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
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
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