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After discussing their recent travel plans, our founder Rafat Ali spoke with Rob Glaser, partner, Accel Partners / chairman, RealNetworks (N…

Rob Glaser

After discussing their recent travel plans, our founder Rafat Ali spoke with Rob Glaser, partner, Accel Partners / chairman, RealNetworks (NSDQ: RNWK) at the paidContent Mobile conference, with a particular focus on the meaning of iPhone in the marketplace and whether Microsoft (NSDQ: MSFT) has a chance of catching up with Windows Mobile 7.

Apple (NSDQ: AAPL) and the rise of the super-phone: Glaser: “Apple has gone from single digit shares in PCs to defining the architecture of super-phones. The iPhone goes far beyond what smartphones offer, where consumers are browsing the web as a fuller experience and are looking to own dozens of apps. When I look back at my 25 years in the business, the super-phone is one of the top four revolutionary products.”

E-commerce is key: So far, Google (NSDQ: GOOG) Android’s commercial and monetization model lags Apple iPhone’s, Glaser says. “The iPhone is more seamless and Android’s commercial system is more cobbled together,” but Google has so many resources, they should close that gap quickly.

Open vs. closed: Glaser doesn’t see much of a problem with Apple’s famously closed system, at least when it comes to the iPhone. Being a little bit closed makes Apple’s business model work, but in other ways, it’s inhibiting. Glaser: “However, because Apple has made the e-commerce platform work for them and consumers, it’s a small inconvenience for developers. The wallet and monetization engine has to be closed to create economic value. The restrictions on Flash is annoying, but it’s a light annoyance. Plus, not that many people are looking for Flash sites on iPhone. It’s a different story on the iPad, however.” He sees no problem for Apple, unless its competitors can position having Flash, or other systems not available via Apple products, more viable.

Microsoft and Windows 7: Glaser notes that Microsoft continues to be strong on the PC side, while iPhone dominates mobile. “The alternative is Android,” he says. “Microsoft’s challenge is getting to be regarded as a credible second or third alternative. That’s a very big challenge. But given their financial resources, you can’t count them out.”

Mobile music: Ali noted that RealNetworks hasn’t figured out how to make money on mobile music — but then again, no one else really has either. What’s the solution? Glaser: “There’s a lot of interest from consumers want music at all times. The natural idea would be to do a Hulu of music, in terms of finding a way to get the right amount of advertising support. The sticking point has been trying to find a middle ground between radio and on-demand services like Pandora and Rhapsody, which has to get licenses. The music industry can’t stop radio, but they can stop digital music and as a result, it’s been a huge inhibitor.”

Keyboard vs. touchscreen: There are two kinds of smartphone users: ones who can type on a touchscreen and ones who prefer a physical keyboard. Glaser: “BlackBerry’s Storm 1 was not great, but its Storm 2 was a little better. If there is anyone who can figure out the divide between the physical keyboard and the touchscreen, BlackBerry maker RIM (NSDQ: RIMM) is the one to do it. Glaser was joined mid-interview by John Albright, co-managing partner, BlackBerry Partners Fund, who said, “RIM is coming out with a new device at the end of August and I think they will make progress on bridging that divide.”

Advice for Nokia: With Nokia (NYSE: NOK) reportedly looking for a new CEO, Rafat asked Glaser and Albright if they have any advice for the how the company can turn things around, especially in the North American market, where part of the problem stems from the lack of a product that can challenge the iPhone. (One interesting sidenote: Ali, just back from a trip to several countries in Europe and Asia, noted that in Mongolia, cell phone stores are called “Nokia Shops.”)

Glaser: Nokia needs a one-to-five year U.S. strategy. What they’re doing in Europe and Asia is working; what they’ve been doing in the U.S. is not. “A new CEO should have a five-year strategy in the U.S. that’s completely different from elsewhere. But for the most part, they’ll continue to struggle here,” he said. Albright agreed, adding Nokia will continue to do well in Asia, where it can offer a cheap product to a large population.

By David Kaplan

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  1. How did Rob Glaser become an expert on mobile? He hasn’t done anything in the mobile space and is one of the least interesting commentators on mobile I’ve seen.

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