To Win in the Mobile Market, Focus on Consumers


It wasn’t long ago that you needed a notebook computer to function on the go. But the growing maturity of the smartphone market these past few years is eroding that need. To be sure, there are simply some functions, applications or services that require a full computer; but for the basic, everyday needs of consumers, a well-designed smartphone with a wide variety of available software means we can lose the laptop. Email, web browsing, social networking, location-based services and even some basic content creation can be done on modern smartphones today.

Still, mobile productivity on a smartphone is really only in its infancy at this point. Sure, it started up nearly 10 years ago, but it took until now for the hardware, networks and applications to catch up. And as the devices mature, consumers are vying for control to do what they want, when they want to, on their device of choice.

Companies like Microsoft and Palm that helped to create the smartphone market have faltered as it’s matured. Both are trying to stage a comeback — Microsoft with new versions of Windows Mobile and Palm with its innovative webOS. Meanwhile, Apple and Google have upended the entire space with new and elegant mobile operating systems that paved the way for mobile application stores. And this is just the beginning. The opportunity for someone to take the lead towards a true open mobile market is sitting there like low hanging fruit, yet the players are all trying to keep control — from the aging carriers to the hip, new platform-designers that orchestrate the experience of using a handset.

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  1. I don’t think Apple with bother with MVNO business. It makes way too much money being a top-notch device maker and now increasing revenues via its innovative AppStore strategy. Apple does not need to bother with entering MVNO market. The same way Microsoft does not need to enter PC manufacturing itself.

  2. Google has also shown us how the applications stores shouldn’t be a feature that traps consumers (a la Gmail, Google Latitude).

    By creating some of the more advanced HTML5 web applications, they’ve paved the way for cross-platform compatibility: it’s called the internet. And, amazingly enough, the experience can be similar to a native application.

    1. No argument that the potential is there for Google and web apps, Devin. I’ve been using the Google Voice web client on my iPhone for months, so when Apple exerted their influence and rejected the GV iPhone client, I was totally unaffected. Thanks to the great equalizer — the web — this consumer didn’t suffer.

      1. Exactly. So with that said, I’d argue that Google is the most focused on the consumer and is in the interesting position of being on both sides of the equation. Something tells me they “get it.”

        I just hope the left hand knows what the right is doing.

  3. Despite what people say, I still prefer Google Maps to anything else, free or not.

  4. Disney, ESPN, Amp’s Mobile, and a bunch more tried as MVNO’s and failed. Hundreds of Millions were lost. Problem is that if you have to buy minutes and resell them you never win. ^^^One carrier needs to just completely open up and become a dumb pipe. The first one that does this is going to gain a huge share of the audience.^^^ The one in the toughest position right now – Sprint- is a prime candidate to do this. Handle billing, simplify the plans and get out of the way.

  5. not sure if i agree with ‘consumer are happy with goog maps’ – those who’ve tried the premium nav apps love them – thats why the user base for these service keeps growing fast (look at the Nielsen data).

    problem is consumer dont know the difference between maps & nav.

    there’s still a lot of education/awareness needed.

    (full disclosure: i work for one of the mobile nav providers)

  6. Kevin C. Tofel Wednesday, August 5, 2009

    Tariq, you’re absolutely correct that it would offer a billing challenge to Apple. But I look at the micropayment system they’ve implemented with the iTunes store and see some leveraging there. They have some experience already here and because the infrastructure is there to work with, it minimizes the CAPEX part. Plus they have several billion in the cash coffers, so I keep wondering: what will they spend it on?

    1. Hey Kevin, you are right about the Micropayment system, actually I was referring to telco billing this involves a number of complexities such as:
      – Creating, Managing and Maintaining offers
      – Tracking usage (Voice, data, numbers etc..)
      – Having a Valuation Engine that would match offers, clients, phone numbers, network information etc…

      Quite a mess… thing is that the MVNO business is complicated and margins are lower as:
      MNO Wholesale prices are either Cost-Plus or retail-minus, and believe me, MNOs choose retail-minus…

      There is also the need for Customer Care and CRM altogether (Which can be outsourced, but that adds to the cost and lower margins…)

      As mentioned Apple would have to strike a deal with an MNO, and per nature, a MVNO is a ‘host': MNOs are ‘Masters of their Domain’ and dictate their own set of rules, and for instance still block VoIP on their mobile networks, Apple would be MNO-dependent.

      Finally in line Apple would need to define some compelling value-proposal, way different than other MNOs and MVNOs, in order to make people switch…

      IMHO Apple will not go down that path, too many problems and risks, and thin Margins…

      What about creating a virtual currency and launching iTunes as a payment platform?!

  7. Hello Kevin, I don’t think that Apple would go down the MVNO path, sure Apple has a great brand and retail presence but

    1- it’s a whole new business (Billing, IT etc…) even though there are MVN Enablers (MVNE)

    2- This would allow the Mobile Network Operator back in the game, as the MNO sells access and minutes to the MVNO…

    Ultimately this would require CAPEX (#1) as well as OPEX (#1 with a MVNE and #2), that would lower current margins for Apple.

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