Tag: carriers Page 3 of 7

Carnival of the Mobilist # 228

On 05/07/2010

This should have come a week earlier but, alas, I was on the road – quite literally – en route to San Diego and Qualcomm’s most excellent Uplinq conference.

Life of course did not stop, and amongst the things you should not miss was (and is!) the last iteration of the formidable Carnival of the Mobilists, hosted by our very own Peggy Anne Salz on her award-winning MSearchGroove blog. Amongst the gems not to be missed were:

An interview of a company focused on Windows Phone 7 (yes, you read that right!);
Tomi Ahonen with another go at the app economy (which he claims isn’t much of an economy; read my comments on this here);
A look on web bookmarks as an alternative to apps (to which I still not agree; cf. here);
A couple of posts on Android, and specifically Motorola’s Droid X (and the future, if any, of Motoblur);
And many, many more…

Finally, my post on Vodafone’s pondered changes to its revenue share structures featured, too.

The carnival is here, and well worth a read! And, again, my apologies for the late posting of this. But the old Highway 101 along the Pacific just had me in its grips… 🙂

Vodafone pondering revenue share improvements

By Volker

On 23/06/2010

In Carriers

Last week, I moderated a panel at Mobile 2.0 Europe in Barcelona on “How to Make Money as a Developer”. Interestingly, there was no developer on the panel… 😉 However, there were representatives from Orange’s Partner Programme and from Telefonica, and I asked them if they would move from the “classic” 50/50 carrier revenue share (no one confirmed or denied the accuracy of that classic share of course) and, whilst they were clearly not willing to confirm anything (they probably couldn’t, to be fair), they did indicate that a revision of legacy models was under way in view of the not so new anymore challenges of app stores with their – now prevailing – 70/30 split in a developer’s favour.

This week, Vodafone came out a little more openly: at MEM, their Content Services Director pondered to

give […] it back to the developers to let them monetise it.

The big one then followed. She said – and this must be close to an industry-first – that carriers

don’t necessarily have to drive towards revenue for all of that content.

And that is the real point: I have long been arguing that the real value of (great) content to carriers may not lie in incremental revenues (be it 50% or 30%) but in softer albeit much, much more important values, namely marketing, positioning as well as customer retention.

An example: a couple of years ago, we shipped a whole suite of X-Men 3 content, game, wallpapers, tones, you name it. The launch was, of course, around the movie launch (which was tremendously successful) and we had carefully crafted marketing plans including many brand partners (20th Century Fox, Activision, Panini, etc). We managed to drive some exceptional campaigns to which carriers in a lot of countries contributed serious marketing dollars. Did they do this in order to obtain an SMS-margin-matching ROI? Not in the strict sense. To them, this was brand extension and affiliation. And, boy, did it work!

Carriers biggest trouble is ARPU and customer churn. I am not sure about the latest numbers but for years the annual churn was reaching towards a third. And that is real money. If you can reduce churn by only a few points if you provide your users with great content services, you will see your money back many times. It is (brand) marketing, not incremental revenues that make it.

Now, as long as the content guys have revenue targets, the (normally very mighty) CFO of a carrier will ask painful questions on ROI and margins; and they will always come up short. Classify it as a marketing task though, and you’re looking really good: effective marketing that should yield measurable results at no cost. Hang on: at negative cost. How cool is that? I know that many a content guy at a carrier agrees with me here. Would they ever admit as much in public? You must be kidding me.

It is therefore good to see that Vodafone starts thinking publicly about alternative approaches with a view to strengthening and/or supporting their core business. Now put it in motion, folks! 🙂

The Economics of Apps / Slides

By Volker

On 19/06/2010

In 1, Events, Slides

Last week, I had the great pleasure to attend Mobile 2.0 Europe in Barcelona. I thought it might be interesting to share the slides of my talk on the “Economics of Apps” there. So here you go…

The Economics of Apps

View more presentations from Volker Hirsch.

For those of you who prefer it, I have also published it to Scribd here.

App Store Fragmentation: Vodafone & Android

By Volker

On 15/06/2010

In 1, Events, OEM, Slides

It’s been looming and was long expected but today Vodafone announced it would embed its Vodafone 360 app store on two Android devices next to Android Market. Vodafone says their store would give partners a richer retailing experience than Android Market – but then they would say that, wouldn’t they?

But cheap puns aside, the move does have some legs: Vodafone uses Qualcomm’s Xiam personalisation engine, which provides recommendations based on user behaviour. They claim – and you may have heard that before in any number of my talks – that recommendations are a much stronger driver than promotions, stronger by a level of 4x to be exact. This ties in with my preachings: nearly 3/4 of all purchasing decisions (not only mobile, all of them!) are made on the recommendation of friends. And, alas, this is where “user behaviour” as the applicable pattern comes short: do I care how many, say, Amazon buyers of Grisham novels are also buying other authors’ crime thrillers? No. Why not? Because I don’t know these people. Do I care what my friends may think I like? You bet! Why? Because they know me and my tastes. Doh!

Anyway, back to Vodafone. They have realised (and, credit to them, admit it!) that a vertical implementation where you only get the full scope of 360 services if you have one of two phones doesn’t work. And, well, that’s somewhat obvious, isn’t it? Or is it a reasonable assumption that all my friends will all of a sudden (and at the same time) exchange their various handsets for a Samsung M1? No, I thought not either.

Vodafone did divulge a little data sniplet that must encourage them though, and that is that 360 customers have a 3x higher ARPU than others. If you look at the above (recommendations, friends, etc), that is not completely surprising. So now the next hurdle is to roll it out across their whole range of handsets. And let’s face it: a simple store won’t cut that on its own. Going cross-platform also means that – depending which handset you fancy – you may find different app stores of differing attraction competing with Vodafone’s own for attention (e.g. does Nokia’s Ovi offering seem to have more traction than, say, Blackberry App World but the latter has – from a publisher’s perspective – vastly superior price levels). All in all pretty sub-optimal, I think.

On a sideline: I will be moderating a panel on “How to Make Money as a Developer” this week at Mobile 2.0 Europe in Barcelona and I will be having the immense pleasure of having two operators on the panel (Orange and Telefonica-O2) as well as Microsoft (representing the OS side). This Vodafone announcement highlights some of the challenges the industry is facing. Interesting times!

$13m for Idle Screens?

By Volker

On 08/06/2010

In 1

Taiwanese handset maker and Android maven HTC has bought French idle-screen specialists Abaxia for $13m (or so industry sources say). Abaxia says it increases ARPU

by putting services at a zero-click distance to the user and pushing services directly to the front screen.

Think push notifications to a J2ME feature phone. Abaxia works with carriers and OEM to optimize the interface across multiple devices from different suppliers, which seems an apparent benefit to carriers as it will allow them to make their on-device brand communication consistent throughout the handsets available through them. That an OEM should then buy the company could therefore surprise…

And as to the use of idle screens? Hm, I am not totally convinced: an idle screen is, well, idle. I may be tempted to jump to it if an app sends me something from a friend (because, hey, it’s a friend in need) but I am not sure if the same attention can be garnered from the latest and greatest service offer from your operator. This is however what Abaxia claims it excels in. According to its website, the company helps

to drive not only data revenue but […] to recover failing voice ARPU and secure advertising ARPU.

And here, well, show me the money. I have yet to see a convincing solution for this, and I am not sure if an attempt to capture the idle screen is the way to go.

However, when it comes to interface improvements, it might just work. So all might not be lost. And, in any event, congratulations to the teams at Abaxia and HTC!

Orange UK on Gaming Offensive

By Volker

On 30/03/2010

In 1

The UK arm of Orange, the France Telecom-owned operator that is merging with T-Mobile’s UK bit, today offered a lot of news on the mobile games side. They made an announcement on the introduction of not less than 3 different gaming services that they will be launching over the next couple of weeks:

Playtomo is a social gaming service to be used within the users’ social networks (e.g. Facebook; no others were mentioned). Users can download the app (?) from Orange’s portal and then share scores etc on the social network of choice. It sounds a little like a “posh Facebook Connect” solution (and this is not meant derogatory at all!). Friends can be invited from any UK network operator.
Games Zone is a subscription-service where “just” £5 per month buy you two games and a 20% discount on all others. It also offers “exclusive competitions”.
The third offering is a little unclear to me: Orange will launch the aptly called “Orange iPhone Games” offering, which will feature games that are “designed specifically or published by Orange for iPhone customers”. They say it will include a variety of game genres as well as the aforementioned Playtomo. Now, this one, I am not sure about… Orange clearly looks to bolstering their brand (or, perhaps, use their brand as a lever to lift otherwise unbranded games into the limelight) but this seems like a tough proposition. It is an interesting one, too, though as it would seem the first time an operator steps into the ring as a publisher amongst many. Watch this space…

The really uplifting thing about this is that Orange clearly recognises the significance of games to their overall offering and playful interaction is – as I have often pointed out – likely to be a driver for interaction between people in the mid- and long-term.

Finally: do you think this gives any hint as to which brand will survive the merger of the Orange and T-Mobile UK operations? 😉

Carnival of the Mobilists # 217

By Volker

On 29/03/2010

In 1, Carnival of the Mobilists

This week’s Carnival of the Mobilists is live and, amongst other great posts, includes my take on the tremendous value to be unlocked by mobile “2.0” over the coming years.

Now, since I hope you have read that one previously, here are (some) of the posts you shouldn’t miss either:

Looking at the value of location-based mobile advertising;
Affiliate programmes as an (additional) business model for app developers;
App or not – again… 😉 this time though the question is raised by none other than the Chief Communication Officer of DDB Worldwide;
Some posts looking at services of network operators (might that have let the chasing-Apple-craze impact other service offerings?);
Judy Breck, keeper of the tents emeritus, looks at how mobile leverages learning…

It can all be found over at Indigo 102, namely here. And now go there, and enjoy yourself!