Wednesday, February 9, 2011
How Digital Media Might Affect Education Business
A look at how mobiles and e-book readers might affect the education business.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Nokia Admits Difficulties
"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience," says Nokia CEO Stephen Elop. "Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable."
"There is intense heat coming from our competitors, more rapidly than we ever expected," Elop says. "Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem. They changed the game, and today, Apple owns the high-end range."
Also, "Google has become a gravitational force, drawing much of the industry's innovation to its core."
At the same time, "Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements."
"Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem."
Also, "Google has become a gravitational force, drawing much of the industry's innovation to its core."
At the same time, "Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements."
"Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem."
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Visa to Buy Online Commerce Platform
Visa is buying online payments company PlaySpan Inc for $190 million, expanding Visa's its e-commerce and mobile payments capabilities.
Privately-held PlaySpan processes transactions for online games and virtual goods sold on social networking websites. It is based in Santa Clara, California, and backed by several venture funds, including Easton Capital, Menlo Ventures, TimeWarner Investments, Vodafone Ventures and GE Asset Management.
Privately-held PlaySpan processes transactions for online games and virtual goods sold on social networking websites. It is based in Santa Clara, California, and backed by several venture funds, including Easton Capital, Menlo Ventures, TimeWarner Investments, Vodafone Ventures and GE Asset Management.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Card Issuers Face $25 Billion Hit, Implications for Mobile Payments
New credit card and debit card regulations could cost U.S. card issuers up to $25 billion a year in lost revenue, according to a study from Boston Consulting Group. That has implications for mobile payments providers who expect to build business models built on payment fees.
For starters, the business, though lucrative, will be smaller than it has been in the past. Also, to the extent that the market leaders create the price umbrella under which all other contestants must operate, lower fees mean discounts offered by would-be competitors also must be lower.
The other issue is that there has been pressure in the retail payments business for other reasons. Since 2008, payment revenues have fallen about four percent annually, despite volume growth. Revenues are expected by BCG to grow about six percent, but remain the peak 2007 level of $162 billion globally. Many will note that the "real money" in payments is in "interchange" fees, the "percentage of transaction" revenues that processors earn.
Credit card issuer revenue was down about 18 percent in 2010. And the sword of Damocles hanging over the industry is the threat of further action to reduce the key interchange revenue stream.
The other issue is that there has been pressure in the retail payments business for other reasons. Since 2008, payment revenues have fallen about four percent annually, despite volume growth. Revenues are expected by BCG to grow about six percent, but remain the peak 2007 level of $162 billion globally. Many will note that the "real money" in payments is in "interchange" fees, the "percentage of transaction" revenues that processors earn.
Credit card issuer revenue was down about 18 percent in 2010. And the sword of Damocles hanging over the industry is the threat of further action to reduce the key interchange revenue stream.
The other approach is simply to price the upstart services higher than currently imposed by the major card issuers, but then the value issue immediately becomes more obvious. What incentive will a retailer have to switch if transaction costs actually are higher? There are answers, but nearly all the answers have to do with additional value beyond transaction costs.
The consulting group said various changes from the CARD Act, the Durbin amendment and Regulation E will take away 29 percent of the revenue that U.S. issuers, mostly retail banks, collect from retail card transactions. Moreover, the new rules may open the door for more regulations, including possible changes to credit cards.
The consultants said that, in response, issuers will transform the card industry, selling more products to each consumer and moving further into mobile banking. In large part, that is because the credit card portion of the business has reached an inflection point, according to BCG.
In response, banks will have to shift strategies, spending more time creating value around mobile location, customer features such as real-time alerts, location, remote deposit, product reviews, loyalty and other features possible when users can take advantage of smartphone capabilities. See http://www.bcg.com/documents/file71194.pdf
The consulting group said various changes from the CARD Act, the Durbin amendment and Regulation E will take away 29 percent of the revenue that U.S. issuers, mostly retail banks, collect from retail card transactions. Moreover, the new rules may open the door for more regulations, including possible changes to credit cards.
The consultants said that, in response, issuers will transform the card industry, selling more products to each consumer and moving further into mobile banking. In large part, that is because the credit card portion of the business has reached an inflection point, according to BCG.
In response, banks will have to shift strategies, spending more time creating value around mobile location, customer features such as real-time alerts, location, remote deposit, product reviews, loyalty and other features possible when users can take advantage of smartphone capabilities. See http://www.bcg.com/documents/file71194.pdf
Study Says Card Issuers Face $25 Billion Hit - WSJ.com (subscription required)
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Sprint Adds Kyocera Echo,with 2 Screens
The device, called the Echo and made by the U.S. unit of Kyocera Corp., features two 3.5-inch touch screens that can be stacked side by side. It will be available in the spring for $199.99.
Users can accomplish multiple tasks on the two screens, or drag items from one screen to the other. The phone, which runs on Google Inc.'s Android software, uses a pivot hinge that allows one screen to be tucked under the other, transforming it into a more conventional touch-screen phone.
Sprint Adds Kyocera Echo, a Two-Screen Smartphone - WSJ.com (subscription required)
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Death of Apps?
Not everybody believes mobile apps are the future. "Apps are going to die away in favor of simple mobile websites," says Mark Ferdman, chief executive of Pushkart, a start-up in the mobile coupon and group buying business. "Steve Jobs has done a great job of creating a marketplace that is unnecessary."
That might be a minority view at the moment, though.
Reporter's Notebook: Entrepreneurs Debate Death of Apps - WSJ.com (subscription required)
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Dodd-Frank Bill Poses Issues for Mobile and Most Other Payment Providers
The new Dodd-Frank bank regulations impose a transaction fee cap of 12 cents per transaction. If the rules stand, there are business implications for mobile payments firms that promise "lower transaction costs." The typical assumption is that a new provider can provide the retailer with a lower transaction cost, but that might not be the case.
Square, whose one-inch-square card swipe device attaches to an iPhone, iPad, or Android device, charges 2.75 percent plus 15 cents for each swiped transaction; typed-in transactions cost slightly more. A standard debit card transaction might cost less, at 1.75 percent.
Sage Mobile Payments offers a credit card reader that plugs into the audio jack of a smartphone. The company plans to charge customers a set-up fee and then a monthly fee starting at $10.95, but no transaction fees.
Intuit's GoPayment, which works with iPhone, iPad, iPod Touch and BlackBerry devices and will be one of the first mobile payment apps available on Android 3.0-based tablets, provides a free card reader but charges 15 cents per transaction along with 2.7 percent per swiped transaction or 3.7 percent per keyed transaction for low volumes; businesses that process more than $1,000 a month pay $12.95 per month and 30 cents per transaction as well as 1.7 percent for swiped transactions, 2.7 percent per keyed transaction.
If new providers cannot offer lower fees, there will have to be some other value driver.
Square, whose one-inch-square card swipe device attaches to an iPhone, iPad, or Android device, charges 2.75 percent plus 15 cents for each swiped transaction; typed-in transactions cost slightly more. A standard debit card transaction might cost less, at 1.75 percent.
Sage Mobile Payments offers a credit card reader that plugs into the audio jack of a smartphone. The company plans to charge customers a set-up fee and then a monthly fee starting at $10.95, but no transaction fees.
Intuit's GoPayment, which works with iPhone, iPad, iPod Touch and BlackBerry devices and will be one of the first mobile payment apps available on Android 3.0-based tablets, provides a free card reader but charges 15 cents per transaction along with 2.7 percent per swiped transaction or 3.7 percent per keyed transaction for low volumes; businesses that process more than $1,000 a month pay $12.95 per month and 30 cents per transaction as well as 1.7 percent for swiped transactions, 2.7 percent per keyed transaction.
If new providers cannot offer lower fees, there will have to be some other value driver.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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