Universal Mobile Interface

New Business Models, New Markets – Red Herring panel

Posted in UMI by Martin Vendel on May 28, 2010

“Will 2010 be the year when new use cases and emerging business models start to make their mark? What can we expect from the consumer market? And what are the latest in the mobile enterprise space?” These were some of the questions setting the framework for a panel which I chaired this week at the Red Herring Europe 100 in Paris. The venture capital community as well as entrepreneurs were represented by Jan Vocke, Cartagena Capital (technology-focused corporate finance advisory firm), Javier Rubió, Nauta Capital (VC specialized in technology, media and telecom), Stefan Hultberg, Accumulate (mobile payment and authentication solutions), Andy Munarriz, HulloMail (visual voice mail provider).

The fundamental issue or frustration is the inability of the market players, except for operators and device manufacturers to make substantial revenues and profits. The area has looked so promising for so many years, but still has not materialized in line with the expectations. How can this be? We have the fastest growing new media and the highest global penetration ever with about 3 billion phones capable of browsing the Internet. There are many hundred thousands of apps available and billions are downloaded. The majority of the time spent using the mobile is for services other than voice and SMS. And still both investors and entrepreneurs seem frustrated about the malfunctioning business ecosystem and desperately seek new and sustainable business models. This is not a question about greed or maximising profits but rather that we need working models and systems to fully utilise the benefits and potential of the mobile media.

What is quite clear is that there is no doubt what so ever regarding the potential or that this media will influence and benefit humanity worldwide. From a technology point of view there are no real obstacles anymore and everything is possible. The three key areas slowing innovation down and that where pinpointed by the panel are the fragmentation of operating systems, the walled garden or protective approaches by present larger stakeholders (operators, device manufacturers and Internet giants) and that some enabling and supporting services are not yet openly available, efficient or well enough established. The general view is that the operating system fragmentation is here to stay and that there is a huge potential in services managing to bridge functionality cross platforms, which in essence is the vision of the UMI concept. The panel did not share the same view regarding whether the big players will open up further to facilitate partner businesses. We all agree that it in the long run would benefit all stakeholders but the ambition to capitalize on existing businesses and lock customers in may turn this into a very slow process. The general recommendation giving highest probability for fast uptake is to launch services and business models that manages to work well independently of operators or device brands and that can handle all relevant operating systems. Independent global players that can offer supporting cost efficient functionality such as payment solutions, security solutions, ad solution are also essential for a fast development. These supporting roles are of course very attractive positions and will create substantial value.

New business models and markets are thereby expected to be developed on top of and bypassing existing proprietary and closed solutions. Having a larger addressable market enables a very fast penetration and also very competitive cost levels. We can expect to see quite disruptive new services not only affecting the mobile market but also other areas in the same way that online Internet services more or less changed the rules of any business or market, being consumer or enterprise. 

What is also quite encouraging is that the company Squace, fully dedicated to establish a world class Universal Mobile Interface solution on the market, was announced Red Herring Europe 2010 Winner.