The mobile revolution is just getting started

[Posted by Thomas Husson]

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I just presented the latest findings of a new research published "Mobile Technographics in Europe" to Forrester clients at our London Consumer Forum.

This report looks at the state of the European mobile market and at how consumers are using mobile services. We have created different profiles looking at how consumers are using their mobile phones in the different countries.

Over the past two years, the introduction of the iPhone has changed the way consumers and brands perceive mobile phones. It acted as a marketing catalyst, raising awareness of smarter devices and conveying the idea that there are as many mobile services as there are consumers. Consumers will continue to shift their attitudes toward mobile phones — perceiving them not only as communication tools but also increasingly as entertaining and productive devices that can help them in their daily lives. More than 40% of European consumers are beginning to demonstrate sophisticated usage of mobile services.

We expect this to grow over time led by the two most sophisticated group of users (SuperConnecteds and Entertainers). They will change the general perception of mobile phones:

I had a number of conversations with financial institutions, retailers, travel companies and global CPG or luxury brands either planning to add a mobile dimension to their strategy or already doing so. Most of them recognized that mobile could be potentially as disruptive as the PC a decade ago. Japan or South Korea are not exceptions. The question is not if but when and how to phase out their mobile investment.

I have also met executives that are still skeptical saying the market is not mature enough and acknowledging they are still struggling with their online strategy. We believe they are wrong because the path of innovation is accelerating like never before and because they are growing even if limited opportunities to tap into today. The key is to identify the relevant audiences.

Companies that hadn't anticipated the disruption of the PC internet such as media companies are now doubling their efforts to catch up in the digital space, not only on the PC but also on mobile.  

Let's face reality, mobile is not going to change drastically their P&L even in 2010. However, it is time to make the most of new consumer behaviors and to anticipate changes.

One first step is to look at the mobile profile of your own customers to at least know the potential you can tap into today...and to plan ahead for tomorrow.

Clients can access the research here. If you want to discuss this more in depth, feel free to contact me at thusson AT forrester DOT com.

Why mobile could reinvent social computing

[Posted by Thomas Husson]

You can also follow me on Twitter at Thomas_Husson

Many innovative start-ups have pioneered mobile social networking in the last few years: BuzzCity, Peperoni, Fring, Nimbuzz, eBuddy, Zyb, Plazes, Loopt, Foursquare and many others demonstrated the potential of the market.

 

In the last few months, a bunch of announcements clearly showed that the convergence between mobile and social computing is gaining traction and attracting the largest stakeholders:

 

·         In September 2009, Facebook announced it had passed the 65,000,000 mobile users' monthly mobile audience mark (which represents more than 20% of a global online audience of 300M users). Bebo, Friendster, MySpace, Orkut also are among the top mobile Web destinations in countries where they have significant online audiences. Twitter partnered with Vodafone and O2 in the UK while offering a mobile VoIP offering with Jajah.

·         Operators such as Vodafone with its “360” initiative and to a lesser extent Orange with “Social Life” are going one step further than just offering access to social networking sites.

·         Handset manufacturers are trying to integrate online social experiences in their devices: INQ gained lot of attention with its INQ 1 (see below a pic from a recent trip in Italy) by winning the “handset of the year” award at MWC, while Nokia recently announced a deeper integration of Facebook in the N97, not to mention the Motoblur product.

 

In the UK, 40% of 16/25 years old are either accessing (17%) or interested in accessing social networking (23%) via their mobile phones. Of course, mobile social computing is primarily a youth activity today. However, it has a strong potential to unlock.   

 

Most of the digital revolution has taken place on the PC so far, with the emergence of email, instant messaging, blogs, photo- and video-sharing sites, and social networks. The ubiquitous nature of mobile phones has changed the way we live and communicate. Letters, diaries, address books, and memories have gone digital, while communication with friends, relatives, and colleagues has never involved such a mix of our personal and professional lives. However, mobile phones are not only communication tools. Mobile phones have unique characteristics that will enhance and modify existing PC-based Social Web experiences.

 

Indeed, mobile social activity is more than just accessing social networking sites while on the go. Mobile phones have the potential to become the hub of Social Computing activities and to be more than just a complement to the PC experience. Mobile phones will increasingly become the glue that holds the social graph together, offering creative tools and immediacy, presence, location, and context when interacting with the real world. The “always on” mobile connected handset frees the Social Web from the chains of the PC and thrusts it into the real world.

 

As Social Computing is still primarily about social communication, traditional telecom and online players will start fighting to tap into consumers’ social address books. It is too early to say who will win the race: stakeholders have different assets, and uncertainties around business models still exist. In fact, stakeholders have no other choice but to collaborate, as no single player can really own a person’s social graph. They need to balance business opportunities with the need to respect consumers’ privacy concerns by providing them with the tools to manage their digital identities.

 

Despite massive communication audiences, traditional online giants have failed so far to turn their communication audiences into social audiences — a lesson that traditional telecom stakeholders should bear in mind! Moving away from personal information management (PIM) to fun, exciting social experiences is not an easy game.

 

If you want to know more about this topic, Forrester Research just published a new report: “Why mobile could reinvent social computing”. Clients can access it here.

 

I had some interesting discussions with my colleagues serving Interactive Marketers and there are still lots of unknown and open issues around the convergence between mobile and social computing. I’d be curious to know your thoughts on this nascent and exciting topic. If you want to share your ideas, feel free to comment below.

Mobile augmented reality

[Posted by Thomas Husson]

You can also follow me on Twitter at Thomas_Husson

The pace of innovation is accelerating in the mobile space like never before and opening up new opportunities. Mobile has the potentiel to bridge the digital and the real worlds. Not a day without a new mobile augmented reality service or application out on the market. Of course, that's still niche but it clearly demonstrates the potential of the mobile platform.

If you disagree or if you don't get my point, just watch the video below

This video is not brand new and has already been seen close to 500,000 times. The service is provided by an innovative start-up that offers a reality browser available for Android. However, these types of applications are flourishing. See for example the Métro Paris application here or more recently the Meilleursagents.com app here.

I bet the best mobile service at the next MWC conference in Barcelona will be a mobile augmented reality app or service. If you haven't submitted your service, the contest is now open at www.globalmobileawards.com.

What do you think? What are the most innovative mobile services you have seen in the recent weeks?

Quantifying mobile trends in Western Europe

[Posted by Thomas Husson]

You can also follow me on Twitter at Thomas_Husson

 

At the end of this year, Forrester expects mobile Internet penetration to reach 17% in Western Europe — the same adoption rate for the PC Internet a decade ago. At that time, mobile phone penetration was still below the 40% threshold and mobile shops were opening at every high-street corner. Companies were only starting to launch their web presence and to anticipate the impact of the Web. Operator-branded mobile Internet solutions would only launch 3 years after and 3G in 2003/2004.

10 years after, the mobile Internet is reaching critical mass and a virtuous mobile Internet cycle is kicking off. Consumers who have a flat-rate data bundle spend more and more time on the Internet from their mobile phones, brands begin to launch their mobile Web presence to monetize these growing audiences and engage with their customers via more relevant mobile content and services, which in turn attracts more and more consumers to unlimited mobile Internet tariffs.

The current economic climate will lengthen handset renewal cycles, foster the development of low-cost offerings, and boost the uptake of SIM-only contracts. Operators are likely to postpone major investments in new networks such as 4G / Long-Term Evolution, despite early trials and commercialization in the Nordics. However, it will only slightly reduce the pace of growth for those elements that stimulate mobile Internet usage: 3.5G and Internet-centric mobile phones as well as all-you-can-eat data plans will be widely available in the next five years. That's the reason why Forrester expects mobile Internet to grow to 39% by the end of 2014. That's a lower end point than for the PC Internet in 2004, but the growth curve per se looks quite the same.

The iPhone is just the tip of the iceberg and many other compelling devices and services are on the roadmap in the next five years. Early examples of PC trends being reinvented by the mobile media are numerous: social computing, widgets, ad-funded business models, search engine optimization, behavioral targeting, content on demand or even augmented reality. New entrants are simply shaking up the value chain and the pace of mobile innovation is accelerating like never before.

It is about time to building a mobile strategy and to tap into today's opportunities but also to anticipate the significant changes that will happen in the coming years.

To do so, we truly recommend to look at the diversity of European countries. We've just published a brand new report: Western European Mobile Forecast, 2009 to 2014 to quantify mobile trends in many European countries. If you are a Forrester client, you can access the report here. To know how to obtain detailled mobile figures (adoption rate, handsets by type and by network, flat-rate data plans and other metrics) for 17 Western European countries, learn about ForecastView here.

I'll be hosting a teleconference on this topic sharing our latest Forecast and recent consumer survey data tomorrow Tuesday at 5pm CET. If interested, you can register here.

If you want to discuss your vision of the future of mobile in Europe, feel free to let a comment below or to contact me at thusson AT forrester DOT com.

What role will mobile play in the future of social networks?

[Posted by Thomas Husson]

You can also follow me on Twitter at Thomas_Husson

I published my first report on mobile social networks 2 years ago (see here) at a time when Facebook audience was "only" around 50 million unique monthly visitors. At that time MySpace was a paid-for and exclusive experience on Vodafone-Live and Bebo was about to launching a mobile version. Needless to say lots has happened in the last 2 years.

Numerous acquisitions and parternships took place between the likes of Facebook, MySpace, Bebo, Twitter, Hyves and with handset manufacturers / mobile operators. Several mobile-only communities (AirG, peperonity, itsmy.com, buzzcity...) have gained traction and there is plenty of innovation in that space. INQ generated lots of media coverage and interest by lauching its so-called "Facebook phone" and plans to launch new devices. I am not sure what the latest Facebook mobile stats are but not that long ago rougly 10% of the worldwide installed base of FB users had registered to the mobile version. Even more significantly, the GSMA announced a few months ago that UK mobile consumers who access Facebook via their mobile phone spend, on average, 24 minutes on the site daily, just shy of the 27.5 minutes that PC-based Internet users spend daily on Facebook; mobile users of Facebook average 3.3 visits per day versus 2.3 visits per day from PC users.

It is not clear yet who is best positioned to tap into consumers’ social address books but it is quite clear mobile phones offer a great potential as they are not only communication devices but increasingly consumption and creation tools.

I have plenty of questions and would be curious to know your thoughts. Feel free to contribute to the questions below my letting your own comments below:

- Is it just a question of who will control the social address book? I tend to believe it is (see a former post on this here)

- By easy sharing and integration, can mobile phones become the hub of social networking? - Is it key to control the core technologies (APIs and web services that use them)?

- Is there a future for mobile-only communities? Aren't itsmy.com and others overhyped in Europe?

- How will mobile be part of the social graph?

- What are the most innovative ways to connect people and to enhance social networks?

- Aside from increasing data demand and traffic, how can social networks help mobile operators?

- How can mobile operators and handset manufacturers control or facilitate mobile social network ecosystems?

- What types of business models will emerge around mobile social computing?

 

I am planning some new European research on this theme to try to answer these questions and plan to interview lots of stakeholders. If you want to discuss this or if you want to set up a briefing, please contact me at thusson AT forrester DOT com.

24x7 People and the Rise of 24x7 Social Computing

By Ian Fogg (bio, recent research)

Too many firms are building their mobile strategies as a mere extension of the PC Internet, and are missing out on what's now possible when mobile, but which remains impossible using a PC.

A PC is always going to be limited to deliver a part time Internet experience. They are too bulky, too heavy, too power hungry, and increasingly too dependent on the assumption that a super fast fixed-quality broadband connection is present to be something that people will have with them all of the time 24x7. If a PC evolved to be suitable for 24x7 use it wouldn't be a PC anymore.

Today's Internet mobiles offer people that 24x7 digital life. People are becoming connected 24x7 through their Internet phones and that must transform the strategies that firms adopt. Mobile enables a 24x7 relationship between brands and consumers. Mobile enables people to interact with websites 24x7, both to consume -- read and browse -- and to contribute. Mobile opens up new business models through the fusion of location awareness and a 24x7 Internet-connected device.

The first and clearest example of this new world is what's happening with social computing. People are now able to lurk on Facebook or Bebo at anytime, or post photos onto Flickr that are taggged with where they were taken (as well as when).

Read this new report for more on 24x7 people:-
How Mobile Handsets Will Deliver 24x7 Social Computing

I'll be developing this theme in future reports this year.

Mobile contactless payments in Europe: reality beyond the NFC hype

[Posted by Thomas Husson]

You can also follow me on Twitter at Thomas_Husson

 Hardly a week goes by without a press article or conference reporting how ubiquitous mobile payment services and their adoption are in Japan. Forrester decided to put some figures on the so-called Japanese mass-market reality and to understand why Japan is the declared leader in mobile contactless payment services. What lessons can others learn from the Japanese market and to what extent do they apply to Europe?

There are several reasons why Japan is ahead of the curve among which the role of Felica Networks in the value chain and the scale merchants could benefit from (Sony and DoCoMo invested several dozens of million euros to make sure that retailers and points of sale had the technology to read the chipsets embedded in mobile devices), the loosening of Japan's financial regulations (making it possible for non-banks to become financial services players), operators' role in paving the way for mass market adoption of mobile Internet and higher usage of mobile services (fostering the natural expansion of mobile payments).

Despite this, reality is that the mobile contactless market in Japan is only reaching critical mass, not mass-market adoption. In Europe, conditions differ quite a lot and even if Near-Field Technology is likely to play a key role in the future, the technology is only entering the pre-commercial era.

There are some very positive signs such as banks rolling out NFC payment cards (Barclays in the UK), hypermarket chains like Carrefour adding NFC to their loyalty cards, transporters adding NFC to their transport cards (Navigo, Oyster Card), card networks (Visa, Mastercard) and technology vendors (handset/hardware and smart chip manufacturers) evangelizing the solution, governments offering pre-live conditions (many regions in Europe will help funding live tests such as the one starting next year in Nice). 

However, two key inhibitors will prevent mobile contactless from becoming mainstream anytime soon: conflicting interests and the classic chicken-and-egg situation (handset manufacturers won't start mass production of NFC-capable handsets until the supporting infrastructure is in place) and the huge marketing efforts needed to convince consumers of changing their habits since mobile contactless payments provide only marginal improvements over established systems like cash and credit/debit cards.

However, NFC is much more than a mobile payment technology. It will enable a range of applications and services from various industries, linking together mobile marketing, mobile CRM, and mobile commerce. That's the reason why we believe in its long-term potential.  

If you want for more information, see the full report "Mobile Contactless Payments in Europe: Reality Beyond the NFC Hype".

The "magic blue circle"

[Posted by Thomas Husson]

I recently came accross this quote in the Financial Times from the former Vodafone CEO on November 19, 2007: "The simple fact that we have the customer and billing relationship is a hugely powerful thing that nobody can take away from us". Would you still agree with this operator statement written in golden letters at the forefront of any "smart pipe" operator strategy? 

Since then, new entrants such as Google and Apple have shaken up the value chain. I have two examples in mind showcasing the tectonic shifts happening: 1) Apple imposing a direct billing relationship via iTunes/App store and 2) Google managing to create its own location data base (via cell ID or Skyhook's wireless technology) without relying on operators' network.

As early as in July 2007 (before the 3G iPhone version embedding a GPS chip), Google Maps on iPhone (the combo of Google's and Apple's strengths) started offering the "magic blue circle" experience. You could benefit from a compelling user experience like never before, with instant localization without any GPS chipset. Of course, the accuracy may not be good enough if you are looking for a pure turn-by-turn navigation, but honestly this is so simple and useful if as a pedestrian you're looking at the streets nearby.  

 

Location is at the very heart of the mobile value proposition.

This seems quite obvious but despite having being launched by operators for more than a decade, location-based services never really managed to gain huge traction. In the last two years, a lot has happened as highlighted above because of significant changes in the mobile ecosystem.

Location-based services are finally emerging as one of the most promising new mobile services categories in the mobile industry.  

Thirty percent of European online consumers with mobile phones are interested in using mobile GPS/navigation services, while 52% of smartphone owners with unlimited mobile Internet packages already do so!

 

Beyond navigation services and mapping, a range of innovative location-based services (LBS) for mobile phones is emerging. Coupled with consumer interest are significant changes in the value chain, with Nokia’s acquisition of NAVTEQ and Web developers’ interest in the mobile platform being key drivers for LBS.

 

Location identifiers help filter and search for information, facilitating interactions between people. If consumer product strategists manage to build a compelling user experience and reassure consumers about privacy and pricing issues, location as a service will become obsolete — and will instead become a core enabler of mobile activities.

 

 

If you want a synthetic view of this topic, check out our latest European research on this theme: the future of location-based services.

Mobile World Congress 09: a wrap-up

[Posted by Thomas Husson]

It is often difficult to step back from the flow of news coming out from Barcelona but here's a quick take on the main announcements.

- new handset makers such as ACER are entering the mobile space highlighting the fact that boundaries between computers and mobile phones are being blurred. Toshiba, HP are already here and Dell or Lenovo could well follow. Will they succeed? Well they need to master not only the hardware but also the software, offer scalability/economies of scale, negotiate with operators and revamp their brands. This will not happen in one night but some of them have bold long-term objectives

- As always a great autumn/winter device collection from the usual suspects: Nokia E75, SE "Idou", LG Arena or Smasung Beat DJ. Despite few announcements (2 devices with Android OS), Google and Apple cast their shadow over the congress though. Apple because most phones were still compared to the iPhone even though the device was announced 2 years ago. If many visitors were disappointed not to see more Android handsets, one should bear in mind this is still the early days and that there is a strong support from the Open Handset Alliance. No doubt this is a long-term play and that Android is here to stay.

- Appstores are the new retailing/merchandizing paradigm. Many handset/OS vendors announced their own "vertical" solutions but operators also joined the dance such as Orange with its Application shop. The parntership between T-Mobile and OVI is one of the most interesting announcements at it shows that operators can also offer an "horizontal" layer and offer a large reach/distribution to developers. Not everybody will succeed but it is likely that both types of stores will co-exist.

- there are plenty of other very interesting announcements such as the Nokia/Qualcomm truce, the good momentum of LTE vs Wimax (manufacturers I spoke to do not plan to release LTE handsets before 2011 though), the GSMA mobile metrics survey results, and the flow of innovation around location-based services and mobile social networks.

With disruptive technologies ahead, the MWC congress is an amazing glimpse of what the future of mobile services could become. Despite gloomy expectations of a tough year to come, the industry is confident in its future and will come out ahead of the recession because of its constant innovation. Internet players and new entrants are leading the innovative path and forcing traditional telecom stakeholders and particularly operators to reinvent themselves.

If you want to have more details about these announcements, Forrester clients can read this brand new report published today: Mobile World Congress 2009: At the Heart of a New Ecosystem

You can also register to this teleconference taking place next Monday (March 2nd) where I will come back on these announcements and discuss key mobile consumer trends.

Global Mobile Awards 2009: and the winner is...

[Posted by Thomas Husson]

UnfortunateIy winners' names will only be announced at the Mobile World Congress Gala Dinner Awards night on Tuesday 17th February 2009, at the National Palace in Barcelona, Spain.

This year again I was honoured to be a judge in the Global Mobile Awards in the Mobile Entertainment Category. The 5 finalists/nominees in each category have just been officially announced today by the GSMA:

Best Mobile Music or Video Service:

Bharti Airtel On-Demand Service
Shazam on iPhone
BBC iPlayer on mobile
M-Blox MyMixer Music Tool kit
Sony Ericsson PlayNow

Best Mobile TV service:

MediaFlo FloTV
MobiTV
Vodafone Libertel TV (Netherlands)
Telstra Mobile TV Mobile Foxtel and Big Pond TV (Australia)
Yota TV Service

Best Mobile Advertising Service:

Cellcity: DC2Go (digital city-guide in Singapore)
Turkcell: Tonla Kazan (ad-funded RBT service)

Vodafone Spain: Mobile Music Discovery Programme
Telstra: Mobile Codes (2D bar codes in Australia)
Microsoft: Ad-funded Windows Live Messenger Mobile Client

More details on the judging process here.

Other finalists (incl Best Mobile Handset, Best Mobile Internet services...) in the remaining categories are listed here.

It highlights the constant flow of innovation in the mobile space. Expects lots of interesting announcements in Barcelona next month!

Updated February 18th: the final list of winners is here.