Tag Archives: mobile marketing

Appvertainment from Jobs-Apple and the iAd

The announcement of iPhone OS4 changes the Smartphone  world – yet again.  As Steve Jobs described the 7 tent poles of the new iPhone/iTouch/Ipad OS, it was clear that the tent was not quite large enough for everyone. The center pole of this tent is clearly– iAds.

The raison-d’etre  for the much heralded multi-tasking feature is Appvertainment.  (e.g. iAds).    Do not be distracted by the fact that he introduced multi-tasking first and iAds last.  They are intimately linked.

Apple is pursuing their app centric  vs. search (Apple vs. Google) strategy for smartphones  through the introduction of their own OS integrated  ad serving technology.  Multi-tasking is the key component in this ad strategy to permit a user to return to an app after an ADHD moment is fulfilled by playing with a cool appvertainment.  Without multitasking you lose your application state/status and have to start over again.  Jobs is trying to change user behavior and reward users for clicking on an ad with an engaging experience, instead of punishing them by having them have to re-start their app.

Appvertainment targeting was not discussed. The social  and geolocation information that the host apps maintain on users will most likely be used for targeting purposes.  The Apple social game network API will no doubt  be used for providing this targeting information for game hosted appvertainments .    Apple is betting that App hosted ads will be valuable than Internet style search ads.

Jobs boosted that the Apple platforms would be capable of serving 1 billion app-ads per day by the summer of 2010.  Even if we cut that number in half and apply a modest $10/CPM ad rate – that represents daily gross appvertainment revenue of  $5M.  Apple’s vig on the ad revenue is 40%.  This is easily approaching a $1B+ annual revenue opportunity for Apple.

Click for full commercial

Another interesting aspect of this strategy is that Apple is clearly focusing on large brands and advertising agencies – in other words, the folks with the largest budgets.   This clearly makes sense.  The cost of an appvertainment production can easily be in excess of $250K+.  The inclusion of integrated and compelling video with engaging interactivity is not the domain of amateurs, but rather professional digital agencies.  The examples that Jobs demonstrated during his presentation (Nike, Disney and Target) are all major national brands with large budgets and big Madison Avenue agencies.

As I watched the presentation another thought came to mind –  “Is this legal?”  What would happen if Microsoft integrated a proprietary ad serving system in their OS and demanded 40% of the revenue of every ad served on a Windows machine?  This topic will clearly be discussed in the blogosphere and perhaps courtrooms in the future.

Did anyone hear a mention of sharing ad revenue with Mobile Carriers?

Another  “pole” of significance is the enhanced suite of enterprise features. Corporate CIOs have had a set of killer issues that prohibited the iPhone from significant corporate sanctioned and supported utilization.  Apple is trying to remove these roadblocks with OS4.  In addition to the enhanced  security and email capabilities is device management.  Device management includes the feature of permitting corporations to load their own private apps on the iPhone.    The execs at RIM should be concerned about their Blackberry franchise.

Apple would not be investing in enterprise features while maintaining an exclusive relationship with AT&T.  OS4 changes Apple from the Trojan Horse of a sexy consumer device on AT&T to a machine poised for world domination.

The competition between Google and their Android platform and Apple will only get fiercer.  Nokia is the only other global player who can play at this level.   Palm, RIM and even Microsoft will fight for the leftover niches.  It is a battle of the controlled and planed eco-system of Apple vs. the Open-Source world of Android.

The Apple tent has room for enterprise applications, has a new revenue source for app developers, and embraces big brands, ad agencies and publishers.  Adobe (no Flash support) and Google are outside the tent of OS4.  Microsoft got the biggest slight in this announcement as their mobile efforts were ignored as though not relevant.  And what about the mobile carriers?  Do they exist in the Apple world? Continue reading

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Kudos to Verizon for taking on Leadership – Mobile without Phone Numbers

Approximately one year ago I wrote an article entitled “The Future of Mobile – without phone numbers.” In my discussion I put forth the proposition that social networks would take over the fundamental connectivity for individuals and that phone numbers would be a network “IP address”.   This article generated 100’s of emails and questions, some supportive, some not, but all thought provoking. It was clear that I had hit a nerve.

A major step towards my view of the future of mobile communications was taken by Verizon in the last week.  Verizon Announced at the Mobile World Congress in Barcelona, and later confirmed and launched at CTIA 2010, an integrated Skype calling service.  This service enables users to click any Skype username, make a call, and not be charged for mobile minutes.  This service even uses the mobile voice connectivity of Verizon for the wireless network of the call.

This is a major watershed event for the industry.  A major carrier embracing voice as a data service, with calls completed outside of the carrier’s equivalent phone number – DNS.

In fact, this capability had been  available by such applications as ISkoot.  What is big news is that Verizon is openly promoting this service and not charging for mobile minutes.   Another advantage of the Verizon version is that it is “always-on”.  I received my first Skype call on my mobile yesterday.  It just happened like any other mobile call.  It was an important business call and all I could think about at the conclusion was – that was cool.

The use of social networks and non-phone number connection services implies that that contact DNS aggregation services will become even more important.  My network contact list will be an amalgamation of my Facebook, Linkedin, Skype, Twitter,  existing phone books, AOL IM list and likely several others.  Aggregating my contact lists, storing them in the network cloud and presenting them to me on demand in a usable form is essential.

While at CTIA I was on a panel discussion with   Mike Mulica, CEO of FusionOne.  FusionOne is a leading example of such a network based contact/address book that spans social networks.  They are certainly a company worth watching in the future, as they appear to be “on the right side of the technology curve”.

A question that remains is how does Verizon generate revenue by connecting calls for free?  Simple answers include increased data subscriptions and greater subscriber growth via churn from other carriers.    In the U.S. market, with mobile penetration approaching 90%, carriers can only increase subscribers by churning their competitor’s customers.   Since the Skype app on iPhone is not as full featured and cannot be “always-on”, VZW has given leading edge users a reason to switch NOW.

In the future I would expect connections between Skype calling capability and other applications on Verizon, especially those provided through the Verizon’s own app store.  I also expect that full mobile video calling and even video conferencing via Skype is no doubt on the roadmap.

This feature is only available to VZW smartphone subscribers , and that means a $29.99/mo data charge.

Regardless of the long term revenue sources, VZW has taken a clear leadership position in its market and now has the their competitors determining a catch-up strategy.  Kudos to Verizon on this move.

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Filed under Acquisitions, advertising, android, Apple, AT&T, cloud computing, CTIA, facebook, FusionOne, iphone, location based services, MAc, mobile, mobile advertising, Mobile Application Stores, mobile commerce, portal, skype, smart phone, Smartphone, Twitter, Verizon, Web2.0, widgets, wireless

SNL Really!?! Really?

This past episode of SNL had a Toyota Prius commercial parody..

You can view it by clicking here:

What was even funnier than the skit was the targeted advertisements for this video clip on the NBC website.

When I first viewed it on the web I was shown a Toyota Sienna commercial. Would Toyota want to sponsor such an anti-Toyota commercial parody with Toyota’s advertising budget? Really!?!

Not to be satisfied with just one viewing, I reloaded the web video to see what I would get next. I was pleased that the Toyota Sienna ad had been replaced…… by a Lexus Hybrid Ad! Really? Really! The ad voiceover describes that while others are just now building hybrid cars, Lexus hybrids have traveled over 5 billion miles. This is the ad that runs before a skit on a Toyota hybrid that will not stop? Really!?!

To be truthful in my advertising of this advertising faux pas, these Toyota Ads , along with ones from, Sprint, Mercedes, Audi, Nissan, a Broadway Play and other food products. This ad rotation seemed to be running on all videos on the SNL site.

The Mercedes ad shows one of their cars rolling and bouncing down a test track highlighting its structural integrity in crashes! Really!?!

There was even an ad for the “Parenthood Driving Challenge”, sponsored by Nissan,

Despite this “run of site advertising mode”, Toyota and their agency cannot be thrilled at the commercial parody coupled with their partial sponsorship of their own humiliation.

Really!?!

Lastly it is worth asking, ”Did Ford actually sponsor that commercial parody?” It is their most effective advertisement in a long time. Really!

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Filed under advertising, Automobile, mobile, mobile advertising, Toyota, Web2.0

Google clicks in for Mobile

googleDuring the past week Google made two significant splashes in the mobile arena. Their much heralded, bombing of middle America with Stealth fighters announced the landing of the “Droid” mobile device. Secondly, their acquisition of the leading U.S. mobile advertising company, Admob for $750M announced the full legitimacy of mobile advertising. When Google speadmobaks, the rest of the industry should listen.

There was a time, not too long ago, when an entire industry seemed to get a simultaneous epiphany – that the Internet had created a legitimate “second” screen to television.  When this became “conventional wisdom”, the advertising Dollars, Euros and Yen started to shift from the “spray and pray” methods of television to the increasingly targeted methodologies of the web.

The same thought process can now be safely referred to as “conventional wisdom” for mobile.  The consumer is spending more time starring at their mobile screen, and less and less at their Web browsers, and even far less in front of the television.  With this reality, the web advertising giant is shifting more investment to the third screen  – which we should refer to as the consumers prime screen, the mobile screen.

We have transitioned from TV ad blindness (really a Pavlovian queue to go to the frig or bathroom), to web banner blindness.  We now, however, have the personal medium of the smartphone to reach consumers.

We have moved from the communal family device, the television, to a shared, yet personal device, the PC to the personal and un-shared device, the smartphone.

There will be some winners and losers in this new reality.  The winners will be companies that have invested ahead of the curve and have developed mobile and true multimodal next gen advertising vehicles.   Advertising and promotional technologies and processes that have broken with the “spray and pray” techniques of the past and capitalize on the true personal 1-1 advertising techniques, providing consumers ads that they want to view, will be the market winners.

The Android has positioned Google to be in your pocket, not figuratively, but literally.  The combined promotion with VZW and Moto, with stealth bombers creating a thinly veiled a sense of “Shock and Awe”, is a loud statement.

(Note to the Droid ad agency – Stealth bombers do not fly during the day, hence the word “stealth”)

See my other comments on the ad campaign at the end of this blog article.

VZW is a company with a great network and a lagging device lineup. Moto has raw engineering and production talent for mobile devices and has largely fallen off the radar screen in recent years.  Google, the dominant player in the present  generation of Internet advertising, is seeking to maintain and grow that position in the next generation.

So, Google is playing a pre-emptive attack strategy in mobile. VZW is playing catch-up to the iPhone.  Moto is, perhaps, playing their last “bet the company” card on Android technology.  Offense, defense and survival makes for three very motivated partners.

With the expected proliferation of Droids and other smartphones, Google’s purchase of ADMob is both stunning and obvious.   Another winner in this market shift will be, as I have written about in the past, the major social networks.

So who are the losers this past week?

On the Wireless Carrier side of the equation, Sprint and T-Mobile have to be concerned.  The gap between them and the leaders  (AT&T and VZW) is widening.   I  expect one less mobile service company in the U.S. in the next 12 months.

The emergence of Android platforms is likely the end of Palm as a mobile platform.  The Palm Pre never got the consumers attention and thus critical market share.

Too little, too late.

Palm will not be able to compete with Google and Apple in this round.  Their demise is written on the wall (in Graffiti).

500x_smartphonemarkshareRIM also has to be very concerned.  The launch of their touch screen device, the Storm was, well, stormy.   Blackberry has a strong market position and is well entrenched.  It has made significant growth in the consumer segment in recent years.  Will that growth reverse with maturing Android devices?  While Blackberry is in a much stronger position than Palm, the combined investment potential and application resources of Apple and Google will be a major challenge to RIM’s Blackberry.

All that said, RIM still commands over 20% global share in smartphones

Application developers will have to start to prioritize their porting and promotion of new applications between four major global platforms – Symbian,  Blackberry, Apple and Android.

It will be interesting to watch the global leader in the smartphone category – Nokia and their Symbian Operating System.  This platform is relatively unknown in the U.S. market, but is dominate in the rest of the world.

The next obvious question is how do these moves motivate other players in the industry to react?  Microsoft is desperately playing catch-up to Google in present generation search engines and advertising.  Their own version of a mobile operating system has made, at best, niche inroads.  Microsoft has suffered from execution issues and seems to be the biggest example of true  “innovators dilemma” in the last 20 years.

Yahoo has some mobile applications but seems to be a company unable to focus the attention necessary on any one initiative.  Perhaps some Corporate Ritalin is in order?

My conclusion is that both Microsoft and Yahoo will likely go shopping for a focused next gen advertising company.

Ad Agencies that have largely focused on managing creative production and bulk television ad buying are increasingly on the wrong side of the technology curve.  They are, however, in a good position with the depth of their industry relationships, to be a major force in the next wave of Internet/Mobile advertising,. The question is are they willing to move from their existing business models and develop the expertise in the methodologies, either in-house or through acquisition that can maintain their market positions in the value chain for the next generation.

The technology of smartphones, advertising and applications has now combined to make the next generation of consumer services and commerce a break from the past.  At least that’s what I hear from all of the “Conventional Wisdom”.

Notes on Droid Ad Campaign:

The more I thought about the Android “Stealth Fighter” ads the more I realized that that imagery was quite familiar.  I have added four additional videos for your viewing.  Theses video are the trailers for the 1953 and 2005 versions of “War of the Worlds” , the trailer for Armageddon and CNN footage of the bombing of Baghdad.

With these videos you can draw your own conclusions.  Please let me know what you think.

In my opinion, these images all have some resemblance to the Droid commercial.  In each of these cases the situation did not end well for the “entrenched” establishment.  Mass destruction was the result.  In one case a virus saved mankind.  This is hardly the message that a smartphone operating system might want to promote.    The droid-like figures eventually emerge to destroy everything in sight –they really do – you can Google it.  In the CNN footage a nation watched mesmerized by the imagery, only to learn that perhaps the wrong war was fought.

All interesting imagery for the first shot in a new generation of smartphones.

Subtle – this is not.

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Filed under Acquisitions, advertising, android, Apple, facebook, Google, mobile, mobile advertising, Mobile Application Stores, mobile commerce, smart phone, Smartphone, Social Media, Twitter, Web2.0, wireless, You Tube

Open Letter to Madison Avenue

iphonev5800This past week the New York Times had an article about the convergence of contextual advertising and Smart phones. The potential for highly targeted advertising including the use of GPS is a trend I have been discussing in this blog for over a year.

 

The interesting angle in the NY Times piece , “Is this an invasion of privacy?”

Regardless of ones wishes, all consumers will continue to be bombarded with advertising, much of which is the Madison Avenue equivalent of carpet bombing. As with the military version, this is a technique whose time has come and gone.

For the purposes of this article I will focus on video advertising because like many consumers, I can not tell you the last Internet banner ad I paid any attention to or clicked on.

I watch most of my video entertainment on the Internet. I frequent the websites of the major networks, as well as Hulu and YouTube. All of these sites have various forms of advertisements.

Most of these (I would say 99.999%) have zero interest for me.

These are a wasted investment with no opportunity to drive a sale of anything.

Would I prefer to see ads that were actually targeted to my interests? Of course I would. I would prefer no advertisements at all, but that is not realistic.

For me this equation becomes very simple. If I want advertisements that I would care about, the advertisers must have knowledge specific to my interests through some mechanism. The advertisers can either try to derive my interests through various contextual techniques (location, click analysis, websites frequented, purchases made, etc) or they can simply ask me.

Both of these techniques run into privacy concerns. There are fear mongers claiming that “big brother” is watching us and will do some unmentioned evils with all of this data. The questions are: What is private? What should remain private? and What forms of personal information can be revealed for mutual benefit?

I believe that information that is your medical history , your financial status, your sexual orientation, your marital status, your status as a veteran and your religion should remain private unless you explicitly release it. Basic consumer desires are fair game in my opinion.

Any person in 2009, however, who has any expectation that their Internet use, whether on a PC or a Smartphone, cannot be monitored for commercial gain is living in a fantasy world. Perhaps it is for this reason that 10’s of millions of Facebook subscribers readily reveal the most intimate details about their lives. They are just not concerned about their privacy.

If you have an expectation of privacy then never use a credit card, or make a phone call, or shop in a store, or use the Internet, or send a text message, or stay at a hotel, or use an airline, or subscribe to anything. You cannot live in modern society without leaving a digital trail of breadcrumbs that can be used for commercial purposes.

Now back to my video entertainment.

sgt_starWhen I watch any of my favorite shows I am subjected to commercials on trucks, beer, video games, grape juice (as a cure for everything!), tax services, an assortment of female oriented products, German cars, U.S. Army recruitment, fast food, etc. All of this investment is wasted on me.

To make my video watching more enjoyable and to help save advertisers millions of dollars, I offer the following open letter to those who want to advertise to me in the future:

Dear Advertisers

I will never buy a truck,a German car or an SUV. I am not interested in woman’s deodorant, and the last Budweiser Beer I drank was in High School. (Yes Mom, I did drink beer in high school) I don’t smoke, so telling me to stop is a waste of your breathe. I already have a subscription to the New York Times, so ads that try to get me to subscribe are also a waste, I only need one copy of your newspaper per day.

I am past the age of recruitment for the U.S. Army, Navy, Marines and Air Force. My kids are not interested in the military. We do support you and suggest you save the money that you use to advertise to me and use it to pay your soldiers more.

To Taco Bell, McDonalds, Wendys, and Dominos, we get it. You are fast, unhealthy and fattening. Please save the advertisements on me and work on your quality instead.

I have no interest in household cleaning products. I don’t know which one is for what mess.

I do like action movies, ice hockey (particularly the New York Rangers),baseball (Yankees), football (Jets), politics, and technology. I like the latest electronic gadgets, high definition television, anything made by Apple, and Japanese cars that last 15 years.

For Verizon, I would gladly consider switching my cable and Internet provider to your Fios service, if and when you get the one HD channel that I really care about. If you paid attention to this open letter you would know that it is MSG. Any advertising to me that does not have the words “We now have MSG in HD” is a waste of money.

I also find that a mob of guys in glasses and Verizon uniforms following me around to be creepy.

I like good wine and hand crafted microbrews. I prefer the anti-oxidants of grapes in my Chianti, not Welchs grape juice.

If you want to sell me diamonds and gold jewerly, then only send these ads to me a month before my wife’s birthday. You’ll have to get that information from her. But then, it is in her interest to tell you, isn’t it?

Now you have it. It would have taken millions in investment dollars to build the algorithm to derive this same information about me. This is a win-win. I get ads that I would at least find entertaining and focused on my interests, and you get a chance that is greater than zero of influencing a purchase decision.

I expect that the next time I watch something on Hulu, or “The Office” on NBC.com that the ads will be focused on my interests.

Regards,

Steve Spencer

A good ad targeted to my interests

A good ad targeted to my interests

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Filed under advertising, Apple, Content, mobile, mobile advertising, smart phone, Smartphone, Social Media, subscription servcies, You Tube

Cheers and Jeers for Mobile without Numbers

My article “The Future of Mobile – without numbers” created a large reaction.  I received a full inbox worth of cheers and jeers.  For those who cheered, I say “thanks.”

comedy-tragedy-maskFor those who jeered, I say, “Thank you very much!”  I have always believed that when people challenge your thinking and your logic, you have the opportunity to learn and make your own arguments better.  With this in mind, I have created a couple of broad categories of challenges from my critics.   (If you have not read the original article you should first check it out with this link)

 These areas are:

1-The sociological, technological and economic feasibility of my hypothesis that social networking and VoIP will fundamentally change the mobile industry

2-What should the Wireless Service Providers do to counter this threat?

Item 1:

To explain and expand on my logic more fully it is useful to look at some history.

What was the key invention that made the Internet a global phenomenon?

It was not TCP/IP, or browsers or even Google.

barilan_internet-thumbThe key invention was the Domain Name Server (DNS).  DNS translates a domain name to an IP addresses.   It is much easier to remember www.nytimes.com, instead of its IP address (170.149.173.130).  DNS servers are continuously updated around the globe as Internet services switch IP addresses; add new destinations or new web services are created.

DNS is also what makes email possible.

Prior to global DNS services the translation of a name to an IP address took place (if at all) in the equivalent of a local address book on your computer.  You would update this local file with new IP address/Web name pairs as you discovered them, with the obvious problem that your local address book did not automatically update to track changes.

 Does this sound familiar?        

For nearly 100 years telephone services have been in the local address book mode.  As a telephone subscriber, the implied requirement was for you to carry your own version of a local DNS in your pocket. Antique telephoneYour phone contacts would only update if you physically made a change to your address book.

The phone company would issue all subscribers a regional, printed, version of DNS on a yearly basis, the big phone book.

This fundamental use case did not change until the introduction of phones with imbedded contact lists.  With embedded contact lists you could scroll through a list and click to call.  This feature eliminated the need to dial or punch all the digits yourself, but was still limited to your personal updates.

Prior to the ability to look up and retrieve phone numbers for people and businesses on the Internet, the only global DNS equivalent for telephone service was “411”, information service.

The use case for smartphones is the start of a fundamental change.  With their larger screens and easy keyboard entry, you just type the name of the person you want to call and press send.  The connection with the phone number is further eroded.  The contact list still, however, must be maintained personally, just like our Grandparents did with their paper versions.

I can still remember the phone numbers from my friends in high school, but have to look up my kids’ numbers.  The reason is that I never use my kids’ numbers; I just type their name.

The ability to take your phone number with you when you change providers (landline or wireless) was a big boost to the manual updating of address books.  This was made necessary because of the lack of Global DNS in telephone service.

The emergence of large, ubiquitous social networks is the final missing puzzle piece that will finally alter this 100-year pattern and make phone calling similar to typing “nytimes”, instead of its IP number.  These social networks provide several key elements.

They are a collection of your friends, family members and business associates.  Your network(s) contain the majority of people you need, or want, to communicate with on a regular basis.

fhw1uoifmega5hwmediumSecondly, your networked friends should give you permission to view and have access to their actual phone numbers.  This access will give you the equivalent of global DNS for your contact list!  The updating of the phone numbers will no longer be your responsibility, but the responsibility of your friends.  This is the same scenario as a Webmaster updating their web services IP address for DNS.  Even if Voice over IP (VOIP) services do not emerge as a dominant mobile trend (I believe they will), then the social network aspects will be a major force unto themselves.

So, at least to this point the logic is that Social Networks = Global DNS.

The last aspect of social networks is that they can easily provide an “always connected” status.  This is the way instant messaging services (AOL, MSN, Yahoo, Skype) work today.  This always-connected feature creates a direct IP path between any two (or more) members.  If you have a direct IP path, you can easily create voice and video communications services.

The combination of social networks providing DNS-like service and IP connectivity is the core of the technological argument.  The fact that the Internet has trained a large segment of the world to access sites and services by name, instead of by IP number is my proof point that there should not be a sociological issue with my scenario.

The economics of this scenario are more difficult to predict.  I agree with those who said that the social networks and VOIP providers such as Skype would not run a global communications network without significant revenue and profit.  The issue to consider is:  Have the economics of providing a significant portion of this service forever altered in a significant manner?

VOIP service for home or business is significantly less expensive for the consumer than a direct-wired solution using 100-year-old twisted pair telephone technology.  The ease of provisioning and maintenance, and the lower cost of transmission and billing, has changed the economics of landline services.   It is less expensive to transmit and manage a very high bandwidth data path using Internet technologies, than to maintain individual transmission paths.  

Why not the same for mobile?

Item 2:  What should the Wireless Carriers do?

If I were the CEO of a major service provider I would execute the following strategy:

vzw_logo_1024Recognizing the importance of the trends that I discussed, the game that is now being played puts this mobile carrier at a structural disadvantage.  If you think you are going to lose at the game that is being played, you change the game.

The Carriers should obtain their own DNS service for their subscribers that updates continuously and allows for one click friend calling.  This service should be a collection of the key social networks.  

The Carriers should Interface/partner with Facebook, LinkedIn, etc and create a superset DNS of their subscribers’ contacts.  Then they should build the social networking application(s) directly on the phones to permit IM, voice, and video communications. The existing mobile numbers can be used as the equivalent IP addressing scheme.  The integration with the social networks will also permit contextual communications as the subscriber has access to their friends profile and status.

The strategy of partnering with the social networks for calling DNS functionality and contextual communications would create tremendous value. 

The marketing possibilities for a Wireless Carrier with this strategy are huge.

If this strategy was implemented by just one carrier (Verizon for example) then they could market to your friends list to switch and get In-Calling rates (free) when they call each other.  If 98% of your calls were within your social networking contacts, then it would make sense for that group to be on a single carrier.

The Carriers have tried viral marketing in the past with In-Calling and T-mobiles Fav-5 program.  What I am suggesting would be many orders of magnitude more impactful.  The first carrier that figures this out and executes will steal many of their competitor’s subscribers and really change the game.

The last issue for the Carrier strategy section is to counter the VOIP threat.

My strategy would be to embrace and profit from it.   There are two obvious moves to capitalize on mobile VOIP.  First, follow the strategy of the landline providers by creating your own VOIP mobile service that utilizes your connections into the social networks.  You can have a flat monthly fee for VOIP calls.

Secondly, you can also provide a “bring your own VOIP” service plan.  The Carrier would charge a lower monthly fixed fee that would reflect their lower costs in servicing these 3rd party subscribers.

theatre_and_the_internet

Over the past five years the bulk of new mobile service investment has been on mobile data applications. Mobile  voice services have not evolved beyond the basic voice call, callerID, voicemail stage.  This is the opportunity to merge the data application investments directly with the core voice service.

The real issue for the Wireless Carriers will be in the recognition of this threat and the real opportunity that this fundamental disruption in the market it creates for a first mover to capitalize on the changes and redefine how people communicate.

I hope I have addressed many of the Jeers that I got last week.  I welcome your comments on these expanded explanations and logic!

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The Future of Mobile – Without Phone Numbers

Sol Trujillo

Sol Trujillo

The most striking exchange at the recent Mobile World Congress in Barcelona was the give and take of jabs between Sol Trujillo , CEO of Telestra and Josh Silverman, CEO of Skype.

Sol represents the mobile business of the present and the past.   Josh is the future.

Josh Silverman

Josh Silverman

The rate of innovation and fundamental change in the mobile industry is out pacing the oligopoly based businesses ability to react or perhaps even acknowledge what is happening on multiple levels.

The basic argument was about whether that phones with Skype capability would grow the market with low cost, data application, voice calling services.

Sol Trujillo was less than enthusiastic about voice as a data service and as much said that he would use his monopolistic power to prevent that in Australia. (Those are my words, not his)

This is the classic industry transition that has been taught in every business school of merit. The existing entrenched companies reaction to a shifting structure is predictable, since their company’s enterprise value, their careers and their personal fortunes have been created with an old, but soon to be outdated industry structure.

The interesting aspect of the interchange in Barcelona was that the market shift is even greater than either of them hyped (Skype) or condemned (Telestra). This is much bigger than arguing whether making voice calls is a voice service (Mobile Carrier) or a data service (Skype).

There are five technologies and business models coming into play that will change the way the world utilizes mobile phones in the near future. These colluding forces are: Mobile Application Stores, Powerful Smartphone Devices, Advanced Mobile Data Networks, Social Networks, and Voice Over IP.

Here is my prediction for the mobile environment of 2015.

facebook_phoneYou purchase your sleek, touch screen, mobile communications device in an electronic retail store (or online). It is likely that some devices will have applications pre-loaded. Any subsidy or rebate that you receive for your device will come from the application providers who want you to use their specific services, not from the mobile data provider as it is today.

Once you have your mobile communicator you will then purchase data access, similar to the way you subscribe to your home or business Internet Service Provider. Your data provider might provide full roaming services (VZW, AT&T, T-Mobile), and/or fixed WiFi access. Your device will work with your home or business WiFi network in a seamless manner.

With your device and data access you can shop over the mobile IP network to download applications for you mobile communicator. Two of the must have applications will be your social network application(s) and your VOIP application.

It would make logical business and technical sense for the VOIP software to come bundled with your social networking package.

mobile-skypeYou will be able to aggregate your “friends” from several Social Networks and load them on your phone. Your VOIP provider (Skype) will be able to place calls to your friends directly. The use of phone numbers will diminish and be used for the 5% of calls you make to people outside of your friends group. Businesses will advertise to become your social network “friend”, so that you can communicate and call them with ease.

This model is not that far off from today’s reality. The Iphone application has several available Facebook applications and Skype applications, and can switch between mobile broadband service and WiFi.

The issue is that this new model strips the mobile carriers of their service model and relegates them to wireless roaming Data IP providers. You can understand why an executive of a Wireless Service Provider would take an aggressive stance against this thinking. The problem is that he is on the wrong side of the technology curve. This will happen. The issue is how long it will be stalled by politics. By politics I mean both company politics and governmental politics.

The fact is that it takes billions of dollars and Euros to license the spectrum and build out mobile data networks. The service model that these investments were predicated upon is quickly becoming invalid, and must evolve and is replaced to reflect the coming reality. There will not be a “free lunch” for the Facebook’s and Skype’s of the world to reap (or rape?) the investment of the world’s mobile carriers.

Rather then ignore, deny or fight an inevitable technology tsunami, the carriers would be better served by creating a business model that fairly compensates then for their considerable investments going forward. The new application providers such as Skype and Facebook will need to acknowledge the value of these mobile networks and work on creating the proper framework for all to move forward.

My follow-up article to this topic is here

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