mobile broadband – new applications and new business models
TRANSCRIPT
![Page 1: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/1.jpg)
Mobile Broadband – New Applications and New Business
Models
Brough Turner
![Page 2: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/2.jpg)
2
IMT-2000 Vision (for 3G) includedLAN, WAN and Satellite Services
Satellite
MacrocellMicrocell
UrbanIn-Building
Picocell
Global
Suburban
Basic TerminalPDA Terminal
Audio/Visual Terminal
![Page 3: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/3.jpg)
3
The Internet is the killer platform
• Mobile Internet access driving 3G data usage
• Future business models an open question– Walled garden ?– Advertising ?– Other 2-sided business
models ?
![Page 4: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/4.jpg)
4
Leading Apps don’t depend on 3G
• Voice ― still the largest revenue source– Bar none!
• SMS ― 2nd largest mobile revenue source
• Voice SMS, picture mail & video mail coming on strong
Content !
Mobile TV
Mobile social networking
![Page 5: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/5.jpg)
5
Mobile Content
• More music sold on-line than off-line in both China and Korea
• Ringback tones– Created by SK Telecom in Korea in 2002; 30% adoption in
just 9 months
• Ringback tones today– Korea: ~55% adoption– China: ~50% adoption Any G,
1, 2, 3 or Fixed
![Page 6: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/6.jpg)
6
Japanese Music Revenues
Source: Infinity Venture Partners
![Page 7: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/7.jpg)
7
Mobile TV
70% of new handsets in Japanare Mobile TV enabled
Only Japan and Korea have multi-million Mobile TV subscriber bases
Broadcast services independent of 3G
![Page 8: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/8.jpg)
8
Mobile Social Networking
Source: Benjamin Joffe, Plus Eight Star Ltd.
50 M 6 M 10 M 3 MMobile users:
2000 2004 2006 2007Mobile launch:
Profit (USD):
$225M ~$100M ~$35M ($50M)
2.5G
![Page 9: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/9.jpg)
9
“3G” Services
• 3G-324M Video telephony
• Location-based services
• Push-to-Talk (VoIP w/o QoS)
• Rich presence (instant messaging)
• Fixed-mobile convergence (FMC)
• IP Multimedia Services (w/ QoS)– Video sharing (conversational video on IP)
• Converged “All IP” networks – the Vision
Limited adoption
Limited adoption
Limited adoption
Limited adoption
Bypassed !
No traction
Still waiting …
![Page 10: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/10.jpg)
10
Mobile operators miss the boat
• Location-based services (LBS)
• Required in US for 911 services
• Fully implemented (after multiple delays)
• Not made attractive for 3rd parties
Result:
• All US location-based services based on alternate location approaches– GPS, Cell ID, Navizon, Skyhook
![Page 11: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/11.jpg)
11
Mobile operators slow the boat
• Billing Services– Mobile operators have efficient billing systems &
own the customer relationship– DoCoMo showed (I-Mode in 1999) the enormous
potential of affordable billing services– Yet billing still offered only via premium rate #s
• Result:– 3rd party content is paid for via 3rd party billing
systems or (multiple) premium rate SMS(s)
![Page 12: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/12.jpg)
12
Mobile Broadband Access
US prospects for “over the top” access to the open Internet
![Page 13: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/13.jpg)
13
iPhone traffic per month
![Page 14: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/14.jpg)
14
iPhone glimmer of what’s possible
• Controlled eco-system– Applications approved by Apple– Must meet unpublished
standards under contract between Apple & AT&T
– E.g., can’t run VoIP over 3G, only over Wi-Fi
But, $30/ month flat rate data plan (on top of $40+ phone plan)
• Explosive growth in web usage
![Page 15: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/15.jpg)
15
Mobile Internet Access
• Available for PC’s with restrictions, e.g. no servers, no P2P, no substitution for private lines or frame relay
• AT&T: 5GB @ $60/mo
• Verizon: ditto
• Sprint: ditto
• No US operator offers flat rate unlimited plans
![Page 16: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/16.jpg)
16
Breaking Oligopolies
• Four or more viable competitors is what it takes; more than four and it can be rapid– Many examples in mobile voice telephony from
around the world
• 2009: Three established US 3G operators– AT&T Mobility, Verizon Wireless & Sprint PCS– Flat rate data plans exist; but with caps– No unlimited open Internet access
![Page 17: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/17.jpg)
17
Additional US 3G/4G Competition
• USA (well financed)– Paid $4.2B for AWS spectrum in 2006 and
committed additional $2.7B for initial rollout– Currently spending almost $1B per quarter, 3G
had reached 1/3rd of cell sites as of 3Q08
• (build out partially financed)– WiMAX on Clearwire and Sprint spectrum
Potential for affordable flat rate mobile broadband in the US in 2010
![Page 18: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/18.jpg)
18
Subscribers & Applications
• Historically, only applications pre-installed on handsets had any traction– “On-deck” applications and content offers
• Apple iPhone application store is on-deck– Provides access to 50K+ applications
• Andriod store, RIM, Nokia, Qualcomm, Palm, Handango, Adobe, Samsung, …
Application stores are the new “deck”
![Page 19: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/19.jpg)
19
Handset diversity
Remaining obstacle to widespread deployment of 3rd party applications
![Page 20: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/20.jpg)
20
IMS doesn’t solve inter-operability
![Page 21: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/21.jpg)
21
Handsets more & more diverse
• Browsers – Openwave, Opera, Safari, …– Using: WebKit, Netfront, Presto, …
• Runtime environments as several levels– Adobe AIR, .Net/Silverlight, Brew, JavaME, …
• Operating systems– Symbian, WinMobile, Android, OpenMoko…
• Hardware capabilities– CPUs, supported codecs, screen size, …
![Page 22: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/22.jpg)
22
Mobile Software Frameworks
Source: Andrea Constantinou, ©2008 VisionMobile Research
![Page 23: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/23.jpg)
23
Mobile Facebook by: http://www.flickr.com/photos/philiphubs/
Internet will win in the end, but…
![Page 24: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/24.jpg)
24
Important trends
• App stores!– Easier distribution; Easier discovery
• More and more smart phones
• Richer browser capabilities– Approaching PC browser functionality
• New access to device capabilities– User data (contacts, logs, …), events (incoming
calls) and core functionality
![Page 25: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/25.jpg)
25
Uniquely Mobile Internet
• Phase 1 – cut down web, e.g. WAP
• Phase 2 – full web accessible on mobile
• Phase 3 – designed-for-mobile web– Optimize the mobile user experience; speed ups
• Phase 4 – client-side mashups– telephony, address book, location, camera…
• Phase 5 – apparent persistence– Despite battery limitations; widgets; push; …
![Page 26: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/26.jpg)
26
![Page 27: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/27.jpg)
27
Challenges
• Handset diversity
• Pace of change
• User interface – minimum clicks; max speed
• Battery life – “chatty” apps drain power
• Application concurrency– Manage events over browser, native & helper apps
• Persistent user experience across multiple applications
![Page 28: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/28.jpg)
28
Dealing with handset diversity
• Browser-based application first
• Optimize for top N phones by market share– For most applications, N likely equals 1-3, not 10-12
Source: StatCounter
SmartPhone market share
![Page 29: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/29.jpg)
29
Smart Phones & Feature Phones
• Smart Phone adoption soaring– Nokia, Blackberry, iPhone, RIM, WinMobile,
Palm, Android, …– Moore’s law suggests it will only get better
But
• 85% of US phones are “feature phones”– Higher percentage in emerging markets
• Application environments emerge– Java, Flash, Qt and ever richer web runtimes
![Page 30: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/30.jpg)
30
Expectations are clear
Camera
Media Player
PhoneMobile
Telephony
Today
BrowserMobile
WebMobileWeb2.0
Browser
Camera
Media Player
PhoneMobile Telephony
Tomorrow
![Page 31: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/31.jpg)
31
The initiative has passed to application developers
Biggest Take-Away
![Page 32: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/32.jpg)
32
Dumb Pipes or New Service Opportunities?
How operators can profit while providing open mobile access
to the Internet
![Page 33: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/33.jpg)
33
Advertising won’t cover lost voice $
Source: Telco 2.0 Manifesto, STL Partners Ltd.
![Page 34: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/34.jpg)
34
Two-Sided Markets
• eBay connects sellers and buyers
• Nightclubs: women get in free
• Media– Newspapers – low prices for subscribers
facilitates sales of advertising– Broadcast TV – free attracts viewers facilitating
sales of advertising
• Akamai caching benefits– Free to ISPs; Paid for by content providers
![Page 35: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/35.jpg)
35
800 numbers
• The original telco 2-sided play
• Bell system provided retail phone service to essentially all US consumers
• Offered “800 service” to businesses, helping them connect with their customers and prospects
![Page 36: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/36.jpg)
36
Billing Service
• Most operators cautious about partnering– Fear of “dumb pipe” slow roll out of new services
• DoCoMo i-mode 2G data service launched 1999– Small screens, slow (9.6 kbps) data rate
• But i-mode business model was wide open– Free development software kits; No access restrictions– DoCoMo’s “bill-on-behalf” with 9% commissions
• i-mode big success in first 24 months– 55,000 applications, 30M subscribers !
![Page 37: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/37.jpg)
37
DoCoMo i-Mode: 2-sided business model
• Subscribers pay for data access (flat rate monthly bundles)
• Application providers pay DoCoMo for billing services
![Page 38: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/38.jpg)
38
DoCoMo’s i-mode
• Open to any application developer
• Optional billing for a 9% commission
Results:
• Over 100K new applications in first 3 years
• Over 15K applications use billing service
• DoCoMo has highest data revenue per user, in the world, consistently for 10+ years
![Page 39: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/39.jpg)
39
Operator Assets
• Brand, PSTN numbers
• Location (motion, context, …)
• Fine-grained billing systems
• User data– Name, address, age, devices, …
• Rich presence
• Customer relationships
![Page 40: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/40.jpg)
40
Telco Platform
Customers: Revenue Side 2
Customers: Revenue Side
1Developers
Retailers
Government
Brand AdvertisersContent Owners
Telco – Retail
B2B VASB2B VAS
DistributionDistribution
Source: Simon Torrance © 2008, STL Partners Ltd/Telco 2.0TM Initiative
Millions of Customers
Thousands of Segments
Millions of Customers
Thousands of Segments
$ $
![Page 41: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/41.jpg)
41
Opportunities on all fronts
Rich mobile applicationsare coming
but,business models will change, significantly
![Page 42: Mobile Broadband – New Applications and New Business Models](https://reader033.vdocuments.mx/reader033/viewer/2022052822/554b4a94b4c905cd2c8b53fd/html5/thumbnails/42.jpg)
42
Brough TurnerAshtonbrooke Corporationhttp://www.ashtonbrooke.com
Blog: http://blogs.broughturner.com
Email: [email protected]
Skype: brough
Thank you !Thank you !