BUSINESS REPORT : MAKING MONEY IN MOBILE

Contents

a Business RepoRt on

Mobile Computing Is Just Getting Started
Google Wants a Computer on Your Face
Smartphones: High Prices, Huge Market

Making Money
in Mobile
Mobile computing is the fastest-spreading consumer
technology in history. But 65 percent of the world isn’t even
online. That means the real change is only beginning.

Making China’s Cheap Smartphones
How Facebook Slew the Mobile Monster
An Anti-iPad for India
Qualcomm Wants to Be Famous
Akamai’s Plan for a Data Fast Lane
Garmin Navigates the Smartphone Storm
Startup Boom Gives Way to Caution
... and more

The Big Question

Mobile
Computing Is
Just Getting
Started

shout

Smartphones, tablets, and wireless
data plans are already a trillion-dollar
business.
● Mobile computers are spreading faster
than any other consumer technology in
history. In the United States, smartphones
have even begun reaching the group of
relative technophobes that consumer
researchers call the “late majority.” About
half of mobile-phone users now have one.
The big question facing technology
companies, and the subject of this month’s
MIT Technology Review Business Report,
is how to make money from this rapidly
expanding technology.
Wireless carriers make money at the
greatest scale. Globally, 900 of them
take in $1.3 trillion in revenue each year,
about four times the combined revenue
of Google, Apple, Microsoft, and

1

technologyreview.com

business report — MAKING MONEY IN MOBILE

More to Grow

The world’s seven largest markets for smartphone subscriptions
250 million smartphones
200
150
100
50

korea

U.K.

INDIA

Brazil
2011

Intel. Yet individual device makers, notably Apple, capture more profit. That company’s markets aren’t restricted to one
network. Its products, by bringing personal computing to phones, have sharply
increased their capabilities and value.
In 2007, the average wholesale price of
a mobile phone was $120 and falling; analysts talked of market saturation because
nearly everyone who could afford one
had one. But since then, prices have leapt
by 50 percent, and the revenue from all
mobile handset sales has doubled.
Apps and services still account for the
least amount of money in mobile computing. Mobile advertising brings in only $9

23%

Facebook’s share of the time U.S. smartphone users spent on apps.

billion as yet. But here is where the most
opportunities lie. Facebook has a monthly
audience as large as any that’s ever been
reached. And in January, it said for the
first time that most of that audience was
coming from mobile devices.
The swings in the company’s value—
it was worth $104 billion at its IPO, then
$42 billion, and now more than $60 billion—are a measure of its No. 1 rank-

2

japan

U.s.A

China

2012

ing among apps (23 percent of the time
that Americans spend on mobile apps is
devoted to Facebook) and the uncertainty
about whether Facebook can profit from
ads on the small screen, something it has
recently started to do.
Who isn’t making money is a story too.
For example, Microsoft’s share of mobile
computing is negligible. The company
“didn’t miss cell phones,” Bill Gates said
in a TV interview in February, “but the
way we went about it didn’t allow us to get
the leadership. It was clearly a mistake.”
Gates underplayed what’s been lost. In
2009, his company’s software was on 90
percent of personal computing devices,
counting smartphones, tablets, and PCs.
At the end of 2012, it was on just 23 percent of such devices.
That was fast. Now, watching the
fever lines on tech analysts’ charts cross
and collide has become a spectator sport.
Smartphones outsell PCs. Touch screens
outnumber keyboards. Even ordinary
search—Google’s great cash cow—is
declining in the United States as people
use their phones to search for restaurants,
bus times, and weather reports.
Large companies are responding with
bold moves. Google is developing Google
Glass—a computer in a pair of glasses.
The components are cheap, off-the-shelf.
It’s not hard to make. Google hopes this

new way to use a computer tilts mobile
revenue in its direction. Whether anyone
will want Glass isn’t clear, but it’s worth
trying. That’s because we’re still early in
the mobile switchover.
How early? Mary Meeker, the Internet prognosticator, leads her annual set
of predictions with observations on the
underlying trends. By her tally, 1.14 billion people own mobile computers, but
another 5.8 billion don’t. Of those, 4.5
billion aren’t users of the Internet at all.
One entrepreneur with a feel for the
opportunities in those figures is Suneet
Singh Tuli. His company, DataWind, is
trying to sell dirt-cheap tablets in India.
Just as customers in the developing world
skipped landlines for cell phones, Tuli
thinks, they’ll skip PCs for wireless tablets and smartphones. It makes sense: in
India only 11 percent of people are on the
Internet, but just about everyone already
has a mobile phone. “We’re talking about
what will be their first computer,” he says.
That’s a reminder of what the real
stakes are: the killer app isn’t Angry Birds
but access to computing itself. Wireless
smartphones and tablets allow the Internet
and its digital affordances to flow into every
hand, everywhere, in every circumstance.
We’re not in the “late majority” yet, either.
We’ve got nearly six billion people to go.
—Antonio Regalado

Emerged Technologies

Google Wants
to Install a
Computer on
Your Face
The search company is developing a
computer in a pair of glasses. But why
would anyone wear them?
● Google Glass, a compact computer
fitted onto a pair of slim metal eyeglass
frames, must be considered an impres-

Source: KPCB, MORGAN STANLEY

MIT TECHNOLOGY REVIEW



sive technical achievement. But can it
become a business?
Glass is the pet project of Google’s
cofounder Sergey Brin. The compact
frames have a boom on one side that
hides a camera, a battery, motion sensors,
a wireless connection to reach the Internet, and other electronics. That boom
also contains a small display, the light
from which is directed into a person’s
eye by a thumb-size prism positioned just
under his or her right eyebrow.
Google has shown off video and crisp
photos captured by trapeze artists, skydivers, and supermodels wearing Glass
prototypes like those it first unveiled in
April 2012. Recently the company posted
a show reel in which people used voice
commands to order Glass to take images
and send messages.
But just how this R&D project might
become a popular product and a significant contributor to Google’s bottom line
remains fuzzy.
Clearly, anyone who can reinvent the
mobile computing experience has everything to gain. Apple proved that with
its iPhone and tablets. Yet for Google
to turn Glass into a similar commercial
coup, the company will have to negotiate challenges in fashion, design, and
human relationships that lie outside its
previous experience. Google, which says
it plans to start selling Glass this year,
declined to comment for this article.
Making Glass affordable to consumers will be the easiest part. The device
may look unique, but it will mostly be a
remix of compact electronic components
now standard in smartphones, and it
should cost about as much as a smartphone to make.
“We put the average prices of smart
glasses, not just Google’s, at $400,” says
Theo Ahadome, an analyst with IHS
Insight, which strips down phones, tablets, and other devices to estimate the
cost of manufacturing them.
Persuading large numbers of people
to put the device on their faces will be a
far bigger challenge. Blake Kuwahara, an
eyewear designer who has created glasses
for Carolina Herrera and other fashion
houses, says Google will have to reinvent

its product to succeed as fashion, not just
a computer for your face.
To judge from Google’s prototypes,
“it’s clear that this device was designed
by industrial designers,” says Kuwahara.
“To make this something that someone
will want to wear full time, there need to
be adjustments to the aesthetics and styling—it reads as a device and not a pair of
fashion eyewear.”
It also remains unclear what Glass’s
killer app will be. Google has floated
some ideas—people could use the technology to get directions while traveling,
or to share video of experiences such as
roller-coaster rides with friends in real
time. Those videos make for great TV
coverage of Google’s prototype, but the
value to most people is uncertain, since
most everything you can do with Glass
you can do with a smartphone, and probably more easily.
Perhaps recognizing the dilemma,
Brin has openly sought help generating
more ideas for how to use the product,
and he’s also taken digs at the competition. During the TED conference in
late February, he called smartphones
“emasculating” because their users are
“hunched up, looking down, rubbing a
featureless piece of glass.” By contrast,
Glass would “free your eyes,” he said.
Last June, Brin appealed to software
engineers attending Google’s annual conference for outside developers, inviting
them to pay $1,500 for prototypes to
experiment with (these early “Explorer”
models have yet to ship). After signing
nondisclosure agreements, some developers attended closed-door meetings last
month in San Francisco and New York
to get their first experience with the new
technology.
Hardly any software programmers
have experience developing for something like Google Glass, and doing it well
will require throwing out some fundamental conventions of today’s computers,
says Mark Rolston, chief creative officer
at Frog Design, a design firm that has
worked with many consumer technology companies.
Today, people treat mobile computers like tool boxes, says Rolston, digging


out individual tools—applications—to
achieve particular tasks. “If you’re wearing a computer, that application model
needs to go away,” he says. “Instead, it
needs to be cued by the outside world so
it feels like natural life, not interacting
with a computer.”
Google’s limited demonstrations of
Glass suggest that the company agrees.
The glasses do have a touch pad on the
side for scrolling through menus, but
in Google’s demonstrations, users are
shown calling out “Okay, Glass” and
then saying a command such as “Take a
picture.” Google’s Android mobile operating system for smartphones has also
been shifting away from an app-centric
approach. Google Now, a core feature
of the latest version of Android, offers
live arrival and departure times when a

$400
Estimated retail price of smart glasses
person is near a transit stop, an approach
well suited to Glass.
Those same techniques may also
be suited to mixing in targeted ads,
although the leader of the Glass project, Babak Parviz, said in January that
he had no plans for ads to appear on
the device.
The least predictable part of Google’s
task is to make Glass as acceptable to
people who aren’t wearing it as it is to
those who are. Looks aside, the way people wearing Glass behave will be crucial,
says Rolston. For example, talking with
or even paying attention to other people
while information streams directly into
your field of view could be challenging.
“We’ll have to learn the social boundaries [of ] ignoring someone when it
looks like you’re engaged,” says Rolston.
“Normal cues like taking out your phone
will go away.”
—Tom Simonite

3




by Benedict Evans

Smartphones: High Prices, Huge Market
Tale of two industries
Smartphones have created a bridge
between two previously separate industries: wireless networks and personal

$248

$35

computing. For Internet firms and device

BIllion

Billion

Billion

makers, this means access to the world’s
largest network of people. As can be seen

$1,252

Global Revenue
2012

mobile operators

Tablets

at right, the wireless telephone business

PC sales

is much larger than personal computing.
In 2012, the world’s mobile operators did
$1.2 trillion in business and served around
3.2 billion people, versus perhaps 1.7 billion
people who used PCs to access the Inter-

$341

$269
Billion

net. By comparison, the combined revenue

$89

Billion

Billion

of Microsoft, Google, Intel, Apple, and the
entire global PC industry was $590 billion.
Online advertising, the main driver of the

mobile phones and
smartphones

internet
advertising

microsoft, intel, apple, and google

consumer Internet, generated only $89 billion in revenue.

SHIFT AWAY FROM PCs

Number of Devices in Use (millions)
2,000

PCs still represent a majority of personal computing devices in use globally.
But not for long. As sales of smartphones and tablets increase rapidly, they
are becoming the dominant personal-
computing paradigm. At right are the
number of PCs, tablets, and smartphones in use, as well as (far right) the
number of each sold in 2012. Growth
in smartphone sales is coming largely
at the expense of older-style “feature

1,800
1,600
1,400
1,200
1,000
800
600

phones” as people replace them. As the
data show, two-thirds of mobile-phone
purchasers have yet to convert to smartphones. Close to a billion smartphones
will be sold in 2013, while PC sales will
gradually decline.

400
200
2003

2004

2005
PCs

4

2006

2007

tablets

2008
iPHONE

2009

2010
android

2011

2012


iPHONE’s PRICE
Smartphones have greatly increased the



Revenue
$350 billion

profitability of the mobile-phone handset
business. The average selling price of all

300

mobile phones rose from about $105 in
2010 to $180 at the end of 2012, largely

2007
apple
iphone
introduced

250

thanks to Apple’s iPhone. In 2012, Apple
sold 136 million iPhones for $85 billion,
averaging $629 per phone. By comparison,
the average selling price of a PC is about
$700. With a further $33 billion in revenue
from iPads, Apple’s annual revenue now

200
150
100

exceeds the combined business of Intel
and Microsoft. Sales by other companies of
Android smartphones (not shown) reached
480 million units in 2012, generating an esti-

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

mated $120 billion in revenue at an average
selling price of $250.

Apple

google

intel

microsoft

Global Units Sold, 2012
= one million units

354

1.7

pcs

mobile handsets

MILLION

BILLION

613 million
iphone and
android

66
MILLION

ipads
5

Case Studies

Here’s Where
They Make
China’s Cheap
Smartphones
Apple and Samsung, beware.
Practically anyone can make a
smartphone these days.

● A little over a year ago, 38-year-old
entrepreneur Liang Liwan wasn’t making
smartphones at all. This year, he expects
to build 10 million of them.
Liang’s company, Xunrui Communications, buys smartphone components and
then feeds them to several small factories around Shenzhen, in southern China.
There, deft-fingered workers assemble the
parts into basic smartphones that retail
for as little as $65.
Manufacturers built about 700 million smartphones last year. But the market has taken on a barbell shape. On one
side are familiar names like Apple and
Samsung, selling pricey phones for $300
to $600; on the other, several hundred
lesser-known Chinese brands supplied by
a thousand or more small factories.

6



The change began in 2011, when
computer- hip makers began selling
c
off-the-shelf chipsets—the set of processors that are the brains of touch-screen
phones. Those, plus Google’s free Android
operating system, made smartphones
much easier to produce.
The flood of inexpensive devices could
force everyone to lower prices, including
Samsung and Apple. “They have reached
their peak,” Liang said during an interview near his office in Shenzhen, which
has become a hub for electronics makers. “In [manufacturing] technique we
are close to the same level. Then the only
difference will be the cost and the brand.”
Larger Chinese companies, like
Lenovo and Huawei, have also swarmed
into China’s market with midrange
phones that cost closer to $200. Lenovo
captured 12 percent of China’s market
last year.
Liang’s phones are the ultracheap
kind. He builds them at several Shenzhen factories, like Shenzhen Guo Wei
Global Electronics, which opened in 1991
as a manufacturer of fixed-line phones
and audio equipment. At Guo Wei, young
Xunrui engineers lounge about, smoking
cigarettes and drinking warm Coca-Cola
while playing games on various brands
of laptops.
One floor up, past a metal detector
and an enclosure where high-pressured
air blows dust and other impurities off
workers’ blue smocks, are the production
lines—five of them, each with 35 young
workers able to solder together and box
up 3,000 smartphones a day.
Guo Wei has had to make some investments to get into the smartphone game,
including importing new solder inspection equipment from Korea. One production line costs around $1.6 million to set
up, according to Li Li, a production manager at the factory who showed off the
equipment.
“The techniques are very complicated
compared to older phones,” says Li, who
joined the factory 17 years ago to work
in a department that repaired fixed-line
telephones.
But the real reason for the switchover
to smartphones was that last year large

chip makers, including the Taiwan-based
MediaTek and Spreadtrum, started offering “turn-key” systems: phone designs
plus a set of chips with Android and other
software preloaded. Spreadtrum says it
may sell 100 million units this year.

$65
Retail cost of a basic smartphone
in China
Each chipset costs $5 to $10, depending on the size of a phone’s screen and
other features. In total, Liang says, his
cost to make a smartphone is about $40.
He says that at Guo Wei and his other
factories, he can manufacture as many
as 30,000 smartphones a day for brands
such as Konka Mobile and for telecom
operators like China Unicom.
In the United States, a smartphone’s
high cost is generally masked by wireless companies, which discount them
steeply if consumers agree to a contract.
In China that happens as well. Liang says
his phones retail for about $65 or $70 but
can cost only $35 with a contract.
That is making China, now the world’s
largest smartphone market, a challenging
place for foreign firms to compete. Apple
accounts for 38 percent of U.S. smartphone sales, but its share in China is 11
percent and falling. Google has even bigger problems making money. Even though
the devices use Android, they often don’t
come with Google’s apps and search tool
installed.
Liang says his aim is to make smartphones that are affordable, even if they
aren’t yet as good as an iPhone. That
means the camera and LCD screen might
not be the best, and the battery life could
be shorter. “I always use this word ‘acceptable,’” he says. “A lot of users only need
an acceptable product. They don’t need a
perfect product.”
What’s certain, Liang says, is that the
quality of the phones his factories produce
will rise. “There is no profit at the bottom,”
he says. “Everyone is trying to improve
their techniques.” —Michael Standaert
with reporting by Su Dongxia

shout



Case Studies

How Facebook
Slew the Mobile
Monster
The fortunes of the world’s largest
social network depend on how much it
can earn from mobile advertisements.
● Scarcely a year ago, Facebook was the
poster child for Internet companies blindsided by the rapid shift of online activity from computers to smartphones and
tablets. Just before its highly anticipated
initial public offering in May, Facebook
revealed that it wasn’t making “any significant revenue” from its mobile website
or app—even though more than half its
900 million members used the service on
mobile devices.
By August, the widening gap between
mobile usage and revenue had helped send
shares plunging to under half their $38
offering price. The company had made “a
bunch of missteps” in mobile, CEO Mark
Zuckerberg sheepishly admitted in September.
Behind the scenes, though, Facebook
was already finding its footing. From near
zero last May, revenue from ads on mobile
devices rocketed to $305 million in the
last three months of 2012. That figure
amounted to 23 percent of overall ad sales
and helped lift shares back above $30 in
January. “We are a mobile-first advertising
company now,” says Gokul Rajaram, Facebook’s product director for ads.
That remains debatable, but Facebook’s
experience provides a lesson for anyone
trying to cope with the mass migration of
computer users to mobile phones and tablets. What Facebook discovered is that integrating ads directly into a user’s flow of
natural activities—in Facebook’s case, the
main feed where people view updates from
friends—works far better than banners and
pop-up ads. While these so-called native
ads might be controversial, they look like


advertising’s most successful adaptation
yet to mobile computing.
A year ago, Facebook faced all the usual
problems: small screens, fewer technologies to target potential customers, and gaps
in marketers’ ability to measure the impact
of mobile ads. These factors made ads look
far less effective on mobile devices, and
marketers less willing to pay for them.
Facebook’s advertising team was also
too preoccupied with pushing a new kind
of desktop Web ad, called Sponsored Stories, to pay much attention to mobile.
These ads are actions by a Facebook member, such as “liking” a page or checking in
at a store, that marketers can then promote, for a fee, to the member’s friends.
Zuckerberg viewed these ads as the future
of Facebook advertising because real posts
from friends were less likely to be ignored.
By early 2012, Facebook was ready to
start running them not just in the right-

Close to $0
Facebook’s mobile advertising revenue
during the first three months of 2012

$305 million
Facebook’s mobile advertising revenue
during the last three months of 2012

hand section reserved for ads but also on
its prime real estate: the news feed, where
people spend most of their time on the
social network. Executives knew it was a
risky step—especially when they extended
the same type of ads to mobile as well.
What if the ads really annoyed people?
Far from it. Sponsored Stories got more
clicks. But it was the mobile versions that
really took off. They got twice as many
clicks and commanded nearly three times
as much from advertisers as those on the
desktop, according to a subsequent study by
advertising agency TBG Digital. By July, the
mobile ads were grossing $500,000 a day.
Emboldened, Facebook launched
other mobile ads over the summer and


fall, including one that allowed makers of
mobile apps to urge users to install their
games or programs. This was an even bigger leap: it was the first ad in the mobile
news feed that didn’t require advertisers to
wait for a “like” or other social action to create it. Advertisers instead could use Facebook’s trove of biographical data from user
profiles to target likely prospects, as they’re
accustomed to doing with traditional ads.
That worked, too. In January, for
instance, Cie Games used app installation
ads to draw players for its first iPhone game,
Car Town Streets. The cost of acquiring
them was 40 percent lower using Facebook’s
ads than using those from other mobile ad
networks, says CEO Dennis Suggs. Even
big brands are getting interested. During
Thanksgiving weekend, Walmart bought 50
million mobile ads from Facebook, rivaling
the reach of TV campaigns.
Facebook’s success has exploded some
myths of mobile marketing. Advertisers
often complain that they can’t run big,
flashy ads on tiny screens. But Facebook’s
mobile ads take up a larger part of the
screen than desktop ads do—one reason
they get so many clicks. “Our ads are big
and flashy,” says David Fischer, Facebook’s
vice president of advertising and global
operations. And they’re getting more so:
some mobile ads now include photographs,
and Facebook is actively looking at incorporating video into them.
Everyone, including Zuckerberg, worried that users might balk at ads mixed
with posts from friends. So far, that hasn’t
happened. Tests found that ads reduced
comments, likes, and other interaction
with posts by 2 percent, a decline that the
company deems acceptable.
For all that, Facebook is still far behind
the mobile-ad revenue leader, Google—
which earned $2.2 billion from mobile
search and ads in 2012. And as much as
mobile ad revenues grew in the fourth
quarter, some analysts fretted that growth
wasn’t even better, especially since mobile
ads could be supplanting desktop ads.
Jacking up mobile ads even more,
though, could be a challenge. Says TBG
Digital CEO Simon Mansell, “They have
to be careful they don’t fill people’s feeds
with crap.” —Robert D. Hof

7

Leaders

An Anti-iPad
for India
Suneet Singh Tuli, the man behind
the ultracheap Aakash 2 tablet, says
the West doesn’t understand mobile
business in the developing world.
● A devout Sikh, Suneet Singh Tuli, 44,
has found his own way to live by his religion’s central belief of sarbat da bhala, or
“may everyone be blessed.”
He wants everyone in India to be on
the Internet.
To that end, Tuli’s London company,
DataWind, is building inexpensive tablet
computers, which it assembles in China or
with the help of support staff at its India
offices. The idea, Tuli says, is to pair cheap
tablets with ad-supported wireless service as a way to bridge the digital divide
between poor and rich countries.
DataWind began winning attention
last year when it struck a deal to supply
India’s government with 100,000 of its
Aakash 2 tablets, for roughly $40 each,
by this March 31. That tablet works only
near Wi-Fi points, but DataWind also sells
an $83 commercial version called Ubislate 7C+, which comes with an unlimited
mobile data plan for $2 per month. Within
18 months, Tuli says, he hopes to bring
the price of a basic tablet down to $25



slow wireless networks). MIT Technology
Review spoke with Tuli about his company’s business model and the future of
tablet computing in India.

Then I realized that most of these minivans were used as taxis, and the taxi drivers actually slept in them.
In the same way, the applications of
these tablets will be very unique, and I’m
not sure that I can comprehend what all
of them would be. But I’m hoping that if
we own the platform, we can become the
conduit for those applications and those
businesses.

You’ve said you never intended to be in the
hardware business. What do you mean?

We think that hardware is dead. A gigahertz processor costs $4. It’s good enough
for most everything you’d want to do
with a tablet, and not just for poor people in India. Hardware has gotten cheap
enough that restaurants or resorts should
be giving customers tablets to walk away
with for free. Hardware is becoming a
customer-acquisition tool.
So tablets should be literally disposable,
like USB flash drives?

I don’t like the word “disposable,” but by
2015, you’re going to see tablets reach
the stage where you can just pick one up
at 7-Eleven. And for consumers in the
developing world, tablets will be their
first computer.
We did a study to understand where
the inflection point for PC deployment in
the U.S. was: when did PCs really take off?
Our assessment was that when the cost of
purchasing PCs fell to within 20 percent
of monthly salary, you started to see them
in every home. In a place like India, there
are about billion people for whom $50
meets that criterion.
What new businesses will ultracheap
tablets lead to in the developing world?

There are going to be applications that
will create billion-dollar opportunities,

“Hardware has gotten cheap enough that
restaurants or resorts should be giving
customers tablets to walk away with for free.”
—Suneet Singh Tuli

and make the Internet connection free.
Tuli’s company is not a charity.
DataWind plans to make money with its
own app store and by displaying ads in its
built-in browser (which also compresses
websites for fast delivery over India’s

8

but we may not understand them in the
West or be able to relate to them. My
epiphany came when I saw a magazine
ad in India that showed a minivan with a
driver’s seat that could be laid down 180
degrees. I thought, “How dumb is that?”

You’re practically giving away the tablets.
So what’s your strategy for making this
into a business?

The first killer app on these devices is
going to be Internet access. We have
18 patents on how to deliver basic Web
access, even on India’s GPRS networks.
The idea is to bundle free Internet access
with advertising on an affordable tablet.
Basic browsing without audio or video
streaming would be available for free, and
we’d have a banner ad that runs on the
top, which pays for the cost of data service
and makes us money.
Does the Ubislate come with free Internet access right now?

In India, the free usage model is not in
place yet. We have a Rs.98 ($1.80)-permonth data plan for unlimited usage. It
is a fraction of what other plans cost, and
we intend to drive it down to free.
What new opportunities do you see for
apps in the developing world?

Nobody focuses on the problem of creating apps for somebody whose monthly
income is $200. Those people are not
part of the computer age or the Internet
age; most of them are not literate. So we
run app competitions in India to try to
get people thinking from that perspective. The winner of our last competition
was a group of students who designed a
commerce app for “fruit walas,” the guys
who run around with carts selling fruits
and vegetables. These students created
a graphically intuitive way of running a
small vegetable business.
There are something like five million
fruit walas in India, so if you had an app
for them, there could be a lot of money to
be made. —John Pavlus

datawind



Case Studies

Qualcomm
Wants to Be
Famous
Qualcomm is already worth more
than Intel. Now the chip maker wants
everyone to know it.
● Qualcomm is a company that sells chips
that go inside TVs, BMW dashboards, game
consoles, and, most important, into onethird of smartphones sold. It did $19 billion
in business last year and its stock market
value has surpassed that of rival Intel.
But for all of Qualcomm’s success, it’s
like the Rodney Dangerfield of chip companies—it gets no respect. Intel’s name is still
synonymous with microprocessors. Even in
San Diego, Qualcomm’s hometown, the average person knows the company because its
name is on the football stadium, not because
its products run the all-important computers
in their pockets.
Qualcomm’s chief marketing officer,


plus company, in terms of market cap, that
nobody knows.”
Qualcomm executives began expanding
the consumer marketing program in 2011
when the company realized gadget fans were
comparing smartphone specifications as if
they were PCs or even cars. If Qualcomm
can get consumers to prefer phones with its
chips, it could charge smartphone manufacturers higher prices or more easily fight its
way into other markets, like desktop computers.
Qualcomm’s efforts echo the famous
‘Intel Inside’ campaign launched during the
1990s, which saw the rival chip maker slap
its logo onto nearly every PC. Intel ended
up with a brand as well recognized as that
of Disney and Coca-Cola.
Although Intel’s campaign was an
inspiration, Chandrasekher says the mobile
phone market is different than that for
PCs—it moves faster, it requires more players working together to make a single device,
and the phones don’t have room for physical stickers.
Instead, Qualcomm has tried to get its
name in front of consumers in other ways,
starting in San Diego. Two years ago, it convinced the city of San Diego to change all the
signs at Qualcomm Stadium to “Snapdragon
by Qualcomm” during 10 days in Decem-

“We’re a $100 billion–plus company, in terms
of market cap, that nobody knows.”

Qualcomm

—Anand Chandrasekher, Qualcomm CMO

Anand Chandrasekher, is frank about the
company’s name recognition: “It’s not great.”
While it may not seem to matter whose
chips are in your device, Qualcomm is trying
hard to become a household name. With TV
ads, noisy promotions, prizes, and YouTube
videos, the company has been stepping up
efforts to promote its Snapdragon line of
chips for smartphones directly to consumers.
Chandrasekher, who worked at Intel for
18 years and took the Qualcomm job last
August, wants to make sure phone shoppers
recognize the Qualcomm name. “That’s why
I’m here,” he says. “We’re a $100 billion–

ber 2011, when several nationally broadcast
football games were played. The move was
an advertising coup, even though the city’s
attorney later called the name change illegal.
Qualcomm won’t say how much it
spends on marketing. But it has been working with four different branding, PR, and
advertising firms to develop movie theater
and TV ads that will feature its new dragon
mascot. In its ads, Qualcomm has tried to
entertain, but it also has to make technical
arguments about why its chips are better.
Last year, Qualcomm engineers sat down to
help brainstorm what Chandrasekher calls


“viral videos” of quirky experiments involving melting butter and praying mantises—
the idea being to illustrate the thermal and
power efficiency of Snapdragon chips. Those
videos have gotten two million views on YouTube, and some smartphone makers have
begun featuring Qualcomm’s chips in their
own advertisements.
There have been missteps. To say that
Qualcomm CEO Paul Jacobs’s keynote at
the annual Consumer Electronics Show
this January came across as trying too hard
would be putting it lightly. Between appearances by Big Bird, Nobel Peace Prize laureate
Desmond Tutu, rock bands, and awkwardly
scripted actors playing stereotyped young
people, technology bloggers present at the
Las Vegas show offered reviews that ranged
from “insane” to “all over the place.”
Chandrasekher admits the CES show
was “not as well received” as he would have
hoped. “We’ve been learning. You learn and
move on,” he says. “People are starting to care
about what’s inside their phones,” he says.
“We’ve invented a lot of these technologies
and we feel, maybe rightly, that we should
get some credit for it.” —Jessica Leber

Emerged Technologies

Akamai’s Plan
for a Wireless
Data Fast Lane
Clogged wireless networks spur a plan
to speed data to smartphones, for a
price.
● No matter how quickly you dispatch data
over the Internet, the last link is increasingly
a wireless link—slower, and sporadically
congested—to a customers’ smartphone
or tablet.
These days, while the average desktop
Web page loads in two to three seconds, the
average mobile Web page takes about eight
seconds—sometimes causing shoppers to
abandon transactions.
Now Akamai, based in Cambridge, Mas-

9



sachusetts, and several partners are working toward establishing a kind of “fast lane”
on the radio waves that wireless relies on.
It would allow companies to pay extra to
have their Web page or app data get transmitted ahead of others. Akamai’s move is
part of a growing effort to figure out how to
deliver information to your phone at faster
speeds, but it could also raise fairness issues,
depending on how much the premium service lengthens other people’s wait for data.
Akamai is already the big player in
speeding up the fixed-line Internet, the
one that operates across fiber-optic and
copper cables in the ground. The company runs 120,000 servers on 1,200 networks in 81 countries, where it hosts Web
content for its clients near locations of
expected demand. Now the company is
teaming with Ericsson—the Swedish firm
that makes 40 percent of wireless base
stations (the radio antennas on hilltops
and sides of buildings that transmit data
to your phone)—to push the same concept
into the wireless realm.
The new Akamai-Ericsson technology—
called Mobile Cloud Accelerator—builds on
the way wireless carriers already give voice
calls priority over other data. Right now, to

even where 10 percent of the network’s
capacity was set aside for premium content. Akamai thinks that even if delays
were noticeable on things like e-mails and
photo downloads, the trade-off of reaching a speedy conclusion to an important
transaction like buying an airline ticket
would be worth it.
Businesses that might want to pay extra
include banks and just about anyone hoping to close a sale. Those using the service
would pay between 20 to 50 times more
for their data to be delivered first. Akamai,
which plans to run the service from its servers, would split the revenue with equipment
makers like Ericsson that install the technology, and with the wireless carriers that
will use it on their networks.
As the amount of data on wireless networks soars, any effort to treat some bits
differently than others could raise concerns.
In recent years some academics and legal
experts have advocated for a concept called
net neutrality, which in its purest interpretation means no Internet service or government should treat data differently, or charge
differently, depending on the content.
For instance, in late 2011, the U.S. Federal Communication Commission issued
rules forbidding companies that provide
Internet or wireless service to block access
to any website or apps (except illegal ones),
even in cases where companies, like Skype,
might use them to offer services that compete with a carrier’s business.
However, the net neutrality doctrine is
usually not interpreted as preventing people
from paying extra for better service. After
all, many customers already pay extra for
a faster Internet connection at their home
or office.
Still, Akamai’s new wireless effort is different because space on wireless networks is
much scarcer than on fiber-optic networks,
and it could therefore penalize non-subscribers more heavily, says Wendy Seltzer, a
fellow with Yale Law School’s Information
Society Project.
“Here, if somebody doesn’t take advantage of this prioritization technology, it’s not
clear that they aren’t getting slowed down,”
says Seltzer. “I’m not sure it’s necessarily bad
because of that. But it may not be purely
neutral.” —David Talbot

120,000
The number of servers Akamai runs,
spanning 1,200 networks in 81 nations
avoid choppy conversations, mobile carriers
place data associated with voice calls at the
front of the queue, ahead of text messages,
e-mails, videos, or photos.
Under the new protocols and technology being pushed by Akamai and Ericsson, such prioritization is being extended
to create a tier of premium service for data
that companies can pay to access. Trials of
Akamai’s technology over the past year on
wireless networks in Europe showed that a
typical 200-kilobyte mobile Web page that
took between 3.5 seconds and 7 seconds to
load would instead load in one to three seconds when placed in the fast lane.
Lior Netzer, vice president for mobile
networks at Akamai, says the penalty on
other content was “barely measurable,”

10


Case Studies

A Shrinking
Garmin
Navigates the
Smartphone
Storm
Smartphones are digital “Swiss Army
knives” that do just about everything.
Can the world’s leading GPS company
survive?
● Garmin was once one of the world’s hottest growth companies—“the next Apple,”
according to some stock pickers. In 2007
the company, the world’s top seller of GPS
devices for car dashboards and boat cockpits, doubled its sales on what seemed like
unquenchable consumer demand for its
location-finding gadgets.
Then smartphones happened.
Not only have smartphones seen
record-beating adoption among consumers, but they have also become the Swiss
Army knives of consumer electronics,
doing a decent job at dozens of tasks once
reserved for specialized hardware like cameras and GPS systems.
The effects on Garmin’s business have
been withering. The company is worth less
than a third of what it was in 2007, and its
sales have shrunk by 15 percent. “It’s not a
mystery that the personal navigation market is in a period of decline,” says Dawn
Iddings, Garmin’s vice president for business development. “Mobile has permeated
each one of our markets.”
Hardest hit have been Garmin’s sales of
GPS devices for vehicle dashboards, also its
biggest line of business. Sales in its automobile and mobile division fell 6 percent last
year, to $1.5 billion.
Even so, Garmin has fought a successful rear-guard action by grabbing business
from other GPS firms, launching topshelf products for sportsmen and sailors,




and diversifying. (In 2011, for example,
it acquired a company that makes GPSenabled training collars for dogs.)
All that has served to cushion what the
company calls an unstoppable decline in
demand for stand-alone GPS devices. “It’s
still a really large market,” Iddings says,
“but I wouldn’t want to be number 2 or
number 3 [in personal navigation] at this
point, that’s for sure.”
Garmin isn’t the only consumer electronics firm fighting for relevance. The popularity of smartphones, of which around
640 million were sold last year, has reduced
sales of digital cameras and music players
as well. Mobile computers, including tablets, have also begun to bite into sales of
hit products like Sony’s PlayStation game
console.
Some companies have responded by
making their gadgets more like smartphones: Canon now sells cameras that connect to the Internet and run social apps.
Polaroid, also clobbered by mobile computers, even hatched the idea of opening retail
stores where people can print out pictures
taken on their phones.
Garmin didn’t think phones posed
much of a threat early on. Cofounder Min
Kao told Forbes in 2003 that he wasn’t worried about competition from them because
of high “barriers to entry”: specifically, the
need to pair the GPS location signals from
satellites with cartographic software.

Today, though, nearly all smartphones
have those capabilities, either because
they have a GPS chip or because they can
pinpoint a user’s location using cell-phone
towers. When a new version of Google’s
free map and navigation app became
available for iPhones last December, 10
million people downloaded it in just two
days—almost as many as buy a Garmin
GPS in a year.
To its credit, Garmin tried to head off
the mobile-phone threat. It launched six
navigation-friendly smartphones, including the so-called Garminfone (unveiled in
2010), but none proved successful.
The company’s strategy now starts
with milking what profits are left in the
market for personal GPS devices. It’s been
doing that partly by introducing higherend models like the Nüvi 3597 LMTHD,
which sells for $379.99 and comes with
a fancy magnetic mount and bells-andwhistles map features. It can tell you what
highway lane to be in and will alert you to
“turn right at Starbucks,” something that
phones can’t do.
The company has also worked hard
to diversify. Last April, with Suzuki, it
announced its first factory-installed dashboard “infotainment” system for cars—the
result of four years of investment that saw
it open new offices in Detroit, Germany,
Japan, and China.
Garmin has also been selling more

Mobile Computers Replace Host of Gadgets

The percentage of people reporting they own cameras and music players is declining.
80%
70
60
50
40
30
20
10
smartphone

tablet

GPS Device
2009

Digital camera

2012

portable
music player

specialized GPS devices, like wristwatches
to help runners map their workouts and
extra-rugged handhelds for backpackers.
Those are applications of GPS where a
smartphone still isn’t up to the task. Nevertheless, says Iddings, “If you are a serious hiker and are going to hike up a big
old mountain, you are probably going to
want a better product.” —Jessica Leber

Leaders

For Investors,
Mobile Startup
Boom Gives
Way to Caution
Some venture capitalists are starting
to avoid consumer apps and are
putting their money into the “picks and
shovels” of mobile computing.
● Viddy, a mobile video-sharing service
that bathed in media attention and more
than $36 million in investor funds last
year, is facing hard times. Users have
abandoned its app by the millions, and
last month it had to fire its cofounder and
CEO and a third of its staff.
Ask almost any venture capital investor how he or she feels about mobile
computing, and inevitably the answer
is bullish. But after a couple of years of
pouring money into startups, some investors are turning into skeptics, saying that
mobile computing startups—particularly
those looking for consumer hits—have
proved more expensive and riskier than
they expected.
Private companies involved in mobile
computing attracted more than $2 billion
in venture capital in 2012, around 10 to 15
percent of all investments made by venture capitalists, according to the research
firm CB Insights. Another survey, by PricewaterhouseCoopers and the National Venture Capital Association, found that the
number of mobile software startups get-

11




ting funded hit a three-year high at the
end of 2012, reaching 43 startups a month.
The wave of dollars was propelled by
several big successes, notably Instagram,
whose simple photo-sharing app quickly
found a huge audience. Facebook acquired
the company for $1 billion last April.
But now the mobile boom could be
headed for a shakeout as investors become
choosier. One measure of their caution is
what Silicon Valley has termed the “Series
A” crunch. Technology investors have
made seed, or early-stage, investments in
4,000 companies since 2009. But many
of these companies are finding that their
investors won’t be giving them any more.
CB Insights predicted in December that
the crunch could lead 1,000 startups to
become “orphans.”
Some investors are avoiding consumer
apps, saying it’s become too risky to guess
which will prove a hit in Apple’s App Store.
Daniel Leff, a partner at Globespan Capital Partners, says he will only invest in
companies building the “picks and shovels” of mobile computing—unsexy software tools like the ones that count clicks
or deliver ads. One of his firm’s successes
was Quattro Wireless, a mobile advertising network that Apple acquired in 2010
for $275 million.
Howard Hartenbaum, an investor at
August Capital and the first to put money
into Skype, says he also avoids companies
whose main asset is “mindshare” but that
don’t have a clear business plan. “No one

has figured out how to monetize mobile all
that great,” he says.
Instead, Hartenbaum has been
investing in companies making tools for
other app developers. His firm recently
led a $25 million investment in one such
startup, Urban Airship. It makes a software tool that lets developers and marketers send “push” notifications. Even if
those apps flop, Urban Airship could still
do well.
Another reliable way to make money is
to help large companies caught off guard
by the growth of mobile computing. Lightspeed Venture Partners’ Ravi Mhatre says
he’s interested in startups that have security
software to help corporate IT departments
as they struggle to integrate employees’
smartphones into their systems.
Consumer apps still offer the biggest
potential payoffs, but investors are being
careful about where they put their money.
Albert Wenger, a partner at Union Square
Ventures, says he tries to invest in mobile
companies whose apps enable people to
do things that aren’t possible on PCs, such
as monitor their heart rate or book hotels
at the last minute while traveling. His firm
backed Hailo, a company in London that
built an app for hailing a cab on a smartphone. “But we’re not looking for the CNN
for mobile, which 99 percent likely is actually CNN itself,” says Wenger.
The companies that are hurting are
those that haven’t found a way to make
money even after their apps have caught

on. Another Union Square investment,
Foursquare, employs over 100 people and
has raised about $71 million.
But its efforts to make money haven’t
yet amounted to much, and Foursquare
has had trouble raising the extra $50 or
$100 million it needs. Battery Ventures
partner Brian O’Malley, an investor in
Viddy, the ailing video startup, says the
company’s lack of revenue might actually
make it a more attractive takeover target
for a company interested in its technology.
Many investors are lately becoming “overly
negative,” he says. —Jessica Leber

For Mobile Startups, Money Booms

Venture capital investments in private mobile software companies, by quarter.
$1,000 million
800
600
400
200
2010

12

2011

2012

Case Studies

Lack of Ways to
Measure Success
Holds Back
Mobile Ads
No one really knows if ads on
smartphones work.
● Where consumer attention goes, ad dollars are supposed to follow. That hasn’t quite
happened on mobile devices.
U.S. adults now spend about 82 minutes a day on average using mobile devices
for activities other than calls. Yet only about
2 percent of all advertising dollars is being
spent on mobile websites or inside mobile
apps, according to estimates from eMarketer, an advertising research company.
The problem, advertisers say, is that
technologies for tracking users and measuring the impact of ads haven’t kept up with
the fast switch by consumers to smartphones
and tablets, leaving marketers unsure if the
ads are working and unwilling to commit
large budgets.
One result is that advertisers are paying much less for mobile ads. The average
price an advertiser pays to show an ad to
a thousand people on desktop computers
is $3.50, but it’s only 75 cents on mobile
devices, according to estimates from the



venture capital firm Kleiner, Perkins, Caufield, and Byers. Google, which dominates
the $70-billion-a-year business of digital
ads, said in January that its average revenue
from each ad click dipped 6 percent in 2012
because advertisers pay less for mobile ads.
The most significant issue for ad buyers
is that they don’t know if the ads are working, as they do on desktop computers. The
Interactive Advertising Bureau, an online ad
industry group, admitted as much in a 2011
report. It said “all media depend critically
upon reliable metrics for audience reach,”
adding that mobile ads were “challenged by
serious methodological and technological
limitations.”
What works on conventional computers
doesn’t on mobile devices, and in many cases
replacements have not yet been developed.
The standard method of tagging, tracking,
and targeting online ads is the cookie, a
small text file that websites store on a given
computer’s Web browser that identifies it.
But cookies don’t work as reliably or powerfully on the Web browsers of mobile devices,
and there’s no such thing as a cookie inside
a mobile app, where much of people’s time
is spent and advertisers would like to follow.
Another particularly vexing problem for
advertisers is the way consumers frequently
switch back and forth between their mobile
devices and a PC when performing a task.
For example, a person may see and click on a
mobile ad but actually purchase the product
on a PC. That means advertisers can’t tell if
their ad worked.
“Our ability to measure behavior on
mobile is very challenged,” says John Montgomery, chief operating officer for interactive
advertising in North America at GroupM,
the world’s largest ad agency by billings. “It’s
very difficult to connect the mobile impression to an action or sale.”
Disagreements over how to advance
tracking technologies haven’t helped. Last
year, Apple blocked advertisers from tracking iPhones and iPads using the unique ID
of each device, preferring to develop its own
solution. There’s also the chance of regulation: in February, the U.S. Federal Trade
Commission released a report cautioning
mobile advertisers over privacy issues, like
tracking users’ locations, and recommended
making it easier for people to block ads.

Technology companies are now rushing
to fill the infrastructure gap that’s preventing mobile ads from becoming truly valuable. Google has filed patents on ideas for
how to link mobile ad campaigns to data
about people’s real-world purchases, and
one alumnus of Google’s ad business recently
raised $6.5 million in funding for her company, Drawbridge, whose technology allows
marketers to follow consumers from one
device to another.
Once the technology gaps close, mobile
advertising will probably eclipse desktop
advertising, as has already happened in some
countries, like Japan, where Internet-capable mobile phones have been in use longest.
—Tom Simonite

Case Studies

Five
Opportunities
for Mobile
Computing
Thousands of startup companies see
mobile computing as their chance to
strike it big. We picked five.
● Dozens of mobile-computing startup
companies get funded by investors each
month in the United States, according
to PricewaterhouseCoopers. Around the
world, tens of thousands more entrepreneurs are dreaming and coding and trying
to invent something big.
Here are what we think are five large
opportunities in mobile computing, and
a startup company pursuing each.
1. Transportation
If you live in San Francisco, you’ve probably seen cars roving around with hotpink furry mustaches on their grills.
This signals that the drivers are for hire
through Lyft, a ride-sharing app offered
by startup Zimride. Anyone with a car can
become a limo driver and pick up fares,


who can hail a driver using the app. Lyft
takes about 20 percent of the revenue
from each ride.
Zimride and competitors Uber and
SideCar are using smartphones to challenge the taxi industry. It hasn’t been
smooth. In November, the California Public Utilities Commission fined all three for
operating illegal taxi companies.
Who’ll win the struggle isn’t clear. But
the mobile-app companies have a numerical advantage. In San Francisco, there
are 1,700 licensed cabs but more than
380,000 registered cars.
How much? San Francisco taxicabs
licenses have been sold for $300,000.
(Source: SFMTA)
2. Internet Access
Many people in poorer countries are still
using feature phones with prepaid minutes. A switch to smartphones is happening fast—yet few can afford a data plan to
connect to the Internet.
Blaast, a startup based in Helsinki,
Finland, thinks the key to these markets
will be shrinking the apps people use and
making them work cheaply over older,
slower wireless networks. The company
compresses and caches streamlined versions of apps like Facebook and Twitter,
offering access to a package of applications for 5 to 10 cents per day.
How many? India has nearly as many
cell-phone subscribers (1.1 billion) as
people. Only 4 percent use smartphones.
(Source: KPCB)
3. Things That Communicate
What if any object could talk to your
phone?
Tagstand, a San Francisco–based
startup, sells inexpensive near-field communication (NFC) tags that can be stuck
anywhere. The tags communicate information or commands over short distances
to phones that also have an NFC chip.
When you set your phone down on your
bedside table, for example, a tag on the
table could turn the phone off and turn
your alarm on. Cofounder Omar Seyal
says NFC tags at movie theaters’ entrances
could automatically silence your phone.
How soon? About one in five smart-

13




phones sold has an NFC chip. (Source:
ABI Research)

Leaders

You’ve said Amazon wants to shorten the
time between wanting and buying to less
than 30 seconds. How short can it get?

4. Phone Security
Online bad guys have been paying attention to the swift growth of smartphones and
tablets, and malware for the small screen is
on the rise.
One of the first to jump to phones’
defense was Lookout, whose security apps
are now used by 30 million people. Lookout’s free software for Android can scan
downloaded apps for malware and back
up smartphone contacts. Features include
Signal Flare, which can help find a missing
phone by logging its location as the battery
is dying, and Lock Cam, which will silently
take and send a photo of any person who
tries and fails three times to unlock your
smartphone.
All this warms up users for the company’s premium service, which costs $3 per
month and adds extras like the ability to
remotely erase your phone’s memory.
How safe? By 2016, consumers will
spend more than $2.4 billion a year downloading mobile security software. (Source:
Infonetics)
5. Credit Card Payments
Smartphones and tablets are changing the
way people pay for things. One startup in
the field is Braintree, which processes credit
card payments, mostly for high-profile Web
merchants.
Braintree recently launched Venmo
Touch, an app that will let any other app
execute a payment with “one touch” if a
person’s credit card information is already
on file. The feature is available with popular apps like the last-minute hotel booker
HotelTonight and the errand-running service TaskRabbit.
Braintree CEO Bill Ready says the company is processing more than $1 billion in
mobile transactions annually. It charges 2.9
percent of the purchase price, plus another
30 cents for each transaction, though it pays
most of that money to banks and card companies.
How much? In 2013, people in the U.S.
will spend about $13 billion using mobile
phones. (Source: Forrester)
—Rachel Metz

14

From Wanting
to Buying in 30
Seconds
The man responsible for Amazon’s
mobile shopping strategy talks about
app design, shopping habits, and how to
make it easier to act on your impulses.
● Sam Hall doesn’t just eat his own dog
food, as the Silicon Valley saying goes. He
also orders it on his mobile phone.
As vice president of mobile shopping
at the world’s largest online retailer, Hall is
in charge of making sure it’s easy, and very
fast, to shop on Amazon using its apps and
mobile websites. His mantra is that people
should go from “wanting to buying in 30
seconds,” and Hall is a compulsive tester of
the process, using his phone to buy basketball hoops, dental floss, shampoo, and even
a gorilla costume for Halloween.
Mobile shopping is still a sliver of overall
retail, and of Amazon’s revenue. While the
company doesn’t divulge details, analysts
think that maybe 8 percent of the company’s $61 billion in annual sales comes from
phones and tablets. But Hall’s domain is
growing as more people use smartphones
and tablets. Amazon runs a slew of mobile
apps, including the basic Amazon Mobile
shopping app. There’s also Flow, which pulls
up price information (and a chance to buy
the item on Amazon instead) on any product you aim your smartphone’s camera at.
Amazon is tight-lipped about its operations and plans, and Hall is no exception.
MIT Technology Review spoke with him
about his work.
What’s the big thing on your mind these
days?

I spend most of my time worrying about
how we continue to invent, on behalf of our
customers, newer, faster, better, easier ways
that they can shop on their mobile phones
and tablets.

We believe that customers want the time
from wanting to buying to be as close to
instant as possible.
How do you do this, technologically?

We are very, very focused on making sure our
experiences are fast. That every page loads
quickly—from the time you press the icon
on your phone to the time you see a search
box, it’s very, very quick. For instance, we
focus on input. We know one of the hardest
things about shopping on a mobile device is
just inputting what you want.
What is an example of designing for that?

When you’re typing in something in the
search box, we put up search suggestions
very, very quickly. Earlier this week, I ran out
of razor blades. I use Gillette Fusion razor
blades. I was able to type “gil” and one of
the first few suggestions that came up was
Gillette Fusion razor blades. I only had to
type the first three letters of what is probably a 26- or 27-letter title to quickly get to
that item.
Some researchers are working on software
that tries to actually anticipate what a person wants. Is Amazon doing this?

What I can say is, we have a search team that
focuses specifically on the very fastest way
we can get customers from typing in what
they want to the detail page of what they
actually want.
What are the most surprising things you’ve
learned about people’s shopping behavior?

I think people tend to assume there are certain categories that do better on mobile than
others, but the reality is, customers are buying everything on their mobile phones. We’ve
sold, believe it or not, engagement rings,
bicycles, razor blades, jeans, dresses. People
buy the whole variety of what Amazon has.
Another observation that’s been interesting is that one of our busiest days happens
to be on Christmas Day, for mobile phones
and tablets in particular. My theory, at least,
is you open up all your presents, you didn’t
get what you want, and you’re able to quickly
buy what you really wanted. —Rachel Metz

BUSINESS REPORT : MAKING MONEY IN MOBILE

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie BUSINESS REPORT : MAKING MONEY IN MOBILE

Ähnlich wie BUSINESS REPORT : MAKING MONEY IN MOBILE (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

BUSINESS REPORT : MAKING MONEY IN MOBILE