I think it’s time to stop using the term “mobile Internet”. In the early days of mobile Internet services, these were in WAP or similar formats, and usually within a separate universe compared to ordinary online Internet services. With increased bandwidth and capacity of the mobile devices the mobile and online versions have gradually converged. Today most content accessed through the mobile is technically integrated with the online web platforms, but often adjusted to the limitation of the mobile.
The mobile has become an additional access point to more or less any Internet service. We are referring to services “in the cloud” independent of access point and ordinary web services are increasingly viewed directly on more advanced phones such as the iPhone, parsed into a more mobile friendly format or through an app. What is then the difference between the “mobile Internet” and Internet? Well, there’s actually no difference as it is all one and the same Internet accessed and viewed through the computer, the mobile or, soon also to a high extent, the TV. However, there is still a need to adjust the content depending on context and device where the computer probably will be the exception compared to other devices, as it’s the only one with a full size key board.
Mobile internet services have gained significant increase in attraction and usage. About 20% of all active on Facebook use the mobile to access the service. 27% of the mobile phone owners browse the Internet, use applications or download content, according to comScore. 3G, smartphones and flat rate data plans are key enablers.
Apple demands that the iPhone is sold bundled with a flat rate data plan to encourage the use of data services. The success of the iPhone gives a good indication for how large the unmet market need is and what can be achieved when services are easy to find, buy, download and use in combination with simple pricing. High quality screens, improved data speed, and flat rates also open up for services that are quite data heavy such as streamed videos, TV and music, for example YouTube and Spotify. The perceived end user value per MB decreases as the users become more advanced and with the introduction multi media services. The dilemma is that the additional value is usually less than the additional cost of production. With flat rates we can expect that the usage of non-voice services will grow rapidly resulting in heavy pressure on the mobile networks, demanding further significant investments.
Flat rates as such are a good thing for the end user giving cost control. The network operator may also initially get an increase in average revenue per user (ARPU) as customers migrate to flat rate data plans, but exponential increase in data traffic drives cost and additional network investments. There is today no incentive for a player like Apple to decrease the data consumption. This situation should worry the network operators as they may be trapped in a situation with competition on flat rate pushing the prices down at the same time as usage increases heavily.
What are then the options for the operator? Trying to avoid introduction of flat rates on the market is probably not an option. To cap “unlimited” data plans is possible but the upper usage limit has to be set at a quite high level not become counter productive. We will also see attempts to increase the price but it may be difficult depending on the competition. Most probably these alternatives will either not be possible or may have a too limited effect. The equation does not add up and we may gradually move into a situation where the networks collapse as it may be impossible to justify further investments. It may be necessary to enter into stage of network apocalypse before we can rebuild the ecosystem on sustainable business principles. Is there then no way out of this situation?
Let’s go back to the original thinking of NTT DoCoMo regarding imode. This success story was created in times of quite limited network capacity. imode was built to maximise the end user value per consumed data volume. The whole system was built based on this basic idea safeguarding that all actors in the value chain should be happy. NTT DoCoMo thereby forced, as they did set up the rules, the content providers to develop services that used as little data as possible. It is now time to once again try to optimise the value for the end user to data consumption ratio, the value density. The operator needs to incentivise the content providers and device manufactures to promote concepts with less data consumption and to develop technology and services to avoid the collapse of the system. Is it too late for this? No, I don’t think so given the options. Flat rates are needed and are welcome but all, including the end user, should be incentivised not to waste data as we today are aware of not wasting any resources in the society.
I remember the early hype regarding cloud computing within the computer and operator industries, this was the way to go and all the benefits were piled on top of each other in endless power point presentations. All wanted to become Application Service Providers etc. A lot of the thinking was of course right as it usually is, but the timing was wrong. Once again we have experienced that the take up comes later but then it’s in many aspects more pronounced and with a broader impact compared to what was expected. The impact of cloud computing is now widely recognised, as for instance this week’s cover of The Economist illustrates.
Cloud computing is today a given and it does dramatically change the business logic and balance within the software/computer/Internet industry. The triggers and drivers for the take off are not always the expected. The increased network capacity and low cost storage are for sure key enablers for services in the cloud. Initially the limited need for local computing capacity was seen as a major benefit opening up for cheaper computers, but as prices anyhow rapidly went down this has not really been a driver. I would say that the key drivers from a user perspective are good, convenient and easy to use services giving end user value in relation to the cost. The end user does not care about the technology and if the service is within the cloud or not, as long as it delivers.
We now see mobile services moving into the cloud. How will this change the game and will it experience that same development phases as was seen for the computer services? There are similarities for sure, but some quite important differences. Most services that now show significant increase in the mobile environment have been used since long on the computer. The mobile is not a totally new media in that respect but rather a new access point to existing services. The mobile environment is unfortunately quite complex with many different operating systems etc. Mobile phone capacity when it comes to computing and storage will be a limiting factor for mass market devices for quite some time. In this aspect cloud computing may be even more relevant in the mobile context compared to what it has ever been for the computers. We may now see a development where low end devices can make use of all types of Internet services.
Services and storage of data in the cloud will further drive the presently strong growth for mobile development and penetration. This is not anymore an expansion of what we so far have called “mobile Internet”, this is an expansion and an extension of the Internet. The mobile Internet as a separate parallel universe will now die and Internet will with its mobile access become ubiquitous – at last. This development will change how we access and relate to Internet, also when still using the computer.
Microsoft announced a few days ago their launch of OneApp. OneApp is “a new software application that enables feature phones — commonly found in emerging markets — to access mobile apps such as Facebook, Twitter, Windows Live Messenger, and other popular apps and games.” Microsoft thereby aligns with the basic horizontal operating system independent structure of a UMI. The primary focus is on less smart phone penetrated emerging markets and the distribution will be through operator partnerships. First out is Blue Label Telecoms in South Africa.
It is very positive that Microsoft moves into this space and it will be really interesting to follow the progress. The trend that mobiles will rely more and more on cloud computing is clear and clients will be the tool to make this happen, even if they are quite complex to manage. It’s not really clear how Microsoft intend to play this game mid to long term but so far this UMI approach seems to miss some key elements of which the most important are that the services need to be operator independent to reach the full potential and that it has to be very simple and cost efficient to create applications for true long-tail content and services to become available. The business model would be interesting to know more about to evaluate the service fully. OneApp is part of Microsofts Unlimited Potential initiative aiming to “enable social and economic opportunity for everyone”. This is of course a good cause, but what is really the strategic agenda behind OneApp? Given the history, there will always be the suspicion that Microsoft this way try to create a virtual mobile operating system.
The launch of OneApp by Microsoft clearly shows that the UMI approach now gain acceptance and will be one very important way forward overcoming the present limitations of the mobile phones. We’ll follow this development with excitement.
Let’s give a though to what’s really valuable to you when it comes to content accessed trough your mobile phone. And your explicit and immediate needs in different every day situations.
Analysing what content people really value and want immediate access to, independently of were they are, can be divided into two main categories: broadcasted live streams such as sports, news etc. and on the other hand micro community or very personal stuff, such as your own contacts, photos, messages etc. Radio, television as well as to some extent the web, all with their merits and drawbacks, are utilised to broadcast content to a wide audience. Television is the dominating media for broadcasted live sports, while all three media are more equally important for the distribution of the latest or live news. The mobile can act as a complement for the distribution of both sports and news, but so far the additional value having access to these services through the mobile has been perceived as limited. For the majority the incentive has not been large enough to overcome the initial obstacles to get started and become a regular user of Internet services through the mobile phone.
What has shown to get people started to use Internet services through their mobile phone is rather the very personal need for unique information, information that is extremely valuable for the individual or a very small community and in a very specific situation when other media are not available. What type of information are we then talking about?
This is information such as: your own travel schedule; when and where your kids have their next football training; the phone number to your kids’ friends’ parents etc. Information needed when on the move and that facilitates a normal everyday life. These types of services are many but each one is used by quite few and they thereby belong to the Long Tail of mobile services, borrowing the term first introduction by Chris Anderson in 2004.
In a trial with a number of day care centres in Stockholm, done in cooperation between Squace, SICS ,Vinnova, the possibility to get schedules, contact information etc. has been very well received by the parents and resulted in that many now use the mobile Internet for the first time and regularly. The same effect has been seen as a result of mobile extensions of web sites for kids’ sport teams, school sites, local communities etc. The value of the content to the individual is not a function how many that value that specific piece of content but rather how unique and difficult the content is to substitute and access. The entry point to the mobile Internet services thereby seems to be the end of the long tail and not as was seen in the early days of the web where we started with the most popular services and then found niche content. It’s now time to turn the picture around; the success of the mobile Internet comes from starting with small services. This phenomenon is called the Reversed Long Tail. The users will gradually explore more services and probably the usage pattern will eventually be similar to the PC.
To improve the value of mobile access to the Internet, and to get people starting to use the services, niche content thereby has to be available. And as we all are interested and value different things in life the whole Internet and the long tail of content thereby needs to be accessible and in a user friendly way. Key to this development is that all micro communities and sites with a very limited number of users can distribute their content to the mobile in a very convenient and cost efficient way without bothering about all the messy technical complexity that we unfortunately presently have. They also need to rely on technologies that can deliver the content independently of what device the user has. The best example of a UMI that presently deliver this is Squace, that now also are just about to release their new version of the UMI Squace service.
Many times I find myself taking for granted that all organisations and companies understand the importance of having their web content and services accessible through the mobile phone. All don’t, and many seem not even to have reflected over the need. Others have, but show a reluctance to create a mobile version of there web site. Indeed, there are a number of very good reasons why they should be sceptical, such as: cost, limited penetration, immature technology etc.
But what can they then gain by doing a specific mobile version of their site/service? This depends on the explicit requirements and environment. The needs the PC and the mobile phone meet can be categorised in two dimensions: timing – is the need immediate or can it wait; and complexity – does the service demand a large screen and keyboard to be used in a proper way. The first dimension, timing, is very hard to circumvent while the other, complexity, may be reduced by making the site much simpler and by using a concept such as UMI.
A very simple answer to those that wonder if they should do a mobile site is to respond with the following questions: Is it important for those you address to always be able to have immediate access to the site? If yes, is it possible for you to simplify the site so that it is possible to use over the mobile and more or less any mobile? I would argue that the answer to the second question is always yes, but it may demand some additional work to realise. But are then the users as logical as predicted above in terms of when they use one device as an alternative to the other? Do they really use the optimal tool? No, experience has shown that there are many reasons to act less rational.
Comparing the PC to the mobile, there are clear differences in how they are used, when they are used, why they are used, why they are not used, differences in screen size etc. The table highlight the limitations of a PC compared to a mobile phone and vice versa. Special attention is given to why the devices are used despite not being an obvious choice.
Reasons not to use the mobile when it still would be the best choice are mainly due to lack of experience and knowledge about the mobile. There are still limited possibilities for cost control, the settings may not be correct and the user may not even know how to use additional features and clients on the phone. These barriers are all expected to gradually decrease in importance as the maturity improves over time. Reasons to use the mobile when the PC would be a better choice are different in nature and can be expected to remain. The most significant one is of course that there is a quite limited penetration of PCs in many regions. But there are also less logical reasons such as laziness, similar to why many of us have made more expensive calls from a mobile as we don’t have the energy to look up the phone number and then make a cheap call from a fixed line phone when in reach.
In conclusion, you do not need to do a mobile version of your web content if: there’s no need for your users to access your site when only having a mobile phone available; and if the web site is so simple and with so limited functionality that it can be used directly on any mobile. I guess however that most will conclude that they need good, ubiquitous and user-friendly mobile presence and that the present web site is unable to deliver a good enough user experience. In addition, please keep in mind that the mobile will also be used in situations where you would expect the user to prefer the PC.