some bigger brands, like Starbucks and Nike, have built some great communities with a real purpose and authenticity. I also admire some smaller brands like ModCloth and Threadless.

Sephora is also on Facebook, with a fan base that is 437,000 fans strong (and growing – quickly!). In what ways are you nurturing this community and what’s the end goal of how to leverage all of these fans?

We are obsessed with our Fans. We listen to them daily. We talk to them. We ask them questions. We take their input very seriously. We make changes as a result of them. Given that the people who tend to interact with us are our more serious beauty mavens, they really know what’s going on. It makes us realize how in touch our consumer is! We send treats to some of them, thank you notes… and have some exciting (confidential) activities planned for them in the future. We want to make sure there is value in being our fan.

Throughout the course of your career, you’ve worked with prominent retail brands including Urban Outfitters, Nordstrom and DKNY. What have you taken away from those experiences that you can use in your current position at Sephora?

I would say that the one absolute that crosses all of these companies is that it really is all about having the right product. The role of the merchant is as key as it is for a reason. The other lesson is to know who you are as a brand and what makes you special, and make sure everyone internally is clear and focused on what that means.

Retailers are still trying to get a handle on Facebook and Twitter, but are there any social networks that you think could be next on the horizon?

I think the intersection of Search + Social Media will help make the promise of social shopping come alive. I think TheFind and Polyvore are interesting. A new site called Blippy allows people to log their purchases for their friends. That concept will evolve and play into much of shopping going forward. If the first generation of “user generated content” was Ratings & Reviews, I think the next will be around filtering that input by your own network and friends.

Tell me three Sephora products you couldn’t live without.

Ah, the most important question! But I’m not sure I can limit it to 3. How about 5? I’d have to say: Makeup Forever Duo Mat Powder Foundation, Lancome Oscillating Mascara, Nars Laguna Bronzer, La Vanilla Healthy Deodorant, and Oscar Blandi Dry Shampoo.

COMMENTARY:  I had an opportunity to consult for Sephora's merchandising department back in 2003, and I was surprised to see just how archaic their reporting systems were.  They were using spreadsheets instead of report writers.  They were a fairly new company then, and Sephora was obviously outgrowing its systems. A case of too many users logged in at the same time.  Very frustrating just sitting around waiting for data searches.  I hope they've taken care of that.

Courtesy of an article dated February 26, 2010 appearing in the National Retail Federation's Big Blog    

RECENT U.S. HOUSING UPTURN IS JUST TEMPORARY, SECOND BUBBLE LIKELY

The rest of the U.S. economy may be bouncing back, but for the battered housing sector, the hopes of economists and real estate experts are still modest. "Recovery is probably too strong a word," First American Funds Chief Economist Keith Hembre says of recent housing data. Call it "stabilization at a lower level." Home prices and buying activity are coming back, but only from a disastrous 2009. In the first quarter of 2009, for example, the Standard & Poor's Case-Shiller National Home Price index dropped 19% from the year before. In the last quarter of 2009 -- for which data were released on Feb. 23 -- the index was down just 2.5% from the year before. "We're showing signs of the housing market bottoming," says Michael Strauss, chief economist at Commonfund. "The bad news is we still have a long way to go." The widely watched S&P Case-Shiller 20-City Composite Home Price index rose 0.3% from November to December. But the figure only increased when adjusted for the winter slowdown. Without a seasonal adjustment, home prices fell 0.2% from month to month.

Government Support to End

Improvements have occurred only after extraordinary efforts by the U.S. government to prop up the housing market. To lower mortgage rates and heal financial markets, the U.S. Federal Reserve has been buying up to $1.25 trillion in mortgage-backed securities. To bring more buyers to market, Congress approved, and then extended, an $8,000 first-time home-buyer tax credit. "Even with these dramatic efforts to bolster home sales, they're still languishing at recessionary levels," says David Rosenberg, chief global economist at investment manager Gluskin Sheff & Associates. And now comes 2010's big test for the housing market: The Fed's mortgage-buying will end at the end of March, and the home-buyer tax credit expires at the end of April. What happens without government support? "I see no evidence that this is a sector that has the capacity to stand on its own two legs," Rosenberg says. Real estate professionals are worried, too. Earl Lee is president of Prudential (PRU) Real Estate, which has 2,000 franchised real estate offices in North America and employs 62,000 real estate agents. "The first half of the year will be strong," Lee says. "The question is what will [the second half] look like." Without government support, he adds, "the economy is still not strong enough."

Bright Spots

There are bright spots in the housing market, and they're often in places hardest hit by the bursting of the real estate bubble. In December's Case-Shiller data, only five cities did not see prices decline before adjusting for the season: San Diego, Las Vegas, Los Angeles, Phoenix, and Detroit. In the upscale Detroit suburb of Birmingham, M. Michael Cotter, a real estate broker at SKBK Sotheby's International Realty, says he has seen a "rather substantial improvement" in the housing market in the last three months. After local giants General Motors and Chrysler declared bankruptcy last year, Detroit's already weak real estate market fell into the doldrums. Now, "there is optimism that we didn't have a year ago," Cotter says. Though conditions could be much better, he says, "the economy is starting to right itself." Crucial for the housing market in 2010 is the jobs picture and the amount of homes coming onto the market. "At 10% unemployment, it's difficult to think Americans are going to be out there on the market for homes," says Brian Levitt, an economist at OppenheimerFunds. The U.S. unemployment rate was 9.7% in January, and economists expect it to edge up to 9.8% in February.

Foreclosure Supply

Another concern is how many foreclosed houses will be pushed onto the market in 2010, flooding markets with unwanted supply. "There is a fair amount of shadow supply waiting in the wings," Hembre warns. A Feb. 16 analysis by Standard & Poor's estimated the number of troubled mortgages "will likely take about 33 months -- or nearly three years -- to clear at the current rate of liquidations." A recent slowdown in foreclosed homes is temporary, the report said. The state of the housing market has large ramifications for the rest of the economy. Home Depot (HD) Chairman and Chief Executive Francis Blake often notes the impact of residential real estate spending on his company's business. After the No. 1 home-improvement retailer reported earnings on Feb. 23, Blake told analysts such spending "has stopped its dramatic and historic decline." However, he added, "the housing industry remains at distress levels, mortgage defaults continue to increase, unemployment remains high, and our pro customers" -- contractors who buy supplies at Home Depot -- "are still under pressure." Sales of furniture, appliances, and electronics all are linked to housing, economists note. And home prices can weigh on consumer confidence, which unexpectedly fell on Feb. 23 to its lowest level since April. "It will be very difficult to have a strong economy without housing kicking into gear," Rosenberg says. Action Economics Chief Economist Michael Englund is not so gloomy. He says housing is "on a slow but steady recovery," driven in part by the natural life cycle as people form families, move up, and retire and downsize their homes. After the rough conditions of 2009, "my assumption is we have nowhere to go but up from here," he says.

COMMENTARY:  On numerous occasions I have made mention of a second real estate bubble occuring around mid-2010 due to the "Shadow Inventory" and housing overhang of 7 million homes that hangs over the U.S. real estate economy like a dark cloud.

Sure there currently some bright spots, but several real estate experts believe that this is just temporary.  The above article points this out very clearly.  The $8,000 tax credit for first time homebuyers, which was extended for another six months beginning November 2009, has helped to prop up the U.S. residential real estate market.  However, foreclosures continue at all-time highs, ending the year 2009 with nearly 3 million foreclosures, the highest rate since the Great Depression.

Another reason for the slight improvement in the residential real estate market is that many lenders negotiated loan modifications with their borrowers.  Other extended the process of foreclosure on properties during the holiday season.  It is estimated that 40% of those loans will ultimately go into default, increasing the Shadow Inventory.

The fact that the Federal Reserve has purchased $1.25 trillion in mortgage-backed securities from banks, to relieve some of the financial pressures brought about by the "toxic assets" or sub-prime loans on properties that were foreclosed in 2009 and prior, and that this practice is likely to end at the end of April, is going to take a lot of steam out of the real estate market.

You don't have to be an Ivy League economist or "sharpie" real estate speculator to see that this "ride" is just about over, and it is very likely that the improvement in the current residential real estate market will come to an abrupt end, and the prediction of continued high unemployment, will further depress real estate home values, possibly triggering a second real estate bubble.

I have gotten a lot of flack from "sharpies" as being too negative, an alarmist or armchair expert.  Guilty as charged.  The point is that I have been through several recessions, and this is the worst one that I have experienced.   

Courtesy of an article dated February 24, 2010 appearing in MSNBC        

CHINA'S LUXURY MARKET GREW BY 12% IN 2009, U.S. WAS DOWN BY 16% DUE TO RECESSION

While consumers worldwide continue to downsize their discretionary spending, China’s consumption of luxury is growing at a healthy rate.

Chinese consumers’ luxury purchases were expected to have increased 12 percent last year, according to Boston-based consulting firm Bain & Co. Over the same period, the luxury market declined 16 percent in the United States, 10 percent in Japan and 8 percent across Europe.

China now accounts for one-quarter of the global luxury market and has jumped over the United States into second place overall, according to the World Luxury Association report. And Goldman Sachs predicts China will surpass Japan to become the top luxury market by 2015.

Just who is doing all this high-end buying? China's super-wealthy (incomes of $10 million or more) are the pacesetters, but the majority of China’s luxury customers are between the ages of 20 and 40. These are the “new rich” -- upper-middle management and white-collar workers making $200,000 to $300,000 annually.

The world's leading luxury brands have taken notice and are expanding their China operations. Many brands are also accelerating the opening of boutiques in China's second- and third-tier cities.

COMMENTARY:  According to The Boston Consultancy Group's survey of 2,500 Chinese luxury consumers, China will become the top luxury market in just five to seven years. This will principally be due to an increase in income as well as a desire to purchase from the top-brands, a desire which has remained throughout the crunch.   Chinese luxury consumers are relatively younger, most of them are in the 25 to 35 age span.

Critically, because they are young compared with the rest of the global luxury market, they will purchase plenty of luxury goods during their lifetimes.

"And second is the mobility, meaning many people have increasing income, so yesterday they couldn't afford the luxury products, but one, two or three years down the road, they will have a means to afford (luxuries)," Lui said.

David Wolf, president of Wolf Group Asia, a Beijing-based corporate advisory firm explained that Chinese consumers are also known for being adventurous and impulsive.

He said: "In a world increasingly preoccupied with sustainable consumption, China is the last great bastion of bling, not only luxury but flashy luxury".

The Boston Consultancy Group added that by next year high net-worth households will rocket from 417,000 to 609,000. As a result, luxury brand competition will shift to China's developing inland cities. 

Check out Luxury Insider, the definitive source of information on China's luxury market.

Courtesy of an article dated February 2010 appearing in NRF Trends

SMS TEXT MARKETING RULES FOR REACHING AND ENGAGING WITH THE TEEN MARKET

Have you ever run into a teen without a phone or, better yet, one who isn't asking, "What's in it for me?" Rarely, right? So, when looking at marketing strategies targeting teens, you can't ignore mobile. You should even consider it as a primary media channel.

We've all heard the phrase "the medium is the message." In the case of teens, this is even more relevant. Teens will judge your brand in an instant. But by communicating in a first-person voice in channels in which they "live," you put your brand on a level playing field. You can grab their attention more easily than with a TV ad or other traditional medium and effectively drive them to take action.

SMS is just one of the many dimensions of the mobile channel that creates results. To harness its power, you have to grab young consumers' attention with a simple, yet strong call-to-action. An SMS program's rate of participation -- regardless of its targeted demographic -- is the result of media exposure coupled with a compelling call-to-action and offer. The equation looks something like this:

SMS Call-to-Action Response = Media Exposure x Call-to-Action Strength x The Offer Value

If you follow the five rules below while keeping this in mind, you'll be on the way to creating a powerful SMS call-to-action and offer.

1. Your shortcode is your new URL. For teens, mobile is the first place they want to go. Be bold, and make the shortcode BIG. It is part of the primary message. A simple SMS call-to-action will work with any advertisement and, while their parents may not, your teen consumers know what to do with those five numbers and keyword. Put it in every piece of printed and outdoor material you have. Your Website is the only possible exception; see point 5 to learn why. When looking at the specific call-to-action, focus on making the keyword and shortcode the strong elements, as these are the keys to open the door. For example: "Text the keyword DUNK to 777483."

2. Don't forget about the value proposition! Your young consumers are not going to join just because you are a brand they know. Offer something fun, engaging, useful and valuable. What teen wouldn't love a PlayStation or a retail voucher? People love the chance to win something. We've had clients build mobile databases three times faster than other clients simply by adding a sweepstakes element.

3. Out with vanity codes. Smartphones are here to stay. Vanity codes worked well, just like those catchy customer support phone numbers that spell out the company's name (SPRITE=777483), when all phones came equipped only with the standard 12 buttons. But what teen remembers that? BlackBerries, Palms and even iPhones now have full QWERTY keyboards. If you have a vanity code, then always include the digits; it's very hard to work out the numbers from the letters on a smartphone.

4. When in-venue, remember the rule of three. The call-to-action must be announced three times and supported with a visual reminder like video on a JumboTron. Ideally, have the announcer also do a shout-out asking people to grab their phones and TXT in. Announce the keyword and short code at the beginning, middle and end of the event. You are trying to get an entire venue's attention, to borrow some of their memory, and get them to act. Also, be sure you're advertising where they can get mobile reception.

5. If online, stay online. Asking people to grab their phone to send you an SMS when they are on their computer is a fail. Instead, offer them a field to enter their mobile phone number. Time and again, we see higher response rates to this mechanic than asking them to TXT in.

Remember, mobile is a teen's remote control for their world. It holds the key to their friends, family, social networks, and it goes with them everywhere. So respect the unique perspective and needs of teens, and you'll get them engaged in your mobile program.

COMMENTARY:  Bribery works every time.  The word FREE can be very powerful when it comes to the Teen market.  I would also suggest that you include a recommendation statement, something like, Justin Timberlake also uses XYZ (product name).  Teens relate to celebrities, and if their favorite celebrity says it's "okay", then it must be.

Courtesy of an article dated February 25, 2010 appearing in MediaPost Publications Engage:Teens

RUMOR: APPLE MAY PUT IPHONE OS ON OTHER DEVICES

Apple is showing its true mobile colors. The company is on the lookout for an engineer who can help get its mobile-phone software onto additional devices. On Feb. 15, Apple (AAPL) posted an ad on its Web site for an engineering manager "to lead a team focused on bring-up of iPhone OS [operating system] on new platforms." Days later, Apple Chief Operating Officer Tim Cook called the company "a mobile device company," echoing remarks by Chief Executive Steve Jobs, who in January said "Apple is the largest mobile device company in the world." The posting and remarks underscore Apple's growing reliance on devices that provide Web access and computing features for users on the go.

In the three months ended Dec. 26, the iPhone and related products accounted for $5.58 billion, or 36% of total sales, up from 25% of revenue a year earlier. Apple also sells other mobile devices, including the iPod Touch. An adaptation of the operating system used in Macintosh computers, the iPhone OS runs the iPhone, iPod Touch music player, and the forthcoming iPad tablet computer. In the future, analysts say, Apple may put the OS onto Web-connected TV machines and devices that help viewers watch 3D programming. The Cupertino [Calif.]-based company may also consider licensing the iPhone OS to outside cell-phone manufacturers. Apple has shipped more than 75 million devices based on the iPhone OS, which lets users download and run applications such as games and calendars sold at the Apple App Store. Apple spokeswoman Natalie Kerris declined to comment.

Web-Connected TV

Responsibilities for the sought-after engineer include "working closely with the hardware and custom silicon teams to bring-up new platforms and prototype systems." The term bring-up "typically refers to the final stages of a technology being brought to market," says Nick Corcodilos, a tech recruiter who runs the AskTheHeadhunter.com blog. The job posting was previously reported by TheInquirer.net. Apple may embed the iPhone OS in a Web-connected TV, says Charlie Wolf, a senior analyst at Needham & Co. "Where Apple is noticeably almost absent is in the living room," Wolf says. "It represents the natural migration of the operating system. And it's going to be a big market." Currently, Apple sells Apple TV, a set-top box that lets users buy and rent high-definition movies through its online iTunes Store. The $229 gadget, introduced in 2007, isn't yet a big source of revenue for Apple, executives say. Cook and Jobs have both called Apple TV a "hobby." Still, Apple will invest in Apple TV "because our gut tells us there's something there," Cook said at a Goldman Sachs (GS) conference on Feb. 23. Demand for Web-connected home entertainment is on the rise. Wal-Mart (WMT) on Feb. 22 said it will acquire Vudu, a movie-downloading service that this year will be built into more than 150 products, including televisions. Last year, retailer Best Buy (BBY) said it will sell Netflix (NFLX) movies through certain Blu-ray disc players and offer Sonic Solutions' (SNIC) CinemaNow service through an array of electronic devices. Another place Apple could use the iPhone OS is in eyewear that lets users watch 3D movies on the go, says Richard Doherty, a director at consultant Envisioneering Group. Apple may also build a larger version of the iPhone, says Alex Spektor, an analyst at consultant Strategy Analytics. "You'll see Apple experimenting with sizes," he says.

Hardware Partners Possible

The job posting may also signal that the company may consider offering its software capabilities to hardware partners, Doherty says. Apple may wish to use other companies' brands to increase the number of devices running its software to make the OS more appealing to content providers and app developers eager to reach as many consumers as possible. "Some of the content companies have been asking if there will be other hardware products," Doherty says. Movie studios, for example, may be more willing to provide Apple with new releases sooner if Apple offers them access to more devices and potential consumers. The iPhone is the most popular mobile operating system among developers. Apple's App Store boasts 140,000 apps. As of Jan. 5, consumers had downloaded more than 3 billion apps from the App Store. Getting the iPhone OS onto more gadgets from partner brands would help Apple get iPhone OS-based devices into markets it doesn't want to enter solo. One example: cheaper phones for the developing world. Due to its high price, the iPhone hasn't taken off in markets like China. But Apple has historically balked at introducing lower-cost devices for fear of destroying its premium brand. A partner like Motorola (MOT) could help Apple's software broaden its reach without jeopardizing Apple's brand, Doherty says. In 2005, the two companies collaborated on the Motorola Rokr phone, enabling it to access songs on iTunes.

Exclusivity Preferred

While Apple prefers to keep its software exclusive to its own hardware, in 2004 the company agreed to manufacture an iPod under Hewlett-Packard's (HPQ) brand; the device was discontinued in 2005 amid tepid demand. "Those folks who were interested in the iPod were going straight to Apple," says Stephanie Ethier, senior analyst at consultant In-Stat. From 2004 to 2006, HP also preloaded iTunes onto its PCs. And when the One Laptop Per Child project, designed to develop low-cost laptops for use by children in developing nations, had just got under way, Jobs offered free use of Apple's Mac OS software, The Wall Street Journal reported at the time. OLPC opted to develop its own software. Licensing its software or manufacturing iPhone OS-based devices under a partner's brand could help Apple increase the number of gadgets running its software, and make it more attractive to developers. The iPhone is competing for developers with Android, an operating system developed by a consortium of companies led by Google (GOOG). Android may overtake the iPhone OS to become the world's second-most widely used operating system for smartphones in 2012, according to consultant Gartner (IT). Nokia-owned Symbian ranks No. 1. Some analysts say the iPhone OS is most likely to end up in Apple's own devices. Licensing to outside manufacturers "is really antithetical to Apple's DNA," Wolf says.

COMMENTARY:   I think what we are seeing here is Steve Jobs making a move to increase Apple's influence and potential revenue by expanding the Apple iPhone OS onto other mobile devices.  This is the logical next step because as I have mentioned before, and voiced by other experts, is that Apple is rapidly reaching market penetration for the iPhone.  

 

At the end of 2009, Apple had slightly more than 30 million customers.  Many of them had purchased the original iPhone and later versions.  If we assume that out of the 75 million iPhones sold since January 5, about half are customers who purchased the original and later upgraded to newer versions of the iPhone, and if you use 50% as a conversion factor, this would mean that Apple currently has about 37.5 million iPhone customers.  Let's say 45 million to be safe, because I like nice round numbers, plus a little extra "fudge" factor.  A bad habit of mine, but it works for me.

 

This being the case, Jobs realizes that in order to increase iPhone market share, the next best thing is to license the Apple iPhone OS to cell phone producers.  This allows him to have the best of two worlds:  A broadening of the iPhone platform market, something akin to what Google is doing with Android, and the addition of additional revenue from the sales of Apple iPhone apps, games, music, movies and other products from subscribers of other cell phone service providers.

 

Jobs' main aim is to slow down the threat of Android equipped cell phones, including the Nexus One, and slowdown Google.   If these rumors are true, different versions of the Apple iPhone OS will have to be developed for each different cell phone manufacturer, so I think it could be six to nine months before you see the Apple iPhone OS on other smartphones.

 

A master stroke of genius from Jobs part.

 

Courtesy of an article dated February 25, 2010 appearing in MSNBC 

     

 

VENTURE CAPITAL DISPATCH FOR FEBRUARY 25, 2010

For the best articles on venture capital, including venture capital profiles, venture capital fundings, hot industry sectors, marketing strategy, technology, clean-tech, company profiles, mergers and acquisitions, strategic partnerships, licensing and franchising deals, rumors, gossip and other tidbits, we recommend VentureWire's Venture Capital Dispatch. The following are some informative articles for your reading pleasure:

• Will More People Go With ‘Startup Visa’?
• For Gold Hill, Smaller Is Better (Until Bigger Becomes Possible)
• With New CEO, SiPort Tries To Put Triple Homicide Behind It
• Luminus Devices Returns From A Near-Death Experience
• Online Research Firm comScore Announces that Travel Web Sites’ Are Among Fastest Growing
• Intel Corp Announces $3.5 Billion Venture Alliance To Invest In Technology Startups
• Intel’s $3.5 Billion Pact With 24 Venture Firms
• Austin, Texas: Live Music And Now LiveOak
• Credits Roll On Would-Be ‘Thunder Lizard’ B-Side Entertainment
• Financial Engines Revs Up For IPO
• English-Learning Game Co. Moonshoot Seeks ‘Sonic’ Success
• Venture Deal Terms Studies Hint Worst Is Over
• Corporate Venture Investors, The New Early Birds
• Internet Startup Hopes To Be The TV Guide Of The Internet
• Storms Ahead For Start-Ups Raising Second Rounds
• India's the Morpheus Tries To Replicate Y Combinator’s Incubator Model
• Air Tragedy At Tesla Motors 
• Ex-Carlyle Partner Grady Sees Opportunity In Wide Open Spaces
• Growth-Equity Investors Feeling Upbeat About 2010
• The Censorship Wars Between China and Google
• Merlin Nexus Looks To Cast Fund-Raising Spell Over LPs
• The $100 Million Revenue Club: Art.Com
• If PIPEs Seem Rusty, Try A CMPO
• Winter Conference Finds Some Signs Of VC Spring
• Israel Struggles To Evolve Into VC “Promised Land”
• The Demise of Video Startup Veoh
• Backlash Against Social Games Brews On Facebook
• Meet Aardvark, Google’s Newest Search Prize
• 3i CEO Defends Decision To Stop Making Venture Deals
• Limited Partners Wonder How Long Terms Will Tip In Their Favor
• Sweet Home Alabama Looking More Attractive
• The $100 Million Revenue Club: ExactTarget
• The Buzz On Google Buzz
• China Mobile Touts 4G, But Some VCs Remain On Hold
• The $100 Million Revenue Club: ServiceSource
• Redpoint Ventures Rides Recent Exits To $400M Fund
• Fisker Automotive Expects To Pick Up $529M Loan By Mid-March
• Philip Eliot Of Paladin Capital: Cyber Security Is Not Going Away
• Was HomeAway’s Commercial Worth It?
• Jason Kyle: From Start-Up CEO To Super Bowl Snapper
• The $100 Million Revenue Club: Bravo Health
• Who Dat? A New Orleans Seed Fund
• Three Start-Ups Ask, What Online Ad Slump?
• Like Other Venture Firms, Intel Capital Pulled Back In 2009
• Has Venture Fund-Raising Come To This?
• Earnings Calls Ain’t Just For Public Companies Anymore
• VC’s Peek Into Future Turns Rosy, But What About Here And Now?
• Biotechs Test IPO Waters
• Venture Capital’s Most Trafficked Web Sites
• Q&A With Ustream Investor DCM On Softbank Deal & Japan
• Many More Weeks Of Winter For Venture
• What Will Our Clean-Energy Future Look Like In 20 Years?
• The $100 Million Revenue Club: Mblox
• Venture Returns Are Free Fallin’
• Tesla Motors Files For IPO - So Much For The Profits

Courtesy of VentureWire's Venture Capital Dispatch