M obile Software Global Trends <ul><li>What is changing in the markets </li></ul><ul><li>Business models </li></ul><ul><li>Distribution channels </li></ul><ul><li>Summary </li></ul>
Forum Nokia Business Development Team EMEA +358504823831 +358407009694 +358504801487 +358503891632 +358408037360 +358504869523 +358503423554 Scandic, Poland, Czech Republic, Slovakia Middle East and Africa Russian speaking territories French speaking territories, Spain, Portugal Finbaltics, Germany, Netherlands Alps and Adriatic, South East Europe UK and Ireland, Italy, Turkey Personal Productivity and Utilities MEA CIS Multimedia Enterprise and Business Mobility Location Based Services and Near Field Communication Leader, Business Development Benjamin Roszczewski Rahim Zaknoun Kirill Zelenski Patrick Dalez Jarkko Tolvi Jure Sustersic Gian-Luca Cioletti
Our Vision Forum Nokia the preferred partner for mobile developers communities
Forum Nokia’s Roles <ul><li>Technical support, providing developers with tools and technical information for a better, easier and faster development on top of Nokia’s platforms </li></ul><ul><li>Create business opportunities for mobile developers </li></ul>
Big Opportunity number 1: mass market The world in 2010: EUR 100 billion* revenue for core markets * Nokia and external analysts´ estimates Digital imaging Communities Video & TV Navigation Gaming Music Messaging
Big Opportunity number 2: enterprise market The world in 2010: EUR 90 billion* * Nokia and external analysts´ estimates PPM SCM Office Suite CRM ECM ERP Other Application E-mail DCC Web conference & Team collaboration
Current and Future Use of Mobile Services, Worldwide (Gartner Q4, 07)
D! client on Nokia phones, some facts… <ul><li>Downloads, global markets </li></ul><ul><ul><li>Europe, China, MEA, SEAP, India </li></ul></ul><ul><li>Downloads, EMEA markets </li></ul><ul><ul><li>Russia, UK, Saudi Arabia, Egypt, UAE, Iran, Ukraine, Italy </li></ul></ul>
How important are mobile applications to the purchase of a handset? <ul><li>86% of panelists said the possibility to install applications to mobile devices is important. </li></ul><ul><li>Almost half of panelists installed add-on applications during the study. </li></ul><ul><li>Source Smartphone 360 study 2007 </li></ul>
Great potential for non-voice services on Nokia devices Source: Nokia Smartphone 360 * At least twice per week during the panel period Low Mid High 0 80 100 120 Minutes / Day / User 20 40 60 Other Navigation and Maps Multimedia/Gaming Browsing PIM Messaging Voice
Why does mobile and Nokia matter to developers? <ul><li>More than 3 billion mobile phones worldwide - one for every two people on the globe </li></ul><ul><li>Expected to jump to 4 billion by 2010 - roughly triple the number of personal computers </li></ul><ul><li>Approximately 4% of mobile phone users are actively downloading mobile applications. </li></ul><ul><li>Symbian OS device owners are much more likely to be downloaders. In certain EMEA countries, 23% of them are active downloaders. </li></ul><ul><li>Over 900 million Nokia handsets are in use around the world </li></ul><ul><li>More than 150 million S60 smartphones shipped </li></ul>
<ul><li>Data service usage is rapidly increasing worldwide, principally driven by mobile internet </li></ul><ul><li>Data revenues amount now almost 20% of total revenues globally </li></ul><ul><li>As growth slows down in mature markets, global operators expand to Emerging markets for future growth and service differentiation, mobile VAS market is booming in emerging markets </li></ul><ul><li>Rising the interest to replicate Emerging markets’ business models based on low costs and low tariffs also in more mature markets </li></ul><ul><li>Carriers are dominant distributors of content and applications in their domestic markets </li></ul>Operator’s ARPU global trends are downward, but…….
Flat rate data pricing stabilizing in most markets Operator Country GB/Jan GB/Jul Australia Telstra 1 1 Austria A1 3 3 Bulgaria M-Tel 1,5 1,5 Croatia Vipnet 1 1 France Orange 1 1 France SFR 1 1 Germany O2 5 5 Germany T-Mobile 5 5 Hong Kong 1010 1 1 Italy TIM 1 0,5 Italy Vodafone 10 15 Kuwait Zain Lithuania Omnitel 1 1 Malaysia Maxis Netherlands T-Mobile 1 Portugal Vodafone 1 1 Singapore M1 South Africa Vodacom 3 3 Switzerland Swisscom 1,5 1,5 U.K. H3G 1 1 USA AT&T 5 20 € 40 € 60 € 0 € Jan 07 July 08
Business models & distribution channels Licensing Advertising Subscription The application store boom…. Content Providers Retailers Operators
Forum Nokia Business Development Team EMEA was consulting Turkcell in setting up their application market place. On the portal it has been deployed already more then 100 mobile applications from Forum Nokia developers and more are in the pipeline waiting for the deployment. From the following link: http:// www.uygulamapazari.com / StoreFront /Index.aspx?lang=2 you will find the application portal in English LAUNCHED TURKCELL PORTAL PROVIDING FORUM NOKIA MOBILE APPLICATIONS TO ABOUT 35 MILLIONS TURKCELL SUBSCRIBERS
TELENOR GROUP AND FORUM NOKIA JOIN FORCES Forum Nokia Business Development Team EMEA reached an important agreement with Telenor Group. Forum Nokia will start promoting applications and services to Playground, the application portal for Telenor Group. Playground portal is used by operators belonging to the Telenor Group to select and deploy new applications and services in the markets. You will find more information from the following link: http:// playground.telenor.com / node /887 , and the article regarding the agreement at the following link: http:// playground.telenor.com / node /899
Summary The ways people use their phone are changed The mobile is still the preferred device Mobile applications can offer new dimensions and more value The business will be big enough for all the ecosystem
Our goal = to expand from a pure play hardware company to a hardware company that provide solutions (i.e., both devices and services) to our customers Services & Software net sales in Q1 = 84mln as disclosed in Q1 earnings in April. In the future, the link created between our mobile devices and mobile services could play a part in enhancing our brand, our market share, and increasing retention rate. In the long-term, we expect that the services business will generate meaningful revenue on its own. As communicated at the Capital Markets Day in 2007: we expect that Internet services market opportunity could be approximately 100 billion Euros in 2010 (not only “Mobile Internet Services, but the overall Internet service market) MUSIC: Over 30% of the devices Nokia shipped in 2007 integrated with digital music players. NAVIGATION: Already leading in mobile navigation. Generating revenue for us. Already have more than 10 devices with GPS available, and plan to ship 35mln devices with GPS in 2008 . IMAGING: No1 provider of digital cameras. A bit less than 50% of the devices Nokia shipped in 2007 are camera devices . We will seek ways to leverage this in all segments and in all markets, with partners, and locally and globally.
A workplace evolving from physical to virtual environments • The rise of consumer technologies affecting daily work • The impact of globalization regarding reach, access and collaboration • Growth of the midmarket (100 to 1,000 employees), especially with a focus on business and financial applications • Consolidation of markets and technologies • The direct and real-time availability of the Web and Internet, simultaneously global and local Business factors — Regulations (aligned to governance risk and compliance, e-discovery, privacy, and security), data security, business performance transparency, business unit and IT partnerships for project delivery, and leveraging IT for innovation and technical advantage. • Market factors — Convergence and delivery of software products wrapped with services, evolving software licensing and alternative delivery models, vertical-market and business process expertise, and &quot;software stack&quot; battles. • Economic factors — Mixed regional and country economic performance, and trade-offs between discretionary and baseline budget funding in light of low-single-digit IT budget growth. • Technology factors — Increasing use of industry and technology standards, open source, SOA, Web services, Web 2.0, technology consolidation, virtualization, and consumerization of IT (many of these key technology trends and forces are discussed in more detail in the Contributing Factors to Trends section).
Worldwide, MMS, ringtone downloads and logo/screensaver/wallpaper downloads are the top three mobile applications after SMS and voice. So far, mobile applications tend to be more entertainment-oriented, although productivity-enhancing services such as mobile e-mail and search could become more popular in the next 12 months. Other services, such as mobile TV and push-to-talk, may never have a chance to reach the mass market, as their appeal to consumers is limited.
Downloads here means users+downloads per region and then per markets in EMEA. Where are more activities from Nokia’s phone users with D!
Here are the results from the survey, the two main things there.
2 interesting observations: First, voice is only a small part of the users’ activities. Navigation and Maps” under-represented: Only 28% had Nokia maps and devices with integrated GPS. Second, even the users that do not spend a lot of time with their devices actually spend a fair amount of time daily using other services than voice (and SMS). --------------------------------------- (NOTE) this chart is from the latest Nokia Smartphone 360 study, which included 333 device users in Singapore. The study is done so that we install a small monitoring application onto the users’ devices, with their consents, and the client regularly reports about practically every activity the users undertake with their devices.
Here again some facts why now we see the changes on the markets, at least in Europe.
Main messages: Operators are not making money anymore from voice and SMS Operators are looking for new data consuming apps and services Operators are looking for emerging markets as mature markets are not anymore profitables as they were in the past, operators are looking for the next growth.
Flat rate pricing still to high for young.
The main 2 talking points in this slide are 1) Trends in Developer Business Models (Source, excl. Try-n-buy: FN PRO developer poll, Q1 2007) Single payment declining in all segments In APAC, single payments for personal productivity apps are forecast to decline from 80% to 25% of the mkt by 2009. During the same time, Subscription and advertising is forecast to increase to 25% of the revenue. (source: Forum Nokia developer poll Q1 2007) Try-N-Buy shows very positive trends 20-30% of downloaders buys product license (source: Finnish Service Catalog P03/2007) Subscription increasing and will stay important for specific segments like video, mobile TV etc. (all you can eat services) Ad-based models are emerging but there are really no implementations in the market yet 2) Operators are the primary channel on average accounting for about ~65-70% of the developer revenue stream depending on application segment. E.g. in Games segment is 68% and in Infotainment 75%. (source: FN BD&C channel study in Oct 2006) Currently, most of software/content revenue (67%) is paid by consumers, of which developers receive just 25%. (Source: Ovum, 2007) The rest is paid by: 10% by device manufacturers, 23% by enterprise/customized solutions (subcontracting) More details about business Models: Definition for Content Partners & Developers Single payment Buyer is given a single (or multi) user license for use without time or feature usage limitations. Drastic decline, with channels shifting to direct-to-consumer; PremiumSMS popular Multi-part payment - Try-N-buy driven Buyer is given a perpetual but limited license for use of the software. User needs to pay for additional feature and/or capacity Operator and developer centric strategy Subscription payment Buyer is given a limited license for use of the software. License expires after a fixed time or fixed number of uses and needs to be renewed by additional payment Advertisement/Sponsorship payment - Lot of talk, few implementations Sponsor pays for the license (e.g. coca-cola sponsored game). Mobile advertising – Payment from dynamic ads that can change according to user/time/location. Currently strong in China and Japan Growing operator attention Advertising revenues projected to grow almost 4.5 times, compared with direct revenues, which will less than double. In 2011, advertising will account for over 1/4 of the core services revenues. Mobile advertising will reach €5.8bn (the rest of the advertising revenues come from online social networking). This expectation though is much lowered compared to earlier expectations, as the economic slowdown is affecting the mobile advertising The main sources of mobile advertising revenues will be mobile Internet usage: browsing, search and local search. Content and other services (maps, email, IM) will bring significantly less advertising revenue than mobile Internet. Advertising ARPU is not high enough to sponsor content. Mobile advertising is still in early stages of development and brings significant uncertainty to the forecast.
Messages: People use their phones in a different way, especially youngs The mobile is the device that people are carrying with 24/7 Mobile application offer to consumers new dimensions on how to use the phone and more value If the application business will take off will be enough money for all ecosystem, all the players (operator, channels, handsets manufactures) have to understand this and work together to make this happen
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