2011 – Mobile payment era begins

A lot of rumours….and research by f.i. Forrester say that the era of mobile payments will have a lift off in 2011. With the launch of Near Field Communication (NFC) and other mobile payment tools customers will gradually switch to the mobile device to make their payments.

The how and why…easy the different technologies which are available will augment your mobile device to a paying device. Off course this will have a huge impact on commerce (on- and off-line).  A payment is becoming easy, fast and ecological! A short round-up on different available technologies:

• Near Field Communication: The Near Field Communication protocol makes your mobile device an active wallet. You just swipe your phone at a payment terminal and you’re done! No hassle with cards or other transactions
• Square, or other App supported payments: For App supported payments you need to download the App to the smartphone and use it to pay. Again easy and fast going, but more action is needed in this scenario. (f.i.) Starbucks has successfully launched his mobile payment service in January.
  Square is a bit different. You download the square-App and order the free Square device to plug into your mobile phone.  With the Square device you swipe your regular credit card to pay. The payment runs through your mobile phone/device, but still needs a traditional card.
• Visa, American Express, PayPal… and most major credit cards are working on different technologies to facilitate mobile payment…

2011 will be the launch path for mobile payment….Android and Blackberry have NFC services already incorporated in 2011-models (40 to 50 millions sales projections for 2011). Look at the presentation at Mobile World Congress in Barcelona this year.  Apple will probably have NFC on the iPhone 5 (to launch this year)…..which means consumers will be able to pay mobile (at least the early adaptors)! The huge challenge will be at the business side of society to have NFC terminals available to pay at! Salt Lake City equips his public transportation with the NFC technology, and the London Olympic Games (2012) will probably embrace NFC as well, … but we need a major shift in traditional retail to facilitate this new way of paying!
AND we need one standard NFC payment protocol, no 12 and so one different systems….one clear NFC technology. But as always a lot of competitors need to enter, and one will survive (cfr. Betamax/VHS – HD DVD/Blue Ray - …) Time will tell which one survives!

The mobile retail experience….as you recall is the future, and this is a step into this future.

Inspired by Thomas Husson (Forrester Research), Erika Morphy (E-commerce Times) and Christina Warren (Mashable)

The App – business model

Amazon to launch its app-store on march 22nd….it’s been a while but again Amazon is adapting to the new generation of business modelling entering a cloudy and mobile app-world. 

But why change a winning team….when everybody says, never change a winning team! The future of  new mobile and cloud era forces Amazon to take action. App’s are the future is this era, so the time was right after the big 2: Google and Apple (through iTunes) for Amazon to adapt to the app era. Why? Easy…it’s the business model (stupid!), so let’s take a closer look at the business model of a digital business where the app-store takes a central role!

This image points out a clear role for the app store…central in the business model between business, developer and customer.  The app-store serves as a central hub where network effects plays connecting customer value to app. On the revenue part, it’s easy the app store is the middleman containing the data and money flows (look at iTunes, who keep everything very close and gains a lot of money and data).

What’s in it for Amazon….easy Amazon’s web store will focus on web apps, who are accessible to the cloud on any device. Buy once, use everywhere. That’s the future of app….not only accessible through one device but accessible through multi devices, and adapts to the device. This is a weak point regarding the Apple strategy….I can’t access my iPad Apps through my iPhone and vice versa. I’ve got to buy them both, because they run locally. The web App is stored in the cloud, and can be accessed in an adopted format on every device…and that’s when it starts to get interesting for companies like Amazon. The app has proven it’s effect, and the app stores becomes the central service point, because everything can be made into an app, and this means business if you can reach a lot of potential customers like Amazon. It adds to the already connecting and sharing strategy of Amazon, and make Amazon available everywhere on any device…that’s a good business model in the mobile and cloud era!

The Apple business model succes?!

The Apple business model….a lot has been written already (I did myself – Flat Education – Case: Apple Inc), but then again you wonder: Is my business model Apple proof?

With the launch of the iPad 2, last week, Apple had a major advantage: they were first to give an updated version on a tablet at a ‘cheap’ price. How is it possible for a Market introduction to put these ‘low’ price for such a ‘high’ tech product. In normal marketing pricing terms, we would use a market skimming pricing strategy, coming in high and then lowering the price (a classical marketing theory….I love it – in the off-line world, or the web 1.00 world), but in the online web world of 2011 traditional marketing isn’t always the right way. So way is Apple able to introduce the new iPad 2 at a competitive price? Easy….it’s the business model!

Let me explain it you!
“Apple is the only company in the IT industry that sells the whole widget” – Steve Jobs!
Apple has used this business model since it introduction mid 70-ies. Apple wants to produce  integrated software and hardware-solutions, look at Macintosh, Apple 1, ….even the iPhone and iPod use the same strategy. Apple makes everything in-house, even adding the iTunes store as the third-party intermediary between the Apple user and the commercial world. (See my case: Apple Inc.)

If we look at the iPad (2) strategy we see the same strategy:

• hardware: Apple’s patented R&D design, with A4 Chips, …. (and not Intel, AMD, ….)
• software: a closed ecosystem (where you can run third-party Apps, but can’t change the operating system, or else….)
• sold through the Apple retail network: off-line and online Apple stores….and third party stores to get word out! Works especially well in the US, outside the US we see more traditional retail sales. 
• iTunes store which is one of the most succesful online stores around…and fully integrated on the iPad, with the iBook and App Store.

These key elements make sure Apple can sell it’s iPad at a reasonable 500$ price….Maybe the overall value of the iPad is over 500$, but to be the first in the market you can set the price (especially when you have a good product – and the iPad is more than ok! I’m not saying it’s the best!). This means you can make it hard on competitors, which don’t have this vertical integration, and are teaming up with each other….but since everyone wants a piece op the pie, the price is higher. ( Motorola’s Xoom tablet is introduced at 800$ and the Samsung Galaxy Tab is 600$). 

In addition I’m adding an interesting presentation of the Apple  Business model, in comparison to the Amazon business model (see my Amazon.com case for more information Amazon). Although the outcome of this comparison is correct, I still feel that the Amazon business model is sufficient enough to survive the second Bubble…because of other key elements of a succesful flat business (see my page on creating a flat business).

Is your business Apple proof and ready to survive the second bubble?
Maybe you want to rethink your business model?

Mobile world in numbers

Comscore launched it (first) annual report on the  mobile world (US, EU5 and Japan).  Free to download at their website!

I’ve rounded up the most important trends:

• Mobile growth in 2 speeds: US vs EU
  In total market share, the US is ahead of the European market. Although we see a similar growth in terms of smartphone and 3G adoption, the EU doesn’t embrace the unlimited data transfer yet, probably because of the expensive and segregated mobile market across Europe.
  We’ll see how the European Union deals with these challenges. The EU has already set maximum prices to text messaging and phone calls over the mobile network, it’s to be expected that they will set a maximum price on data transfer as well.

• Smartphone tops the charts
  When we purchase a mobile device, 80% in the US and 60% in the EU are buying a smartphone.  Off course the Apple iPhone is popular, but other manufacturers are selling their smartphones as well.
  

 

• Smartphone demographics show old users in the EU against youngsters in the US
  Again the EU sees older (35+) and more mature people buying and using smartphone.  Probably the budget plays a role in the decision-making process to buy a smartphone….althuogh we see the fastest growth in the EU in the categories of 18 – 24 year olds (up 54%) and 13 – 18 years olds (up 66%). Youngsters are shifting to mobile….
  

 

• Android OS on steroids
  Google’s Android OS was the fastest growing mobile operating system in 2010, taking over a lot of Symbian market share (hence the collaboration between Nokia and Microsoft…). Only to show that Apple doesn’t own the mobile market (although US Verizon is using Apple’s OS as their standard….so we’ll see in 2011 what this means in market share). Android’s main challenges will be, to sort out the big differences in versions to make it easier for developers….

• Steady growth of mobile media usage
  With the use of smartphones we switch our main use of the mobile device as well….not only texting and phone calls are popular, we access mail, social networks, browse and follow online retail stores,… with our mobile device.  The mobile device is taking centre stage in our life!  We see different usage in the US then in EU, but social networking is certainly a hit on the mobile!
  

 

• Japan uses mobile wallet!
  The mobile wallet is already a rising succes story in Japan.  Who needs real money when you have your mobile anyway?
  10% of the mobile subscriptions used their mobile as a paying device. They use it most of the time in classical retail situations.
  But again this is a trend which is developing in Northern European countries as well, ….only a matter of time to concur the world!

In 2011 we will see more mobile shifting.
Media usage will be more and more integrated between the different devices (PC, tablet, mobile, screen, ….)
Mobile Marketing will be the next challenge for the marketeers….they’re already working out new strategies!
Mobile Commerce will hand real-time price and product information to the consumer, and when this consumer embraces the mobile wallet…the sky is again the limit!

 (graphics taken from the Comscore report)

iPhone 4: Mobile Device of the Year ….iPhone Nano and Mobele Me future?

…not completely unexpected…but still nice to know.

At the Mobile World Congress in Barcelona the jury picked Apple’s iPhone 4 as mobile device of the year. It was rewarded for its design, used materials, ‘high definintion’ (touch)screen and its user friendly AppStore. Although it was a close call, Apple won because of its fresh corporate strategy to re-invent the smartphone again, and made smartphone hip and trendy (again).

And Apple is already looking ahead….with strategic leaks in the Wall Street Journal it ‘announced” the launch of the iPhone Nano (a small budgetfriendly version of the iPhone) and a new, and maybe free, MobileMe service as a ‘locker’ for personal memorabilia such as photos, music and videos, eliminating the need for devices to carry a lot of memory. Again a giant step forward into the always synchronised consumer cloud computing segment…and taking up arms against the Google and Microsoft free ‘log on/log off’ cloud.

Apple sells subscriptions

[continued from my earlier post on the my earlier post].  The iTunes App store is selling subscriptions to newspapers, magazines, music and other media, but publishers will have the chance to sell their subscriptions through their own channels or give it free with an offline subscription.

When a subscription is being sold through the App store, Apple keeps 30% of the earnings, while other distribution channels will not be charged by Apple. Other question remains: What will Apple do with the subscribers data? Will they hand over the data to the publisher of will it be the exclusive property of Apple?

CES vs Business

A day in computer and entertainment life….CES in Las vegas, the annual mass for freaks and geeks….but what can we learn businesswize from CES 2010.  It’s only open for a day but the trends are already visible!

CES is known as the place for new developments in television, computer, telecommunication, phone and refrigerators! But in 2011 every development is shifting into a higher gear! The 2010 introduced iPad is the accelerator for this new evolution. With a great wave of new tablet PC’s, a new era is announced. The world at your fingertips whenever and where-ever you are; I saw it with my own eyes at SAPphire Now (Frankfurt, mai 2010), where all businessmen where even at this congress in control of there business, communicating through there iPad, LapTops and smartphones!

With the AppStore (now available for mac, iPhone, iPad, google, …) a second new wave is visible. Up in the cloud, local on your system through a small app….little money for your personalized tablet, phone, …. through the apps you can individualize your own system and keep your resources in the cloud….who needs a hard disk anyway.  It’s safer to keep it in the cloud via a dropbox, iDisk, … The next step will be the apps for television. Once our flatscreen is fully connected to the net, there nothing left to loose! Your televisionset will be the communication tool with the world….controlled with the tablet or smartphone, although this is the challange. All these items are working side by side, instead of with each other!

Business will be easy….you need a screen, a internetconnection and you’re up and running! I read a story recently of a small business which was run through an RV while being on a world trip! Thanks to the flat world this is possible, and in 2011 we will see more of this new businesses ran through the flat world, the cloud and a ‘screen’.