Category: Carriers (Page 1 of 2)

What is the Value of a Twitter User?

German newspaper F.A.Z. had a nice graph where they compare the “values” of users by putting user numbers in relation to market capitalization. The paper says “experts” estimate (ahead of the recently announced IPO) the value of Twitter to be up to $15bn (€11.3bn) which, with some 200m users, would equate to the value of a user to just under €57. They then go on and compare it to other companies and suggest that that value is really rather low. They provide comparative numbers:

  • Amazon: €809
  • Walmart: €752
  • Vodafone: €327
  • Google: €200
  • Facebook: €72
  • Procter & Gamble: €49

Now, this is of course a somewhat crude analysis (an Amazon or Vodafone user arguably must be a lot more valuable as those two companies derive value directly from transactions with and by those) but it is interesting nonetheless. If you want to see snazzy graphs and/or can read German, here’s the article.

Mobile Gaming today: about whales, self-publishing and the like…

Didn’t the world change and quickly? Only a few years ago, mobile games worked like a supermarket: if you have shelf-space, you rule. The early kings of mobile gaming 1.0 (which many users today won’t even know about) were the ones that “owned” the relationships with mobile operators (or carriers if you prefer that word), OEM and the like. Those relationships guaranteed that you would be in front of consumers. Those of your competitors who didn’t? Well, tough luck. Today, the picture is very different. There were a few waves since those early days: the Wild West days of iOS and Android (which didn’t happen simultaneously but with similar patterns), the rise and fall of the Zynga empire (and folks who thought that that approach would cure all [business] evils of gaming and, in its latest pattern, the rise of Supercell, Kabam and King and the scratching of heads (and lay-offs of people) in a lot of other gaming outfits.

So what’s this all about then? Now, I won’t be able to offer you the full Monty in just one small blog post (it’s bloody late already) but there are a few pointers that show both the opportunities but also the pitfalls of the whole thing.

Fun Matters

Ilkka Paananen is the CEO of Supercell who are, arguably, the undisputed money-spinners these days. $2.4m/day is their benchmark, and that was a while back. In Q1/2013, they made $179m in revenues and $109m in operating profits (or so says the FT). Their two (!) games ride comfortably in the top-5 of the top-grossing charts of Apple all around the world, sometimes #1 and #2, sometimes #2 and #4 but never far off… When asked, Ilkka (who is as nice a person as you’ll ever meet) will always tell you that fun is what matters first and foremost (and I reckon this is what young master Pinkus wishes he had known earlier…). Ilkka managed to combine a dream of the free-wheeling nature of the likes of Valve, Inc. with the experience he gained in running as tight a ship as Digital Chocolate who, from the olden days of mobile gaming, were amongst the ones who had perfected the tightly-strung mastery of processes and engines. The result were – now famously – a number of canned projects plus two of the most profitable games (on an ROI basis) produced ever.

Alas, Ilkka will tell you that fun matters. If your game is rubbish and no fun, no one will like it, at least not longer term. Some earlier appstore succresses might have wanted to take note… It is an important bit to remember though: games are part of the entertainment side of things. And entertainment is about fun. No fun = no (long-term) success. There is only so much conning you can do…

Marketing is Part of Design

In the olden days, you had developers and suits. The former had grand ideas and the latter were a pain in the rearside. The success of a game always was due to the former and the success was always claimed by the latter. Now though, even the geekiest of developers has realized that you need to market efficiently if you want to be successful (which also means that your company has a chance of survival). Here’s a post you should read in this respect (it is a bit patronizing but there is a lot of good – if harsh – insight there nonetheless).

Building Brands is Cool (and Hard)

So, let’s go and build a brand, right? Because then we can replicate things, right? I mean, Rovio did this with Angry Birds, right? Yes, they did. How many others do you know who did? Not very many, right? Because, you know, it is not easy. Many tried (and are trying). Many see some traction. None I know of have had counterfeited bobble hats sold in San Francisco so far (yes, there are hand-knitted Angry Birds beanies on sale every weekend at the farmers market at the Ferry Terminal in SF! No, I haven’t seen beanies of the Cut-the-Rope frog yet…).

If you can get it right (and there is some magic (and hard work required), building an entertainment brand is insanely rewarding (just ask Walt Disney, George Lucas, Stan Lee, etc.). However, it is also very hard to do. And it is not for the faint of heart. So think twice… Oh, and hire the right people (two of Rovio’s rockstars just started his own thing in this realm. Go, Andrew!).

Those Bloody Whales

There was a time when only one-legged near-pirates hunted whales. Nowadays every game developer and their dogs (or cats or rats or pet hedgehogs do). According to Forbes, here’s (well, below) is why. Those are the folks who bring in the money. By my reckoning, the numbers Forbes calls out are not actually the industry benchmark but – perhaps – an averaged out number. This means that, if you’re good at what you do, you should be pulling in a lot more than what their article has you believe you should. And that is something that can be a little daunting. So, kids, there goes your easy career in game development…

Before I link to this Forbes thing then: it is not easy, mind the fun, get some kudos to them suits and be in for the ride… 😉

Here’s the Forbes article (from which I copied the infographic below and where you can get the fully scalable version).

The Power of Platforms

Mary Meeker has just released her almost iconic annual “Internet Trend” report. In it (on slide 7), she points out that 88% of the smartphone OS share is now “made in USA”. Now, this might be good for the patriotic US soul but it signifies a much more important thing and that is the shift from carrier control to platform control. If you are an EU politician, you may lament that the current winners are from North America, but the fundamental shift does not actually depend on it (there will be Canada on the map next year again, and we may well see some Asia-led one, too).

The forced break-up by Apple

The introduction of iOS by Apple moved the access to the ultimate customer, the end user, from carrier to platform owner. With hindsight, carrier execs are probably pulling their hair out that they allowed this but they were falling all over each other when Apple came out with its shiny iPhone back, when?, in 2007.

This introduced a monstrous disruption in the telecoms industry as it marked a move from where carriers could dictate what they would or would not allow over their networks to being virtually at the mercy of the platform owners. It was, however, less about the shiny devices (though it helped their market cap to untold heights) but more about the platform approach. And therefore, Apple was, of course, quickly joined and then swiftly overtaken by Android. Today, they now rule the roost (though Apple is fast falling behind).

The Power of (Somewhat) Open Systems

Seen from today, a lot of criticism of the early leader, Apple, is centered around closed systems. People complain that iOS is too restrictive and does not allow them to do what they want to do (take any number of services, be it iCloud, iMessage, Game Center or anything else – they only function on Apple devices). Alas, back in 2007, that didn’t sound so bad. Because, you see, back then there was a) hardly any interaction and b) the one there was was restricted in “my” (haha) carriier network. But then, who cares, right? My friends are on any number of networks, and they change frequently, too. The carriers, however, thought that they could tie people in. Hell, some even thought they could become cool (anyone remember Vodafone Live!?). But that should not happen. And therefore the world changed.

Then came Android and, with it, the ability to dip into an even larger ecosystem, namely Google’s. I mean, who doesn’t use them, right? And with their “don’t be evil” motto, they took it up another notch. The Apple users were thenceforth fanboys and irrational, high-spending hipsters. Proper geeks would go with Android. Now though Google also starts showing signs of wanting to rule the world. The don’t be evil thing hasn’t been heard for some time

The Next Step?

And if you go through Ms Meeker’s deck a little further, you’ll find a lot of slides where Sina Weibo, Tencent, Amazon, eBay, etc feature. And you know what? Neither those companies nor their users give a toss whether the service is being delivered on iOS, Android, BlackBerry 10 or otherwise. They just want their service. And this is the challenge the current platform owners have (and it might sound vaguely familiar to the one carriers had): how to keep your users tied into your platform? It started of on the “it’s easier, better, simpler” lure. However, on most both iOS and Android people now start to realise that that might not be so: why does Google force me into a Gmail account (or is it Google+ now?) in order to get the most out of my shiny new phone? Why does Apple not allow me to share XYZ with my friends independent of what handset system they choose to use? This, incidentally, is why it makes insane sense for BlackBerry to release its BBM solution across other operating systems, too… (but this will be the only corporate plug today).

In short, when you look at the overall ecosystem, people want Facebook, Twitter, Sina Weibo, Line, Snapchat, Instagram, YouTube, LinkedIn, Skype, WhatsApp, you name it. They don’t really care where. Does this sound familiar? The first iPhone users went to AT&T because they were it was the only carrier that had it. Today, they’d scoff at a carrier that doesn’t have it (just ask Sprint, they allegedly struck a [too?] rich deal to get it).

What this means is that, in the (near) future, it will be less about operating systems (come on, who cares about them?) but more about actual applications. So what’s the winning one? Facebook? Twitter, Skype? I’d argue there’s more to come. We’ve heard of Line, Kakao. So what about Alibaba (check slide 69 on Ms Meeker’s deck), or Tencent’s We Chat (slide 65)? It is services and products users crave. These are platforms all right! The only reason they went for the platform owners was that they had better access routes than the (previous) incumbents. Now though they might have called in old Goethe’s Faust:

Do you not see the ghosts I’ve called?
Came in the night when I was asleep.
Here in the dark far too big.
The ghosts I’ve called won’t let me go. 

So then, dear friends, what next?

giffgaff: Doing Good! More to Do?

All the way back near when it was founded, I wrote a post about giffgaff, an MVNO with a twist running on (and actually owned by) the UK operator O2 (which is of course now owned by Telefonica). The twist with giffgaff is that it termed itself as being “people-powered”. Nice buzzword, huh? When I wrote that post, it was pretty much on the basis of early news, PR and not much more. Now, though, I know better what it is because, you see, I just swapped the phone deals for my two children over to giffgaff (away from Vodafone where they were on a 30-day-rolling contract).

No Frills

So, here’s what it does (and, more significantly, doesn’t): giffgaff doesn’t have shops, it doesn’t have sales reps, call centres, etc. In other words: it doesn’t have much overhead. It does have a network (not its own, it piggy-backs on the mothership, i.e. O2), simple tarifs, very low prices and the quickest way I have ever ordered any phone product online.

Beating the Power Law of Distribution (?)

But how, do you ask, can they run a network with all its customer queries, moans and whining, small and big problems? And that is exactly where I originally voiced concerns: You see, they use fora instead. If you have a question, just post it to their forum and the users will answer. According to the power law of distribution, this is a tricky one as only very few users contribute a lot and most contribute nothing. However, by the looks of it, they answer a) more quickly and b) more competently than a poorly paid, poorly trained, probably somewhat frustrated (whatever happened to the glistening career) call centre worker. The MVNO has a programme for users encouraging to participate in the community. They will earn points (convertible in additional phone credits) for spreading the word (marketing) and helping out other users on the fora (customer service).

So (and here’s a theme for me): giffgaff effectively used some basic tools from the social and commercial toolbox to drive customer acquisition and customer service: incentivise people and, in doing so, make sure you align their commercial interests with your own.

And whilst there seem to have been growing pains, it seems to work more or less really rather well. And all this for £12 per month for a “bucket” of 250 minutes, unlimited texts and unlimited (!) data. Can’t beat that!

Is There More?

This then got me thinking: what if they would expand on this bucket (and, perhaps, forum) ideas and start customizing them for the more “discerning” user. Something for SME for instance, travelers, professionals, etc. Higher bucket prices but better tailored for business needs. Premium buckets for, say, dedicated concierge services (the crux is that the customer service required for that is quantifiable and directly accountable). With the basics still covered (cf. supra under “No Frills”), it should still be possible to run the basic service at similar margins (and note that I assume that they have positive margins) but start building in the fatter bits of the market in return for the higher reliability, security and no hassle that business users require. The thing is, you see, they do not require tedious and generally hopeless customer service over phone lines you have trouble even finding or reaching (20 minute waiting time is not rare as we probably all know).

Such a service would probably not for everyone but. You would have to be comfortable to transact your business online (but more and more people – and, yes, probably 100% of readers of this blog – do so anyway), you would arguably have to have at least a basic understanding of some tech issues (again, cf. supra) but, hey, you would be targeting the growing part of the economy, i.e. the one that either is purely digital or successfully leverages (terrible word, I know) digital outlets for its business. Bingo!

There Are Blueprints Galore!

Come to think of it: it is exactly how so many of the online stalwarts disrupted traditional businesses. And it seems almost ironic that this has not yet happened in an industry such as mobile telecoms! Amazon (first books, now almost everything), Zappos (first only shoes, now part of Amazon and, well almost everything), eBay, PayPal, First Direct and any other number of online banking services), Charles Schwab, eTrade and those folks (stock trading), Okado (groceries), Money Supermarket,, etc. (insurance brokerage), etc., etc., etc., etc. Virtually all e-commerce business models rely on realizing higher efficiencies through digital scale combined with lower overheads.

And virtually all of them originally were told that this was a niche for a few, that only geeky people with no money would use it. And in virtually all those cases, the doubters were wrong. So, then, O2, let your “gaffer” (that’s the title the giffgaff CEO goes by) lose and go for it. There’s money to be made (and I might just be persuaded to leave Vodafone, too).

To the others (Vodafone, are you listening?): it’s not too late. Get in whilst you can!

Carnival of the Mobilists # 270

Greetings, friends. Due to the English inability to have bank holidays on days other than a Monday, this week’s Carnival of the Mobilists is a day late but it is here nonetheless, and with verve! I have spent reading through a plethora of good stuff from the trenches of mobile:

Our friends from All About Symbian (yes, that name is still around!) have a bit of a prolific blogging streak and brings us two contributions this week looking at aspects of device and OS design respectively. Since both are intriguing, they get a double mention.

First, the function of home screens (note the plural) is queried and the question is as simple as it is compelling: if you have seven (or nine or eleven) “home” screens, do you then actually still have a home screen? Do you also have nine homes? Steve posits that simplicity should arguably win it, which of course is the opposite of what the iPhone’s all-app grid or Andoid’s army of home screens do today. Interesting!

Secondly, Steve looks at the burgeoning size of smartphones. He points out that the Nokia N95 screen size of a whopping 2.6” was huge by the standards then. It is dwarfed by the Samsung Galaxy S III’s 4.8” screen though. And the question is raised when is big too big. The answer is suggested to be at the end of people’s arms: Steve points out that hands are not growing as quickly as the screensizes (if indeed at all) and that therefore there should indeed be a perfect size for a phone – which 4.7” or bigger is, alas, not.

Moving on to even bigger things, and it doesn’t get any bigger than the Chinese market. Andy from Mobithinking has looked at recently released figures from some of the bigger analysists in the space and compacted this in a post that gives us numbers that make the mind of even the hardened mobilista boggle. China has now more smartphones than the US (22% vs 16% of the overall market). China has 3x more mobile subscribers than the US (1bn vs 330m). The country’s largest operator, China Mobile, alone has more than 2x as many mobile subscribers than the population of the US (which is itself the 3rd-largest mobile market in the world – India is a long way ahead of it on #2 though). China has more than 430m mobile Internet users, which is more than the population of either Europe or North America. For more, make sure to read thoroughly!

MobileGroove has a post from guest author Jeff Hasen on something that piqued my interest significantly when I heard about it, namely the International Olympic Committee’s (IOC) attempt to regulate the disemination of content via social media (and mobile). Jeff’s background as a reporter and marketer of previous Olympic Games adds further insight. The long and short is that the IOC has set up a “hub” that will post content for more than 1,000 current and former athletes directly from their Facebook and Twitter accounts (which I would suggest is the antithesis of social media). Restrictions as to what you can share apply, however, also to ticket holders (so don’t you dare tweeting that photo of Usain Bolt using a Mac; Acer is a sponsor!). The predictable result? Uproar, mayhem and another big old body having to bow to the anarchic power of social (and mobile) media!

Lastly, something more (seemingly) mundane but (evidently) more practical: MobyAffiliates has a post on AppStore optimization, namely a guide what you need to do in order to make sure that your app doesn’t sink in between those other apps upon launch. This takes everything from app title, keywords, description, icons, imagery, etc, etc. An eminently useful post if I may say so!

As is good tradition on this blog, I will not choose a winner – I think all of them are good and important reads! So go ahead, get a coffee (or glass of wine) and do yourself some good! 🙂

Next week, the Carnival will be hosted by MobiThinking. If you want to submit something worthy, please e-mail us at mobilists [at] gmail [dot] com by the end of the week. And if you need more information on the Carnival (or to catch up on a wealth of information from all the previous Carnivals), make sure to visit the Carnival’s own site.

UPDATE: we have had a late bloomer to this week’s edition but I wouldn’t want to omit this, so here we go: The Mobile Payments Today blog brings a report on the jungle that mobile payments still are (using the example of Google Wallet) and highlighting the apparent complexities in connecting the various ecosystems (different POS systems, card providers, loyalty programs etc).

Sweden’s Mobile Wallet

Funny old world this. I haven’t written about operators for a while until last week. And here I am again. They seem to be coming in pairs…

Anyway, there were reports today on an initiative of the four Swedish mobile network operators, namely Telia, Tele2, Telenor and 3. They formed a joint venture (with the witty name 4T), which will deliver (not directly but via PayEx and Accumulate) a unified mobile wallet to at least 97% of all Swedish subscribers on launch.

Older services such as Gallerie in France and Payforit in the UK never really hit it, as ME points out, arguably because of the use of WAP (*shiver*), which was the only available carrier for such services at the time. This time around, it will all be different, we hear, with all handsets from 2006 onwards being supported. The one thing that is not so clear is the technology used… The system is apparently ready for NFC (which I find uber-exciting).

What will be more exciting to users than some tech stats is the fact that the system will be able to handle online, peer-to-peer and man-to-machine transactions (presumably also for women). So rather than with cash or cards, you will be able to pay with your mobile (something predicted by Forbes’ #1 mobile influencer, Tomi Ahonen, for years of course).

The service will also have the same look-and-feel (and the same name!) irrespective of the carrier, which will do a lot to instill consumer trust (as well as avoiding to erect any unnecessary barriers to switch carriers).

All in all, very exciting and indeed commendable!

The Mobile Landscape: It will all change. Or will it?

Recently, previously civilized and subtle top executives of the world’s big mobile handset makers took the gloves off and became, well, a little more outspoken. What sticks from this is, of course, always only the most figurative snippets. Because all of these esteemed people have the most vested of all vested interests, their statements tend to distort reality a little. And because of that, we have increasingly lively debates at hand. But, alas, these debates may not necessarily lead to enlightenment.

So I thought I undertake a little mapping exercise and see where we end up…

The War of Words

I don’t know who started this. But we have had a couple of outbursts recently. Nokia’s soon to be former smartphone maestro Anssi Vanjoki (of nGage and other fame) likened switching to Android to boys who pee in their pants for warmth in winter. What he wanted to say is that it gets worse after brief relief. Apple supremo Steve Jobs sees no one (and in particular not RIM) getting anywhere near his beautiful iPhones anytime soon (he probably has not forgotten Mike Lazaridis riposte to the iPhone 4’s Antennagate). Others are convinced that Apple cannot beat Android. Period. Everyone wonders what Nokia will come up with (and, no, we do not think the N8 is it). Etc, etc, etc.

A Lot of Little Worlds

When one looks at the world map and then listens to the good folks cited above (and others), it appears that there is not one but many little worlds out there. Nokia is sitting high and dry in overall handset rankings with over 35% market share across all handsets. It is estimated to ship more than 500m handsets in 2011, too (so hold back with your obituary just yet). However, it is nowhere to be seen in the US (and even less in US smartphones where it is fighting a close fight with Palm around the 4-5% mark). Samsung (one of the few big boys not to participate in the above bickering) is building out its #2 spot with around 20% market share. Apple is well behind (although recording fairly impressive numbers given that it is basically a single handset company).

Does this matter in the discussion who is “winning”? No, it does not. An iPhone is useless if you are in an emerging (or developing) country with no 3G coverage and no abundance of power outlets from where to re-charge your fancy beauty every 8-12 hours or so. On the other end of the spectrum, a Nokia 1100 is useless if you would like to navigate on your handset through the urban jungle of Manhattan whilst shooting photos for the ones at home. But it runs forever, doesn’t mind a bit of sand or water and will never ever break. Ever.

The point is that there is more than one market here. The market is not mobile phones. The market is not even smartphones. There are many. And in some of them, Apple is looking really weak. And in others, Nokia is looking really weak.

Single Segment vs. Multi-Segment

Nokia’s strength (and, to an extent, curse) is that it wants to be everything to everyone. The N8 is a great handset from a hardware perspective but, after having played around with it for a week or so, I think it has a distinct 3-years-ago feel to it. It makes great phone calls though (which, well, the iPhone does not always). However, will Apple be able to challenge Nokia (and Samsung) in the broad lower-end mass market? Not for a long time, I would say.

The situation is a little more serious for other single-segment OEM. RIM used to live off the fat of the land in the enterprise sector. And it continues to thrive there. In recent years, it has seen a huge upswing amongst kids – because of the now almost legendary BBM (Blackberry Messenger for the uninformed). However, can you successfully build or expand on a single feature? And then on one that could really also be mimicked, worked around or substituted by something similar? Tricky.

Tricky in a different way is the situation for the likes of Motorola, HTC or Sony Ericsson: they have all committed their life to the Android platform. With Google’s muscle in the Open Handset Alliance, this means that they depend more and more on hardware design only. It feels a little like the movie business: hit-driven. And that is a tricky situation to be in. HTC looks good at this: this is home turf for it. On top of this, it has quickly started to try some gentle steps to distinguish itself (HTC Sense; Google Nexus One, etc) from other Android makers. Motorola’s Blur was less successful initially. And Sony Ericsson has yet to show its hand.

Vertically Integrated vs. Multi-OEM

All this does of course not bother Android (and perhaps also Microsoft’s Windows Phone 7) as they have the advantage of being able to bringing many weapons to the battlefield. Android’s huge advantage is one of price due to its open-source nature: For Windows Phone 7, you need to pay a software license. Android is – basically – free. Both have multiple OEM that fight their corner though. Which is, or at least can be, good. Google will not really care if the next killer phone is produced by HTC or Motorola or Sony Ericsson (or Foxconn directly for that matter).

Apple will likely struggle to match the sheer number of iterations being thrown at it. And therefore it is likely that Android will be winning, or rather continue to win.

Does this matter much to Apple? Possibly not. The margin discussion will, in all likelihood, be one that Apple execs will happily take. They will look better at it. However, will it manage to break the old Mac vs. PC pattern? Probably not. However, Apple’s position looks much brighter than it did in the decades of 5% OS-share mediocrity. The company has perfected the hardware-software-service-sex-appeal equation, which looks likely to cement a much more comfortable niche for it (just have a look at its market cap).

Vertically Integrated Multi-Segment

Nokia and Samsung try (or seem to try) a different way. Nokia is betting on MeeGo (its Symbian support sounds more and more hollow by the day). Samsung, which traditionally bet on almost every horse, made a big push for its proprietary bada OS.

This approach could be a winner: with their strong grip on emerging markets and the ability to roll out a proprietary OS across multiple segments, it presents an opportunity to nurture users in emerging markets (where the real growth will be in the next 5 years) into the use of their respective ecosystems. It did pay off for Nokia the first time around!

The Real Battlefield

In the more saturated markets in the Northern hemisphere though the battlefield is likely to be one involving OEM and network operators. This is where Apple really shook up the markets. A lot of the revenue streams from the iPhone simply bypass carriers. The Android OS opens similar avenues. The reason why Apple managed to pull this off is likely to be seen in the branding side of things: it enjoys such pulling power that carriers were bending over backwards to get their hands onto it (and then of course started moaning about the strain on their networks). Android is now being positioned as the alternative. At least, carriers can put competing offers onto Android devices.

Now, in markets where handset purchases are also driven by the overall package (cf. my recent post on this), this is likely to be important.

Nokia, Motorola, RIM, Samsung, etc all enjoy good distribution relationships with carriers. Apple is in a special position because of a) its brand but also b) its price; not much flexibility here, I suspect.

Nokia for instance struggled however to assert itself with some further-reaching ideas it had: some carriers pushed it back over e.g. plans to put Skype onto its handsets. It apparently has less brand power than Apple. Or the carriers were more used to having a say over what gets onto its handsets and what doesn’t.

Conclusion: We don’t Know What We don’t Know

We are, hence, in essence still in a fairly foggy situation: other than Apple’s brand power, we really don’t know as yet what, who, how will prevail. And that is in itself good news. Because it means we will have some time left with competing concepts, competing OEM and competing approaches. And with more CEO banter of course…

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