With MWC now well and truly over our post mortem can begin. With so much activity going on, the Insight, called "Mobile Money, Location Based Services, & HTML5 Shine at MMW 2013," from the Wireless Media Strategies team focuses on a handful of key non-device related industry announcements and initiatives which were unveiled at MWC 2013:

• We put Samsung’s global alliance with VISA into context – what does it mean for Samsung’s operator partners and for Google, both of which aim to offer competing NFC payment services?
• How is Nokia executing on its strategy to grow HERE as a horizontal platform spanning competitor WP8 devices and other operating systems (OSs)? 
• The new OpenAPI Exchange initiatives from the GSMA – will it breathe new life into operator ambitions to participate in the evolving apps space, or is it too little too late?
• The growing support behind Mozilla FireFox OS provides a welcome boost to the HTML5 apps ecosystem, but is it sufficient to overcome some of the inherent challenges facing the technology?

This Insight compliments the webinar and daily MWC blogs published by Strategy Analytics' devices team.

 

Nitesh Patel

 

 

Mobile operators like to talk about the wealth of information they have about the users on their networks. Brian Smith, director of Product Development at Sprint termed this data as "crude oil" in an m-commerce webinar I co-presented.

Operators have access to demographic and behavioural data of postpaid customers, including gender, age, and address for the former. For the latter operators know the location of customers each time their phone interacts with the network, call records for which numbers and locations they call or text, and how actively the user engages in data services. Prior to the rise of smartphones and OS controlled browsers, operators also had a clear view of which mobile sites most of its users were accessing.

Much of this customer information has been used by astute operators to understand customers and to provide appropriate levels of service. It has also helped smarter operators to target relevant products and services to specific user segments. Collecting the data has never been a problem. The main challenge remains aggregating, refining and analysing relevant data from separate silos across its business so that the information is useful.

On 9th October 2012 Telefónica announced the launch of a new division, Telefónica Dynamic Insights, which aims to sell anonymous data about its customer base to third parties. “Smart Steps” is intended to be the division’s initial product. It is aimed at retailers and will provide “heat maps” of its users on a real time basis through the day. Leveraging GFK’s retailer relationships clearly makes sense as the division reaches out to new customer segments.

It’s refreshing to see Telefónica moving forward with ambitions to become more than a smarter pipe, particularly as operators need to expand revenue streams in order to mitigate the decline of the core communications businesses. However, even if the crude oil can be refined some key questions need to be answered before the real value provided by the Dynamic Insights division can be assessed:

 

• Who will be the main customers for that information? Retailers are the clear target for Smart Step, but what other data sets will emerge, and how long is the tail for this type of analysis? In future I suspect we will see products built around profiles of customers, the types of devices users own, the services they use and users’ data usage patterns, among others.
• How attractive is customer data from a single operator to potential buyers? On 11th October Telefónica acknowledged the need to extend its operator billing efforts to other operators by announcing Telenor would make its billing APIs available to BlueVia. Customer analytics clearly needs to also open up beyond the single carrier in a country, even if it does have a global footprint.
• Competition and fragmentation risks? Competing operators ma y follow with similar products and partner with other providers of consumer information, such as Experian and Springboard, leading to fragmentation and complexity for buyers.
• Is operator location accuracy sufficient to provide true value to those customers? Momentum is clearly growing behind improved data granularity and indoor location, as highlighted by the formation of the Accurate Mobile Indoor Positioning Industry in August 2012. Initiative such as the Zonal Presence Service, created by the Small Cell Forum, and supported by Aepona starts to become more relevant for operators to address the accuracy gap.

 

 

The recent focus on maps and location services in the media has centred on Apple’s botched first attempt to offer its own map service riddled with errors.  However, we want to highlight the successes occurring in the background such as Nokia’s continued building towards its ambition to become the leading “where” platform in advertising, automotive and enterprise markets.

Nokia’s Location & Commerce (L&C) unit remains one of the brighter spots for company. Despite being loss making, the L&C unit increased its revenue 25% to €1 B in 2011. Based on its performance during 1H 2012, the division looks set to grow revenue by more than 10% in 2012.  Nokia L&C accounted for just below 3% of Nokia’s total revenue in 2011, against a backdrop of falling sales in its core handset business. With Nokia doubling down its investment in key strategic areas including location, investors need evidence of where and how L&C will grow its revenue in the future. A combination of recent announcements helps shed some light on its L&C business as a growth area:   

Advertising & Marketing: Nokia has partnered with Groupon to deliver local targeted offers via Nokia Maps. We expect Nokia to take a share of the advertising revenue by providing Groupon with access to Nokia Map users on Nokia devices. In order to maximise the advertising revenue potential (for Groupon and Nokia) it makes sense for the Groupon integration to be extended to other WP8 licensees like HTC and Samsung, which we expect to be next steps.      

Automotive: At the Pairs auto show Nokia announced extensions of existing relationships with major automotive players BMW, Mercedes, Volkswagen, Hyundai, Pioneer and Garmin. These deals not only enable Nokia to maintain existing licensing revenue with these vendors but to also increase the licensing opportunity through provision of ADAS related content.

Enterprise apps: Just this week, Nokia announced that Oracle had created a link between its Nokia Location Platform (NLP) web service and Oracle’s Fusion Middleware MapViewer. Nokia is currently the only provider of both map data and online mapping services that are integrated with Oracle products. This new integration is intended to reduce the complexity and cost for customers to integrate map content into business applications, and should see Nokia move up the Oracle enterprise value-chain.

With respect to the use of business location information, many enterprise apps contain information about customers or assets such as fleet vehicles that is connected to specific geographic locations.  Having access to up-to-date location information is necessary for business users to do their work.  The value of having this information mapped visually within the worker’s business applications can range from moderate to extreme.  In industries such as transportation, energy/mining, facilities management etc. the ease and speed of use and the level of detail that can be provide by visual maps are essential.  In other industries such as finance and healthcare, visual mapping of customer and other sites is useful but not critical.

As access to and use of location information becomes easier and less costly due to advances like the ones listed above, more consumers and business users will benefit from the rich maps that will pop up in lots of new and exciting places.  This bodes well for Nokia’s strategy to double its investment in location and commerce to pursue growth across all segments.  

 

Nitesh Patel & Mark Levitt

Over the last 12 month Facebook has bolstered its presence in mobile, underlined by its recent acquisitions of photo sharing application providers Instagram and Lightbox, and real time messaging company Beluga.

Furthermore, given Facebook’s rapidly increasing scale and growing use on mobile, the role of Facebook in over-the-top (OTT) messaging should not be ignored by mobile operators, despite the hype around smaller "independent" services such as WhatsApp. WhatsApp has been credited for the demise of KPN’s mobile messaging revenue in the Netherlands.

In our recently published report “Facebook and Messaging: Threat or Opportunity” we address key questions, such as:

• Does Facebook Messenger, along with the core messaging and communication features of the main Facebook app and website, represent a considerable threat to carrier messaging?
• What is Facebook’s scale?
• How is it used by consumers?
• What rich features can carriers, OEMs and others learn from?
• And what’s next for the seemingly ubiquitous and unstoppable social network?

The report also highlights a number of offensive and defensive response strategies for operators in order to combat the growing threat of Facebook, including wholesale partnerships through to evolving carrier messaging services in order to compete.

The mobile phone is evolving into a power commerce tool, enabling consumers to review products, run price comparisons, access inventory levels and to make transactions both over the mobile network and also at the retail point of sale. However, while industry commentators have hailed the virtues of mobile commerce for some time consumers have not responded positively beyond buying ringtones and wallpapers for their phones. So why will m-commerce begin to blossom in 2012?

Firstly, some big web retailers indicate that mobile is becoming a significant sales channel. In July 2010 Amazon announced that mobile devices generated US$1 billion in sales, 3.5% of its net sales during the 12 month period. Last month Ebay stated it expects to process $3 billion in payments (via PayPal) in 2011. To dispel the view that big ticket items aren’t ripe for mobile commerce Ebay indicated 3-4 Ferraris are sold via its mobile app each month!

Secondly, we expect to see more retailers create mobile sites enabled for mobile commerce. For a long time web traffic from mobile devices has been negligible, but once it accounts for over 10% of traffic, as it is for some retailers, merchants start to view it as a missed sales opportunity. 

Thirdly, a slew of services will be launched in 2012 enabling consumers to make small value payments by tapping their NFC enabled mobile phone against an NFC retail point of sale. 2012 will be a critical year for driving NFC handset sales and also encouraging retailers to adopt the technology, although we expect end-user adoption to lag due to inertia.

Finally, consumers increasingly recognise that product reviews and price comparisons conducted on mobile enable better purchasing decisions in and outside the store. Importantly, mobile payment is convenient and enables consumers to buy products when and wherever they want.

This post forms part of RCR Wireless' Analyst Angle: 2012 mobile trends - mobile commerce, product ecosystems, location integration

Words like ‘experimental,’ and ‘niche,’ are often used to describe the status of advertising on mobile phones. However, on 14th October 2010 Google announced that its mobile advertising business is currently operating at a $1 billion annual run rate, which I believe represents a significant milestone and proof point that advertisers are beginning to take mobile advertising much more seriously. Strategy Analytics estimates that globally advertiser spending on mobile will reach over $6.9 billion in 2010, which we estimate would give Google a 15% share of the total mobile advertising market. This compares to Google’s 35% share of the total digital advertising market. We are not surprised that Google’s share in mobile advertising is lower than its total digital share given that mobile advertising is more fragmented than the online advertising market. Our advertising estimates are built on assumptions about growing mobile media usage and the average price that advertisers pay media owners to display their adverts within their properties. Indeed, Google has confirmed this growth in usage is fuelling the rise in its mobile advertising revenue - the company claims that search queries conducted by mobile handsets has increased by 500% over the past two years, with search queries from Android devices playing a role in that growth. Search requests from Android phones increased 300% in 1H 2010. This evidence of improving usage will also have a positive impact on advertisers’ attitude towards allocating their budgets to mobile, with companies like Google, Apple, Microsoft, AOL, and Millenial Media positioned to benefit from this shifting sentiment. Although Apple is a one platform pony in the handset market it has shown how successful it can be at exploiting its niche. In June 2010 at its WWDC Apple stated that advertisers had already committed $60 million to its iAd platform. As online advertising networks Microsoft and Yahoo also continue to ramp up activity in mobile advertising, the next big question is – who will follow Google to be the next $1 billion mobile advertising company? Nitesh Patel

September 23, 2010

While there has understandably been a lot of attention given to consumer apps post iPhone and the plethora of application stores that have emerged, business mobility and enterprise mobility offer huge potential from horizontal to vertical applications and from smartphones to iPads and tablets to superphones.

In both NA and W. Europe, business customers account for under 30% of users but are the dominant streams of both revenue and profits for operators. On the device side, premium priced models from RIM, Nokia, and Microsoft Mobile licensees as well as the iPhone have long been key drivers of profits in a market where low single digit margins are the norm.  The explosion of smartphone choices has led to the battle ground moving beyond the corner office, to other executive and now increasingly the midlevel manager.

With a new range of devices competing for space in the corporate market, the issue of corporate versus individual liable has become an increasing priority for IT decision makers. Add on the complexity of managing an expanding list of OS (Android, iPhone, Windows Mobile, Symbian, Palm, MeeGo, Bada from Samsung) and the growing importance of mobile portable devices with access behind the firewall and one can already feel a corporate migraine forming…. And that’s before we even discuss device management, mobility policy, device retirement etc. etc.

I am looking forward to CTIA Fall (San Francisco October 5-7) and in particular to the Enterprise Mobility Boot Camp moderated by Philippe Winthrop of the Enterprise Mobility Foundation. The boot camp spread over two days will address many of the issue listed above with our own Andy Brown featured in an analyst roundtable on October 6^th.  I look forward to meeting you there. Don’t hesitate to contact Philippe for passes to this the deep dive enterprise mobility event.

David Kerr

David Kerr
Snr. VP - Global Wireless Practice
Tel: +1 617 614 0720
Mob: +1 262 271 8974