App Battle Heats Up

Whether mobile apps are as strategic as most people think, or not, there is little question more resources are going into the battle.

Mobile 'apps' to be $58 billion market

Mobile applications downloaded from online stores will be a $58 billion worldwide business by 2014, as tablet computers such as Apple's iPad stoke the surging market, Gartner predicts.

The figure marks a huge increase on the $5.2 billion spent on mobile applications in 2010, technology consultancy Gartner said, predicting there will be 17.7 billion application downloads this year, more than double the 8.2 billion in 2010.

By the end of 2014, Gartner forecasted that over 185 billion applications will have been downloaded since 2008.

Mobile 'apps' to be $58 billion market

Payment Methods Changing

Consumer use of cash and checks are declining, use of debit cards and other payment systems climbing, while use of credit cards is flat, according to Nilson Report data.

That explains, only in part, why there now is interest in mobile payments.

Information Workers Are Not Quite Ready For Desktop Videoconferencing

Forrester Research's latest survey of North American and European business technology users shows that the workforce overall has little interest in and access to desktop video.

There’s a disconnect between what vendors and executives are pushing and what information workers are looking for, says Forrester analyst T J Keitt. Right now, most of the desktop video conferencing technology is not widespread.

For example, while 33 percent of workers surveyed said their company has desktop video systems, only 15 percent said they had access to them. In addition, it’s the upper-level executives who are most interested in the technology, and who use it most.

Forty-two percent of directors use desktop video conferencing, 40 percent of vice presidents and 38 percent of owners or CEOs, according to Forrester By contrast, only seven percent of individual workers say they use the systems.

In addition, for the time being, interest among those individual workers is low. About 72 percent of workers said they didn’t want desktop video conferencing, compared with 13 percent who don’t have it but do want it. Another 13 percent use it, and while 2 percent said they have desktop video conferencing but don’t use it.

Forrester analyst T J Keitt says “Forrester’s workforce data reveals that most of the workforce doesn’t have access to and isn’t bullish on using desktop video for business purposes.”

The study surveyed more than 5,400 information workers. Fifty-six percent of businesses have deployed a room-based or desktop-based video-conferencing system, Keitt said.

Information Workers Are Not Quite Ready For Desktop Videoconferencing - Forrester Research

Is iPad Driving Netflix?

One might be tempted to note the quick rise of streaming on Netflix and assume people have suddenly decided to watch TV on their PCs, or have quickly gotten the hang of configuring "net TV" boxes.

There's some truth to those notions, but a more-obvious guess is that many of those tablet devices are now being used to watch Netflix. In that sense, Netflix could be one of the most-successful app store subscription products yet seen.

The Triple Crown

Who wins and who loses when carriers tweak loyalty programs

Sprint announced it will change its Premier loyalty program starting April 1, 2011. In the past, loyal customers of ten years or more, or customers who paid at least $69.99 on an individual plan or $99.99 on a family plan each month were offered the ability to upgrade their handsets every 12 months, as well as other benefits and discounts.

Earlier, Verizon Wireless also ended its "New Every Two" program, which offered customers a credit of $30 to $100 towards a new phone. So will those carriers suffer customer churn? IDC doesn't think so.

IDC: Who wins and who loses when carriers tweak loyalty programs

Kindle Content Sales Top Book Sales

"After selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com," says Jeff Bezos, founder and CEO of Amazon.com.

"Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected, and it's on top of continued growth in paperback sales."

None of that stops some analysts from worrying. A study by market-research firm iSuppli last year estimated the total cost of materials for the 3G Kindle at $155.56, about $33 less than the $189 selling price for the device.

Since iSuppli’s estimates do not include the cost of software, licensing, royalties, manufacturing expenses (Amazon outsources production of the Kindle) and a cut for the wireless carriers, and well are marketing expense, analysts suspect Amazon likely sells the Kindle at a slight loss.

Many analysts assume the Kindle operates on a razor-razorblade model, which is the tactic of selling one good (like razors) at a discount, and a second good that it dependent on it (like razorblades) at a higher price. For Amazon, this would mean selling the Kindle at a discount in order to make money on e-book sales.

Amazon therefore uses the reverse of the model employed by Apple. Apple sells content only so it can boost sales of its devices; Amazon sells hardware only to boost sales of content.

Amazon Media Room: News Release

Nearly Half of Mobile App Users Report Clicking on Mobile Ads by Mistake

According to a new survey conducted online by Harris Interactive on behalf of Pontiflex in December 2010, 47 percent of mobile app users say they click/tap on mobile ads more often by mistake than they do on purpose.

Given that mobile advertising models typically charge advertisers for clicks, the survey findings indicate that a large portion of mobile ad dollars are wasted.

In a related December 2010 survey, 71 percent of mobile app users stated that they prefer ads that keep them within the app they are using, instead of ads that take them out of the app to a mobile web browser, further reinforcing the need for mobile advertising to move away from a model based on clicks.

Marketwire Survey Finds Nearly Half of Mobile App Users Report Clicking on Mobile Ads by Mistake

Social Media Marketing by the Numbers

Social media marketing now represents about $1.7 billion in expenditures. Facebook gets 53 percent of that. Twitter gets only about three percent. But I'd watch Twitter.

Social Media Marketing by the Numbers L2: A Think Tank for Digital Innovation

Forrester Research Expects Digital Experience to Lead to Market Disruption

"Longstanding structural barriers to innovation are about to collapse," says Forrester Research analyst James L. McQuivey.  That belief flows from a conviction that economic assets might now, at least in part, because the cumulative impact of new digital technologies have made a world in which it is much easier for attackers to disrupt existing businesses, including even those with substantial barriers to such disruption.

That is the reason video industry executives are so worried about Netflix, for example. But something more than that is at play. Increasingly, the best products in many industries will build a digital relationship into the experience. In some ways, that is a linear extrapolation from what has been happening for at least a decade, namely that physical products have been incorporating more software as key parts of the overall product value. The typical way we say this is that "all companies are becoming 'experience' companies."

The relationships are probably easiest to see in products with some existing "content" component. That's why Sony began investing in content assets. But the iPod builds on iTunes as smartphones and tablets now build on app stores.

What is harder to see, but will become increasingly more obvious, is that most products, even those without a "content" component, will start to use content more frequently. Most companies create brochures, white papers, data sheets, press releases, websites, videos, podcasts and webcasts. Some create mobile apps and games. All of that is "content." What will change, over time, is the prominent use of other types of content as a routine part of the branding and relationship-building activities conducted by companies.

Retailer Video, Music Services: Means to an End

Observers might wonder about whether Amazon or Apple can catch Netflix in the online video space. Others, including major retailers, seem be in a second tier, despite their other assets. Sears Holdings Corp. became the latest traditional retailer to get into streaming and downloads on Dec. 28, 2010, when it launched movie service Alphaline Entertainment.

That followed Best Buy Co.'s launch last year of rental and purchase site CinemaNow and Wal-Mart Stores Inc.'s acquisition of streaming service Vudu last February for roughly $100 million.

The retailers say the ventures not only help them gain a foothold in the fast-growing digital entertainment business, but also give them an edge in selling Internet-connected televisions and movie players in their stores.

As with some other players, online video is a means to an end.

Retailers' Video, Music Services Spin Wheels - WSJ.com (subscription required)

India Mobile Banking Gets Boost from Bharti Airtel and Vodafone

“Mobile payments will be the next step for delivering financial services to hundreds of millions of 'underbanked' people or those who are under-served currently, both urban and rural customers, especially in emerging economies," says Gerhard Romen, Director, Mobile Financial Services, Nokia.

Recently, mobile banking got a huge boost with Bharti Airtel and Vodafone announcing separate partnerships with State Bank of India and ICICI Bank, respectively. While Bharti Airtel and SBI have formed an exclusive joint venture, Vodafone has agreed to become a "business correspondent" for ICICI Bank.

While Vodafone manages over 1.5 million retail points for acquiring customers and servicing them, Airtel is present across 5,101 towns and more than 5,00,000 villages. That's a big deal considering that 51.4 percent of 89.3 million farmer households do not have access to any credit from institutional or non-institutional sources. 

Only 27 per cent of farm households are indebted to formal sources. Only 13 per cent are availing loans from the banks in the income bracket of less than Rs 50,000. 

There's money in the mobile

Africa is the Silicon Valley of Banking

You might say Kenya-based Safaricom (M-PESA) helped start a banking revolution, one coming to the world from Africa. "Africa is the Silicon Valley of banking," says Carol Realini, executive chairman of Obopay, a California-based mobile-banking innovator.

"The future of banking is being defined here," Realini says. "The new models for what will be mainstream throughout the world are being incubated here."

Mobile banking has been available for years in Japan and elsewhere, but only on a limited basis. M-Pesa now has 19,000 agents today. Of Safaricom's 16 million customers, 12 million have M-Pesa accounts — this in a nation of 39 million people.

Finance: Kenya's Banking Revolution

Mobile Banking: The mobile banking revolution: Nigerian style

There is no shortage of startups focused on the African mobile banking opportunity just in Nigeria. Some of the contestants are "bank focused," and include:
Stanbic IBTC
Ecobank
Fortis MFB

Among the "bank-led" ventures are:
UBA/Afripay
GT Bank/MTN
First Bank of Nigeria

Among the "non-bank led" ventures are:
Pagatech
Paycom
M-Kudi
Chams
Eartholeum
E-Tranzact
Parkway
Monitiz (Is this the Monitise brand in Nigeria)
FET
Corporeti

And that's just Nigeria.

Mobile Banking: The mobile banking revolution: Nigerian style

M-PESA is the Model for Perhaps 60 Other Ventures

The M-PESA money-transfer service, operated by Safaricom, Kenya’s largest mobile operator, is used by 9.5 million people, or 23 percent of the population, and transfers the equivalent of 11 percent of Kenya’s GDP each year.

See presentation for a description of how it works.

The basic idea of M-PESA is that the 100,000 small retailers in Kenya who already sell mobile-phone airtime, in the form of scratch cards, can also register to be mobile-money agents, taking in and paying out cash. More than 17,600 retailers have signed up as M-PESA agents—far outnumbering Kenya’s 840 bank branches. When a customer is registered with the system, paying in cash involves exchanging physical money for the virtual sort, called “e-float”, which is credited to his mobile-money account. E-float can then be transferred to other users by mobile phone, and exchanged for cash by the recipient, who visits another agent.

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