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Mobile megatrends 2011 (VisionMobile)

  1. VisionMobile : distilling market noise into market sense Mobile Megatrends 2011 updated 10 Feb 2011 Page Copyright VisionMobile 2011
  2. Knowledge. Passion. Innovation. Andreas Constantinou Michael Vakulenko Matos Kapetanakis (c) VisionMobile 2011 Licensed under Creative Commons Attribution 3.0 Unported License (http://www.creativecommons.org/licenses/by/3.0) You are free to Share or Remix any part of this work as long as you attribute this work to VisionMobile (www.visionmobile.com). Page Copyright VisionMobile 2011
  3. VisionMobile research Distilling market noise into market sense Research Training Market maps Strategy definition competitive analysis, open source economics, Competitive landscape maps of strategy design, ecosystem commissioned research, Android commercials, the mobile industry positioning, product definition company due diligence mobile industry dynamics Developer Economics 2010: Everything on mobile development Active Idle Screen Open Source Chessboard Who will own the business impacts of mobile open Mobile Megatrends series source, the competitive landscape and Mobile Industry Atlas, 3rd ed. screen? 1,100+ companies, 69 market sectors how to design your company strategy Top-100 analyst blog 4,000+ subscribers 20,000+ monthly uniques 90% mobile industry insiders GPLv2 vs GPLv3 White Paper The Android Game Plan the commercial mechanics 100 million club behind Android and how tracking successful businesses Google runs the show in mobile Page Copyright VisionMobile 2011
  4. Trusted by industry brands Clients selected VisionMobile clients 2008-2010 Page Copyright VisionMobile 2011 Copyright VisionMobile 2007-2010
  5. Mobile Megatrends 2011 The DELL-ification of mobile Software: new era for telecoms Experience ecosystems How the mobile handset landscape is and the new rules for innovation how telecoms + internet convergence becoming much like the PC is leading to the next megabrands Apps are the new web open + closed Developers, developers Why apps are the new information use of open + closed strategies to the engine behind telecoms innovation paradigm for web 3.0 commoditise + protect Communities: a new currency Stuck in the telecoms age Communities will provide the main how carriers are stuck in the telecoms age and differentiation above price, design and content how to compete Page Copyright VisionMobile 2011
  6. The DELL-ification of mobile How the mobile handset market is approaching PC-like commoditisation Page Copyright VisionMobile 2011
  7. Internet players agenda drive top-5 OEMs and OEM market is fragmenting, approaching the PC market 2000 2002 2004   2006   2008   Q3  2010   Market share of top-5 OEMs (source: Gartner) 67% 73% 72% 81% 80% 61% Page Copyright VisionMobile 2011
  8. Profits are driven by end-to-end players and away from the old top-5 OEM league source: Deutsche Bank Page Copyright VisionMobile 2011
  9. OEM strategies: volume vs profit = strategy $ profit per unit data source: Deutsche Bank 2010 market share % Page Copyright VisionMobile 2011
  10. OEMs at different stages of integration Three roles for handset manufacturers across the double helix Horizontal player structure Vertical player structure Leaders: new product experiences and enviable margins Assemblers razon-thin margins wannabee innovators wannabee leaders Innovators: incremental innovation strong brand, performance, good looks and services Page Copyright VisionMobile 2011
  11. Lead, innovate or assemble The new role models for OEMs in the post-Android era 1. Assemblers: Razor-thin margins 10s of assemblers use Android to deliver ready-to-market smartphones with complete service and apps ecosystem competing head-to-head with major OEMs. iPhone me-too experience at $100 retail. 2. Leaders: unique product experiences Manufacturers who can masterfully integrate hardware + software + services + industrial design into new product experiences - from phones and tablets to TVs. Unique product experiences at $500 retail. 3. Innovators: incremental innovation The old top-5 OEM guard. Differentiation is on strong brand, performance, good looks and services. 4. Mass producers: catering to developing markets ? Mass producers rely on huge economies of scale to break even at $50, but make up nearly 50% of unit sales in the mobile handset market. Page Copyright VisionMobile 2011
  12. The innovators are squeezed in Revenue pyramid performance pressure Leaders: new product experiences Innovators: incremental innovation Assemblers: price razor-thin margins pressure Page Copyright VisionMobile 2011
  13. DELLification in 2015 closely modelling the PC business Profit pyramid Revenue pyramid Present-day example Leaders Role model: Apple €37.5B 5% @ $500 Innovators Role model: Samsung €90B 25% @ $250 Assemblers Role model: Dell €56B 25% @ $100 s ce Mass producers vi Role model: Nokia ? de €37.5B 45% @ $50 B 1.5 $200B Page Copyright VisionMobile 2011
  14. OEM + Android: winners and losers The winners: The losers: low cost assemblers ‘old guard’ OEMs Cost structure optimised for razor-thin margins Cost structure requires high-margins Android is a long-term opportunity for global reach Android is a short-term life support No Name Page Copyright VisionMobile 2011
  15. The new world: Innovate or die The new rules of the handset industry 1. Software and hardware is commodity - Software is a loss-leader, monetised by ads (Google), hardware (Apple), content (Amazon), services (RIM) - Software is provided a la carte and pre-integrated by chipset providers (e.g. Qualcomm, MediaTek) 2. Points of differentiation rapidly disappearing - Android provides out-of-the-box, complete ecosystems; OEMs compete on equal footing to assemblers 3. The search for innovation is on OEMs are search for new models of innovation beyond price, brand, performance and marketing: - communities BlackBerry messaging or facebook deals - made-to-order handsets; copying DELL’s PC model - white label services for carriers where OEMs trade service revenues for carrier subsidies - micro-retailing ‘slotting’ promos across distribution regions and channels Page Copyright VisionMobile 2011
  16. Software: the new era for telecoms and the new rules for innovation image source: maschinenraum / Flickr Page Copyright VisionMobile 2011
  17. $$$ and software DNA are key for platforms 20 dead platforms in the last 10 years Internet Danger OS Android Chrome OS SavaJe OS PC Trolltech $30M A la Mobile iOS Nokia GEOS IXI Mobile Palm 5/6 Azingo Motorola L-J Comneon Apoxi Access ALP Mobile e-SIM Intrinsyc OS OpenWave MIDAS Sasken Aria Mizi Prizm SKY-MAP MOAP UIQ TTPCom Ajar OpenMoko 2000 2001 2002 2007 2008 2009 2010 Page = dead end bubble size = company revenues Copyright VisionMobile 2011
  18. The battle for mass-market smartphone reach OEM internal licensable €600+ computers mobile €400 device retail price connected Nokia Series 40 phones Samsung SHP €100 LG Wise €50 phones voice Note: OSes omitted: Myriad, Mediatek OS, Mango (Qualcomm), Koretide Elastos 14 out of 15 platforms are monetised indirectly by complementary products 11 out of 15 platforms have developer ecosystems or industry consortia built around them Page Copyright VisionMobile 2011
  19. The battle for ecosystem completeness Carriers Nokia RIM Apple Qualcomm Google facebook Components Social networks Cloud services Developer ecosystem Network User interface Operating system Hardware IP Manufacturing denotes where vendor started Page Copyright VisionMobile 2011
  20. Huge gap between telecoms & software worlds success as defined in 2010 success as defined in 2005 Page Copyright VisionMobile 2011
  21. software: turning telecoms upside down VA3#234+53#41G#N::1#L8?87-W#XX#C+1+-.D-E+,3#Y3138?5A# 234+531#6-,7#0-#7803#9/:#0-#;%#)'"'<# J/*E3?#-K#8::1#848+,8E,3#+.#8::#10-?31#9;%#)'"'<# !"!# 6>*E+8.# $&%''# internalised $!# +LA-.3# )H'&'''# 9+M6<# the new !!# N.7?-+7# I'&'''# networks %&%''# O848#DP# !(&'''# dual stasis ""(# Q,85RQ3??># "'&'''# personality back to "&(''# S,81A# (&'''# T+03# square zero back to U+.7-F1# '# I''# square zero *+,,+-.#/.+01# LA-.3# 8::1# %&(''# %&'''# )&(''# )&'''# "&(''# "&'''# (''# '# '# ('&'''# "''&'''# "('&'''# )''&'''# )('&'''# %''&'''# =-:>?+@A0#B#C+1+-.D-E+,3#)'"'# FFFG4+1+-.*-E+,3G5-*# Page Copyright VisionMobile 2011
  22. Huge gap between telecoms & software worlds Telecoms world Software world Success factor Installed base Number of apps Speed of innovation 1 OS version every 2 years 5 OS versions/year Time to market 1-2 years 1-2 weeks Type of services comms-centric catering to entire needs portfolio Risk-taking predictability / de-risking entrepreneurship / uncertainty Access to innovation 100s of close partners 100,000s of developers Business model B2B licensing B2C sales/ads/in-app sales Channel to market voice, text and web smartphones Discovery On deck / on device App store First step “we need to sign an NDA” “we need to download the SDK” Process Waterfall: RFI, RFQ, deliver, Agile: add feature, build, test, QA repeat Attitude “developers will come to us” “we need to go to developers” Page Copyright VisionMobile 2011
  23. The new rules of innovation 1. Speed of innovation defined by internet companies, not hardware / networks - Companies from the Internet domain (Apple, Google, Facebook) out-innovate companies from the mobile industry domain (Nokia, Samsung, Sun) and the networks domain (Vodafone, China Mobile) - Internet players are at top of the food chain and are becoming increasingly assertive 2. Innovation requires new competence and regional presence - California is the center for software and services innovation. Japan/Korea is the center of CE innovation. - You can’t innovate in software unless you have DNA in software and presence in those regions 3. If you can’t innovate in software, you will be replaced - The evolutionary game has just accelerated 10-fold. - Players who cannot evolve at software speeds will eventually be replaced by alternatives (e.g. software has superseded carrier efforts in location, billing and distribution) Page Copyright VisionMobile 2011
  24. Experience Ecosystems telecoms + internet convergence is leading to experience ecosystems Page Copyright VisionMobile 2011
  25. telecoms + internet + PC + consumer electronics = ? our definition of convergence has changed 2003   2010   2015   ?   Page Copyright VisionMobile 2011
  26. Is the future of convergence? No  more. Leaders Innovators -­‐  Innovators  are  in  a  price  war Assemblers -­‐  Android  is  making  smart  devices  possible -­‐  ARM  becoming  defacto  in  CE  devices -­‐  Sensors  +    form  factors  =  diverse  experiences -­‐  Developer  ecosystem  is  part  of  core  experience Page Copyright VisionMobile 2011
  27. Convergence is about experience roaming Convergence is about having an experience that roams consistently across ‘screens’ experience roaming across screens Social circle Developer ecosystem convergence = User data roaming Service roaming x User interaction design Industrial design Brand Page Copyright VisionMobile 2011
  28. Apple is the poster child of experience roaming Apple leads by example, by delivering a consistent experience across divers screens Experience roaming Across screens Social circle Ping iPod Apps ecosystem App Store iPhone User data roaming MobileMe iPad Service roaming iTunes, AirPlay Mac User interaction design iOS Apple TV Industrial design Apple ? Brand Apple Page Copyright VisionMobile 2011
  29. The next battle is for Experience Ecosystems Experience Ecosystems create major exit barriers and drive cross-sales; they are therefore a sustainable strategy for Innovator OEMs needing to survive margin pressures. network network effects effects Page Copyright VisionMobile 2011
  30. the future of convergence is experience roaming convergence = screens + experience 2003   2010   2015   the future of convergence is in a single experience + developer ecosystem powered by ARM hardware across mobile, PC & embedded Page Copyright VisionMobile 2011
  31. Apps are the new web Why apps are the new information paradigm for web 3.0 Page Copyright VisionMobile 2011
  32. Everyone wants their own app store but very few are above the radar = number of apps when above 5,000 OS vendors OEMs Carriers Independent Source: Distimo Page Copyright VisionMobile 2011
  33. App stores are about control, not $$$ App Stores are a control point for: and an opportunity for: - access to applications e.g. Skype cannot have a video calling app on the iPhone - distribution of applications e.g Google uses Android Market to enforce compliance requirements on Android handsets - billing & monetisation of applications an opportunity to extract a commission in the form of revenue share for paid apps and in-app purchases - retailing & discovery of applications an opportunity to sell ads and personalisation services to developers, plus differentiate with content curation - consumer insights an opportunity to optimise device and service targeting Page Copyright VisionMobile 2011
  34. Building an app store is not easy Page Copyright VisionMobile 2011
  35. Why is building an app store so hard? App stores need 5 genes from 5 species across the value chain Genes Species platform mobile handset platform brands and companies carriers & OEMs companies retailers payment brokers Page Copyright VisionMobile 2011
  36. 3 pillars to the app store evolution 2011-13 1. Merchandising: App stores will take retailing where it’s never been before - app retailing is bottleneck, resulting in price erosion as developers drop prices to bubble up to the top-25. -This will drive retail sophistication: App Malls (shops-in-shop), bundles, time-limited offers, friend endorsements, inventory micro-targeting, gift/beg options, second-hand apps, offers tied to carriers, etc 2. Diversity: App Stores will cater to 100s of niche segments; Genre-centric stores (Games store), lifestyle-centric stores (e.g. sports or clothes brands), specialist content (e.g. adult or enterprise), region-centric stores (e.g. Seattle apps) 3. Low barriers: App Malls will enable low-cost shops-in-shop setups SDP vendors will offer the infrastructure, catalogue and recommendations technology allowing wannabe app retailers to be setup at very low cost, with proven revenue models (setup fee + rent + sales commission) Page Copyright VisionMobile 2011 Copyright VisionMobile 2007-2010
  37. Apps succeed where the web failed - 2007: voice, text and web was main channel for services the old school of mobile services: voice, texting, ringtones, televoting, MMS, Mobile TV,.. - 2011: 500,000+ applications on smartphones - Apps are the single biggest digital channel since the web - There are apps springing up everywhere there is a website for every website, for every brand and for every corporate intranet - Apps succeeded where cross-platform frameworks failed Mobile web pages and widgets are poor alternatives to apps Java and Flash failed to pick up where web left off - The web is now the lowest common denominator across screens across devices, the living room, the PC and the car Page Copyright VisionMobile 2011
  38. what is are apps? apps are a new information paradigm For.. Mobile apps Web pages packaging Self-contained Set of pages personalising access to location, explicitly typed info only contacts discovering app store text results or URL monetising micropayments ads interacting touch, sensors, keys mouse, keys measuring downloads economy attention economy .. information Page Copyright VisionMobile 2011
  39. Web 3.0 will adopt the app paradigm Web apps will proliferate in mobile handsets driven by - web benefactors Google, Microsoft, Apple - technology commoditisation; WebKit and V8; - consistent technology adoption WebKit on >350M handsets up to June 2010 - platform vendors seeking to modernise their developer platforms e.g. WebOS vs Palm OS, RIM WebWorks vs BlackBerry OS 6, Nokia WRT. BREW to follow? - and “buy in” to a developer community and a “hype-ready” platform building a developer community is extremely expensive. It comes for free with web technologies - the need to tap into new developer segments from the web domain 1.5 million web developers most of which are new to mobile - The need to reduce development costs for cross-screen apps mobile, tablet, PC, TV, consumer electronics, automotive, .. Page Copyright VisionMobile 2011
  40. Google under threat in web 3.0 Google rose due to openness, info chaos and lack of monetisation - the open (crawlable) web, - the lack of information semantics (needing Pagerank to create order out of chaos) - the lack of a micropayments mechanism on the web (increasing demand for ads) Google is now threatened from web silos, app stores and micropayments - closed web silos (Facebook and Apple’s app store) - semantic information discovery in app stores (reducing greatly the search complexity) - app micropayments & NFC (reducing the need for ads) To survive, Google is trying to outrun the market trends - launching is own walled gardens (Orkut and Buzz), its own app stores (Android Market and Chrome Web Store) and integrating a payments technology (NFC) within Android handsets Page Copyright VisionMobile 2011
  41. Open + closed: two sides of the same coin use of open + closed strategies to commoditise + protect Page Copyright VisionMobile 2011
  42. Open is the new closed - Android, MeeGo, Webkit, Qt, Maemo, Eclipse, Linux all use open source all projects use an open source license for the public source code - Open source licenses are standardised and well understood 3 licenses used most often in mobile projects (GPL, LGPL, APL) - But an open source license is only the tip of the iceberg a license determines access to the project (e.g. Android public source code) - Governance is what determines the rules of the game the governance model determines access and influence into the product (e.g. Android handsets) - Open licenses are used with closed governance many projects restrict governance while maintaining an open source license Page Copyright VisionMobile 2011
  43. Closed governance is used to control clever use of governance models can be used to control products based on OSS license type dual license (commercial + copyleft) Qt strong copyleft (GPL) Linux kernel weak copyleft Foundation (LGPL, MPL, EPL,..) Foundation WebKit permissive (APL, BSD, MIT, ...) Android open community managed community autocratic community governance model (simplified) Page Copyright VisionMobile 2011
  44. What are the criteria for ‘openness’ ? Access • Is source code available to all without discrimination? • Are project mailing lists, forums, bug-tracking databases and developer tools available to all? • Is the project roadmap available publicly? Development • Are decision-making mechanisms transparent and accessible? • Is the code contribution and acceptance process clear and accessible? • Are the requirements to become a committer clear and equitable? • Can you identify who the committers to the project are? • Are the requirements to become a reviewer clear and equitable? • Can you identify who the reviews to the project are? • Does the contribution license require copyright assignment (vs. a copyright license) Derivatives • Are trademarks used to control compliance and use of the project? • Are go-to-market channels for Application Derivatives constrained? Community • Do different community members have different rights? Page Copyright VisionMobile 2011
  45. Openness to commoditise product complements beyond open source, openness is used as a business strategy to commoditise product complements while protecting core assets Windows iOS Android BlackBerry Symbian Phone Bundled services Closed Open Closed Closed Open App developers Curated Open Curated Curated Curated Device vendor Closed Open Open Closed Open Software platform Closed Closed Closed Closed Curated Hardware platform Closed Curated Closed Closed Open Page Copyright VisionMobile 2011
  46. Developers, Developers, Developers the engine behind telecoms innovation Page Copyright VisionMobile 2011
  47. Based on Mobile Developer Economics 2010 - Analysis of the developer experience from design to monetisation Free download: www.Developer Economics.com - Across all 8 major platforms - Based on a sample of 401 mobile app developers - With significant experience in mobile development More than 60% of respondents have 3+ years of experience in app development. Nearly 30% have won one or more developer awards Page Copyright VisionMobile 2011 Copyright VisionMobile 2007-10
  48. The diverse world of software developers With different business models and incentives content publishers Internet service providers system integrators mobile games developers software houses independent developers apps development software integration agencies services Page Copyright VisionMobile 2011
  49. Android has biggest mindshare “ Android is better than other -Android has biggest mindshare platforms in terms of tools, - Symbian/Java down from #1/#2 in 2008 platform features, and it’s easier to stand out as - Most developers work on multiple platforms developer.” The average is 2.8 platforms, across sample of 401 developers Android developer Page Copyright VisionMobile 2011
  50. Android 3x easier to learn than Symbian Page Copyright VisionMobile 2011
  51. Developers becoming market savvy “ technical considerations are Commercial above technical reasoning irrelevant, the choice of -Large market penetration (70% of respondents) is platform is ALWAYS more important than ability to code & prototype quickly (45%) marketing-driven.” - Revenue potential (55%) is more relevant than Mobile web developer good documentation (35%) Page Copyright VisionMobile 2011
  52. App Stores reduce time-to-market by 3x “ App Stores minimised time-to-shelf from 68 days to 22 days and halved time-to-payment Page Copyright VisionMobile 2011
  53. The app developer journey The many facets of the app developer experience - platform hype - developer certification - analytics & sales tracking - addressable market - app signing, certification & approval - user ratings (devices/regions) - regional testing & sandbox networks - user support - platform features - beta testing with peers and end users - application updates - learning curve & coding effort - localisation frameworks - cross-selling - conferences & competitions - packaging and SKU management tools - privacy compliance * * * develop, application platform market retailing & in-life debug & planning selection readiness monetisation application use support - audience targeting - IDEs, SDKs and documentation - go-to-market channels - concept design - UI tools - promotional tools - feature design - emulator and on-target debugging - co-marketing programs - prototyping tools - community & official forums/websites - revenue models - market research - profiling tools - billing & settlement - focus groups - test frameworks - porting tools *: mostly applicable to developers who sell apps - premium technical support Page Copyright VisionMobile 2011
  54. Key developer pain points based on Developer Economics 2010 research App submission & certification Application marketing application certification is expensive, approval takes too lack of effective marketing channels to increase long, and signing is complicated app exposure and discovery develop, application platform market retailing & in-life debug & planning selection readiness monetisation application use support most vendor effort goes here Localisation Dubious long-tail economics lack of localised apps for most regions, lack of average RoI through an app store is much less than localisation tools for developers the cost of producing the app Page Copyright VisionMobile 2011
  55. Are you a mobile developer? Want to share your own views on app development? Join in Developer Economics 2011. Have your say on the hottest issues in app development and win a $1,500 Amazon voucher. www.visionmobile.com/dev open until end March 2011. created by sponsored by Page Copyright VisionMobile 2011
  56. Communities: the new currency Page Copyright VisionMobile 2011
  57. Communities are the new frontier Building a brand, product or technology is science Building a community is a form of art Whether it’s a consumer, enterprise or a developer community New techniques are emerging; game mechanics and religion engineering Page Copyright VisionMobile 2011
  58. you can buy an audience but.. you can’t buy a community an audience is people who interact with a service. a community is a network of people who interact amongst them you can buy an audience (eyeballs or subscribers) but you can’t buy a community (network interactions) Page Copyright VisionMobile 2011
  59. Communities are the new differentiator Service brands, OEMs and carriers have tried to create own communities But found that community creation needs a very different rulebook And ended up partnering with communities (Facebook, Twitter, etc) Exclusive deals with communities will be the new differentiator above price, design and premium content. Page Copyright VisionMobile 2011
  60. Communities are the new currency Zynga's CityVille grew to 100 million users in just 43 days Facebook is a platform between 500M+ users and 2.5M+ developers Facebook is #1 social network across the world except China, Russia, Brazil, Japan Skype: 8 million paid users and 25% of global international calling traffic Page Copyright VisionMobile 2011
  61. Carriers: stuck in the telecoms age and how to compete Page Copyright VisionMobile 2011
  62. Carriers in the midst of an identity crisis Carriers are telecoms-age species in a software age - Carriers have grown in the telecoms age; this affects their ability to adapt and their speed of innovation ..In an identity crisis - Carriers are still undecided as to whether they want to be an access company (e.g. LightSquared, KPN), a supermarket (Verizon), a shelf (Vodafone) or a broker (Three). They want to be everything to everyone. Losing battle after battle for control points - non-communication needs (apps), location (GPS), billing (app stores), service retailing & discovery (app stores), authentication (Twitter/facebook), mobile termination (Google C2DM), subscriber activation (iPhone soft SIM?) With no innovation in their core business - voice, texting and SIM cards have seen no innovation in the last decade. Page Copyright VisionMobile 2011
  63. Taking baby steps in the software age Carriers don’t know how to use software - Carriers software efforts are mediocre; see Vodafone VSCL, VFX and widgets - Using WAC to profit from apps, when Apple/Google are not profiting from apps Carriers are accelerating the PC-like commoditisation of handsets - skewing the natural OEM selection process (by ranging handsets on a OS basis) and forcing Innovator OEMs to struggle while nimble assemblers thrive - The $100 smartphone means loss of subsidy power for carriers, therefore loss of differentiation Carriers are funding their antagonists - most Android projects 2007-2009 were carrier-funded. - Android and iPhone are playing AT&T and Verizon like puppets on strings; e.g. Verizon now heavily marketing iPhone, while AT&T heavily pushing Android. Page Copyright VisionMobile 2011
  64. The real value of carriers The real value of carriers is still untapped 1. Leverage apps to drive core business, not generate revenues - Deliver voice and messaging apps that build on core network business, at 10x deployment speeds - quit pushing for higher communications ARPU, but leverage apps to extent revenues across untapped segments of consumer spending portfolio (transport, health, food, housing, etc) - expose network APIs that drive lock-in to core business, not APIs that generate revenue - leverage apps to drive premium customer acquisition, customer retention and increase switching costs 2. Divide and conquer among app stores - Don’t create new app stores (WAC) but divide and conquer among existing app stores - Create shop fronts for app retailing and promotions - Monetise by helping developers target apps to the right demographic in real time - Offer recommendation services by tapping into users’ social graph Page Copyright VisionMobile 2011
  65. The real value of carriers 3. Increase power over OEM suppliers - Shift handset purchasing model to a performance based per-device bonus based on hitting ARPU, messaging and churn targets; leverage on network analytics. - Resist a price war on handsets by favouring an oligopoly of traditional suppliers 4. Become the VISA of mobile - aggressively grow carrier billing usage via in-app payments - provide micro-billing at VISA-like rates activated via SMS 5. Invest in retail differentiation - as devices commoditise, retail will become a stronger control point for customer acquisition - Invest in retail differentiation, for example visual service retailing, bundling services/apps in handsets, deploying handset PoS configurators and carrying out PoS customer segmentation analysis. Page Copyright VisionMobile 2011
  66. The real value of carriers 6. Customer experience management - Identify influencers and improve lifetime value metrics - Understand customer behaviour and enable behavioural targeting by third parties 7. Drive wholesale business beyond mobile - Drive wholesale model in CE business (ala Kindle) to de-risk and differentiate bandwidth pricing 8. Handset customisation: focus on merchandising and addressbook - focus on a single app (active idle screen) to be provisioned on all smartphones + some Java handsets - idle screen app can encompass service merchandising/promos and addressbook functionality - leave all other apps to 3rd parties! Page Copyright VisionMobile 2011
  67. a note of caution is WAC repeating history mistakes? - WAC is a framework for creating carrier-owned app stores even if carriers don’t have most of the genes to create their own app store - and making money from apps when Apple/Google use apps as a complementary business, not as a revenue generator - Needs software agility, but moves with telecoms rigidity 12 months since announcement and no distribution channel, no marketplace, no billing Telecoms rigidity and ‘design by committee’ is the key reason why LiMo failed - Smartphone focus, but feature phone opportunity Smartphone focus (Opera, S60, iPhone), where competition is fierce. Opportunity is in feature phones but challenge is fragmentation of widget runtimes and buying power - why i-mode alliance failed. - Distribution channel will fail once runtimes fragment Same reason why a Java app store would fail. - Distribution will fragment among carriers Each carrier to have different app requirements and revenue shares Same reason while the BREW app store (since 2001) failed to reach Apple’s proportions Page Copyright VisionMobile 2011
  68. Thanks for listening. Knowledge. Passion. Innovation. want more? hello@visionmobile.com contact us to schedule an on-site workshop. Updated: 12 November 2010 Page Copyright VisionMobile 2011