Posts Tagged ‘business model’
Mobile Money Exchange initiative launched to engage with new stakeholders and sectors that are entering the mobile ecosystem
July 2nd, 2009 | 
Author: Through this initiative, the GSMA is helping financial services companies who are entering the mobile environment, by providing a common voice and formal business forum for business collaboration. The ethos behind the formation of the Exchange is for best practise and innovations to be highlighted and shared, both across industry and inter-industry.
The Mobile Money Exchange will feature an online knowledge portal with social business networking and community functionality designed to advise and serve the interests of the mobile money industry.
“Mobile Money Exchange builds on the Mobile Money Programme that the GSMA launched in 2006 and which has been a tremendous success in terms of building a global community,” said Bill Gajda, Chief Commercial Officer, GSMA.
“Through the Mobile Money Exchange, fundamental principles and requirements which are not currently being met, such as fragmentation and therefore lack of ability to scale, will be addressed and the Exchange will advance, advise and serve the interests of the mobile money market.”
“As a founding partner, Visa looks forward to helping drive thought leadership and industry participation in the Mobile Money Exchange programme in collaboration with the GSMA,” said Tim Attinger, Global Head of Product Development for Visa.
“We congratulate GSMA for the foresight to build on its successful Mobile Money Transfer initiative to this new Mobile Money Exchange programme,” said Globe Telecom President and CEO Ernest Cu.
“At Globe we have been constantly involved in global initiatives to hasten the advancement of mobile money and moves to position it into a mainstream business line not only for telcos but for the financial services industry as well. Being a Founding Partner in this umbrella program provides us an avenue to collaborate with experts and stakeholders in the mobile commerce space to come closer to this objective,” he added.
The Mobile Money Exchange is open to any organisation and seeks to establish a broad-based stakeholder community that comprises key areas of mobile money including m-payments, m-banking, MMU (Mobile Money for the Unbanked) and MMT (Mobile Money Transfer). It will facilitate new partnerships and business models, drive thought leadership, champion innovation and knowledge transfer through engaging all elements of the mobile money industry.
The Mobile Money Exchange will have an advisory board consisting of a select number of thought leaders to shape and develop the Exchange, working alongside discussion groups and committees who collaboratively set guidelines, standards and best practise.
Posted in Communications | 
Tags: amp, Banking, blog, blogs, business, business model, business models, Communications, Design, Environment, functionality, Innovation, Mobile, mobile ecosystem, mobile money, money, Network, Networking, ngage, online, Space, system, world | 
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WiMAX: most operators are focused on the less capital-intensive fixed and nomadic WiMAX broadband services now to address underserved markets
ANALYST NOTE
“Although WiMAX service strategies differ from operator to operator and from market to market, most operators are focused on the less capital-intensive fixed and nomadic WiMAX broadband services now to address underserved markets seeking ‘wireless DSL,’ and many have formalized plans to migrate to full mobility WiMAX over the next couple of years. VoIP, CPE and device subsidization, and an emphasis on pre-paid and ad-hoc pricing are also integral service components for many operators we interviewed,” said Richard Webb, Infonetics Research’s Directing Analyst for WiMAX, Microwave, and Mobile Devices.
WiMAX SERVICE PROVIDER SURVEY HIGHLIGHTS
59% of respondents plan to offer VoIP over WiMAX services by 2011, indicating the strong potential of voice over WiMAX as an additional high-value revenue stream for operators
An increasing number of GSM operators are entering the WiMAX market, seeking to leverage their trusted consumer brand by offering basic broadband services, and WiMAX offers the more cost-effective delivery option
To move to full mobility WiMAX services, operators must continue to deploy network infrastructure to ensure coverage to support mobility and roaming, and wait for the mobile device ecosystem to become more diverse and affordable for consumers
REPORT SYNOPSIS
Infonetics’ Global WiMAX Service Strategy 2009–2011: Service Provider Survey captures a strategic overview from WiMAX network operators (WiMAX-only, competitive, mobile, and incumbent operators) to better understand how and why WiMAX networks are being deployed, the rationale behind the services offered, the business model, the target markets, and the subscriber and revenue numbers operators are projecting between now and 2011.
Of the operators surveyed, 41% are from Asia Pacific, 36% from Europe, the Middle East, and Africa (EMEA), 18% from North America, and 5% from Central and Latin America (CALA).
Operator survey shows market reality of WiMAX services;
VoIP a key component
Posted in Communications |
Tags: blog, blogs, broadband service, business, business model, consumers, ford, Mobile, mobile device, mobile devices, Network, psi, research, system, wimax, Wireless |
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WiMax gets closer and further away at the same time
The announcement was both interesting and supremely frustrating. The interesting part was that Sprint has brought several promising investors into WiMax, including Google. That’s right, Google is launching a wireless network, if only as a minority investor. (And it got a sweet deal, which I’ll explain below.) The unbelievably frustrating part is that Sprint has pretty much slipped the deployment plan for WiMax by another two years. It’s hard to get excited about a new technology, no matter how great the investors, when I have zero confidence in the companies’ ability to deliver.
Here’s what was announced:
Sprint and several companies have banded together to buy Clearwire, the other wireless company that had been building a WiMax network in the US. Clearwire will be merged with Sprint’s WiMax division, the company will be managed by a mix of Clearwire and Sprint executives, and will be headquartered at Clearwire’s site in Washington state.
Investors in the merged company, to be called Clearwire, include Google, Comcast, Intel, TimeWarner Cable, Bright House Networks, and Trilogy Equity Partners. Intel and Comcast are investing about $1 billion each, TimeWarner and Google about $500 million, Bright House $100 million, and Trilogy $10 million.
Google gets to be the preferred search provider for both Sprint and Clearwire, will provide apps (including Gmail, YouTube, and Maps) for bundling with devices, and Clearwire will sell devices running Google Android. Google and Clearwire will also partner to develop advertising, applications, and create the operating principles for the network (link). Google said it will work with Clearwire to create:
An open Internet protocol to work with mobile broadband devices…and implementing other open network practices and policies….The network will: (1) expand advanced high speed wireless Internet access in the U.S., (2) allow consumers to utilize any lawful applications, content and devices without blocking, degrading or impairing Internet traffic and (3) engage in reasonable and competitively-neutral network management.
Intel will provide WiMax chips (which it was doing anyway), and Sprint, TimeWarner, Comcast, and Bright House will all become Clearwire resellers.
The new company will be 51% owned by Sprint, and its governance structure is so nuanced that I won’t even try to explain it here.
As part of the announcement, Sprint slipped in an estimate that the new Clearwire network will reach 120 million to 140 million people by the end of 2010 (link).
What it means
Death to the Xohm. On a personal basis, the most exciting part of the announcement is that Sprint is apparently dropping the brand name Xohm, which it was using for its WiMax services. I am very sympathetic to the troubles that companies have finding brand names that aren’t already trademarked. But even by my lowered standards, I thought Xohm was a bizarre name. To me, it sounded like something you’d read in a bad science fiction novel. The Xohm would be a race of homicidal crustaceans bent on destroying humanity.
“Captain, the Xohm have deployed a quantum weak force destabilizer!”
“Good God! That could rupture the very fabric of space-time!”
Google gets a wireless network. The company that made out like The Xohm in this deal is Google. For just $500 million (little more than gas money for the corporate jet in Google terms), the company gets preferred placement for its services on both Clearwire and Sprint; a showcase for its apps, advertising, and OS; and the opportunity to design the business model for a national wireless network. No wonder Google didn’t bother to bid seriously in the recent US wireless spectrum auction — why build a network when you can play with one for a tenth the price?
Comcast, Time Warner, and Bright House all get quadruple play options. They can pair Clearwire services with their current cable businesses to deliver advanced bundles of wireless services, Internet access, telephony, and television.
Will it succeed?
The reaction to the deal on some prominent tech blogs seems to range from lukewarm (link) to intensely negative (link). But I think there’s a lot to like about it. The involvement of Google means we’re very likely to get a pretty much open ecosystem on a major wireless network, which Silicon Valley has been collectively screaming about for years. The size of the investments mean there is a lot of money available to build out the network. People ought to be dancing in the streets here, but instead most of them appear to be either yawning or throwing spitwads.
I’d be out there dancing myself if it weren’t for the slip in the schedule. A year and a half ago Sprint announced that its WiMax network would reach 100 million people by the end of 2008 (link). Now Sprint says that by the end of 2010 the network will reach 120-140 million people. So in the last 18 months, the schedule has basically slipped by 24 months. It’s going backwards. At this rate we’ll have passenger rockets to Pluto before we have WiMax service.
Hopefully the management of the new Clearwire will be dominated by people from outside Sprint. I want to believe that they can build out this network; we need it both for the service itself and as an example of how to grow an open mobile ecosystem. But it’s very hard to trust people who have missed their targets as badly as these guys have.
Some other interesting commentary on the deal:
Muni Wireless on the cable companies’ motives for investing (link).
Fierce Wireless explains the ownership structure (link).
Sprint’s amazingly complex press release (link).
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Thanks to Xellular Identity for including last week’s post on Adobe in the latest Carnival of the Mobilists (link).
Copyright 2008 Michael Mace.
Posted in Phones |
Tags: amp, apps, ash, blog, business, business model, car, comcast, gadget, gas money, gmail, google, internet access, internet traffic, Mac, maps, mobile broadband, mobile ecosystem, money, network management, new technology, ngage, search provider, silicon valley, system, Technology, vaporware, wimax, wireless data networks, youtube |
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The three laws of technology strategy
Here we go, twenty years of industry experience boiled down to three lines:
1. An elegant business model paired with mediocre technology beats an elegant technology paired with a mediocre business model.
To put it another way, if you create a marvelous tech product that has no way of making money, you get a long and passionate entry on Wikipedia. If you create a lousy tech product that prints money, you get to be Bill Gates.
Windows is the best case study here, but this one has been proven over and over again in the history of the tech industry. But companies keep tripping over it because they’re often run by engineers who have been trained to value technical elegance as an end in itself.
Don’t get me wrong, elegance is great. The most wonderful tech companies are those that combine elegant products and great business models. But you must pay the bills or you don’t get to keep playing. And wads of money can buy a lot of patches and kludges.
2. Design for a need, not a desire.
A serial entrepreneur once expressed this to me nicely: “I focus on aspirin issues.” In other words, if someone has a serious enough problem that they feel pain, they’ll be much more likely to pay money for an answer. (I wish I could remember who told me that — I’d like to credit him by name.)
Very often tech companies will fall in love with a concept that is compelling to people in the company, but not to non-technologists. They’ll convince themselves that people will want it because, well, they ought to want it.
A related problem: A company will come up with a product that’s nice, but doesn’t really address an aspirin problem. You know you have this problem when someone in the company says that need a marketing campaign to explain to people why they should want the product. The really good products need marketing for visibility, not persuasion.
I think this is the underlying problem behind most failed web applications. They do something interesting, as opposed to something compelling.
What makes this whole problem especially tough is that you can’t just ask customers what they need. They aren’t engineers, they don’t understand what you could build. All they’ll ask you for is improvements on the products they already have today. What you have to do is get inside the customers’ heads, understand how they live, and figure out what you could do to improve their lives. That’s what the best product managers do.
3. Software designed for one platform usually fails on another.
We teach this one to ourselves every time the industry goes through a platform transition, and then we promptly forget it again:
A computing platform isn’t just a technology, it’s a mindset, with a huge set of unstated assumptions about customers and business practices attached to it. When you port software from one platform to another, you take those assumptions along with you, and usually they don’t fit.
This is why the software leaders in one generation of computing usually fail in the next generation. Check it out — which software products led in the DOS world? Lotus, WordPerfect, Ashton-Tate. Did any of them thrive in the Windows/Mac world? Nope.
Then did the software leaders in Windows/Mac — Adobe, Microsoft, Symantec, Intuit — dominate in the Internet? Nope, the new startups without the mental baggage dominated.
Which leads to an interesting question: Do you think the leaders of mobile Internet will be the same companies that led the PC Internet? Or is the next Adobe/Lotus/Google a little startup out there, rethinking what it means to be connected in a mobile setting?
Think about it.
Copyright 2008 Michael Mace.
Posted in Phones |
Tags: amp, apps, ash, AWS, bill gates, blog, business, business model, business models, google, intuit, Lotus, Mac, making money, microsoft, mobile internet, money, Technology, technology strategy, wikipedia, Windows |
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Mobile applications, RIP
The decline of the mobile software industry
Mobile computing is different from PC computing.
For the last decade, that has been the fundamental rule of the mobile data industry. It was the central insight of Palm Computing’s “Zen of Palm” philosophy. Psion came up with similar ideas, and you can hear echoes of them from every other successful mobile computing firm: Mobile computers are used differently from PCs, and therefore must be designed differently.
We all assumed this also meant mobile devices needed a whole mobile-specific software stack, including an operating system and APIs designed specifically for mobility, and native third-party applications created from the ground up for mobile usage.
That’s what we all believe, but I’m starting to think we got it wrong.
Back in 1999 when I joined Palm, it seemed we had the whole mobile ecosystem nailed. The market was literally exploding, with the installed base of devices doubling every year, and an incredible range of creative and useful software popping up all over. In a 22-month period, the number of registered Palm developers increased from 3,000 to over 130,000. The PalmSource conference was swamped, with people spilling out into the halls, and David Pogue took center stage at the close of the conference to tell us how brilliant we all were.
It felt like we were at the leading edge of a revolution, but in hindsight it was more like the high water mark of a flash flood. In the years that followed, the energy and momentum gradually drained out of the mobile applications market.
The problem wasn’t just limited to Palm; the level of developer activity and creativity that we saw in the glory days of Palm OS hasn’t reappeared on any mobile platform since. In fact, as the market shifted from handhelds to smartphones, the situation for mobile app developers has become substantially worse.
That came home to me very forcefully a few days ago, when I got a call from Elia Freedman. Elia is CEO of Infinity Softworks, which makes vertical market software for mobile devices (tasks like real estate valuation and financial services). He was one of the leaders of the Palm software market, with a ten year history in mobile applications.
I eventually moved on from Palm, and Elia branched out into other platforms such as Blackberry. But we’ve kept in touch, and so he called recently to tell me that he had given up on his mobile applications business.
Elia gave me a long explanation of why. I can’t reproduce it word for word (I couldn’t write that fast), but I’ve summarized it with his permission here:
Two problems have caused a decline the mobile apps business over the last few years. First, the business has become tougher technologically. Second, marketing and sales have also become harder.
From the technical perspective, there are a couple of big issues. One is the proliferation of operating systems. Back in the late 1990s there were two platforms we had to worry about, Pocket PC and Palm OS. Symbian was there too, but it was in Europe and few people here were paying attention. Now there are at least ten platforms. Microsoft alone has several — two versions of Windows Mobile, Tablet PC, and so on. [Elia didn't mention it, but the fragmentation of Java makes this situation even worse.]
I call it three million platforms with a hundred users each (link).
The second technical issue is certification. The walls are being formed around devices in ways they never were before. Now I have to certify with both the OS and with each carrier, and it costs me thousands of dollars. So my costs are through the roof. On top of that, the adoption rate of mobile applications has gone down. So I have to pay more to sell less.
Then there’s marketing. Here too there are two issues. The first is vertical marketing. Few mobile devices align with verticals, which makes it hard for a vertical application developer like us to partner with any particular device. For example, Palm even at its height had no more than 20% of real estate agents. To cover our development costs on 20% of target customer base, I had to charge more than the customers could pay. So I was forced to make my application work on more platforms, which pushed me back into the million platforms problem.
The other marketing problem is the disappearance of horizontal distribution. You used to have some resellers and free software sites on the web that promoted mobile shareware and commercial products at low or no charge. You could also work through the hardware vendors to get to customers. We were masters of this; at one point we were bundled on 85% of mobile computing devices. We had retail distribution too.
None of those avenues are available any more. Retail has gone away. The online resellers have gone from taking 20% of our revenue to taking 50-70%. The other day I went looking for the freeware sites where we used to promote, and they have disappeared. Hardware bundling has ended because carriers took that over and made it impossible for us to get on the device. Palm used to have a bonus CD and a flyer that they put in the box, where we could get promoted. The carriers shut down both of those. They do not care about vertical apps. It feels like they don’t want any apps at all.
You can read more of Elia’s commentary on his weblog (link).
Add it all up, and Elia can’t make money in mobile applications any more. As he told me, “Mike, it’s time for you to write the obituary for mobile apps.” More on that later.
Although it’s a very sad situation, if Elia’s experience were an isolated story I’d probably just chalk it up to bad luck on the part of a single developer. But it mirrors what I’ve been hearing from a lot of mobile app developers on a lot of different operating systems for some time now. The combination of splintering platforms, shrinking distribution channels, and rising costs is making it harder and harder for a mobile application developer to succeed. Rather than getting better, the situation is getting worse.
I’ve always had faith that eventually we would solve these problems. We’d get the right OS vendor paired with a handset maker who understood the situation and an operator who was willing to give up some control, and a mobile platform would take off again. Maybe not Palm OS, but on somebody’s platform we’d get it all right.
I don’t believe that any more. I think it’s too late.
The mistake we made
We told ourselves that the fundamental rule of our business was: Mobile is different. But we lost sight of an even more fundamental law that applies to any computing platform:
A platform that is technically flawed but has a good business model will always beat a platform that is elegant but has a poor business model.
Windows is the best example of inelegant tech paired with the right business model, but it has happened over and over again in the history of the tech world.
In the mobile world, what have we done? We created a series of elegant technology platforms optimized just for mobile computing. We figured out how to extend battery life, start up the system instantly, conserve precious wireless bandwidth, synchronize to computers all over the planet, and optimize the display of data on a tiny screen.
But we never figured out how to help developers make money. In fact, we paired our elegant platforms with a developer business model so deeply broken that it would take many years, and enormous political battles throughout the industry, to fix it — if it can ever be fixed at all.
Meanwhile, there is now an alternative platform for mobile developers. It’s horribly flawed technically, not at all optimized for mobile usage, and in fact was designed for a completely different form of computing. It would be hard to create a computing architecture more inappropriate for use over a cellular data network. But it has a business model that sweeps away all of the barriers in the mobile market. Mobile developers are starting to switch to it, a trickle that is soon going to grow. And this time I think the flash flood will last.
If you haven’t figured it out yet, I’m talking about the Web. I think Web applications are going to destroy most native app development for mobiles. Not because the Web is a better technology for mobile, but because it has a better business model.
Think about it: If you’re creating a website, you don’t have to get permission from a carrier. You don’t have to get anything certified by anyone. You don’t have to beg for placement on the deck, and you don’t have to pay half your revenue to a reseller. In fact, the operator, handset vendor, and OS vendor probably won’t even be aware that you exist. It’ll just be you and the user, communicating directly.
Until recently, a couple of barriers prevented this from working. The first was the absence of flat-rate data plans. They have been around for a while in the US, but in Europe they are only now appearing. Before flat-rate, users were very fearful of exploring the mobile web because they risked ending up with a thousand-Euro mobile bill. That fear is now receding. The second barrier was the extremely bad quality of mobile browsers. Many of them still stink, but the high quality of Apple’s iPhone browser, coupled with Nokia’s licensing of WebKit, points to a future in which most mobile browsers will be reasonably feature-complete. The market will force this — mobile companies how have to ship a full browser in order to keep up with Apple, and operators have to give full access to it.
There are still huge problems with web apps on mobile, of course. Mobile web apps don’t work when you’re out of coverage, they’re slow due to network latency, and they do not make efficient use of the wireless network. But I believe it will be easier to resolve or live with these technical drawbacks in the next few years than it will be to fix the fundamental structural and business problems in the native mobile app market.
In other words, app development on the mobile web sucks less than the alternative.
Here’s a chart to help explain the situation. Imagine that we’re giving a numerical score to a platform, rating its attractiveness to developers. Attractiveness is defined as the technical elegance of the platform multiplied by how easy it is for developers to make money from it. The attractiveness score for native mobile app development looks like this over time:
This is why mobile app developers are in trouble. Even though the base of smartphones has been growing, and the platforms themselves have become more powerful, the market barriers have been growing even faster. So attractiveness has been dropping.
Now add in mobile web development:
Based on what I’m hearing from mobile developers, the lines just crossed. The business advantages of mobile web development outweigh its technical limitations. More importantly, if you look at where the lines are going, the advantage of mobile web is going to grow rapidly in the future.
I’m not saying all native mobile development is dead. In fact, we’re about to see the release of Apple’s native development tools for the iPhone, and as Chris Dunphy just pointed out to me, they are sure to result in a surge of native development for that platform. But I think even a rapidly-growing base of iPhones can’t compare to the weight of the whole mobile phone market getting onto a consistent base of browsers.
What it all means
If you’re a mobile developer, you should consider stopping native app development and shifting to a mobile-optimized website. That’s what Elia did, and he said it’s amazing how much easier it is to get things done. Even mobile game developers, who you’d think would be the last to abandon native development, are looking at web distribution (link; thanks to Mike Rowehl for pointing it out).
See if you can create a dumbed-down version of your application that will run over the mobile web. If the answer is yes, do it. If the answer is no, try to figure out what technology changes would let you move to the web, and watch for those changes to happen.
There are exceptions to any rule, and I think it makes sense to keep doing native development if your app can’t work effectively over the web, and it’s a vertical application so popular that you can get about $50 or more in revenue per copy. In that situation, you probably have enough resources to stay native for the time being. But even you should be monitoring the situation to see when you can switch to the web, because it will cut your expenses.
If you’re a mobile customer, make sure your next smartphone has a fully functional browser that can display standard web pages. And get the best deal you can on a flat-rate data plan; you’ll need it.
If you’re an operator or a handset vendor, get used to life as a dumb pipe. By trying to control your customers and make sure you extract most of the revenue from mobile data, all you’ve done is drive developers to the Web, which is even harder to control. You could have had a middle ground in which you and mobile developers worked together to share the profits, but instead you’ve handed the game to the Google crowd.
Congratulations.
Oh, about that obituary…
In loving memory of the mobile applications business. Adoring child of Java, Psion, Palm OS and Windows Mobile; doting parent of Symbian, Access Linux Platform, and S60; constant companion of Handango and Motricity. Scared the crap out of Microsoft in 2000. Passed away from strangulation at the hands of the mobile industry in 2008. Awaiting resurrection as a web service in 2009. In lieu of flowers, the family asks that you make a donation to the Yahoo takeover defense fund.
Copyright 2008 Michael Mace.
Posted in Phones |
Tags: amp, apis, apple, apps, ash, Battery, BlackBerry, blog, business, business model, car, developers, functionality, game, google, iphone, Mac, microsoft, mobile application, mobile applications, mobile computers, mobile data industry, mobile developer, mobile developers, mobile development, mobile device, mobile devices, mobile ecosystem, mobile industry, mobile market, mobile operators, mobile phone, mobile platform, mobile software, mobile usage, mobile web, mobile world, money, native apps, nokia, online, operating system, palm, palm computing, palm developers, party applications, pocket pc, psi, smartphone, software stack, symbian, system, t mobile, Technology, Windows, Windows Mobile |
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