Friday, June 7, 2013
Big Data Panel at CTIA
The Panel's theme: "Who will be the next Tableau?"
How the communications industry is developing, investing in and acquiring data analytics companies. Speakers include James Henry of Bank Street Capital, Dave Barford of Gilead Group and Michael Morgenstern, Principal at CSMG.
Thursday, April 7, 2011
4/11 Michael Morgenstern quoted in Tablet PC Review
Analysts Chime In: 10-inch Tablets vs 7-inch Tablets
http://www.tabletpcreview.com/default.asp?newsID=2114&news=apple+ipad+samsung+galaxy+tab
by Jacqueline Emigh - 4/1/2011
Will Apple's tablet competitors really sell more 7-inch models than 10-inchers, as the perpetual rumormongers at the Digitimes predicted this week? Analysts interviewed this week by TabletPCReview are mainly pessimistic over other manufacturers' chances with iPad-sized devices, for now at least. Yet opinions on the future fate of the smaller gadgets range all over the map.
In a report drawn from unnamed sources in the touch panel space, Digitimes argued that 7-inch tablets face better prospects since they are priced lower and avoid direct competition with the iPad (that actually sports a 9.7-inch display, even though it is commonly referred to as a 10-inch tablet). The Digitimes report also included the nonsensical statement that, “Samsung Electronics’ 7-inch Galaxy Tab and ViewSonic’s 7-inch ViewPad are both generating stronger sales than their 10.1-inch models.”
In an email Q&A with TPCR, Avi Greengart, research director at Current Analysis, poked holes in this statement right off the top. “That’s laughable,” according to the analyst. “Of course, Samsung is seeing higher sales of 7-inch [than] 10-inch tablets. It hasn’t launched the 10-inch model yet.”
Yet, as attested to by a string of announcements before, during and after the recent CTIA show , the small smattering of iPad wannabes available today will soon be joined by a multitude of new entrants in both the 7- and 10-inch categories.
120 Tablet Variants
“I count close to 120 tablet variants planned for 2011, and I suspect that the market can absorb only a fraction of them,” Greengart noted.
None of the analysts interviewed by TPCR disagreed that 7-inch tablets will carry lower pricing. Nor would anyone argue that Apple is not about to step into 7-inch territory – any time soon, that is. After all, Apple’s Steve Jobs has uttered harsh criticisms of the 7-inch form factor on numerous occasions.
“Trying to outdo Apple in its market niche is a tough strategy, which is why Steve Jobs is perfectly comfortable in ‘recommending’ that his competitors stick with 10-inch tablets,” pointed out Michael Morgenstern, principal at Marconi Pacific.
Seven-incher Pros and ConsAnalysts do perceive advantages as well as disadvantages to the 7-inch form factor. The major pluses include lighter weight and greater portability, said Rod Enderle, principal analyst at the Enderle Group. Smaller tablets also tend to be better on battery life, since they use less power.
Smaller tablets are generally better suited to gaming and taking photos, Enderle told me. “But are less useful as Web viewers, and the [on-screen] keyboard can take up too much real estate if you want to type heavily.”
“Portability is definitely a plus for the 7-inch tablets,” Morgenstern concurred. “However, we have been hard-pressed to identify a cohort of consumers that values portability above other characteristics and still prefers a tablet over a smartphone,” according to the analyst.
10-inch Price Cut?As virtually everyone sees it, Apple will continue to dominate 10-inch tablets, although some do foresee certain opportunities for low-priced 10-inchers as the market heads more mainstream.
“Currently, 10-inch tablets from other manufacturers do not provide the same level of functionality, richness of applications,
ecosystem, or ease of use relative to [the iPad].,” said Levi Shapiro, partner, TMT Strategic Advisors.
“[Yet] Apple is focused on the high-margin, tip-of-the-pyramid consumer. Competitors without a significantly lower price point don’t have a chance with that segment. I’m talking to you, Motorola Xoom. As the tablet market expands to the mass audience, much lower price points will be imperative.”
Will Tab and NOOK Prevail?Yet how much of a dent will seven-inch tablets manage to make against the iPad? Some point to bits of traction already behind Samsung’s seven-inch, Galaxy Tab and Barnes and Noble’s NOOK Color.
Samsung’s first ever tablet will greet its numerous upcoming rivals with an early market edge. The 7-inch Tab received mixed-to-positive reviews upon its release last fall, Nevertheless, Samsung shipped 2 million units of the device last year, all in the fourth quarter, say new numbers from the Gartner Group.
For its part, the NOOK Color continues to expand in capabilities, with more custom Android apps and a probable upgrade to Android OS 2.2 and Adobe Flash anticipated for this spring. About 3 million units have shipped so far, according to industry estimates.
“Research suggests that consumers – not Geeks in Palo Alto, but real customers in the heartland – are willing to carry no more than two devices. One of these is a smartphone. That means NOOK could be a ‘last man standing’ if it continues to innovate and provide meaningful functionality,” Shapiro said.
A Hazier Crystal BallFor other 7-inch devices, which have yet to see the light of day, the crystal ball grows hazier. Some analysts wonder what unmet demands these smaller tablets might fill, or if there’s even enough room for them in the market.
“Currently, it seems to us that the Galaxy and others are seeking to differentiate themselves from Apple simply by being a different size,” Morgenstern contended. “The 7-inch tablet is too small to spend a long time surfing [with] or consuming media, such as video.”
"Like their bigger cousins, 7-inch tablets need to offer high resolution screens with good visibility", suggested J. Gerry Purdy, principal analyst, MobileTrax.
"Vendors wanting to gear their tablets to business use should urge developers to optimize their enterprise apps for multiple tablet form factors", Shapiro advised. “We will see more and more carriers subsidize tablets for their user base, similar to smartphones today, in the interests of encouraging greater data consumption,” he elaborated.
“M2M (mobile-to-mobile) connected devices are already the fastest growing segment in mobile. Tablets that integrate a full suite of enterprise-ready applications will be an important component of this growth.”
A 7-inch iPad?Will Apple ever pull an “about face” on its 7-inch tablet stance? Some analysts wouldn’t be too surprised.
“It is certainly possible,” answered Greengart. “Jobs said that nobody needed video on an iPod…until they did. Apple has a history of dismissing product categories until it is ready to enter the category themselves.”
“Apple could and will introduce a 7-inch iPad if the form factor takes off,” Enderle agreed. “Until Apple sees a threat, though, it will market the 10-inch product as superior and drive people to it, rather than build a smaller offering.”
http://www.tabletpcreview.com/default.asp?newsID=2114&news=apple+ipad+samsung+galaxy+tab
by Jacqueline Emigh - 4/1/2011
Will Apple's tablet competitors really sell more 7-inch models than 10-inchers, as the perpetual rumormongers at the Digitimes predicted this week? Analysts interviewed this week by TabletPCReview are mainly pessimistic over other manufacturers' chances with iPad-sized devices, for now at least. Yet opinions on the future fate of the smaller gadgets range all over the map.
In a report drawn from unnamed sources in the touch panel space, Digitimes argued that 7-inch tablets face better prospects since they are priced lower and avoid direct competition with the iPad (that actually sports a 9.7-inch display, even though it is commonly referred to as a 10-inch tablet). The Digitimes report also included the nonsensical statement that, “Samsung Electronics’ 7-inch Galaxy Tab and ViewSonic’s 7-inch ViewPad are both generating stronger sales than their 10.1-inch models.”In an email Q&A with TPCR, Avi Greengart, research director at Current Analysis, poked holes in this statement right off the top. “That’s laughable,” according to the analyst. “Of course, Samsung is seeing higher sales of 7-inch [than] 10-inch tablets. It hasn’t launched the 10-inch model yet.”
Yet, as attested to by a string of announcements before, during and after the recent CTIA show , the small smattering of iPad wannabes available today will soon be joined by a multitude of new entrants in both the 7- and 10-inch categories.
120 Tablet Variants
“I count close to 120 tablet variants planned for 2011, and I suspect that the market can absorb only a fraction of them,” Greengart noted.
None of the analysts interviewed by TPCR disagreed that 7-inch tablets will carry lower pricing. Nor would anyone argue that Apple is not about to step into 7-inch territory – any time soon, that is. After all, Apple’s Steve Jobs has uttered harsh criticisms of the 7-inch form factor on numerous occasions.“Trying to outdo Apple in its market niche is a tough strategy, which is why Steve Jobs is perfectly comfortable in ‘recommending’ that his competitors stick with 10-inch tablets,” pointed out Michael Morgenstern, principal at Marconi Pacific.
Seven-incher Pros and ConsAnalysts do perceive advantages as well as disadvantages to the 7-inch form factor. The major pluses include lighter weight and greater portability, said Rod Enderle, principal analyst at the Enderle Group. Smaller tablets also tend to be better on battery life, since they use less power.
Smaller tablets are generally better suited to gaming and taking photos, Enderle told me. “But are less useful as Web viewers, and the [on-screen] keyboard can take up too much real estate if you want to type heavily.”
“Portability is definitely a plus for the 7-inch tablets,” Morgenstern concurred. “However, we have been hard-pressed to identify a cohort of consumers that values portability above other characteristics and still prefers a tablet over a smartphone,” according to the analyst.
10-inch Price Cut?As virtually everyone sees it, Apple will continue to dominate 10-inch tablets, although some do foresee certain opportunities for low-priced 10-inchers as the market heads more mainstream.
“Currently, 10-inch tablets from other manufacturers do not provide the same level of functionality, richness of applications,
ecosystem, or ease of use relative to [the iPad].,” said Levi Shapiro, partner, TMT Strategic Advisors.“[Yet] Apple is focused on the high-margin, tip-of-the-pyramid consumer. Competitors without a significantly lower price point don’t have a chance with that segment. I’m talking to you, Motorola Xoom. As the tablet market expands to the mass audience, much lower price points will be imperative.”
Will Tab and NOOK Prevail?Yet how much of a dent will seven-inch tablets manage to make against the iPad? Some point to bits of traction already behind Samsung’s seven-inch, Galaxy Tab and Barnes and Noble’s NOOK Color.
Samsung’s first ever tablet will greet its numerous upcoming rivals with an early market edge. The 7-inch Tab received mixed-to-positive reviews upon its release last fall, Nevertheless, Samsung shipped 2 million units of the device last year, all in the fourth quarter, say new numbers from the Gartner Group.
For its part, the NOOK Color continues to expand in capabilities, with more custom Android apps and a probable upgrade to Android OS 2.2 and Adobe Flash anticipated for this spring. About 3 million units have shipped so far, according to industry estimates.
“Research suggests that consumers – not Geeks in Palo Alto, but real customers in the heartland – are willing to carry no more than two devices. One of these is a smartphone. That means NOOK could be a ‘last man standing’ if it continues to innovate and provide meaningful functionality,” Shapiro said.
A Hazier Crystal BallFor other 7-inch devices, which have yet to see the light of day, the crystal ball grows hazier. Some analysts wonder what unmet demands these smaller tablets might fill, or if there’s even enough room for them in the market.
“Currently, it seems to us that the Galaxy and others are seeking to differentiate themselves from Apple simply by being a different size,” Morgenstern contended. “The 7-inch tablet is too small to spend a long time surfing [with] or consuming media, such as video.”
"Like their bigger cousins, 7-inch tablets need to offer high resolution screens with good visibility", suggested J. Gerry Purdy, principal analyst, MobileTrax.
"Vendors wanting to gear their tablets to business use should urge developers to optimize their enterprise apps for multiple tablet form factors", Shapiro advised. “We will see more and more carriers subsidize tablets for their user base, similar to smartphones today, in the interests of encouraging greater data consumption,” he elaborated.
“M2M (mobile-to-mobile) connected devices are already the fastest growing segment in mobile. Tablets that integrate a full suite of enterprise-ready applications will be an important component of this growth.”
A 7-inch iPad?Will Apple ever pull an “about face” on its 7-inch tablet stance? Some analysts wouldn’t be too surprised.
“It is certainly possible,” answered Greengart. “Jobs said that nobody needed video on an iPod…until they did. Apple has a history of dismissing product categories until it is ready to enter the category themselves.”
“Apple could and will introduce a 7-inch iPad if the form factor takes off,” Enderle agreed. “Until Apple sees a threat, though, it will market the 10-inch product as superior and drive people to it, rather than build a smaller offering.”
Wednesday, December 8, 2010
Mobile devices – Which company will lead the next innovation cycle?
http://www.rcrwireless.com/article/20101208/OPINION/101209961/analyst-angle-mobile-devices-8211-which-company-will-lead-the
Thursday, October 7, 2010
The mobile wallet – not yet meeting, let alone exceeding, consumer expectations
September 22, 2010
Originally published by RCR Wireless: http://www.rcrwireless.com/article/20100922/OPINION/100919954/analyst-angle-the-mobile-wallet-8211-not-yet-meeting-let-alone
Despite chattering from technologists and consultants, consumers have consistently been lukewarm to “mobile money” and near-field communications. Given the lack of apparent consumer demand, banks have not been clamoring to build and deploy new products. The credit card eco-system works very well in the United States. Consumers need something more from mobile banking, something that exceeds the functionality they currently enjoy. And merchants need a cost-effective, easy to implement and broadly adopted solution that is better than what they have today.
Earlier this year Marconi Pacific conducted a survey which indicated that 50% of participants were interested in having mobile phones replace the functionality of their credit cards, provided there were additional benefits. In the following months, we have heard a consistent stream of new mobile money announcements, but consumer actions have not followed either their stated interest, or the market opportunity. Marconi Pacific believes that, in the U.S., simply replacing credit and debit cards is insufficient.
To generate meaningful consumer adoption, a successful mobile wallet business model must also include real-time couponing (to save consumers' money), real-time financial intelligence (to enable consumers to make better purchasing decisions) and real time accounting (to help consumers manage their money). All the relevant technologies are currently available in some form. Marconi Pacific recently interviewed experts in these areas to solicit their viewpoints:
1. Getting the technology right is imperative
In March, MasterCard trialed a service in Canada with Bell Canada, Telus, and Rogers. Earlier this month Verizon, AT&T and T-Mobile announced a joint venture partnership with Discover. These efforts and many more attempts and announcements have been focused on NFC similar to the “tap-and-go” keychain fobs available at gas stations such as the ExxonMobil's Speedpass. These systems require new hardware at the point-of-sale, currently costing over $200. Numerous start-ups are based on NFC. But bank, retailer and consumer adoption has been incredibly slow.
Several startups, however, are creating solutions based on other technologies. Max Metral, the founder of mobile payments company FIG succinctly explained his value proposition. “RFID is available at many retailers but on almost no phones. Even for the five phones where it is available, it can replace plastic, but does not offer the user anything more. And it is expensive for retail establishments to buy new POS terminals. FIG offers a mobile payments solution over a secure Wi-Fi connection that is essentially free for retailers.” Companies like Obopay and Square have also created solutions. Both companies enable phones to store value and transfer funds over wireless data networks. These solutions and others may not have perfected the mobile payments offering but they are solving some of the implementation cost challenges and meeting some of the consumer adoption hurdles.
2. Mobile affinity programs in isolation have not engendered significant consumer interest
In August, Verizon invested $400,000 in mobile loyalty card start-up CardStar. While there are dozens of applications for managing loyalty cards, none are particular consumer friendly, or particularly easy to use. An intelligent mobile system could enhance loyalty programs. Unlike a card, often forgotten in a wallet or in a drawer, a mobile loyalty program can target consumers for immediate promotions based on their location. Combined with mobile payments, consumers could receive real-time credits, promotions, or advertisements
Drew Sievers, the CEO of mFoundry said, “If it were just enough to put a contactless chip on a card, then all the contactless credit cards would be used. But they just aren't getting used. You have to provide incremental value. The question is what is that value? mFoundry has partnered with Starbucks to create an application that enables mobile gift cards. Customers can now see the transaction history and balance. The CEO of Starbucks has been very positive on the results and customer adoption to date.”
3. Mobile couponing has great potential, but only in combination with other services
Consumer interaction with mobile phones enables an unprecedented opportunity for sales and marketing, especially with mobile couponing. Mobile phones are capable of storing and organizing coupons received via all available means (e-mail, SMS, MMS, etc.). If consumers are presented with these coupons at the right time during their purchase process, they would be able to easily manage and use coupons. Location-based couponing (where advertisers find users based on GPS) has had slow adoption – because there is a limited scale for any particular advertiser or user. Combining such services within a mobile wallet potentially increases the likelihood of being able to build a more compelling offering and hence build more scale.
4. A successful mobile wallet service would likely provide real-time purchasing intelligence to consumers
Mint.com, Intuit's web2.0 company providing free personal finance software to assist with money management, financial and budget planning, currently offers both iPhone and Android applications. Mint syncs with consumers' bank and credit accounts to provide purchasing information and the mobile service can now update consumers' data at the moment of purchase. Justin Maxwell, the Mobile Service Product Manager for Mint.com, said: “Mint.com knows that our users are asking us to help them make wise money decisions on the go. They are not looking to go out and spend money and then come back to the computer to see how they did on a scorecard. They are looking for advice while they are out making a decision in real time.”
Combined with mobile couponing, this level of purchasing intelligence could enable consumers to make much more informed purchases. Taken one step further, Mint could soon begin informing consumers of better deals at other locations. Your mobile wallet could let you know that down the street, you could purchase a pair of shoes for less.
Each of the four “services” outlined above has already received some level of consumer interest. Together they might offer a compelling case for smart phone consumers to switch from their plastic credit cards to a digital solution. The start ups are beginning to close the gap. If telecom carriers and/or banks hope to succeed in providing compelling mobile money offers, they need to combine several of these technologies, and offer a portfolio of services that exceed consumer expectations.
And with Nielsen predicting 2011 U.S. smart phone penetration of 50%, there are 150 million potential wallets to replace.
Michael Morgenstern is a Principal at Marconi Pacific, a strategy consulting and venturing firm based in Washington, D.C., focused on telecommunications, media and technology.
Originally published by RCR Wireless: http://www.rcrwireless.com/article/20100922/OPINION/100919954/analyst-angle-the-mobile-wallet-8211-not-yet-meeting-let-alone
Despite chattering from technologists and consultants, consumers have consistently been lukewarm to “mobile money” and near-field communications. Given the lack of apparent consumer demand, banks have not been clamoring to build and deploy new products. The credit card eco-system works very well in the United States. Consumers need something more from mobile banking, something that exceeds the functionality they currently enjoy. And merchants need a cost-effective, easy to implement and broadly adopted solution that is better than what they have today.
Earlier this year Marconi Pacific conducted a survey which indicated that 50% of participants were interested in having mobile phones replace the functionality of their credit cards, provided there were additional benefits. In the following months, we have heard a consistent stream of new mobile money announcements, but consumer actions have not followed either their stated interest, or the market opportunity. Marconi Pacific believes that, in the U.S., simply replacing credit and debit cards is insufficient.
To generate meaningful consumer adoption, a successful mobile wallet business model must also include real-time couponing (to save consumers' money), real-time financial intelligence (to enable consumers to make better purchasing decisions) and real time accounting (to help consumers manage their money). All the relevant technologies are currently available in some form. Marconi Pacific recently interviewed experts in these areas to solicit their viewpoints:
1. Getting the technology right is imperative
In March, MasterCard trialed a service in Canada with Bell Canada, Telus, and Rogers. Earlier this month Verizon, AT&T and T-Mobile announced a joint venture partnership with Discover. These efforts and many more attempts and announcements have been focused on NFC similar to the “tap-and-go” keychain fobs available at gas stations such as the ExxonMobil's Speedpass. These systems require new hardware at the point-of-sale, currently costing over $200. Numerous start-ups are based on NFC. But bank, retailer and consumer adoption has been incredibly slow.
Several startups, however, are creating solutions based on other technologies. Max Metral, the founder of mobile payments company FIG succinctly explained his value proposition. “RFID is available at many retailers but on almost no phones. Even for the five phones where it is available, it can replace plastic, but does not offer the user anything more. And it is expensive for retail establishments to buy new POS terminals. FIG offers a mobile payments solution over a secure Wi-Fi connection that is essentially free for retailers.” Companies like Obopay and Square have also created solutions. Both companies enable phones to store value and transfer funds over wireless data networks. These solutions and others may not have perfected the mobile payments offering but they are solving some of the implementation cost challenges and meeting some of the consumer adoption hurdles.
2. Mobile affinity programs in isolation have not engendered significant consumer interest
In August, Verizon invested $400,000 in mobile loyalty card start-up CardStar. While there are dozens of applications for managing loyalty cards, none are particular consumer friendly, or particularly easy to use. An intelligent mobile system could enhance loyalty programs. Unlike a card, often forgotten in a wallet or in a drawer, a mobile loyalty program can target consumers for immediate promotions based on their location. Combined with mobile payments, consumers could receive real-time credits, promotions, or advertisements
Drew Sievers, the CEO of mFoundry said, “If it were just enough to put a contactless chip on a card, then all the contactless credit cards would be used. But they just aren't getting used. You have to provide incremental value. The question is what is that value? mFoundry has partnered with Starbucks to create an application that enables mobile gift cards. Customers can now see the transaction history and balance. The CEO of Starbucks has been very positive on the results and customer adoption to date.”
3. Mobile couponing has great potential, but only in combination with other services
Consumer interaction with mobile phones enables an unprecedented opportunity for sales and marketing, especially with mobile couponing. Mobile phones are capable of storing and organizing coupons received via all available means (e-mail, SMS, MMS, etc.). If consumers are presented with these coupons at the right time during their purchase process, they would be able to easily manage and use coupons. Location-based couponing (where advertisers find users based on GPS) has had slow adoption – because there is a limited scale for any particular advertiser or user. Combining such services within a mobile wallet potentially increases the likelihood of being able to build a more compelling offering and hence build more scale.
4. A successful mobile wallet service would likely provide real-time purchasing intelligence to consumers
Mint.com, Intuit's web2.0 company providing free personal finance software to assist with money management, financial and budget planning, currently offers both iPhone and Android applications. Mint syncs with consumers' bank and credit accounts to provide purchasing information and the mobile service can now update consumers' data at the moment of purchase. Justin Maxwell, the Mobile Service Product Manager for Mint.com, said: “Mint.com knows that our users are asking us to help them make wise money decisions on the go. They are not looking to go out and spend money and then come back to the computer to see how they did on a scorecard. They are looking for advice while they are out making a decision in real time.”
Combined with mobile couponing, this level of purchasing intelligence could enable consumers to make much more informed purchases. Taken one step further, Mint could soon begin informing consumers of better deals at other locations. Your mobile wallet could let you know that down the street, you could purchase a pair of shoes for less.
Each of the four “services” outlined above has already received some level of consumer interest. Together they might offer a compelling case for smart phone consumers to switch from their plastic credit cards to a digital solution. The start ups are beginning to close the gap. If telecom carriers and/or banks hope to succeed in providing compelling mobile money offers, they need to combine several of these technologies, and offer a portfolio of services that exceed consumer expectations.
And with Nielsen predicting 2011 U.S. smart phone penetration of 50%, there are 150 million potential wallets to replace.
Michael Morgenstern is a Principal at Marconi Pacific, a strategy consulting and venturing firm based in Washington, D.C., focused on telecommunications, media and technology.
Mobile strategy: Applications are not enough
Originally published by Connected Planet: http://connectedplanetonline.com/commentary/apps-not-enough-081910/
August 19, 2010
Many companies have begun to develop mobile applications. This is good news – embracing the rapidly evolving mobile data revolution and beginning to develop iPhone applications are important advancements. But this step is not enough. Rolling out an iPhone application is not a mobile strategy – it is but one small step. To successfully capitalize on mobile technology, companies need a much expanded road map for mobile strategy development and planning.
Nielsen reported 2009 end-of-year smartphone data penetration at 21%, and that is expected to grow to more than 50% in 2011. However, with 2010 U.S. penetration currently around 25%, organizations must take a hard look at whether their existing "mobile strategy" actually reaches their customers.
Today, companies are not reaching enough customers with their iPhone apps. The iPhone applications marketplace is the dominant distribution channel for mobile applications. However, the absolute largest market size for an iPhone application is currently only 8% of mobile phone customers (25% smartphone penetration * 28% iPhone penetration * 80% of users who actually download apps). A business case for an example company with a 25% market penetration (share of available customers) deploying an iPhone app should therefore include no more than 1% of their customers.
Companies need to build an app for Android. Adding an Android app increases the potential customer penetration to 2%. If Nielsen’s 50% number is correct, we predict a 6% to 7% total penetration of Apple + Android users.
For some functions, only messaging is needed. Companies must take a holistic look at how they interact with their customers digitally and then determine which functions and features could or should be extended to a mobile environment. To generate scale, and not face the 2% app fragmentation problem, multiple mobile technologies should be brought together, including SMS and MMS. For example, Singapore Airlines allows check-in for flights by sending a SMS message – smartphones are not needed.
Some services will be better served by a link to a Web site, rather than an application resident on the mobile deck. Device enablement and adoption of HTML5 will result in a return to the past when full applications did not need to be native on mobile devices. Remember WAP pages? HTML5 also enables organizations to design and support a single user experience rather than separate interfaces. In the future, when companies have an SMS/MMS platform for feature phones and a Web page for smartphones, adoption will only be limited by how many customers they can convince to interact with their mobile brand, rather than which of their customers can actually use the native application. Take rates will then reach double digits, generating scale in mobile brand-building and functionality, not just iPhone sizzle.
As an example, the movie ticketing company Fandango delivers its mobile experience in all the ways we have described. Ticket confirmations are currently sent by SMS, MMS, e-mail and mobile app – whichever way the customer prefers. Fandango has currently deployed applications for Apple, BlackBerry, Palm, and Android, and it has a Windows app forthcoming. Customers can purchase tickets directly through their mobile app, and Fandango is developing a scanable bar code (similar to what several airlines have deployed) so that the mobile screen can replace the paper ticket. SMS can be better leveraged to deliver real-time information to all mobile customers. MMS can also be better employed. Fandango sends confirmation images by MMS, for example, when e-mail or applications are unavailable.
All too often, customer needs and desires are under-considered in the quest to launch a new technology, service or product. A successful mobile strategy cannot be solely based on an iPhone or Android app. And companies can improve their mobile strategy development by having a co-creative conversation with customers about their mobile business and personal lifestyles and needs.
Michael Morgenstern is a principal with Marconi Pacific, a strategy and operations consulting firm in Washington, D.C., focused on telecommunications, media and technology.
August 19, 2010
Many companies have begun to develop mobile applications. This is good news – embracing the rapidly evolving mobile data revolution and beginning to develop iPhone applications are important advancements. But this step is not enough. Rolling out an iPhone application is not a mobile strategy – it is but one small step. To successfully capitalize on mobile technology, companies need a much expanded road map for mobile strategy development and planning.
Nielsen reported 2009 end-of-year smartphone data penetration at 21%, and that is expected to grow to more than 50% in 2011. However, with 2010 U.S. penetration currently around 25%, organizations must take a hard look at whether their existing "mobile strategy" actually reaches their customers.
Today, companies are not reaching enough customers with their iPhone apps. The iPhone applications marketplace is the dominant distribution channel for mobile applications. However, the absolute largest market size for an iPhone application is currently only 8% of mobile phone customers (25% smartphone penetration * 28% iPhone penetration * 80% of users who actually download apps). A business case for an example company with a 25% market penetration (share of available customers) deploying an iPhone app should therefore include no more than 1% of their customers.
Companies need to build an app for Android. Adding an Android app increases the potential customer penetration to 2%. If Nielsen’s 50% number is correct, we predict a 6% to 7% total penetration of Apple + Android users.
For some functions, only messaging is needed. Companies must take a holistic look at how they interact with their customers digitally and then determine which functions and features could or should be extended to a mobile environment. To generate scale, and not face the 2% app fragmentation problem, multiple mobile technologies should be brought together, including SMS and MMS. For example, Singapore Airlines allows check-in for flights by sending a SMS message – smartphones are not needed.
Some services will be better served by a link to a Web site, rather than an application resident on the mobile deck. Device enablement and adoption of HTML5 will result in a return to the past when full applications did not need to be native on mobile devices. Remember WAP pages? HTML5 also enables organizations to design and support a single user experience rather than separate interfaces. In the future, when companies have an SMS/MMS platform for feature phones and a Web page for smartphones, adoption will only be limited by how many customers they can convince to interact with their mobile brand, rather than which of their customers can actually use the native application. Take rates will then reach double digits, generating scale in mobile brand-building and functionality, not just iPhone sizzle.
As an example, the movie ticketing company Fandango delivers its mobile experience in all the ways we have described. Ticket confirmations are currently sent by SMS, MMS, e-mail and mobile app – whichever way the customer prefers. Fandango has currently deployed applications for Apple, BlackBerry, Palm, and Android, and it has a Windows app forthcoming. Customers can purchase tickets directly through their mobile app, and Fandango is developing a scanable bar code (similar to what several airlines have deployed) so that the mobile screen can replace the paper ticket. SMS can be better leveraged to deliver real-time information to all mobile customers. MMS can also be better employed. Fandango sends confirmation images by MMS, for example, when e-mail or applications are unavailable.
All too often, customer needs and desires are under-considered in the quest to launch a new technology, service or product. A successful mobile strategy cannot be solely based on an iPhone or Android app. And companies can improve their mobile strategy development by having a co-creative conversation with customers about their mobile business and personal lifestyles and needs.
Michael Morgenstern is a principal with Marconi Pacific, a strategy and operations consulting firm in Washington, D.C., focused on telecommunications, media and technology.
Open Versus Shut Approaches to Building Business
Originally published in the WSJ as a Letter to the Editor: http://online.wsj.com/article/SB10001424052748704269204575270483291181678.html
June 1, 2010
Holman Jenkins's "Apple's Second Date With History" (Business World, May 26) accurately details the fall and rise of Apple computers. It neglects, however, the key to Apple's success: a laser focus on customer experience.
The current mobile universe is dominated by the value propositions of Apple (pitched at media-loving consumers) and Blackberry (pitched at business users). Google, Palm, Microsoft and a myriad of others have sought to define themselves as hybrids between Apple and Blackberry. This approach has not inspired increased adoption. It is true that Google has and will continue to have a much broader universe of applications due to its platform openness. Consumers, however, continue to spend most of their time using well-built, experience-friendly applications—not those thrown together on shoestring budgets.
The long-tail hypotheses, whereby specialized applications and content are profitably delivered to ever smaller customer segments, continues to prove elusive. In a recent study of 250 smart-phone users, Marconi Pacific determined that people's favorite applications are more often than not the most used and useful applications rather than the newest (only 25% of survey respondents indicated their coolest app was under three months old). This speaks volumes about whether simply having a wider universe of applications gives Google a competitive advantage over Apple. We strongly believe that Apple's meteoric rise has come from strong quality control and deep understanding of the target customer base.
Technology systems trend toward openness, and Google definitely has a unique and dominant position in the market. Apple's closed system, however, has such a "network" effect at this point (music, phone, computer, Apple TV, etc.) that it still has staying power. In the near term Apple has built a defendable competitive position because it delivers a top-notch customer experience.
Michael I. Morgenstern
Principal
Marconi Pacific
Boston
June 1, 2010
Holman Jenkins's "Apple's Second Date With History" (Business World, May 26) accurately details the fall and rise of Apple computers. It neglects, however, the key to Apple's success: a laser focus on customer experience.
The current mobile universe is dominated by the value propositions of Apple (pitched at media-loving consumers) and Blackberry (pitched at business users). Google, Palm, Microsoft and a myriad of others have sought to define themselves as hybrids between Apple and Blackberry. This approach has not inspired increased adoption. It is true that Google has and will continue to have a much broader universe of applications due to its platform openness. Consumers, however, continue to spend most of their time using well-built, experience-friendly applications—not those thrown together on shoestring budgets.
The long-tail hypotheses, whereby specialized applications and content are profitably delivered to ever smaller customer segments, continues to prove elusive. In a recent study of 250 smart-phone users, Marconi Pacific determined that people's favorite applications are more often than not the most used and useful applications rather than the newest (only 25% of survey respondents indicated their coolest app was under three months old). This speaks volumes about whether simply having a wider universe of applications gives Google a competitive advantage over Apple. We strongly believe that Apple's meteoric rise has come from strong quality control and deep understanding of the target customer base.
Technology systems trend toward openness, and Google definitely has a unique and dominant position in the market. Apple's closed system, however, has such a "network" effect at this point (music, phone, computer, Apple TV, etc.) that it still has staying power. In the near term Apple has built a defendable competitive position because it delivers a top-notch customer experience.
Michael I. Morgenstern
Principal
Marconi Pacific
Boston
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