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Like my colleagues who serve Interactive Marketing professionals and are working on a study to benchmark social media maturity in organizations, we’re also conducting a new research project to benchmark how companies define and implement their mobile consumer approach.

Taking a step back, mobile phones have changed the way we live and communicate in the past 10 years. They’ve had a deep effect on society. At Forrester, we believe they’ll change the way companies do business in the next 10 years. Back in 2007, the iPhone created a market catalyst, not only in the way consumers use and perceive mobile phones but also in the way companies engage with their customers in the mobile environment. Since then, a growing number of companies have launched a mobile consumer presence and started to define a road map for their mobile products and services. Some of them are still testing and learning, while many companies are starting to integrate mobile in their corporate strategies, and others have already created dedicated mobile business units and plan to generate millions of €/$ per month in direct revenues. They follow different objectives — whether building brand loyalty, delivering added-value services in a multichannel experience, reducing costs, or acquiring new customers. 

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Back From Italy

I spent some time last week in Italy, where I regularly visit clients to discuss mobile opportunities.

I always try to spend a few hours visiting operators' shops and getting hold of some brochures. The ones below from Telecom Italia are very typical of a certain type of Italian ad...

Beyond this, however Italy is a very interesting market to study. It is wrongly perceived as leading in Europe because of its huge penetration rate — more than 140% — which doesn’t mean much, per se. Put simply, it links to the high ratio of prepay phones and to the multi-SIM phenomenon, in which Italian consumers take advantage of the most attractive tariffs. For example, handset subsidies are not common and were introduced by Tre (greenfield operator Hutchison Whampoa), the operator with the highest postpay market share.

However, Italian consumers are starting to demonstrate sophisticated mobile usage. An example: At the end of 2009, 15% of Italian online users accessed the mobile Internet on a weekly basis and more than 10% were interested in receiving contextualized mobile coupons. I see numerous examples of mobile innovation, and many companies (from media groups to banks) are starting to integrate mobile into their corporate strategies. I am, however, surprised by the lack of a cohesive and consistent approach. Few companies have a clear understanding of how their own customers use mobile services and what their attitudes toward mobile are. That's the first step in assessing mobile opportunities. For example, does it make sense to launch an Android application if you don't know how many of your customers own an Android device? Few companies have defined clear and measurable objectives or have a vision of how they want to integrate mobile as part of a multichannel and multimedia approach moving forward.

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The End Of "All-You-Can-Eat" Mobile Data Plans?

Following AT&T's decision in the US ten days ago (see my colleague Charles Golvin's take here), there's a hot debate as to whether European operators will follow suite and stop their unlimited mobile Internet pricing schemes.

O2 UK announced no later than last Friday that it will stop it and introduce various caps: from 500MB for the cheapest one (GBP25 with 100 minutes and unlimited texts) up to 1GB for the most expensive (GBP60 for unlimited voice/SMS and 1GB of mobile Internet).

According to the press release, 97% of O2 smartphone customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average O2 customer’s current use. In short, just 3% of customers will have to pay extra.

Other UK operators as well as KPN in the Netherlands and Orange France have shared indications that they will follow suite and that this pricing scheme is outdated. Here are a couple of thoughts:

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What's The Future Of Application Stores?

At the beginning of this year, we stated that application stores would continue to flourish, but none would replicate Apple's success in 2010. So far, it has been quite easy not to be proven wrong on this one. Android Market and, to a lesser extent, RIM's BlackBerry App World are growing fast in the US, while Nokia's OVI is performing quite well in some regions. Windows Marketplace is likely to benefit from end-of-year Windows 7 sales, while Samsung Apps are not yet really marketed, not to mention LG's efforts. The Wholesale Applications Community (the operators' alliance) has not yet launched. Global operators have yet to significantly launch their own multiplatform stores. Both approaches (the vertically integrated from handset manufacturers/OS players and the horizontal layer added by operators) are likely to continue to expand this year, making it even more complex for brands and companies launching their own applications. Many of them are starting to realize that there is a world outside of Apple's iPhone and that their app will be lost in a back catalog of more than 200,000 apps if they don't market it. They are starting to wonder how to break the Apple App Store ranking algorithm, how much to invest in the life cycle of their application, and which stores they should target to distribute their products and services. I see a couple of key issues that need to be tackled to seriously address this market opportunity:

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Stratospheric Levels Of Hype

If you are in the mobile industry and you've never heard of Foursquare, there is something wrong with the way you keep up to date on new trends. Indeed, Foursquare is one of the most hyped social location services, enabling users to "check-in" to locations in the real world from pubs, bars and restaurants (through to any conceivable location) - sharing them with updates on social sites like Twitter or Facebook, wrapping points and benefiting from potential discounts. Foursquare recently announced it had passed the 1M users mark. The rate of growth is indeed quite strong, bearing in mind the company had just 170,000 users at the end of 2009. According to TechCrunch, Yahoo! was rumored to have made an offer above $80M to acquire the start-up! I am not a financial analyst, but let's say $100M for just 1M users seems high at first sight. So what makes it so valuable and why is foursquare being perceived as the new Twitter? Here are a few thoughts:

- First of all, foursquare is not the only one in town but is probably the one with the most active PR team. It struck some interesting deals with Metro newspapers, with TV channel Bravo, with Vodafone in the UK (on-deck and via SMS promotion) and more recently with even the Financial Times, if we believe business insiders. What makes it quite successful is its entertainment-centric approach. It is quite addictive as it is primarily an interactive game. There are others (not only Gowalla) such as MyTown (a sort of a real-world monopoly), which passed the 2 million active users mark a few days ago!

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Mobile Advertising: Apple, Google, And The Mobile Operators

Following its acquisition of Quattro Wireless for $275,000,000, Apple has just announced the launch of iAd, its mobile advertising platform (see my colleague’s take here). Adding the $750,000,000 that Google is ready to invest in AdMob (the deal is still under FCC scrutiny), the two most disruptive new mobile entrants have invested more than $1 billion — a clear signal that mobile advertising has long-term potential. The main difference between Google and Apple is that Apple is only just entering the advertising business, while Google’s entire business model simply IS advertising. However, that potential has yet to be realized. Does that mean stakeholders can generate significant revenues in the short term and that operators will be bypassed once again? I have read in various places some strange comments suggesting that Google’s mobile ad revenue share with mobile operators would be a way to finance network evolution. Just compare the cost of a base station and the significant investment required to finance 4G with absolute mobile advertising revenues and you’ll quickly figure out for yourself that this is unlikely to happen anytime soon. This is more of an online advertising discussion around the Net neutrality debate (remember France Telecom’s CEO warning that he was not “building freeways for Californian cars”!) but it will crop up later for mobile.

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Who's leading mobile innovation?

Conventional wisdom in the mobile industry is that Japan and South Korea are the most advanced mobile markets worldwide while US is lagging behind and Europe somewhere in the middle. This is less and less true.

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Liberty, equality and mobility

I find it quite amazing to see the societal impact of mobile phones. 

They have changed the way we communicate and live. There is a drastic change in the way children and parents communicate, in our individual relationships with time and location and in so many other parts of our daily lives. There are interesting books and theses about this topic. I recently came across an interesting view point from Russell Buckley about the "Unintended Consequences and the Success of Blackberry in the Middle East", which is further proof of how disruptive mobile can be. As communication and creation/media tools, mobile phones offer new ways to upload and access information (remember the riots in Iran). As such, governments have to monitor and anticipate this impact. 

Beyond this, public authorities can make the most of mobile services. Many local councils, regional and national governments, and transport authorities are launching mobile initiatives, creating new value-added services for citizens, and trying to use mobile to connect with the least connected. They need to anticipate the arrival of NFC technology and make the most of more mature mobile ecosystems. They should balance their mobile investments with the constant need to avoid discriminating against particular groups of citizens and to allocate funds to projects with critical mass. Governments in particular can play a key role in stimulating ideas for new services and in backing and funding the most relevant initiatives.

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Mobile World Congress 2010: a wrap up

I posted some thoughts when in Barcelona last week. So did my colleagues Mike Cansfiled, Charles Golvin and Ian Fogg. Now that I am back from the MWC pilgrimage and that I have digested briefings, meetings, press releases and demos, here are my key takeways on the Mobile Mecca gathering.  

 

The mobile industry is in full swing. Its center of gravity is shifting from hardware to software, from voice to data and services, and from traditional telecom stakeholders to new entrants.

Google’s “mobile first” approach and the shadow that Apple cast over the show are forcing mobile operators in particular to redefine their position in the value chain. The traditional focus on infrastructure (LTE..) and this year’s debate on operators’ congested networks need to be put in the context of nontelecom players’ willingness to monetize mobile. Mobile World Congress is a unique opportunity to witness how mobile is reinventing itself and to see how it will become even more disruptive in consumers' daily lives in the future.

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Mobile World Congress: some thoughts on day 1

It is difficult to say whether the number of delegates attending Mobile World Congress is lower than expected or than last year, but the Fira was this year again crowded with audiences from all over the world (circa 50,000 visitors from what I have read). Despite the rainy / chilly day, the mood is much better than last year where the economic recession casted its shadow on the show.Read more