Wednesday, July 05, 2006

Steve Palley: M:Metrics and Telephia Enter Mortal Combat

Steve Palley atFoci Mobile writes about the legal battle between mobile market research firms, M:Metrics and Telephia, and how it relates to the highly competive mobile games industry.He writes:

Telephia and M:Metrics may make their living at the periphery of the mobile content market, but the struggle between the two is no less serious than the publisher donnybrooks listed above. The suit is a direct result of the competitive pressures that have been slowly but steadily ratcheting up across the entire industry. The two data analysis companies are gunning for the same pool of clients; many of these prospective customers have been tightening their belts, and no longer have the liquidity to experiment with both firms' services at leisure.
Palley notes that the two firms "released contradictory reports upon the state of the mobile gaming industry's growth. As I mentioned in a previous column, the two reports essentially neutralized one another, because neither was really authoritative enough to discredit the other. The principals of both firms were well aware that this was a worst-case scenario for everybody involved; the clashing reports reflect poorly on both companies, and, more importantly, only one is likely to emerge with its research methodology vindicated and its credibility intact."

He then provides his analysis of the resultant patent infringement claims mad eby Telephia. He notes that:
A close look at the language in Telephia's press release also uncovers a shot at M:Metrics' reliability and overall level of propriety: Telephia has accused M:Metrics of creating "unacceptable risks" for operators and consumers by using uncertified software.

This is actually a fairly grave charge in the world of mobile data, where virtually every piece of commercial mobile software is put through its paces by a testing firm (for mobile games in the U.S., the firm is usually NSTL) to make sure it won't crash consumers' phones. When it comes to commercial software, at least, skipping certification opens up a lot of questions about the quality of the product in general; it'll certainly raise eyebrows among mobile publishers, who have accepted certification as routine. By mentioning the uncertified software angle, Telephia obliquely suggested that M:Metrics' results aren't secure or accurate, and that they may even be open to tampering.
Palley thinks "the issue has become a point of vulnerability for M:Metrics, and Telephia has seized upon it as an advantage in the battle of perceptions." He states:
Consider this: M:Metrics' response to the move was to truck out a mention of their long client list in its answering press release. Subtextually, this riposte indicated that the company is well on its way to dominating the analysis market, certification or no. Telephia's challenge is serious, and M:Metrics has clearly taken it at face value.
Palley concludes:
This lawsuit isn't the endgame for Telephia and M:Metrics, but it could come to represent the beginning of the end for one of the two companies. After last month's debacle, the dueling analysts have decided that the market isn't big enough for the both of them--and they're probably right, at least at the moment. To be sure, the winner will enjoy a plum prize: the priceless, indispensable position of industry oracle.