Thursday, March 31, 2005

pwc Nextcode Interview

Can you briefly describe what Nextcode offers to consumers and corporations?

Unlike traditional barcode scanning solutions, Nextcode is primarily focused on enabling consumer solutions. Nextcode provides consumers quicker access to mobile content, commerce and services by eliminating usability barriers such as keystrokes and cumbersome menus. Further, we help mobile content providers and carriers improve services, better merchandize content, expand their offerings and enhance customer satisfaction. We have offerings that enable any camera phone to use barcode scanning services so we can open up the market.

What is the biggest obstacle your company and this industry is facing?

The biggest challenge faced by the industry is overcoming the technical complexity involved in delivering scanning solutions to the wide variety of handsets available on the market. There is a great deal of difference in the way different phones operate when it comes to camera-based applications. Nextcode offers our solutions across any number of handsets and devices, but with each model, we face the challenge of making the technology compatible for all of them.

Nextcode achieves this because we have developed our technology from the ground up to be specifically for mobile phones and mobile services. This gives us the capability and flexibility to support a wide array of different handsets and platforms. A major factor that sets Nextcode apart from our competitors is that we recognize the reality of phone optics and imaging capabilities and we have built technology that does not require changes to optics or necessitate the use of special hardware.

Corporations or consumers, who are you catering your business to?

Nextcode offers business solutions, but our primary focus is on providing consumer applications of code scanning technology. Our goal is to enable any consumer with a camera phone to use barcode-scanning applications to access mobile content, commerce and services.

The reality of this goal, however, is that in order to provide these consumer solutions we must create technology that is easy to rollout, deploy and use. This also necessitates working across a wide array of phones. With business applications you could dictate a single optimized phone, or make changes to the camera or the optics to make it able to scan barcodes. But that approach won’t work for consumer applications. You need to work with what is going to be in consumers’ pockets and provide a superior user experience that makes them comfortable and gets them hooked.

Further, you need to understand the needs of brands and how they are going to want to communicate with consumers using barcodes.

What is taking service providers so long to implement this?

First of all, one needs to think about this regionally. We worked with operators in Japan several years ago to develop barcode scanning technology for camera phones. Services are now quite active over there today.

In the US, Europe, and other regions, camera phone sales have been initially slower but now are taking off like a rocket. While it might seem like service providers in the US and Europe are being slow to move, and some of the delays do make sense. First, there need to be enough camera phones in the market to make code scanning services viable. We now finally have that high level of penetration.

Second, the state of the camera phone technology in the past hasn’t been well suited to scanning. Nextcode has been working hard to develop unique technology that enables us to offer code scanning that works with any camera phone. We have been getting a great response and we expect much will be happening quite soon.

Has the search engine industry recognized how your product, and this new industry, will be the catalyst for mobile marketing? (ie. Have any search engines contacted you about any business relationships?)

We are talking with some search engine firms. But the two metaphors for information access are really quite different. Search is typically spontaneous and not based upon a physical code, rather one expects the user will key in their search. Search is also trying to find its appropriate place in the handset. Traditional search methods need to be recast for mobile to be appropriate to the constrained phone UI. Scanning can facilitate this.

The two services can be integrated but we see barcode scanning supporting a much wider array of services and types of firms than would fall into the “search” category. Barcode scanning presents more of a planned user experience. There will be lots of companies working with code scanning based offerings that will be unrelated to search engine services.

When do we see the ability to click on a barcode/2D code and purchase/retrieve info happening?

Barcode scanning applications are already being used today in Asia. Services in the US and Europe will roll out this year, and will become commonplace by 2006.

If you could land one specific customer/client, who would it be?

Nextcode is eager to see major media companies integrate code-scanning services into their offerings. A perfect partnership for Nextcode would be a firm like AOL Time Warner because they offer both print and interactive content and have huge media assets. If a company like that begins to actively promote code scanning, it will be a great facilitator in moving the industry forward.

Does Nextcode have an application that can read RFID tags?

There is a lot of confusion in the comparison of RFID tags and barcode scanning. While Nextcode is very supportive of RFID initiatives, the solutions provided by the tags are very different from those of barcode scanning.

We are very supportive of RFID. However, it addresses a different problem than what is intended for barcode scanning. Further, RFID applications are limited compared to barcodes. With barcodes, we can put unlimited numbers of codes into a publication. For example fully code-enable a catalog or newspaper with hundreds of codes, at no additional printing cost. With RFID you could only have a single tag embedded in a magazine. Plus, the widespread implementation of RFID into publications (even at target prices of 5-10 cents per tag) could be quite expensive when dealing with large volumes. Further points on the flexibility of barcodes are that they can be generated on screen, created dynamically, and produced by any printer.

If you had to sum up Nextcode in one sentence, it would be.

Nextcode provides barcode scanning solutions that enable a richer mobile experience for consumers by eliminating usability barriers, and allows companies a fast, easy way to offer customers content, commerce and services.

I had a chance to speak to NextCode's CEO Jim Levinger and get a much better handle on the obstacles this industry is facing. One issue right now is the ability for the cameraphone to "capture" the barcode. Most phones don't have the proper zoom capability and just zoom in a fuzzier barcode.

Nextcode works with the standard cell phone optics and requires no macro focus lens or other changes. This is a big hurdle cleared for implementation. Nextcode also has a high tolerance to defocus, lighting conditions, motion blur and other distortions.
I know if I take a picture with my Treo, half the battle is proper lighting.

Nextcode has their own 2D code called mCode. Nextcode's mCode technology is specifically designed to meet the needs of emerging mobile applications and mobile camera phone devices. Nextcode's technology lets codes be read with a wide range of cameras, processors, and optics in standard mobile phones.

NextCode has already created partnerships I found interesting Crisp Wireless , Musikube , and QPass .

I can see some great potential with these partners. I have talked about Musikube and their iCapture division before. The ability to identify music via print or sound through a cell phone could have huge opportunities.

Qpass is software that manages the entire digital supply chain over any network and any type of device. They already have more than 1000 content providers and integrators through Qpass software.

Crisp Wireless is a mobile content management that has already created some impressive campaigns.

It looks like Nextcode has a nice infrastructure in place once their platform is on the phone. That looks like the only obstacle for now

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